f- 1 *******>* i*Ji 1 >"'LLIAMSOK I R©CH£STeii, t4. t. f3 Olorn^U tarn i'rljojil ICihtary CORNELL UNIVERSITY LIBRARY 3 1924 069 394 579 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924069394579 PARTICULAR ACTIONS AND PROCEEDINGS IN THE COUETS OF EECOED OF THE STATE OF NEW YOEK UNDEB THE CIVIL PRACTICE ACT AND CONSOLIDATED LAWS LAW, PRACTICE AND FORMS BY J.' NEWTON FIEEO, LL.D. State Reporter, Dean of the Albany Law School FOURTH EDITION IN THREE VOLUMES BY AETHUB F. CUKTIS of the Delhi Bar VOL. I ALBANY, N. Y. MATTHEW BENDEE & COMPANY INCORPOBATED 1921 Copyright 1887, 1888, 1897, 1899 By MATTHEW BENDER Copyright 1908, 1912 By MATTHEW BENDER & COMPANY Copyright 1921 By MATTHSW bender & COMPANY ' INCORPOKATBD 4e ^iv. 1, 135 N. Y. Supp. 338 ; Matter of 179 N. Y. Supp. 1S2. Johnston, 76 Mise. 374, 137 N. Y. Supp. 8. Matter of Ziegler, 83 Misc. 346, 143 N. Y. Supp. 566. b ADOPTION. If a parent withholds his presence, his love, his care, the op- portunity to display filial affection, and neglects to lend sup- port and maintenance, such a parent relinquishes all parental claim, and abandons the child.^ But a parent who has abandoned a child should receive notice of the proceedings in order that he may be bound by an adjudication that he has abandoned the child.^" Otherwise, he may have the adoption abrogated by showing that he did not abandon the child." Courts are not authorized to determine in an adoption pro- ceeding, without actual or constructive notice to the parents, that they have forfeited their natural rights to the custody of their children.^^ The consent of the putative father of an illegitimate child is not required.-^^ The consent of a parent who has been divorced is not neces- sary, except possibly when such parent has the right to visit the child." There is no provision in our statutes relating to adoption which requires notice to the heirs-at-law and next of kin of the minor or otherwise, except as it is included within the pro- visions of section 111.^^ Upon a second adoption of a child, the consent of the natural parents is not required.^^ 3. Foster parents, Upon proceedings for the second adoption of a child, the consent of the foster parents, or the survivor, is required.^'' A husband cannot adopt a child without the consent of his wife and where she did not sign the instrument and it does not appear that she ever consented to such adoption, or any order of adoption was made by the court having such matters 9. Matter of Hayford, 109 Misc. 479, Div. 1, 135 N. Y. Supp. 328. 179 N. Y. Supp. 183; Matter of Lar- 13. Matter of Hayford, 109 Misc. son, 31 Hun, 539. 479, 179 N. Y. Supp. 182. 10. People ex rel. Lentino v. Feaer, 14. Matter of Metzger, 114 Mise. ■ 195 App. Div. 90, 186 K Y. Supp. 443. 313, 186 N". Y. Supp. 269. See also. Matter of Hurter, 111 Misc. 15. Matter of MacEae, 189 N. Y. 85, 181 N. Y. Supp. 75. 142. 11. Matter of Johnson, 76 Misc. 374, 16. Matter of MacEae, 189 N. Y. 137 N. Y. Supp. 92; People ex rel. 142. Lentino v. Feser, 182 N. Y. Supp. 407. 17. Matter of MacEae, 189 N. Y. 12. Matter of Livingston, 151 App. 142. ADOPTION. m charge, the child is not legally adopted; but is entitled, as against the husband and his estate, to the benefits secured to her by a contract made by him with the father of the ehild>« 4. Child. If the child to be adopted is over twelve years of age, its consent to the adoption must be procured. If the child is not of sound mind, it is incompetent to give its consent to the adoption, and it is thought that in such a case the adoption proceedings are not valid.^^ C. Order. 1. Domestic Relations Law, § 112. Requisites of voluntary adoption. In adoption the following requirements must be followed. 1. The foster parents or parent, the person to be adopted and all the persons whose consent is necessariy under the last section, must appear before the county judge or the surrogate of the county where the foster parent or parents reside, or, if the foster parents or parent do not reside in this state, in the county where the minor resides, and be examined by such judge or surrogate, except as provided by the next subdivision. 2. They must present to such judge or surrogate an instrument containing substantially the consents required by this chapter, an agreement on the part of the foster parents or parent to adopt and treat the minor as his, or her or their own lawful child, and a statement of the age of the person to be adopted, as nearly as the same can be ascertained, which statement shall be taken prima facie as true. If a change in the name of the minor is desired, such instru- ment may also state the new name by which the minor shall be known. The instrument must be signed by the foster parents or parent and by each person whose consent is necessary to the adoption, and severally acknowledged by said persons before such judge or surrogate; but where a parent or person or insti- tution having the legal custodiy of the minor resides in some other country, state or county, his or their written acknowledged consent, or the written acknowledged consent of the ofHcers of such institution, certified as conveyances are required to be certified to entitle them to record in a county in this state, is equivalent to Ms or tlieir appearance and execution of such instrument. In all cases where the consents of the persons mentioned in subdivision one, two, three, and four of section one hundred and eleven have been waived as provided in subdivision five of such section, or where the person to be adopted is of the age of twenty-one years or upwards, notice of such application shall be served upon such persons as the judge or surrogate may direct. (Amended by L. 1915, ch. 352, and L. 1918, oh. 453. See B., 0. & G. Consol. L., 2nd Ed., p. 1940.) 18. Middleworth v. Ordway, 191 N. 20. People ex rel. Burns v. Bloedel, Y. 404. 4 N". Y. Supp. 110, 20 St. Rep. 16. 19. Ryan v. Sexton, 191 App. Div. 20a. Matter of Gregory, 13 Mise. 159, 181 N. Y. Supp. 10. 365, 35 N. Y. Supp. 105. 8 ADOPTION. 2. Domestic Belations Law, § 113. Order. If satisfied that the moral and temporal interests of the person to be adopted will be promoted thereby, the judge or surrogate must make an order allowing and confirming such adoption, reciting the reasons therefor, and directing that the person to be adopted shall henceforth be regarded and treated in all respects as the child of the foster parent or parents. If the judge or surrogate is also satisfied that there is no reasonable objection to the change of name proposed, the order must also direct that the name of the minor be changed to such name as shall have been designated in the instrument mentioned in the last section. Such order, and the instrument and consent, if an,y, mentioned in the last section must be filed and recorded in the office of the county clerk of such county. The fact of illegitimacy shall in no case appear upon the record. (Amended by L. 1915, ch. 352, and L. 1918, Oh. 453. See B., C. & G. Conaol. L., 2nd Ed. p. 1942.) 3. Compliance with statutes. Precise compliance with the terms of the statute is not essential.^" It is not necessary for the validity of an adoption of an illegitimate child that the fact of its illegitimacy appear on the face of the papers.^*** A parent who has consented to the adoption cannot avoid it by objections going merely to informalities, not affecting his consent, such as the failure of the judge to subscribe the consent and agreement of the person adopted.^^ The objection that the necessary instruments were executed in the presence of a person other than a judge before whom the proceeding for the adoption was had is immaterial, where the judge certifies in the order of adoption that the adopted child and the adopting parents appeared before him and that the necessary consents and agreements were ex- ecuted as provided by the statute.^^ Discretionary power is clearly given by section 113, which provides that if satisfied that the moral and temporal inter- ests of the child will be promoted thereby the judge or surro- gate must make the order. The words " if satisfied " are a clear grant of discretionary power.^^ An order of adoption bearing the caption and seal of the County Court and signed by the clerk may nevertheless be deemed a judge's order where it recites that the parties " ap- 21. People ex rel. Burns "v. Bloedel, Div. 373, 60 N. Y. Supp. 1094; aff'd, 4 N. Y. Supp. 110, 20 St. Bep. 161. 167 N. Y. 601. 22. Von Beck v. Thomsen, 44 App. 23. Matter of Ward, 59 Misc. 338. ADOPTION. 9 peared before me, and on examination by me," etc., and it is signed by the county judge, without any direction to enter. The fact that such an order was made at a term of the County Court and while the county judge was on the bench does not make it a court order .^^ A foster parent must be a resident of the county in which the county judge who makes an order of adoption resides and holds office.^ D. Adoption of adults. Since the enactment of chapter 352 of the Laws of 1915, the adoption of a person of the age of twenty-one and upward is permitted, and no consents save of the person adopted and of the foster parent are required.^ As the adoption of an adult affects the devolution of prop- erty on the death of the foster parent and has the same result as a will, the courts, in determining its validity should apply the same tests as in the case of a testamentary act, and to that end undue influence and lack of testamentary capacity may be shown to nullify the adoption.^ For a man to adopt a woman with whom he is living in adultery is against public policy, and an attempt to obtain the approval of such adoption is a fraud upon the eourt.^ E. Abrogation of voluntary adoption. 1. Domestic Relations Law, § 116. Abrogation of voluntary adoption. A person adopted may be deprived of the rights of a voluntary adoption by the following proceedings only: The foster parent, the person adopted and the persons whose consent would be necessary to an original adoption, must appear before the county judge or surrogate of the county where the foster parent resides, or if the foster parent resides without the state, where the original papers of adoption are on file, or where the natural parent or parents or persons whose .consent would be necessary to an original adoption reside, who shall conduct an examination as for an original adoption. If he is satisfied that the abrogation of the adoption is desired by all parties concerned, and will be for the best interests of the person adopted, the foster parent, the person adopted, if over the age of twelve years, and the persons whose consent would have been necessary to an original adoption shall execute an agreement, whereby the foster parent agrees, or whereby the foster parent and person adopted, if the latter is above the age of 24. Eosekrans v. Bosekrans, 163 Div. 19«, 168 N. Y. Supp. 142. App. Div. 730, 148 N. Y. Supp. 954. 27. Stevens v. Halstead, 181 App. 25. Matter of Carpenter, 74 Misc. Div. 198, 168 N. Y. Supp. 143. 127, 133 N. Y. Supp. 735. 28. Stevens v. Halstead, 181 App. 26. Stevens v. Halstead, 181 App. Div. 198, 168 N. Y. Supp. 142. 10 ADOPTION. twelve years and therebjy a necessary party as above required, agree to relinquish the relation of parent and child and all rights acquired by such adoption, and the parents or guardian of the person adopted or the institution having the custody thereof agree to reassume such relation. The consent of a foster parent who has abandoned the child, or is deprived of civil rights, or divorced because of his or her adultery or cruelty, or adjudged to be insane, or to be an habitual drunkard, or judicially deprived of the custody of the child on account of cruelty or neglect, is unnecessary; excepting, however, that where such parents are divorced because of his or her adultery or cruelty, notice shall be given to both the parents personally or in such manner as may be directed by a judge of a court of competent jurisdiction. The judge or surrogate shall indorse, upon such agreement, his consent to the abrogation of the adoption. The agreement and consent shall be filed and recorded in the office of the county clerk of the county where the foster parent resides, and a copy thereof filed and recorded in the office of the county clerk of the county where the parents or guardian reside, or such institution is located, if they reside, or such institution is located, within this state. From the time of the filing and recording thereof, the adoption shall be abrogated, and the person adopted shall reassume its original name and the parents or guardian of the person adopted shall reassume such relation. A person so adopted, however, may be adopted directly from such foster parents by another person or by either of such foster parents in the same manner as from parents, and as if such foster parents were the parents of such person so adopted. (Amended by L. 1910, ch. 154; L. 1913, eh. 38; L. 1915, ch. 352; L. 1920, ch. 287. See B., C. & G. Consol. L., 2nd Ed., p. 1948.) 2. Under stktute. Adoption and abrogation thereof are not contracts between private persons within the meaning of the Federal Constitu- tion relating to the impairment of contracts.^^ The voluntary adoption of an infant to which the parent has consented and which fully complies with all the statutory requirements, cannot be abrogated by a county judge without the consent of the foster parent, for the abrogation is con- trolled entirely by the statute, which requires the consent of all parties concerned.^" The consent of a mother who has been divorced for her adultery is not necessary in an abrogation proceeding.'^ An abrogation of an adoption requires an agreement ex- ecuted by the parties interested and the consent of the surro- gate. The surrogate in giving his consent acts in his adminis- trative, not in his judicial capacity, and the consent signed by 29. Matter of Ziegler, 82 Misc. 346, 221 N. Y. 598 ; Matter of Hayf ord, 109 143 N. Y. Supp. 5&3. Misc. 479, 179 N. Y. Supp. 182. 30. Matter of McDevitt, 176 App. 31. Matter of Ziegler, 82 Misc. 346, Div. 418, 162 N. Y. Supp. 1032, aff'd, 143 N. Y. Supp. 562. ADOPTION. 11 him is not a decree or order of the Surrogate's Court. Hence, a surrogate has no jurisdiction to revoke the abrogation of an adoption, which relief can be obtained only in a court of equity.^^ Where the surrogate, deciding that the foster parents of an adopted child are unfit persons to have its care and cus- tody, abrogates the order of adoption and no appeal is taken from the order of abrogation, it is thought that the county judge has no power subsequently to make an order adopting the chid to the same foster parents as before.^^ Although the County Court and the Surrogate's Court have concurrent jurisdiction in such a matter, the power to abro- gate an order of adoption rests solely with whichever court granted the order.^* The powers of the county judge to abrogate the voluntary adoption of a minor are strictly statutory, but, it is thought that the Supreme Court in the exercise of its equity juris- diction may annul an adoption which violates equitable prin- ciples, and has ample power at law and in equity to promote the welfare of a child, notwithstanding a legal adoption.^^ 3. Illegal adoption. The statute set forth above applies to a legal adoption. If the adoption does not comply with the necessary formalities, it is thought that, independently of the statute, the court may revoke an order of adoption. Hence, an order of adoption made without the necessary consent of a natural parent, may be abrogated.^^ Jurisdiction of the surrogate to make an order, confirming an agreement by grandparents 'for the adoption of their de- ceased daughter's infant child, made without the consent of the father, who had no notice of the application for said order and on proof that he had abandoned the infant, may properly be raised on the father's application for the abrogation of such adoption upon allegations that he had made proper pro- 32. Matter of Ziegler, 161 App. Div. 63 N. Y. Supp. 952. 589, 146 N. Y. Supp. 881; Stevens v. 35. Matter of MeDevitt, 176 App. Halstead, 181 App. Div. 198, 168 N. Y. Div. 418, 163 N. Y. Supp. 1032, afE'd, Supp. 142. Compare Matter of John- 221 N. Y. 598. See also, Matter of Ston, 76 Mise. 374, 137 N. Y. Supp. 92. Trimm, 30 Mise. 493, 63 N. Y. Supp. 33. Matter of Trimm, 30 Misc. 493, 952. 63 N. Y. Supp. 952. 3G. Matter of Johnston, 76 Misc. 34. Matter of Trimm, 30 Misc. 493, 374, 137 N. Y. Supp. 98. 12 ADOPTION. vision for the maintenance of the child and upon his denial of the charge of abandonment.^'^ The heirs and next of kin of a deceased foster parent who adopted a woman with whom he was living in adultery may maintain a suit in equity to annul the adoption, and are not restricted to a motion before the surrogate to vacate it.^* But it has been held that there is no authory under the statute which enables the next of kin of a deceased person to attack directly the adoption proceedings, and in a proceeding for a judicial settlement of administrator's accounts a Sur- rogate's Court cannot review an order of adoption made by a county judge which recites all the jurisdictional facts required by the Domestic Eelations Law.^' F. Precedents for adoption. 1. Petition for voluntary adoption of minor over twelve years of age. MONROE COUNTY COURT. In the Matter of the Voluntary Adoption of MARY SMITH, a Minor Over the Age of Twelve Years, By JAMES H. JONES. The petition of James H. Jones of the City of Rochester, in the County of Monroe, and State of New York, respectfully shows to the court : I. That the above-named Mary Smith is a minor over the age of twelve years, born on or about the 15th day of July, 1897 ; that your petitioner is desirous of adopting the said Mary Smith as his own lawful child, pursuant to the statute in such case made and provided, and that the consent of said Mary Smith to her adoption by your peti- tion is annexed to this petition and made a part thereof. II. That the said Mary Smith is the legitimate child of "William Smith and Elizabeth Smith, his wife, who are now living together as husband and wife in the said City of Rochester, and the consent of said William Smith and Elizabeth Smith, his wife, to the adoption of their said daughter, Mary Smith, by your petitioner is annexed to this peti- tion and made a part thereof. III. That your petitioner is an adult of full age, lawfully married to Emma Jones, an adult of full age ; that your petitioner and his said wife, Emma Jones, live together as husband and wife in the said City 37. Matter of Johnston, 76 Misc. 374, Div. 198, 168 N. Y. Supp. 142. 1.37 N. Y. Supp. 93. 39. Matter of Ward, 59 Miac. 328, 38. Stevens v. Halstead, 181 App. 113 N. Y. Supp. 362. ADOPTION. 13 of Rochester, and that the said Emma Jones duly consents to the adoption of said minor, Mary Smith, by your petitioner, by an instru- ment annexed to this petition and made a part thereof. Annexed hereto, and made a part hereof, is an agreement on the part of your petitioner, as foster parent, to adopt and treat the said minor, Mary Smith, as his own lawful child. Wherefore, your petitioner prays for an order of this court, per- mitting him to adopt the said minor, Mary Smith, as his own lawful child, pursuant to the statute in such case made and provided, and directing that the said minor, Mary Smith, be regarded and treated in all respects as the lawful child of said James H. Jones. Dated at the City of Rochester in the County of Monroe and State of New York, the day of October, 1909. (Signed) James H. Jones. i(Add verification ss.: City of Rochester, J I, James H. Jones, of the City of Rochester, in the County of Mon- roe and State of New York, desiring to adopt Mary Smith, a minor over the age of twelve years and the daughter of William Smith and Elizabeth Smith, his wife, of the said City of Rochester, do hereby consent and agree to adopt the said minor, Mary Smith, as my own lawful child pursuant to the statute in such case made and provided, and that the said Mary Smith shall take the name of Mary Smith Jones and be known as Mary Smith Jones, and that hereafter she shall sustain toward me and I toward her the relation of parent and child, and have all the rights and be subject to all the duties of that relation, and I further consent and agree that the said minor, Mary Smith, shall be treated in all respects as my own lawful child. In witness whereof, I have hereunto set my hand and seal, at the City of Rochester, in the County of Monroe and State of New York, this day of October, 1909. James H. Jones. [l. s.] (Add acknowledgment taken before Monroe County Judge.) 6. Final order of adoption. (Same title.) (Caption.) Upon reading and filing the annexed petition of James H. Jones, praying that he be permitted to adopt Mary Smith, a minor, over twelve years of age, as his own lawful child, pursuant to the statute in such case made and provided; the consent of said minor to her adoption by said James H. Jones; the consent of her parents, Wil- liam Smith and Elizabeth Smith, to such adoption ; the consent there- to of Emma Jones, the wife of said James H. Jones ; and the consent and agreement of said James H. Jones to adopt said minor and treat ADOPTION. 15 her in all respects as his own lawful child ; all of which are dated and duly verified and acknowledged before me this day of October, 1909, the same being all the consents and agreements required by statute ; and after due examination by this court of the said parties, appearing before it as prescribed by law, from which it appears to the satisfaction of this court that said Mary Smith is a minor over twelve years of age, born on the 15th day of July, 1897 ; that the said William Smith and Elizabeth Smith, the parents of said minor, are unable to properly maintain, support and provide for said minor and that said James H. Jones is able, competent and willing to support, educate and maintain said minor, Mary Smith, and is in the judg- ment of this court a fit and proper person to adopt said minor and the court being satisfied that the moral and temporal interest of said minor will be promoted by said adoption, it is Ordered and decreed, That said James H. Jones be and he hereby is authorized and empowered to adopt said minor, Mary Smith, as his own child and that the said minor be hereafter treated by him in all respects as his own lawful child ; that the said James H. Jones be and he hereby is deemed to have assumed all the responsibilities of a parent in respect to said minor; and that said minor be hereafter known by the name of Mary Smith Jones and that the said James H. Jones, on the one part, and the said minor, Mary Smith, on the other part, shall sustain toward each other the legal relation of parent and child and have all the rights and be subject to all the liabilities and duties of •that relation. It is" further ordered and directed. That this order and the said petition and consents be filed and recorded in the ofBee of the County €lerk of Monroe County. , Monroe CQunty Judge. AUTICLE II. ADOPTION FROM CHARITABLE INSTITUTIONS. A. Domestic Eelations Law, § 115. Adoption from charitable institu- tions. An orphan asylum or charitable institution, incorporated for the care of orphan, friendless or destitute children may place children for adoption and the adoption of every such child, shall, when practicable, be given to persons of the same religious faith a;S the parents of such child. The adoption shall be effected by the execution of an instrument containing substantially the siame provisions as the instrument provided in this article for voluntary adoption, signed and sealed in the corporate name of such corporation by the officer or officers authorized by the directors thereof to sign the corporate name to such instruments, and signed by the foster parent or parents and each person whose consent is necescsary to the adoption; and may be signed by the child if over twelve years of age; all of whom shall appear before the county judge or surrogate of the county where suoh foster parents reside or, if such foster parents do not reside in this state, in the county where such institution is located, and be examined except that such officers need not IP ADOPTION. appear; and such judge or surrogate may thereupon make the order of adoption provided by this article. Such instrument and order shall be filed and recorded in the office of the county clerk of the county where such adoption takes place and the adoption shall take effect from the time of such filing and recording. (Amended by L. 1916, ch. 453; L. 1918, ch. 280. See B., C. & G. Consol. L., 2nd Ed., p. 1947.) B. Domestic Relations Law, § 117. Application in behalf of child for abrogation of an adoption from a charitable institution. A minor who shall have been adopted in pursuance of this chapter or of any act repealed thereby, from an orphan asylum or charitable institution, or any corporation which shall have been a party to the agreement by which such child was adopted, or any person on behalf of suxih child, may make an application to the county judge or the surrogate's court of the county in which the foster parent then resides, or if the foster parent resides without t)he state, where the original papers of adoption are on file, or where the natural parent or parents or persons whose consent would be necessary to an original adoption reside, for the abrogation of such adoption, on the ground of cruelty, misusage, refusal of necessary provisions or clothing, or inability to support, maintain, or educate such child, or of any violation of duty on the part of suoh foster parent toward such child; which application shall be by a petition setting forth the grounds thereof, and verified by the person or by some officer of the cor- poration making the same. A citation shall thereon be issued by such judge or surrogate, in or out of such court, requiring such foster parent to show cause why the application should not be granted. Th* provisions of the Code of Civil Procedure relating to the issuing, contents, time and manner of service of citations issued out of a surrogate's court, and to the hearing on the return thereof, and to enforcing the attendance of witnesses, and to all proceedings thereon, and to appeals from decrees of surrogate's courts, not inconsistent with this chapter, shall apply to such citation, and to all proceedings thereon. Such judge or court shall have power to order or compel the production of the person of such minor. If on the proofs made before him, on the hearing of such citation, the judge or surrogate shall determine that either of the grounds for such application exists, and that the interests of such child will be promoted by granting the application, and that such foster parent has justly forfeited his right to the custody and services of such minor, an order shall be made and entered abrogating the adoption, and thereon the status of such child shall be the same as if no proceedings had been had for the adoption thereon. After one such petition against a foster parent has been denied, a citation on a subsequent petition against the same foster parent may be issued or refused in the discretion of the judge or surrogate to whom such subsequent petition shall be made. (Amended by L. 1920, ch. 287. See B., C. & G. Consol. L., 2nd Ed., p. 1950.) C. Domestic Relations Law, § 118. Application by foster parent for the abrogation of such an adoption. A foster parent who shall have adopted a minor in pursuance of this chapter or of any act repealed thereby, from an orphan asylum or charitable institu- tion, may apply to the county judge or surrogate's court of the county in ADOPTION. 17 whioh such foster parent resides, or if the foster parent resides without the state, where the original papers of adoption are on file, or where the natural parent or parents or persons whose consent would be necessary to an original adoption reside, for the abrogation of suoh adoption on the ground of the wilful desertion of such child from such foster parent, or of any misdemeanor or ill-behavior of such child, which application shall be by petition, stating the grounds thereof, and the substance of the agreement of adoption, and shall be verified by the petitioner; and thereon a citation shall be issued by such judge or surrogate in or out of such court, directed to such child, and to the corpora- tion which was a party to such adoption, or if such corporation does not then exist, to the superintendent of the poor of such county, requiring them to show cause why such petition should not be granted. Unless such corporation shall appear on the return of such citation before the hearing thereon s'hall proceed, a special guardian shall be appointed by such judge or court to protect the interests of such child in such proceedings, and the foster parent shall pay to such special guardian such sum as the court shall direct for the purpose of paying the fees and the necessary disbursements in preparing for and contesting such application on behalf of the child. If such judge or surrogate shall deter- mine, on the proofs made before him, on the hearing of such citation, that the child has violated his duty toward such foster parent, and that due regard to the interests of both require that such adoption be abrogated, an order shall be made and entered accordingly; and such judge or court may make any disposition of the child which any court or officer shall then be authoried to make of vagrant, truant or disorderly children. If such judge or surrogate shall otherwise determine, an order shall be made and entered denying the petition. (See B., C. & G. C!onsol. L., Slid Ed., p. 1950.) D. Procedure. Since the Domestic Eolations Law took effect, the mutual rights and liabilities of foster parents and children adopted from public institutons, including their mutual rights of in- heritance, are the same as if the adoption had been made with the consent of the child's parents rather than from a public institution.*" A Roman Catholic institution stands in loco parentis as to chidren surrendered to its custody pursuant to its statutory power to receive deserted children and those surrendered to it and may place them by indenture or adoption. Where two foundlings in such an institution are surrendered to a married couple on condition that said children should be brought up in the Catholic faith and the wife dies a member of the Roman Catholic church, an order for the adoption of the children on 40. United States Trust Co. v. Hoyt, 849 ; Eosekrans v. Rosekrans, 163 App. 150 App. Div. eai, 135 N. Y. Supp. Div. 730, 148 N. Y. Supp. 954. 2 18 ADOPTION. the petition of the surviving husband, who has no definite religious belief, cannot be granted without the consent of the institution.^ Where a mother has been deprived of the custody of her children and they have been committed to a charitabe insti- tution upon a judicial determination that the mother is a dis- solute person and has neglected them, she cannot attack an order of the Surrogate's Court authorizing the adoption of said children by their uncle merely because the proceedings were had without notice to her. A determination of the Chil- dren 's Court committing the children to the charitable insti- tution has the effect of judically depriving the mother of their custody within the meaning of the adoption statutes.^ E. Precedents for adoption of child in foundling asylum. 1. Petition. To the Surrogate's Court of the County of New York: The petition of Christian Thomsen and Florentine Thomseo, his wife, respectfully shows : That your petitioners are residents of the City of New York, resid- ing at No. 6 "West 21st Street. That your petitioners are desirous of adopting a certain minor female child under the laws of this State in such case made and pro- vided, namely under the Domestic Relations Law, being chapter 14 of the Consolidated Laws. That said child is now about four and a half years old, and has been in the family and under the care of your petitioners since the month of March, 1904, and that they have treated said child as their adopted daughter. That the parents of said child are not known to them; that a so- ciety called the ' ' Foundling Asylum of the Sisters .of Charity, in the City of New York," which society was duly incorporated under the Laws of this State, on October 8, 1869, and whose charter was amended by a special act of the Legislature passed May 11, 1872, and whose particular business and object is to receive, care for, maintain and support deserted children or foundlings, heretofore received and main- tained said infant child, and afterward, in the month of March, 1904, delivered and assigned said child by them called "Lora," and now called "Sylvia," to your petitioners to adopt, maintain and educate the same, and to bring her up in the Roman Catholic religion, which your petitioners have done ever since. That your petitioners are desirous of adopting said child under said act of the Legislature of this State, and said society, called the "Foundling Society of the Sisters of Charity in the City of New 41. Matter of Korte, 78 Misc. 276, 42. Matter of Antonopulos, 171 App. 139 N. Y. Supp. 444. Div. 659, 157 N. Y. Supp. 587. ADOPTION. 19 York," are willing to give, and have given, their consent that your petitioners may adopt said child. Your petitioners therefore pray that the Surrogate of this court cause the proper persons to appear before him, and that upon due examination of the parties, the necessary consent be signed and the necessary agreement be executed by your petitioners and that the necessary order be made directing that the said child shall henceforth be regarded and treated in all respects, as their own lawful child should be treated, and that the honorable Surrogate make such other and further order as the said statute requires and as to him shall seem meet and proper, and Your petitioners will ever pray. New York, 30th of November, 1907. Christian Thomsen. Floeentine Thomsen. (Verification.) 2. Order to appear and be examined as to a proposed adoptiou. SURROGATE'S COURT— New York County. In the Matter of the Petition op Christian Thomsen and Florentine Thomsen, to Legalize the Adoption BY Them of a Certain Minor Female Child, Abandoned by Her Parents, Called "Silvia/' Alias "Lora." Upon reading the petition of Christian Thomsen and Florentine Thomsen, his wife, dated November 30,. 1907, it is Ordered, That the petitioners aforesaid and the proper officer of the society called "Foundling Society of the Sisters of Charity in the City of New York," a corporation organized under the laws of the State of New York, and the minor child adopted by said petitioners, appear before me at chambers of the Surrogate 's Court of New York County at the County Court House in the City of New York on the 23d day of December, 1907, at 5 o'clock of that day, to be examined according to the provisions of the Domestic Relations Law, that it may be determined whether the moral and temporal interests of said child will be promoted by such adoption, and to have the legal docu- ments and papers required by law to be executed. New York, December 11, 1907. T , Surrogate. 20 ADOPTION. 3. Foster parents' agreement. (Same title.) Be it known that we, Christian Thomsen and Florentine Thomsen, his wife, of the City, County and State of New York, do hereby agree and covenant that we hereby do adopt a certain minor female child, abandoned by her parents, and heretofore, to wit, about the month of July, 1904, received and taken care of by the society, called ' ' Found- ling Asylum of the Sisters of Charity in the City of New York," a corporation duly organized under the laws of the State of New York, and by them called by the Christian name of "Lora," and by us called "Sylvia," which child was delivered to us by said society, to be adopted and maintained and educated by us, about the month of March, 1904; said child being now about five years old. And we further agree and bind ourselves jointly and severally, firmly by these presents that the said child shall be adopted and treated by us and each of us, in all respects, as our own child should be treated, and be brought up in the Roman Catholic religion. In witness whereof, we have hereunto set our hands and seal this 23d day of December, one thousand nine hundred and seven. Chr. Thomsen, Plokentine Thomsen. Signed, sealed and delivered in the presence of Surrogate of New York County. (Same acknowledgment as taken by Surrogate of New York County.) 4. Foster parents' consent. (Same title.) "We, Christian Thomsen and Florentine, his wife, of the City and County of New York, do hereby consent to adopt the certain minor female child about five years old, heretofore received and taken care of by the society called ' ' Foundling Asylum of the Sisters of Charity in the City of New York" and by them called "Lora" and now called "Sylvia" and delivered to us by said society to be adopted and main- tained by us ; and we consent and promise to bring up said child in the Roman Catholic religion and to treat her the same in all respects as our own lawful child should be treated. New York, December 23, 1907, Chr. Thomsen, Florentine Thomsen. In presence of Surrogate of New York County. (Same acknowledgment as taken by Surrogate of New York County.) ADOPTION. 21 5. Final order of adoption. (Same title.) (Caption.) Upon reading and filing the petition of Christian Thomsen and Florentine Thomsen, his wife, dated November 30, 1907, praying to have the adoption by them of a certain minor female child abandoned by its parents, legalized under the Domestic Relations Law. And it appearing to my satisfaction that the said child is a minor of the age of about five years and was abandoned by its parents and that the parents are not known and that said infant child was re- ceived and taken under the care, charge and custody of the society called ' ' The Foundling Asylum of the Sisters of Charity in the City of New York, ' ' a corporation created, organized and acting under and by virtue of the laws of this State, and its amended charter, and the said society, acting by its proper officer. Sister Irene (Catherine Fitz- gibbon), and having heretofore had the lawful custody of said child, called by them "Lora," have given their consent to the adoption of said child by said Christian Thomsen and Florentine, his wife, and have heretofore transferred and assigned said child to the said Chris- tian and Florentine Thomsen. And the said persons adopting said child now called ' ' Sylvia, ' ' and the child adopted, and the said society, the ' ' Foundling Asylum of the Sisters of Charity in the City of New York," by their proper officer, Sister Irene (Catherine Fitzgibbon), having appeared before me, and the necessary consent having been signed, and an agreement having been duly executed by the said Christian Thomsen and Florentine Thomsen, the persons adopting said child, to the effect that the child shall be adopted and treated, in all respects, as their own lawful child should be treated. And all the said persons appearing before me have been examined by me, separately. And I, being satisfied that the moral and temporal interest of said child will be promoted by the adoption. Now for and on the reasons aforestated, I , Surrogate of the County of New York, do hereby order, decree and direct that the said minor female child, called "Sylvia" and there- tofore called ' ' Lora, ' ' shall henceforth be regarded and treated in all respects as the child of said Christian Thomsen and Florentine, his wife, and shall take the name of Sylvia Thomsen, and the two shall henceforth sustain toward each other the relation of parents and child, and shall have all the rights and be subject however to the ex- ceptions in said act set forth. Surrogate of the County of New York. 22 ADOPTION. ARTICLE III. EFFECT OF ADOPTION. A. Domestic Relations Law, § 114. Effect of adoption. Thereafter the parents of the person adopted are relieved from all parental duties toward, and of all responsibilities for, and have no rights over such child, or to his property by descent or succession. Where a parent who has procured a divorce, or a surviving parent, having lav^ful custody of a child, • lawfully marries again, or where an adult unmarried person who has become a foster parent and has lawful custody of a child, marries, and such parent or foster parent consents that the person who thus becomes the stepfather or the stepmother of such child may adopt such child, such parent or such foster parent, so consenting, shall not thereby be relieved of any of his or her parental duties toward, or be deprived of any of his or her rights over said child, or to his property by descent or succession. If the order allowing and confirming the adoption shall direct that the name of the child be changed, the child shall be known by the new name designated in such order. His rights of inheritance and succession from his natural parents remain unaffected by such adoption. The foster parent or parents and the person adopted sustain toward each other the legal relation of parent and child, and have all the rights and are subject to all the duties of that relation, including the right of inheritance from each other, except as the same is affected by the pro- visions of this section in relation to adoption by a stepfather or stepmother, and such right of inheritance extends to the 'heirs and next of kin of the person adopted, and such heirs and next of kin shall be the same as if he were the legitimate child of the person adopting, but as respects the pass- ing and limitation over of real or personal property dependent under the provi- sions of any instrument on the foster parent dying without heirs, the person adopted is not deemed the child of the foster parent so as to defeat the rights of remaindermen. (Amended by L. 1915, ch. 352 and L. 1916, ch. 453. See B., C. & G. Conaol. L., 2nd Ed., p. 1943.) B. Care and custody of child. The legal relation between the foster parent and the adopted child is the same as that between natural parents and their children.*^ There is no provision in the statute for the creation of the relation of brother and sister by adoption.^ The adoption divests the natural parents of the relation which they had theretofore sustained toward the infant and such change of relation is in no way affected by the death of the foster parent or parents.^^ 43. Oarpenter v. Buffalo General 44. Matter of Benson, 99 Misc. 322, Elec. Co., 213 N. Y. 101. 163 N. Y. Supp. 670. 45. Matter of MacRae, 189 N. Y. 142. ADOPTION. 23 The primary rigtt to the custody of an adopted child is in the foster parents.*^^ The foster parent must bestow parental care on the adopted child, and while the relation continues is to be held to all the parental obligations.^^ But the order of adoption does not prevent the court from disposing of the custody of an infant so as to promote its best interests.'*'' C. Rights of inheritance. The legal relations of foster parents and adopted children are the same as those of natural parents and children " in- cluding the right of inheritance from each other, and such right of inheritance extends to the heirs and next of kin of the minor, and such heirs and next of kin are the same as if he were the legitimate child of the person adopting. ' '** An adopted child of a testator is given a status of inheri- tance equivalent to that of a "child born to the testator, with the exceptions prescribed in section 114.*' The foster parent and the minor have all the rights of parent and child, including the right of inheritance from each other ; but a limitation, in a deed or will, to a child or children or conditional upon the survivorship of a child or children, is 45a. See Habeas Corpus. aff'd, 162 N. Y. 635, that a child 4G. Matter of Anonymous, 80 Misc. adopted in ISSS is, under the provisions 10, 141 N. Y. Supp. 700. of the statute of 1873, entitled to take 47. People ex rel. MeKinney v. Stin- property under the provisions of a will eon, 13 App. Div. Ill, 43 N. Y. Supp. of its adopted father directing that the 311; People ex rel. Cornelius v. Callan, remainder of the estate shall "descend 69 Mise. 187, 124 N. Y. Supp. 1047; and be distributed according to the' People V. Paschal, 68 Hun, 344, 22 N. laws of the State of New York." Y. Supp. 8«1. Insurance policies. — A Child adop- 48. Carpenter v. Buffalo General ted by a husband and wife in 1875, after Electric Co., 213 N. Y. 101; Matter of policies of insurance had been issued Hurter, 111 Misc. 85, 181 N. Y. Supp. upon the husband's life, payable to the 75. wife and in case of her failure to sur- ITpon the death of the child and vive the husband, to her cildren for foster parents, the property of the their use, is entitled upon the wife's child passes to the heirs of the foster failure to survive the husband, who parent instead of to those of his natu- died in 1898, to share in the proceeds ral parents. Eyan v. Sexton, 191 App. of the policies with the natural Div. 159, 181 N. Y. Supp. 10. children of the adopting parents 49. Bourne v. Dorney, 184 App. Div. who were living at the time the policies 476, 171 N. Y. Supp. 264. were issued. Von Beck v. Thomson, 44 Will.— It is held, in Dodin v. Dodin, App. Div. 373, €0 N. Y. Supp. 1094, 7 16 App. Div. 42, 44 N. Y. Supp. 800, Anno. Cas. 33; aff'd, 167 N. Y. 601. 24 ADOPTION. not deemed to include an adopted child, where the grantor or testator is a stranger to the adoption.^^ Where a daughter and legatee of a decedent predeceased him, her legally adopted daughter, who survived her, is en- titled to that portion of decedent's estate that her foster mother would have taken had she survived the decedent.^* The rights of inheritance as between an adopted child, his foster parents and his natural parents must he determined, not by the statute in force at the time of adoption, hut by that in force at the time of the death of the child or the parents.^^ • Hence, a child adopted from a public institution in 1894 pursuant to the provisions of chapter 438 of the Laws of 1884, is entitled to inherit from her foster parents where they died subsequent to the date on which the Domestic Eelations Law took effect. Where the foster parents of such a child die with- out issue she is their sole next of kin under the Statute of Dis- Probate of will. — A petitioner for probate of a will who has knowledge of an adoption of a child by the testa- tor should allege the fact in the pe- tition ; he has no right to pass upon the adoption papers and determine for him- self that such child is not entitled to be cited, but the question is one for the determination of the court in a proper proceeding for that purpose. Matter of Gregory, 13 Misc. 363, 35 N. Y. Supp. 105. Compelling filing of inventory. — Where an alleged adopted daughter sought to compel a filing of an inven- tory, and the adoption was denied, it was held that the surrogate might prop- erly investigate the question of adop- tion before making the order compell- ing the filing of the inventory. Matter of Comins, 9 App. Div. 492, 41 N. T. Supp. 323. 53. Matter of Leask, 197 N. Y. 193. 54. Matter of Foster, 108 Misc. 604, 177 N. Y. Supp. 827. 55. Kemp v. New York Produce Ex- change, 34 App. Div. 175, 54 Supp. 678 ; Theobald v. Smith, 103 App. Div. 200, 92 N. Y. Supp. 1019; United States Trust Co. v. Hoyt, 150 App. Div. 631, 135 N. Y. Supp. 849 ; Rosekrans v. Rosekrans, 163 App. Div. 730, 148 N. Y. Supp. 954. Where an adult person was adopted in 1916 after section 110 of the Do- mestic Relations Law was amended by chapter 352 of the Laws of 1915, so as to allow the adoption of adults, and after section 114 of the statute was so amended as to allow adults to inherit from the foster parent except where it would defeat the rights of remainder- men, but the foster parent did not die until 1918 after the statute was again amended by chapter 149 of the Laws of 1917 providing that the right of an adopted adult to inherit from the foster parent should not apply to any will, devise or trust made or created before April 22, 1915, etc., the adopted adult is not entitled to share in a residuary estate which came to her deceased foster parent under the will of an ancestor who died in 1888, which pro- vided that if a beneficiary of the resi- duary estate died without surviving is- sue, which was the fact, her share should go to "her heirs at law." Un- der the circumstances the share of the deceased foster parent went to her ADOPTION. 25 tribution, and under a deed of trust which left property to her foster parents for life, and on their death without issue to the next of kin of her foster father, she is entitled to the entire re- mainder, to the exclusion of his collateral relatives.®^ Where the statute in force at the time an adopted child was killed by negligence cut off the rights of inheritance and suc- cession of his natural parents and transferred those rights to the foster parent, the moneys recovered for his death should be distributed among his foster parent's next of kin, she hav- ing died before the decedent who left no wife or children.^ The right of a half-sister of a decedent who died intestate to share in his estate is not lost by reason of her legal adoption by a stranger in whose family she lived until her marriage.^^ But it is said that there is no provision which entitles the adopted child to inherit from the collateral relatives of the foster parent.^' Thus, an adopted daughter of a deceased brother is not an heir at law or next of kin of his sister.^" D. Adoption agreement affecting inheritance. Where the mother, the sole surviving parent of the child, enters into a contract with a husband and wife by which she delivers and transfers her right in the child to them, and they in consideration thereof agree to adopt it, and upon their death to give to it all the property of which either of them may then be possessed, the child may maintain an action against the devisees and grantees of the husband to compel the specific performance of the contract.*^ Where husband adopts a child, with a provision that if she remains with him until she becomes eighteen years of age she shall be entitled to the interest of a child in his estate, the con- tract must be enforced in surbordiuation to the rights of the nieces as her heirs at law to the ex- 58. Matter of Landers, 100 Mise. 635, elusion of the adopted adult daughter. 166 N. Y. Supp. 1036. Matter of Kingsbury, 19a App. Div. 59. Matter of Benson, 99 Misc. a32, a06, 183 N. Y. Supp. 559. 163 N. Y. Supp. 670. 56. United States Trust Co. v. Hoyt, 60. Matter of Powell, 112 Mise. 74, 150 App. Div. 621, 135 N. Y. Supp. 183 N. Y. Supp. 939. 849. 61. Winne v. Winne, 166 N. Y. 263; 57. Carpenter v. Buffalo General Brantingham v. Huff, 43 App. Div. 414, Electric Co., 155 App. Div. 655, 140 60 N. T. Supp. 157. N. T. Supp. 559, aff'd, 213 N. Y. 101. 26 ADOPTION. widow in the husband's estate, which he cannot impair. Where a child was adbpted under a contract to feed, clothe, educate and provide for it, if she should remain with the adopting parents and subject to their government until she arrived at eighteen years of age, when she should be entitled to her ' ' dower right to the property " as if she were their own child, it was the intent of the parties that on the performance of the condition she should be entitled to the same interest in her foster father's property as his own lawful child would have had in case of intestacy .^^ When a foster parent on adopting two children from an orphan asylum agreed that ' ' provision shall be made by will . . . giving to such adopted child a reasonable share " of his estate, ' ' such as would be given if he were the father of said child," he was not bound to divide his estate among them in the same proportion they would receive as heirs, but was bound only to give such reasonable share of the estate as a parent would give, and hence, where the estate was small and one of the children, a male, married and was self-supporting, while the other, a female, was of weak mind and unable to care for herself, a will giving $1 to the adopted son and the remainder to the daughter was reasonable and within the contract.^^ Even, if formal adoption proceedings are not taken, and the agreement to give property to a child taken in the family, rests on parol, it may be specifically enforced, pro- vided it is sufficiently proved.^* Parol evidence as to an agreement adopting a child is not rendered inadmissible by the execution of an indenture of adoption not referring to it.^° E. Foreign adoption. The legal status of an adopted child, acquired by the law of adoption, is by the law of comity recognized in every other jurisdiction where such status becomes material in deter- mining the right to take property by will or inheritance, so that children of foreign adoption, whose rights are to be 62. Middleworth v. Ordway, 49 Misc. Supp. 1136. 74, 98 N. Y. Supp. 10, 18 Anno. Gas. 64. Godine v. Kidd, 64 Hun, &85, 29 102, aff'd, 117 App. Div. 913, 191 N. Y. Abb. N. C. 36, 46 St. Eep. 813, 19 N. 404. Y. Supp. 335. 63. Doppman v. Muller, 137 App. 65. Brantingham v. Huff, 43 App. Div. Sa, 114 N. Y. Supp. 620, 122 N. Y. Div. 414, 60 N. Y. Supp. 157. ADOPTION. 27 adjudicated upon here, should be regarded in the same light as though they had been duly adopted under the laws of New York.«« Although an adoption of a child is effected under the laws of another State, the devolution of real property in this State to such child is to be determined by the law of this State. Such adopted child is not an ' ' heir-at-law " of a sister of her foster mother, where the latter dies before such sister.^^ A child legally adopted under the laws of another State, substantially similar to our own, is exempt from the collateral inheritance tax. No evidence of formal adoption is required.^^ F. Adoption not complying with statute. "Where a child is taken into a family and brought up as a member of the family, but no formal adoption proceedings are had, there is no right of inheritance as between the child and the other members of the family.''^ The child is not an heir-at-law of the foster parents, although they have agreed to leave him all their property.™ The person taking the child does not stand in the relation of master, parent, or guardian to him, and is liable to him for the value of any services he renders.''^ There is no presumption that children living with people whose name they have taken, have been adopted. The "pre- sumption is raised, however, that there were no adoption yjapers by their absence from the office where, if in existence, they should have been filed.''^ The consent of the parents of a child to his adoption, when 66. Matter of Leask, 197 N. Y. 193. gitimate children of a man insured in 67. Kettell v. Baxter, 50 Mise. 438, a benefit order, described by him in the 100 N. Y. Supp. 529. application as his adopted children and 68. Matter of Butler, 34 St. Eep. whom he had supported for years at 189 12 N. Y. Supp. 201. the home of their mother, were entitled 69. Merchant v. White, 37 Misc. 376, upon his death to recover under a certi- 75 N. Y. Supp. ■ 756. ficate limited as to beneficiaries to wife, "Adopted children." — ^It was said in children, "dependents," or blood rela- Henley v. Supreme Tent, Knights of tives, as they were "dependents." Maccabees, 38 Mise. 161, 77 Supp. 246, 70. Hawkes v. Warren, 140 App. Div. that the term "adopted children" has 712, 125 N. Y. Supp. 820. a broader significance in expressive 71. Manuel v. Beck, 70 Misc. 357, 137 language as used than the mere in- N. Y. Supp. 266. elusion of those who have been taken 72. Matter of Huyek, 49 Misc. 391, in through the stated form of statutory 99 N. Y. Supp. 502. law. It was held in that case that ille- 28 ADOPTION. the adoption is not under any statute, does not deprive such parents of the right to inherit as the child's next of kin. There is no method of adoption which will result in establishing a right of inheritance, except that prescribed by statute.''^ Section 13, Laws of 1873, chapter 830, which provided that nothing therein contained shall prevent the proof of the adoption of any child heretofore made, according to any method practiced in this State, from being received in evi- dence, nor such adoption from having the effect of an adoption hereunder, refers only to those forms of adoption theretofore existing by virtue of special statutory enactments contained in the charter of charitable societies that receive destitute and homeless children ; and whose officers are permitted to execute agreements of adoption on their behalf with suitable persons willing to assume the obligations of parents. The Legislature did not have in contemplation the legalizing of private agree- ments executed without authority of law, and containing no safeguards or restrictions of any kind as to the transmission of property.''* Such statute applied only to prior adoptions which were authorized by special statute.''^ The second clause thereof provided that such statute should not have the effect of preventing an adoption, theretofore made, from having the same effect as one made thereunder', yet it did not provide that an adoption theretofore made should have the like effect as one made thereunder.''® 73. Carroll v. Collins, 6 A pp. Div. 75. Carroll v. Collins, 6 App. Dlv. 106, 40 N. Y. Supp. 54, 74 St. Eep. 106, 40 N. Y. Supp. 54, 74 St. Eep. 667. 667. 74. Matter of Thome, 155 N. Y. 140. 7G. Hill v. Nye, 17 Hun, 457. ADVERTISEMENT, FORECLOSURE BY. See Foreclosure bt Advertisement. ARBITRATION.* ARTICLE I. Introductory matters. A. Befinitions. B. Historical statement. C. Policy of courts towards arbitrations. D. Scope and effect of provisions of Civil Practice Act. 1. Civil Practice Act, § 1469. Application of this article. 2. Common 'La.w arbitrations. E. Agreement to subn\it future controversies to arbitration. ARTICLE II. The submission. A. Civil Practice Act, § 1448. Submission to arbitration. B. Civil Practice Act, § 1449. Contents of submission. C. Common Law arbitration. D. Competency of parties. E. Claim to real estate. F. Contents of submission. G. Acknowledgment, etc., of submission. H. General submission of all controversies. I. Construction of submission. J. As discontinuance of pending suits. K. Precedents for submission. 1. Short form. 2. Agreement for arbitration. 3. Agreement to arbitrate. ARTICLE III. Powers and duties of arbitrators. A. General powers of arbitrators. 1. Civil Practice Act, § 1453. Power of arbitrators. 2. Acts of majority. B. Appointment of umpire. 1. Civil Practice Act, § 1450. Appointment of additional arbitrotor or umpire. 2. The umpire. C. Oath of arbitrators. 1. Civil Practice Act, § 1452. Oath of arbitrators. 2. Failure to take oath. 3. Form of oath. * For a further discussion of the matters referred to in this chapter, see B., C. & G. Oonsoldiated Laws. [29] 30 AEBITEATION. D. Hearings. 1. Civil Practice Act, § 1451. Hearings by arbitrators. 2. Right of party to be heard. 3. Evidence. 4. Form for appointment of time and place of hearing. 5. Form for notice of hearing. ARTICLE IV. Award and its effect. A. Civil Practice Act, § 1455. Requirements as to award. B. General contents of avrard. C. Acts beyond power of arbitrators. D. Acts of arbitrators after expiration of oflBce. E. Definiteness. F. Award must be final. G. Costs and fees. 1. Civil Practice Act, § 1454. Fees and expenses of arbitrators. 2. Costs. H. Delivery of award. I. Form of award, short form. J. Form of award. K. EflFect of award. ARTICLE V. Confirmation, vacation or modification. A. Civil Practice Act, § 1456. Jlotion to confirm award. B. Civil Practice Act, § 1457. Motion to vacate award. C. Civil Practice Act, § 1458. Motion to modify or correct award. D. Civil Practice Act, § 1459. Notice of motion and stay. E. Civil Practice Act, § 1460. Costs on vacating award. F. General grounds for vacating awards. G. Burden of attack on award. H. Errors in judgment. I. Misconduct of arbitra'tors. J. Impeachment of award by arbitrators. K. Moving papers. L. Common law arbitrations. M. Form of notice of motion. N. Form of order to show cause why award should not be modified. 0. Form of order confirming award. ARTICLE VI. Judgment and appeal. A. Civil Practice Act, § 1461. Entry of judgment on award and costs. B. Civil Practice Act, § 1462. Judgment-roll. C. Civil Practice Act, § 1463. Effect of judgment and enforcement. D. Civil Practice Act, § 1464. Appeals. E. Judgment. ABBITKATION. 31 P. Lien of attorney on award. G. Appeal. H. Form of judgment. ARTICLE VII. Revocation or enforcement of submission. A. Civil Practice Act, § 1465. Death or incompetency of party. B. Arbitration Law, § 2. Validity of arbitration agreements. 0. Arbitration Law, § 3. Remedy in case of default. D. Arbitration Law, § 4. Provision in case of failure to name arbitrator or umpire. E. Arbitration Law, § 5. Stay of proceedings brought in violation of an arbitration agreement or submission. F. Arbitration Law, § 6. Applications to be heard as motions. G. Arbitration Law, § 8. Application of certain sections of code of civil procedure and the civil practice act. H. Revocation before Arbitration Law. 1. Effect of Arbitration Law. ARTICLE I. INTRODUCTORY MATTERS. A. Definitions. Arbitration is defined as " a submission by parties in con- troversy to the judgment of two or more individuals who are substituted in place of a judicatory established by law, and who are to decide the controversy. It is called a domestic tribunal, and the arbitrators, judges of the parties, choosing." The act by which parties submit their grievances to the tri- bunal is called a " submission," the persons selected as judges are termed " arbitrators," and their decision is an " award. "^ B. Historical statement. Arbitration existed at common law and was early recog- nized by the statutes of this State. Under the Eevised Statutes a complete system was introduced providing for the conduct of arbitrations and the enforcement of awards by the entry of judgment thereon, saving the necessity of an action 1. Elmendorf v. Harris, 5 Wend. 516. etc. E. K. Co., 74 Misc. 524, 133 N. T. A stipulation in an action to submit Supp. 418. Agreements to submit a the question of the amount of damages, pending controversy were, under the but not the defendant's liability, to a circumstances, held arbitrations in board of five appraisers is not an arbi- Dodge v. Waterbury, 8 Cow. 136; Mer- tration. Turner v. New York Central, ritt v. Thompson, 27 N. Y. ZRi. 32 ARBITRATION. on the award. It was also provided that appeals might be taken from the award, and the manner of vacating, modifying, •and correcting them was prescribed. This was codified in the Code of Civil Procedure with but slight changes." In 1920 the Legislature enacted the Arbitration Law as chapter 72 of the Consolidated Laws for the purpose of mak- ing arbitration compulsory in certain cases. At the same time several sections of the Code of Civil Procedure were repealed. The Civil Practice Act, when originally enacted, did not con- sider the provisions of the Arbitration Act or the repeal of the sections of the Code, but this situation was corrected by amendments made to the Civil Practice Act by chapter 199 of the Laws of 1921. The article and sections in the Civil Prac- tice Act relating to Arbitrations were renumbered by chap- ter 199 of the Laws of 1921, so that they constitute Article 84, comprising sections 1448-1469. C. Policy of courts towards arbitrations. The jealousy with which, at one time, courts regarded the withdrawal of controversies from their jurisdiction by the agreement of parties, has yielded to a more sensible view, and arbitrations are now encouraged as an easy, expeditious, and inexpensive method of settling disputes, and as tending to prevent litigation.^ A statute referring a claim against .", municipality to arbitrators is held unconstitutional, as de- priving a party of trial by jury.* But the constitutionality of the new arbitration law has been sustained.^ D. Scope and effect of provisions of Civil Practice Act. 1. Civil Practice Act, § 1431. Application of this article. This article does not affect any riglit of action in affirmance, disaffirmance, or for the modification of a submission, made either as prescribed in this article or otherwise, or upon an instrument collateral thereto, or upon an award made or purporting to be made in pursuance thereof. And, except as otherwise expressly prescribed therein, this article does not affect a submission made otherwise than as prescribed therein, or any proceedings taken pursuant to such a submission, or any instrument collateral thereto. 2. Cutter v. Cutter, 48 N. Y. Super. Probst, 151 App. Div. 147, 135 N. Y. Ct. 470. Supp. 642. 3. Fudickar v. Guardian Mut. Life 4. People v. Haws, 37 Barb. 440. Ins. Co., 62 N. Y. 393, 399; Welch v. 5. See, Infra, Art. VII.— Revocation or enforcement of submission. ARBITRATIOBT. 33 2. Common law arbitrations. Article 84 of the Civil Practice Act does not abolish common law arbitrations, and its provisions are not generally applic- able to such arbitrations.^ At the same time, it is to be noted that section 1469 contains the clause, "except as otherwise especially prescribed," and this clause is thought to indicate that Article 84 contains provisions which are applicable to common law arbitrations^ It is generally held that a common law arbitration may be made by parol f and, if an arbitration submission is in parol or if it is not acknowledged, or proved and certified, as required by section 1449, it is not a statutory arbitration and is not governed by Article 84.^ If an arbitration does not comply with the requirements of this article, and the method of procedure is informal and the award which follows is never confirmed, and no judgment is entered thereon, the submission nevertheless may be good at common law, and the award as between the parties may possess the same force and effect as a final judgment in regard to all matters within the scope of the submission.^" A report of a referee in an irregular reference may be made available at common law as an award.^^ E. Agreement to submit future controversies to arbitration. Prior to the enactment of the Arbitration Law a court of G. New York, etc., Lumber Co., 119 States Circuit Court, the plaintiff's ]sr. Y. 475, 15 Civ. Proe. 30; Matter of complaint is dismissed on the ground Dicarlo, 13 N. Y. Supp. 83. that he has failed to establish a cause 7. Hinkle v. Zimmerman, 184 N. Y. of action, and, on appeal by the plain- 114. tiff, the United States Circuit Court of 8. See,* infra. Art. II. — G. Acknowl- Appeals dismisses the action, holding edgment, etc., of submission. that the United States court had no 9. Van Beuren v. Wotherspoon, 13 jurisdiction to entertain it, the action App. Div. 421, 42 N. Y. Supp. 404; and proceedings in the Federal court Cope V. Gilbert, 4 Denio, 349 ; Valentine do not amount to a common-law arbi- T. Valentine, 2 Barb. Ch. 430. tration or preclude the plaintiff there- 10. Burhans v. Union Free School after from maintaining an action in a District, 24 App. Div. 429, 48 N. T. court having jurisdiction, but the case Supp. 702, affirmed, 165 N. Y. 661. resembles one in which an arbitrator, 11. Barber v. Lane, 60 App. Div. £7, duly chosen, has refused to act and 69 N. Y. Supp. 739. pass upon the claims of the parties. Court not having jurisdiction. — Dunlevie v. Sprangenberg, 66 Misc. 354, Where, in an action in the United 121 N. Y. Supp. S99. 34 ARBITRATION. equity would not compel the specific performance of an agree- ment to arbitrate.^^ Moreover, agreements requiring the arbitration of future controversies were held void. It was thought that there was two classes of cases ; in one class of cases the parties undertook, by an independent agree- ment, to provide for the settlement of all disputes by arbi- tration, to the exclusion of the courts ; such an agreement was no bar to an action, the agreement only entitling the party to damages. In the other class of cases the agreement which created the liability qualified the right by providing that be- fore the right of action accrues damages shall be determined, or amounts and values ascertained, and this was made a con- dition precedent; this condition was lawful and the courts gave full effect to it. It was further held that the rule that an agreement to arbitrate was not sufficient to oust a court at law, or equity, ol jurisdiction was a departure from the gen- eral principle that effect should be given to contracts when lawful in themselves according to their terms and the intent of the parties, and it would not be extended or applied to new cases not coming within the letter or spirit of the decisions already made.-^^ An agreement by which the members of an association agreed to confer judicial powers on a body of men as to all controversies which might arise was void, and the courts would not aid in enforcing the judgment of a tribunal sought to be created by private compact, except in case of submission of specific matters in controversy." Where by the sarfie agreement which created a liability and gave a right it was made a condition precedent to a right of action thereon, either in express terms or by necessary impli- cation, that certain facts should be determined or amounts and values ascertained by arbitrators in case the parties could not agree thereon, in case of such disagreement and in the absence of fraud, there was no cause of action under the agreement, either at law or in equity, until the award was made as provided.^^ 12. Sinclair v. Talmadge, 35 Barb. See also, Nat. Contracting Co. v. Hud- 602; Dunnell v. Keteltas, 16 Abb. 205, son E. W. P. Co., 170 N. Y. 439. aff'd, 26 How. 599; Hurst v. Litchfield, 14. Austin v. Searing, 16 N. Y. 112. 39 N. Y. 377. 15. Pres't, etc., D, & H. C. Co. v. Pa. 13. Delaware & Hudson Canal Co. v. Coal Co., 50 N. Y. 250. Pennsylvania Coal Co., 50 N. Y. 250. The right of plaintifi to recover the ARBITRATION. 35 An agreement, in the event of the parties to a contract for the performance of certain work and the furnishing of certain materials in the construction of the iron metal work for a building failing to agree upon the questions as to whether any work was added or omitted, under the terms of the contract, and the fair valuation of such work, if added or omitted, that such disputes should be left to the determination of a third person, whose decision should be final, was not a general arbi- tration agreement attempting to oust the courts of juris- diction but an agreement within the rule authorizing the parties to agree that the decision of a third person shall be a condition precedent to a right of action.^^ A submission of a dispute arising on a building contract, though not conforming to the mode prescribed by the con- tract, was sufficient to bind the parties by the award. The appearance by one of the parties as a witness was sufficient to show he assented to the submission." damages provided by his contract with defendants, if they cease to manufac- ture, as therein stipulated, is not such a dispute as is contemplated by the clause of the contract providing that any dispute between the parties shall be referred to and decided by arbitra- tors, and that no action shall be brought by either party except to en- force a decision of such arbitrators. Grant v. Piatt & Lambert, 110 App. Div. S67, 97 N. Y. Supp. 39; aff'd, 186 N. Y. 611. Under a provision in a lease that if the parties at the time fixed for its re- newal do not agree upon the value of the premises, then it should be deter- mined by two disinterested, competent, then owners of real estate in the im- mediate vicinity of the demised prop- erty, or real estate agents or brokers well versed in the value of such prop- erty in that vicinity, one of whom should be chosen by each of the parties to the lease, and if they are unable to agree they should choose a third per- son and a decision of the majority of the three should be final ; but if no two of them agree the average of the values determined upon by the three should be accepted, an appraisal is not the submission of a controversy to arbitra- tion within the meaning of Article 84 of the Civil Practice Act; but it is an appraisal made under the provisions of the contract for the purpose of fixing the amount that should be paid by the tenant and included in his contract. Wurster v. Armfield, 175 N. Y. 356. Where a contract for the sale of electric power provided that any ques- tion as to the iiitent and meaning of the contract should be submitted to ar- bitration as to the right of the purchaser to assign the contract, resting not only on the provisions of the contract, but on the acts of the seller as constituting a waived of rights which the purchaser might otherwise have had, was not within the provision as to arbitration. Hudson River Water Power Co. v. Glens Falls Gas & Elec- tric Light Co., 90 App. Div. 513, 85 N. Y. Supp. 577, aff'd, 178 N. Y. 611. 16. Wyckoff V. Woarms, 118 App. Div. 699, 103 N. T. SupP- 650- 17. White V. Matthews, 14 Week. Dig. 67. 36 ARBITRATION. Under an arbitration clause in a policy of insurance it was the duty of the parties to the contract to act in good faith to accomplish the appraisement in the way provided; and if either acted in bad faith, so as to defeat the real object of the clause, the other was absolved from compliance therewith, and so when one arbitration failed from default of one of the parties the other was not bound to enter into a new arbitration agreement.-^* The Arbitration Law, however, overrules the old rule with reference to agreements to submit future con- troversies to arbitration and provides a procedure for the enforcement of agreements to arbitrate. ARTICLE II. THE SUBMISSION. A. Civil Practice Act, § 1448. Submission to arbitration. Except as otherwise prescribed in this section, two or more persons may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission, which may be the subject of an action. A submission of a controversy to arbitration cannot be made, either as prescribed in this article or otherwise, in either of the following cases: 1. Where one of the parties to the controversy is an infant or a person incompetent to manage his affairs by reason of lunacy, idiocy or habitual drunkenness. 2. Where the controversy arises respecting a claim to an estate in real prop- erty, in fee or for life. But where a person capable of entering into a submission has knowingly entered into the same with a person incapable of so doing, as prescribed in subdivision first of this section, the objection on the ground of incapacity can be taken only in behalf of the person so incapacitated. The second subdivision of this section does not prevent the submission of a claim to an estate for years, or other interest for a term of years, or for one year or less, in real property; or of a controversy respecting the partition of real property between joint tenants or tenants in common; or of a controversy respecting the boundaries of lands or the admeasuren^ient of dower. B. Civil Practice Act, § 1449. Contents of submission. A submission authorized by the last section shall be in writing, duly acknowl- edged or proved, and certified, in like manner as a deed to be recorded. The submission may provide that a judgment of a, specified court of record shall be rendered upon the award made pursuant to the submission. If the supreme court is thus specified, the submission may also specify the county in which the judgment shall be entered. If it does not, the judgment may be entered in any county. 18. Uhrig V. Williamsburg City Fire Insurance Co., 101 N. Y. 363. ARBITRATION. 37 C. Common law arbitration. With certain exceptions, the parties to a controversy could make a common law arbitration of their differences by parol agreement.^^ But an executory agreement under seal could not be discharged by a parol arbitration.^" And a parol agree- ment to submit matters which could not be determined by a parol arbitration, was void.^^ But it has been held that a sub- mission of a dispute as to the line between two lots of land may be made by parol.^ D. Competency of parties. The general principle is that where there is power to con- tract with a liability to pay, there is power to arbitrate. This includes a married woman, a corporation, and a guardian on behalf of a ward.^^ An agent entering into a submission in his own name is per- sonally bound by the award.^* But the principal may ratify the act of his agent, and thus become bound by the award.^ The submission of a controversy to arbitration is not an action, and is not within the scope of the authority of an at- torney, and his authority must be shown in order to bind the client by an award.^^ But, if a submission is made by an at- torney, and the parties appear and proceed before the arbi- trators, they cannot object that the submission was un- authorized.^^ A board of supervisors may submit a claim to arbitration.^^ But a city has no authority to enter into a stipulation with a landowner to submit to arbitrators the amount of assess- ment on his lands benefited by street grading, for xmder the 19. Valentine v. Valentine, 3 Barb. 24. Smith v. Van Ostrand, 5 Hill, Ch. 430; Diedriek v. Eichley, 3 Hill. 489. 271. 25. Lowenstein v. Mcintosh, 37 Barb. 20. French v. New, Z Abb. Ct. App. 251; Smith v. Sweeney, 35 N. Y. 291. 209, 28 N. T. 147. 26. McPherson v. Cox, 86 N. Y. 472; 21. French v. New, 3 Abb. Ct. App. Stinerville & Co. v. White, 25 Misc. 314, 209, 28 N. Y. 147. 54 N. Y. Supp. 577. 22. Eyder v. Dodge, 14 Week. Dig. 84. 27. Diedriek v. Bichley, 3 Hill. 271 ; 23. Weed v. Ellis, 3 Caines, 253 ; Hays v. Hays, 23 Wend. 363. See also, Brady v. Mayor of Brooklyn, 1 Barb. Tillon v. V. S. L. Ins. Co., 8 Daly, 84. 584; Palmer y. Davis, 28 N. Y. 243. 28. People v. Supervisors, 24 Hun, See Jones v. Phoenix Bank, 8 N. Y. 413. 238. 38 ARBITRATION. charter the power of assessment lies in the city.^^ And the' assent of a corporation to arbitration may be assumed from circumstances, as, for example, the fact that all the, trustees attended before the arbitrators.^" Executors and administra- tors have the right to submit disputed claims or demands against the estate they represent.^^ Partners who sign or assent are bound; those who do not sign are not bound.^^ The fact that a party is under arrest at time of submission, is not such duress as to avoid his agreement to arbitrate.^^ E. Claim to real estate. The provision forbidding the submissions of claims in fee or for life to real estate forbids only the submission of con- troversies relating to the legal title in lands; a claim to an equitable estate in lands may be submitted.^* But a sub- mission to arbitration of a claim to a freehold estate is abso- lutely void and incapable of ratifiction.^^ A question of bound- ary may be submitted, or a claim for a term of years.^^ Dis- putes between partners relative to the partnership property or business may be submitted.^^ The question as to whether or not real estate belonging to a religious corporation shall be sold, or questions as to who are the legally elected trustees of the corporation, cannot be so submitted.^^ A cause of action to set aside a conveyance and establish a lien on the land can- not be submitted to arbitration, for it involves an estate in fee.^^ A submission of the question as to how much should be paid for the use of land for a highway has been sustained.*" F. Contents of submission. It is not important what form the submission takes. . It is sufficient if it clearly shows an intent to arbitrate and abide by the award, but it should be so drawn that the arbitrators 29. Smadbeck v. City of Mt. Vernon, 34. Olcott v. Wood, 14 N. Y. 33. 134 App. Div. 515, 109 N. Y. Supp. 70. 35. Wiles v. Peek, 36 N. Y. 42. 30. Isaacs v. Beth Hamedrash So- 36. Cox v. Jagger, 3 Cow. 638 ; Eob- ciety, 1 Hilt. 469; appeal dismissed, 19 ertson v. McNeil, 13 Wend. 578; Sloat N. Y. 584. - V. Woodward, 5 Hun, 340, aff'd, 71 N. 31. Eussell V. Lane, 1 Barb. 519; Y. 590. Wood V. Tunnicliff, 74 N. Y. 38. 37. Backer v. Fobes, .20 N. Y. 204. 32. McBride v. Hagan, 1 Wend. 326 ; 38. Wyatt v. Benson, 33 Barb. 327. Harrington v. Higham, 15 Barb. ,524; 39. Keep v. Keep, 17 Hun, 153. Harrington v. Higham, 13 Barb. 660. 40. Mitchell v. Bush, 7 Cow. 185. 33. Shepard v. Watrous, 3 Gaines, 166. ARBITRATION. 39 acquire jurisdiction.*^ It may be by mutual bonds so drawn as to show the intention of the parties.^ It is not necessary that there should be an express agreement to abide by the award ; the submission implies such an agreement.^^ Although the submission does not contain an agreement that a judgment shall be entered on the award, it may be sufficient to give the arbitrators power to hear and determine the controversy.'** If the submission is under the statute, and the parties in- tend to authorize the arbitrators to award the cost and ex- penses of the arbitration, the submission should contain such authority in express terms.*^ But, if the subject of the award is a pending action, they may determine as to the costs of that suit, and also may award as to fees and expenses of arbitrators.*® The parties naay select whomsoever they choose as arbi- trators, although if a person be selected who is objectionable for any cause, the court will relieve the party, in case he acts promptly so soon as he becomes aware of the incompetency.*^ G. Acknowledgment, etc., of submission. An agreement for submission to arbitration must be duly acknowledged or proved and certified as a deed to be recorded in order to justify an order of confirmation under section 1456 of the Civil Practice Act ; and the certificate of a notary pub- lic of another State must be properly authenticated.*^ An agreement to arbitrate not meeting the formal demands of the statute, in that it is not duly acknowledged and certified, affords no basis for action by the court.*^ It constitutes, at the most, only a common law arbitration.^" 41. Pratt V. Hackett, 6 Johns. 14; 47. Mayor, etc. v. Butler, 1 Barb. MeBride v. Hagan, 1 Wend. 32.6 ; Butler 336 ; Perry v. Moore, 1 E. D. Smith, 32. V. Mayor, etc., 7 Hill. 329; Howard v. 48. Matter of Concrete Steel & Tile Sexton, 4 N. Y. 157. Const. Co., 65 Misc. 210, 121 N. Y. 42. Isaacs v. Beth Hamedrash So- Supp. 237, 2 Civ. Pro. N. S. 6. ciety, 1 Hilt. 469; Brady v. Mayor of 49. Electric Steel Elevator Co. v. Brooklyn, 1 Barb. 584. Kam Malting Co., 112 App. Div. 686, 43. Valentine v.- Valentine, 3 Barb. 98 N. Y. Supp. 604 ; Smadbeck v. City Ch. 430; Efner v. Shaw, 3 Wend &67. of Mt. Vernon, 134 App. Div. 515, 109 44. Howard v. Sexton, 4 N. Y. 157. N. Y. Supp. 70. 45. Matter of Vanderveer, 4 Denio, 50. Van Beuren v. Wotherspoon, 13 249; People v. Newell, 13 Barb. 86; App. Div. 421, 42 N. Y. Supp. 404. rev'd, 7 N. Y. 1. And see, Lorenzo v. Deery, 26 Hun, 46. Matter of Yanderveer, 4 Denio, 447. 249. 40 AKBITEATION. H. General submission of all controversies. Parties may agree to submit all controversies and claims between them, or they may agree for the determination of certain specific difficulties. A submission to arbitration of an action pending between the parties to the submission, and of " all other actions or causes of action " and of " all other matters in controversy " is a general submission of all questions and controversies be- tween the parties. Where a submission is full and general of all matters in question between the parties, and the intent appears to have everything decided, if anything is, a decision of all matters submitted will be imperatively required to vali- date the award, and an award determining a part only i void.^^ Where the submission is of all demands, it includes all actions relating and demands which were in existence at the time of the submission.^^ The statute is not intended to authorize the submission of matters arising after the agreement.^^ A submission specify- ing particular questions and adding " divers and other mat- ters " is deemed equivalent to a general submission of all questions.^* On such a submission, parol evidence is not ad- missible to show that any matter was not intended to be sub- mitted.^^ A clause submitting " all questions between the parties connected with said partnership " includes everything necessary to a settlement of its affairs, though there is also an enumeration of special matters.^^ Where the submission is by two parties on one side and one on the other, it may include, not only the joint demands of the two, but their individual demands against the other party." The submission to arbitration by parties of all matters in dispute growing out of a particular transaction or contract, will estop them from thereafter ■ claiming that the award is not conclusive and does not embrace a decision upon some particular matters.^ If there is any uncertainty as to what 61. Jones v. Welwood et al., 71 N. Y. 54. Munro v. Alaire, 2 Caines, 3a0. 208. 55. De Long v. Stanton, 9 Johns. 38 ; 52. Selleek v. Adams, 15 Johns. 197 ; Efner v. Shaw, 2 Wend. 567. Fiedler v. Cooper, 19 Wend. 2«5 ; Owen 56. Locke v. Filey, 14 Hun, 13-9. V. Boerum, 23 Barb. 187; Byers v. Van 57. Fiedler v. Cooper, 19 Wend. 285. Deusen, 5 Wend 2&8; Wheeler v. Van See Dater v. Wellington, 1 Hill, 319. Houten, 12 Johns. 311. 58. N. T. L. & W. W. Co. v. 53. Matter of Vanderveer, 4 Denio, Schneider, 119 N. T. 475. 249. AEBITRATIONo 41 is submitted, it may be cured by reference to an instrument attached to the submission and referred to therein.^^ I. Constructon of submission. An agreement for an arbitration under the statute will be given effect in a most liberal sense so as to support the award and to accomplish a complete and final settlement of all exist- ing controversies between the parties.^* Thus, a submission to arbitration of the claim of a con- tractor for expert work in the alteration of a building, may include the right of interest on the amount found due the contractor.^^ When a real controversy is submitted to arbitration it is mutual and based upon a sufficient consideration. The fact that it afterward appears that one of the parties derived no benefit therefrom does not permit him to repudiate the agree- ment upon the general ground of lack of consideration.^^ J. As discontinuance of pendin^^ suits. The submission of a controversy to arbitrators constitutes a discontinuance of an action involving such controversy.^^ This is so, although the arbitrators have not consented to act as such,"* and even though they fail or refuse to take upon themselves the duty of the submission.*^^ The rule applies though the award is void.^^ It is in the power of the parties either to ascertain before- hand whether the persons named will accept the office of arbi- trators, or to so qualify their agreement as to make it con- ditional on their acceptance, or that proceedings in the suit 59. Winship v. Jewett, 1 Barb. Ch. Sandf. 4. 173. Mechanic's lien. — Where a contractor 60. Curtis V. Gokey, 68 N. Y. 300; furnishing material and doing work Matter of Burke, 191 N. Y. 437. upon buildings agrees to submit mat- 61. Matter of Burke, 191 N. Y. 437, ters in dispute with the owner to an afE'g 117 App. Div. 477, 103 N. Y. arbitration, such submission and arbi- Supp. 785. tration is a waiver by the contractor of 62. Green-Shrier Co. v. State Realty his right to file a mechanic's lieu for & M. Co. 199 N. Y. 65. money due under the contract. N. Y. 63. McNulty v. Solly, 95 N. Y. 244; Lumber Co. v. Schneider, 15 Civ. Proe. Larkin v. Bobbins, 2 Wend. 505; Wells 30; aff'd, 119 N. Y. 475. V. Lain, 15 Wend. 99; Grosvenor v. 64. Larkins v. Robins, 2 Wend. 505. Hunt, 11 How. Pr. 355 ; Baldwin v. 65. Buel v. Dewey, 22 How. Pr. 342. Barrett, 4 Hun, 119 ; Van Slyke v. Let- 66. Jordan v. Hyatt, 3 Barb. 275 ; tice, 6 Hill, 610; Blount v. Whitney, 3 Keep v. Keep, 17 Hun, 152. 42 ABBITKATION. should only be stayed until an award is made, or no longer than a specified time, and then cease to be of effect unless an award is made. Where there is provision for a stay in a pending action that is operative till an award is made, the action should not be discontinued, but proceedings therein should be stayed until the award is made.^'^ But an agreement to arbitrate which is not carried out, does not bar a suit on the cause intended to be submitted.®^ K. Precedents for submission. 1. Short form (134 N. Y. 88). Whereas, Patrick J. Flannery, of the City of Yonkers, County of Westchester, and State of New York, claims that Asian Sahagian is indebted to him for work, labor, and services performed and materials furnished to the amount and in the manner set forth in the annexed bill, marked "A;" and Whereas, the said Asian Sahagian disputes the validity of said claim and alleges that he has sustained damages in consequence of the negligence and unskilled manner in which the said work was per- formed. Now, therefore, we, Patrick J. Flannery and Asian Sahagian, afore- said, do hereby mutually covenant and agree to and with each other that Evert K. Baldwin, James -W. Prendergast, Frederick Durand, and John C. Campbell, Jr. (and in case they cannot agree then that a fifth man to be named by the said [insert names of arbitrators] in writing) shall arbitrate, award, adjudge, and determine of and con- cerning all manner of claims, damages, and controversies whatsoever arising out of said suit or now pending, existing or held by and be- tween us, the said parties. And we do further mutually agree to and with each other that the award to be made by the arbitrators shall in all things by us and each of us, and by our respective heirs, executors, administrators, and assigns, be well and faithfully kept and observed, provided that said award be made in writing and signed by the said arbitrators, and ready to be delivered to the said parties in difference, or such of them as shall desire the same, on or before the fourth day of January next ensuing the date hereof. And it is further mutually agreed by and between the parties afore- said that judgment in the Supreme Court of the State of New York shall be rendered upon the award to be made pursuant to this sub- mission. Witness our hands and seals this day of (Add acknowledgment.) Patrick J. Flannery, AsLAN Sahagian. 67. Jacoby v. Johnston, 1 Hun, '242. 198; aff'd, 6 N. Y. 422; Buel v. Dewey 68. Haggard v. Morgan; 4 Sandf. 22 How. 343. ARBITRATION. 4d 2. Agreement for arbitration (191 N. Y. 437). Agreement made the 3d day of April, 1905, between Luke A. Burke, doing business in the City, County and State of New York, party of the first part, and Henry Corn, of the same place, party of the second part, witnesseth: Whereas, under date of May 8, 1903, the parties hereto entered into a certain contract whereby the party of the first part agreed, under the direction and to the satisfaction of Robert Maynicke, architect, to provide all the materials and perform all the work mentioned in the specifications and shown on the drawings prepared by the said archi- tect for the mason work of the alterations to the building known as Nos. 110 and 112 Fifth avenue in the Borough of Manhattan, New York City; and Whereas, controversies have arisen, and still exist, between the par- ties hereto as to .what amount, if any, is due the party of the first part from the party of the second part on account of the work per- formed and materials furnished on said building, whether under said contract or otherwise, and also as to what amount, if any, is due to the party of the first part from the party of the second part with re- gard to the various claims made on behalf of the party of the first part against the party of the second part arising out of the said con- tract or in connection with the alterations on said building; and also as to what amount, if any, is due the party of the second part from the party of the first part with regard to the various claims made on behalf of the party of the second part against the party of the first part,' arising out of said contract or in connection with the said altera- tions; and Whereas, the parties hereto have agreed to submit all their differ- ences to Hon. D. Cady Herrick, as arbitrator; Now, therefore, the parties hereto in consideration of the premises, and of $1 by each to the other in hand paid, the receipt whereof is hereby acknowledged, do agree as follows: First: That the parties hereto do hereby, pursuant to article 84 of the Civil Practice Act, submit all and all manner of actions, cause and causes of actions, suits, controversies, claims and demands what- soever, now pending and existing by and between them, as aforesaid, to the Hon. D. Cady Herrick, as arbitrator, to decide the same with all reasonable dispatch, his decision to be final. Second: The parties hereto hereby mutually convenant arid agree to and with each other, that the award to be made by the said abri- trator shall in all things, by each of them and by the executors, ad- ministrators and assigns of each of them, be well and faithfully kept, observed and performed, and that judgment of the Supreme Court shall be entered upon the award which may be made pursuant to the above submission, said judgment to be entered in New York County; to the end that all matters in controversy in that behalf between them shaU be finally concluded. In witness whereof, the parties hereto have hereunto set their hands ^iid seals the day and year first above written. (Add acknowledgments.) Henbt Corn, [l. s.] Luke A. Burke. [l. s.] 44 ARBITRATION. 3. Agreement to arbitrate (138 App. Div. 147). This agreement made the 7th day of January, 1910, between Julius Marqusee, of the Borough of Manhattan, New York City, party of the first part, and Harry N. Gitt, of the City of Hanover, county of York, State of Pennsylvania, party of the second part, Witnesseth : Whereas, certain differences, disputes and controversies have arisen and do now exist between the parties hereto in relation to diverse sub- jects and controversies in dispute between them, and which might ■ respectively be the subject of an action; and Whereas, the parties hereto did, on the 16th day of October, 1908, enter into an arbitration agreement for a settlement of such disputes, and which arbitration agreement has not been enforced and is hereby waived ; Now, therefore, the parties hereto do hereby mutually covenant and agree to and with each other as follows : First : To submit all and all manner of actions, cause and causes of action, suits, controversies, claim and demands whatsoever now pending, existing or held by and between the said parties to Aaron J. Bach and to Frank F. Peard, who shall arbitrate, award, order, judge and determine of and concerning the same, and who, in case they are unable to agree with reference to said matters, shall select or appoint a third person as an additional arbitrator at any time they see fit, either before or after hearings had in accordance with this agreement, and such selection or appointment shall be in writing and a copy thereof shall be delivered to each of the parties hereto. Second : In case of the selection or appointment of such additional arbitrator, it shall not be necessary to rehear so much of said arbitra- tion as shall theretofore have been heard, except as to such parts thereof as such additional arbitrator may desire to have reheard by and before all of said arbitrators, and the parties hereto do hereby waive such rehearing and consent that as to so much of said arbitra- tion, said additional arbitrator may base his arbitration, award, or- der, judgment and determination upon the minutes of such prior hearings. Third : In the event of the selection or appointment of such third arbitrator, the award, order, judgment and determination of any two of said arbitrators shall be valid and binding and have full force and effect. Fourth : The award of said arbitrators, or any two of them, shall be in writing and duly signed and acknowledged by said arbitrators, or any two of them, and filed in the office of the Clerk of the Supreme Court, New York County; and it is hereby expressly agreed that judg- ment for the amount of such award, and in favor of the successful party therein, may be rendered and entered upon such award in and by the Supreme Court, New York County, in the manner provided by the Civil Practice Act of the State of New York. Fifth : Notice of motion to confirm such award and for the entry of such judgment, and all other notices that may be necessary or proper in and about said matters, shall be served upon the respective parties by leaving and sprvinsy the same at their respective offices on Water street, Borough of Manhattan, New York City. ABBITRATION. 45 Sixth : That the parties hereto do hereby agree that all the arbitra- tors, and each and all of them, are to be sworn to perform their duties herewith before a notary public of New York County. Seventh : No action, suit or proceeding at law or in equity shall be brought or maintained by either of the parties hereto against the other until after the making and filing of said award, and the hearing and determination of a motion to confirm the same, and the making and filing of said award and the hearing and determination of such motion shall be a condition precedent to the bringing and maintenance of any such actions, suits or proceedings at law or in equity. Eighth : The award is to be made within a period of three months from the date of the first hearing and unless the award is so made, the parties hereto may or shall, if they see fit, discontinue all proceed- ings under this agreement and disregard the same. Ninth : It is further agreed that any expenses incurred by reason of the arbitration agreed upon shall be borne between the parties hereto, share and share alike. All testimony to be taken in shorthand and transcribed and copy attached to decision. In witness whereof, the parties hereto have hereunto set their hands and affixed their seals the day and year first above written. (Add acknowledgments.) JcLius Maequsee, [l. s.] H. N. GiTT. [l. s.] • ARTICLE III. POWERS AND DUTIES OF ARBITRATORS. A. General powers of arbitrators. 1. Civil Practice Act, § 1453. Power of arbitrators. The arbitrators selected either as prescribed in this article or otherwise, or a majority of them, may require any person to attend before them as a witness; and they have, and each of them has, the same powers with respect to all the proceedings before them which are conferred upon a, board or a member of a board authorized by law to hear testimony. All the arbitrators selected as prescribed in this article must meet together and hear all the allegations and proofs of the parties; but an award by a majority of them is valid unless the concurrence of all is expressly required in the submission. 2. Acts of majority. An award by two of the persons sitting as arbitrators is sufficient, provided all three have notice of the meeting.^* 69. Crof oot V. Allen, 2 Wend. 494 ; An award signed by three, as to only Isaacs V. Beth Hamedrash Society, 1 two of whom there was a subscribing Hilt. 469; Battey v. Button, 13 Johns. witness, held, good. Ott v. Schroeppel, 186; Matter of Grening, 74 Hun, 63, 4 Barb. 250. 26 N. Y. Supp. 117, 56 St. Eep. 198. 46 AEBITRATION. Nor is it necessary that all should concur in the decision of every question which arises.™ But even if an award made by the two is valid it must ap- pear to have been the result of the joint deliberation of all.'^^ If one of the parties to an arbitration refuses to appoint an arbitrator the arbitrator appointed by the other party cannot actJ^ The statute permitting an award by the majority has been held to apply to statutory arbitrations, not to common law arbitrations.''^ B. Appointment of umpire. 1. Civil Practice Act, § 1450. Appointment of additional arbitrator or umpire. Where a submission is made as prescribed in this article, an additional arbi- trator or an umpire cannot be selected or appointed unless the submission expressly so provides. Where a submission, made either as prescribed in this article or otherwise, provides that two or niore arbitrators therein designated may select or appoint a person as an additional arbitrator, or as an umpire, the selection or appointment must be in writing. An additional arbitrator or umpire must sit with the. original arbitrators upon the hearing. If testimony has been taken before his selection or appointment, the matter must be reheard, unless a rehearing is waived in the submission or by the subsequent written consent of the parties or their attorneys. 2. The umpire. If the submission is under the CivU Practice Act, the appointment of an umpire must be in writing.'* But in a common-law arbitration, an umpire may be appointed by parol.'^ The umpire may be appointed by the arbitrators without waiting until a disagreement has arisen between them.™ The umpire, when called upon to act, is in general 70. Campbell v. Western, 3 Paige, Cortlandt v. Underbill, 17 Johns. 405; 134. McKiustry y. Solomons, 3 Johns. 56, 13 71. Matter of Grening, 74 Hun^ 62, Johns. 26. 26 N. Y. Supp. 117, 56 St. Eep. 196. Umpire appointed by court.— Under 72. HoUiday v. Marshall, 7 Johns, an arbitration agreement which pro- 211. vided that in case two arbitrators dif- 73. Lorenzo v. Deery, 26 Hun, 447. fered they should choose an umpire 74. Elmendorf v. Harris, 23 Wend. "whose decision under oath shall fix 628. and determine the same" (namely, the 75. Elmendorf v. Harris, 5 Wend. value of certain lots for the purpose 516. ' therein designated), it was held that, 76. Butler v. Mayor, 1 Hill, 489 ; when the arbitrators failed to agree the Mayor v. Butler, 1 Barb. 3'25; Van only duty left for them was to ap- ARBITRATION. 4 ( vested with the same power as the arbitrators enjoy, and is bound by the same rules and required to perform the same duties." In case an umpire acts with the arbitrators to hear and determine the matters in controversy, the proceedings are henceforth to be conducted the same in all respects as if he had been appointed in the first instance with" the other arbi- trators.'^* If testimony has been taken before the appointment of the umpire, there must be a rehearing, unless the right to a rehearing is waived. If such rehearing is not had, the award is invalid.™ The waiver of the right to adduce evidence before the arbitrators is not a waiver of the right to do so before the umpire.*" The requirements of section 1450 that the additional arbi- trator must sit with the original arbitrators, and that if testi- mony has been taken before his selection, the matter must be reheard unless such hearing is waived, applies only to arbi- trators under the statute and not to common-law arbitrators. Thus where the agreement was that a matter should be sub- mitted to arbitrators " together with a third person to be ap- pointed by them if necessary," and where the third person was selected by the arbitrators under the assumption that he should not act unless they should (disagree, and the additional arbitrator in no way took part in, the arbitration, it was held that he was only an umpire and that the arbitrators were not deprived of authority to act without him.*^ If the agreement point an umpire in the performance of rent to be fixed by the arbitrators, from whose duties under the agreement they appointing an umpire as provided in the were not required to be present or act; lease, i it was held that it is not the and where one of the parties insisted province of a court of equity to direct that an umpire should be chosen and arbitrators , how they shall decide a the arbitration proceed and the other case pending before them. Livingston party would not consent thereto in the v. Sage, 95 N. Y. 389. absence of his arbitrator, nor appoint 77. Matter of Grening, 74 Hun, 63, a new arbitrator, it was held that a 36 N. Y. Supp. 117, 56 St. Eep. 196; suitable person should be appointed by Matter of Martin, 1 How. Pr. N. S. 38. the court to act in the matter. Van 78. Lyon v. Blossom, 4 Duer, 318. Beuren v. Wotherspoon, 13 App. Div. 79. Day v. Hammond, 57 N. Y. 479 ; 431 43 N. Y. Supp. 404. Matter of Grening, 74 Hun, 63, 36 N. Restraining appointment of urn- Y. Supp. 117, 56 St. Eep. 196. pire.— On dismissal of an action to en- 80. Brown v. Lyddy, 11 Hun, 451 ; join two arbitrators chosen by a land- Matter of Martin, 1 How. Pr. N. S. 38. lord and tenant, pursuant to a cove- 81. Enright v. Montauk Fire Ins. Co., nant in a lease to renew the same at a , 15 N. Y. Supp. 894, 40 St. Rep; 643. 48 AKBITRATION. authorizes the selection of an umpire upon a contingency, but the method by which he is to be chosen is not prescribed, the statute should be foUowedwhich requires the appointment to be in writing, and the umpire must sit with the original arbitra- tors upon the hearing, and if testimony had been taken before his appointment the matter must be reheard unless the rehear- ing is waived. As to the time when the umpire must be ap- pointed, thereis no statutory provision and no general rule can be laid down, for the agreement usually controls the question.^^ C. Oath of arbitrators. 1. Civil Practice Act, § 1452. Oath of arbitrators. Before hearing any testimony, arbitrators selected either as prescribed in this article or otherwise must be sworn, by an officer authorized by law to administer an oath, faithfully and fairly to hear and examine the matters in controversy and to make a just award according to the best of their understanding, unless the oath is waived by the written consent of the parties to the submission or their attorneys. 2. Failure to take oath. The provisions of section 1452 apply to common law, as well as statutory, arbitrations. The words " or otherwise " re- quire the extension to coromon law arbitrations.*^ The re- quirement of the proper oaths is mandatory.*^ If the taking of the oaths of the arbitrators is not waived in the manner 82. Matter of Grening, 74 Hun, 63, 672, 186 N. Y. Supp. 109. 26 N. Y. Supp. 117, 56 St. Rep. 196. It was formerly held that the omis- 83. Hinkle v. Zimmerman, 184 N. Y. sion to take the oath did not invalidate 114. Contra, Britton v. Hooper, 25 the proceedings, whether under the Misc. 388, 55 N. Y. Supp. 493. statute or at common law. Browning Earlier cases hold that a party who v. Wheeler, 24 Wend. 258; Howard v. proceeds to trial before the arbitrators Sexton, 4 N. Y. 157 ■ Winship v. without a request to have the arbitra- Jewett, 1 Barb. Ch. 173. tors sworn is deemed to waive the re- Waiver.— Where an arbitrator omit- quirement. Kelsey v. Darrow, 22 Hun, ted to take his oath at the opening of 125; Cutler v. Cutler, 48 N. Y. Super. the hearing, but did so later, and one ^'''O- party discussed in his presence .the 84. Matter of Grening, 74 Hun, 65, amount of his compensation, it was held 26 N. Y. Supp. 117, 56 St. Rep. 198. that the right to object was lost by a New York Produce Exchange.— The failure to do so till the matter was oath taken by the members of arbitra- practically submitted for determina- tion committee the New York Produce tion. Atterbury v. Trustees of Colum- Exchange, may be sufficient. Krauter bla College, 66 Misc. 273, 123 N. Y. V. Pacific Trading Corp., 194 App. Div. Supp. 25. ABBITRATION. 49 prescribed in the statute, the award cannot be sustained as against a party.*^ The objection that the arbitrators have failed to take the proper oath, though it would have been fatal to the proceedings if made at any time before the judgment, cannot be urged in an action or proceeding to vacate or re- move the judgment.^^ The failure to take their oaths how- ever does not indicate partiality or incompetence; and the court may direct a rehearing before the same arbitrators.^^ An agreement in writing between the parties waiving the oath of arbitrators and of the umpire may be construed with the submission, so as to supply the omission from the sub- mission of any provision for the appointment of an umpire.** The failure of the umpire to take the oath does not render the award void, for it may be waived. In case there is no waiver, the Supreme Court may set aside the award on application, and an action on the award setting up the irregularity is in the nature of an application to the equitable power of the court and is sufficient to present the question,** 3. Porm of oath. (Title.) STATE OF NEW YORK, 1 City and County op New Yoek, \ **••' I, D. Cady Herrick, the arbitrator named in the agreement of arbitration between the above-named parties, dated April 3, 1905, do hereby swear that I will faithfully and fairly hear and examine the matters in controversy submitted to me, as arbitrator, by and be- tween Luke A. Burke, on the one part, and Henry Corn, of the other part, and a just award thereon make according to the best of my un- derstandi;ig. [(Signature and Jurat.) D. Hearings. 1. Civil Practice Act, § 1451. Hearings by arbitrators. Subject to the terms of the submission, if any are specified therein, the arbi- trators selected as prescribed in this article must appoint a time and place for the hearing of the matters submitted to them, and must cause notice thereof to be given to each of the parties. They, or a majority of them, may adjourn 85. Day v. Hammond, 57 N. Y. 479 Flannery v. Sahagian, 134 N. Y. 89 Wurster v. Armfield, 175 N. Y. 256 194 App. Div. 672, 186 N. Y. Supp. 109. 87. Matter of St. John's Guild, 168 App. Div. 889, 152 K. Y. Supp. 685. Matter of St. John's Guild, 168 App. 88. Matter of Martin, 1 How. Pr. N. Div. 889, 153 N. Y. Supp. 685. S. 28. 86. Krauter v. Pacific Trading Corp., 89. Day v. Hammond, 57 N. Y. 479. 4 50 ARBITRATION. the hearing from time to time upon the application of either party for good cause shown or upon their own motion, but not beyond the day fixed in the submission for rendering their award, unless the time so fixed is extended by the written consent of the parties to the submission or their attorneys. 2. Bight of party to be heard. The arbitrators may fix the time and place of hearing, but the parties must have an opportunity to be heard, unless the stipulation provides to the contrary.^" An award made without notice to a party of the hearing, is void.^^ The party seeking to impeach the award must show the lack of notice.^^ It is a good defense to an action upon an award to show that the arbitrators proceeded without notice to the defendant, and that they made the award in suit before the defendant closed his proofs.^^ If the arbitrators disagree and an umpire is chosen, the parties are entitled to notice and opportunity to be heard be- fore the umpire and his associates, and an award made with- out notice is invalid.^* Where a submission provides that the party found indebted shall pay by a certain day, a limitation is implied that the award be made by that day, and subsequent proceedings are void unless the time is extended in writing.^^ But the time for making an award under a sealed submission at common law may be extended by parol, and if the parties proceed without objection, after time has expired, they will be deemed to have waived the stipulation as to time.^^ The notice of hearing and the production of evidence may be waived by the parties, and this waiver may be gathered from the circumstances of the case. It is no objection to the award of an arbitrator that he 90. Morewood v. Jewett, 2 Eobt. 496. the arbitrator by one party need not be 91. Moran v. Bogart, 16 Abb. N. S. given to the other when no dispute as 303; Jordan v. Hyatt, 3 Barb. 275; to items or values is to be determined, Moran v. Bogart, 3 Hun, 603; Knowl- but merely the eonstructlon of the ton v. Mickles, S9 Barb. 465 ; Peters v. specifications. Uustaveson v. McGay, Newkirk, 6 Cow. 103. 13 Daly, 423. Building contract. — Under a pro- , 92. Mayor v. Butler, 1 Barb. 325. vision in a building contract, that 93. (Jarvey v. Carey, 35 How. Pr. 28. should any dispute arise respecting the 94. Linde v. Republic Fire Ins. Co., true construction or meaning of the 50 N. T. Super. Ct. 362. drawings or specifications, the same 95. People v. Townsend, 5 How. Pr. shall be decided by an arbitrator 315. named, and his decision shall be final 96. Wood v. Tunnicliff 74 N. T. 38. and conclusive, notice of submission to AEBITEATION". 51 did not hear the parties or take their evidence when it appears that they waived a hearing, and that it was intended the arbi- trator should decide the matter submitted upon his personal knowledge and inspection.^ 3. Evidence. It is said that, unless the arbitrators are restricted by the submission, they may disregard the strict rules of law and evidence and decide the controversy according to their sense of equity.*^ But the arbitrators are not justified in deciding that the submission limits them to passing upon the state- ments of the parties only, although the submission contains a clause, that " the arbitration shall be conducted and decided upon the principle of fair and honorable dealing between man and man. "^® 4. Form for appointment of time and place of hearing. In the Matter of the Arbitration Between LUKE A. BURKE and HENEY CORN, Under an Agree- ment TO Aebhtrate. To Luke A. Burke and Henry Corn: You are hereby notified that the undersigned arbitrator appointed in and by an agreement of arbitration between you, dated the day of > hereby appoints the day of , at ten o'clock in the forenoon, as the time, and the office of the said arbitrator at No. street in the Borough of Manhattan, City of New York, as the place for the hearing of the matters submitted to him by said agreement of arbitration, and that he will attend at such time and place for the purpose of such hearing. Yours, etc., Dated, D. Cadt Herrick, Arbitrator. 97. Wilberly v. Matthews, 11 Week, way, if that was the trade custom. Dig. 471; aff'd, 91 N. Y. 648. Welch v. Probst, 151 App. Div. 147, 135 Trade custom. — The decision rend- N. Y. Supp. 642. ered on an arbitration may be binding 98. Fudickar v. Guardian Mutual L. although the arbitrators, experienced Ins. Co., 63 N. Y. 392 ; Matter of men of business, did not summon the Wheat Export Co., 195 App. Div. 723, parties or give notice but made an in- 173 N. Y. Supp. €79. spection and examination in a summary 99. Halstead v. Seaman, 82 N. Y. 37. 52 ARBITRATION. 5. Form for notice of hearing. (Same title.) Sir: Take notice that the above-entitled matter will be brought to a hearing before Hon. D. Cady Herriek, the arbitrator appointed there- in, at the office of said arbitrator at No. street in the Borough of Manhattan, City of New York on the day of , at ten o'clock in the forenoon pursuant to an order made by him, fixing such time and place for said hearing. To Heney Corn. Luke A. Bueke. ARTICLE rV. AWARD AND ITS EFFECT. A. Civil Practice Act, § 1455. Beqnirements as to award. To entitle the award to be enforced, as prescribed in this article, it must be in writing; and, within the time limited in the submission, if any, subscribed by the arbitrators making it; acknowledged or proved, and certified, in like manner as a deed to be recorded; and either filed in the office of the clerk of the court in which, by the submission, judgment is authorized to be entered upon the award, or delivered to one of the parties or his attorney.l B. General contents of award. An award is in the nature of a judicial act, and is void if it is made on Sunday/ or if a hearing is held on Sunday against the protest of one of the parties.^ But an award is not invalid because it was discussed and practically agreed upon on Sunday, where it was not made, published, nor delivered until the following day.* It is not necessary that an award should show on its face that all met and heard the matters in controversy, but that may be shown by parol.^ Nor need it show on its face that the parties had notice of the hearing.^ The fact that the sub- mission is under seal does not make it necessary that the award should be under seal. It is only necessary when the submission requires it.'' 1. Common law arbitration. — The re- 3. Matter of Picker, 130 App. Div. quirements of section 1455 do not ap- 88, 114 N. Y. Supp. 289. ply to common law arbitration. New 4. Ehrich v. Pike, 53 Misc. 338, 104 York Lumber Go. v. Schneider, 15 Civ. N. Y. Supp. 818. Proc. 30, 1 N. Y. Supp. 442, aff'd, 119 5. Ackley v. Finch, 7 Cow. 290; N. Y. 475. Schulz v. Halsey, 3 Sandf. 405. 2. Story v. Elliott, 8 Cow. 27. 6. Butler v. Mayor, 1 Barb. 325. 7. Owen v. Boerum, 23 Barb. 187. ABBITKATIOIT. 53 C Acts beyond powers of arbitrators. The power of arbitrators is limited strictly to the matters submitted to them for deermination, and an award on' a mat- ter not referred to them is void.^ The award should embrace nothing but the matters submitted; if otherwise, it is void.^ But in case the portion so in excess of the submission can be separated from the rest, it may be treated as surplusage, and the award may stand as to matters submitted.^" Parties to an arbitration have no power to confer jurisdic- tion upon arbitrators over subject-matter which they did not have under the written submission. Therefore a party by failing to object does not waive his right to require the arbi- trators to keep within the limitations of the written sub- mission.^^ They cannot decide upon their own jurisdiction, nor take upon themselves authority by deciding that they have it, but must, in fact, have it under the agreement of the parties whose differences are submitted to them before their award can have any validity, and the fact of jurisdiction, when their decision is challenged, is always open to inquiry.^- 8. CuUen v. Shipway, 78 App. Div. 130, 79 N. Y. Supp. 627, aff'd, 177 N. Y. 571; Fullman v. Ellis Plumbing & Eng. Co., Inc., 103 Misc. 63, 168 N. Y. Supp. 34; Briggs v. Smith, 30 Barb. 409 ; Butler v. Mayor, 7 Hill, 339 ; s. c, 1 Barb. 335 ; Hiscock v. Harris, 74 N. Y. 109. Value of services. — ^Arbitrators em- powered to decide whether there was an agreement between parties by which the claimant was to receive a percent- age of the profits of a contract in which they were jointly interested, have no authority to try and determine the question of the reasonable value of the services rendered by the claimant, as such issue is not within the terms of the submission. Matter of Conway, 179 App. Div. 108, 166 K. Y. Supp. 183. Interest. — On an arbitration be- tween a contractor and the Public Ser- vice Commission as to the right of the contractor to recover for extra work the arbitrators may allow interest on the cost of the extra work from the date when the whole work was finally com- pleted and accepted, although the ques- tion of interest was not mentioned in the agreement to arbitrate. People ex rel. Cranford Co. v. Willcox, 153 App. Div. 759, 138 N. Y. Supp. 1055, modi- fied, 307 N. Y. 743. 9. Schuyler v. Vanderveer, 2 Caines, 235 ; Jones v. Wellwood, 71 N. Y. 208 ; Pratt V. Hackett, 6 Johns. 14; Butler v. Mayor, 7 Hill, 339. 10. Stinesville & Blomingston Stone Co. V. White, 32 Misc. 135, 65 N. Y. Supp. 609; Locke v. Filley, 14 Hun, 139; Martin v. Williams, 13 Johns. 364; Cox V. Jagger, 2 Cow. 638; Jack- son V. Ambler, 14 Johns. 96; Doke v. James, 4 N. Y. 567; Keep v. Keep, 17 Hun, 153; Harrison v. Highann, 15 Barb. 524; Bacon v. Wilbur, 1 Cow. 117. 11. Matter of Conway, 179 App. Div. 108, 166 K. Y. Supp. 183. 12. Dodds V. Hakes, 114 N. Y. 260. 54 AEBITRATION. The construction by arbitrators of the submission to them is not conclusive; it is for the court to determine whether they have exceeded their powers or refused to exercise them. The general rule that their decisions are not reviewable on the mere ground that they are erroneous applies only to their decisions on matters submitted to them.^^ If special matters are submitted, the award is not void because it directs a gen- eral release, since it will inure only to the matter submitted." An award requiring a party to do an act which it does not appear the party can control, is void to that extent.^^ If an arbitrator exceeds his authority, it is immaterial whether it is done consciously or by mistake.^^ D. Acts of arbitrators after expiration of office. Upon the making and delivery of an award the arbitrators become functus officio, and have no power to perfect it by executing a supplemental award." If arbitrators make a void award, their appointment becomes null, because, having ex- pressed an opinion, they are no longer impartial.^^ As soon as arbitrators under the Code have delivered their award, they have no power to alter the same, although the first award was not acknowledged and proved as required by sec- tion 1455. The failure to follow the requirements as to the acknowledgment and proof of the award does not take frona it the character of an award if it were executed and delivered by arbitrators as an award, and the effect of such defective award is to prohibit them from making another award.^^ But where a paper signed by arbitrators is in the manner and form of an opinion merely, and is merely the basis of the judg- ment to be entered, it is not deemed to be a formal award, and its delivery to one of the parties will not deprive the arbi- trator of power to make an award in due form.^" If arbi- trators decline to act, they are no longer arbitrators, and an 13. Halstead v. Seaman, 83 N. Y. 27. 16. Borrowe v. Milbank, 6 Duer, 680. 14. Munro v. Alaire, 3 Caines, 3S0. 17. Doke v. James, 4 N. Y. 567; 15. Brazil v. Isham, 1 E. T>. Smith, Herbst v. Hagenaers, 137 N. Y. 290. 437; afE'd, 12 N. Y. 9; Martin v. Wil- 18. Mayor v. Butler, 1 Barb. 325; liams, 13 Johns. 264. Fallon v. Kelehar, 16 Hun, 266. Release.— An award requiring a re- 19. Flannery v. Sahagian, 134 N. Y. lease by a married woman, who was not 88. strictly a party to the arbitration, is 20. Matter of Beach v. Stearne, 67 good if the release is tendered. Smith Hun, 341, 22 N. "Y. Supp. 330 51 St. V. Sweeney, 35 N. Y. 291. Eep. 830; aff'd, 143 N. Y. 684.' ARBITRATION. 55 award made by them is void. Parol evidence is admissible to show that before making their award they resigned and their resignations were accepted.^^ The resignation of an arbitrator several days after the award was signed and delivered does not affect the validity of the award, such a resignation being ineffectual.^^ E. Definiteness. An award must be certain and definite, so as to show what each party is required to do ; if it is sufficiently certain to be obligatory as a contract it is valid, and if the several parts are consistent, and their meaning plain, the award will be up- held.^^ An award should be so definite and certain as to pre- clude any future litigation by either party involving the same matters.^* Where an award made on submission of a controversy to arbitrators under the Civil Practice Act does not appear upon its face to be definite and final, and does not contain the data or means of working out a definite and final determination of the whole controversy submitted, it must be set aside.^^ An . award is sufficiently certain though it requires a calculation, if the basis for the calculation is given.^^ Thus, an award is sufficient where it requires the defendant to pay a certain sum, and each party to pay his own witness fees.^^ On a submission of partnership matters, an award requir- ing one partner to pay the partnership debts is sufficiently cer- tain.^^ And where a pending action is referred to arbitrators, an award for a sum and costs to which he has been subjected is sufficiently certain.^^ So, too, an award on a boundary ques- tion is sufficient it it shows enough to enable .each party to decide if his possession corresponds with the line.^° An other- wise indefinite award may be cured by the recital.^^ And an 21. Kelyea V. Eamsey, 2 Wend. 602. 573, 56 N. Y. Supp. 484; afE'd, 167 N. 22. Eisenberg v. Stuyvesant Ins. Co., Y. 540. 87 N. Y. Supp. 463. 26. Ludlow v. Grozart, 3 Johns. Cas. 23. Hisooek v. Harris, 74 N. Y. 109 ; 534. Schuyler v. Vanderveer, 2 Caines, 235; 27. Weed v. Ellis, 3 Caines, 252. Perkins v. Giles, 50 N. Y. 228 ; Pierson 28. Case v. Ferris, 2 Hill, 75. V. Van Marter, 17 Week. Dig. 183. 29. Boughton v. Seamans, 9 Hun, 24. Hoffman v. Greenberg Co., Inc., 392. 109 Misc. 170, 178 N. Y. Supp. 398. 30. Bacon v. Wilbert, 1 Cow. 117. 25. Herbst v. Hagenaers, 137 N. Y. 31. Wood v. A. & B. R. R. Co., 8 N. 890; Hicks v. Mogoun, 38 App. Div. Y. 160; Butler v. Mayor, 7 Hill, 329; Mayor V. Butler, 1 Barb. 325.. 56 ARBITRATION. award incomplete on its face may be supplemented by parol evidence, for the rule requiring an award to be certain only requires that the meaning of the parties can be ascertained when all the evidence is before the court. When a portion of an award is void for uncertainty, it does not vitiate the residue, if, by striking out the defective portion, a substantial, definite, and unobjectionable award remains.^^ But an award that a contractor is entitled to his full bill, after deducting the bills paid him by persons named, is void for uncertainty.^^ F. Award must be final. The arbitrators are presumed to have acted upon all matters which were contained in the submission.^* Where all questions were submitted to the arbitrators and they state that they have passed upon all the proofs and allegations as submitted, there is a conclusive presumption that all questions were passed upon.^ But, in case the award does not embrace all the matters within the submission brought before the arbitrators, it is void.^^ If a counterclaim is a part of the submission and the award is silent as to it, the award is defective, and a judgment entered thereon will be reversed.^^ An award that all causes of action were merged in and dis- charged by a contract, and ordering judgment and dismissing the complaint, but concluding that it is not intended to deter- mine the rights of either of said parties under the contract, is not final and definite and should be set aside.^^ The reservation, by arbitrators, of a power over the thing submitted shows the award not to be final, and with this fundamental defect in an award it is void, and parties have a right to insist upon a legal objection.^^ But this cannot be shown dehors the record.*" But it has been held that an award by arbitrators who are empowered to determine the dis- 32. Becker v. Bowen, 61 N. T. 317. Hoffman v. Greenberg Co., Inc., lOQi 33. Fallon v. Kelehar, 16 Hun, 2«6 ; Misc. 170, 178 N. Y. Supp. 398 ; Wait V. Barry, 12 Wend. 377. Wright v. Wright, 5 Cow. 197; Moore 34. Emery v. Hitchcock, 12 Wend. v. Cockroft, 4 Duer, 133. 156. 37. Hoffman v. Greenberg Co., Inc., 35. N. Y. Lumber Co. v. Schneider, 109 Misc. 170, 178 N. Y. Supp. 398. 15 Civ. Proc. 30, 1 Supp. 442; aff'd, 38. Jones v. Wellwood, 71 N. Y. 208. 119 N. Y. 475. 39. Hiscock v. Harris, 74 N. Y. 109. 36. Merritt v. Thompson, 27 N. Y. 40. Todd v. Barlow, 2 Johns. Ch. 551. 225; Jones v. Wellwood, 71 N. Y. 208; ARBITRATION. 57 position of partnership property in payment of partnership debts is not void because it does not dispose of all the assets, unless the submission expressly provides that it must do so. It was thought valid as to all assets of which it disposes, and the others remain, as before, the joint property of the partners.*^ An award which leaves nothing to be done, except some min- isterial act, as selecting from a designated stock, is final.^^ It is not an objection that a particular matter contained in the submission was not laid before the arbitrators, for the parties are bound to claim all they desire before the arbitrators.^ Cr. Costs and fees. 1. Civil Practice Act, § 1454. Fees and expenses of arbitrators. Unless it is otherwise expressly provided in the submission, the award may require the payment, by either party, of the arbitrators' fees, not exceeding the fees allowed to a like number of referees in the supreme court; and also their expenses. 2. Costs. It is held that a necessary incident of an arbitration is the awarding of costs.** Where it appeared that, when the arbitrators had made their award, the parties were notified, but delivery was with- held until the payment of the fees and expenses, and no time for the delivery of the award was fixed by the submission, and the case showed that the arbitrators were requested to make frequent inspections of the work in progress and to give direc- tions about it, it was held, that the authority to award against one or both of the parties the costs of the arbitration was inci- dent to the general submission, and the arbitrators had a right to hold the award as security for the payment of their charges in the absence of a condition in the agreement of submission to the contrary.*^ If the subject of the controversy is an action then pending in court, the arbitration may award as to the costs of the action without express authority, and also as to fees and expenses of arbitrators.*^ 41. Backus v. Fobes, 20 N. T. 204. Trustees of Amsterdam v. Vanderveer, 42. Owen v. Boerum, 23 Barb. 187. 4 Denio, 249; People v. Newell, 13 43. Owen v. Boerum, 23 Barb. 188; Barb. 86; Akeley v. Akeley, 17 How. Ott v., Sehroeppel, 5 N. Y. 486. 21. 44. Strang v. Ferguson, 14 Johns. 45. N. Y. L. & W. W. Co. v. Schnei- 161; Nicholas v. Bens. Co. Mutual Ins. .der et al., 119 N. Y. 475. Co.. 22 Wend. 125; Cox v. Jagger, 2 46. Matter of Vanderveer, 4 Denio, Cow. 638. And to the contrary see 251. 58 ARBITRATION. The fact that the action has been discontinued or abated by the submission to arbitration, so that no costs can thereafter be recovered therein, does not prevent the arbitrators from allowing the amount thereof to the plaintiff.^'' An award in a matter submitted to arbitration while a suit was pending on an appeal from a judgment of a justice of the peace, to the effect that plaintiff recover $25 and the costs, if any recovered before such justice, gives only such costs as are then owing and unpaid.*^ H. Delivery of award. In legal contemplation an award takes effect when ready for delivery and the parties have been notified to that effect.^' An award ready to be delivered on payment of fees sufficiently complies with a provision in the submission that the award must be delivered by a certain day.^'* The delivery may be waived.^^ Where the arbitrators* bond requires the award to be executed ready for delivery to the parties, it requires the award to be executed in duplicate, so that each party may have one. Either party may waive this, and if he consents to take a copy, leaving the original with the opposite party, the award is valid though but one is exeeuted.^^ I. Form of award, short form (134 N. Y. 88) To all to whom these presents shall come or may concern: We, Evert K. Baldwin, James W. Prendergast, Frederick Durand, and John C. Campbell, Jr., to whom was submitted as arbitrators the matters in controversy existing between Asian Sahagian and Patrick J. Plannery, as by the contents of the statements executed by the said parties respectively and dated the day of more fully appears : Now, therefore, know ye, that we, the arbitrators mentioned in the said submission, having heard the proofs and allegations of the respec- tive parties and examined the matters in controversy by them sub- mitted therein, do therefore make this award in writing, that is to say, the said Patrick J. Plannery is entitled to recover of the said Asian Sahagian the final payment due him on his contract, and as cer- tified to by John Rayner, the architect, and that such payment amounts to one thousand three hundred and eleven dollars and forty- one cents ($1,311.41), and interest thereon for seven months, amount- 47. Boughton y. Seamans, 9 Hun, 50. Ott v. Schroppel, 3 Barb. 56. 392. 51. Perkins v. "Wing, 10 Johns. 143; 48. Willey v. Shaver, 4 Hun, 797. Burnap v. Losey, 1 Lans. Ill ; Buck v. 49. N. Y. L. & W. W. Co. v. Schnei-. Wadsworth, 1 Hill. 321. der, 119 N. Y. 475. 52. Gidley v. Gidley, 65 N. Y. 169. AEBITKATION. 59 ing to thirty-eight dollars and sixty-four cents ($38.64), making a total of one thousand three hundred and fifty dollars and four cents ($1,350.04). In witness whereof we have hereunto subscribed these presents this day of (Signatures and acknowledgment.) J. Form of award (191 N. Y. 437). In the Matter of the Akbitbation Be- tween LUKE A. BURKE and HENRY CORN. The above-named parties, Luke A. Burke and Henry Corn, having entered into an agreement for arbitration on the 3d day of April, 1905, wherein it was agreed as follows : (Recite submission or its con- tents. ) The arbitrator therein agreed upon, D. Cady Herrick, does report as follows: That before entering upon a consideration of the ease, he took and filed the oath of office ^ arbitratpr, which is attached to this report; that he has been attended by the parties to said arbitration, and by George Hahn, Esq., attorney for Henry Corn, and by Messrs. Eidlitz & Hulse, attorneys for Luke A. Burke; that he has heard and read the testimony of the witnesses and the documentary evidence provided by both parties to said arbitration, together with the arguments of counsel thereon, and considered their briefs, and after due delibera- tion upon the evidence produced and the arguments and briefs of counsel, does make the following determination and decision, and render the following award: That there is due to Luke A. Burke froni Henry Corn on account of the matters and things set forth in the said agreement of arbitra- tion, after making deductions and allowances in favor of said Henry Corn from the amount claimed by said Luke A. Burke, the sum of forty-five thousand three hundred eighty-seven dollars and eighteen cents ($45,387.18), with interest thereon from June 1, 1904, being the sum of five thousand nine hundred dollars and thirty-three cents ($5,900.33), amounting in the aggregate to the sum of fifty-one thou- sand two hundred eighty-seven dollars and fifty-one cents ($51,287.51). And the said arbitrator does further determine, decide and award, that the said Henry Corn pay the arbitrator's and stenographer's fees of this arbitration. And the said agreement of arbitration having provided that a judg- ment of the Supreme Court should be entered upon the award which should be made pursuant to the submission of arbitration, said judg- ment to be entered in New York county, it is further awarded and decided that judgment of the Supreme Court be entered in the county of New York, in favor of Luke A. Burke and against Henry Corn for 60 ARBITRATION. the sum of forty-five thousand three hundred eighty-seven dollars and eighteen cents ($45,387.18), with interest thereon from June 1, 1904, being the sum of five thousand nine hundred dollars and thirty-three cents ($5,900.33), amounting in the aggregate to the sum of fifty-one thousand two hundred eighty-seven dollars and fifty-one cents ($51,- 287.51), together with the arbitrator's and stenographer's fees of the arbitration to be taxed by the clerk. All of which is respectfully submitted this 1st day of August, 1906. D. Cadt Herrick, (Add acknowledgment.) ' Arbitrator. K. Effect of award. A valid award acts as a judgment and settles and deter- mines all matters within the scope of the submission.^^ It is conclusive until it is set aside,^* and must be submitted to, however unsatisfactory and disappointing it may be to the parties to the arbitration agreement.^^ The conclusiveness of an award is based upon the principle that the parties have chosen judges of their own and agreed to abide by their decision, and they are bound by their agree- ment and compelled to perform the award.^^ It is a bar to a suit for the original cause of action.^^ And this is so, though the award has not been performed.^^ If the submission is general of all demands which either party has against the other, the award is a bar to any demand existing at the time of the submission.^^ Although the terms of a sub- mission may be sufficiently broad to render a particular claim the proper subject of trial, yet if the award does not on its 53. Lowenstein v. Mcintosh, 37 Barb. 55. Ehlich v. Pike, 53 Misc. 3a8, 104 251. N. Y. Supp. 818. When the arbitration is a common- 56. Matter of Wilkins, 169 N. Y. law arbitration and the method adop- 494. ted is informal, and the award is never 57. Shephard v. Watson, 3 Caines, confirmed, and no judgment is entered 166; Wheeler v. Van Houten, 12 Johns, thereon, it may yet be good at common 311; Fidler v. Cooper, 19 Wend. 285; law; and, if so, an award between the Wells v. Lain, 15 Wend. 99; Diedrick parties has the same force and effect v. Eichley, 2 Hill, 272; Wilberly v. as a final judgment in regard to all Matthews, 91 N. Y. 698; Lowenstein v. matters within the scope of the submis- Mcintosh, 37 Barb. 251; Coleman v. sion. Burhans v. Union Free School Wade, 6 N. Y. 44. District, 24 App. Div. 429, 48 N. Y. 58. Brazill v. Isham, 12 N. Y. 9. Supp. 702; aff'd, 165 N. Y. 661. 59. Wheeler v. Van Houten, 12 Johng. 54. Mayor v. Phoenix Assur. Co., 311. See Taylor v. Eemington, 51 N. Ltd., 124 App. Div. 241, 108 N. Y. Y. 663. Supp. 711. AKBITEATION. 61 face appear to include any adjudication thereon, evidence is admissible to show that proof of such claim was not heard, but was in fact excluded by the arbitrators, and the award will not conclude the parties with respect to such claim.** Al- though an award cannot operate as a conveyance of land, it may be effectual by way of preventing a party from disputing title.*^ Upon the strength of an award upon a question of boundary, the successful party may recover in ejectment.*^ "Where the submission of the question of boundary discloses that the arbitrators were to be governed by an original tier line, the conclusion of the arbitrators, as to where that line was, is conclusive.*^ An award on a legatee's claim against an executor before the surrogate, may be binding on the accounting.** An award made against the estate of a deceased person under a submission made by his personal representa- tives ascertains and liquidates the claim, but gives no priority of payment over other creditors, nor does an award of pay- ment absolutely have that effect, though it may bind the rep- resentatives personally.® An award must be pleaded to be a defense and cannot generally be shown under a general denial.** Where the award is divisible, though it is void as to a part for being outside the submission, the parties are bound by the part that is good.*'' But when an award is void in one particular, and that is the only act which the party is directed to do and is the con- sideration intended for the act required of the other party, the whole is void,** ARTICLE V. CONFIRMATION, VACATION OR MODIFICATION. A. Civil Practice Act, § 1456. Motion to confirm award. At any time within one year after the award is made, as prescribed in the last section, any party to the submission may apply to the court specified in GO. Morss V. Osborn, 64 Barb. 543. 65. Wood v. TunniclifE, 74 N. Y. 38. 61. Cox V. Jagger, 2 Cow. 638. 66. Brazill v. Isham, 13 N. Y. 9. 62. Robertson v. McNeil, 13 Wend. 67. Stinesville & Bloomingston Stone 578; Sellick v. Adams, 15 Johns. 197. Co. v. White, 32 Misc. 135, 65 N. Y. 63. Eobertson v. McNeil, 12 Wend. Supp. 609. And see, supra. Art. IV. — 578. C. Acts beyond powers of arbitrators. 64. Valentine v. Valentine, 3 Barb. 68. Brown v. Hankerson, 3 Cow. 70. Ch. 430. 62 ARBITRATION. the submission for an order confirming the award; and thereupon the court must grant such an order unless the award is vacated, modified or corrected, as prescribed in the next two sections. Notice of the motion must be served upon the adverse party to the submission, or his attorney, as prescribed by law for service of notice of a motion upon an attroney in an action in the same court. In the supreme court, the motion must be made within the judicial district embracing the county where the judgment is to be entered. B. Civil Practice Act, § 1457. Motion to vacate award. In either of the following cases, the court specified in the submission must make an order vacating the award, upon the application of either party to the submission : 1. Where the award was procured by corruption, fraud or other undue means. 2. Where there was evident partiality or corruption in the arbitrators or either of them. 3. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. 4. Where the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject-matter sub- mitted was not made. Where an award is vacated, and the time within which the submission requires the award to be made has not expired, the court, in its discretion, may direct a rehearing by the arbitrators. C. Civil Practice Act, § 1458. Motion to modify or correct award. In either of the following cases, the court specified in the submission must make an order modifying or correcting the award, upon the application of either party to the submission: 1. Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing or property referred to in the award. , 2. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matters submitted. 3. Where the award is imperfect in a matter of form not affecting the merits of the controversy, and, if it had been a referee's report, the defect could have been amended or disregarded by the court. The order maiy modify and correct the award so as to effect the intent thereof and promote justice between the parties. D. Civil Practice Act, § 1459. Notice of motion and stay. Notice of a motion to vacate, modify or correct an award must be served upon the adverse party to the submission, or his attorney, within three months after the award is filed or delivered, as prescribed by law for service of notice of a motion upon an attorney in an action. For the purposes of the motion. AEBITRATION. 63 any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceeding of the adverse party to enforce the award.69 E. Civil Practice Act, § 1460. Costs on vacating award. Where the court vacates an award, costs, not exceeding twenty-five dollars and disbursements may be awarded to the prevailing party; and the payment thereof may be enforced in like manner as the payment of costs upon a motion in an action. F. General grounds for vacating awards. The autliority of the court with respect to awards of arbi- trators is confined, limited and controlled by the provisions of sections 1456-1460 of the Civil Practice Act.™ An award in a statutory arbitration can only be attacked in a case prescribed by sections 1457 and 1458, since by section 1456 the court must grant an order confirming the award un- less it is vacated, modified, or corrected as prescribed in those two sections.'''^ The courts have no general supervisory power over awards of arbitrators ; and, if they have kept within their powers, the award will not generally be set aside on account of , their mistakes, unless they are guilty of fraud or miscon- duct.'" Awards are to be liberally construed for the purpose of upholding them.''^ But the award will be vacated, if the arbitrators have exceeded their jurisdiction,'^* or have been guilty of fraud, corruption or misconduct. An award will be set aside if the rights of the parties have been prejudiced by the misbehavior of the arbitrators, or if the arbitrators before taking testimony have not taken the 69. Delay over three months.— If no 70. Matter of Wheat Export Co., 185 motion is made to modify or correct an App. Div. 723, 173 N. Y. Supp. 679. award within three months after copy 71. Matter of Burke, 191 N. Y. 437. of the award has been served it is not 72. Fudickar v. Guardian Mut. Life reviewable on appeal. Solomon v. Solo- Ins. Co., 63 N. Y. 393 ; Masury v. mon, 150 App. Div. 897, 134 N, Y. Whiton, 111 N. Y. 679; Hoffman v. Supp. 648, aff'd, 210 N. Y. 603. But DeGraff, 109 N. Y. 638; Matter of the failure of a party to an agree- Wilkins, 169 N. Y. 494; McGreggor v. ment for arbitration to move to vacate Sprott, 13 N. Y. Supp. 191; Matter of the award upon the ground that the Roosevelt v. Nichols, 6 Week. Dig. 437. arbitrators exceeded their powers does 73. Jackson v. Ambler, 14 Johns. 96 ; not deprive said party of the right to Fudickar v. Ins. Co., 62 N. Y. 392. raise the objection upon appeal. Mat- 74.. Briggs v. Smith, SO Barb. 409. ter of Conway, 179 App. Div. 108, 166 And see, Supra, Art. IV. — O. Acts be- N. Y. Supp. 183. yond power of arbitratorB. 64 ARBITRATION. oath and the same is not waived by the parties, or if the arbi- trators fail to administer the oath to witnesses, or if the umpire selected by arbitrators uses previous testimony taken before the arbitrators without rehearing the same, or if the award is not acknowledged, proved, or certified according to the requirements of section 1455.'^ Where the award of arbitrators is severable, that which is improper may be rejected, allowing the balance which is proper to stand.™ Where a party has with full knowledge accepted and executed an award it should not ordinarily be set aside.'''' G. Burden of attack on award. An award is presumed to be valid, and the burden is upon the one attacking it to show its illegality.''^ And the party alleging error must be able to show from the award it- self that, but for the mistake, the award would have been different.''^ Where all the proofs and proceedings before the arbitrators are not put in evidence, the court will presume that the facts necessary to sustain the award were estab- lished.™ If the attack is made on the ground of fraud or partiality of the arbitrators, the facts should be clearly shown.^^ A liberal interpretation is given to uphold an award when it is not attacked for corruption or misconduct of the arbitrators.'^ H. Errors in judgment. It is the general rule that awards will not be set aside for errors in judgment by the arbitrators, however great they may be.^ They may make an error either in their 75. Matter of Grening, 74 Hun, 63, Super Ct. 358, aff'd, 62 N. Y. 3*3. 36 N. Y. Supp. 117, 56 St. Eep. 197. 81. Wood v. A. & K. E. E., 8 N. Y. 76. Shrump v. Pariit, «4 Hun, 341, 168; Perkins v. Giles, 50 N. Y. 328. 33 N. Y. Supp. 409. 82. Phillips v. Eouss, 7 N. Y. St. Eep. 77. DeCastro v. Brett, 56 How. Pr. 378 ; Curtis v. Gorkey, 68 N. Y. 300. 484. 83. Smith v. Cutler, 10 Wend. 590; 78. Solomons v. McKinstry, 13 Johns. Ketoham v. Woodruff, 34 Barb. 147 ; 27; Pierce v. Morrison, 6 Hun, 235. Perkins v. Giles, 50 N. Y. 338; De- Opening award.— An award will not Casto v. Brett, 56 How. 484; Turnbull be opened on the subsequent discovery v. Martin, 37 How. 20; Kitcham v. of a receipt. Todd v. Barlow, 2 Johns. Woodruff, 24 Barb. 147 ; Cranston v. Ch 551. Kenny. 9 Johns. 212; Morris v. Ross, 79 Fudickar v. Guardian Mutual L. 2 Hen. & M. 408. Ins. Co., 62 N. Y. 392. If a verdict would not be set aside on 80. Fudickar v. Guardian Mutual L. same facts an award will be sustained. Ins. Co., 45 How. Pr. 462, 37 N. Y. AEBITEATION. 65 decision as to the facts or as to the law, and yet their award will be sustained.^'' The award will not be set aside, because the arbitrators were mistaken in the law they applied to the facts, or decided the case on an erroneous theory.*^ The merits of an award, however unreasonable or unjust it may be, cannot be reinvestigated ; for otherwise the award instead of being the end of the litigation would simply be a useless step in its progress.^'' Where the arbitrators awarded damages for slander, the defendant cannot resist payment on the ground the words were not actionable.*^ Even if arbi- trators opened an account stated, the award may be sus- tained.*^ But a mistake in calculation is subject to correc- tion.*^ And, if it appear from the award that the arbitrators in- tended to decide the case according to the law and the grounds for their decision are set out, which in law do not justify it, the court will set it aside. It is not necessary that it should appear by express statement in the award that the arbitrators intended to decide according to law in order to give the court the power of review. It is sufficient if this is shown by clear and necessary inference.'" I. Misconduct of arbitrators. Ail award may be set aside, if the arbitrators have been guilty of fraud, corruption or misconduct.'^ The refusal to hear testimony which is pertinent and material, is sufficient misconduct to authorize the setting aside of the award, though the arbitrators may think they have sufficient other evidence.'^ Wood V. A. & K. E. E. Co., 8 N. T. 85. Goodard v. King, 40 Minn. 164. 160. 86. Morris Eun Coal Co. v. Salt Co., 84. Masury v. Whiton, 111 N. Y. 679 ; 58 N. Y. 667 ; Perkins v. Giles, 50 N. Morris Eun Coal Co. v. Salt Co. of Y. 228; Sweet v. Morrison, 116 N. Y. Onondaga, 58 N. Y. 667; Matter of 19. Burke, 191 N. Y. 437; Shrump v. Par- 87. Shephard v. Watrous, 3 Caines, fitt, 84 Hun, 342, 33 N. Y. Supp. 409, 166. See also French v. New, 20 Barb. 67 St. Eep. 242; Matter of Wheat Ex- 481; rev'd on other grounds, 28 N. Y. port Co., 185 App. Div. 723, 173 N. Y. 147. Supp. 679 ; Dobson v. Central E. E. Co. 8S. Emmet v. Hoyt, 17 Wend. 410. of N. J., 38 Misc. 582, 78 N. Y. Supp. 89. Garvy v. Carey, 35 How. Pr. 382. 82; Jackson v. Ambler, 14 Johns. 96; 90. Fudickar v. Guardian Mutual Campbell v. Western, 3 Paige, 124; Life Ins. Co., 62 N. Y. 392. Winship v. Jewett, 1 Barb. Ch. 173; 91. Smith v. Cutler, 10 Wend. 590; Keteham v. Woodruff, 24 Barb. 147; Ennist v. Hoyt, 17 Wend. 410. Emmett v. Hoyt, 17 Wend. 410. 92. Halstead v. Seaman, 82 N. Y. 27; 66 AKBITKATION. But it has been held that an award cannot be impeached col- laterally by showing that the arbitrators erred in receiving evidence.'^ On a motion to vacate an award on the ground that improper evidence has been received, the question is whether such evidence has been received which, by any probability, may have affected the conclusion of the arbitrators, and not whether such evidence was considered by them in making their award. If the evidence was received, it is impossible for the court to say that it did not affect the conclusion of the arbi- trators.'* Where after a case has been closed one of three arbitrators produces and exhibits to the others, in the absence of the parties, written testimony signed by a competent witness which relates to one of the controverted issues, the award should be set aside if it could by any possibility have been affected by the evidence so received. The fact that the strong preponderance of the testimony seems to show that the new evidence was not received or considered by the arbitrators in making their award will not be sufficient to sustain it.'^ Where an arbitrator before his selection has examined the property he was to appraise and expressed an opinion as to its value, and the award is clearly excessive, the award is not valid.'^ But the fact that previous to the arbitration one of the arbitrators consulted with defendant and told him the claim was too high, does not show such partiality, corruption, Wurster v. Armfield, 175 N. Y. 256. dickar v. Guardian Mutual Life Ins. Refusal to hear evidence. — A witness Co., 62 N. Y. 392. was called by plaintiff on the hearing Hearing waived. — An award cannot before the arbitrator for the purpose be objected to on the ground that the of proving statements of one of de- arbitrator did not hear the evidence if fendant's witnesses showing bias and it appears that the parties waived a prejudice on his part. He was ex- hearing and expected and intended that eluded by the arbitrator under a rule he should make his decision upon his adopted by consent of the parties to the personal knowledge. Wiberly v. Mat- effect that persons who were expected thews, 91 N. Y. 648. to be examined as witnesses should be 93. Viele v. T. & B. E. B. Co., 21 excluded from the room except while Barb. 381; aff'd, 20 N. Y. 184. testifying. Held, that while an award 94. National Bank v. Darragh, 17 will be set aside for a refusal of the Week. Dig. 290. arbitrators to receive competent evi- 95. Nat. Bank of the Republic v. dence on the merits, the rejection of Daragh, 30 Hun, 29; aff'd, 13 N. Y. the evidence offered under a mistaken 655. construction of the rule was not suf- 96. Smith v. Cooly, 5 Daly, 401. flcient cause for setting it aside. Fu- AKBITKATION. 67 or gross misbeliavior as to invalidate the award.^' Nor does the fact that the plaintiff communicated with his proposed arbitrator with reference to the controversy, avoid the award.^^ In an arbitration between an insurance company and one assured, when it appears that the arbitrator appointed is an agent or advocate of the insurance company after the com- pany represented the arbitrator to be a disinterested person, the award should be set aside as obtained by fraud and the assured allowed a remedy by action.^^ But an award will not be set aside where the arbitrator was a cousin to one of the parties and was' a guest at his house during the hearing of the controversy, in the absence of evidence of undue partiality or fraud.^ It is misconduct for the arbitrators before whom one party appears with counsel to refuse an adjournment to enable the other party, who has appeared without, to get counsel.^ ^ " J. Impeachment of award by arbitrators. On an application to vacate an award, the court may go behind the award and inquire as to what took place before the arbitrators.^ But the arbitrators cannot give evidence for the purpose of impeaching or contradicting the award.* How- ever, they may give evidence to show that they did not con- sider a particular matter, or that matters were contained in the award which were not included in the submission.^ The rule that arbitrators cannot give evidence to impeach the award does not apply where an umpire has been chosen.^ Nor does it apply to an arbitrator who has not signed an award made by the majority of the arbitrators.'' 97. French v. New, 20 Barb. 481; Butler v. Mayor, 7 Hill, 329. rey'd on other grounds, ZS N. Y. 147. 4. Mayor v. Butler, 1 Barb. 335; 98. Wood V. A. & R. K. E. Co., 8 N. French v. New, 20 Barb. 481; Camp- y. 160. bell V. Western, 3 Paige, 124; Harring- 99. Bfadshaw v. Agricultural Ins. ton v. Hamblin, 13 Wend. 212. Co., 42 St. Eep. 79, 16 N. Y. Supp. 5. Morris v. Osborn, 64 Barb. 543; 640. Mayor v. Butler, 1 Barb. 325; Briggs 1. McGregor vi Sprott, 13 N. Y. v. Smith, 20 Barb. 409. Supp. 192, 35 St. Bep. 908. 6. Mayor v. Butler, 1 Barb. 325. 2. Matter of Picker, 130 App. Div. 7. Arbitration of National Bank v. 88, 114 N. Y. Supp. 289. Daragh, 17 Week. Dig. 290. 3. Matter of Williams, 4 Denio, 194; 68 ARBITRATION. K. Moving papers. The proceeding provided for vacating, modifying, or cor- recting an award is a motion, to support -whicli the affidavits or papers, upon which it is intended to be founded, must ac- company the notice of motion, and from the order made thereon an appeal may be taken and heard upon the same papers upon which appeals from orders are heard in other cases.^ A motion to vacate an award for the wrongful and improper behavior of the arbitrators may be made upon an affidavit of one of the arbitrators who refused to sign the award because he considered the conduct of the other arbitrators to be illegal and unfair.^ L. Common law arbitrations. The provisions of the statute as to vacating awards do not apply to common law arbitrations, and a party seeking redress as against such an award must do so by action.^" An action in equity may be maintained to set aside an award under a common law arbitration.^^ Where a submission agreement is so defective that the pro- ceedings do not amount to a statutory arbitration, so that the court has no power to order judgment on the award, it has no power to vacate the award.^^ M. Form of notice of motion. SUPREME COUET— New York County. , ] In the Matter of the Arbitration! Between HARRY N. GITT and}- 138 App. Div. 147. JULIUS MARQUSBE. j ^J Sir: Please take notice, That upon the award of Aaron J. Bach, Frank F. Peard and John H. Duys, the arbitrators herein, bearing date the 10th day of February, 1910, and duly filed in the office of the Clerk of the County of Kew York on the 10th day of February, 1910, and upon the annexed affidavit of Julius Marqusee, verified the 14th day of February, 1910, a copy of which is herewith served upon you, 8. Matter of Poole v. Johnston, 32 11. Mayer v. Phoenix Assurance Co., Hun, 215. Ltd., IZi App. Div. 241, 108 N. Y. 9. Nat. Bank of the Eepublic v. Dar- Supp. 711. ragh, 30 Hun, 29; aff'd, 93 N. Y. &55. 12. Electric Steel Elevator Co. v. 10. Matter of Dicarlo, 13 N. Y. Supp. John Kara Malting Co., 113 App. Div. 83. 086, 98 N. Y. Supp. 604. AKBITKATION. 69 and upon all the proceedings had herein, the undersigned will move this court, at a Special Term, Part I, thereof, to be held at the New York County Court House, in the Borough of Manhattan, New York City, on the 21st day of February, 1910, at 10:30 o'clock in the fore- noon, or as soon thereafter as counsel can be heard, for an order con- firming the said award of the said arbitrators, and for such other and further relief as to the court may seem just, together with costs. Dated, New York, February 14, 1910. Yours, etc., RiEGELMAN & BaCH, Attorneys for Julius Marqusee. (Same title.) STATE OF NEW YORK, ) CouNTT OF New York, ] **• •" Julius Marqusee, being duly sworn, deposes and says: I am one of the parties to the arbitration herein. On or about the 7th day of Janu- ary, 1910, Harry N. Gitt and myself entered into an agreement of arbitration by the terms of which the parties thereto agreed to sub- mit their controversies and claims to Aaron J. Bach and Frank F. Peard, as arbitrators, to judge and determine the same, a copy of which arbitration agreement is hereto annexed and made a part here- of ; that by the terms of said arbitration agreement it was agreed that the said arbitrators could, at any time in the proceeding or before the commencement thereof, select and appoint a third person as an addi- tional arbitrator, such appointment to be in writing and a copy there- of to be delivered to each of the parties to said agreement. In ac- cordance therewith said Aaron J. Bach and said Frank F. Peard selected and appointed John H. Duys as the additional arbitrator, and the selection of said third arbitrator was made in writing ; and I am informed that notice of said selection was served upon Harry N. Gitt as well as upon myself. Thereafter the said arbitrators duly met from time to time and heard the testimony and the CAddence of the parties hereto and the evidence of such witnesses as the parties hereto produced before them, and the said three arbitrators, having duly considered the testimony duly reached a determination and have duly filed their finding or award, bearing date the 10th day of February, 1910, in the office of the Clerk of the County of New York on the 10th day of February, 1910, in accordance with the terms of said arbitration agreement, for the sum of nineteen thousand nine hundred ninety-nine and fifty-six one-hundredths ($19,999.56) dollars in favor of Julius Marqusee and against Harry N. Gitt. Wherefore, deponent asks that an order may be made confirming the award of the said arbitrators, and for judgment thereon, in ac- cordance with the provisions of the civil Practice Act of the State of New York and the terms of the said arbitration agreement, together with costs. (Verification.) Julius Marqusee. 70 AKBITRATION. K. Form of order to show cause why award should not be modified. (Same title.) Upon the annexed affidavits of Henry Corn and George Hahn, veri- fied respectively the 10th day of September, 1906, let Luke A. Burke, or his attorneys, show cause before one of the justices of this court, at Special Term thereof, to be held in Part I, in the County Court House in the City of New York, on the 14th day of September, 1906, at 10:30 o'clock a. m., or as soon thereafter as counsel can be heard, why the award of the arbitrator herein, Hon. D. Cady Herrick, in the above-entitled matter, bearing date August 1, 1906, and filed in the office of the Clerk of the County of New York on August 2, 1906, should not be modified and corrected by striking therefrom the award of five thousand nine hundred dollars and thirty-three cents ($5,- 900.33) interest, and why the said Corn should not have such other and further relief in the premises as may be just and proper. Service of a copy of this order and of the annexed affidavits on or before the 11th day of September, 1906, shall be sufficient. Dated, New York, September 11, 1906. Victor J. Dowlinq, Justice of the Supreme Court. 0. Form of order confirming award. (Title.) (Caption.) On reading and filing the notice of motion, dated the day of , and due proof of service thereof, and on the submission and award herein filed in the office of the Clerk of the County of New York on day of , after hearing Robert H. Hutchins, in support of said motion, and Edward J. Meegan in opposition there- to, on motion of Parsons, Shepard & Ogden, attorneys for Charlotte L. Wilkins, it is Ordered, that the said award be and it hereby is confirmed, and judgment directed thereon according to statute. Enter : Henkt R. Beekman, J. 8, C. ARTICLE VI. JUDGMENT AND APPEAL. A. Civil Practice Act, § 1461. Entry of judgment on award and costs. Upon the granting of an order confirming, modifying or correcting an award, judgment may be entered in conformity therewith, as upon a referee's report in an action except as is otherwise prescribed in this article. Costs of the applica- tion and of the proceedings subsequent thereto, not exceeding twenty-five dollars and disbursements, may be awarded by the court in its discretion. If awarded, the amount thereof must be included in the judgment. AEBITKATION. 71 B. Civil Practice Act, § 1462. Judgment-roll. Immediately after entering judgment, the clerk must attach together and file the following papers, which constitute the judgment-roll: 1. The submission; the selection or appointment, if any, of an additional arbitrator, or umpire; and each written extension of the time, if any, within which to make the award. 2. The award. 3. Each notice, afRdavit or other paper used upon an application to confirm, modify or correct the award, and a copy of each order of the court upon such an application. 4. A copy of the judgment. The judgment may be docketed as if it was rendered in an action. C. Civil Practice Act, § 1463. Effect of judgment and enforcement. The judgment so entered has the same force and effect, in all respects as, and is subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered, D. Civil Practice Act, § 1464. Appeals. An appeal may be taken from an order vacating an award, or from a judg- ment entered upon an award, as from an order or judgment in an action. The proceedings upon such an appeal, including the judgment thereupon and the enforcement of the judgment, are governed by the provisions of statute and rule regulating appeals in actions as far as they are applicable. E. Judgment. Where plaintiff deposits a sum of money in a bank sufficient to pay a claim if it is established before arbitrators, and an award made to the defendant is set aside by the court, the judgment properly enjoins the defendant from drawing on the bank.^^ Judgment cannot be entered upon an award not acknowl- edged, proved, or certified according to the requirements of this section, and if such an award is entered it may be set aside." An action upon an award on a submission under the statute may be brought in the Supreme Court, although the submission provides for judgment in the County Court. If the defendant desires to move that court for relief he may ob- tain a stay of proceedings. The statute is cumulative merely, not exclusive, and the right of action on the award still remains.^^ 13. CuUen v. Shipway, 177 N. Y. 571. 15. Burnaide v. Whitney, 21 N. T. 14. Matter of Grening, 74 Hun, 62, 148. 86 N.- Y. Supp. 117, 56 St. Eep. 196. 72 AKBITRATION. r. Lien of attorney on award. Statutory arbitrations are special proceedings and an attor- ney-at-law rendering services to one of the parties is entitled to a lien under section 475 of the Judiciary Law. But where the parties to such arbitration agree without the consent of • such attorney that the awards shall be set off, and the result of an offset will defeat the attorney's lien by preventing the entry of any judgment in his client's favor his lien is superior to the parties ' right to set off, for by virtue of the statute such lien cannot be affected by any settlement between the parties before or after judgment. Hence, to preserve such lien the court will permit a judgment to be entered upon the client's award for the amount due the attorney and limit the set-off agreed upon by the parties to the balance of the client's award.^^ An attorney need not give notice of his lien, and any party settling without the knowledge of the attorney does so at his peril. Even though a judgment in favor of the client is entered to protect her attorney's lien, he must first resort to the client for payment, the judgment meanwhile standing as security, and he cannot resort to it until he has exhausted his remedy against the client, or has shown that she is insolvent and that it would be futile to pursue the claim." 0. Appeal. Appeals are allowed (1) from an order vacating an award, and (2) from a judgment entered upon an award. No judg- ment is entered upon an order vacating an award. If a court at a Special Term determines that an award should be vacated, an order is entered upon that determination from which an appeal may be taken under section 1464. But if an order of the Special Term confirms or modifies or corrects an award, judgment is to be entered thereon (section 1461), and from that judgment, not from the order, the aggrieved party is entitled to appeal.^* No appeal lies from an order confirming an award made in a statutory arbitration. By virtue of section 1464 of the Civil Practice Act an appeal Hes only from an order vacating an IG. Webb V. Parker, 130-App. Div. 18. Matter of Wilkins, 48 App. Div. 92, 114 N. Y. Supp. 489. 433, 62 N. Y. Supp. 1068; aff'd, 169 17. Webb V. Parker, Ibo App. Div. N. Y. 494; Matter of Gitt, 138 App. 92, 114 N. Y. Supp. 489. Div. 147, ia3 N. Y. Supp. 304. ARBITRATION. 73 award or from a judgment entered upon the award. Where, however, a party has appealed both from an order confirming an award and from the judgment entered thereon, the appeal from the former may be disregarded. The proper practice for a party wishing to vacate, modify or correct an award made on a statutory arbitration is to make an independent motion for relief, but a failure to do so does not deprive him of his right to raise objections upon the motion to confirm the report and to review the judgment upon the same ground. But the objections which may be so taken are only those which might have been taken by an independent motion to vacate, correct or modify .^^ An appeal, pursuant to section 1464, from a judgment en- tered upon the award of an arbitrator to whom questions of law were submitted under an agreed statement of facts, pres- ents for review only such questions as have been raised by a motion under sections 1457 and 1458, and where no such appli- cation has been made in the case the award cannot be re- viewed.^" It has been held that on reviewing an order refusing to vacate an award and giving judgment thereon, the appellate court will not consider questions which were not raised in the court below,^^ and that the party aggrieved could, on appeal, review only the errors specifically pointed out by statute.^^ If the award has been confirmed, the appellant may contend that it ought to have been vacated, modified or corrected upon some or all of the grounds set out respectively in sections 1457 and 1458 of the Civil Practice Act, so far as the record on appeal discloses the existence of such grounds. If it has been modified or corrected upon any or all of the grounds mentioned in section 1458 he may insist that it should have been con- firmed in toto or not modified and corrected to the extent ordered in the court below.^^ An appeal from an order confirming the report of arbitra- tors, and from the judgment entered thereon, must be heard upon the same papers as were before the court at the time when the order was made and the judgment directed from 19. Matter of Picker, 130 App. Div. Ketcham v. Woodruff, 24 Barb. 147; 88, 114 N. T. Supp. 3«9. Wilson v. Wilson, 66 Barb. 209. 20. Matter of Wilkins, 169 N. T. 494. 23. Matter of Wilkins, 48 App. Div. 21. Hollenbeck v. Fleming, 6 Hill, 433, 62 N. Y. Supp. 1068; afE'd, 169i 303. N. Y. 494. 22. Dibble v. Camp, 60 Barb. 150; 74 ABBITRATION. which the appeal is taken. A case forms no part of these papers, and none can regularly be proposed or served in any proceeding taken to make or review an application concerning an award.^* H. Form of judgment. (Title.) A dispute having arisen between the parties above-named in regard to divers matters pending between them, and the said dispute and dif- ferences having been submitted to Hon. D. Cady Herrick as arbitrator, agreed upon between the parties, and the aibitrator having duly made an award dated the 1st day of August, 1906, and filed in the office of the County Clerk of New York County on the 2d day of Au- gust, 1906, wherein the said arbitrator awarded and decided that the said Luke A. Burke was entitled to recover against the said Henry Corn the sum of fifty-three thousand three hundred and fifty-seven and ninety-two one-hundredths dollars ($53,357.92), of which said sum the sum of forty-seven thousand two hundred and eighteen and fifty-five one-hundredth dollars ($47,218.55), was paid by the said Corn to the said Burke on the 29th day of August, 1906, leaving still due and owing on account of said award from said Corn to said Burke, including interest to the said 29th day of August, 1906, the sum of six thousand one hundred and thirty-nine and thirty-seven one-hundredth dollars ($6,139.37), and the said award having been duly confirmed by an order of this court dated the 26th day of Sep- tember, 1906, and it appearing that the said Luke A. Burke is en- titled to judgment against the said Henry Corn for the sum of six thousand one hundred and thirty-nine and thirty-seven one-hun- dreth dollars ($6,139.37), with interest from the 29th day of August, 1906, amounting to the sum of six thousand one hundred and seventy- eight and twenty-five one-hundredth dollars ($6,178.25). Now, on motion of Eidlitz & Hulse, attorneys for Luke A. Burke, it is adjudged, that the said Luke A. Burke recover of said Henry Corn the sum of six thousand one hundred and seventy-eight and twenty-five one-hundredth dollars ($6,178.25), damages, and that he have execution therefor. Peter J. Dooling, Dated, October 9, 1906. Clerk. ARTICLE VII. REVOCATION OR ENFORCEMENT OF SUBMISSION. A. Civil Practice Act, § 1465. Death or incompetency of party. Where a. party dies after making a submission either as prescribed in- this article or otherwise, if the submission contains a stipulation authorizing the entry of a judgment upon the award, the award may be confirmed, vacated, modified or corrected, upon the application of, or upon notice to, his executor or administrator, or a temporary administrator of his estate; or, where it relates to real property, his heir or devisee who has succeeded to his interest in the real property. Where a committee of the property or of the person of a 84. Matter of Poole v. Johnston, 33 Hun, 215. ABBITRATION. 75 party to a submission is appointed, tlie award may be confirmed, vacated, modified or correoted, upon the application of, or notice to, a committee of the property, but not otherwise. In a case specified in this section, a judge of the court may malce an order extending the time within which notice of a motion to vacate, modify or correct the award must be served. Upon confirming an award, where a party has died since it was filed or delivered, the court must enter judgment in the name of the original party ; and the proceedings there- upon are the same as where a party dies after a verdict. B. Arbitration law, § 2. Validity of arbitration agreements. A provision in a written contract to settle by arbitration a controversy thereafter arising between the parties to the contract, or a submission here-, after entered into of an existing controversy to arbitration pursuant to title eight of chapter seventeen of the code of civil procedure, or article eighty -three of the civil practice act, shall be valid, enforcible and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract. C. Arbitration law, § 3. Remedy in case of default. A party aggrieved by the failure, neglect or refusal of another to perform under a contract or submission providing for arbitration, described in section two hereof, may petition the supreme court, or a judge thereof, for an order dirscting that such arbitration proceed in the manner provided for in such contract or submission. Eight days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by law for personal service of a summons. The court, or a judge thereof, shall hear the parties, and upon being satisfied that the making of the contract or submission or the failure to comply therewith is not in issue, the court, or the judge thereof, hearing such application, shall make an order directing the parties to proceed to arbitration in a/ccordance with the terms of tlie contract or submission. If the making of the contract or sub- mission or the default be in issue, the court, or the judge thereof, shall proceed summarily to the trial thereof. If no jury trial be demanded by either party, the court, or the judge thereof, shall hear and determine such issue. Where such an issue is raised, any party may, on or before the return day of the notice of application, demand a jury trial of such issue, and if such demand be made, the court, or tlie judge thereof, s;hall make an order referring the issue or issues to a jury in the manner provided by law for referring to a jury issues in an equity action. If the jury find that no written contract providing for arbitration was made or submission entered into, as the case may be, or that there is no default, the proceeding shall be dismissed. If the jury find that a written contract providing for arbitration was made or submission was entered into and there is a default in the performance thereof, the court, or the judge thereof, shall make an order summarily directing the parties to the contract or submission to proceed with the arbitration ' in accordance with the terms thereof. 76 ARBITRATION. D. Arbitration law, § 4. Provision in case of failure to name arbi- trator or umpire. If, in the contract for arbitration or in the submission, described in section two, provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then, upon application by either party to the controversy, the supreme court, or a judge thereof, shall designate and appoint an arbitrator or arbitra- tors or umpire, as the case may require, who shall act omder the said contract or submission with the same force and eflfect as if he or they had been specifically named therein; and unless otherwise provided, the arbitration shall be by a single arbitrator. E. Arbitration Law, § 5. Stay of proceedings brought in violation of an arbitration agreement or submission. If any suit or proceeding be brought upon any issue otherwise referable to arbitration under a contract or submission descrbied in section two, the supreme court, or a, judge thereof, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under a contract containing a provision for arbitration or under a, submission described in section two, shall stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement. F. Arbtration Law, § 6. Applications to be heard as motions. Any application to the court, or a judge thereof, hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided. Gr. Arbitration Law, § 8. Application of certain sections of code of civil procedure and the civil practice act. The provisions of sections twenty-three hundred and sixty-five to twenty- three hundred and eighty-six of the code of civil procedure, both inclusive, except sections twenty-three hundred and eighty-three, twenty-threie hundred and eighty-four and twenty-three hundred and eighty-five, and the corresponding sections of the civil practice act, namely sections fourteen hundred and ten to fourteen hundred and thirty-one, both inclusive, except sections fourteen hun- dred and twenty-eight, fourteen hundred and twenty-nine and fourteen hundred and thirty, so far as practicable and consistent with this chapter, shall apply to an arbitration agreement under this chapter, and for such purpose the arbitration agreement shall be deemed a submission to arbitration. Wherever in such sections reference is made to the court specified in the submission, the supreme court ghall have jurisdiction of the subject matter, if no court be specified in the arbitration agreement. AEBITEATION. 77 H. Revocation before Arbitration Law. At common law a submission to arbitration was revocable at any time before the award was actually made.^ Both in common-law arbitrations and in statutory arbi- trations, by virtue of section 2383, of the Code of Civil Pro- cedure, parties to an arbitration could terminate the same, and after such revocation the court had no authority to establish or maintain the submission, for it was as much out of exist- ence as though no agreement had been made at any time pro- viding for it. All parties were restored and remitted to the rights against each other which they had previous to the mak- ing of the agreement to submit, and these rights could be en- forced by action. Where such arbitration had been termin- ated by revocation, equity would not restrain actions on the ground that a compromise had been made.^^ Arbitrators obtained their power merely by the continuing consent of the parties, and if an agreement to arbitrate, while yet executory, was broken by either party the power of the arbitrators cease. This was true both as to common-law arbitrations and as to arbitrations under the Code of Civil Procedure, and the submission could be revoked by any party at any time before the matter has been finally submitted to the arbitrators ; and this is so, even though the submission to arbi- tration provided against any revocation, and although the party seeking to revoke had expressly waived and abandoned his right to revoke for a valuable consideration. This, on the ground that such stipulations like other executory agree- ments, if broken, simply left to the other party an action for damages.^ An agreement that arbitrators shall be appointed in case 25. Bank of Monroe v. Widner, 11 trators. Nor will the withdrawal o£ Paige, 529, 534; Allen v. Watson, 16. one of the arbitrators in such a case Johns. 205. 8^d his refusal to act after one of the 2S. Schepp V. Manly, 59 Hun, 440, parties has attempted to withdraw af- 36 St. Kep. 994, 13 N. Y. Supp. 730. feet the validity of an award made the Appraisal clause in lease. — ^An arbi- same day by the other arbitrators tration under an appraisal clause in a where the lease permits a majority de- lease is not revocable like a common- cision. Atterbury v. Trustees of Co- law or statutory arbitration. Neither lumbia College, 66 Misc. 273, 123 N. party to an arbitration has the power Y. Supp. 25. to withdraw after the allegations and 27. People ex rel. Union Insur. Co. proofs have been made and the matter v. Nash, 111 N. Y. 310. has been finally submitted to the arbi- 78 ARBTTKATION. controversy arises between the parties to the agreement, or an agreement to arbitrate' a pending controversy, was subject to revocation at any time before the final submission to the arbitrators for their decision.^^ The manner prescribed in section 2383 of the Code of Civil Procedure for revoking a submission to arbitration applied to common law as well as to statutory arbitrations, and an arbi- tration could be revoked by the commencement of an action ; it had to be made by an instrument in writing signed by the revoking party or his authorized agent and delivered to the arbitrators.^^ A letter by one of the parties to arbitration to another, in which he complained of the arbitrator having improperly con- sidered certain questions, though expressing willingness to accept the award except as to certain items, was held not a repudiation of the arbitration.^" But a revocation was not available to a party after the proofs of the parties had been closed and the matter had been finally submitted to the arbi- trators for their decision.^^ After the briefs had been made on both sides and the matter finally submitted, the submission could not be revoked on the ground of irregularities in the proceeding, such as failure to compel the production of documents, appearance of counsel as witness, and failure to swear witnesses.^^ If a party to an arbitration revoked the same, he was chargeable upon an action by the other party with all costs and other expenses incurred by the latter in preparing for the arbitration.^^ This liability existed, notwithstanding the fact that the agreement for arbitration provided that the expenses should be borne proportionately by the parties and that no part of the costs should be recovered by the prevailing party or parties or be entered in the judgment.^* The provisions of the Code of Civil Procedure did not place 28. Finucame v. Board of Education, 310; Pizzini v. Hutchins, 70 Misc. 94, IM N. Y. 76. 127 N. Y. Supp. 1043. 29. N. Y. Lumber Co. v. Schneider, 32. Briton v. Hooper, 25 Misc. 388, 15 Civ. Pro. 33, 1 N. Y. Supp. 443. 55 N. Y. Supp. 493. 30. Stinesville & Bloomington Stone 33. Union Ins. Co. v. Central Ins. Co., Co. V. White, 33 Misc. 135, 65 N. Y. 24 Civ. Pro. 2-20, 66 St. Rep. 300, 32 Supp. 609. N. Y. Supp. 838, 87 Hun, 143. 31. N. Y., L. & W. R. R. Co. V. 34. Union Ins. Co. V. Central Trust Schneider, 119 N. Y. 475; People ex Co., 87 Hun, 140, 36 Supp. 439, 32 N. rel. Union Ins. Co. v. Nash, 111 N. Y. Y. Supp. 838, 24 Civ. Pro. Sao. AKBITKATION. 79 a limitation upon the right of action at common law to recover damages for revocation of a submission, except by limiting the amount of the recovery. They created no new or exclusive remedy but confirmed the old one and fixed a measure of damages.^^ An executor or administrator, who had entered into an arbitration could be sued for the damages for revoking the submission, both individually and in his representative capacity, it being uncertain in which capacity he was liable.*^ I. Effect of Arbitration Law. The Arbitration Law abrogates the rule that a submission can be revoked before the award is made ; and, moreover, pro- vides for the enforcement of an agreement to arbitrate future controversies. The constitutionality of the statute has been sus- tained as against attacks on the grounds that violates the right to a trial by jury, that it abridges the jurisdiction of the Supreme Court; and that it impairs the obligation of a con- tract.^'' It applies to contracts in existence at the time of en- actment of the statute so that a clause in such contracts pro- viding for arbitration of controversies arising thereunder may be enforced.^^ To be enforcible under the statute, it is not necessary that the provision of the contract relating to the submission be acknowledged or proved, and certified, in like manner as a deed to be recorded, as is required by section 1449 of the Civil Practice Act relating to the contents of a submission.^^ But section 5 providing for a stay of actions does not apply so as to require the stay of an action pending before the statute went into effect.^" A foreign corporation may secure an order requiring a domestic corporation to pro- ceed to arbitrate.*^ 35. Union Ins. Co. v. Central Trust 39. Matter of Yeannakopoulos, 195 Co., 157 N. Y. 633. App. Div. S61; Matter of Shima & Co., 36. Magoun v. Magoun, 84 App. Div. 113 Misc. 613, 186 N. Y. Supp. 154. 232, 82 N. Y. Supp. 830. 40. Berkovitz v. Arbib, 230 N. Y. 37. Berkovitz v. Arabib, 230 N. Y. 261. 261. 41. Matter of Shima & Co., 113 Mise. 38. Berkovitz v. Arbib, 230 N. Y. 612, 186 N. Y. Supp. 154. 261. ASSESSMENT, HOW REVIEWED. See Tax Law. ATTORNEYS AND COUNSELLORS.* ARTICLE I. Examination, admission and registration. A. Authority of Court of Appeals and its rules. 1. Judiciary Law, § 53. Power of court of appeals as to admission of attorneys and counsellors. 2. Rules for admission of attorneys. B. Appellate Division and rules. 1. Judiciary Law, § 88. Admission to practice by appellate division. 2. Rules of Civil Practice, Rule 1. Applications for admission as attorneys. C. State board of law examiners. 1. Judiciary Law, § 460. Examination and admission of attorneys. 2. Judiciary Law, § 461. State board of law examiners continued. 3. Judiciary Law, § 56. Appointment and compensation of state board of law examiners. 4. Judiciary Law, § 462. Times and places of examinations. 5. Judiciary Law, § 463. Certification by state board of successful candidates. 6. Judiciary Law, § 464. Annual account by state board of law ex- aminers. 7. Judiciary Law, § 465. Fee for examinations. 8. Rules of examiners. D. Decisions relating to admission of attorneys. E. Oath of attorney. 1. Judiciary Law, § 466. Attorney's oath of office. 2. Chapter 263 of Laws of 1918. Person in military or naval service. F. Registration. ARTICLE IL Duties and liabilities. A. In general. B. As public officers. C. Disqualification in certain cases. D. Transactions between attorney and client. E. Authority. F. Use of client's money. G. Liability for unskillfulness. H. Representing conflicting interests. ARTICLE III. Enforcement of lien. A. Nature and kinds of attorneys' liens. 1. Judiciary Law, § 475. Attorney's lien in action or special proceeding. * See Judiciary Law, B., C. & G. Consolidated Laws, as to matters relating to attorneys and counsellors. [80] ATTORNEYS AND COUNSELLORS. 81 2. Two kinds of liens. 3. Possessory lien. B. Statutory lien under Judiciary Law, section 475. 1. In general. 2. To what lien attaches. 3. Effect of settlement without consent of attorney. 4. Discontinuance of action. 5. Substitution of attorneys. 6. Who can assert lien. 7. Priority of liens. 8. Loss of lien. C. Enforcement of lien upon petition. 1. In general. 2. Nature of proceeding. 3. Power of surrogate. 4. Amount allowed. 5. Forms in proceeding to have lien enforced against securities belonging to client. 6. Forms in proceeding to determine lien in surrogate's court. D. Enforcement by action in equity. 1. In general. 2. Form of complaint. ARTICLE IV. Summary proceedings against attorneys. A. General power of court. 1. In general. 2. Counterclaim or lien of attorney. 3. Necessity of demand of attorney. 4. Moneys collected in another jurisdiction. 5. Effect of pendency of action against attorney. 6. Discretion of court. B. Necessity of relation of attorney and client. C. Procedure. 1. In general. 2. References. 3. Interest and costs. 4. Enforcement of order. 5. Forms of petition. 6. Form of order to show cause. 7. Form of order directing payment of moneys. ARTICLE V. Substitution of attorneys. A. Nature of proceeding. B. Grounds for substitution of attorneys. 1. Rules of Civil Practice, Rule 56. Substitution of attorneys. 2. Without cause. 6 82 ATTORNEYS. AND COUNSELLORS. C. When order of substitution necessary. D. Death or disability. 1. Civil Practice Act, § 240. Death, removal or disability of attorney. 2. Court decisions.. 3. Form of notice. E. Authority of attorney after judgment. F. Substitution on appeal to court of appeals. 1. Rules of Court of Appeals, Rule 3. Attorneys and guardians below to continue to act. 2. Effect of rule. G. Protection of fees of prior attorney. H. Procedure. I. Form of petition to substitute attorneys. J. Form of consent to substitute attorney and order thereon. ARTICLE VI. Suspension and disbarment. A. Statutory provisions. 1. Judiciary Law, § 88. 2. Judiciary Lavir, § 476. Suspension of attorney from practice must be on notice. 3. Judiciary Law, § 477. Attorney convicted of felony shall cease to be attorney. 4. Judiciary Law, § 478. Suspension or removal of attorney effective in all courts. B. Grounds for disciplinary action. 1. In general. 2. Acts outside of profession. 3. Conviction of crime. 4. Conversion of client's money. 5. Mingling trust funds. 6. Deceiving client. 7. Deceiving court. 8. Disrespect to judges. 9. Giving false testimony. 10. Permitting or advising client to do unlawful aets. 11. Witnesses. 12. Bribery. 13. Forgery. 14. Fraud. 15. False acknowledgment or jurat. 16. Divorce matters. 17. Neglect of client's interests. 18. Unlawfully commencing action. 19. Advertising or soliciting. 20. Collection agency. 21. Fleeing jurisdiction after unlawful acts. 22. Fraudulent admission to practice. 23. Miscellaneous grounds for discipline. ATTORNEYS AKD COUNSELLORS. 83 C. Procedure, punishment, etc. 1. Juri8diction of appellate division. 2. Preliminary examination. 3. Nature and purpose of proceedings. 4. Procedure. 5. Evidence. 6. Punishment. 7. EflFect of order. 8. Costs. 9. Appeal to Court of Appeals. 10. Reinstatement. 11. Form of petition. 12. Form of notice of application. 13. Form of order. AETICLE I. EXAMINATION, ADMISSION AND REGISTRATION. A. Authority of Court of Appeals and its rules. 1. Judiciary Law, § 53. Power of court of appeals as to admission of attorneys and counsellors. 1. The court of appeals may from time to time make, alter and amend, rules not inconsistent with the constitution or statutes of the state, regulating the admission of attorneys and coimsellors at law, to practice in all the courts of record of the state. 2. The court may make such provisions as it shall deem proper for admission to practice as attorneys and counsellors, of persons who have been admitted to practice in other states or countries. 3. The court shall prescribe rules providing for a uniform system of examina- tion of candidates for admission to practice as attorneys and counsellors, which shall govern the state board of law examiners in the performance of its duties. 4. The rules established by the court of appeals, touching the admission of attorneys and counsellors to practice in the courts of record of the state, shall not be changed or amended, except by a majority of the judges of that court. A ocpy of each amendment to such rules must, within five days after it is adopted, be filed in the office of the secretary of state. 5. Nothing contained in this chapter prevents the court of appeals from dispensing, in the rules established by it, with the whole or any part of the stated period of clerkship, required from an applicant, or with the examination where the applicant is a graduate of the Albany law school, being the law department of the Union university, or of the law department of the university of the city of New York, or of the law school of Columbia college, or of the law school of the university of Bufifalo, or the New York law school, or the college of law, Cornell university, or of the school of law, Syracuse university, or the Brooklyn law school of Saint Lawrence university, or Fordham university law school, or any law school duly registered by the regents of the university of the state of New York which requires a three year course for graduation and produces his diploma upon his application for admission. (See B., C. & 6. Consol. L., 2nd Ed., p. 4168.) 84 ATTORNEYS AND COUNSELLORS. 2. Rules for admission of attorneys. Pursuant to the authority contained in section 53 of the Judiciary Law, the Court of Appeals has promulgated rules for the admission of attorneys. These rules are long and it is thought unnecessary to insert them in this book.^ B. Appellate Division and rules. 1. Judiciary Law, § 88. Admission to practice by appellate division. 1. Upon the state board of law examiners certifying that a person has passed the required examination, or ^hat the examination has been dispensed with, the appellate division of the supreme court in the department in which such person shall have resided for at least six months prior to such applica- tion, if it shall be satisfied that such person possesses the character and general fitness requisite for an attorney and counsellor-at-law, ehall admit him to practice as such attorney and counsellor-at-law in all the courts of this state. (Amended by L. 1912, ch. 253; L. 1918, ch. 105. See B., C. & G. Oonsol. L., 2nd Ed., p. 4181.) 2. Rules of Civil Practice, Rule 1. Applications for admission as attorneys. Within the first ten days of each year the appellate division in each department shall name a committee of not less than three practicing lawyers for each judicial district within its department, which committee shall investi- gate the character and fitness of every applicant for admission to the bar. Each of such committees shall continue until its successor is appointed, and all applications for admission to the bar of persons residing within a ditrict shall be referred to the committee for such district. Unless otherwise ordered by the court, no person shall be admitted to the bar without a certificate from the proper committee that it has carefully investigated the character and fitness of the applicant and that, in such respects, he is entitled to admission. Such committee Shall have power to prescribe a form of written statement of the applicant's experience, from which the committee may pass on his moral and general fitness. If such applicant has before applied for admission to the bar in this or any other state, the applicant shall set forth the same with the par- ticulars thereof. If his application has been rejected or disapproved by the committee on character of an appellate division, he shall obtain the consent of that appellate division to the renewal of his application in any other depart- ment. No person shall receive a certificate from any such committee who does not satisfy the committee that he believes in the form of, and is loyal to, the government of the United States. Each applicant for admission must present to the court where he shall apply for admission, proof that he has complied with the rules of the court of appeals relating to admission to the bar. No person shall be admitted until he has proven that he is a citizen of the United States and an actual resident 1. See Parsons Civil Practice Manual. ATTORNEYS AND COUNSELLORS. 85 of the state of New York for six months prior to the making of the application. He flh&U specify the place of his residence by street and number, if such there be, and the length of time he has been such resident. The clerk of the appellate division must file in his office all the papers presented and acted on by the court on each application for admission. C. State board of law examiners. 1. Judiciary Law, § 460. Examination and admission of attorneys. A citizen of the state, of full age, applying to be admitted to practice as an attorney or counsellor in the courts of record of the state, must be examined and licensed to practice as prescribed in this chapter. (See B., C. & G. Consol. L., p. 4285.) 2. Judiciary Law, § 461. State board of law examiners continued. The state board of law examiners is continued. Said board shall consist of three members of the bar, who shall be appointed, from time to time, by the court of appeals. Each member of such board shall hold office for a term of three years, and until the appointment of his successor. (See B., C. & G. Oonsol. L., 2nd Ed., p. 4285.) 3. Judiciary Law, § 56. Appointment and compensation of state board of law examiners. The members of the state board of law examiners shall be appointed from time to time, by the court of appeals, as provided in section four hundred and sixty-one of this chapter. The court of appeals shall fix the compensation of the members of the said board. (See B., C. & G. Consol. L., 2nd Ed., p. 4170.) 4. Judiciary Law, § 462. Times and places of examinations. There shall be examinations of all persons applying for admission to prac- tice as attorneys and counsellors-at-law at least twice in each year in each judicial department, and at such other times and places as the court of appeals may direct. (See B., C. & G. Consol. L., 2nd Ed., p. 4285.) 5. Judiciary Law, § 463. Certification by state board of successful candidates. The state board of law examiners shall certify to the appellate division of the supreme court of the department in which each candidate has resided for the past six months every person who shall pass the examination, provided such person shall have in other respects complied with the rules regulating admission to practice as attorneys and counsellors, which fact shall be determaned by said board before examination. (See B., C. & G. Consol. L., 2nd Ed., p. 4285.) 86 ATTORNEYS AND COUNSELLORS. 6. Judiciary law, § 464. Annual account by state board of law examiners. The state board of law examiners shall render during the month of January, an annual account of all their receipts and disbursements to the court of appeals. (See B., C. & G. Consol. L., 2nd Ed., p. 4286.) 7. Judiciary Law, § 465. Fee for examinations. Every person applying for examination for admission to practice as any attorney and counsellor-at-law shall pay such fee, not to exceed twenty-five dollars, as may be fixed by the court of appeals as necessary to cover the cost of such examination. No applicant shall be required to pay more than one examination fee. (Amended by L. 1917, ch. 365. B., C. & G. Oonsol. L., 2nd Ed., p. 4286.) 8. Rules of examiners. Rule I. — Each applicant for examination must file with the Secre- tary of the Board, at least fifteen days before the day appointed for holding the examination at which he intends to apply, the preliminary proofs required by the "Rules of the Court of Appeals for the ad- mission of attorneys and counsellors-at-law, " from which it must appear affirmatively and specifically that all the preliminary condi- tions prescribed by said rules have been fulfilled, and also proof of the residence of the applicant for six months prior to the date of the said examination, giving place, with street and number, if any which must be made by his own affidavit. Said affidavit must also state that such residence is actual and not constructive. The Board in its dis- cretion may order additional proofs of residence to be filed, and may require an applicant to appear in person before it, or some member thereof, and be examined concerning his qualifications to be admitted to the examinations. The examination fee of $15 must be paid to the Treasurer at the time the application for examination is filed. To entitle an applicant to a re-examination, he must notify the Secretary by mail of his desire therefor, at least fifteen days before the examination at which he intends to appear and file with him, at the same time, his own. affidavit stating that he is and has been for the six months prior to such examination an actual and not constructive resident of this State, giving the place of such residence, and street and number, if any. Rule II. — Bach applicant must be a citizen of the State, of full age; he may be examined in any Department, whether a resident thereof or not, but the fact of his having passed the examination will be certified to the Appellate Division of the Judicial Department in which he has resided for the six months prior to his examination. He must, however, entitle his papers in the Department in which he resides. Note. — An Applicant must appear for examination in the Depart- ment in which he entitles his papers, unless permission of the Board otherwise be granted at least fifteen days before the day appointed for holding the examination. ATTORNEYS AND COUNSELLORS. 87 Rule III. — In applying the provisions of Rules III and VII of the Rules of the Court of Appeals, "For the admission of attorneys and counsellors-at-law, " the Board will require proof that the college or university of which an applicant claims to be a graduate, maintains a satisfactory standard in respect to the course of studies completed by him. In case the college or university is registered with the Board of Regents of the State of New York as maintaining such standard, the applicant must submit to the Board, with his diploma or certi- ficate of graduation, the certificate of the said Board of Regents to that effect, which will be accepted by this Board as prima facie evi- dence of the fact. Such certificate need not be filed in cases where the Board of Regents, by a general certificate, has certified to this Board that the said college or university maintains a satisfactory college standard leading to the degree with which the applicant graduated. In all other cases the applicant must submit with his diploma or cer- tificate of graduation satisfactory proof of the course of study com- pleted by him and of the character of the college or university of which he claims to be a graduate. Rule IV. — The papers filed by each applicant must be attached to- gether, and there must be endorsed upon them the name of the ap- plicant. The papers must be entitled, "In the matter of the applica- tion of for admission to the Bar." Each applicant must state the beginning and the end of each term spent in a law school, his age when he began his attendance upon the law school, as well as the beginning and the end of each vacation that he has had. Rule V. — An applicant Avho has been admitted to the bar as an at- torney in another State or country, and who has remained therein as a practicing attorney for the period of three years, may prove the latter fact by his own affidavit, and must present also a certificate from a judge of the court in which he was admitted, or from a county judge in said State, certifying that the applicant had remained in said State or country as a practicing attorney for said period of three years, after he had been admitted as an attorney therein. The signa- ture of the judge must be certified to by the clerk of the court or by the county clerk under the seal of the court. Rule VI. — The Board will divide the subjects of examination into two groups, as follows : Group One, Pleading and Practice and Evi- dence ; Group Two, Substantive Law, viz. : Real Property, Contracts, Partnership, Negotiable Paper, Principal and Agent, Principal and Surety, Insurance, Bailments, Sales, Criminal Law, Torts, Wills and Administration, Equity, Corporations, Domestic Relations, Legal Ethics and the Constitutions of New York State and of the United States. Bach applicant will be required to obtain the requisite stand- ard in both groups and on his entire paper to entitle him to a certificate from the Board. If he obtains the required standard in either group and not on his entire paper he will receive a pass card for the group which he passes and will not be required to be re-examined therein. He will be re-e'xamined in the group in which he failed or on the en- 88 ATTORNEYS AKD COUNSEIiLORS. tire paper if he failed in both groups at any subsequent examination for which he is eligible and for which he gives notice as required by these rules. Note. — Applicants should file their papers at the earliest possible moment; amendable defects may be discovered, which can be cor- rected if attended to promptly. D. Decisions relating to admission of attorneys. In this State, counsellors, solicitors, and attorneys have ever been appointed or admitted to practice by the several courts in which they intend to pursue their profession; and, although they are declared by statute to be judicial officers yet they do not hold an office or public trust in the constitutional sense of that term. They are officers of the court, exercising a privilege or francise subject to removal or suspension by the courts, but, if they are not so removed or suspended, they hold their office for life.^ The power of the court to admit or to re- move attorneys is given by statute, and the proceeding is a special one.^ The right of a qualified applicant to admission, is a sub- stantial right, and an order denying the right of admission is appealable to the Court of Appeals.* A citizen of another State is not entitled, as matter of right, to admission to the bar of this State.^ An alien may not be admitted to practice as an attorney and eounsellor-at-law in this State. The provision of the rule of the Court of Appeals, authorizing the admission of persons who have practiced three years in the highest courts of law of another country, applies only to the case of a citizen of the United States who has thus practiced.^ An applicant admitted to practice in the several courts of a certain judicial district in another State, but who was never admitted to practice in the highest court of that State, is not entitled to be admitted to practice in this State without exam- ination.'^ To entitle a person to admission on the ground that 2. Matter of Baum, 8 K. Y. Supp. 5. In Matter of Henry, 40 N. Y. 560. 771, 30 St. Rep. 174. 6. In the Matter of O'Neill, 90 N. 3. In re Percy, 36 N. Y. 651; In the Y. 584. Matter of an Attorney, 83 N. Y. 164. 7. Matter of Backus, 151 App. Div. 4. Matter of the Application of 813, 136 N. Y. Supp. 484. Cooper, 22 N. Y. 67. Attorney in Italy. — On account of Attendance at law school. — See Mat- the difference in the systems of juris- ter of New York Law School, 190 N. prudence in Italy and New York State, Y. 215. it is inadvisable to permit a naturalized ATTOKNEYS AND COUNSELLORS. 89 he is a member of the bar of England, Ireland or Scotland he must have been admitted to the bar and as such entitled to practice in the highest court of some part of the Kingdom of Great Britain and Ireland. Attorneys and solicitors are not entitled to admission.^ , Eule IV of the Court of Appeals regulating admission to the bar, which prescribes the character of the examination which applicants who are not graduates of a college or univer- sity must pass before entering upon a clerkship or attendance at a law school, was framed with reference to the then existing rules of the education department relative to its examinations in the studies therein mentioned. The rule prescribes those studies in general terms, indicating by the language of the rule that specific information as to the precise subjects of ex- amination is to be obtained on application to the regents.^ The selection of physics as the scientific subject in which law students must be examined was made by the judges of the Court of Appeals in approving an existing rule of the edu- cation department prescribing physics as the proper branch of science to be embraced in the preliminary studies of a law student, and a certificate showing that an applicant has passed an examination in some other science, but not in physics, is defective." A law student is not required to pass an examination in economics^ as a preliminary to the entrance upon the study of law.^^ The law clerkship in practical office work must be during the usual business hours of the day and must be continuous for one year. It cannot be made up of successive summer vacations as the year would not be continuous, neither can it be made up by waiving the last year at the law school since the law school attendance breaks into the usual business hours of the day.^ citizen of this country to practice law 906, 142 N. Y. Supp. 186. in this State because of his having been 9. Matter of Grout, 214 N. Y. 39. an attorney in good standing in Italy. 10. Matter of Grout, 214 N. Y. 39. Matter of Maggio, 27 App. Div. 129, 11. Matter of Grout, 214 N. Y. 39. SI N. Y. Supp. 1055. 12. Matter of McGarey, 167 App. 8. Matter of Wray, 157 App. Div. Div. 931, 152 N. Y. Supp. 324. 90 ATTORNEYS AND COUNSELLORS. E. Oath of attorney. 1. Judiciary law, § 466. Attorney's oath of office. Each person, admitted as prescribed in this cliapter must, upon his admission, take the constitutional oath of office in open court and subscribe the same in a roll or book, to be kept in the oflSce of the clerk of the appellate division of the supreme court for that purpose. (See B., C. & G. Consol. L., 2nd Ed., p. 4286.) 2. Chapter 263 of Laws of 1918. Person in military or naval services. Any person who, from actual service in the military or naval forces of the United States, is unable to take in open court the constitutional oath of office required of an attorney and counselor at law, may take such oath before the commanding officer of that person's regiment or ship or separate detachment, as the case may be, and such commanding officer is hereby authorized to administer such oath and to transmit the written or printed form thereof to the clerk of the proper appellate division, who, upon approval of the said court, shall file such oath in his office, and thereupon such oath shall have the full force and effect as if taken in open court; provided, however, that such person, as soon as he is physically able, shall forthwith subscribe the oath in the roll or book kept in the office of the said clerk and before he shall discharge any of the duties of an attorney and counselor at law. F. Eegistration. By chapter 165 of the Laws of 1898 and subsequent amend- ments, now sections 468 and 469 of the Judiciary Law, all at- torneys must file with the clerk of the Court of Appeals an oath or affirmation setting out the date of his admission to practice, and the clerk of that court must keep an official regis- ter of such oaths, which is termed the " official register of attorneys and counsellors-at-law in the State of New York." (See B. C. and G.. Consol. Laws, 2nd Ed., Pp. 4286-4288.) ARTICLE n. DUTIES AND LIABILITIES. A. In general. Membership in the bar is a privilege burdened with con- ditions. A fair, private and professional character is one of them. Comphance with that condition is essential at the moment of admission; but it is equally essential afterwards, and whenever the condition is broken, the privilege is lost.^' An attorney in order to hold office must be honest in his deal- 13. Matter of Rouss, 221 N. Y. 81. ATTORNEYS AND COUNSELLORS, 91 ings and especially with his clients and those who have been such. He cannot escape discipline for acts which involve a breach of his duty to a client by severing the relation."' But specific contractual relations of attorney and client are not always necessary to create professional obligations for which a lawyer may be held to account.^^ B. As public officers. Attorneys are not to be classed as public officers, but they are officers of the court exercising a privilege or franchise." As officers of the court, they are subject to removal or sus- pension for cause.^' C. Disqualification in certain cases. No judge of the Court of Appeals or justice of the Supreme Court, or any county judge or surrogate in a county having a population exceeding 120,000 shall practice as an attorney and counsellor in any court of record in the State or act as referee.^^ , A law partner or clerk of a judge is barred from practicing before such judge.-'^^ A surrogate's father or son shall not practice or hie employed as attorney or counsel, in any case, in which his partner or clerk is prohibited by law from so practicing, or being employed.^" A sheriff, under sheriff, deputy sheriff, sheriff's clerks, constable, coroner, crier, or attendant of a court, shall not, during his con- tinuance in office, practice as an attorney or counsellor in any court."^ The clerk, deputy clerk, or special deputy clerk of a court cannot during his continuance in office practice as an attorney in that court.^^ The partner of a district attorney may not defend a prosecution, and an attorney may not defend a per- son of whom he has been public prosecutor.^' Au attorney may not permit a person, not being his agent, law partner, or clerk in his office to sue out a mandate or prosecute or defend an action in his name.^* 14. Matter of Beare, 158 App. Div. 18. N. Y. Constitution, Art. VI, sec- 469, 143 N. Y. Supp. 595. tion SO. 15. Matter of Coleman, 170 App. 19. Judiciary Law, section 471. Div. 537, 156 N. Y. Supp. 487. 80. Judiciary Law, section 472. 16. Matter of Baum, 8 K. Y. Supp. 21. Judiciary Law, section 473. 771 ; Matter of Burchard, 27 Hun, 429 ; 22. Judiciary Law, section 350. Matter of Wood, 3 Cow. 29. 23. Penal Law, section 278. 17. See, infra, Article VI. 24- Judiciary Law, section 479. 92 ATTORNEYS AND COUNSELLORS. Section 274 of the Penal Law prohibits attorneys or coun- sellors from procuring retainers by offering or giving any valuable consideration therefor, and it, not only prohibits them from giving it to a desired client for the purpose of ob- taining his claim to bring suit upon, but also from paying or agreeing to pay any layman, out of the prospective profits of eases, for services in inducing desired clients to place their claims in the attorney's hands for enforcement.^^ Where a person not regularly admitted to practice and not a party to an action, conducts it in the Municipal Court of the city of New York, the judgment rendered therein is void as violative of Penal Law, section 271.^^ D. Transactions between attorney and client. Owing to the fiduciary relations between attorney and client, the court will scrutinize closely all transactions be- tween them, and the burden is on the attorney to show that the contract with his client is fair.^^ And that his client acted on full information of all the material circumstances, and that he did not take undue advantage of his client's complacency, confidence, ignorance, or misconception.^* An attorney cannot recover on a contract wih his client giv- ing him as compensation a certain percentage of moneys real- ized by the client from a sale of land without showing that the agreement was fair; that the client acted freely and with understanding, and when making the contract fully under- stood its purport and had knowledge of all material circum- stances known to the attorney, and that he was not guilty of fraud and made no improper use of the confidence imposed in him.^® 25. Matter of Clark, 184 N. Y. 2S2. prohibiting attorneys from suing on as- Assigned claim. — ^Where the plaintiff signed claims. Thompson v. Stiles, 44 was admitted to the bar and main- Misc. 334, 89 N. T. Supp. 676. tained a law office for about a year, but 26. Kaplan v. Berman, 37 Misc. 502, thereafter discontinued his office and 75 N. Y. Supp. 100:2. abandoned the practice of law intend- 27. Kissam v. Squires, 102 App. Div. ing never to resume it, and he never 536, 92 N. Y. Supp. 873 ; Matter of filed the certificate required by the Holland, 110 App. Div. 799, 97 N. T. Laws of 1898, as amended by the Laws Supp. 202. of 1899, which laws make it unlawful 28. Couse v. Horton, 23 App. Div. for any one to practice law unless he 198, 200, 49 N. Y. Supp. 132. files a certificate required by statute, 29. Blaikie v. Post, 137 App. Div. it was held that he was not an attor- 648, 122 Supp. 292. ney within the meaning of the statute ATTORNEYS. AND COUNSELLORS. 93 E. Authority. The authority of an attorney at law extends to the manage- ment of the case in all the exigencies which arise during its progress; and, in the absence of fraud, his authority cannot be questioned by his client because of want of specific author- ity to do the act done or consented to.^" But, an attomey-at-law retained to defend an action for divorce and without power to compromise, has no authority under his original retainer to make a contract binding his client to pay a sum of money to his wife.^^ Where one acting as an attorney in behalf of a client, en- gages a private detective to procure evidence for use in a con- templated action for divorce, the client ordinarily is liable to pay for such services ; but where it appears that the services were rendered in response to an express agreement on the part of the attorney to pay therefor, and upon the strength of his personal credit, he may be held personally liable in an ac- tion by the detective.^^ F. Tlse of client's money. Under no circumstances is an attorney warranted in using his client's money as his own, and an intent to pay is no excuse for such misconduct.^^ It is the duty of an attorney to pay over to his client money collected for him whenever he can do so with safety ; and even when there is doubt whether the securities upon which the money was collected did in fact belong to such client, all that he can require from his client on paying over the money to him is an indemnity.^* A client by accepting a portion of moneys collected for him by his attorney-at-law does not make an accord and satisfac- tion of his claim against him ; he need not return the portion received, it being his own money, before bringing action to re- cover a balance due.^^ Where an attorney-at-law having received a check in pay- so. Clinton v. New York Central, etc., 33. Matter of Coleman, 178 App. K. R. Co., 147 App. Div. 468, 131 N. Div. 580, 165 N. Y. Supp. 685. Y. Supp. 881. 34. Marvin v. EUwood & Titus, 2 31. Joseph V. Piatt, 130 App. Div. Paige, 365. 478, 114 N. Y. Supp. 1065. 35. General Fireproof Construction 32. Eiley v. TuU, 186 App. Div. 90l5, Co. v. Butterfleld, 143 App. Div. 708, 174 N. Y. Supp. 862. 138 N. Y. Supp. 407. 94 ATTORNEYS AND COUNSELLOBS. ment of moneys due his client, an infant, hands the same to the general guardian to whose order the check is payable, and receives it back when indorsed by him for the purpose of col- lecting the check and deducting his fees and disbursements, he cannot, when sued for the sum collected contend that the de- livery of the check constituted a payment so that the plaintiff cannot recover as for moneys delivered to him by the defend- ant, in that the suit is brought solely for moneys collected.^^ Where an attorney deposited the money of his client's in his own name and to his own credit in the bank in which he had carried his account for twelve years, and which had been doing business for over sixty years and which was given a high rating in the commercial agencies and enjoyed the con- fidence and had the accounts of many prominent customers, and the attorney's course was not in violation of the instruc- tions of his clients, and where the bank failed and a dividend of 40 per cent, was declared on deposits therein, a motion to compel the attorney to make good to the clients the money lost was denied.^ Gr. Liability for unskillfulness. It is the duty of an attorney to bring to the conduct of his client's business the ordinary legal knowledge and skill com- mon to members of the legal profession; to act toward his client with the most scrupulous good faith and fidelity, and to exercise, in the course of his employment, that reasonable care and diligence which is usually exercised by lawyers. He is not bound to possess or exercise the highest degree of skill, care, and diligence; nor is he an insurer or guarantor of the results of his work. For the consequences of a failure to per- form these duties the attorney is generally liable to his client.^^ An attorney employed to search title to real property may be guilty of negligence in failing to detect flaw in title.^^ An attorney having a contingent claim for part of a recov- ery may not collect his own part and then abandon all efforts to collect his client's part.*" 36. Weber v. Werner, laS App. Div. 39. Trimboli v. Kinkel, Z2& N. Y. 137, 132 N. T. Supp. 943. 147. 37. Matter of Shanley, 37 Misc. 8, 40. Matter of Lahm, 179 App. Div. 107 N. Y. Supp. 913. 757, 167 N. Y. Supp. 317. 38. 4 "Cyc", p. 957. ATTOBNEYS AND COUNSELLORS. 95 In an action against an attorney for a willful violation of duty in settling a claim against an estate for less than its face value without authority, the plaintiff must establish that the settlement was unauthorized, that the claim was valid, and that it was worth more than the amount collected thereon. An instruction to the jury, therefore, that " when negligence has been proved, if you find there was any, in consequence of which a client has lost his case, it is not incumbent upon the client to show that but for the negligence he would have suc- ceeded in that action," is erroneous in that it submitted the case upon a wrong theory and authorized the adoption of a wrong measure of damages.^^ In an action brought by a client against her attorney to compel him to account for money which she had paid to him for the purpose of having it invested in real estate mortgages, and which had been lost, owing to the fact that the attorney did not exercise reasonable diligence and such care and skill as is ordinarily possessed by persons of common capacity en- gaged in the same business, the court will not give effect to an instrument executed by the client to the attorney in which she ratified his acts in her behalf and released him from all liability in respect thereto, unless it appears that the client knew and fully understood the entire transaction and the ex- tent of her legal rights in the premises.'*^ An attorney who issues a body execution in a case where it is unauthorized by statute is liable to the party arrested for the damages sustained.^ H. Representing conflicting interests. It is not always improper or unlawful for an attorney to represent conflicting interests. Adverse interests, if they are to be adjusted, may be represented by the same counsel, though the cases in which this can be done are exceptional, and never entirely free from danger of conflicting duties.** 41. Vooth V. MeEachen, 181 N. T. 43. Allen v. Fromme, 195 N. Y. 404. 28. 44. Eiseman v. Hazard, 218 N. T. 42. Kissam v. Squires, 102 App. Div. 155. 536, 92 N. Y. Supp. 873. 96 ATTORNEYS AND COUNSELLORS. ARTICLE III. ENFORCEMENT OF LIEN. A. Nature and kinds of attorneys' liens. 1. Judiciary Law, § 475. Attorney's lien in action or special proceeding. From the commencement of an action or special proceeding, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of .action, claim or counterclaim, which attaclies to a verdict, report or decision, judgment or final order in his client's favor, and the proceeds thereof in whosesoever hands they may come; and the lien cannot he affected by any settlement betwen the parties before or after judgment or final order. The court upon the petition of the client or attorney may determine and enforce the lien.45 (See B., C. & G. Consol. L., 3nd Ed., p. 4296.) 2. Two kinds of liens. An attorney at law has two liens:*® A retaining lien on all papers, securities or moneys belonging to his client which eame into his possession in the course of his professional employment, which is a general lien for the entire balance of account, dependent, however, upon possession. There is also a charging lien, which is not dependent upon possession, and is not a lien for a general balance of account. From the commencement of an action or special proceeding the attor- ney has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, decision, judgment or final order in his client's favor, and the proceeds thereof in whosesoever hands they may eome.*'^ The distinction between the lien on papers or property of the client in the possession of the attorney and the lien on a judgment has given rise to the terms " charging lien " and " retaining or possessory lien." The " charging lien " is defined as the right of the attorney to charge upon property 45. Construction. — The statute is 177, 121 N. Y. Supp. 1070. remedial in its character and should be Forfeiture of lien. — There is no dif- eonstrued liberally in aid of the object ference between the two liens as re- sought, which is to furnish security to gards a forfeiture of the right thereto, attorneys by giving them a lien on the Matter of Rieser, 137 App. Div. 177, cause of action. Fisoher-Hansen v. 131 N. Y. Supp. 1070. Brooklyn Heights R. Co., 173 N. Y. 493. 47. Matter of Heinsheimer, 214 N. Y. 46. Matter of Reiser, 137 App. Div. 361. ATTORNEYS AND COUNSELLORS. 97 not in his possession but connected with his employment, his claims arising out of his employment, that is, upon the cause of action or a judgment which may be recovered thereon. The " possessory or retaining lien " is defined as the attorney's right to retain possession of property belonging to his client which comes into his hands within the scope of his employ- ment until his charges are paid. The charging lien is the right to be paid for his services out of the proceeds of his judgment obtained by his labor and skill.*^ 3. Possessory lien. The lien of an attorney upon the property of his client in his possession was recognized at common law. It is the right of the attorney to retain possession of such property until his claim for compensation for services has been satisfied. The principle was settled long ago, said Lord Kenyon, in Reed v. Dupper, 6 T. E. 362 : ' ' That the party should not run away with the fruits of the cause without satisfying the legal de- mands of his attorney, by whose industry and in many in- stances at whose expense those fruits are obtained." The lien is a general one,*^ and is independent of the pro- visions of section 475 of the Judiciary Law.^" It extends to the client's papers and property which are in the possession of the attorney, qnd entitles him to retain them until his claim for services is paid.^^ And the court will not require the attorney to deliver the property to the client or his suc- cessor, without preserving the lien.^^ If moneys come into the hands of an attorney, as such, he may assert a lien thereon.^^ A general lien of an attorney extends to a balance of ac- 48. Matter of Craig, 171 App. Div. 51. Matter of. Knapp, 85 N. Y. S84; 218, 157 N. Y. Supp. 310, afarmed Matter of MeGuire, 106 App. Div. 131, without opinion, 230 N. Y. 576. See 94 N. Y. Supp. 97 ; Anderson v. Bracke- also, Leask v. Hoagland, 64 Misc. 1-56, leer, 28 Civ. Proc. 306, 55 N. Y. Supp. 118 N. Y. Supp. 1035; s. c, 136 App. 731. Div. 658; Anderson v. Brackeleer, 28 52. Matter of Dunn, 305 N. Y. 398; Civ. Proc. 306, 55 N. Y. Supp. 721. Matter of Bergstrom & Co., 131 App. 49. Anderson v. Brackeleer, 28 Civ. Div. 791, 116 N. Y. Supp. 245. Proc. 306, 55 N. Y. Supp. 721. 53. Kose v. Whiteman, 52 Misc. 210, 50. Matter of McGuire, 106 App. 101 N. Y. Supp. 1034. Div. 131, 94 N. Y.. Supp. 97; Matter Attorney for estate. — Attorneys at of Ney Co., 114 App. Div. 467, 99 N. law who have not only rendered ser- Y. Supp. 983. vices in procuring the appointment of 7 98 ATTOKNEYS AND COUNSELLORS. count for personal services and attaches to the moneys re- ceived and coUected.^^ But, the existence of such lien does not entitle the attorney to use the property subject thereto, and if he uses money in his possession on which he claims a lien, he is guilty of con- version/^ The lien may operate in favor of one who is not the attorney of record for the client.^ But it is strictly per- sonal to the attorney and cannot be transferred by him to a third party/^'^ The lien of the attorney ujjon the papers of his client does not extend beyond the interest of the client, and when that interest terminates the lien also terminates.^** It covers only those papers which have come into the possession of the attor- nej in the course of his professional employment.^^ And, an attorney who obtains his client's property by fraud acquires no lien thereon.^" "Where an attorney receives property for a specific purpose he must carry out that purpose irrespective of any lien which he might have otherwise ; but, where an attorney has a lien for services, the fact that moneys were received by him on ac- count of disbursements and that he applied them to the ex- pense of printing cases on appeal does not deprive him of his ■lien on the printed cases, but he retains a lien thereon as well as upon all other papers in the suit belonging to his client.^^ An attorney has no lien for services on copies of the printed record of a case on appeal to the Court of Appeals, which must be filed, and were delivered to and received by him for an administratrix with the will an- 558, 1&5 N. Y. Supp. 736. nexed, but have also aided such admin- 56. Harding v. Colon, 14-6 App Div. istratrix in converting the assets of the 842, 131 N. Y. Supp. 903. estate into cash and who have received 57. Sullivan v. Mayor, etc., of New and hold in their possession the funds York, 68 Hun, 544, 22 N. Y. Supp. of the estate are entitled to a retain- 1041. ing lien thereon for the value of their 58. Jackson v. American Cigar Box services, which lien is distinguished Co., 141 App. Div. 195, 126 N. Y. Supp. from the statutory lien upon a cause of 58. action. Matter of O'Connor, 177 App. SB. Anderson v. Brackeleer, 28 Civ. Div. 616, 164 N. Y. Supp. 574. Proc. 306, 55 N. Y. Supp. 721. 54. Matter of Knapp, 85 N. Y. 284; 60. Heyward v. Maynard, 119 App. Matter of an Attorney, 87 N. Y. 521 ; Div. 66, 103 N. Y. Supp. 1028. Ward V. Craig, 87 N. Y. 550. 61. Matter of HoUins, 197 N. T. 55. Matter of Brown, 178 App. Div. 361. ATTORNEyS AND COUNSELLORS. 99 that purpose, where the cost of printing was paid by his client.*^ B. Statutory lien under Judiciary Law, section 475. 1. In general. Under section 475 of the Judiciary Law, an attorney has a lien on the cause of action of his client. This lien is a special lien, and hence the attorney cannot, under the statute, enforce a lien for a general balance of account for services rendered outside of any special proceeding or action.^^ It lacks the element of possession, but is founded upon equity upon the ground that an attorney by whose labor a judgment has been obtained should have an interest in that judgment. It was formerly limited to the judgment recovered,^* and extended only to taxable costs and disbursements,^^ but has now been enlarged so as to include a lien on the " cause of action," and is now broad enough to cover full compensation for the ser- vices.^® In its early history it covered only actions, but now it includes special proceedings as well.®'' It is well settled that, under this section, an attorney has a lien for his compensation on the client's cause of action or claim or demand from the time of the commencement of the action or special proceeding, and that this attaches to the pro- ceeds thereof, in whosesoever hands they may come ; that the attorney is not required to inform parties of his claim ; that all the world must take notice of it, and that any one settling without the knowledge of the attorney does so at his peril.®^ Before recent amendments to the statute, it was held that, in the absence of notice of the lien, the defendant in good faith had a right to pay the judgment to the plaintiff.®^ 62. Matter of Bergstrom & Co., 131 65. Phillips v. Stag, 2 Edw. Ch. 108. App. Div. 791, 116 N. Y. Supp. 245. 66. Matter of Regan, 167 N. Y. 338. 63. Matter of Heinsheimer, 214 N. T. 67. Fischer-Hansen v. Brooklyn 361; Matter of Craig, 171 App. Div. Heights E. Co., 173 N. Y. 492; Matter 218, 157 N. Y. Supp. 310; affirmed of Lexington Ave., 30 App. Div. 602, without opinion, 220 N. Y. 576. 52 N. Y. Supp. 203. 64. Williams v. Ingersoll, 89 N. Y. 68. In re Flower, 167 N. Y. Supp. 517; Randall v. Van Wagenen, 115 N. 778. y. 527. 69. Wright v. Wright, 70 N. Y. 98. 100 ATTORNEYS AND COUNSELLORS. 2. To what lien attaches. Under the statute, the attorney has a lien upon "his client's cause of action, claim or counterclaim."™ An attorney for the owners of real property has no lien thereon for services and disbursements in a certiorari pro- ceeding to review an assessment on such property.''^ So, too, an attorney representing a property owner in con- demnation proceedings obtains a lien on the award, not upon the land.''" And an attorney is not entitled to a lien upon real estate for procuring the passage and approval of a special act author- izing the Commissioners of the Land Office to grant and con- vey property without further payment.''^ An attorney employed by the plaintiff, after the entry of a judgment establishing his rights to certain land as against the town, to prosecute an appeal from said judgment taken on the claim that the plaintiff was entitled to more land, and such claim fails, but the judgment as rendered is affirmed, is not entitled to a lien.''* Section 475 applies to proceedings in Surrogate's Courts, and gives an attorney a lien upon his client's claim for ser- vices rendered in compelling an accounting by executors and administrators.''^ But an attorney who performs services for an executor or administrator of an estate has no lien upon the general assets of the estate for the value of his services.''^ An attorney who is employed to contest the probate of an alleged will, has no lien under the statute.'" 70. Schoenherr v. Van Meter, 315 N. Money in the hands of an adminis- Y. 548; Matter of Reisfeld, 237 N. Y. trator applicable to a judgment re- 137. covered against the decedent is money 71. Matter of Ely, 79 Misc. 118, 139 in the hands of a third person to which N. Y. Supp. 729. the lien of the attorney recovering said 72. Matter of Scheier, 159 App. Div. judgment attaches to the extent of such 861, 144 N. Y. Supp. 882, aff'd, 211 N. lien. Matter of Tierney, 88 Misc. 347, Y. 584. 151 N. Y. Supp. 972. 73. Morey v. Schuster, 159 App. Div. 76. Matter of Rabell, 175 App. Div. 602, 145 N. Y. Supp. 258, aff'd, 217 345, 162 N. Y. Supp. 218; Matter of N. Y. 639. Dawson, 110 Misc. 472, 180 N. Y. Supp. 74. Matter of Jones, 76 Misc. 331, 271; In re Nocton's Estate, 163 N. Y. 136 N. Y. Supp. 819. Supp. 215. 75. Matter of Williams, 187 N. Y. 77. Matter of Beckett, 113 Misc. 45. 286. ATTORNEYS AND COUNSELLORS. M But an attorney may have a lien on moneys collected for an estate, notwithstanding he was retained by the adminis- trator.''^ The lien of an attorney for services rendered upon an application for letters of administration attaches to the decree granting the letters, but no lien for services rendered subsequent to the issuance of such letters can attach to the decree granting the letters.™ The attorney for an administratrix who on her accounting has defeated the claim of next of kin that certain property in her hands belonged to the estate is not entitled to a lien upon his client's property under this section.^" Attorneys who have furnished legal services in probating a will in which their client, who is the sole legatee, is appointed administratrix, and as such has obtained the entire estate which will even- tually belong to her individually, have a lien for the value of their services, upon their client's individual interest in the estate.^^ An attorney has no right to appropriate alimony, either as compensation for his services or as payment for disburse- ments connected with the action. His allowance of counsel fee is deemed sufficient by the court for such matters.*^ And a fine in contempt proceedings to punish for nonpay- ment of alimony is a substitute for the unpaid alimony and as such is not subject to a lien for counsel fees.^^ The lien of an attorney attaches to money paid into court by the opposite party and is not disturbed by a subsequent judgment for costs in favor of the party making the payment.^* 78. Matter of Boss, 133 App. Div. acting for a defendant in the municipal 74, 107 N. T. Supp. 899. court has obtained a judgment dismiss- 79. In re Nocton's Estate, 162 N. T. ing the complaint with costs which have Supp. 215. been deposited with the clerk of the 80. Matter of Eobinson, 125 App. court, the attorney has a lien thereon Div. 424, 109 N. Y. Supp. 827; aff'd, for his services irrespective of the 192 N. Y. 574. statute, and said lien is superior to that 81. Matter of Wood, 170 App. Div. of a Judgment creditor of his client. 533, 156 N. Y. Supp. 810. In order to enforce said lien the attor- 82. Matter of Bolles, 7i8 App. Div, ney is not required to prove either that 180, 79 N. Y. Supp. 530. his client is irresponsible, or has re- 83. Turner v. Woolworth, 221 N. Y. fused to compensate him, or that there 425. was any agreement that he was to re- 84. Bernstein v. Traverso, 82 Misc. ceive any part of the avails of his 411, 143 N. Y. Supp. 1091. client's judgment. Fliashniek v. Burke, Costs deposited with clerk of muni- 176 App. Div. 367, 162 N. Y. Supp. 867. cipal court. — Where an attorney at law 102 ATTORNEYS AND COTJNSELLOKS. An; attorney who has been retained to file a proof of death and collect an insurance policy, has a lien upon such policy for the services which he had rendered.*^ 3. Effect of settlement without consent of attorney. Two fundamental rights clash when a client settles his litigation to the detriment of the attorney's lien. On the one hand is the clear right of a client to settle his own cause of action whenever he desires and at such an amount as is satis- factory to him. On the other hand, the attorney's lien is a legal right which must be respected by all the world, includ- ing the other parties to the litigation.^® Honest settlements by parties made with no intention to take advantages of their attorneys, but for the simple purpose of ending the litigation, are praiseworthy and should be en- couraged. Dishonest and collusive settlements made with in- tent to defraud the attorneys upon either side are reprehen- sible and should be condemned.^ A clause in a retainer which forbids the client from settling the litigation without the con- sent of the attorney, is void as against public policy, and may be repudiated by the client.^^ But the right of a defendant to procure from the plaintiff a release of the cause of action, so long as it is done honorably and fairly and with due regard to the rights of plaintiff's counsel, of which the defendant has notice, will be sustained.^^ A defendant having knowledge of the lien of the plaintiff's attorney may not disregard it upon settlement with the plain- tiff and part with the entire fund. He is bound to retain, and the law conclusively assumes he has retained, sufficient to pay the sum which the attorney was entitled to receive.^" In such a case, the attorney may have his lien determined and en- forced pursuant to the provisions of section 475.^^ Also it is 85. Matter of Sweeney, 86 App. Div. Co., 183 N. Y. 456 ; Fenwiek v. Mit- 547, 83 N. Y. Supp. 680. chell, 34 Miae. 617, 70 N. Y. Supp." 667, 86. Knipe v. Wheelehan, 160 N. Y. rev'd, 64 App. Div. 621, 7a N. Y. Supp. Supp. 1013. 1102. 87. National Exhibition Co. v. Crane, 90. Sargent v. McLeod, 209 N. Y. 167 N. Y. 505, 508. 360. 88. Matter of Snyder, 190 N. T. 66 ; 91. Matter of Reisfeld, 187 App. Di,-. Syme v. Terry & Tench Co., 125 App. 223, 175 N. Y. Supp. 365, modified, 237 Div. 610, 110 N. Y. Supp. 25. N. Y. 137. 89. Kuehn v. Syracuse Rap. Transit ATTOENBYS AND COUNSELLORS. 103 clear that after the entry of judgment, the plaintiff's attorney is entitled to a lien on the judgment which cannot be affected by any settlement between the parties.^^ The lien of an attorney upon a judgment which he has ob- tained for a solvent client operates only as a security for his legal claim, and where there is a dispute between him and his client as to the value of the services the client may collect the judgment and execute a satisfaction piece without the knowl- edge or consent of the attorney. In such case the satisfaction of the judgment does not displace the lien of the attorney, and the latter may, under section 475, institute proceedings to en- force his lien. He is also entitled to an order authorizing him, if he is unable to collect the amount of his claim from his client, to make a motion to set aside the satisfaction of the judgment.^^ And the satisfaction of a Surrogate's decree may be set aside, when such action is necessary for the protection of an attorney's lien.^* 4. Discontinuance of action. The right of a party to discontinue an action is similar to his right to settle it. A plaintiff who is concededly able and willing to pay all his 'attorney's just claims, should be per- mitted to discontinue the action.^^ An attorney can enforce his lien for his protection only; and, where a responsible client discontinues his action, his at- torney cannot have the order of discontinuance set aside, although irregular, because it failed to provide for costs, but he must look to his client for compensation.^^ But the court 92. Baxter v. Connor, 119 App. Div. satisfy their lien. So, too, they are en- 450 104 N. Y. Supp. 337; Matter of' titled to have vacated an order can- Salant, 158 App. Div. 697, 143 N. Y. celing an undertaking given by the Supp. 870, aff'd, 210 N. T. 632. " plaintiff on appeal where the same was Settlement after appeal — Where de- entered without notice or consent, ir- f endants, after having secured a judg- respective of whether they can enforce ment for costs, from which the plaintiff the undertaking. Knickerbocker In- has appealed, settle the action without vestment Co. v. Voorhees, 128 App. Div. the consent of or notice to their attor- 639, 112 N. Y. Supp. 842. neys. who thereafter obtain an order 93. Peri v. New York, etc., E. Co., determining their lien with a provision 152 N. T. 521; Corbit v. Watson, 88 for such further relief as may be neces- App. Div. 467, 85 N. T. Supp. 125 ; sary to enforce it, the attorneys are en- Knickerbocker Inv. Co. v. Voorhees, 128 titled to have the satisfaction of judg- App. Div. 639, 112 N. T. Supp. 842. ment vacated and the judgment rein- 94. Matter of Began, 167 N. Y. 338. stated so that they may enforce it to 95. Matter of Evans, 58 App. Div. 104 ATTORNEYS AND COUNSELLOKS. will not generally permit the discontinuance of the action if it will defeat the lien of the attorney, but will continue the action for the adjustment of the attorney's claim.^^ Or the court, as a condition for the discontinuance, will impose such terms as will protect the attorney .^^ While the court will preserve the lien of an attorney and prevent him from being cheated by collusion and fraudulent settlements, a discontinuance asked by both parties should not be denied, where it is doubtful that the plaintiff's attorney opposing the motion was ever authorized to bring the action.^^ And, where an attorney commenced an action in violation of his client's instructions he has no lien requiring the pro- tection of the court, and if both parties so desire the action should be discontinued despite the attorney's opposition.^ Where there is no counterclaim there cannot be any statu- tory lien in favor of defendant's attorney; and where a settle- ment is made between the parties in good faith the defend- ant's attorney is not authorized to prosecute an appeal for the mere purpose of securing his fees.^ The remedy of continuing a suit for the protection of the attorney's lien is practically obselete, as it is superseded by the more effective remedies of an action in equity or a proceeding to determine the lien. And, if the lien and the other remedies fully protect the interests of the attorney, there is no ground for permitting him to con- tinue the litigation.^ 5. Substitution of attorneys. A client has the right to change his attorney at any time, with or without cause, but this right can only be exercised upon payment to the attorney of the amount due him. The 502, 69 N. Y. Supp. 483; Young v. Railway Co., 122i App. Div. 467, 106 Howell, 64 App. Div. 246, 72 N. T. N. Y. Supp. 894. Supp. 5 ; Mitchell v. Mitchell, 143 App. 1. Mitchell v. Mitchell, 143 App. Div. Div. 172, 127 N. Y. Supp. 1065. 172, 127 N. Y. Supp. 1065. 96. McKay v. Morris, 35 Misc. 571/ 2. Grossman v. Smith, 116. App. Div. 72 N. Y. Supp. 33. 791, 103 N. Y. Supp. 18. 97. Randall v. Van Wagenen, 115 N. 3. Young v. Howell, 64 App. Div. Y. 537 ; Eusso v. Darmstadt, 116 App. 246, 73 N. Y. Supp. 5 ; Smith v. Acker Div. 887, 102 N. Y. Supp. 209. Process Co., 103 App. Div. 170, 93 N. 98. Rogers v. Marcus, 93 App. Div. Y. Supp. 351; Sullivan v. McCann, 113 553, 87 N. Y. Supp. 941. App. Div. 61, 98 N. Y. Supp. 947; 99. Matter of Kelly v. N. Y. City Knipe v. Wheelehan, 160 N. Y. Supp. 1012. ATTORNEYS AND COUNSELLOBS. 105 lien of an attorney is now securely protected by statute and cannot be defeated because the client arbitrarily desires to change his attorney, unless the client discharges the lien by paying to the attorney the amount which he owes him.* "Where a substitution of attorneys is sought to be had by the client and it does not appear that the attorney has done any act or been guilty of any omission prejudicial to his client, he is entitled to have the amount of his lien ascertained by the court or by a referee and to be paid or have security for the payment of such amount as shall eventually be determined to be justly due him before he can be compelled to turn over papers upon which he has a lien for services.^ But an attorney who is retained on a contingent fee to ob- tain an award on the condemnation of his client's lands by the city of New York, but whose retainer is revoked before the service of the application in the condemnation proceeding, cannot assert a lien on the award subsequently made, as the condemnation proceedings were not ' ' commenced ' ' until the service of said application. Under such circumstances the remedy of the attorney, if any, is by action against the client for a breach of contract.^ A determination by the Supreme Court, made in a proceed- ing for a substitution of attorneys, that the attorneys sought to be removed and their privies have, through their miscon- duct, lost all lien or claim upon a judgment in favor of their client by virtue of certain contracts made with the latter, is conclusive upon the delinquent attorneys and their privies in an action brought by them, against the client, after the filing of the referee's report in the substitution proceeding, to com- pel the specific performance of such contracts.'^ 6. Who can assert lien. No one except an attorney can assert an attorney's lien.^ No lien exists under section 475 in favor of counsel, but only the attorney of record is entitled to, a lien.* In fixing 4. Matter of Liebergall, 189' App. 7. Matter of Barkley, 4Z App. Div. Div. 681, 178 N. T. Supp. 857; Lederer 587, 59 N. Y. Supp. 7ia; appeal dia- V. Goldston, «3 Mise. 32S, 117 N. T. taissed, 161 N. T. 647. Supp. 151. 8- Matter of City of New York, 158 5. Matter of Bergstrom & Co., 131 App. Div. 587, 143 N. T. Supp. 943. App. Div. 791, 116 N, Y. Supp. S45. 9. Daley v. Wellbrock, 65 App. Div. 6. Matter of Albers Realty Co., 140 533, 72. N. Y. Supp. 848. App. Div. 277, 125 N. Y. Supp. 179, 106 ATTOBNEYS AND COUNSELLOKS. the lien of an attorney on funds, the proceeds of a judgment, it is improper to include moneys due another attorney, not an attorney of record, which have not been paid over to said attorney by the petitioner, or to include sums representing disbursements in collateral matters.^" An attorney's lien for services cannot be enforced on be- half of a corporation which has contracted for the prosecution of legal proceedings to recover compensation for an owner of lands taken for a public use, and which employs attorneys to perform the service who are made reasonable allowances for their compensation in the final order in the proceeding. A corporation cannot be an attorney and counsellor-at-law nor can it contract to perform the duties of one and employ a law- yer to do the work and assert a lien therefor.^ An attorney is not entitled to the lien given by this section unless he shows performance on his part or a condition of affairs justifying his withdrawal from the case.^ 7. Priority of liens. A claim, in order to supersede an attorney's lien, must be a prior charge against the specific fund upon which the lien has attached. It is not sufficient for such claim to be a gen- eral debt against the elient.^^ An attorney's lien takes precedence over the title of an assignee for the benefit of creditors." 10. Lebandy v. Carnegie Trust Co., services in the court of original juris- 178 App. Div. 614, 165 N. T. Supp. 566. diction and on appeal, and before the 11. Matter of Bensel, 68 Misc. 70, litigation is completed, and upon the 124 N. Y. Supp. 7S6. See also, Matter substitution of other attorneys for the of Co-operative Law Co., 198 N. Y. 479, plaintiff the plaintiff assigns to them and chap. 483, Laws of 1909. the judgment of foreclosure as security 12. Halbert v. Gibbs, 16 App. Div. for her indebtedness to them for their 126, 45 N. Y. Supp. 113, 4 Anno. Gas. services and expenses, the lien thus ac- 333. quired is superior to the rights of those 13., Cooper v. Cooper, 51 App. Div. to whom the plaintiff had previously 595, 64 N. Y. Supp. 901; Bacon V. promised to pay a certain sum of Schlesinger, 171 App. Div. 503, 157 N. money upon the sale of the property Y. Supp. 649. under the judgment of foreclosure, out Judgment of foreclosure. — Attorneys of the surplus belonging to her. Petti- who conduct all the proceedings in an bone v. Thomson, 72 Misc. 486-, 130 action for the foreclosure of a mort- N. T. Supp. 284. gage are entitled to a lien thereon as 14. In re Fowler, 167 N. T. Supp. security for their compensation and 778. where, after they have performed such ATTOENEYS AND COUNSELLORS. 107 The lien of tlie defendant's attorney upon a judgment for costs in defendant's favor is superior to the right of the plain- tiff to offset the judgment against a previous judgment in plaintiff's favor.^ 8. Loss of lien. The discharge of an attorney, without cause, does not de- prive him of his lien for services theretofore rendered.^^ But an attorney may waive his right to a lien." An attorney-at-law may for a just cause terminate his re- lation with his client, but if he do so without justification he forfeits his common-law lien on the pleadings and papers in the action. In the latter case, where the client moves for the substitution of attorneys, the former attorney should be re- quired to turn over the pleadings and papers in the action without imposing conditions. Where an attorney, after hav- ing been retained by a client in two actions, refused to proceed in one of them because of a dispute between himself and the client respecting sums due the attorney in the other action, which the client settled, he discharged himself as attorney without just cause and lost any common-law lien upon the papers in the pending action.^* An attorney who refuses to proceed or to permit any one 15. Beeeher v. Vogt Mfg. Co., 227 ply (BeU), 179 App. Div. 877, 167 N. N. Y. 468; Wesley v. Wood, 73 Mise. Y. Supp. 531. 33, 133 N. Y. Supp. 248. 17. West v. Bacon, 164 N. Y. 425. Offsetting judgments. — ^Although an Lien not waived, — Matter of King, attorney for a judgment debtor, on ap- 168 N. Y. 53. peal from an order discharging him Release of one of joint tort feasors. — from custody, has a lien on the judg- An attorney in prosecuting a case ment for costs, such lien should not be against two joiat tort feasors, under allowed on an appeal from an order of a contract whereby he was to receive the County Court, offsetting and ered- one-half the recovery and costs, ac- iting the judgment for costs against eepted a sum from one joint tort feasor, the judgment obtained against the and gave him a release in which he re- debtor, where it does not appear from served the right to proceed against the the record that ■ the attorney has other tort feasor for the balance of his claimed a lien or that he has not been lien for services; held, that by releas- paid, or that he, in fact, acted for the ing one tort feasor he lost his right to debtor in procuring his discharge from proceed against the other to recover the imprisonment, and such information is balance of his lien. Johanson v. City not even set forth in the opposing affl- of New York, 71 App. Div. 561, 76 davits. Matter of Steele, 165 App. Supp. 119. Div. 683, 151 N. Y. Supp. 81. 18. Matter of Rieser, 137 App. Div. 16. Matter of Board of Water Sup- 177, 121 N. Y. Supp. 1070. 108 ATTORNEYS AND COUNSELLORS. else to proceed with the trial of an action, unless his claim for services is paid, thereby loses his right to a lien given by section 475.^^ Where an attorney refuses to act in the midst of a litigation unless the client will pay a certain sum which the client either refuses or is unable to pay, the attorney is discharged by his own act and thereby loses any lien for services which he may have had upon any judgment ultimately obtained.^" Where, after an assignmnt for the benefit of creditors, the attorney for the assignee procures the assignment to himself of claims of creditors, and on an accounting makes no claim other than as creditor on the claims bought, he is deemed to have waived his lien for compensation as attorney in procur- ing the assignment of the claims.^^ C. Enforcement of lien upon petition. 1. In general. Section 475 of the Judiciary law, after providing for an attorney's lien, contains the sentence: "The court upon the petition of the client or attorney may determine and enforce the lien."^^ The proceeding authorized by this section is applicable only to disputes between an attorney and his client. When the attorney seeks to enforce his lien against another party to the litigation, he should proceed by an action in equity to foreclose his lien.^ And this summary authority 19. Halbert v. Gibbs, 16 App. Div. an action to establish the same. Hoff- 126, 45 N. Y. Supp. 113, 4 Anno. Gas. staetter v. Schinkel, 168 App. Div. 36, 232. 153 N. Y. Supp. 768. 20. Fargo v. Paul, 35 Misc. 5e8', 73 Interest.— Where a sum of money N. Y. Supp. 21. upon which an attorney claims a lien is 21. Matter of Dwight, 61 App. Div. held by the city chamberlain, the rate 357, 70 N. Y. Supp. 563. of interest on the award made to the 22. Eusso V. Darmstadt, 116 App. attorney should be that which is re- Div. 887, 103 N. Y. Supp. 209. ceived by the city chamberlain. Matter Existence of lien. — Power conferred of Heinsheimer, 154 App. Div. 265, on the court by section 475, which au- 149 N. Y. Supp. 631; modified on thorized the court on petition of an at- other grounds, 214 N. Y. 361. torney or his client to determine and 23. Matter of King, 168 K. T. 53; enforce the attorney's lien, necessarily Matter of Salant, 158 App. Div. 697, includes the power of the court to de- 143 N. Y. Supp. 870, aff'd, 210 N. Y. termine in a summary way whether or 622; Matter of Goodale, 58 Misc. 182, not a lien exists. Eadley v. Gaylor, 98 108 N. Y. Supp. 949 ; James v. Mar- App. Div. 158, 90 N. Y. Supp. 758. quette, 82 Misc. 400, 143 N. Y. Supp. A motion by a client to vacate a no- 750. And see, infra, D. — Enforcement t're of lien will not be granted pending by action in equity. ATTORNEYS AND COUNSBLLOKS. 109 is limited to the professional relation of attorneys and clients, and does not extend to transactions of a business nature.^* An attorney-at-law holding money belonging to his client has an absolute right to a summary determination by the court as to the existence and the amount of his Hen. It is not neces- sary that he show that he has preserved the money intact ; it is enough that he is ready, able and willing to account to the client.^^ There is nothing in the section which requires an attorney to first proceed against his client before he can enforce his lien, the judgment remaining unpaid being still within the jur- isdiction of the court.^^ An application by attorneys for an order under section 475 will be denied where the moving papers do not show the amount of the compensation claimed by the attorneys or that the plaintiff is not financially responsible.^'^ 2. Nature of proceeding. A proceeding under section 475 to enforce an attorney's lien is not a motion in the action, but is a special proceeding.^^ Hence, in order to give the court jurisdiction, service of the papers must be made upon the party proceeded against in the same mianner as is provided for the service of a summons.^® There is no right to a jury trial in a proceeding to enforce a lien.^" Where there is an issue presented, a Special Term should treat the record as presenting an issue upon which nothing short of a complete and thorough hearing either in open court or before a referee will satisfy the demands of justice.^^ A reference may be ordered although the attorney claims upon a quantum meruitp If a reference is ordered the matter must come back to the court for final determina- 24. Matter of Ney Co., 114 App. Div. 170 N. T. Supp. 137. 467, 99 N. T. Supp. 983. 29. Smith v. First National Bank, 25. Matter of Farrington, 146 App. 103 Misc. 274, 170 N. Y. Supp. 127. Div. 590, 131 N. T. Supp. 312. 30. Matter of White, lOOi Misc. 56, 26. Smith v. First National Bank, 166 N. T. Supp. 158. 103 Misc. 274, 170 N. Y. Supp. 12-7. 31. Matter of Speranza, 186 N. Y. 27. Smith v. Acker Process Co., loe aSO. App. Div. 170, 93 N. Y. Supp. 351. 32. Matter of King, 168 N. Y. 53 ; 28. Sullivan v. McCann, 124 App. Thomasson v. Latourette, 63 App. Div. Div. 126, 108 N. Y. Supp. 909; Smith 408, 71 N. Y. Supp. 559. V. First National Bank, 103 Misc. »74, 110 ATTORNEYS AND COUNSELLOBS. tion, and it must be considered as a report to the court on a reference to determine and report upon a question of fact.^^ The determination in the proceeding is conclusive upon the parties in a subsequent proceeding or action brought by the attorney.^* Where an order declaring the existence of an attorney's lien and a reference to ascertain the amount has been affirmed by the Appellate Division, the order of reference cannot be again reviewed, or the matter reargued, on appeal from the report of the referee.^^ 3. Power of surrogate. .The Surrogate's Court has jurisdiction to determine and enforce the lien of an attorney for services rendered in the settlement and distribution of the estate of the testator.^^ He may appoint a referee to take testimony and report the value of the services; and, although the executors are primarily personally liable for the services of an attorney, yet such services when necessary are chargeable as a lien upon the estate.^'' But a surrogate has no power to insert in a decree settling the executor's account a provision determining the existence and amount of the attorney's lien for services rendered to a legatee and to decree that the legacy, consisting of stock; shall be delivered to a referee, to sell the same for the purpose of paying the attorney's lien and the balance to the legatee.^^ An attorney's lien for services to an administrator rendered sub- sequent to the granting of the letters of administration can- not be enforced by the revocation of the letters.^' 4. Amount allowed. When an attorney renders services in an action under an agreement that he shall receive his compensation out of the proceeds thereof he has an equitable lien upon, or ownership as equitable assignee, in such proceeds. When, however, the 33. Sullivan v. McCann, 1S4 App. White, 100 Misc. 5B, 1S6 N. T. Supp. Div. 126, 108 N. Y. Supp. 909. 158. 34. Matter of Winkler, 154 App. Div. 37. Matter of Smith, 111 App. Div. 533, 139 N. Y. Supp. 755. 23, 97 N, Y. Supp. 171. 35. Matter of Heinsheimer, 164 App. 38. Matter of Hasbrouck, 153 App. Div. 3&5, 149 N. Y. Supp. 631, modi- Div. 394, 138 N. Y. Supp. 630. fied, 214 N. Y. a65. 39. Matter of Noeton's Estate, 162 38. Matter of Smith, 111 App. Div. N. Y. Supp. 315. 23, 97 N. Y. Supp. 171; Matter of ATTOKKEYS AND COUNSELLORS. Ill agreement fixes no sum or way of compensation for Ms ser- vices, the attorney is bound to establish by evidence, compe- tent as against his client, the value of the services.^'' The mere fact that the attorney under an agreement for a contingent fee was to receive one-half of the recovery does not render it unconscionable unless it appears from the evi- dence that it was induced by fraud or, in view of the nature of the claim, that the compensation provided for was so exces- sive as to evince a purpose on the part of the attorney to ob- tain an improper or undue advantage over his client.*^ A contingent fee, amounting to a very large sum, resting on an agreement between a client and one already her con- fidential adviser and friend as well as counsel, in a case where she was not fully advised how trifling was the risk of an ad- verse decision, nor that a previous decision of the Appellate Division favorable to her contention had been rendered by the unanimous opinion of all the judges, though there was no fraud in the transaction but the attorney exaggerated the risk in his own mind, should be reduced to a reasonable amount, having regard to the fact that the fee was contingent and the amount of labor required might have been much greater than it proved to be, but under such circumstances not to a mere quantum meruit and against such amount should be charged the taxable costs the attorney has coUected.^^ 5. Forms in proceeding to have lien enforced against securities belonging to client. To the Supreme Court, New York County: The petition of David Bennett King and Henry W. Jessup respect- fully shows to this court, and alleges : I. That they are the attorneys of record for the plaintiff in an ac- tion long pending in this court wherein the plaintiff is Theodore C. English, as trustee, substituted for Isaac H. Williamson as trustee un- der the last wiU of Benjamin Williamson, deceased, and wherein the defendants are Thomas A. Mclntyre, Edward L. Adams, Samuel Taylor, Jr., James G. Marshall, and Harry B. Day. II. That said action was brought in part to recover certain securi- -ties from the said named defendants, upon the allegation that they had taken the same as margins on a speculative account from plain- tiff's predecessor trustee, with notice of their trust character, and of his lack of power to pledge said trust securities. III. That this action was begun in the spring of 1896, at which 40. Harwood v. La Grange, 137 N. K. E. Co., 185 N. Y. 520. Y. 538. 42. Ransom v. Ransom, 70 Misc. 30, 41. Morehouse v. Brooklyn Heights 127 N. Y. Supp. 1027. 112 ATTORNEYS AND COUNSELLOES. time your petitioners formed a partnership for the practice of law, and were retained by the said English for the purpose of prosecut- ing said litigation and recovering said securities and that the said English had little evidence available of the material facts involved; that the result was then deemed very doubtful ; that these petitioners took the case on a contingent basis, as well as another case against Robert J. Kimball & Co., for similar acts with said predecessor trus- tee, which proceeding was settled, and out of the proceeds of said settlement said English defrayed the disbursements of this action. That said English desired to bring an action in conversion, which your petitioners refrained from doing; that the measure of damages in an action for conversion would have been approximately, fifty thousand dollars ($50,000) ; that the said English was repeatedly ready to settle the said action, while pending, for fifty thousand dollars ($50,000) ; that the action brought by advice of petitioners was an action more diiiScult to maintain and to get evidence in support of, but that the settlement hereinafter referred to has resulted in the said trustee getting back the identical securities diverted by the predeces- sor trustee, which are at present worth seventy thousand dollars ($70,000) and upward. IV. That the sard action was bitterly litigated, and that for over four and a half years the petitioners were actively occupied in various phases of the litigation or of the situation arising thereout of, with the result of securing an interlocutory judgment in favor of the plaintiff, an affirmance thereof on appeal to the Appellate Division, an account- ing before a referee and filial judgment by the court and, while an appeal to the Court of Appeals from said final judgment was pending, the negotiation of a settlement of the said action under conditions such as that the defendants agreed to turn over intact the securities speci- fied in the complaint and to pay the costs of the action. V. That petitioners attended upon said settlement, one of the terms of which was the consent to the entry of an order, which was consented to, to the effect that the Central Trust Company of New York, with whom the securities had been deposited pending the defendants' ap- peal to the Court of Appeals, should turn the securities over to the said English as trustee, and that upon filing his receipt therefor the said action should be discontinued, and that such order was in fact entered; that before the entry of said order the plaintiff requested petitioners to render him a statement of the amount of their charge for services to him during the four and a half years and over during which they had acted as his attorneys. VI. That the said English as trustee is a resident of Elizabeth, N. J., and was appointed by the Orphans' Court of Union County, N. J. ; that it was stated by him upon receipt of the securities from the Central Trust Company he would remove the same to the State of his appointment; that these securities are as follows: (Here follows schedule.) VII. That petitioners accordingly rendered a bill for their services to the said English and refrained from itemizing the same at his re- quest; that annexed to this petition is a copy of said bill marked "A" and referred to as if set forth at length herein. ATTORNEYS AND COUNSELLORS. 113 VIII. That the amount stipulated in said bill as the balance due to petitioners for their services was exclusive of the costs and allowances paid them upon such settlement, which amount had been paid to them by Mclntyre & Wardwell upon the settlement, with the consent of the said English ; that said charge was reasonable, taking into conclusion the services rendered, the length of time consumed, the importance of the interests involved, the standing and reputation of petitioners and the entire success of all their endeavors in behalf of the plaintiff as trustee. IX. That after receipt of said bill the said English waited upon petitioners and stated that while he was willing that they should re- ceive all to which they were entitled, he desired to have the approval, in advance, of the Chancellor of New Jersey, or of the Judge of the Orphans' Court, in order that no question might arise upon his ac- counting ; that thereafter he again waited upon petitioners and stated that he had seen the Judge of the Orphans' Court and that it would be impossible for him to secure in advance his approval of said charge ; that the same was high from a New Jersey standpoint and he refused to pay the same or any part thereof, although payment thereof has been demanded. X. That on the 3d day of December, 1900, your petitioners accord- ingly served upon the said Theodore C. English as trustee, and upon the Central Trust Company of New York, the depository aforesaid, a notice of their attorneys' lien upon the said securities above specified. XI. Your petitioners further show that by section 475 of the Judi- ciary Law, it is provided that the court may determine and enforce the lien of an attorney upon the petition either of said attorney or of the client. Wherefore, Petitioners pray that this court do determine the amount to which the petitioners are entitled as compensation on a quantum meruit or otherwise, as to the court may seem just and proper, and direct how the lien of the petitioners upon the securities mentioned in this petition shall be enforced. ((Verified, December 12, 1900.) David Bennett King, Henry W. Jessup, Petitioners. Order Appointing Referee to Hear and Determine Lien of Attorneys. Present — Hon. James A. Blanchard, Justice. (Caption.) SUPREME COURT— New York County. In the Matter of the Petition of DAVID BENNETT KING and HENRY W. JESSUP to Enforce AN Attorneys' Lien. A petition, duly verified, having been presented to this court by David Bennett King and Henry W. Jessup, under section 475 of the 8 114 ATTOENEYS AND COUNSELLORS, Judiciary Law, to have determined and enforced their attorneys' lien on certain securities described in said petition now in the hands of the Central Trust Company of New York. (Here follow recitals.) On motion of David Bennett King and Henry W. Jessup, attorneys in person, it is Ordered, That the prayer of said petition be granted, and that it be referred to Alex. T. Mason, Esq., counsellor-at-law, as referee, to hear and report with his opinion with all convenient speed the claim of the said David Bennett King and Henry W. Jessup, to compensation for their services to Theodore C. English, as trustee substituted for Isaac H. Williamson, as trustee, under the last will of Benjamin Wil- liamson, deceased, in the above-mentioned action, wherein Theodore C. English as trustee, substituted for Isaac H. Williamson as trustee, under the last will of Benjamin Williamson, deceased, was plaintiff, and Thomas A. Mclntyre, Edward L. Adams, Samuel Taylor, Jr., James G. Marshall and Harry B. Day were defendants. Enter. James A. Blanchaed, J. 8. C. €. Forms in proceeding to determine lien in surrogate's court. Petition. SURROGATE'S COURT— Albany County. In the Matter of the Judicial Set- tlement OF the Account op Pro- ceedings OF WILLIAM A. SMITH AND IRVING R. COUGHTRY, as Executors of the Last Will and Testament of MATTHEW W. BENDER, Deceased. To the Surrogate of the County of Albany: The petition of Robert G. Scherer and J. Murray Downs respect- fully shows: I. That your petitioners are and were, during all of the time here- inafter mentioned, attorneys-at-law, duly licensed to practice in the courts of the State of New York, and co-partners carrying on the prac- tice of their profession under the firm name and style of ' ' Scherer & Downs," at the City of Albany, New York. II. That heretofore and on or about the 25th day of May, 1903, the will of one Matthew W. Bender, deceased, was duly admitted to pro- bate by the Surrogate of Albany County and letters testamentary thereon were issued to William A. Smith and Irving R. Coughtry as executor of and under the said last will and testament of Matthew W. Bender, deceased ; and the said executors thereupon duly qualified and entered upon the performance of their duties as executors. That the said William A. Smith was a legatee under the said last will and testament to the amount of two thousand dollars ($2,000) ; and that ATTORNEYS AND COUNSELLORS. 115 the said Irving R. Coughtry was also a legatee under the said last will and testament, receiving as a specific legacy the sum of five thousand dollars ($5,000) ; and being also a residuary legatee to the extent of one-fifth of the residue, which amounts to upward of five thousand dollars ($5,000). III. That thereupon and on or about the 25th day of May, 1903, the said William A. Smith and Irving E. Coughtry, the said executors, retained your petitioners as attorneys and counsellors for the purpose of assisting them in the care, management and settlement of the said estate of Matthew W. Bender, deceased; and that acting under the said retainer your petitioners have performed all such services they were requested to perform and have rendered work and services on behalf of the said executors in the care and management and settle- ment of the said estate, and will render certain other services in con- nection with the said estate, all of which services are of the value of twenty-five hundred dollars ($2,500.). That your petitioners have demanded of the said executors payment for the services so rendered, which demand the executors have refused to comply with and still refuse, and that no part of the services rendered by the said attorneys have been paid for by the said executors, and that your petitioners have a lien upon the funds in the hands of the said executors, and also upon their respective legacies and interests in the said estate to the extent of the said sum of twenty-five hundred dollars [($2,500). IV. That the said executors are proceeding for a final distribution of the said estate and for a final judicial settlement of their accounts as executors, which proceeding is now pending in the Surrogate's Court of Albany County, and that it is necessary that the amount of the lien of your petitioners should be ascertained and fixed, in order that the same may be protected before the distribution of the estate of the said Matthew W. Bender, deceased. Wherefore, Your petitioners pray that the Surrogate, by virtue of the powers conferred upon him by section 475 of the Judiciary Law, will determine the extent and the amount of the lien of your petition- ers for their services and enforce the same ; and for that purpose re- quire the said William A. Smith and Irving R. Coughtry to show cause before the Surrogate of Albany County on the 24th day of May, 1904, why the said lien should not be determined and enforced. Dated, Albany, N. Y., May 12, 1904. (Verified by both petitioners.) Robert G. Schereb, J. Murray Downs. Referee's Report. < (Same title.) Pursuant to the order of the Surrogate of the County of Albany, made herein on the 13th day of June, 1904, directing me as referee, appointed by said order for the purpose, to take proof as to the amount, character, and value of the services rendered by the said Scherer & Downs on behalf of the said William A. Smith and Irving R. Coughtry, individually and as executors, and as to any payments 116 ATTORNEYS AND COUNSELLORS. made on account thereof, and to report such proof and opinion of the referee to the court, I report and return herewith, as a part of this report, the oath taken by me as referee and the proofs taken herein by me as referee, the same being typewritten and in book form, each witness having testified before me as stated in the deposition signed by him. I report. First. That the value of the services rendered by Messrs. Scherer & Downs on behalf of "William A. Smith and Irving R. Coughtry, in- dividually and as executors, in the above-entitled matters, respec- tively, is the sum of $1,500. Second. That they have been paid upon account thereof by the said executors the sum of $200. Third. That the amount and character of their said services and my opinion thereon and of the value thereof and of payments thereon are as follows : Robert G. Scherer and J. Murray Downs at the times mentioned in the proofs in this proceeding were and still are attor- neys and counsellors-at-law, practicing law under the firm name of Scherer & Downs with offices in the City of Albany; Matthew W. Bender, late of the City and County of Albany, died in said city, May 21, 1903, having previously made his last will and testament, wherein the said William A. Smith and Irving R. Coughtry were named as executors thereof; said executors brought the said will to Scherer & Downs and employed them to procure the probate thereof and assist them in the administration and settlement of the estate. . . . I think $1,500, under the circumstances, a reasonable com- pensation for their services. . . . Scherer & Downs admit the payment of $200. Dated, July 20, 1904. D. Enforcement by action in eqnity. 1. In general. The establishment and enforcement of an attorney's lien is a well established feature of equity jurisprudence.^ The remedy is peculiarly applicable when the attorney seeks to 43. Matter of Atterbury, 323 N. T. Court to enforce it. Tynan v. Mart, 355; Mathot v. Triebel, 98 App. Div. 53 Misc. 49, 103 N. Y. Supp. 1033. 338, 90 N. Y. Supp. 903; Eansom v. Foreclosure suit. — The attorney may Cutting, 113 App. Div. 150, 98 N. Y. maintain an equitable action to have Supp. 383; Cohn v. Polstein, 41 Misc. his services in a foreclosure suit de- 431, 84 N. Y. Supp. 1073. clared a lien upon the land purchased Services in inferior courts. — Although by the mortgagee executrix, where the the Municipal Court of the city of New mortgagee died before the entry of the York has no jurisdiction to enforce an judgment and the action was com- attorney's lien, an attorney who has pleted by another attorney employed by rendered services in an action brought the executrix. Skinner v. Busse, 33 in that court is entitled to a lien under Misc. 365, 77 N. Y. Supp. 560. section 475 of the Judiciary Law, and Lien of counsel. — An attorney, not may maintain an action in the Supreme an attorney of record, but whp acted ATTORNEYS AND COUNSEIjLOKS. 117 enforce his lien against the defendant in the prior action, or some party other than his own client.** The action is fre- quently utilized when the client has settled his cause of action without the knowledge of the attorney, and it is sought to enforce the lien against the opposing party.*" In such a case, the attorney cannot recover more than the sum to which he was entitled under his contract with the client.^ merely under a written retainer to per- form legal services after action brought, is not entitled to maintain a suit in equity to enforce the statutory lien. Where such retainer is merely an agreement to pay the attorney out of the recovery or settlement, it does not affect an assignment of part of the fund, nor give him a lien thereon. Weinstein v. Siedmann, 173 App. Div. 219, 159 N. Y. Supp. 371. Counsel not entitled to a lien for their services. Goodwin Film & Camera Co. v. East- man Kodak Co., 216 Fed. 831. Jury trial. — The defendant is not en- titled to a jury trial. Fenwick v. Mitchell, 34 Misc. 617, 70 N. Y. Supp. 667, rev'd, 64 App. Div. 621, 72 N. Y. Supp. 1102. Proceeding in Surrogate's Court. — A determination in a collateral proceed- ing in a Surrogate's Court fixing the lien of creditors upon the proceeds of the sale of real estate of a decedent is not a bar in an action in equity to de- termine the lien of the attorneys to the fund and its priority over that of the creditors, such services having been rendered subsequently to the death of the decedent. Aii intermediate order in a proceeding to determine the lien of an attorney which does not deter- mine the lien but postpones such deter- mination until after a final judicial settlement in the Surrogate's Court, when the fund upon which the lien is asserted may have been depleted, is not a bar to an action in equity to deter- mine the lien and its priority over other nllpged liens, nor is it available as a defense of another action pending. Se- bring v. Quinn, 104 Misc. 630, 172 N. Y. Supp. 177. 44. Roehfort v. Met. St. R. Co., 50 App. Div. 361, 63 N. Y. Supp. 1036. Against receiver. — The court may en- force the lien of the attorney for a judgment creditor as against a receiver of the judgment creditor and a trus- tee of his estate in bankruptcy, where the lien attached more than four months prior to the bankruptcy and there is no restraining order. Knee- land V. Pennell, 54 Misc. 43, 104 N. Y. Supp. 498. 45. Dermuth v. Marks, 84 N. Y. Supp. 453. Change of represeatative. — ^Where the plaintiffs, attorneys at law, sue to. enforce a lien for professional services rendered as attorneys for the plaintiff in a negligence action against the defendant, which the defendant, having notice of the lien, had settled by payment to the decedent's administratrix, it is no defense to al- lege that the administratrix who orig- inally brought the action has resigned and the administratrix to whom the payment was made had been appointed in her place, and that there had been no substitution of parties plaintiff in the action. This, because it is imma- terial who was the personal representa- tive of the decedent at the time of settlement. Leary v. New York Cen- tral R. R. Co., 183 App. Div. 334, 170 N. Y. Supp. 366. 46. Neu V. Brooklyn Heights R. R. 118 . ATTORNEYS AND COUNSELLORS. Where attorneys attempt to enforce against defendants who have settled with their chent their lien for fees, under an agreement entitling them to one-half of the sum adjusted, the sum paid in settlement must be taken as the basis of the at- torney's claim.*'' But, before proceeding against an opposing party with whom his client settled, the attorney must show that he has exhausted his remedy against his client or that such client is insolvent and it would be futile to proceed against him.*^ Where the plaintiff in an action is solvent and able to pay his attorney, the attorney cannot recover the amount of his agreed lien of the defendant.*^ In an action for the enforcement of an attorney's lien, plaintiff must show that he comes within the statute by estab- lishing facts alleged in his complaint.™ The client himself is a necessary party to the action, being entitled to be heard as to the existence of the lien and the at- torney's right to enforce it; but when the client has departed from the State he may be served by substituted service of the process for the action is in rem. When, in such action, it ap- pears that the client has departed from the State and is finan- cially irresponsible, it is not error for the judgment to pro- vide that the execution be issued against the client and re- turned unsatisfied before the defendant is bound to pay.^^ Co., 113 App. Div. 446, 99 N. Y. Supp. ment of a referee to fix his compensa- 390. tion, where his moving papers fail to 47. Neu V. Brooklyn Heights E. R. show any agreement between him and Co., 113 App. Div. 446, 99 N. Y. Supp. his client for compensation, or that the 390. settlement was in fraud of his rights, 48. Webb. v. Parker, 130 App. Div. or that his client is not able and will- 92, 114 N. Y. Supp. 489. ing to pay proper charges. Goldstein 49. Gurley v. Gruenstein, 44 Misc. v. Nassau Electric Railway Co., 157 368, 89 N. Y. Supp. 887. App, Div. 2»6, 141 N. Y. Supp. 805. 50. t'ischer-Haiisen v. Brooklyn 51. Oishei v. Penna. R. R. Co., 117 Heights E. K. Co., 173 N. Y. 49S. App. Div. 110, 102 N. Y. Supp. 3«8j Reference. — ^An attorney should not aflf'd, 191 N. Y. 544. be granted an order for the appoiat- ATTORNEYS AND COUNSBLuLORS. 119 2. Form of complaint. Complaint. SUPREME COURT— Kings County. CARL FISCHER-HANSEN, Plaintiff, vs. LOUIS OLSEN AND THE BROOK- LYN HEIGHTS RAILROAD COMPANY, Defendants. Plaintiff, complaining of the defendants in this action, respectfully alleges and shows to this court : First. That at the time or times hereinafter mentioned, said plain- tiff was and he still is an attorney and counsellor-at-law of the State of New York, and that he then was and still is duly licensed, author- ized and qualified to practice his profession as an attorney and coun- sellor-at-law in all the courts of said State. Second. That on the 5th day of January, 1900, the defendant Louis Olsen retained this plaintiff as his attorney and counsel to com- mence and prosecute for him, as plaintiff therein, an action against the defendant herein, The Brooklyn Heights Railroad Company, and sole defendant therein, for the recovery of fifty thousand dollars ($50,000) damages for certain personal injuries received and sus- tained by said Louis Olsen on the 2d day of January, 1900, at the corner of Richards and Verona streets in the Borough of Brooklyn, through the gross negligence, carelessness and recklessness of said de- fendant, The Brooklyn Heights Railroad Company, in suddenly set- ting one of its cars, then controlled and being operated by it, in mo- tion after bringing it to the standstill, and while said defendant, Louis Olsen, was in the act of getting aboard the front platform of said car at the place aforesaid, whereby said defendant, Louis Olsen, was thrown from the said front platform of said car and then and there had his right leg cut off from above the knee by the wheels of said car. Third. That in consideration of the professional services to be ren- dered and the disbursements to be laid out by this plaintiff in behalf of the said Olsen, as the plaintiff in said action, said defendant, Louis Olsen, made an agreement in writing, executed by him and dated on the 5th day of January, 1900, wherein and whereby he agreed that this plaintiff as his attorney, should have one clear half, 50 per cent., of the verdict recovered in said action. Fourth. That on the 6th day of January, 1900, an action was com- menced in this court upon the cause of action mentioned and set forth in paragraph 2 hereof and mbre particularly described in Plaintiff's Exhibit "A," hereto annexed, by this plaintiff, under said retainer and agreement, as the attorney and of counsel for said Louis Olsen, the plaintiff therein, and a defendant herein, against the defendant, 120 ATTORNEYS AND COUNSELLOES. The Brooklyn Heights Railroad Company, as sole defendant therein, by the service of a summons upon said defendant, The Brooklyn Heights Railroad Company personally therein, on which said sum- mons was indorsed a written notice of this plaintiff's lien in said ac- tion, of which the following is a copy, to wit : "To the defendant: ' ' Take notice that I have a lien under my written retainer by the plaintiff, upon the papers and upon the subject-matter of the within entitled action, for my fees, services and disbursements, and you are hereby requested to make no settlement with the plaintiff or any other person, but to make it with the undersigned. Carl Fischer-Hansen, Plaintiff's Attorney." Fifth. That on the 25th day of January, 1900, the defendant in said action, The Brooklyn Heights Railroad Company, duly ap- peared therein by Sheehan & Collin, Esquires, its attorneys, and, upon said day formally and duly served a written notice of appearance upon this plaintiff, who was the plaintiff's attorney in said action, wherein and whereby they demanded the service on them, as such at- torneys, of a complaint of the plaintiff and all other papers in said action. Sixth. That on the 2d day of March, 1900, this plaintiff having im- mediately previously drawn the complaint in said action, the defend- ant, Louis Olsen, the plaintiff in said action, signed and verified his said complaint in said action, a copy of which is hereto annexed, marked Exhibit "A;" and that a copy of said complaint on said day was duly served by this deponent on the said Sheehan & Collins, Esquires, as the aforesaid attorneys of the defendant in said action. The Brooklyn Heights Railroad Company, who, as such attorneys, indorsed upon the original of said complaint a written acknowledg- ment of the receipt by them of a copy of said complaint on said date. Seventh. That on the 21st day of March, 1900, said defendant in said action, and herein, The Brooklyn Heights Railroad Company, through said attorneys, served upon this plaintiff, as the attorney for the plaintiff in said action, a written verified answer, of which the annexed is a copy marked Exhibit "B," which said answer admits that said defendant in said action is a domestic surface railroad in- corporation, but denies any liability in said action, and demands an affirmative judgment in its behalf therein. Eighth. That on the 22d day of March, 1900, the defendant, Louis Olsen, the plaintiff in said action, by this plaintiff as his attorney therein, served a written notice of trial of the issue joined in said ac- tion for the first Monday of May, 1900, upon the said Sheehan & Col- lin, Esquires, attorneys for the said defendant therein and herein. The Brooklyn Heights Railroad Company. Ninth. That on the 22d day of March, 1900, the defendant in said action and herein. The Brooklyn Heights Railroad Company, through the said Sheehan & Collin, Esquires, its attorneys, served upon this plaintiff a counter notice of trial of the issues joined in said action for the Monday of May, 1900. ATTORNEYS AND COUNSELLORS. 121 Tenth. That on the 11th day of April, 1900, this plaintiff, as the attorney for the plaintiff in said action, caused a written note of the issues joined in said action to be filed with the clerk of this court, and then and there caused said issue to be placed upon the general calendar of issues of this court, triable by jury, for said first Monday of May, 1900; that said issue joined in said action was placed upon the gen- eral calendar of this court, of issues triable by jury, for said first Monday of May, 1900, as and by the number 6277, and is now await- ing trial by this court and a jury. , Eleventh. On information and belief, that on or about the 20th day of July, 1900, the defendant herein and in said action, The Brooklyn Heights Railroad Company, and the defendant, Louis Olsen, herein, the plaintiff in said action, without any notice whatever to this plaintiff, agreed upon and arranged a money settlement of said action, whereby, in consideration of the execution and delivery by the said Louis Olsen, the plaintiff in said action, to said defendant, The Brooklyn Heights Railroad Company therein, of a release in writing .bearing date that day, releasing it. The Brooklyn Heights Railroad Company, of and from all claim and demand whatever, by reason of the cause of action and matters and things set forth in the complaint in said action, said defendant therein and herein. The Brooklyn Heights Railroad Company, agreed to pay to the defendant, Louis Olsen, herein, as plaintiff in said action, the sum of one thousand five hundred dollars ($1,500). Twelfth. On information and belief, that on or about the 20th day of July, 1900, said defendant, Louis Olsen, the plaintiff in said action, executed and delivered to the defendant therein and herein. The Brooklyn Heights Railroad Company, a certain release in writing, wherein and whereby said defendant, Louis Olsen, the plaintiff in said action, released said defendant therein and herein. The Brooklyn Heights Railroad Company, of and from all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings bonds, bills, specialities, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, accidents, execiitions, claims and demands whatsoever in law or in equity, which against the defendant in said action. The Brooklyn Heights Railroad Company, the said Louis Olsen, as plain- tiff therein, ever had, then had, or which he, the said Louis Olsen, his heirs, executors or administrators thereafter could, should, or might have, for, upon, or by reason of any matter, cause or thing whatsoever by reason of the cause of action and the matters and things set forth in the complaint in said action hereinbefore referred to. On information and belief that on or about the said 20th day of July, 1900, said defendant, in said action and herein. The Brooklyn Heights Railroad Company, in consideration of the aforesaid execu- tion and delivery to, in, of said release by Louis Olsen, the plaintiff . in said action and a defendant herein, paid over and delivered to said defendant herein, Louis Olsen, the plaintiff in said action, the sum of one thousand five hundred dollars ($1,500) in full settlement, release and discharge of his said claim and demand for damages in said action. That on said settlement no financial provision was made 122 ATTORNEYS AND COUNSELLORS. by said defendants for the satisfaction of this plaintiff's lien upon said retainer and agreement as attorney for the plaintiff in said action. Thirteenth. That this plaintiff last saw and conversed with said defendant, Louis Olsen, on or about the 13th day of July, 1900, but that on that day, said defendant, Louis Olsen, did not then nor did he at any time previously or subsequently to said date last named, give this plaintiff any notice whatever, verbal or otherwise, or any idea whatever, that negotiations were pending between himself, the said Louis Olsen, and the said The Brooklyn Heights Railroad Company for a settlement of said action as aforesaid. Fourteenth. That at all the times hereinbefore mentioned, the de- fendant herein, Louis Olsen, and the plaintiff in said action was finan- cially irresponsible, save and excepting only, at the time when he received from said defendant therein and herein, The Brooklyn Heights Railroad Company, said sum of one thousand five hundred dollars ($1,500) in full settlement of his said claim and demand for damages in the action above referred to. Fifteenth. On information and belief, that on or about the 21st day of July, 1900, and since such aforesaid settlement with the de- fendant, in such action, The Brooklyn Heights Railroad Company, Louis Olsen, who was a Norwegian by birth, and one of the defend- ants herein and the plaintiff in the action above referred to, without the assent, consent, connivance and procurement of this plaintiff, left the. United States of America and returned to the kingdom of Nor- way, his native land, and that said defendant, Louis Olsen, the plain- tiff in said action, is now without the jurisdiction of this court and of the United States of America where he still remains. Sixteenth. That this plaintiff under his aforesaid written retainer by, and the aforesaid agreement relative to his compensation for ser- vices with said defendant, Louis Olsen, the plaintiff in the action above referred to, was at the time of the settlement of said action, and he still is, justly entitled to the sum of seven hundred and fifty dollars ($750.00) fixed or based upon the amount paid, as aforesaid, by said defendant in said action, and herein, The Brooklyn Heights Railuoad Company, to said Louis Olsen the plaintiff in said action, and one of the defendants herein, in settlement and in release of said action. Seventeenth. That no part of said sum of seven hundred and fifty dollars ($750.00), or any other sum whatever in said action herein- before referred to, has been paid to this plaintiff by either Louis Olsen, a defendant herein and plaintiff in said action, or The Brooklyn Heights Railroad Company, a defendant herein and in said action above referred to, although payment thereof has been duly demanded and that the sum of seven hundred and fifty dollars $750.00) and the further sum of fifty dollars and seventy-five cents ($50.75), being the costs and disbursements taxable in said action, still remains due and ■ owing by said defendants to said plaintiff. Eighteenth. That by reason of the matters and things and the premises hereinbefore mentioned and set forth, this plaintiff is en- titled to recover of said defendants the sum of seven hundred and ATTOKNEYS AND COUNSELLORS. 123 fifty dollars ($750.00) besides the costs and disbursements of said ac- tion, taxable at fifty dollars and seventy-five cents ($50.75). Nineteenth. That the aforesaid services rendered by this plaintiff, as attorney for Louis Olsen, the plaintiff in said action under his said retainer and agreement, were rendered upon said retainer and agreement, and at the request of and employment by said defendant, Louis Olsen, the plaintiff in said action; and that this plaintiff was the attorney and of counsel of record for the defendant, Louis Olsen, the plaintiff in said action, of which The Brooklyn Heights Railroad Company, the defendant therein and a party defendant herein, and its said attorneys in said action, Sheehan & Collin, Esquires, had due notice. Twentieth. That at the time or times hereinbefore stated, the de- fendant. The Brooklyn Heights Railroad Company, then was and it still is, a domestic street surface railroad corporation, duly incor- porated under the laws of the State of New York, having an office for the principal transaction of its business at No. 168 Montague Street, in the Borough of Brooklyn, Kings County, in said State of New York. Wherefoee, said plaintiff demands judgment : 1. That his lien in the action above referred to, as attorney for Louis Olsen, the plaintiff therein (under section 475 of the Judiciary Law) may be ascertained and foreclosed against said defendants and each of them. 2. That this court will settle and determine the equities of the parties hereto in relation to plaintiff's said lien in the action herein- before referred to. 3. That by reason of the foregoing premises, said defendants, or either of them, be adjudged to pay to this plaintiff, upon his said written retainer and agreement with the defendant, Louis Olsen, the plaintiff in the action above referred to, based upon the settlement made by and between the said Louis Olsen, the plaintiff in said action and a defendant herein, and said defendant therein and herein, The Brooklyn Heights Railroad Company, in said action, as aforesaid, the sum of seven hundred and fifty dollars ($750.00), and the further sum of fifty dollars and seventy-five cents ($50.75) as and for the taxable costs and disbursements of the plaintiff in said action, amount- ing together to the sum of eight hundred dollars and seventy-five cents ($800.75). 4. That this plaintiff may have such other and further relief, or both, in the premises as shall be just and equitable, and that this court will adjudge unto this plaintiff the costs and disbursements of this action against said defendants or either of them. CARL FISCHER-HANSBN, Plaintiff, Attorney in Person. 55 Liberty Street, Borough of Manhattan, New York City. (Add verification.) 124 ATTORNEYS AND COUNSELLORS. ARTICLE IV. SUMMARY PROCEEDINGS AGAINST ATTORNEYS. A. General power of court. 1. In general. The courts have jurisdiction to entertain a summary pro- ceeding by a client against his attorney for misconduct, or to settle a controversy between them.^^ Thus, an attorney may be summarily compelled to restore money which is wrongfully retained by him from his client.^ The proceeding is incident 52. Foster v. Townshend, 2 Abb. N, C. 29, &8 N. Y. 203; Kuhne v. Daley, 23 Hun, 382; Saxton v. Wyekoff, 6 Paige, 182. Common law authority. — The court has authority at common law, upon the application of a client, to inquire into the alleged misconduct of an attorney. People ex rel. White v. Feenaughty, 51 Misc. 468, 101 N. Y. Supp. 700. Different remedies of client. — In Kose V. Whitman, 52 Misc. 310, 101 N. Y. Supp. 1024, the court discusses the remedies which may be taken by a client as against an attorney who wrongfully withholds moneys. In that case it appeared that the client brought an action against an attorney for an alleged conversion of moneys upon which the attorney claimed a lien. It was held that the action would not lie until there had been an accounting and the amount due the attorney from the client had been ascertained; that the plaintiff mistook her remedy, and that she should have applied to the court for an order requiring the defendant to show cause why he should not pay over any moneys belonging to her which were wrongfully withheld. On the return of such order the court had the power to appoint a referee to take proof of such facts, and if the ref- eree's report shows any moneys in the hands of the attorney belonging to plaintiff, in excess of what they were entitled to for services, the court could on confirmation of the report summarily direct the attorney to pay over such moneys, and if he failed to do so he could be proceeded against by attachment as for a contempt. Or the client could commence an action for an accounting, and if it was ascertained on the trial that any sum of money was in the hands of the defendants be- longing to the plaintiff over and above their reasonable charges, then an ac- tion for conversion could have been maintained. But the said action could not be maintained so long as the amount of compensation was in dis- pute. Delivery of extension of mortgage. — Matter of Robertson v. Clock, 18 App. Div. 363, 46 N. Y. Supp. 87, 80 St. Kep. 87. Remedy not by action. — ^Where an at- torney has acted in a way inconsistent with his relation to the court and suitors have sustained damage, the rem- edy is by summary proceeding and not by action. Foster v. Townshend, 68 N. Y. 203. 53. Pritchard v. Marvin, 33 App. Div. 639, 56 N. Y. Supp. 974; aff'd, 158 N. Y. 667; Matter of Leopold v. City of New York, 186 App. Div. 872, 175 N. Y. Supp. 188; Matter of Keen, 39 Misc. 374, 79 N. Y. Supp. 857; Wolfe V. Mack, 81 Misc. 185, 142 N. Y. Supp. 433 ; Matter of Mertian, 29 Hun, ATTORNEYS AND COUNSELLORS. 125 to the equitable powers of the court ;^* and the inquiry upon the application is whether the attorney has money in his possession which equity and justice require should be paid over to the client.^^ The provisions of the Judiciary Law as to agreements be- tween attorney and client for compensation do not deprive the court of its supervisory power over dealings between at- torney and client.^® The right of the client to compel the at- torney to account will not be denied because of the interposi- tion of technical objections.^" This claim of the attorney may be sound, for he has a lien on the funds in his hands for his services and expenses.^^ Where the value of his services is in dispute, and it is conceded that he has performed some ser- vices, the court will not, as a general rule, summarily order him to surrender to the client securities or moneys which are in his hands.^^ But the mere fact that the attorney has a lien or is acting in good faith in retaining the money does not 459; aff'd, on reargument, 17 Wkly, Dig. 163; Matter of Sprague t. Hor- ton, 46 8t. Eep. 17, 18 N. Y. Supp. 165 ; Matter of Bleakley, 5 Paige, 311. Inatallment coUectiona — ^If an at- torney collects the claim on install- ments he may be compelled to pay over the collections as they are made, and is only entitled to his percentage from the cash actually collected. Matter of Tracey, 1 App. Div. 113, 37 N. T. Supp. 65, 73 St. Eep. 219; aff'd, 149 N. Y. 608. Application -of funds. — The court has power to compel an attorney to apply money received on account toward pay- ment of costs and disbursements, upon the case being decided against the client, where that was the express agreement with the client. Anderson V. New York & Harlem R. B., 150 App. Div. 432, 135 N. Y. Supp. 3.0. Money for costs. — Where an attorney receives money in payment of costs awarded to his client on an erroneous order, which order is subsequently re- versed, and he has never paid such money over to the client, and still has it in his hands, he may be compelled by order to restore the mnnev. Fnrstman V. Schulting, 108 N. Y. 110. Waiver of objection to jurisdiction. — In a summary proceeding to compel the payment of money by an attorney, who has submitted to the jurisdiction of the court, the latter cannot subsequently object that the court had no jurisdic- tion in the summary application. Yates V. Heath, 33 St. Rep. 392, 5 N. Y. Supp. 954. A trustee in bankruptcy may make application to the Supreme Court to compel an attorney for the bankrupt to pay over moneys collected by him, and the fact that the attorney remitted his cheek for a portion of the moneys col- lected will not establish an account stated. Matter of Klein, 101 N. Y. Supp. 663. 54. Purdy v. Stewart, 16 Week. Dig. 384. 55. Purdy v. Stewart, 16 Week. Dig. 2.84. 56. Barry v. Whitney, 3 Sandf. 696. 57. Matter of Keen, 39 Misc. 374, 79 N. Y. Supp. 857. 58. See, supra. Article III. — ^Enforce- ment of lien. 59. Matter of H., 87 N. Y. 521; Mat- 126 ATTORNEYS AND COUNSELLORS, bar the sttmmary remedy.®" The court is authorized in the same proceeding to determine the attorney's claim and to order the payment of the balance to the client.®^ Or the court may direct a reference to determine the issues relative to the attorney's lien and the value of his services.®^ If the value of the attorney 's services can be readily ascertained, it is proper for the Court to fix the amount without sending the issue to a referee.®^ The proceeding should not be dismissed because an issue is raised by the affidavits of the parties.®* 2. Counterclaim or lien of attorney. On a summary proceeding by a client, it is frequently claimed by the attorney that he has a claim against the moneys in his hands for his services, and that he, therefore, has a lien which entitles him to retain the moneys until his claim is adjusted. 3. Necessity of demand of attorney. The client should make a demand on the attorney for the payment of moneys held by him, before being permitted to ter of McKirvin v. Nafis, 59 St. Eep. 101, 27 N. Y. Supp. 733. 60. Bowling Green Savings Bank v. Todd, 5-2 N. Y. 489; Matter of GiUes- pie V. MulhoUand, 12 Mise. 40, 33 N. Y. Supp. 33, 66 St. Rep. 532; Matter of Chittenden, 4 St. Rep. 606, afC'd with- out opinion, 105 N. Y. 679. 61. Matter of Waterbury v. Eldridge, 24 St. Eep. 429, 5 N. Y. Supp. 324, 1 Silvernail, 292. In order to prevent the giving of summary relief by the court, where an attorney asserts a counterclaim, such assertion must be shown sufficiently to justify a formal investigation thereof. Matter of Tracey, 1 App. Div. 113, 37 N. Y. Sttpp. 65, 72 St. Eep. 219; afE'd, 149 N. Y. 608. StqmlaMon. — Where an attorney kept half of the sum received on the settle- ment of an action pursuant to his con- tract of retainer, but upoo the client de- manding a larger proportion they en- tered into a stipulation fixing an addi- tional amount which the attorney should turn over, the settlement to be approved by the court, it is not bound by the stip- ulation but may order the attorney to turn over a larger sum. Matter of Friedman, 136 App. Div. 750, 121 N. Y. Supp. 426. Special agreement. — If upon a sum- mary proceeding there is a disputed question of fact between the attorney and his client as to the existence of a special agreement fixing the attorney's rate of compensation, the court has power to determine such question of fact. Porter v. Parmly, 39 Super. Ct. 219; Matter of Fieldman, 27 Hun, 301. 62. See, infra, C, 2, References. 63. Matter of Knapp, 85 N. Y. 2«4 ; Ferdon v. Ferdon, 1 App. Div. 629, 36 N. Y. Supp. 741, 71 St. Rep. 671; Weiss V. Schleimer, 86 App. Div. 611, 83 N. Y. Supp. 234 ; Waterbury v. Eld- ridge, 5 N. Y. Supp. 324. 64. Matter of Martin, 73 App. Div. 505, 77 N. Y. Supp. 192. ATTOENEYS AND COUNSELLORS. 127 maintain a summary proceeding against him.''^ If an attorney withholds money wrongfully, a demand is sufficient to support a summary remedy, even though the demand be for too much, where the attorney refuses to pay over any of the money.®® 4. Moneys collected in another jurisdiction. It has been held, that the court may compel an attorney to pay over moneys, although they were collected upon the settle- ment of an action in another State.®'' On the other hand, it has been held that the proceeding is not maintainable to re- quire an attorney to pay over money where the services were rendered as counsel of another court, not a State court, but a court of a separate jurisdiction.®^ 5. Effect of pendency of action against attorney. The pendency of the action against an attorney for moneys withheld, in which action he has been arrested, is sufficient ground for refusing the summary remedy.®^ If the client pro- ceeds by action he waives his right to proceed by summary order.'''' But it is held that after judgment against the attor- ney and failure to collect the amount thereof by execution, the client is justified in applying for the summ.ary remedy.''^ 6. Discretion of court. The granting of a summary order to compel an attorney to pay over money to a client is within the discretion of the courf^ The court, in its discretion may decide that the dis- ss. Ex parte Ferguson, 6 Cow. 596; 72. Matter of Nellis, 116 App. Div. CottreU V. Finlayson, 4 How. Pr. 343, 94, 101 N. Y. Supp. 698 j Keeney v. 2 Code Eep. 116. TredweU, 71 App. Div. 521, 75 N. Y. 66. Matter of Ackerman v. Wagner, Supp. 1097; Matter of Hitchings, 157 29 St. Eep. 166, 8 N. Y. Supp. 457, 5 App. Div. 393, 143 N. Y. Supp. 339; Silvemail, 443. Le Cross v. Chain Shirt Shops, Inc., 187 67. Matter of Batterson v. Osborne, App. Div. 371, 175 N. Y. Supp. 633; 44 St. Eep. 837, 18 N. Y. Supp. 431. Matter of De Oraindi, 31 St. Eep. 744, 68. Matter of Forster, 49 Hun, 114, 9 N. Y. Supp. 873. 17 St. Eep. 115. Unprofessional conduct required. — 69. Matter of Mott, 36 Hun, 569. It has been held by the General Term 70. CottreU v. Finlayson, 4 How. Pr. it would not interfere in a summary 242, 2 Code Eep. 116. manner in quarrels between an attorney 71. Gabrial v. Schillinger Fire Proof and client, unless the former has been Cement Co., 34 Misc. 313, 53 N. T. guilty of such unprofessional and dis- Supp. 1127. honest conduct as to require his dis- 128 ATTORNEYS AND COUNSELLORS. pute between an attorney and client be determined by action instead of by summary remedy .'^^ While the court may deter- mine disputed facts by aid of a reference,''* if there is a serious dispute in the facts, the court may properly consider an ac- tion to be the appropriate remedy for the client.''^ The fact that the attorney is retaining the money in good faith does not preclude the summary remedy, but may have weight on how the court will exercise its discretion." B. Necessity of relation of attorney and client. In order that the simamary remedy may be invoked it is necessary that the transaction of which complaint is made arose out of the relation of attorney and client.''' The theory upon which the proceeding is based is that the attorney is an officer of the court, and in order that the proceeding may lie, barment or discipline. Berks v. Hoteh- kiss, 83 Hun, 27, 31 N. Y. Supp. 16, 63 St. Eep. 354. Second Department. — It has been said that in the Second Judicial De- partment, the court will not summarily adjust a dispute between an attorney and the client but will remit the ag- grieved party to his action. Arone v. Launders, 43 Misc. 138, 88 N. Y. Supp. 259. 73. Matter of Schell, 128 N. Y. 67, 38 St. Kep. 442 ; Matter of Pollock, 69 App. Div. 499, 74 N. Y. Supp. 976. 74. See, infra, C, 2, References. 75. Matter of Yeuni, 3 Month. L. Bui. 2. 76. Matter of Chittenden, 4 St. JJep. 606; aff'd without opinion, 105 N. Y. 679. 77. Matter of Tracey, 1 Appi Div. 113, 37 N. Y. Supp. 65, 72 St. Eep. 219; Taylor v. Long Island E. E. Co., 38 App. Div. 595, 56 N. Y. Supp. 665; Matter of Hess, 133 App. Div. 654, 118 N. Y. Supp. 171; LeGros v. Chain Shirt Shops, 187 App. Div. 371, 175 N. Y. Supp. 623; Matter of Eowe Co., 191 App. Div. 179, 181 N. Y. Supp. 87; Matter of Fellini, 194 App. Div. 449, 185 N. Y. Supp. 330; Matter of Ham- maun, 37 Misc. 417, 75 N. Y. Supp. 775; Matter of Haskins, 18 Hun, 42; Matter of Husson, 26 Hun, 130, 6S How. Pr. 358 ; Matter of Sardy, 47 St. Eep. 308, 19 N. Y. Supp. 575. Money procured by fraud. — Though in most cases it is stated that the sum- mary remedy by attachment lies only where an attorney by fraud procures from the court an order by which he obtains money from a party not his client, he may, nevertheless, be pro- ceeded against summarily by attach- ment. Wilmerdings v. Fowler, 14 Abb. Pr. N. S. 249, aff'g 45 How. Pr. 143; a. c. Fowler v. Lowenstein, 7 Lans. 167. See, however, 15 Abb. N. S. 86, where it was held that the fraud in question was not made out. For a ease where a motion was made to compel an attorney to pay a check given to an adverse party, see Wilkinson v. Gill, 14 Week. Dig. 331. Foreclosure. — ^Where an attorney in a foreclosure action receives his client's surplus moneys and fails to pay the same over to the referee or county treasurer, a summary proceeding lies. Matter of Silveruail, 45 Hun, 575. ATTOKNEYS AND COUNSELLORS. 129 he must be sueli officer in respect to the particular wrong which it is sought to repair.™ It must appear that the relation of attorney and client ex- isted between him and the petitioner, and also that while such relation existed the attorney received money or property be- longing to his client which he failed to pay over or account for.''^ It is essential that the relation of principal and agent exists between the parties ;^'' if the relation is merely that of debtor and creditor, the remedy cannot be invoked.^^ But, so long as the moneys in question are received by the attorney in his professional capacity, it is not required that they arise out of any particular legal proceeding.^ Thus, if an attorney receives money to invest on bond and mortgage, but does not do so, and upon its appearing that he would not have been so employed if he had not been an attorney, the summary remedy will lie.^ And an attorney employed to purchase property at a sale under his client's execution may be subject to summary proceedings.*^ So, too, an employment to avoid an appre- hended foreclosure suit, may be in a professional character.^ If the transaction is a business, as distinguished from a pro- fessional transaction, a summary application is not the proper remedy. Thus, where an attorney collects money as a land agent, and not as an attorney-at-law, the client must resort to an action.^^ The mere fact that one is an attorney, and also holds a power of attorney from another to collect the amount due on a certificate of a benefit society, does not create rela- tion of attorney and client, so as to support summary pro- ceedings.®' Where an attorney who has collected moneys in his profes- sional capacity is requested by his client to hold and invest said moneys, he becomes a business agent for the latter pur- pose and no longer holds the moneys in his professional capacity, and, if he subsequently wastes the moneys by im- 78. Ex parte Ketchum, 4 Hill, 564. 82. Grant's Case, 8 Abb. Pr. 357; 79. Matter of Minnesota Phonograph Ex parte Staats, 4 Cow. 76. Co. 148 App. Div. 56, 13a N. Y. Supp. 83. Grant's Case, 8 Abb. Pr. 357. 1063; Matter of Hitchings, 157 App. 84. Matter of rriedman, 27 Hun, Div, 392, 14S N. Y. Supp. 339. 301. 80. Wolfe V. Mack, 81 Misc. la's, 142 85. Matter of Lamer, 20 Week. Dig. N. Y. Supp. 433. 73. 81. Wolfe V. Mack, i81 Misc. 185, 86. Matter of Dakin, 4 Hill, 42. 142 N. Y. Supp. 433; Matter of Has- 87. Matter of Hillebrandt, 33 App. kins, 18 Hun, 42; Matter of Husson, Div. 191, 53 N. Y. Supp. 353. 26 Hun, 130, 62 How. Pr. 358, 9 130 ATTORNEYS AND COUNSELLOES. proper investments, lie cannot be compelled by siimmary pro- ceedings to pay them over,^^ Where, upon the settlement of a controversy between various contractors engaged in the erection of a building and the owner, one of the contractors pays money to an attorney to satisfy certain claims and the claimant refuses to accept the money, said contractor, not claiming that the money came into the possession of such attorney, as its attorney, cannot maintain a summary proceeding to recover the same.^^ If the attorney did not receive the money in his professional char- acter, a stipulation that the court hear the differences be- tween the parties, will not justify the court in fixing the amoimt due and directing its payment.^" The summary remedy will not lie on the motion of one who merely advanced money to the attorney for the client,^^ or in favor of court officers to compel the payment of their fees,^^ or in favor of counsel against an attorney who has collected his counsel fees,^^ or by one attorney to compel the payment of moneys due him from another attorney,^* or by an assignee of the client.^^ But the right to maintain the proceeding is not lost because the attorney is subsequently disbarred;* or be- 88. Matter of King, 175 App. Div. by whose advice a formal assignment 196, 161 N. Y. Supp. 338. was delayed until after judgment, the 89. Matter of Sigmund Contraeting assignees may maintain summary pro- Co. V. Montegriffo, 153 App. Div. 374, ceedings to compel the payment of 138 N. Y. Supp. 510. moneys collected on the judgment, be- 90. Matter of Langslow, 167 N. Y. cause the attorney will be deemed to 314, modif'g judgment, 5Z App. Div. have prosecuted the action for the bene- 635, 66 Supp. 1135. fit of the assignee. Matter of Gillespie 91. Hess V. Joseph, 7 Robt. 609. v. Mulholland, la Mise. 40, 33 N. Y. 92. Lamoreux v. Morris, 4 How. Pr. Supp. 33, 66 St. Eep. 532. While it is 245. undoubtedly true that the relation of 93. Matter of Haskins, 18 Hun, 42. attorney and client must have existed 94. Matter of Cattus, 42 App. Div. at the time of the reception of the 134, 59 N. Y. Supp. 55 ; Matter of money by the attorney, yet it does not Hirschbach, 72 App. Div. 79, 76 N. Y. follow that a successor in interest from Supp. 117. the party may not maintain a summary 95. Post V. Evarts, 9 N. Y. Supp. proceeding to compel payment over by 370, 31 St. Bep. 123; Matter of Schell, the attorney, even though the conven- 58 Hun, 440, 43 St. Eep. 928, 12 Supp. tional relation does not and has never 790. But see s. c, 128 N. Y. 67; existed between them. Matter of Bowen v. Smidt, 49 St. Eep. 647, 20 Lahm, 179 App. Div. 757, 167 N. Y. Supp. 73i5. But where an assignment of a Supp. 217. claim was agreed upon pending an ac- 96. Matter of Bumham, 58 Mise. tion with knowledge of the attorney 576, 109 N. Y. Supp. 988. ATTORNEYS AND COUNSELLOES. 131 cause he has given the client a worthless check or note for the sum due the client." A corporation which has made contracts with third persons to undertake legal proceedings on their behalf, in violation of section 280 of the. Penal Law, and has retained an attorney to conduct such proceedings, may compel the attorney to ac- count for moneys in his possession.^* C. Procedure. 1. In general. The court has frequently issued an attachment against the attorney to require him to pay the moneys due the client.'' The same result may be obtained by the issuance of an order.^ The proceeding should be commenced by a verified petition.^ The papers in the application should not be entitled' in the action previously maintained by the attorney.^ Several dif- ferent claimants cannot unite in the same proceeding.^ If a firm appears as attorney in an action, it is not necessary to join all the members of the firm in a proceeding to compel the payment of money to the client, where it appears that the at- torney proceeded against personally received the money and appropriated it to his own personal use.^ 97. Matter of Papa v. Kini, 171 App. have been received by him in a profes- Div. 796, 157 N. Y. Supp. 1079, aff'd, sional capacity should not be granted 219 N. Y. 575. But see, Matter of upon a petition, all the material aver- Neville, 71 App. Div. 103, 75 N. Y. ments of which are stated to be upon Supp. 588. information and belief, signed by a 98. United States Title Guaranty Co. person who describes himself as "At- V. Brown, 166 App. Div. 688, 153 N. torney for the Petitioners" and veri- Y. Supp. 470, afE'd, 317 N. Y. 638. fled by him upon information and be- 99. Bowling Green Savings Bank v. lief, the grounds of which information Todd, 53 N. Y. 489 ; People v. Smith, 3 and belief are stated to be conversa- Caines, 221; People ex rel. Bacon v. tions and correspondence had with one Wilson, 5 Johns. 368. of the petitioners, where the only Statute of limitations. — See People reason given for the failure of the pe- V. Brotherson, 36 Barb. 663; Van Tas- titioners to verify the petition is that sel v. Van Tassel, 31 Barb. 439. both of them are residents of the State 1. People ex rel. White v. Fee- of Connecticut. Matter of Curtis, 51 naughty, 51 Misc. 468, 101 N. Y. Supp. App. Div. 434, 64 N. Y. Supp. 691. 70()_ 3. Hess v. Joseph, 7 Eobt. 609. 2. Verification. — ^An order appointing 4. Matter of Forster, 49 Hun, 114, a referee to take proof in a proceeding 1 N. Y. Supp. 619, 17 St. Eep. 115. instituted to compel an attomey-at-law 5. Matter of Wolfe, 51 Hun, 407, 21 to pay over certain fundS' alleged to St. Eep. 334, 4 N. Y. Supp. 339. 132 ATTOEBTEYS AND COUNSELLORS. Upon a summary application the inquiry is, What money has the attorney received belonging to the client which equity and justice required him to pay over? The proceeding is inci- dent to the equitable powers of the court, and the court should not estop either party by rules of evidence which would pre- vent the ascertainment of the truth. So held, as to the intro- duction of parol evidence to vary the attorney's receipt.^ 2. References. If there is a material dispute as to the facts it is proper to appoint a referee to hear the testimony.'' But, if the facts can be readily determined by the Court, there is no necessity for a reference.* 6. Purdy V. Stewart, 16 Week. Dig. 284. 7. Matter of Knapp, 85 N. Y. 284; Matter of Ernst, 54 App. Div. 363, 66 N. Y. Supp. 620; Matter of Martin, 73 App. Div. 505, 77 N. Y. Supp. 192; Matter of Gillespie V. Mulholland, 13 Misc. 40, 33 N. Y. Supp. 33, 66 St. Eep. 532; Matter of Hammann, 37 Misc. 417, 75 N. Y. Supp. 775; Matter of Fincke, « Daly, 111; Brown v. Mayor of New York, 11 Hun, 21; Waterbury V. Eldridge, 5 Supp. 324; Matter- of Taylor Iron & Steel Co. v. Higgins, 49 St. Bep. 645, 20 N. Y. Supp. 960. Waiver of objection to reference. — Upon an application to compel an at- torney to pay over a sum of money col- lected by him to his client, the attorney who has submitted to the Special Term to determine the amount to which he ia entitled cannot, on appeal from the order entered, raise the objection that a reference should have been ordered, the facts having been before the court which disposed of the matter on the motion. Matter of Borkstrom, 63 App. Div. 7, 71 N. Y. Supp. 451; aff'd, 168 N. Y. 639. Evasive affidavits of attorney. — Even if the affidavits by an attorney in a summary proceeding are evasive and unsatisfactory they cannot be disre- garded, and if they present an issue as to the capacity in which he acted, or as to the existence or extent of a lien upon the funds, it ia the duty of the court to institute an inquiry by refer- ence and not to assume that there has been professional misconduct, solely be- cause the attorney's affidavit is dis- trustful. Matter of H., 87 N. Y. 521. Acts of clerk. — Where, pending an appeal to the Court of Appeals from a judgment for the plaintiff in a negli- gence action, a clerk in the office of the plaintiff's attorney induced the plain- tiff to assign his one-half interest in the judgment for a sum much less than the value of that interest, the money paid to the plaintiff being in the greater part furnished by the clerk, the court, on the plaintiff's motion, will order a reference to determine whether the plaintiff's attorney should not be compelled summarily to pay over the client's share in the recovery notwith- standing the assignment thereof. Mat- ter of DriscoU, 175 App. Div. 375, 161 N. Y. Supp. 872. 8. Ferdon v. Ferdon, 1 App. Div. 629, 36 N. Y. Supp. 741, 71 St. Eep. 671 ; Matter of Waterbury v. Eldridge, 24 St. Bep. 429, 5 N. Y. Supp. 324, 1 Silvernail, 292. And see, supra, A, 2, Counterclaim or lien of attorney. ATTORNEYS AND COUNSELLORS. 133 A reference should not be ordered on a petition of a client against an attorney where the facts are in small compass and not complicated.^ The reference, if granted, is for the purpose of informing the conscience of the court, and the latter may adopt or dis- regard the report of the referee.^" The requirement of section 1022 of the Code of Civil Pro- cedure, (now covered by sections 440 and 470 of the Civil Practice Act), that the referee separately state and number the facts found and conclusions of law, was held not to apply to this proceeding."^ The report of the referee, though not bind- ing on the Court, is entitled to weight by reason of the fact that the referee saw and heard the witnesses.^^ The attorney is entitled to have a clear case made out against him;^^ but, after it is shown that the attorney received moneys in his professional capacity, the client can insist that he strictly ac- count for the same." An attorney should not be allowed to retain his client's money for what appeared to be excessive charges, when the only evidence to support such charges is his opinion that they were fair. He should be required to produce legal evidence upon the question of the value and the necessity of the ser- vices.^^ Where moneys were recovered for the client, and the 9. Weiss V. Sehleimer, 86 App. Div. A referee's finding, upon conflicting 611 83 N. Y. Supp. 234. evidence, in a summary proceeding to 10. Matter of Jones & Co., 117 App. compel the payment of money collected Div. 775 109 N. Y. Supp. 983; Matter by an attorney-at-law, that the latter of Cartier v. Spooner, 118 App. Div. has no money of the petitioner which 342 103 N. Y. Supp. 505. came to him as attorney, and that the Testimony. — A referee ordered to re- only money in his hands belonging to port the evidence vrith his opinion is her came to him as her business agent, not bound to take irrelevant testimony; adopted by the Special Term and af- contra, if he be ordered to take testi- firmed by the Appellate Division, is mony only. A question put to an at- conclusive in the Court of Appeals, torney upon application to compel him Matter of Langslow, 167 N. Y. 314. to pay over moneys, as to whether 13. Mater of Knapp, 85 N. Y. 384; other claimants were making claims Matter of Hammann, 37 Misc. 417, 75 against him for moneys collected and Supp. 775. not reported, is iioompetent. Matter 14. Matter of Baby, 29 App. Div. of Jones & Co., 117 App. Div. 775, 109 2.25, 51 N. Y. Supp. 552; Matter of N. Y. Supp. 983. Ernst, 54 App. Div. 363, 66 N. Y. Supp. 11. Matter of Jones & Co., 117 App. 620. Div. 775, 109 N. Y. Supp. 983. 15. Matter of Eaby, 25 Misc. 240, 12. Matter of Jones & Co., 117 App. 55 N. Y. Supp. 87, 89 St. Rep. 87. Piv, 775, 109 N. Y. Supp. 983. 134 AXTOBKEYS AND COUNSELLORS. attorney directed a referee to pay the sum to one to whom the attorney was indebted, the attorney cannot claim that he has not received such moneys on a summary application by the client to compel him to pay over.^® 3. Interest and costs. ' No doubt, in a proper ease, the attorney may be compelled to pay the costs of the reference. Or the situation may be such that the expense of the reference will be charged against the client." If the attorney sustains a clainl to an unliqui- dated amount due him for services, it is improper to charge him with interest on the balance prior to the commencement of the proceeding.^^ And, if it is determined that the attorney is entitled to retain the amount of his disbursements and a reasonable counsel fee, he should not be charged with interest or with eosts.^^ 4. Enforcement of order. If the attorney fails to obey the order for the payment of money to his client, he may be punished as for a contempt of court.^" Where an order has once been made requiring an at- torney to pay money to his client, he cannot question the order collaterally in a proceeding to punish him for contempt in dis- obeying the order.^i Where a proceeding is instituted against a party charged with contempt by affidavit and attachment, and he is adjudged in contempt, a warrant must issue under section 770 of the Judiciary Law; but where the proceeding 16. Kent v. Rockwell, 89 Hun, 88, 34 a business agent, and authorizing the N. Y. Supp. 1041, 69 St. Eep. 13. court upon the confirniation of the 17. Matter of Bachraeh, 153 App. referee's report to enter a decree or- Div. SSfi, 137 N. Y. Supp. 794. dering him to pay over any amount 18. Grangier v. Hughes, 56 Super, found due, is binding upon him in his Ct. 346, 3 N. Y. Supp. 828. character as business agent only to the 19. Matter of Von Polheim, 175 App. extent of the determination of the Div. 819, 163 N. Y. Supp. 498. amount due, since the court, having no 20. Matter of McBride, 6 App. Div. jurisdiction to compel by order instead 376, 39 N. Y. Supp. 579; People ex rel. of judgment and execution the pay- White V. Feenaughty, 51 Misc. 468, 101 ment of moneys in his hands as agent, N. Y. Supp. 700; Matter of Steneirt, cannot, even with his consent, acquire 24 Hun, 246. such jurisdiction which would make Effect of stipulation. — A stipulation him subject to imprisonment without in the proceeding providing for the bail for contempt if he failed to obey amendment of an order of reference so the order. Matter of Langslow, 167 N. as to include also the determination of Y. 314. the differences between the parties as 21. Matter of Bornemann, 6 App. to moneys in the attorney's hands as Div. 524, 39 N. Y. Supp. 686. AITORNEYS AND COUNSELIiORS. 135 is begtin by an aflfidavit and order to show cause the offender may be committed by a certified copy of an order so made as prescribed by section 772.^^ 5. Form of petition. SUPREME COURT— New York County. In the Matter of the Application OF OSCAR G. BORKSTROM, To Compel JOHN DOB, an Attorney- at-Law of the State of New York, to Pay Over Certain Moneys. To the New York Supreme Court: The petition of Oscar G. Borkstrom respectfully shows : First: That your petitioner resides at No. 504 Bast 119th street, in the Borough of Manhattan, New York City, and is the petitioner herein. Second : That on or about August 31, 1900, your petitioner retained one John Doe, an attorney and counselor-at-law of the State of New York, to institute and prosecute an action, by your petitioner as plain- tiff, against Michael Cooper and others, as defendants, for the fore- closure of a mechanic's lien against the said defendants; and said action was duly commenced by the filing of a notice of pendency of action and a summons and complaint, dated on or about September 10, 1900; that issue was joined in said action and that said action came on for trial and was tried before Hon. Alden Chester, Justice, at a Special Term of this court, held at Part VI., on February 15, 18, and 19, 1901; that a decision in said action was thereafter duly rendered therein in petitioner's favor, and a judgment was there- after and on or about April 8, 1901, duly entered thereon in favor of said plaintiff, your petitioner, against the defendants therein for the sum of one thousand five hundred and thirteen dollars and six- teen cents ,($1,513.16), principal and interest, and three hundred and ninety-nine dollars and thirty-two cents ($399.32) costs, making a total of one thousand nine hundred and twelve dollars and forty- eight cents ($1,912.48) ; that in said bill of costs of three hundred and ninety-nine dollars and thirty-two cents ($399.32) is included the sum of seventy-nine dollars ($79) paid by your petitioner to said John Doe for a copy of the stenographer's minutes upon said trial, which said sum of seventy-nine dollars ($79) the said John Doe agreed to repay to your petitioner out of his bill of costs. Third: That on or about said August 31, 1900, when your peti- tioner retained said John Doe to institute and prosecute this said ac- tion and foreclose the said mechanic's lien, the said John Doe ex- pressly agreed with your petitioner to institute and prosecute said 22. People ex rel. WMte v. Feenaughty, 51 Misc. 468, 101 N. Y. Supp. 700. 136 ATTORNEYS AND COUNSELLORS. action and to foreclose the said lien for the sum of fifty dollars ($50) and the costs he might obtain in said action; that at said time your petitioner paid the said John Doe the said sum of fifty dollars ($50), and received from him a receipt therefor, of which the following is a copy: John Doe, Counsellor-at-Law, 198 Bast 121st St. New York, August 31, 1900. Received the sum of fifty dollars ($50) from 0. G. Borkstrom in full payment of all services and fees in case of Borkstrom v. Cooper, foreclosure of mechanic's lien. John Doe. That in addition to the said sum of fifty dollars ($50) which your petitioner has paid the said John Doe, as aforestaid, your petitioner has also paid the disbursements of said action, amounting to about the sum of thirty-two dollars ($32). Fourth: That on or about April 17, 1901, your petitioner was in- formed by the said John Doe that he, the said John Doe, had settled said judgment and collected the money thereon ; that at said time, your petitioner demanded of the said John Doe that he pay your petitioner the moneys due your petitioner upon said judgment, namely, the sum of one thousand five hundred and thirteen dollars and sixteen cents ($1,513.16), the amount of principal and interest of said judgment, and the further sum of seventy-nine dollars ($79), the amount paid by your petitioner for the said copy of said stenographer's minutes, making in all the sum of one thousand five hundred and ninety-two dollars and sixteen cents ($1,592.16), but that the said John Doe then and there refused and still refuses and neglects to pay over to your petitioner this said sum of one thousand five hundred and ninety- two dollars and sixteen cents ($1,592.16), but continues to wrongfully and fraudulently keep and withhold this said sum of one thousand five hundred and ninety-two dollars and sixteen cents ($1,592.16) which belongs to and is the property of your petitioner, and refuses to pay over the same to your petitioner. Fifth: Your petitioner further states that he has personally ex- amined the judgment-roll in this action, and, among other things, finds on file therewith a satisfaction of this said judgment, executed by the said John Doe, as attorney, and acknowledged on or about April 10, 1901; and that no previous application has been made for this order. Wherefore, your petitioner prays for an order directing the said John Doe to show cause why he should not pay over to your petitioner forthwith this said sum of one thousand five hundred and ninety-two dollars and sixteen cents ($1,592.16) which rightfully belongs to your petitioner, but is wrongfully withheld from your petitioner by the said John Doe, and in default thereof, why he should not be punished as for a contempt of court, and for such other and further relief, as may be just, together with the costs of this proceeding. Dated, April 24, 1901. Oscar G. Borkstrom, ;( Verification.) Petitioner. ATTORNEYS AND COUNSEIiLOKS. 137 6. Form of order to show cause. (Title.) Upon recording the petition of Oscar G. Borkstrom, verified April 24, 1901, hereto annexed, and upon the judgment roll duly entered and field in the office of the Clerk of New York County, on or about April 8, 1901, in the action brought in the New York Supreme Court, New York County, by said Oscar G. Borkstrom, as plaintiff, against Michael Cooper and others, as defendants, and upon aU the papers and proceedings in said action, it is Ordered, that John Doe, attorney-at-law, of the State of New York, show cause before one of the justices of the New York Supreme Court, at a Special Term, to be held at Part II. thereof, in the County Court House, in the County of New York, State of New York, on the 29th' day of April, 1901, at 10.30 o 'clock in the forenoon of said day, or as soon thereafter as counsel can be heard why an order should not be granted and entererd herein, directing the said John Doe to forthwith pay over to the said Oscar G. Borkstrom, the sum of one thousand five hundred and ninety-two dollars and sixteen cents ($1,592.16), moneys collected by the said John Doe in the aforesaid action, but belonging to the said Oscar G. Borkstrom, and wrongfully and fraudulently withheld and kept by the said John Doe, and in default thereof directing that the said John Doe be punished as for a contempt of court, and for such other and further relief as may be just and proper, together with the costs of this motion and proceeding. Service of a copy of this order and petition shall be made upon the said John Doe, on or before the 25th day of April, 1901. Dated, April 24, 1901. George P. Andrews, Justice Supreme Court. (Followed by answering affidavits of John Doe and others in sup- port thereof and affidavit of Oscar G. Borkstrom in reply thereto.) 7. Form of order directing payment of moneys. At a Special Term of the New York Supreme Court, Part II. thereof, ■ held at the County Court House, in the County of New York, on the 6th day of May, 1901. Present, Hon James A. 'Gorman, Justice. (Same title.) An order having been duly granted herein on April 24, 1901, upon the papers therein recited, directing the said John Doe to show cause before this Court on April 29, 1901, why an order should not be granted and entered herein directing the said John Doe to forthwith pay over to the said Oscar G. Borkstrom the sum of one thousand five hundred and ninety-two dollars and, sixteen cents ($1,592.16), moneys collected by the said John Doe upon the judgment duly entered in the office of the Clerk of New York County on or about April 8, 1901, in the action brought in the New York Supreme Court, New York County, by the said Oscar G. Borkstrom, plaintiff, against Michael Cooper and others, defendants, and, in default thereof, directing that the said John Doe be punished as for a contempt of court ; and said 138 ATTORNEYS AND COUNSELLORS. motion coming on to be heard on said 29th day of April, 1901, and after hearing Jesse Grant Roe, attorney for the petitioner herein, in support of said motion, and John Doe, the respondent herein, in per- son, in opposition thereto and due deliberation having been had there- on, and the Court having thereafter duly rendered a decision herein granting the said motion, with ten dollars ($10) costs: Now, upon reading and filing the said order to show cause, granted berein April 24, 1901, and the petition of Oscar G. Borkstrom, veri- fied April 24, 1901, and proof of the due service of a copy of said papers upon the said John Doe. I (Here follow recitals.) In opposition thereto, and upon all the papers and proceedings herein, and upon motion of Jesse Grant Roe, attorney for said peti- tioner, it is Ordered, that the said motion be and the same hereby is granted, with ten dollars ($10) costs of said motion. And it is further ordered that the said John Doe forthwith pay over to the said Oscar G. Borkstrom the sum of one thousand five hun- dred and ninety-two dollars and sixteen cents ($1,592.16), moneys collected by the said John Doe in the aforesaid mentioned action, but belonging to the said Oscar G. Borkstrom and. wrongfully and fraudulently withheld and kept by the said John Doe, and that in case of his failure to forthwith pay over said moneys to the said Oscar G. Borkstrom, the said John Doe be forthwith punished as for a con- tempt of court. James A. 'Gorman, Justice Supreme Court. ARTICLE V. SUBSTITTTTION OF ATTORNEYS. A. Nature of proceeding. An application for a substitution of attorneys involves no question in the action and is in no sense a proceeding in the action, but is a special proceeding.^^ It is a special proceed- ing which terminates in an order, and no formal judgment can be entered as the result of the determination expressed in that order.2^ It is a summary special proceeding, and is addressed to the discretion of the court.^^ A reference ordered there- under is made under section 80 of the Civil Practice Act, not under section 467.^® A determination that the attorneys sought to be removed 23. Matter of Barkley, 42 App. Div. 25. Matter of Doyle v. Mayor, 26 597, 59 N. Y. Supp. 743. Misc. 61 56 N. Y. Supp. 441. 24. Fellon v. Paillard, 46 Misc. 26. Matter of Doyle v. Mayor, 26 J51, 93 N. Y. Supp. 1101. Misc. fil, 56 N. Y. Supp. 441. ATTORNEYS AND COUNSELLORS. 139 and their privies have, through misconduct and delay, lost their lien on a judgment in favor of their client, and all claim thereupon under contracts with him is conclusive upon them and their privies, as though the same had been determined in an action, though it may not preclude them from recovering the value of services rendered.^ B. Grounds for substitution of attorneys. 1. Rules of Civil Practice, Bule 56. Substitution of attorney. An attorney may be changed by the order of the court or a judge thereof on the consent of the party and the attorney, or on application of the party on such terms as shall be just. 2. Without cause. A litigant has a right to change his attorney at will, either with or without reasonable cause.^* If he changes without cause, the court, as a condition of granting the order of sub- stitution, will protect the lien of the old attorney and provide for the payment of his fees. But, if the client has cause for a change of attorneys, the court will leave the old attorney 27. Matter of Barkley, 48 App. Div. 597, 59 N. Y. Supp. 742; dism'd, 161 N. Y. 647. 28. Tenney v. Berger, 93 N. Y. 524 ; Johnson v. Eavitch, 113 App. Div. 810, 99 N. Y. Supp. 1059; Jeny v. Merkle, 128 App. Div. 833, 112 N. Y. Supp. 1106; O 'Sullivan v. Metropolitan Co., 39 Misc. 26.8, 79 N. Y. Supp. 481. Two plaintiffs. — In an action to fore- close a mortgage brought by one plaintiff individually and as executrix and by the other plaintiff as co-execu- tor, one plaintiff cannot, after the property has been bought in by herself and the executors jointly, have an order substituting an attorney of her own choice without the consent of her co- executor. Chappotin V. Corcoran Realty Co., 165 N. Y. Supp. 734. Rights of other parties. — ^A client should not be allowed to change his at- torney when the effect of the change win be to bargain away the rights of the other persons who are interested in the action and for whose benefit, aa well as for that of the plaintiff's, the action was brought. Hirshfield v. Bopp, 5 App. Div. 202, 39 N. Y. Supp. 24. Dissolution of partnership. — ^Where attorneys dissolve? their partnership, a firm client has a right to determine which partner shall continue the con- duct of an action already begun for him by the firm, provided, however, that the existing lien of the firm is pre- served; and, therefore, where one of two partners, upon a consent signed by the client and by that partner of his own motion in the firm name, procures an order merely substituting himself as sole attorney, the court may regard the order as duly obtained, but may amend it by adding a provision that it is without prejudice to any lien of the firm attaching at the date of the sub- stitution. Schneible v. Travelers' Ins. Co., 36 Misc. 52S, 73 N. Y. Supp. 955. 140 ATTORNEYS AND COUNSELLORS. to an action at law to recover for the services he has rendered to the client.^' The fact that the attorney is prosecuting the action upon a contingent fee, does not preclude the client from making a change.^" The contingent fee contract gives the attorney no lien for services not performed.^^ But the fact that the attorney is largely interested in the recover^'- may have weight on the discretion to be exercised by the court.^^ Where the attorney has been prosecuting the action on a contingent basis, the client by discharging him cannot in all cases require that he paid on a quantum meruit basis.^^ The court may protect the interests of the parties in such a case by ordering that the attorney receive a percentage of the final recovery.^* C. When order of substitution necessary. A party cannot change his attorney without leave of the court or of a judge thereof.^^ And, as a general rule, before another attorney can be heard in the case there must be a regular substitution of record.^^ A note of issue cannot be filed by an attorney who has not been substituted by an order of the court, nor can an attorney who has executed a consent in blank to the substitution of 29. See, supra, Art. Ill, D, Enforce- - in Ms place on the application of a ment by action in equity. purchaser of the bond and mortgage at 30. Guardian ad litem. — ^Where a la sale thereof by a receiver, appointed mother engages an attorney to prose- in supplementary proceedings instituted cute her claim for damages for injuries (against the original owner of said bond to an infant son for a contingent fee, and mortgage, but should be allowed thereafter in an action when the mother to continue in charge of the proseou- has been appointed guardian ad litem; tion of the action in which he is him- she is entitled to have another attorney self so largely interested. Steenburgh substituted. Bryant v. Brooklyn v. Miller, 11 App. Div. 286, 42 N. Y. Heights E. Co., 64 App. Div. 542, 72 Supp. 333. N. Y. Supp. 308. 33. Matter of Department of Public 31. Johnson v. Kaviteh, 113 App. Works, 58 App. Div. 459, 69 N. Y. Div. 810, 99 Supp. 1059. Supp. 413, modified, 167 N. Y. 501; 32. Substitution denied. — ^An attor- Haynes v. Hawes, 167 N. Y. 501. ney who has entered into an agreement 34. Kestivo v. Bradley Contracting with the owner of a bond and mortgage Co., 166 App. Div. 809, 152 N. Y. Supp. that he is to receive, in an action 326; O 'Sullivan v. Metropolitan St. E. brought for its foreclosure, one-half of Co., 89 Misc. 268, 79 N. Y. Supp. 481. the recovery together with the costs, ' 35. Krekeler v. Thaule, 49 How. Pr. in the absence of proof of misconduct iB8; Hoffman v. Van Nostrand 14 or delay on his part should not be re- Abb. Pr. 336. moved and another attorney appointed ATTORNEYS AND COUNSELLOES. 141 another attorney subsequently file a note of issue or perform any further act in the court.^' But a substitution is not required where one of a law firm takes a public office which disqualifies him, and he does not afterward take any part in the action.^^ In proceedings for the revocation of letters of administra- tion the administrator may be represented by a different at- torney than the one representing him in the proceedings to obtain the letters without the necessity of obtaining an order of substitution, as the proceedings are entirely independent.^^ The successor to the Attorney-General need not be substi- tuted •,*" but this principle does not apply to a municipal cor- poration having counsel appointed for a given period of time. In such a case, substitution must be made.*^ D. Death or disability. 1. Civil Practice Act, § 240. Death, removal or disability of attorney. If an attorney dies, is removed or suspended or otherwise becomes disabled to act at any time before judgment in an action, no further proceeding shall be taken in the action against the party for whom he appeared until thirty days after notice to appoint another attorney has been given to that party either personally or in such manner as the court directs. 2. Court decisions. The death of a client revokes the power of the attorney and service of papers on the attorney after his client's death is void.*2 The disbarment of an attorney has the same effect with reference to the rights of a client as his death, and all pro- ceedings on the part of plaintiff are stayed in the same man- ner.^^ Likewise, the dissolution of a corporation terminates the power of its attorney,^* although a long suspension of proceed- ings in the action does not have that effect.^ 36. Supervisors v. Brodhead, 44 How. St. Rep. 161. Pr. iZ&. 41- Parker v. City of Williamsburg, 37. Felt V. Nichols, 21 Misc. 404, 47 13 How. Pr. 250. N. Y. Supp. 951. 42. Van Kirk v. Sedgwick, »7 N. Y. 38. Cronin v. O'Keiley, 7 N. Y. Supp. 265; Adams v. Nellis, 59 How. 385. 337, 26 St. Rep. 249. 43. Commercial Bank v. Foltz, 13 39. Matter of Mandelhom, 99 Misc. App. Div. 603, 43 N. Y. Supp. 985. 168, 165 N. Y. Supp. 404. 44. Matter of Norwood, 32 Hun, 196. ' 40. People ex rel. Lardner v. Carson, 45. Bathgate v. Haskin, 59 N. Y. 78 Hun, 544, 39 N. Y. Supp. 619, 61 533. 142 ATTORNEYS AND COUNSELLORS. While the death of an attorney suspends proceedings, such suspension is temporary only and ceases upon the appoint- ment of a new attorney.*^ The above statute has no applica- tion where the attorney dies after the entry of judgment.^' And it does not prohibit a referee from delivering his re- port before the expiration of the thirty days prescribed by that section, especially where it appears that the thirty days did not expire until after the expiration of the sixty days al- lowed to the referee within which to deliver his report. The delivery of the referee's report before the expiration of the thirty days, even if it constituted a technical violation of the statute, is a mere irregularity, which is waived by the failure of the substituted attorneys to take advantage thereof before the entry of judgment, where it appears that judgment was not entered until ten days after their substitution at their re- quest.^ Where an attorney dies actual notice to appoint another is necessary.^^ And all proceedings are stayed for thirty days after notice is given to appoint another attorney.^" Failure to observe the provisions of the statute constitutes an irregularity merely and may be obviated by subsequent proceedings.^^ 3. Form of notice. SUPKEMB COURT— Albany County. SAMUEL JONES vs. HENRY SMITH. To Henry Smith, defendant in the above-entitled action: Please take notice, that you are hereby required to appoint an attorney in place of Andrew Hackett, Esq., your former attorney of record herein, who died on or about the 5th day of July, 1911, and give notice of such new appointment to the undersigned within thirty days after service of this notice, or the cause will proceed without such attorney. Haket H. Hamlin, Dated, September 15, 1911. Attorney for Plaintiff. 4e. N. Y. Land Imp. Co. v. Chap- -^ 49. Hoffman v. Eowley, 13 Abb. 399 ; man, 14 Misc. 187, 35 N. T. Supp. 468. Jewell v. Shouten, 1 N. Y. 241. 47. Chilson v. Howe, 17 Civ. Pro. 86, 50. Hickox v. Weaver, 15 Hun, 375 ; 5 N. Y. Supp. 780. Forbes v. Muxlow, 18 Civ. Pro. 239. 48. Agricultural Ins. Co. v. Darrow, 51. Arthur v. Schiever, 16 N. Y. 70 App. Div. 413, 75 N. Y. Supp. 135. Supp. 610. ATTORNEYS AND COUNSELLOES. 143 E. Authority of attorney after judgment. The authority of an attorney ceases on the entry of judg- ment, and the defendant is at liberty to employ any other at- torney to take such action as he desires in relation to the judg- ment and cause without any order .^^ But, until the party takes affirmative steps to dismiss the attorney or death or dis- ability of the attorney intervenes, the power of the attorney continues for the purpose of collecting the judgment, or of vacating, modifying or reversing it.^^ Thus, the attorney may stipulate to postpone an execution on a fraudulent judg- ment ;^* he may institute supplementary proceedings ;^ he can authorize the sheriff to discharge a defendant held under a body execution.^^ He has power to' satisfy judgment within two years ;^^ or he may make and serve a notice of appeal from a judgment against his client.^^ A substitution of attorneys for plaintiff after judgment operates as a revocation of the authority of the attorney of record to satisfy the judgment upon payment, and the subse- quent satisfaction executed by the original attorney is not conclusive against the substituted attorney, where the judg- ment debtor had notice of the substitution before the payment was made.^^ F. Substitution on appeal to court of appeals. 1. Rules of Court of Appeals, Rule 3. Attorneys and guardians below to continue to act. The attorneys and guardians ad litem of the respective parties in the court ■below shall be deemed the attorneys and guardians of the same parties respec- tively, in this court, until others shall be retained or appointed, and notice thereof shall be served on the adverse party. 2. Effect of rule. The effect of the above rule is that a party desiring to ap- peal from a judgment of the Appellate Division may retain 52. Davis v. Solomon, 25 Misc. ;595, 56. Davis v. Bowe, 118 N. Y. 55. citing Egan v. Eooney, 38 How. 131; 57. Civil Practice Act, § 530; Wood- Cruikshank v. Goodwin, 20 Supp. 757; ford v. Easbach, 6 Civ. Pro. 321. Lusk V. Hastings, 1 Hill. 656. 58. Schuler v. Maxwell, 38 Hun, 240; 53. Commercial Bank v. Foltz, 13 Miller v. Shall, 67 Barb. 446. App. Div. 603, 43 N. Y. Supp. 985. 59. Mitchell v. Piqua Cliib Assoc, 15 54. Bead v. French, 28 N. Y. 395. Misc. 366, 37 N. Y. Supp. 406, 55. Ward V. Eoy, 69 N. Y. 96. 144 ATTORNEYS AND COUNSELLORS. a new attorney without an order of substitution, the former attorney being deemed to be the attorney on the appeal only until another is retained.™ The fact that an attorney who has been authorized to ap- pear for a party, has failed to proceed in a regular manner by obtaining a substitution, does not prevent the court from acting upon a motion made by him on behalf of his client to dismiss the appeal.^^ After the filing of the return on an appeal to the Court of Appeals, a substitution of attorneys should be made by an order of the Court of Appeals and not of the court below.^^ But, where, after appeal to the Court of Appeals, the ap- pellant's attorneys substituted another in their place at the request of their client, it was held that the motion for an order directing the former attorneys to turn over the papers in the case to the substituted attorney was not properly made in the Court of Appeals, but should have been made in the court below.® G. Protection of fees of prior attorney. If the first attorney is without fault, the court will noi grant a substitution, unless the amount due him for his ser- vices and expenses is either paid or secured.^* This rule 60. Magnolia Metal Go. v. Sterling- of Supervisors v. Brodhead, 44 How. worth Ey. & Supply Co., 37 App. Div. Pr. 411. 366, 56 N. Y. Supp. 16. Determination of lien by court. — 61. Squire v. McDonald, 138 N. Y. Where after reversal of a judgment 554. for the plaintiff she agrees on substi- 62. Squire v. McDonald, 138 N. Y. tuting attorneys, that the former at- 554. torney's fees be determined by the court 63. People ex rel. Hoffman v. Bd. of and made a lien upon any subsequent Education of the City of New York, recovery, to which the former attorney 141 N. Y. 66. consents and both parties submit the 64. Matter of Dunn, 205 N. Y. 39«; question, the court may make an order Matter of Mitchell, 57 App. Div. 22, determining the amount. A judge who 67 N. Y. Supp. 961; Yuengling v. presided at the trial in which such ser- Betz, 58 App. Div. 8, 68 N. Y. Supp. vices were rendered may determine the 574 ; Kraus v. Century Gas and Elec- amount without a reference, as the mat- trie Fixture Co., 161 App. Div. 916, 145 ters are within his personal knowledge. N. Y. Supp. 1086; O 'Sullivan v. Metro- Scheu v. Blum, 124 App. Div. 678, 10» politan Co., 39 N. Y. Misc. 268, 79 N. Y. Supp. 130. Supp 481; Naiburg v. Golden, 149 N. The lien of an attorney upon substi- Y. Supp. 495; In re Ackerman's tution should be restricted to the Estate, 166 N. Y. Supp. 1080; Board papers in his hands, and cannot be ex- ATTORNEYS AND COUNSELLOES. 145 applies to a board of supervisors.^ A client who removes his attorney without cause, waives his right to have the attor- ney's fees fixed by a jury.*'* The order frequently requires the satisfaction of the first attorney's claims before the sub- stitution shall be effective, but it may provide for the sub- sequent determination and enforcement of the attorney's claim.^^ The court may protect the attorney by inserting a provision in the order of substitution that his lien on the cause of action shall remain in full force.®^ If the situation of the case requires action by the substituted attorney before the lien of the prior attorney can be determined, the order of substitution may direct the delivery of the papers in the case on the client giving a bond for the amount which shall be found due to the attorney.®^ If the client has reasonable cause for changing attorneys, the court will grant the sub- stitution without protecting the fees of the first attorney, and leave the attorney to his action at law to recover for his ser- vices.™ If the attorney is guilty of misconduct, he is deemed to have waived his lien on the papers or cause of action of his client.''^ Thus, if the attorney abandons the case or refuses without cause to proceed, the client is entitled to an order of substitution without terms in favor of the attorney.''^ tended to all the real and personal ters, and the court ordered a reference property of the client involved in to determine the amount due, it is im- pending lawsuits in charge of the at- proper before the hearing to require the torney. Hinman v. Devlin, 40 App. Div. attorney to furnish a bill of particu- 234, 57 N. T. Supp. 1037. lars of his claim. Dacey v. Fogel,' 144 Stenographer's minutes.— An order App. Div. 160, 128 N. Y. Supp. 750. of substitution should not require the 67. In re Ackerman's Estate, 166 N. attorney to deliver to the substituted Y. Supp. 1080. attorney a copy of the stenographer's 68. Jeffards v. Brooklyn Heights R. minutes of the first trial which were K. Co., 49 App. Div. 45, 63 N. Y. Supp. paid for by the former attorney with 530. his own money unless the disbursement 69. Yuengling v. Betz, 58 App. Div. therefor is paid. Sweet v. Ellis, 160 8, 68 N. Y. Supp. 574. App. Div. 870, 144 N. Y. Supp. 556. 70. Matter of Prospect Avenue, 85 65. Board of Supervisors v. Bred- Hun, 357; Sheldon v. Mott, 91 Hun, head, 44 How. Pr. 411. 637. 66. Yuengling v. Betz, 5« App. Div. 71. Halbert v. Gibbs, 16 App. Div. 8, 68 N. Y. Supp. 574. 126, 45 N. Y. Supp. 113. Bill of particulars.— Where, on a mo- 72. Matter of Dunn, 205 N. Y. 398 ; tion for substitution of attorneys, the Halbert v. Gibbs, 16 App. Div. 126, 45 attorney originally retained asserted a N. Y. Supp. 113 ; Gary v. Gary, 97 App. lien upon the papers for services ren- Div. 471, 89 N. Y. Supp. 1061; Fargo dered in the action and in other mat- v. Paul, 35 Misc. 568, 72 N. Y. Supp. 10 146 ATTOKNEYS AISTD COUNSELLOBS. Where services rendered by an attorney were of no value to the client, the attorney is not entitled to compensation for them, and a substitution should be granted unconditionally.'^ 31; Tuck V. Maiming, 53 Hun, 455, 6 N. Y. Supp. 140. Right to fees on abandonment. — If an attorney without just cause aban- dons his client before the proceeding for which he was retained has been conducted to its termination he for- feits all right to payment for any ser- vices which he has rendered. The con- tract being entire, he must perform it entirely in order to earn his compensa- tion, and he is in the same position as any person who is engaged in render- ing an entire service, who must show full performance before he can re- cover the stipulated compensation. While the attorney is thus bound to entire performance, and the contract as to him treated as an entire con- tract, it is a singular feature of the law that it should not be treated as an entire contract upon the other side, for it is held that a client may discharge his attorney arbitrarily without any cause at any time, and be liable to pay him only for the services which he has rendered up to the time of his dis- charge. Tenney v. Berger, 93 N. T. 524, 539. Other actions. — ^Where an attorney refuses to take any steps in one ac- tion and his client makes an application to compel him to surrender all papers in the action, an order should not be granted requiring the consent to a sub- stitution in all actions in which he is such client's attorney of record, and to deliver up all papers therein upon demand, without providing for the settlement of all matters between the attorney and the client. Philadelphia V. Postal Tel. Cable Co., 1 App. Div. 387, 37 N. Y. Supp. 291. When attorney is justified in with- drawing. — ^An attorney who is retained generally to conduct a legal proceeding enters into an entire contract to con- duct the proceeding to its termination, and he cannot abandon the service of his client without justifiable cause and only upon reasonable notice. If his compensation is stipulated and he, with- out just cause, abandons his client be- fore the proceeding for which he was retained has been conducted to its termination, he forfeits his right to payment for services rendered. If the value of an attorney's services has not been agreed upon, but he is merely re- tained in a case upon the implied un- derstanding that he shall have what his services are fairly and reasonably worth, the attorney may properly ask from time to time for advances with which to pay the expenses of the liti- gation and to apply upon his services, and if the client unreasonably refuses to advance money for such purpose in a reasonable amount during the pro- gress of a long litigation sufScient cause may be furnished to justify the attorney in withdrawing from the ser- vice of his client. Pickard v. Pickard, S3 App. Div. 338, 31 N. Y. Supp. 987. 73. Reynolds v. Kaplan, 3 App. Div. 430, 38 N. Y Supp. 764. Partition. — ^A substitution of attor- neys for the purpose of discontinuing an action for partition should not be conditioned on the payment of the at- torney's fees where he has done nothing except to have a guardian ad litem and referee appointed, and it ap- pears that the action cannot be prose- cuted because the whereabouts of the life tenant is unknown and it is impos- sible to obtain the consent prescribed by section 1014 of the Civil Practice Act. Jeny v. Merkle, 128 App. Div. 833, 112 N. Y. Supp. 1106. ATTOENEYS AND COUNSELX,OKS. 147 The question whether an attorney has been guilty of such naisconduct as "will justify an unconditional substitution of at- torneys should not be determined upon conflicting affidavits^* H. Procedure. If a disputed question of fact arises on an application for the substitution of attorneys, a reference is sometimes granted. There is no error in moving to confirm the report of the referee before the justice who ordered the reference, though he is then sitting at Trial Term, and the motion to confirm was noticed therefor.''^ Upon the handing in of report of referee appointed upon an application for an order of substitution and its confir- mation, the court has power to compel compliance with its order by directing payment of the money to the attorney and may enforce that order by the entry of the judgment and the issuing of the execution, or may proceed to enforce the order by proceeding in the nature of contempt.™ Where the attorney for plaintiff withdraws from the case and plaintiff is unable to ascertain his whereabouts, the court can require the attorney for defendant to permit the substi- tuted attorneys for plaintiff to inspect and copy the pleadings in his possession.''^ A surrogate has no general jurisdiction of attorneys and cannot direct a substitution except as incidental to a proceed- ing before him ; and such an order cannot be granted on the petition of executors, where the proceedings have been con- cluded and the attorney claims a lien on the papers in their hands not specified by the executors as having been delivered to them for the purposes of those proceedings solely.'^ The consent of an attorney to a substitution not followed by any formal order affords no authority to the attorney sought to be substituted, since Eule 56 indicates that a formal order be made evidencing the necessary consent of the court to the change.''' 74. Matter of Lesster, 149 App. Div. 77. Butterfleld v. Bennett, 8 N. T. 938, 134 N. Y. Supp. 401. Supp. 910. 75 Hinman v. Devlin, 40 App. Div. 78. Matter of Krakauer, 33 Misc. 234 '57 N. Y. Supp. 1037. 674, 68 N. Y. Supp. 935. 76 Greenfield v. Mayer, S8 Hun, 330. 79. Felt v. Nichols, 21 Misc. 404, 47 N. Y. Supp. 951. 148 ATTORNEYS AND COUNSELLORS. I. Form of petition to substitute attorneys. To tine, Surrogate of Albany County: The petition of William A. Smith and Irving Coughtry, the execu- tors of the last will and testament of Matthew W. Bender, deceased, late of the City of Albany, N. Y., respectfully shows : 1. That heretofore and on or about the 25th day of May, 1903, the last will and testament of Matthew W. Bender, deceased, late of the City of Albany, N. Y., was duly admitted to probate by the Surrogate of Albany County, N. Y., and letters testamentary thereon were issued out of this court, to William A. Smith and Irving Coughtry as execu- tors of and under the last will and testament of Matthew W. Bender, deceased; that said executors thereupon duly qualified and entered upon the performance of their duties as such executors and still so continue to act. 2. That your petitioners as such executors have a proceeding now pending in this court for the final distribution of the estate of said deceased and for a final judicial settlement of their account as such executors. 3. That your petitioners as such executors retained Henry Jones and James Wilson, composing the firm of Jones & Wilson, of the City of Albany, N. Y., as attorneys to assist them in the preparation of their account and the preparation of the other papers in the above- entitled proceeding now pending in this court. 4. That the original citation for the above-entitled proceeding was duly issued out of this court returnable on the 23d day of March, 1904, and that said proceeding has been adjourned from time to time and is now adjourned until the 2d day of June, 1904, at 10 o'clock in the forenoon of that day at the Surrogate's Court in the City of Albany, N. Y. 5. That the said Henry Jones and James Wilson, compose the law firm of Jones & Wilson, and said firm are now proceeding in the court in the above-entitled proceeding against the said executors, your peti- tioners herein, to determine and enforce an alleged lien against your petitioners for legal services renderd by said firm of attorneys to your petitioners in the course of the administration of said estate. 6. And your petitioners further show that in the above-entitled pro- ceeding at an adjourned hearing thereof, held in the court on the 25th day of May, 1904, the said Jones & Wilson, by James Wilson, consented to accept service of petition and notice of motion for sub- stitution of attorneys in this proceeding on or before Saturday, May 28, 1904. Wherefore, upon this petition and upon the evidence, pleadings and proceedings in the above-entitled proceeding, your petitioners pray that an order be made substituting Dyer & Ten Byck, Esqrs., attorneys and counselors, for your petitioners in the above-entitled proceeding now pending in this court in the place and stead of said Jones & Wilson, Esqrs. Dated at Albany, N. T., May 25, 1904. |( Signature of petitioners and verification.) ATTORNEYS AND COUNSELLOKS. 149 J. Form of consent to substitute attorney and order thereon. SUPREME COURT— Albany County. JOHN SMITH vs. HENRY JONES. The undersigned hereby consent that Robert Steiele, Esq., of the City and County of Albany in the State of New York, be substituted in place of William Chase, Esq., as attorney for the plaintiff in the above-entitled action and that an order to that effect be made and entered without notice. John Smath, William Chase, Attorney for Plaintiff. Plaintiff. Dated, May 24, 1910. (Add acknowledgment by client.) (Same title.) On reading and filing the annexed consent of William Chase, Esq., and John Smith, Esq., and on motion of Robert Steele, Esq., of Coun- sel for said John Smith, it is Ordered, that Robert Steele, Esq., of the City of Albany, be and he hereby is substituted as the attorney for the plaintiff in the above- entitled action in place of William Chase, Esq. Enter. Randall J. LeBoeup, Justice Supreme Court. ARTICLE VI. SUSPENSION AND DISBARMENT. A. Statutory provisions. 1. Judiciary Law, § 88. 2. The supreme court shall have power and control over attorneys and counsellors-at-law, and the appellate division of the supreme court in each department is authorized to censure, suspend from practice or remove from office any attorney and counsellor-at-law admitted to practice as such who is guilty of professional misconduct, malpractice, fraud, deceit, cpime or mis- demeanor, or any conduct prejudicial to the administration of justice; and the appellate division of the supreme court is hereby authorized to revoke such admission for any misrepresentation or suppression of any information in con- nection with the application for admission to practice. It shall be the< duty of the appellate division to insert in each judgment, decree or final order of suspension or removal hereafter rendered a provision which shall command the attorney and counsellor-at-law thereafter to desist and refrain from the practice of law in any form, either as principal or as ao'ent, clerk or employee of another. In addition it shall forbid the performance of any of the following acts for compensation or reward, to wit: a. The appearance as an attorney or counsellor-at-law before any court, judge, justice, board, commission or other public authority. 150 ATTORNEYS AND COUNSELLORS. b. The giving to another of an opinion as to the law or its application, or of any advice in relation thereto. In case of suspension only, the judgment, decree or order may limit the command to the period of time within which such suspension shall continue, and if justice so requires may further limit the scope thereof. If an attorney and counsellor-at-law has been heretofore removed from office, the appellate division shall upon application of any attorney and coun- sellor-at-law, or of any incorporated bar association, and upon such notice to the respondent as may be required, amend the judgment, decree or order of removal by adding thereto as a part thereof, provisions similar to those required to be inserted in judgments, decrees or orders hereafter made. If a certified copy of such judgment, decree or order or of such amended judgment, decree or order, be served upon the attorney and coun«ellor^t-law suspended or removed from office, a violation thereof may be punished as a contempt of court. 3. Whenever any attorney and counsellor-at-law shall be convicted of a felony, there may be presented to the appellate division of the supreme court a certified or exemplified copy of the judgment of such conviction, and thereupon the name of the person so convicted shall, by order of the court, be stricken from the roll of attorneys. 4. Upon a reversal of the conviction for felony of an attorney and counsellor- at-law, or pardon by the president of the United States or governor of this state, the appellate division shall have power to vacate or modify such order or debarment. 5. The presiding justice of the appellate division to which charges of pro- fessional misconduct against an attorney and counsellor-at-law have been presented, may make an order directing the expenses of such proceedings, and the necessary costs and disbursements of the petitioner in prosecuting such charges, including also in a county wholly within a city or in a county having a population of over five hundred thousand irihabitants, the expense of a pre- liminary investigation in relation to such charges, to be paid by the county treasurer of a county within the judicial department, which expenses shall be a charge upon such county.80 (See B., C. & G. Consol. L., 2nd Ed., pp. 4181, 4197.) 2. Judiciary law, § 476. Suspension of attorney from practice must be on notice. Before an' attorney or counsellor-at-law is suspended or removed as pre- scribed in section eighty-eight of this chapter, a copy of the charges against him must be delivered to him personally or, in case it is established to the satisfaction of the presiding justice of the appellate division of the supreme court to which the charges have been presented, that he can not be served within the state, the same may be served upon him withbut the state by mail or otherwise as the said presiding justice may direct, and he must be allowed an opportunity of being heard in his defense. It shall be the duty of any district attorney within a department, when so designated by the 80. " Deceit." — ^The word " deceit " Law, implies concealment or false sug- as used in section 88 of the Judiciary gestion by an attorney to injure a ATTORNEYS AND COUNSELLORS. 151 presiding justice of the appellate division of the supreme court, to prosecute all proceedings for the removal or suspension of attorneys and counsellors- at-law or the said presiding justice may, in a county wholly included within a city or in a county having a population . of over five hundred thousand inhabitants, appoint an attorney and <;ounsellor-at-law, designated by a duly incorporated bar association approved by him, to prosecute any such pro- ceedings and, upon the termination of the proceedings, may fix the com- pensation to be paid to such attorney and counsellor-at-law for the services rendered under such designation, which compensation shall be a charge against the county specified in his certificate and shall be paid thereon. (Amended by L. 1915, ch. 475. See B., G. & G. Consol. L., 2nd Ed., p. 4313.) 3. Judiciary law, § 477. Attorney convicted of felony shall cease to be attorney. Any person being an attorney and counsellor-at-law, who shall be convicted of a felony, shall, upon such conviction, cease to be an attorney and counsellor- at-law or to be competent to practice law as such. (See B., C. & G. Consol. L., 2nd Ed., p. 4314.) 4. Judiciary Law, § 478. Suspension or removal of attorney effective in all courts. The suspension or removal of an attorney or counsellor, by the supreme court, operates as a suspension or removal in every court of the state. (See B., C. & G. Consol. L., 2nd Ed., p. 4314.) B. Grounds for disciplinary action. 1. In general. The Appellate Division is charged with the duty of disci- plining an attorney whose conduct has brought him within the provisions of section 88 of the Judiciary Law. It is its duty to condemn conduct which tends to impair or defeat the ad- ministration of justice or degrade and impair the usefulness of the profession and protect the State and the public from lawyers who prostitute the authority given to them for private gain by imposing on or defrauding their clients or the tribunals which are instituted to administer the law and pro- tect those whose rights and interests are committed to their care.*^ Upon proper proof of the dishonest conduct of an attorney in his professional capacity, it is the duty of the court to pun- ish him by disbarment.^^ party, or mislead the court while he is 81. Matter of Flannery, 150 App. acting in his professional capacity. Div. 369, 135 N. Y. Supp. 612. Matter of Post, 26 St. Rep. 641, 7 N. 88. Matter of Ryan, 143 N. T. 528. Y. Supp. 438, 4 Silvem^l, 348. 152 ATTORNEYS AND COUNSELLORS. The court may and ought to cause charges to be preferred against an attorney whenever satisfied from what has oc- curred in its presence, or from any satisfactory proof, that a case existed where public good and ends of justice call for it.^ An attorney is disbarred, not only to rid the profession of an unworthy practitioner, but also to warn other members of the profession.^* " Solicitors, attorneys and counsellors are admitted to practice and are entitled to special privileges under the laws of the State for the purpose of enabling them to be useful to their fellow citizens in the ascertainment, prosecution, and defenses of their legal and equitable rights. And if such officers abuse the trust which has thus been re- posed in them, and conduct themselves in such a manner as to become a nuisance rather than a benefit to the community in which they reside, it is the duty of the court in which they practice, to remove them from their office ; as well for the pro- tection of the office, as to preserve the character of the honor- able and useful profession."*^ The power of the court to discipline an attorney is not limited to cases where his act was technically criminal, but he may be punished where guilty of unprofessional conduct showing a lack of due appreciation of the rules of ethics by which a lawyer's conduct should be regulated.*^ 2. Acts outside of profession. The court has power to discipline or disbar an attorney-at- law for acts done outside of his profession, where they indi- cate disregard for honesty and decency in his dealings with his fellow men.*^ Thus, the Appellate Division may discipline an attorney for the commission of acts constituting a crime, not growing out of professional relations with the client, before trial and con- viction for such crime.*^ Proceedings have been maintained against an attorney for aiding and abetting a conspiracy to loot the treasury of a fraternal benefit association of which he was a director f^ for allowing a former law partner to get a 83. In re Percy,. 36 N. T. 652. 87. Matter of Somerville, 183 App. 84. Matter of Clark, 1S8 App. Div. Div. 445, 170 N. Y. Supp. 879. 348, 112 N. Y. Supp. 777. 88. Matter of Kammerlohr, 171 App. 85. Matter of Peterson, 3 Paige, 512. Div. 781, 157 N. Y. Supp. 933. 86. Matter of Chadsey, 141 App. 89. Matter of Hoyt, 178 App. Div. Div. 458, 126 N. Y. Supp. 456; afif'd, 570, 165 N Y. Supp. 722. 201 N. Y. 572. ATTORNEYS AND COUNSELLORS. 153 judgment against a corporation of which he was secretary by concealing from the corporation and from the chief person in- terested therein that the suit had been brought.^" An attorney was disbarred for professional misconduct in that, being defendant in a suit to set aside conveyances by him in fraud of his creditors, he falsely testified and produced evi- dence to the effect that he had conveyed the lands to a person whom he refused to produce and who, in fact, was a fictitious grantee having no existence, and also because he fraudulently opened a bank account as an administrator when in fact he was not acting as such, the purpose being to place his funds beyond the reach of creditors.'^ 3. Conviction of crime. The conviction of an attorney-at-law of a felony, ipso facto, disbars him from practice.*^ The conviction of a felony, though under the federal statutes, will have this effect.^^ A conviction for a misdemeanor, though it does not disbar the attorney without an application to the court, authorizes the removal or suspension of the attorney.^* On the application to the Appellate Division, the court will not investigate the question whether the attorney was rightfully convicted.'^ Moreover, the commission of a crime, although the offender has not been indicted or convicted, will generally constitute ground for his removal from office.®® 4. Conversion of client's money. The misappropriation by an attorney of his client's money or property is frequently the cause for the disbarment®'' or 90. Matter of Beare, 158 App. Div. qujilified to practice, and the fact that 469 143 N. Y. Supp. S&S. the alleged order disbarring him cannot 91. Matter of Berkeley, 174 App. be found does not avail him. Matter Div. 205, 160 N. T. Supp. 1093. of Niles, 5 Daly, 465. 92. Matter of Innes, 176 App. Div. 93. Matter of Hadgstin, 193 App. 902, 163 N. T. Supp. 721; Matter of Div. 317, 183 N. Y. Supp. 401. Kosenfeld, 184 App. Div. 882, ■ Matter 94. Matter of Robinson, 140 App. of Kuntz, 178 App. Div. 911, 164 N. Div. 329, 125 N. Y. Supp. 193 ; Matter Y. Supp. 900; Matter of Gunner, 167 of Hughes, 188 App. Div. 520, 177 N. N. Y. Supp. 526; Matter of Boetzel, Y. Supp. 234. 191 App. Div. 881, 180 N. Y. Supp. 95. Matter of Hughes, 188 App. Div. 412 ; Matter of Storey, 193 App. Div. 520, 177 N. Y. Supp. 234. 91 183 N. Y. Supp. 303. 96. Matter of Stanton, 161 App. Div. Failure to find order.— An attorney 555, 146 N. Y. Supp. 890. convicted of an infamous crime is dis- 97. Matter of Cohn, 120 App. Div. 154 ATTORNEYS AND COUNSELLOES. suspensions^ of an attorney. In other cases, with circum- stances more or less mitigating, the attorney has escaped with a censure.ss 378, 105 N. Y. Supp. 84; Matter of Steekler, 146 App. Div. 837, 131 N. Y. Supp. 766; Matter of Kisselburgh, 153 App. Div. '884, 187 N. Y. Supp. 1060; Matter of Shamroth, 148 App. Div. 838, 133 N. Y. Supp. 514; Matter of Levine, 148 App. Div. 396, 133 N. Y. Supp. 124; Matter of Smith, 148 App. Div. 391, 133 N. Y, Supp. 304; Matter of Steekler, 146 App. Div. 837, 131 N. Y. Supp. 766; Matter of SehwarzkofE, 146 App. Div. 930, 131 N. Y. Supp. 385; Matter of Avrutus, 161 App. Div. 549, 146 N. Y. Supp. 741; Matter of Hayes, 169 App. Div. 516, 155 N. Y. Supp. 457; Matter of Vanderpoel, 169 App. Div. 499, 155 N. Y. Supp. 467; Matter of WeiU, 165 App. Div. 675, 150 N. Y. Supp. 803; Matter of Feinblatt, 162 App. Div. 896, 146 N. Y. Supp. 304; Matter of Jones, 1'63 App. Div. 880, 147 N. Y. Supp. 583; Matter of Lewis, 165 App. Div. 436, 150 N. 'Y. Supp. 753; Matter of Dressier, 173 App. Div. 939, 158 N. Y. Supp. 191; Matter of Harris, 169 App. Div. 535, 155 N. Y. Supp. 450; Matter of Licht- enberg, 169 App. Div. 505, 155 N. Y. Supp. 483; Matter of Ayler, 169 App. Div. 494, 155 N. Y. Supp. 489 ; Matter of Livers, 173 App. Div. 609, 158 N. Y. Supp. 723 ; Matter of Dobbs, 173 App. Div. 605, 160 N. Y. Supp. 173; Matter of O'Brien, 173 App. Div. 621, 158 N. Y. Supp. 1059; Matter of Little, 175 App. Div. 280, 1-61 N. Y. Supp. 570; Matter of Levien, 165 App. Div. 883, 151 N. Y. Supp. 379; Matter of West- cott, 170 App. Div. 541, 156 N. Y. Supp. 504; Matter of Osgoodby, 169 App. Div. 626, 155 N. Y. Supp. 465; Matter of Walsh, 177 App. Div. 659, 164 N. Y. Supp. 553; Matter of Wilk- enfeld, 180 App. Div. 286, 167 N. Y. Supp. 508; Matter of Flowerman, 181 App. Div. 488, 168 N. Y. Supp. 860; Matter of Eini, 181 App. Div. 496, 168 N. Y. Supp. 859; Matter of Hy- man, 186 App. Div. 263, 174 N. Y. Supp. 306; Matter of Tinney, 187 App. Div. 569, 176 N. Y. Supp. 103; Matter of Broughton, 193 App. Div. 335, 183 N. Y. Supp. 440 ; Matter of Smythwiek, 193 App. Div. 459 183 N. Y. Supp! 301. Converting to his own use a diamond ring received for purpose of showing the same to a customer and for draw- ing a check upon a bank in wliich he had no account. Matter of Kammer- lohr, 171 App. Div. 781, 157 N. Y. Supp. 933. Judgment against client as adjudi- cation. — Where an attorney, having re- ceived moneys from a client to be ap- plied upon insurance policies, and hav- ing instead applied the sum upon a claim against the client for legal ser- vices, obtains a judgment against his client for the balance due in a subse- quent action, there is an adjudication that the sum received was payable on the debt due from the client, and there is no such misconduct as will justify the court in disciplining the attorney. Matter of Sheehan, 141 App. Div. 510, 136 N. Y. Supp. 300. 98. Matter of Greenberg, 146 App. Div. 945, 131 N. Y. Supp. 531; Matter of Sayer, 146 App. Div. 928, 131 N. Y. Supp. 381; Matter of Lash, 150 App. Div. 467, 135 N. Y. Supp. 370; Matter of La Far, 165 App. Div. 931, 149 N. Y. Supp. 435 ; Matter of Birds- eye, 165 App. Div. 898, 149 N. Y. Supp. 617; Matter of Eich, 158 App. Div. 473, 143 N. Y. Supp. 623; Matter of Herbst, 158 App. Div. 601, 143 N. Y. Supp. 890; Matter of Qoldfarb, 173 App. Div. 882, 157 N. Y. Supp. 1076; Matter of Eisenberg, 173 App. Div. 598, 160 N. Y. Supp. 143; Matter of Coleman, 178 App. Div. 580, 165 N. Y. Supp. 685. 99. Matter of Kiaselburg, 153 App. ATTORNEYS AND COUNSELLORS. 155 In considering the misappropriation of a client's money by an attorney, the amount converted is not important, for the standard which the court requires of its officers is not to be measured in dollars and cents.^ Even an unjustified delay in paying moneys to a client will justify disciplinary action.^ Thus, an attorney may be disbarred for failure to obey orders in summary proceedings directing payment of moneys with- held from clients under unconscionable and void agreements of retainer.^ Likewise, proceedings will lie if he indorses his client's name on a check received by him on behalf of said client and cashes the same and retains one-half of the pro- ceeds to his own use under a claim that it was for services rendered.^ And the proceedings may be justified where the attorney is charged with refusing to return to a client letters upon Which he had no claim or lien and for failure to pay counsel engaged by him, and for the appropriation to his own use of the money due such counsel,^ converting his client's moneys which have been given him to pay a bond and mort- gage f appropriating the proceeds of two checks which he re- ceived for collection f converting moneys received by him to be held as trustee until a certain mortgage was delivered pur- suant to the provisions of a contract, which was a part of a device to swindle the person from whom the money was re- ceived ;^ obtaining money upon the false representations that he had been retained in an action and for converting the sum so obtained to his personal use f obtaining earnest money on a contract for the sale of his wife's lands, knowing at the time that the lands were bound by a similar contract made Div. 884 137 N., Y. Supp. 1060; Mat- of Herrman, 175 App. Biv. 310, 161 N. ter of Karliner, 163 App. Div. 81, 147 Y. Supp. 977. N. Y. Supp. 563 ; Matter of Maged, 163 3. Matter of Carter, 177 App. Dlv. App. Div. 880, 147 N. Y. Supp. 562; 677, 164 N. Y. Supp. 862. Matter of Cohen, IfiS App. Div. 492, 4. Matter of Smith, 173 App. Div. 155 N Y. Supp. 459 ; Matter of Gray, 601, 160 N. Y. Supp. 88. 171 App. Div. 894, 155 N. Y. Supp. 407 ; 5. Matter of Youngentot, 181 App. Matter of Pollock, 178 App. Div. 577, Div. 490, 168 N. Y. Supp. 961. 165 N. Y. Supp. 631. 6. Matter of Burd, 9 Week. Dig. 562. 1. Matter of Stern, 120 App. Div. 7. Matter of Assn. of Bar of City of 375, 105 N. Y. Supp. 199. N. Y. v. Chappell, 131 App. Div. 69, 8. Matter of Lampke, 165 App. Div. 115 N. Y. Supp. 868. 699 140 N. Y. Supp. 622; Matter of 8. Matter of Flower, 138 App. Div. Evans, 169 App. Div. 502, 155 N. Y. 102, 122 N. Y. Supp. 886. Supp. 491 ; Matter of Levor, 169 App. 9. Matter of Andrews, 137 App. Div. Div. 642, 155 N. Y. Supp. 426; Matter 353, 121 N. Y. Supp. 935. 156 ATTORNEYS AND COUNSELLORS. with other parties;^" receiving money to procure the pardon of one imprisoned for crime and failing to return the same as promised when unsuccessful ;-^-' releasing his client's cause of action without authority, and for converting the sum received in settlement ;^^ converting the money of a client received to be applied upon a mortgage and for falsely representing to the client that he had used the money for that purpose ;^^ pro- curing a portion of the savings of a former client, a poor woman, ignorant of business affairs, in order that he might acquire for himself an interest in a mining venture.^* The fact that the attorney made a settlement with the com- plaining witness after disciplinary proceedings were insti- tuted does not wipe out or condone a conversion.^^ Nor does the fact that there was no ultimate loss by his clients, excuse or palliate the attorney's conduct, for disci- plinary proceedings are not entertained for collection pur- poses, nor does restitution reinstate character.^^ 5. Mingling trust funds. An attorney who is acting as trustee and who wrongfully mingles the trust funds with his individual funds, thereby making a personal profit or causing the trust fund to sustain a loss, may be liable to action by the Appellate Division." Thus, if an attorney speculates in stocks with moneys in- trusted to him by a client, he may be disbarred.^^ The fact that by reason of surcharging his accounts the estates of which he was trustee ultimately suffered no financial loss, is not determinative of a proceeding to inquire into his pro- fessional conduct.^^ 6. Deceiving client. Fraud or deceit practiced by an attorney upon his client may be sufficient cause for the disbarment or other punish- 10. Matter of Alexander, 137 App. App. Div. 499, 184 N. Y. Supp. 343. Div. 770, 122 N. Y. Supp. 479. 16. Matter of Steinberg, 193 App. 11. Matter of O 'Sullivan, 133 App. Div. 502, 184 N. Y. Supp. 450. Div. 537, 107 N. Y. Supp. 463. 17. Matter of Both, 181 App. Div. 12. Matter of Lowy, 140 App. Div. 618, 169 N. Y. Supp. 151; Matter of 537, 125 N. Y. Supp. 777. Ball, 184 App. Div. 18, 171 N. Y. Supp. 13. Matter of Hunter, 169 App. Div. 489. 805, 179 N. Y. Supp. 199. 18. Matter of Haire, 175 App. Div. 14. Matter of Coleman, 170 App. 847, 163 N. Y. Supp. 510. Div. 537, 156 N. Y. Supp. 487. 19. Matter of Ball, 184 App. Div. 18, 15. Matter of Mac Williams, 193 171 N. Y. Supp. 489. ATTORNEYS AND COUNSELLOES. 157 ment of such attorney.^*' Thus the proceedings have been maintained for acts of the attorney in obtaining money under false pretences ;^^ obtaining advantage over a client and con- spiring with another attorney to hide from the client the fact that he had brought action against a corporation in which the client was the chief person interested f^ inducing his client to believe that a third person was entitled to a commission for procuring a loan which could easily have been procured by the attorney personally;^ falsely representing to a client that he had already begun an action when in fact he had merely delivered a summons to a process server, for begin- ning an action without authority and for falsely representing to a prospective client that he had entered judgment in favor of another client in a suit involving similar matters ;^^ endeavoring to obtain employment in his professional capacity by means of false representations;^ procuring a client to invest a large sum of money in a hazardous enterprise for the benefit of another client, and for signing a bond given as security for said loan in the name of his firm without authority, although said attorney did not intend to defraud the party loaning the money or to make a pecuniary profit out of the transaction.^ 7. Deceiving court. The act of an attorney in deceiving the court furnishes ground for an application for his punishment. Thus, the sup- pression of material facts,^ or lack of frankness,^^ as well as a 20. Matter of Boehm, 150 App. Div. 8 N. Y. Supp. 771, 30 St. Eep. 174 ; 443, 135 N. Y. Supp. 43 ; Matter of Matter of Titus, 50 St. Eep. ■636, 31 N. Quitman, 153 App. Div. 865, 137 N. Y. Supp. 724. Y. Supp. 1069; Matter of Welch, 156 21. Matter of Wiell, 171 App. Div. App. Div. 470, 141 N. Y. Supp. 381; 895, 155 N. Y. Supp. 449. Matter of Eobinson, 163 App. Div. 844, 22. Matter of Slawson, 158 App. 147 N. Y. Supp. 103 ; Matter of Thorn, Div. 467, 143 N. Y. Supp. 594. 164 App. Div. 151, 149 N. Y. Supp. 23. Matter of O'Brien, 169 App. Div. 507; Matter of Nichols, 165 App. Div. 519, 155 N Y. Supp. 553. 901, 149 N. Y. Supp. 1099; Matter of 24. Matter of Rahm, 175 App. Div. Mulligan, 17-5 App. Div. 333, 161 N. Y. 330, 161 N. Y. Supp 1036. Supp. 1033; Matter of Gladstone, 185 25. Matter of Lauterbaeh, 169 App. App. Div. 471, 173 N. Y. Supp. 89; Div. 534, 155 N. Y. Supp. 478. Matter of Hyman, 186 App. Div. 263, 26. Matter of Young, 188 App. Div. 174 N. Y. Supp. 306; Matter of Tin- 538, 177 N. Y Supp. 259. ney, 187 App. Div. 569, 176 N. Y. Supp. 27. Matter of Flannery, 150 App. 103; Matter of Baum, 5 Silvernail, 462, Div. 369, 135 N. Y. Supp. 612; Matter 158 ATTORNEYS AND COUNSELLORS. deliberate false statement,^^ may subject the attorney to punishment. Thus the proceedings have been successfully maintained for acts of an attorney in submitting to the court, on a motion for alimony and counsel fees, an affidavit of his client which was misleading and calculated to deceive the court f presenting a sham issue to the court on a submission of a controversy f^ stating that bail offered in a criminal case was good, when as a matter of fact the value of the property offered as security was grossly overstated ;^^ making an affi- davit to obtain an extension of time, after being ordered to discontinue by client ;^^ procuring a summons in an action, brought for his client against a corporation of which said client was president, to be served upon the client as an officer of the defendant, and for availing himself of said service by entry of judgment by default and issuance of execution;^* entering judgments in favor of himself and wife which con- tained provisions unjustified;^^ deceptive methods in fore- closure proceeding ;^^ presenting excessive bill of costs ;^'' requesting stay of execution while engaged in putting client through bankruptcy;^* refusing to disclose the facts to the court when called upon to do so f^ obtaining orders from the court upon affidavits made upon knowledge setting forth facts which were not true.** 8. Disrespect to judges. The obligations which attorneys aesume on admission to the bar are not simply obedience to the Constitution and laws, but also the obligation to maintain, at all times, respect due courts of Dangler, 193 App. Div. 237, 183 N. 33. Matter of Hansen, 120 App. Y. Supp. 471. Div. 377, 105 N. Y. Supp. 159; aff'd, 28. Matter of Tepper, 170 App. Div. 193 N. Y. 538. 889, 154 N. Y. Supp. 413. 34. Matter of Ginsburg, 188 App, 29. Matter of Goodman, 135 App. Div. 517, 177 N. Y. Supp. 293. Div. 594, 130 N. Y. Supp. 801; aff'd, 35. Matter of Mulligan, 153 App, 199 N. Y. 143; Matter of Goodman, Div. 883, 137 N. Y. Supp. 1131. 158 App. Div. 465, 143 N. Y. Supp. 36. Matter of Stoddard, 165 App 577; Matter of Hughes, 188 App. Div. 902, 149 N. Y. Supp. 585. 520, 177 N. Y. Supp. 334. 37. Matter of Zorinsky, 163 App 30. Matter of Wagener, 161 App. Div. 960, 148 N. Y. Supp. 417. Div. 546, 146 N. Y. Supp. 589. 38. Matter of Galland, 172 App. Div, 31. Matter of Harris, 169 App. Div. 611, 158 N. Y. Supp. 695. 644, 156 N. Y. Supp. 283. 39. Matter of Burnstine, 169 App, 32. Matter of Sachs, 169 App. Div. Div. 540, 155 N. Y. Supp. 500. 632, 155 N Y. Supp. 461. 40. Matter of Gladstone, 185 App, ATTORNEYS AND COUNSELLORS. 159 of justice and judiciary officers. This obligation is not dis- charged merely Ly observing the rules of courteous demeanor in open court, but also include the abstaining, out of court, from insulting language and offensive conduct toward the judges i^ersonally for their judicial act; and thus a threat of personal chastisement made by an attorney to a judge out of court, for his conduct during a trial, is good ground for strik ing the name of the attorney from the rolls.^^ It is unprofessional conduct for an attorney to submit to the appellate court an affidavit reflecting upon the judicial in- tegrity of the court from which the appeal is taken, and such conduct will not be overlooked. So, too, it is unprofessional conduct, requiring severe censure, to submit an affidavit on appeal calculated to prejudice the court against the opposing counsel by intimating that he was favored by the court below in the trial of causes.*^ An attorney who, after being defeated in a cause, writes a personal letter to the trial justice complaining of his conduct and reflecting upon his integrity as a justice, is guilty of mis- conduct and will be disciplined by the court. It is the duty of an attorney having cause to charge a justice of the court with misconduct to prefer formal charges, on the hearing of which the justice may be hoard in his own defense. The at- torney is not justified in writing a personal letter to the jus- tice or in making formal aspersions calculated to bring the court into disrepute." The removal of an attorney from office is proper where he made charges of corruption against a judicial officer in the latter 's court, and although given an opportunity did not apologize, show any regret, or state anything in extenuation or mitigation of his conduct." An attorney will be censured for stating at a public meeting that a decision of a judge of the Federal courts was not honestly rendered, but was made in the interest of certain traction companies.*^ Div. 471, 173 N. Y. Supp. 89. of Carrao,> 170 App. Div. 545, 156 N. 41. Bradley v. Fisher, 13 Wall. (U. Y. Supp. 379. g.) 344. 44. Matter of Murray, 33 St. Eep. 42. Matter of Roekmore, 127 App. 831, 11 N. Y. Supp. 336. Div. 499, 111 N. Y. Supp. 879. 45. Matter of Markewich, 192 App. 43. Matter of Manheim, 113 App. Div. 243, 182 N. Y. Supp 653. Div. 136, 99 N. Y. Supp. 87; Matter 160 ATTORNEYS AND COUNSELLORS. 9. Giving false testimony. If an attorney gives false testimony,*^ or makes a false affidavit,*' he may be subjected to charges against his pro- fessional conduct. The giving of false testimony on a hear- ing before a referee in a proceeding to disbar him, is fre- quently given as an additional ground for his disbarment.** It is immaterial whether or not the attorney was correct in his view of the legal effect of his testimony.*® Thus, attorneys have been disbarred or otherwise punished for verifying an answer containing false statements;^" testifying for a client charged with bigamy that he believed the client's former wife was dead when the second marriage was contracted, when, as a matter of fact, the information he had received did not jus- tify such a positive statement ;^^ endeavoring to conceal from the grievance committee payments to the complaining witness for the purpose of buying him off and securing the withdrawal of charges, and for making false statements upon the hearing denying such acts;^^ presenting to the court, on several oc- casions, an affidavit signed by him and known, by him to be false for the purpose of obtaining an extension of time within which to serve a case on appeal.^^ 10. Permitting or advising client to do unlawful acts. Frequently attorneys are subjected to punishment for per- mitting or advising their clients to do unlawful acts. Thus, if an attorney draws a pleading which he knows to be false 46. Matter of Joseph, 135 App. Div. App. Div. S91, 132 N. Y. Supp. 304; 58«, 130 N. Y. Supp. 793; Matter of Matter of Simpkins, 169 App. Div. Katzkie, 143 App. Div. 352, 126 N. Y. 633, 155 N. Y. Supp. 521; Matter of Supp. 842; Matter of Gotthein, 153 Thorn, 164 App. Div. 151, 149 N. Y. App. Div. 779, 138 N. Y. Supp. 636; Supp. 507; Matter of Mehols, 165 Matter of Papper, 193 App. Div. 505, App. Div. 901, 149 N. Y. Supp. 1099. 184 N. Y. Supp. 406. 49. Matter of Klatzkie, 143 App. 47. Matter of Greenbaum, 161 App. Div. 352, 126 N. Y. Supp. 842. Div. 588, 146 N. Y. Supp. 969; Matter 50. Matter of Greenbaum, 161 App. of Harris, 169 App. Div. 644, 156 N. Div. 588, 146 N. Y. Supp. 969. Y. Supp. 383; Matter of Brown, 178 51. Matter of Newman, 158 App. App. Div. 558, 165 N. Y. Supp. 736. Div. 471, 143 N. Y. Supp. 590. 48. Matter of Voxman, 148 App. 52. Matter of Branch, 178 App. Div. Div. 286, 133 N Y. Supp. 317; Matter 585, 165 N. Y. Supp. 688. of Levine, 148 App. Div. 396, 133 N. 53. Matter of Cebulsky, 169 App. Y. Supp. 124; Matter of Smith, 148 Div. 636, 155 N. Y. Supp.- 463. ATTORKEYS AND COUNSELLORS. 161 and permits his client to verify it, he is subject to disciplinary action.^* Likewise, permitting the client to testify falsely upon a trial may justify charges.^^ So, too, proceedings have been maintained against an attorney for advising a client under indictment to forfeit his bail;^® aiding a judgment debtor to conceal his property;^'' asserting his client's right to a recovery after discovering that the case is founded on perjured testimony;^* presenting to the court in a matri- monial action affidavits directly contradicting affidavits made by the same deponents in another matrimonial action which hie had previously conducted ;^^ paying over his client's money as consideration for the withdrawal of a criminal charge against the client without distinctly informing the magistrate of the circumstances;^" writing threatening letters in behalf of a client in an endeavor to obtain incriminating correspond- ence.®^ 11. Witnesses. Any tampering with witnesses will justify the removal, sus- pension or censure of an attorney.®^ Thus, he may be pro- ceeded against for dissuading a witness from attending a trial or hearing,^ or inducing him to commit perjury;®* making a contract with a witness by which his compensation 54. Matter of Goodwin, 135 App. 58. Matter of Hardenbrook, 135 Div. 594, 120 N. Y. Supp. 801; afE'd, App. Div. 634, 121 N. Y. Supp. 250; 199 N. Y. 143; Matter of Cohn, 150 afif'd, 199 N. Y. 539. App. Div. 470, 134 N. Y. Supp. 1103; 59. Matter of Schleimer, 150 App. Matter of Thorn, 164 App. Div. 151, Div. 507, 135 N. Y. Supp. 40«. 149 N. Y. Supp. 507; Matter of 60. Matter of Woytisek, 120 App. Schreiber, 170 App. Div. 543, 156 N. Div. 733, 105 N. Y. Supp. 144. Y. Supp. 398; Matter of Mathot, 178 61. Matter of Chadsey, 141 App. Div. App. Div. 759, 166 N. Y. Supp. 217; 458, 126 N. Y. Supp. 456; afE'd, 201 Matter of Tinney, 187 App. Div. 569, N. Y. 572. 176 N. Y. Supp. 102. 62. Matter of Eldridge, 82 N. Y. 55. Matter of Goodman, 158 App. 161. Div. 465, 143 N. Y. Supp. 577; Mat- 63. Matter of Newell, 157 App. Div. ter of Forrester, 169 App. Div. 619, 155 907, 142 N. Y. Supp. 185; Matter of N. Y. Supp. 420. Eouas, 16^ App. Div. 496, 147 N. Y. 56. Matter of Pascal, 146 App. Div. Supp. 713; s. c, 169 App. Div. 629, 155 836, 131 N. Y. Supp. 823. N. Y. Supp. 577; afE'd, 221 N. Y. 81. 57. Matter of Goodman, 135 App. 64. Mtropolitan St. Ry. Co. v. Op- Div. 594, 120 N. Y. Supp. 801; afE'd, penheim, 58 App. Div. 510, 69 N. Y. 199 N. Y. 143; Matter of Abuza, 178 Supp. 524; Matter of Mendelsohn, 150 App. Div. 757, 166 N. Y. Supp. 105. App. Div. 445, 135 N. Y. Supp. 438. 11 162 ATTOKNEYS AND COUNSELLORS. was dependent upon the outcome of the litigation ;^^ appro- priating to his own use moneys intrusted to him by his client for expenses and disbursements in the defense of her son on trial for murder, and for paying a portion of the money to witnesses to prevent them from giving information to the district attorney ;^^ participating in and authorizing the pay- ment of sums of money by a street railway company, of which he was general counsel, to detectives or investigators for use in influencing witnesses and court officers in actions for personal injuries wherein the company was defendant.^^ Money paid for the reasonable expenses of an investigator to ascertain the names of witnesses and their knowledge on the subject under consideration, and for investigation by an expert for the purpose of making such expert a witness upon a trial, constitute legitimate expenditures by a person or cor- poration charged with liability by reason of negligence or for any other cause, and such reasonable payments are not sub- ject to criticism and do not justify a charge against an attor- ney who approves the same.^ 12. Bribery. Bribery is an offense of such a serious nature that it justi- fies the disbarment of an attorney. Thus, action may be taken against an attorney for offering to bribe a police officer,^^ or paying moneys to the .assistant clerk of the court for his aid in procuring the release of his clients from their obliga- tion as bail, and the discharge without trial of persons charged with crime.™ 13. Forgery. Proof of forgery by an attorney is ample to justify his removal from office. It is professional misconduct for an attorney to alter an undertaking used in an unsuccessful application, and again use it in an application to another 65. Matter of Schapiro, 144 App. 209 N. T. 354. Div. 1, 128 N. Y. Supp. 852; Matter 68. Matter of Robinson, 209 N. T. of Imperatori, 152 App. Div. 86, 136 354, aff'g, 151 App. Div. 589, 136 N. N. Y. Supp. 675. Y. Supp. 548. 66. Matter of Hartridge, 162 App. 69. Matter of Billington, 156 App. Div. 877, 146 N. Y. Supp. 421. Div. 63, 141 N. Y. Supp. 16. 67. Matter of Robinson, 151 App. 70. Matter of Boland, 127 App. Div. Div. 589, 136 N. Y. Supp. 548, aff'd, 746, 111 N Y. Supp. 932. ATTORNEYS AND COUNSELLORS. 163 court, without re-execution or acknowledgement.''^ And attorneys have been subjected to discipline for altering a verification f^ filing a forged satisfaction of a judgment;''^ forging the indorsement of a check;''* forging a certificate to a paper, purporting to be an order declaring a marriage void, for the purpose of enabling the husband to induce his wife to believe that she had been legally divorced.™ 14. Fraud. Proceedings may be maintained against an attorney for in- ducing the purchase of property at an excessive value,™ fraud in connection with a bankruptcy proceeding;" or procuring a conveyance of property upon which a mortgage was about to be foreclosed to persons who had no interest in the property so as to delay the foreclosure.''* 15. False acknowledgment or jurat. Disciplinary proceedings against an attorney will lie for executing false acknowledgments of deeds f^ certifying to the acknowledgment in this State of instruments signed by per- sons when they were without the State, and who did not appear before him,^ or signing a jurat to an affidaA^it of a person who did not appear before him but swore to the affidavit over the telephone.*^ 16. Divorce matters. An attorney may be disbarred for professional misconduct in manufacturing evidence to procure a divorce.*^ Thus, he may be proceeded against for deliberately plotting to place his client's wife in circumstances from which an inference of 71. Matter of Goldberg, 76 Hun, 616, 77. Matter of Joseph, 135 App. Div. 61 St. Eep. '277, 27 N. Y. Supp. 972. 589, 120 N. T. Supp. 793 ; Matter of 72. Matter of Loew, 5 Hun, 436, 50 Kopf, 165 App Div. 900, 149 N. Y. How. 373. Supp. 619. 73. Matter of Heyman, 156 App. ' 78. Matter of Jafle, 164 App. Div. Div. 73, 140 K. Y. Supp. 1065. 153, 149 N. Y. Supp. 505. 74. Matter of Rosenthal, 137 App. 79. Matter of Gottheih, 153 App. Div. 772, 122 N. Y. Supp. 471 ; Matter Div. 779, 138 N. Y. Supp. 636. of Pascal, 146 App. Div. 836, 131 N. 80. Matter of Barnard, 151 App. Y Supp. 823. -Div. 580, 136 N. Y. Supp. 185. 75. Matter of Peterson, 3 Paige, filO. 81. Matter of Napolis, 169 App. Div. 76. Matter of Isaacs, 172 App. Div. 469, 155 N. Y. Supp. 416. 181 158 N. Y. Supp. 403. 82. Matter of Gale, 75 N. Y. 626. 164 ATTORNEYS AND COUNSELLOES. adultery could be drawn ;^ participating in a scheme in pur- suance of which his client was induced to go to a room in a hotel in an adjoining State with a woman other than his wife, where he was found by detectives, and as a result of which his wife procured a divorce, and also for delaying the repayment of money to his client by setting up a false claim thereto;^* employing a woman to seduce the defendant to commit adul- tery and thereafter verifying a complaint alleging that the corespondent was not yet identified, and permitting his client at trial to swear that the adultery was committed without her consent, connivance, privity or procurement, etc.,^ forging and delivering to his client who had brought a suit for separation against his wife a decree of the court purporting to grant an absolute divorce to said wife based on a counterclaim for such relief interposed by her in the action ;^^ failing to dis- close to the court on his application for tempor- ary alimony on behalf of a client, that he had an agreement with the client which entitled him to receive in addition to fees awarded by the court, one-half of the alimony awarded to the client.*^ 17. Neglect of client's interests. Disciplinary proceedings may be maintained against an attorney for carelessness, neglect and serious dereliction of professional duty;** for failing for over three years to place a suit upon a promissory note upon the ^ calendar for trial,*^ failure to prosecute an appeal, having accepted a retainer to do so,'" filling in a paper bearing his client's signature with a general release of her cause of action, and for signing the name of another attorney to a consent to dis- continuance without authority .^^ An attorney may be cen- sured for lack of supervision and care over the operation of his clerk in charge of the collection branch of his business re- 83. Matter of Baylea, 156 App. Div. 88. Matter of O'Neill, 175 App. Div. 663, 141 N. Y. Supp. 1053. 973, 161 N. Y. Supp. 899; Matter of 84. Matter of Herrmaa, 175 App. Eobinson, 163 App. Div. 844, 147 N. Y. Div. 310', 161 N. Y. Supp. 977. Supp. 103. 85. Matter of Forrester, 169 App. 89. Matter of Boehm, 150 App. Div. Div. 619, 1^55 N. Y. Supp. 420. 443, 135 N. Y. Supp. 43. 86. Matter of Bunt, 192 App. Div. 90. Matter of Voxman, 148 App. Div. 226, 1S2 N. Y. Supp. 434. . 286, 132 N. Y. Supp. 217. 87. Matter of Dangler, 192 App. Div. 91. Matter of Greenstein, 140 App. 237, 182 N. Y. Supp. 471. Div. 547, 125 N. Y. Supp. 791. ATTORNEYS AND COUNSELLORS. 165 suiting in the clerk's misappropriation of the funds of clients which, however, were repaid by said attorney within a reason- able time, although there was no evidence of improper motive on the part of the attorney .^^ An attorney who, in order to secure his own compensation, settles with the party against whom he has been retained to enforce claims, assigns his contracts of retainer, and notifies his clients to settle directly with such party, agreeing that to the extent of his ability he will facilitate any settlement that the latter may desire to make, is guilty of malpractice.'^ 18. Unlawfully commencing action. An attorney may be disbarred or otherwise subjected to punishment for conunencing an action for personal injuries without the consent of his client,'* or prosecuting a contest of a will against the direction of his client, who by no possibility could take as next of kin.'^ 19. Advertising or soliciting. Canon 27 of the Code of Ethics provides that the solici- tation of business by circulars or advertisement or by per- sonal communications or interviews, not warranted by professional relations, is unprofessional. A violation of this canon subjects the attorney to censure at the least.'^ A second offense may result in his disbarment.'^ Thus, attor- neys have been subjected to disciplinary measures for adver- tising matrimonial actions as a specialty;'^ soliciting con- tributions to finance investigations as to the validity of title to property of Trinity Church in New York city knowing that there was no chance of success;'' soliciting by false represen- tations a retainer from the client of another attorney by whom 92. Matter of Hiisch, 184 App. Div. ter of Barondess, 176 App. Div. 206, 147, 171 N. T. Supp. 634. 162 N. T. Supp. 114; Matter of Gray, 93. Matter of Clarke, 184 N. Y. 222; 184 App. Div. 822, 172 N. Y. Supp. aff'g, 108 App. Div. 150,- 95 N. T. 648. Supp. 388. 97. Matter of Schwarz, 195 App. 94. Matter of Mendelsohn, 150 App. Div. 194, 186 N. Y. Supp. 535. Div. 445, 135 N. Y. Supp. 438. 98. Matter of Neuman, 169 App. 95. Mater of Randall, 122 App. Div. Div. 638, 155 N. Y. Supp. 428. 1, 106 N. Y. Supp. 943; aff'd, 196 N. 99. Matter of Gridley, 179 App. Div. Y. 569. 621, 167 N. Y. Supp. 107. Compare 96. Matter of Sehwarz, 175 App. Matter of Downes, 167 N. Y. Supp. Div. 335, 161 N. Y. Supp. 1079; Mat- 588. 166 ATTORNEYS AND COUNSELLORS. he had formerly been employed as clerk, and for settling a judgment without taking steps to safeguard his former em- ployer's lien;^ agreeing to pay another person for procuring contracts, by which he is retained to prosecute actions at law, a percentage of the fees received by him,^ making a retainer in violation of Penal Law, section 274, and for making an agree- ment with employee of railroad company to disclose par- ticulars of accidents.^ 20. Collection agency. Improper practice in the management of a collection agency will justify the censure of an attorney.* It is improper for an attorney-at-law to send communi- cations to persons against whom he has claims to collect in such a form as to lead to the impression that an action had been commenced or that legal proceedings are pending to col- lect the claim. Such methods are strongly disapproved and require discipline, whether adopted by an attorney or, under his name, by a collecting agency that he authorized to use his name.^ 21. Fleeing jurisdiction after unlawful acts. Proceedings may be maintained against an attorney for extorting from a client who was in financial straits exor- bitant and unconscionable fees for legal services and also for fleeing the jurisdiction to avoid the enforcement of an order of the court directing him to pay over moneys to the client.^ It is a serious offense to flee the jurisdiction for the purpose of rendering the court powerless to enforce its order.'' 22. Fraudulent admission to practice. The admission of an attorney to practice may be revoked where it is procured by fraud.^ Thus, if his papers contain 1. Matter of Glasberg, 169 App. Div. 5. Matter of Hutson, 127 App. Div. 496, 155 N. Y. Supp. 437. 492, 111 N. Y. Supp. 731. 2. Matter of Shay, 133 App. Div. 6. Matter of Cohen, 169 App. Div. 547, 118 Supp. 546; afif'd, 196 N. Y. 544, 155 N. Y. Supp. 517. 530. 7. Matter of Cohen, 169 App. Div. 3. Matter of Newell, 174 App. Div. 544, 155 N. Y. Supp. 517. 94, 160 N. Y. Supp. 275. 8. Matter of Kristelier, 154 App. 4. Matter of an Attorney, 170 App. Div. 556, 139 N. Y. Supp. 64; Matter Div. 922, 154 N. Y. Supp. 703. of Zatulove, 156 App. Div. 79, 141 N. Y. ATTORNEYS AND COUNSELLORS. 167 false statements, he may be removed from office.^ If he con- ceals the fact that he has been convicted for crime, he may be disbarred.^" Although an attorney admitted from another State was pardoned by the governor of such State and may have been unjustly convicted, his failure to disclose the con- viction in his application for admission to practice here, is, nevertheless, deception upon the court and requires his dis- barment.^^ An attorney who procures admission to practice at the bar of this State on papers showing that he had been duly ad- mitted to practice law in Texas and had practiced in that State for twelve years, but who suppresses the fact that after leaving Texas and before coming to this State he had for sev- eral years practiced in Virginia under another name, and had there been disbarred for forging a decree of divorce, is guilty of fraud and deceit and will be disbarred.^ 23. Miscellaneous grounds for discipline. Disciplinary measures have been maintained against attor- neys upon various grounds not readily subject to classification. Of such are the repudiating of a written agreement to reim- burse a bondsman in the event of the forfeiture of the bond ;^^ making a false statement to a receiver, and violating a written stipulation not to take an appeal ;" inserting indecent and scan- dalous matter in a complaint ;^^ preferring criminal charges for the purpose of influencing the decision of civil cases in which he or his client was interested ;^^ stopping payment on a check given by him for the payment of costs and disbursements of other attorneys for searching title to lands, the check having been given in order to induce the making of a loan to his Supp. 75; Matter of Singer, 156 App. App. Div. 636, 155 N. Y. Supp. 465. Div. 85, 141 N. Y. Supp. 74; Matter 11. Matter of Pritehett, 122 App. of Moskovitz, 169 App. Div. 527, 155 DlV. 8, 106 N. Y. Supp. 847. N. Y. Supp. 485; Matter of Hughes, 12. Matter of Marx, 115 App. Div. 188 App. Div. 520, 177 N. Y. Supp. 448, 101 N. Y. Supp. 680. 234; Matter of O'Neil, 27 Hun, 599, 90 13. Matter of Brandmarker, 177 N. Y. 584. App. Div. 656, 164 N. Y. Supp. 369. 9. Matter of Carpel, 178 App. Div. 14. Matter of Brown, 178 App. Div. 146, 165 N. Y. Supp. 102. 558, 165 N. Y. Supp. 736. 10. Matter of Pritehett, 122 App. 15. Matter of Hansen, 182 App. Div. Div. 8, 106 N. Y. Supp. 847; Matter of 568, 169 N. Y. Supp. 881. Quitman, 152 App. Div. 865, 137 N. T. 16. Matter of Abrahams, 158 App. Supp. 1069 ; Matter of Osgoodby, 169 Div. 595, 143 N. Y. Supp. 027. 168 ATTORNEYS AND COUNSELLORS. clients ;" furnishing the opposite party with copies of papers intrusted to him by his client, even though it be after the re- lation is at an end;^^ lack of frankness to the attorneys for creditors who employed him, and for failure to inform them that he had an office with the attorney for the bankrupt, and had discussed with him the bankrupt's affairs ;^^ employing a disbarred attorney;^** allowing a disbarred attorney to prac- tice in his name f^ continuing to practice under the name of a firm by which he was employed as a clerk, one member thereof being disbarred and the other dead f-^ executing a power of at- torney, in consideration of money or property received, whereby he allowed certain employees of a corporation to write letters and sign his name as attorney for the purpose of collecting debts and transacting other legal business of the corporation;^^ disorderly conduct before a city magistrate to whom he refused to give up a paper when ordered to do so and for physically defending his possession against court attend- ants and policemen f* writing a letter containing false state- ments designed to protect a friend against whom a criminal charge had been made ;^ directing the sheriff to take under a writ of replevin a large quantity of goods not described in the writ, refusing to allow the defendant to take an inventory thereof, and causing the same to be immediately delivered to the plaintiffs in the action, with full knowledge of the facts,^^ making unconscionable charges;^'' conspiring with another person to obtain moneys by the institution of groundless ac- tions amounting to blackmail;^* making charges for services never performed f^ demanding fee of considerable amount for services in attempting to secure a reclassification under the Selective Service Law •,^° securing fee for services prosecuting 17. Matter of Kalisky, 169 App. 24. Matter of Reinhardt, 175 App. Div. 531, 155 N. Y. Supp. 550. Div. 843, 163 N. Y. Supp. 524. 18. Ex parte Hahn, 11 Abb. N. C. 25. Matter of Napolis, 169 App. Div. 423. 469, 155 N. Y. Supp. 416. 19. Matter of Liehtenberg, 164 App. 26. Matter of Goldberg, 49 App. Div. Div. 560, 150 N. Y. Supp. 7. 357, 63 N. Y. Supp. 392. 20. Matter of Treadwell, 175 App. 27. Matter of Powers, 13 Week. Dig. Div. 833, 162 N. Y. Supp. 554. 476. 21. Matter of Quitman, 152 App. 28. Matter of Lenney, 169 App. Div. Div. 865, 137 N. Y. Supp. 10«9. 509, 155 N. Y. Supp. 473. 22. Matter of Kaffenburgh, 188 N. 29. Matter of Bobinson, 163 App. Y. 49. Div. 844, 147 N. Y. Supp. 103. 23. Matter of Rothschild, 140 App. 30. Matter of O'Reilly, 188 App. Div. i583, 135 N. Y. Supp. 629. Div. 970, 176 N. Y. Supp. 781. ATTOENEYS AND COUNSELLORS. 169 claim under the Workmen's Compensation Act, when the fee was not approved by the Commission ;^^ harassing a defend- ant by four actions brought in favor of the same plaintiff, based on breach of promise to marry, seduction, rape, sodomy, etc., and causing the arrest of the defendant in a civil and in a criminal action and delaying service of process in the crim- inal action until the defendant was about to sail for Europe, when he caused the papers to be delivered to the defendant on the steamship after it had sailed.^^ But the refusal of an attorney to answer questions as to per- sonal transactions upon the ground that the answers might tend to incriminate him is not a sufficient cause for his dis- barment.^^ C. Procedure, punishment, etc. 1. Jurisdiction of appellate division. The Appellate Division of the Supreme Court has long ex- ercised jurisdiction to discipline attorneys and counsellors-at- law who were guilty of professional misconduct.^* Under the Judiciary Law, the Appellate Division has power, under the personal motion of an attorney-at-law who has been charged in the written opinion of a justice with pro- fessional misconduct, to order an inquiry into his conduct and may designate persons to prepare charges and report to the court.^^ 2. Preliminary examination. It is the settled practice of the Appellate Division of the First Department not to entertain proceedings against at- torneys unless preliminary examination of the charges has been had by the district attorney or the appropriate com- mittee of the Association of the Bar or the New York County 31. Matter of Fiseh, 188, App. Div. Order made by the Appellate Divi- 525, 177 N. T. Supp. SM. sion upon the motion of an attorney 32. Matter of Krause, 165 App. Div. at law who has been charged in the 771, 151 N. Y. Supp. 399. written opinion of a justice of the 8u- 33. Matter of KafEenburgh, 188 N. preme Court with professional miscon- y. 49. duct, granting an inquiry and desig- 34. Matter of Robinson, 209 N. T. nating persons to prepare charges and 354. report, revised so as to show affirma- 35. Matter of Wilson, 158 App. Div. tively that the court did not seek an 607 143 N. Y. Supp. 853 ; mod. on investigation of the opinion of the jus- reargument, 160 App. Div. 921, 145 N. tice. Matter of Wilson, 160 App, Div. Y. Supp. 557. 521, 145 N. Y. Supp. 557. 170 ATTORNEYS AND COUNSELLORS. Lawyers' Association.^^ In presenting charges against at- torneys who have violated their trust and been guilty of un- professional conduct the Association of the Bar of the City of New York is performing a public duty which the Legislature by special act has authorized it to perform.^^ In an action to foreclose a mortgage, a bar association has no right to intervene for the mere purpose of determin- ing whether the attorney appearing for the plaintiff corpor- ation so appears in violation of section 280 of the Penal Law which declares that corporations or voluntary associations shall not practice law. The ordinary methods of discipline of attorneys should be followed.^* 3. Nature and purpose of proceedings. A proceeding to discipline an attorney is a special pro- ceeding, civil in character.^' It is not a criminal proceeding;^" and the statutory rule of no presumption does not apply.*^ He does not enjoy the rights of an accused in a criminal action.*^ Disbarment is not a penalty or forfeiture within the meaning of the section of the Penal Law (section 584) which provides that no person shall be excused from testifying on any trial for conspiracy upon the ground that the testimony required of him may tend to subject him to a penalty or for- feiture.^ The sole inquiry is as to whether he is a person qualified and fit to hold the of&ce.** The proceeding is not a proper method for compelling an attorney to pay money 36. In re Tuck, 167 N. T. Supp. 534. 42. Witness against himself.— A dis- 37. Matter of Jones, 159 App. Biv. barment proceeding is not a criminal 782, 785, 145 N. Y. Supp. 65. case within the provision of the State 38. Post V. Louis, 184 App. Div. 533, Constitution (Art. 1, § 6) which says 172 N. Y. Supp. 561. that no person shall "be compelled in 39. Matter of Spencer, 137 App. Div. any criminal case to be a witness against 330, 122 N. Y. Supp. 190. himself."- Matter of Eouss (1917), 40. Matter of Eouss, 221 N. Y. 81; ^21 N. Y. 81. Proper inferences may Matter of Bauder, 128 App. Div. 346, be drawn from his refusal to answer 112 N. Y. Supp. 761; Matter of Spen- questions in regard to an employee who ser, 143 App. Div. 229, 128 N. Y. Supp. was an important factor in a transac- 168; aff'd, 203 N. Y. 613; Matter of tion alleged as a ground for disbar- O'Neill, 184 App. Div. 75, 171 N. Y. ment. Matter of O'Neill, 184 App. Supp. 514. Div. 75, 171 N. T. Supp. 514. 41. Matter of Randall, 158 N. Y. 43. Matter of Eouss, 221 N. Y. 81. 216; Matter of Spencer, 143 App. Div. 44. Matter of Spencer, 137 App. Div. 229, 128 N. Y. Supp. 168. 330, 122 N. Y. Supp. 190. ATTORNEYS AND COUNSELLORS. 171 which he owes to his client.*^ Hence, the court on finding that the charges against an attorney in such proceeding have not been proved will not require the repayment of money to a client as a condition precedent to the dismissal of a charge of misconduct, although the client is clearly entitled to it.*^ 4. Procedure. A proceeding to discipline an attorney is instituted before the Appellate Division by a petition or affidavits containing the charges, or by an order of some court alleging the mis- conduct.^^ Upon an examination of the papers by the court, an order is issued requiring the attorney to show cause why he should not be subject to discipline.^* In case of the absence of the attorney the order will pro- vide for substituted service of the papers upon him.*^ The proceedings cannot be instituted by a notice of motion.^" If, upon the return of the show cause order, the attorney makes denials, the matter will be sent to a referee to take testi- mony.^^ Except where the acts for which an attorney is dis- barred occur in open court in the presence of the judges, the power of the court so to disbar should not be exercised with- out notice to the offending party of the ground of the com- plaint, and without affording him ample opportunity of in- spection and defense.^^ An attorney charged with professional misconduct may be disbarred by the Appellate Division without regard to a pend- ing indictment, and he is not entitled to a stay until the 45. Matter of Eockmore, 130 App. 51. Matter of Valentine, 92 App. Div. Div. 586, 117 N. Y. Supp. 512; Matter 612, 87 N. T. Supp. 1129. of Flowerman, 181 App. Div. 488, 168 A member of a bar association, who N. Y. Supp. 860. does not belong to either the grievance 46. Matter of Fox, 150 App. Div. committee or the executive committee, 602 135 N. Y. Supp. 821. See bIso, may, as ofiScial referee, hear charges of Matter of Branch, 178 App. Div. fi85, misconduct made against an attorney 165 N. Y. Supp. 688. by the grievance committee of the as- 47. Matter of Brewster, 12 Hun, 109i sociation, and the objection cannot be 48. Matter of Elbridge, 82 N. Y. made that he is both a prosecutor and 161; Ex parte Steinert, 24 Hun, 246; a judicial officer in the proceeding. Anon., 22 Wend. 656. Matter of Jones, 159 App. Div. 782, 49. Matter of Murtha, 92 App. Div. 145 N. Y. Supp. 65. 612, 86 N. Y. Supp. 1130. 52. Bradley v. Fisher, 13 Wall. (L. 50. Matter of Brewster, 13 Hun, S.) 344. 109. 172 ATTOKNEYS AND COUNSELLOES. charges can be tried by a jury.^^ It is not a defense to the at- torney that the improper and unprofessional conduct was committed outside the State of New York and in the United States court, and with respect to the process of that court.^* 5. Evidence. The doctrine of reasonable doubt has no place in a proceed- ing to discipline an attorney-at-law. The questions involved are to be determined upon the fair preponderance of the evi- dence and the reasonable inferences to be drawn therefrom, and not beyond a reasonable doubt.^^ But the charges should be sustained by evidence free from serious doubt.^ The rule that a person cannot be convicted upon the uncor- roborated testimony of an accomplice does not obtain in its strictness.^'' But to establish a charge against an attorney that he in- duced witnesses at a trial to swear falsely, their testimony to the fact must be corroborated.^ On an application to disbar an attorney he is entitled as a matter of right to an independent investigation by the State courts, and he can only be disbarred upon evidence good at common law, delivered, if he chooses, in his presence and by witnesses subject to cross-examination.^^ But the right of an attorney in proceedings to disbar him to be tried by the court on common-law evidence is a personal right and may be waived by appearance on due notice without objection.®' The court cannot act upon testimony taken in the United States courts in a similar proceeding.®^ The Appellate Division has power to issue a commission, on the application of parties moving for a disbarment, to take testimony upon written interrogatories.®^ 53. Eochester Bar Assn. v. Dorothy, penheim, 58 App. Div. 510, 69 N. Y. 152 N. Y. 596. Supp. 524. 54. Matter of Lamb, 10'5 App. Div. 59. Matter of Eldridge, 82 N. Y. 462, 94 N. Y. Supp. 331. 161; Matter of Joseph, 135 App. Div. 55. Matter of Herrman, 175 App. 544, 109 N. T. Supp. 1018. Div. 310, 161 N. Y. Supp. 977. 60. Anon., 86 N. Y. 663. 56. Matter of an Attorney, 1 Hun, 61. Matter of Joseph, 125 App. Div. 321. 544, 109 N. Y. Supp. 1018. 57. Matter of Hardenbrook, 135 62. Matter of Spencer, 137 App. Div. App. Div. 634, 121 N. Y. Supp. 250; 330, 122 N. Y. Supp. 190. Compare a&'d, 199 N. Y. 539. Matter of an Attorney, 83 N. Y. 164, 58. Metropolitan St. Ry. Co. v. Op- 23 Alb. Law. J. 129. ATTORNEYS AND COUNSELLORS. 173 It is no defense to the proceeding to remove an attorney that the court calls upon him to give evidence against himself, because such attorney is not compelled to be sworn at all un- less he chooses, and he may introduce other evidence tending to show his innocence and submit the matter to the court with- out being sworn.^^ 6. Punishment. The punishment to be inflicted upon an attorney who has been found guilty of any deceit, malpractice, crime, or misde- meanor, is largely governed by the facts of the particular case, and rests in the sound discretion of the court, the usual condideration being : Is the character of the offense such as to render the delinquent quite unfit to remain upon the roll of attorneys, or may it be so excused that justice will be done by inflicting a punishment less severe than permanent disbar- ments* The court is not limited to the punishments prescribed in the statute, but may exercise its powers as over an officer of the Supreme Court. It seems that disbarment is not for punish- ment so much as it it for the protection of the court.®^ Where an attorney is young and inexperienced, the court need not disbar him for misconduct, but may suspend him from practice for a substantial period.^ The fact that an attorney appears to have maintained a good reputation in the community and does not appear to have been guilty of wilful dishonesty, may mitigate the pun- ishment.^ But a proceeding to disbar an attorney for converting his client's money will not be. dropped merely because he has re- paid the money and the client has withdrawn the charge.^^ If an attorney has been pardoned after conviction for a felony, the court may, in proceedings to disbar him, take into 63. In re Percy, 36 N. Y. 754. 68. Matter of Eoekmore, 130 App. 64. Matter of V., 10 App. Div. 491, Div. 586, 117 N. Y. Supp. 512; Mat- 42 N. Y. Supp. 268. ter of Cohn, 141 App. Div. 511, 126 N. 65. Matter of Eeif Schneider, 60 App. Y. Supp. 218; Matter of Flowerman, Div. 478, 69 N. Y. Supp. 1069. 181 App. Div. 488, 168 N. Y. Supp. 66. Matter of Goldberg, 79 Hun, «16, 860; Matter of Hyman, 186 App. Div. 61 St. Rep. 277, 29 N. Y. Supp. 972. 263, 174 N. Y. Supp. 306 ; Matter of 67. Matter of Roth, 181 App. Div, Barley, 188 App. Div. 532, 177 N. Y. 618, 169 N. Y. Supp. 151. Supp. 347. 174 ATTORNEYS AND COUNSELLORS. consideration his conduct in committing the crime, and esti- mate his character and fitness to practice therefrom.^^ The fact that an attorney who had been indicted, convicted, sentenced, and imprisoned for forging the name of a third person to a note which he delivered to a client was subse- quently pardoned does not affect the right of the court to dis- bar the attorney in question for the professional misconduct.™ 7. Effect of order. The suspension of an attorney from practice does not pre- vent him from continuing to act in person in an action where- in he is plaintiff.^^ 8. Costs. In proceedings by an attorney to disbar another, the court has power to order the disbursements and costs of motion to be paid by the applicant when it is determined that the pro- ceedings were instituted in bad faith.'^^ 9. Appeal to Court of Appeals. In a proceeding to disbar an attorney, the power to review ends in the Appellate Division when it appears that the pro- ceeding has been instituted and conducted in accordance with the statutes and rules authorizing it ; that no substantial legal right of the accused has been violated; that no prejudicial error has been committed in the reception or exclusion of testimony, and that there is some evidence to sustain the find- ings upon which the order is based.''^ The power of rieview in the Court of Appeals is limited to the consideration of the single question whether the finding of the guilt has any evi- dence to sustain it.''* Questions relating to the comparative weight of evidence or the fairness of the sentence in a pro- ceeding to discipline an attorney are beyond the jurisdiction of the Court of Appeals.''^ 69. Matter of Powers, 13 Week. Dig. 143 ; Matter of Robinson, 209 N. T. 476. 354; aff'g, 151 App. Div. 589, 136 N. 70. Matter of an Attorney, 86 N. Y. Y. Supp. 548. 563. 74. Matter of Flannery, 212 N. Y. 71. Matter of Secured Holdings 610; aff'g, 150 App. Div. 369, 135 N. Corporation, 88 Misc. 706, 151 N. Y. Y. Supp. 612. Supp. 422. 75. Matter of Hawes, 217 N. Y. 602 ; 72. Matter of Kelly, 59 N. Y. 595. aff'g, 169 App. Div. 644, 156 N. Y. 73. Matter of Goodman, 199 N. Y. Supp. 283. ATTORNEYS AND COUNSELLORS. 175 No appeal can be taken from the order of disbarment as a matter of right where the decision of the Appellate Division was unanimous.''^. 10. Beinstatement. An attorney is disbarred not only to rid the profession of an unworthy practitioner but to warn other members of the profession. An attorney of mature years who has been dis- barred for gross unprofessional conduct, criminal in its nature, will not be reinstated after the lapse of two years, for the effect of such reinstatement upon the profession at large must be considered.''^ An application for leave to resume practice by an attorney who was disbarred on the ground that he had been convicted of a crime must be determined under the law as it existed when the conviction took place.™ 11. Form of petition. STATE OF NEW YORK— Supreme Court. APPELLATE DIVISION— First Department. In the Matter of ABRAHAM H.) KAFFBNBURGH, an Attorney. ) J To the Appellate Division of the Supreme Court of the State of New York for the First Judicial Department : The petition of the Association of the Bar of the City of New York, by Howard Taylor, its attorney, respectfully represents and alleges, on information and belief: First. The petitioner is a corporation duly created by an act of the Legislature of the State of New York, passed April 28, 1871, for the purpose, among other purposes, as stated in its charter and constitu- tion, of maintaining the honor and dignity of the profession of the law. It is provided by section 14 of its by-laws, among other things, that: "And if specific charges of fraud or gross unprofessional con- duct shall be made in writing to the Association against a member of the bar, not a member of the Association, or against a person pre- tending to be an attorney and counsellor-at-law practicing in this judicial district, said charges shall be investigated by the committee on grievances, and if in such case such committee shall report in writing to the executive committee that in its opinion the case is 78. Matter of Mathot, 222 N. T. 8. 78. Matter of Darmstadt, 35 App. 77. Matter of Clark, 128 App. Div. Div. 285, 55 N. T. Supp. 32. 348, 112 N. T. Supp. 777. 176 ATTOENEYS AND COUNSELLORS, such as requires further investigation or ptosecution in the courts, the executive committee may appoint one sr more members of the Association to act as prosecutor whose duty jt shall be to conduct the farther investigation or prosecution of such offender under the in- structions and control of the committee on grievances." Second. Heretofore and in the year 1898, Abraham KafPenburgh, the respondent in this proceeding, veas admitted to practice as an at- torney and counsellor-at-law in the courts of the State of New York, and ever since has acted as such attorney and counsellor. He is now practicing as such attorney and counselor in the Borough of Man- hattan, City of New York, in the First Judicial District, with an office at No. 346 Broadway, in said Borough of Manhattan. Third. On or about the 28th day of December, 1905, Edgerton L. Winthrop, Jr., Esq., the then attorney for the committee on griev- ances of said association, submitted to the said committee an official copy of the stenographic minutes of the testimony of the said KafEen- bugh taken before the Hon. Watson M. Sogers and a jury in the Supreme Court, New York County, Part I. (Criminal Branch), in an action entiteld '^The People of the State of New York v. Abraham H. Hummel et al." This testimony was duly examined by the said com- mittee, which thereupon duly reported to said executive com.mittee that in its opinion the case was such as to require prosecution in the courts. The said executive committee thereupon duly appointed Howard Taylor, Esq., who is a member of the association, to act as prosecutor, with authority to conduct the prosecution in the name of said association, pursuant to which authority this proceeding is taken; all of which appears more fully by the annexed affidavit of Einar Chrystie, the acting attorney of said committee on grievance, verified the 31st day of May, 1906, and hereby made a part of this petition. Fourth. Your petitioner further alleges upon information and be- lief that the said Abraham H. Kaffenburgh has been guilty of mal- practice, deceit or crime and gross unprofessional conduct in his office as attorney and counsellor-at-law, as follows: The petitioner respectfully refers to the fourth paragraph of the petition of the As- sociation of the Bar of the City of New York in a proceeding, entitled "In the Matter of Abraham H. Hummel, an Attorney." A copy of said petition is annexed hereto and the facts therein stated are made a part hereof as if herein fully set forth. Upon information and be- lief, all of the facts stated in said annexed petition were then and now are true, and your petitioner now reiterates and here alleges those facts as if herein fully set forth. Abraham H. Kaffenburgh, the individual therein referred to, is the same person against whom this proceeding is brought. He was at all the times therein mentioned, and now is, a clerk in the office of Howe & Hummel. Upon the trial .of Abraham H. Hummel for conspiracy, Kaffenburgh was called as a witness. He was asked several questions tending to elicit his con- nection with the matters set forth in the said annexed petition and refused to answer each and all of the questions as to his personal transactions, on the ground that his answers might tend to incriminate ATTORNEYS AKD COUNSELLOES. 177 him. Either the witness was intentionally deceiving the court or else his connection with these matters was criminal. Fifth. The petitioner annexes hereto the affidavit of Howard Tay- lor, verified the 31st day'of May, 1906, and the affidavit of Einar Chrystie, verified the 31st day of May, 1906, as to the facts above al- leged and referred to. Wheeefobe, the petitioner respectfully submits the matter to this honorable court and asks that such action be taken as justice may require. New York, May 31, 1906. Association of the Bar of the City of New York, By S. B. Brownell, (Add verification.) Recording Secretary. 12. Form of notice of application. (Same title.) Sir : — You are hereby advised that the petition and charges of the Association of the Bar of the City of New York, verified on the 31st day of May, 1906, charging that you have been guilty of malpractice, deceit or crime and gross unprofessional conduct as an attorney and counselor-at-law, the affidavit of Howard Taylor, verified the 31st day of May, 1906, and the affidavit of Einar Chrystie, verified the 31st day of May, 1906, a copy of which petition, charges and affidavits is hereto annexed and is herewith served upon you, will be presented to the Appellate Division of the Supreme Court of the State of New York, First Judicial Department, at the Court House of said court in Madison Square in the Borough of Manhattan, City of New York, on the 8th day of June, 1906, at one o 'clock in the afternoon of that day or as soon thereafter as counsel can be heard. At the same time and place, the undersigned will also present to the court, if the court shall desire to receive the same, a copy of the testimony taken before the Hon. "Watson M. Kogers, justice of the Supreme Court, and a jury in the Supreme Court, New York County, Part II. (Criminal Branch) in an action entitled "The People of the State of New York V. Abraham R. Hummel et al." An application will then and there be made to the Appellate Division to take such action upon said charges as in the judgment of said court justice may require. New York, May 31, 1906. Yours, &c., Howard Taylor, Attorney for Petitioner. To Abraham H. Kaffenbtjrqh. 13. Form of order. (Caption in Appellate Division and title.) Application having been made to this court by the Association of the Bar of the City of New York for an order suspending the respond- ent, Abraham H. Kaffenburgh, from practice and removing him from 12 178 ATTORNEYS AND COUNSELLORS. his office as an attorney and counsellor-at-law ; and the same duly coming on to be heard, Now, on reading and filing the notice of motion, dated October 10, 1906, with the affidavit of Howard Taylor, verified the same day, thereto attached, and upon reading the application herein, dated May 31, 1906, and presented to the Appellate Division on June 22, 1906, and the papers whereon such application was based, the order of the Appellate Division, dated July 12, 1906, providing that the respondent answer the charges contained in said application, and the answer of the respondent, all of which papers have been hereto- fore filed by the court herein; and after hearing Howard Taylor, Esq., of counsel for the Association of the Bar of the City of New York, in support of such motion, and John B. Stanchfield, Esq., of counsel for the respondent, in opposition thereto, and due deliberation having been had, it is, upon motion of Howard Taylor, attorney for the Association of the Bar of the City of New York, Ordered, that Abraham H. Kaffenburgh be, and he hereby is, re- moved from his office as an attorney and counsellor-at-law in the State of New York, and that his name be stricken from the roUs of attorneys of this court. BANKRUPTCY LAW, Sec Debtor and Ceeditoe Law. CERTIORARI.* ARTICLE I. Nature and history ot order of certiorari A. Civil Practice Act, § 1283. Writ of certiorari abolished. B. Certiorari in other chapters of this work. C. History of certiorari. ARTICLE II. Vrhen order may be granted. A. Statutory provisions. 1. Civil Practice Act, § 1284. Granting of certiorari order. 2. Civil Practice Act, § 1285. Granting of certiorari in civil cases. 3. Civil Practice Act, § 1286. Limitation upon granting certiorari orders. 4. Civil Practice Act, § 1310. Definition of terms "body or officer" and "determination." 5. Civil Practice Act, § 1311. Application of article to certain special cases. 6. Civil Practice Act, § 1312. Article applicable to civil cases only. B. General principles prescribing when order may be granted. 1. When allowed, in general. 2. De facto officers. 3. Discretion of court. 4. Absence of other remedies. 5. Final determinations only are reviewable^ C. State officers. D. Supervisors and boards of audit. E. Municipal officers or boards. F. Police commissioner or board. G. Fire department. H. Civil service boards. I. Military' boards. J. School matters. K. Highway matters. L. Assessment for local improvements. ARTICLE IIL What court may grant order> and within what time. A. Oivil Practice Act, § 1287. Court by which order granted. B. CivU Practice Act, § 1288. Limitation of time for order. C. Civil Practice Act, § 1289. Grant of order after removal of disability. D. The time limitation. E. Court to which application is presented. * For a further discussion of matters relating to the remedy of certiorari, see Bender's Village Laws; B., C. & G. Consolidated Laws. [179] 180 CERTIOEAKI. ARTICLE IV. Petition and notice of application. A. Civil Practice Act, § 1290. Application for order. R Civil Practice Act, § 1291. Notice of application. O. The petitioner. D. Contents of petition. E. Form of petition to review action of town auditors. P. Form of petition by patrolman dismissed from police force. ARTICLE V. The order and stay thereon. A. Civil Practice Act, § 1292. Against whom order directed. B. Civil Practice Act, § 1293. Entry of order. C. Civil Practice Act, § 1294. Service of order. D. Civil Practice Act, § 1295. Stay of proceedings. E. Against whom directed. F. Contents of order. 6. Vacating order. H. Stay of proceedings. ARTICLE VL Return of writ and proceedings thereon. A. Provisions of the Civil Practice Act. 1. Civil Practice Act, § 1296. Time and place of return. 2. CivU Practice Act, § 1297. How return made. 3. Civil Practice Act, § 1298. Defect or omission in return. 4. Civil Practice Act, § 1299. Subsequent proceedings as in action. 5. Civil Practice Act, | 1301. Order and return after term of office. 6. Civil Practice Act, § 1302. Bringing in third person. B. Form and contents of return. 1. By whom made. 2. Sufficiency of return. 3. Authentication. 4. Prepayment of fees. C. False, defective or incorrect return. D. Conclusiveness of return. E. Bringing in additional parties. ARTICLE VII, Hearing and questions to be determined. A. Civil Practice Act, § 1300. Hearing upon return. B. Civil Practice Act, § 1303. Additional affidavits or proofs in certain cases. C. Civil Practice Act, § 1304. Questions to be determined. D. Limited to return and accompanying papers. E. Additional affidavits. CEETIORAM. 181 F. Questions determined. 1. In general. 2. Jurisdiction. 3. Regularity of proceeding. 4. Violation of law affecting rights of parties. 5. Determination against weight of evidence. 6. Admission or rejection of evidence. 7. Matters committed to discretion of lower tribunal. ARTICLE VIII. Final order. A. CivE Practice Act, § 1305. Final order upon hearing. B. Civil Practice Act, § 1306. Award of restitution. C. Civil Practice Act, § 1308. Entry and enrollment of final order. D. Civil Practice Act, § 1309. Effect of filing of enrollment. E. Modification of determination. F. Restitution. ARTICLE IX. Costs. A. Civil Practice Act, § 1307. Costs. B. When allowed. ARTICLE X. Appeals. A. Discretion of Appellate Division. ARTICLE I. NATURE AND HISTORY OF ORDER OF CERTIORARL A. Civil Practice Act, § 1283. Writ of certiorari abolished. The writ of certiorari is hereby abolished. The reliei Heretofore obtained by such writ under the provisions of the code of civil procedure shall hereafter be obtained by an order as provided in this article. Wherever in any statute reference is made to a writ of certiorari, such reference, when heretofore referring to a writ of certiorari as regulated by article seven of title two of chapter sixteen of the code of civil procedure, shall be deemed to refer to a certiorari order as provided in this article, and the relief given by any such statute by means of a writ shall be obtained by an order as provided in this article. B. Certiorari in other chapters of this work. The scope of this chapter is limited to Article 78 of the Civil Practice Act, and does not include the granting of the order in certain specified cases. Thus, the certiorari granted to in- quire into the cause of detention is associated with the writ of habeas corpus, and is treated in the chapter on that subject. Similarly the remedy by way of certiorari to review an assess- ment or a corporation tax, is discussed in the chapter relating 182 CERTIOEAKI, to Taxation. So, too, the review of the acts of the Public Ser- vice Commissions is covered in the chapter on that subject; and the remedy of certiorari to review proceedings for con- tempt is treated in the chapter on Contempt. The use of the remedy to review election matters is discussed in the chapter on Election Law. C. History of certiorari. Until the Civil Practice Act went into effect, the writ of certiorari was an established remedy. Its origin dates back to an early date in the history of the common law in England. Its office originally was to correct errors of a judicial char- acter by inferior courts, and errors in the determination of special tribunals, commissioners, magistrates, and officers ex- ercising judicial powers affecting the property or right of citizens, and who acted in a summary way, or in a new way not known to the common law, and also the proceedings of municipal corporations in certain cases. It comprehended the determination of special tribunals, magistrates, officers, and of municipal corporations in certain cases. It brought up the record either for the purpose of examining into the legality of the proceedings or annulling or quashing an order or judg- ment of such inferior court, given in a matter over which the court had no jurisdiction, or for the purpose of giving a de- fendant sued in such inferior court surer and more certain justice before a higher tribunal.^ The common-law writ had its scope and character clearly defined by a long line of authorities, showing the occasions upon which it would be granted, and a distinct and well-defined practice had grown up with its administration. These rules formed the basis for the provisions relating thereto contained in the Code of Civil Procedure. In addition to the common law writ, the Legis- lature from time to time enacted provisions giving the remedy in certain cases, and in these cases it was called a statutory 1. Addison on Torts, 1042. view, fquiring it to return to the ap- Defective appeal record. — ^At com- pellate court all papers aaid proceedings mon law whenever a matter was pend- upon which it acted in making an ad- ing in an appellate court and it was al- judication. This was the usual and leged that the record was defective, so ordinary remedy, not only at common that all the proceedings in the matter law, but under the Revised Statutes, were not before it, the remedy was by and in criminal as well as civil proceed- writ of certiorari directed to the tri- ings. Matter of Delevan Avenue, 62 bunal whose proceedings were under re- App. Div. 492, 71 N. Y. Supp. 137. CEETIORAEI. 183 writ. The Code of Civil Procedure continued tlie writ though it contained limitations thereon not known to the common law. The Civil Practice Act preserves the substance of the provi- sions of the Code of Civil Procedure, with one exception. It abolishes the writ of certiorari and substitutes therefor an order of certiorari. It is thought that under the new practice the order will be granted in the same classes of cases as the writ was formerly granted, and in no others. The remedy of certiorari is not a matter of right, and it may be taken away by the Legislature.^ The Code of Civil Procedure did not provide a new remedy of certiorari, but regulated the writ and the practice therein in cases where it was expressly authorized by statute or where the right to it existed at common law and had not been taken away by statute.* ARTICLE II. WHEN ORDER MAY BE GRANTED. A. Statutory provisions. 1. Civil Practice Act, § 1284. Granting of certiorari order. The certiorari order regulated in fhis article is granted to re.view the deter- mination of a body or officer. It can be granted in one of the following cases only: 1. Where the right to the order or to a writ of certiorari is expressly con- ferred, or the granting thereof is expressly authorized, by a statute. 2. Where a writ of certiorari might be issued at common law, by a court of general jurisdiction, and the right to a certiorari, or the power of the court to grant the same, is not expressly taken away by a statute. 2. Civil Practice Act, § 1285. Granting of certiorari in civil cases. A certiorari order cannot be granted to review a determination made, after this article takes effect, in a civil action or special proceeding, by, a court of record or a judge of a court of record. 3. Civil Practice Act, § 1286. limitation upon granting certiorari orders. Except as otherwise expressly prescribed by statute, a certiorari order cannot be granted in either of the following cases: ^8. Peofile ex rel. Crane v. Hahlo, 338 3. People ex rel. New York Central, N. Y. 309; People ex rel. v. Board of etc., R. Co. v. Block, 178 App. Div. Supervisors, 49 Hun, 476, 2 N. Y. Supp. 251, 164 N. Y. Supp. 962. 555. 184 CERTIORAEI, 1. To review a determination which does not finally determine the rights of the parties with respect to the matter to be reviewed. 3. Where the determination can be adequately reviewed by an appeal to a court or to some other body or oflSeer. 3. Where the body or officer making the determination is expressly author- ized, by statute to rehear the matter upon the petitioner's application; unless the determination to be reviewed was made upon a rehearing, or a rehearing has been denied, or the time within which the petitioner can procure a rehearing has elapsed. 4. Civil Practice Act, § 1310. Definition of terms "body or officer" and "determination." The expression "body or officer," as used in this article, includes every court, tribunal, board, corporation, or other person, or aggregation of persons, whose determination may be reviewed by a certiorari order or by a, writ of certiorari as the said writ heretofore existed; and the word "determination,'' as used in this article, iacludes every judgment, order, decision, adjudication, or other act of such a body or officer, which is subject to be so reviewed. 5. Civil Practice Act, § 1311. Application of article to certain special cases. Where the right to a writ of certiorari is expressly conferred, or the issuing thereof is expressly authorized, by a statute passed before and remaining in force after this article takes effect, this article does not vary or affect in any manner any provision of the former statute which expressly prescribes a different regulation with respect to any of the proceedings upon the certiorari to be issued thereunder. 6. Civil Practice Act, § 1312. Article applicable to civil cases only. This article is not applicable to a certiorari brought to review a determina- tion made in any criminal matter, except a criminal contempt of court. B. General principles prescribing when order may be granted. 1. When allowed, in general. Tile judieial determinations of inferior tribunals and officers, acting judicially under tlie authority of a statute, can be reviewed under an order of certiorari, which is issued to correct errors of law affecting the property or rights of the parties and to test the validity of official action judicial or g'wasi- judicial in character.* Certiorari lies in any case where 4. Matter of Standard Bitulithic Co., People ex rel. Burnham v. Jones, 113 212 N. Y. 179 ; People ex rel. Steward N. T. 597 ; People ex rel. Corwin v. V. Bd. of E. E. Com'rs, 160 N. T. 202; Walter, 68 N. T. 403, (408) ; People People ex rel. Loughran v. Board of ex rel. Smith v. Hoffman, 166 N. Y. Eailroad Com'rs, 158 N. Y. 421; 462 (473). CEKTIOEAKI. 185 it would lie at common law, unless the right thereto has been taken away by statute.^ There are certain well established limitations to the use of the remedy, though great difficulty is experienced in determining whether the remedy lies in a par- ticular case. The order may be granted for the review only of judicial determinations made by tribunals or officers exer- cising judicial powers.^ For the review of legislative,'' ex- ecutive,^ administrative,^ or ministeriaP acts, some other 5. Matter of Fitch, 147 N. Y. 337; People ex rel. Press Pub. Co. v. Martin, 7a Hun, 369, SS N. Y. Supp. 775, 55 St. Kep. 453; People ex rel. v. Bd. of Health, 13 N. Y. Supp. 563, 35 St. Kep. 411. 6. People V. Bd. of Com'rs, 97 N. Y. 37; People ex rel. Copeutt v. Bd. of Health, 140 N. Y. 1; People ex rel. Trustees, etc. v. Bd. of Supervisors, 131 N. Y. 468 ; People ex rel. Second Ave. R. R. Co. V. Bd. of Park Com'rs, 97 N. Y. 37; People ex rel. Corwin v. Walter, 68 N. Y. 403; People ex rel. Schuyler- ville & U. H. E. R. Co. v. Betts, 55 N. Y. 600; People ex rel. Kennedy v. Brady, 166 N. Y. 44, 47; People ex rel. R. & J. Co. V. Wiggins, 109 N. Y. 382; Matter of Carp, 179 App. Div. 387, 166 N. Y. Supp. 243, aff'd, 231 N. Y. 643; Matter of Sherman, 76 Misc. 45, 133 N. Y. Supp. 931; People v. Waldo 212 N. Y. 156; People ex rel. Brooks v. Bush, 22 App. Div. 363, 48 N. Y. Supp. 13 ; People ex rel. Dumary v. Van Alstyne, 63 App. Div. 1, 65 K. Y. Supp. 451; People ex rel. McNulty v. Maxwell, 123 App. Div. 591, 108 N. Y. Supp. 49; Matter of Whitten, 152 App. Div. 506, 137 N. Y. Supp. 360; People ex rel. v. Gilroy, 72 Hun, 637, 25 N. Y. Supp. 878. Liquor Tax Law. — The acts of com- missions appointed under the Liquor Tax Law in selecting the places where liquor may be sold in a city where the number of places must be reduced un- der the law, are not judicial in char- acter and are not reviewable. Matter of Kershing, 101 Misc. 241, 166 N. Y. Supp. 900, aff'd, 179 App. Div. 969, 166 N. Y. Supp. 1100. 7. People ex rel. Smith v. Village of Haverstraw 23 App. Div. 231, 48 N. Y. Supp. 740; People ex rel. Allen v. Su- pervisors, 113 App. Div. 773, 99 N: Y. Supp. 348; People v. Supervisors, 25 Hun, 131. 8. People V. Trustees of Danville, 1 Hun, 593. 9. People ex rel. Van Sickel v. Austin, 20 App. Div. 1, 46 N. Y. Supp. 526 ; People ex rel. Smith v. Village of Haverstraw, 23 App. Div. 231, 48 N. Y. Supp. 740. Power of removal. — ^When by statute or by implication of law the power of removal can only be exercised for cause or after a hearing, the proceeding, al- though an exercise of an administra- tive power, is judicial in its nature, and, as a necessary consequence, it is subject to review by certiorari. People V. Waldo, 212 N. Y. 156. See also, People ex rel. Menzie v. Davis, 189 App. Div. 391, 178 N. Y. Supp. 436. 10. People V. Waller, 68 N. Y. 403; People V. Mayor, 5 Barb. 43; People v. Hill, 65 Barb. 170; People v. Vanslyek, 4 Cow. 297; Pugsley v. Anderson, 3 Wend. 468; People v. Mayor, 2 Hill, 9; Matter of Mt. Morris Sq., 2 Hill, 14; People v. Supervisors of Queens, 1 Hill, 195. Acts of justices of the peace while acting in the position of inspectors of an election are merely those of min- isterial of&cers, and if they permit un- authorized persons to keep the tally sheets and declare the result of the 186 CERTIORARI. remedy must be pursued. The fact that a public agent exer- cises judgment and discretion in the performance of his duties does not make his action judicial.^^ Where the law requires a public officer to do a specific act in a specified way, upon a conceded statement of facts, with- out regard to his own judgment as to the propriety of the act and with no power to exercise discretion, the duty is minister- ial in character.^^ 2. De facto officers. The title to office is not generally triable in a certiorari pro- ceeding.^^ Hence, the acts of persons assuming to act as pub- lic officers will not be reviewed on the ground that they are not such officers. If they are officers de facto, their acts are gen- erally valid, and if they are not such, their acts are void and require no review.^* Hence, if a private individual illegally assumes to act as justice of the peace, his judgment requires no reversal on certiorari, it being absolutely void and the act of a mere tres- passer.^^ The legality of a municipal board cannot be questioned on certiorari, since such remedy assumes its legal existence.^^ 3. Discretion of court. An order- of certiorari is not a matter of right, but it lies within the sound discretion of the court whether to grant or withhold it." It is especially provided by section 1290 that the granting or refusal of the order is discretionary with the court. And this is true though the petitioner has no other eanvasa, and to aid in the distribution Coyle v. Sherwood, 1 Hun, 273. of tickets, etc., the conduct of the jus- 14. People v. Covert, 1 Hill, 674. tices is not a judicial action and can- 15. People ex rel. v. Moore, 48 Hun, not be reviewed by a writ of certiorari. 619, 1 N. T. Supp. 405. People ex rel. Brooks v. Bush, 33 App. 16. People ex rel. v. Hayden, 7 Misc. Div. 363, 48 N. Y. Supp. 13. 292, 27 N. T. Supp. 893. 11. People ex rel. Tracey v. Wood- 17. People ex rel. Mayor v. Mc- ruff, 54 App. Div. 1, 6.6 N. T. Supp. Carthy, 102 N. T. 642; People ex rel. 309, 8 Anno. Cas. 134; aff'd, 166 N. Y. Smith v. Com'rs, 103 N. Y. 370; People 597; Matter of Sherman, 133 N. Y. ex rel. Toms v. Board of Supervisors, Supp. 931. 199 N. Y. 150; People ex rel. Importers 12. People ex rel. Apfel v. Casey, 66 and Traders Nat. Bank v. Purdy, 167 App. Div. 211, 72 N. Y. Supp. 945. App. Div. 50, 153 N. Y. Supp. 275. 13. People V. Walter, 68 N. Y. 403; CEETIOKAEI. 187 remedy .1^ Similarly, the act of the court in vacating the order is discretionary.^' But the discretion of the court is not arbitrary, and the order should be granted where there is a proper subject for revie-w.2" And while the discretion is not an arbitrary one and the order should be granted in a proper case, it can only be granted where the petitioner shows a proper case.^^ The court must be satisfied that the order is necessary to prevent injustice to the applicant, and that it would be beneficial to him and not detrimental to the public welfare.^^ But statutes in certain cases may imperatively require the granting of the order.^* 4. Absence of other remedies. Sections 1285 and 1286 contain limitations upon the grant- 1 ing of an order of certiorari which, as a practical proposition, forbid the remedy when the petitioner has any other remedy.^* An order of certiorari will not be granted, until the statu- 1 tory remedy has been exhausted.^^ Especially will the relief be denied when the petitioner is actually prosecuting an ap- peal from the determination.^^ The purpose of section 1286 is to deny the remedy where the action of the inferior body can be adequately reviewed by a court or some other body or officer, either by a technical ap- peal or by a proceeding which, for the purpose of securing 18. Pople V. McCarthy, lOS N. T. Supervisors of Queens, 1 Hill, 195; 630. People v. Covert, 1 Hill, 674; People v. 19. See, infra, Art. V. — G. Vacating Morgan, 65 Barb. 473; People v. Over- Order, seers of Berne, 44 Barb. 467; People v. 20. U. L. T. Co. V. Grant, 137 N. T. Bd. of Health, 33 Barb. 344. 12. New York City. — The revievr pra- 21. People ex rel. Brooklyn Heights vided by section 951 of the New York R. R. Co. V. Public Service Comm., 101 city charter is hot an appeal within the Misc. 10, 166 N. Y. Supp. 825. meaning of that word as used in sec- 22. People v. Mayor, 5 Barb. 43. tion 1286 of the Civil Practice Act. 23. Pople ex rel. Deutsch v. Dalton, People ex rel. Uvalde Asphalt P. Co. v. 9 Misc. 249, 30 N. Y. Supp. 407. Seaman, l^S App. Div. 870, 154 N. Y. 24. People v. Betts, 55 N. Y. 600; Supp. 539; aff'd, 217 N. Y. 70. People ex rel. Columbia Co. v. O'Brien, 25. People ex rel. Globe Construc- 101 App. Div. 296, 91 N. Y. Supp. 649; tion Co., Inc. v. Ormond, 181 App. Div. People ex rel. Dawkins v. Frost, 129 242, 168 N. Y. Supp. 255. App. Div. 498, 114 N. Y. Supp. 209 ; 2G. People ex rel. Benedict v. Denni- People ex rel. Hill v. Supervisors, 49 son, 28 Hun, 328. Hun, 476, 2 N. Y. Supp. 557; People v. 188 CEETIORAEI. the desired review, is equivalent to an appeal, and the term " appeal " is there used in its broad sense, signifying a re- moval of a cause from a court of inferior to one of superior jurisdiction.^^ Thus, certiorari will not lie to review the action of an asso- ciation in expelling a member, where there is a remedy by appeal.^^ And relief from the action of a person assuming to act as justice of the peace should be had on appeal from jus- tices' court under the Justice Court Act.^^ And the legality of the detention of a person in a criminal action cannot be raised by certiorari under this article,^" though there is a special form of certiorari to inquire into the cause of the detention of a person.^^ And section 1285 precludes the use of the remedy to review the determination in a civil action or special pro- ceeding by a court of record or a judge thereof.^^ A proceeding under the General Municipal Law by resident freeholders of a village, who claim that its officers are unlaw- fully expending moneys raised by taxation and ask an investi- gation, is a special proceeding, and the decision of the justice is not reviewable by certiorari.^^ 5. Final determinations only are reviewable. Under subdivision 1 of section 1286, a certiorari order can- not be granted to review a determination which does not finally determine the rights of the parties with respect to the matter to be reviewed.^* Thus, there can be no review by certiorari of an order made 27. People ex rel. Hanf ord v. Thayer, which treated the writ of certiorari as 88 Hun, 136, 34 N. Y. Supp. 592. analogous to a writ of error has no ap- 28. People ex rel. v. Medical Society plication to the present statutory pro- of Dutchess, 84 Hun, 448, 33 N. Y. ceding under which, by section 1285, Supp. 415. the order of certiorari cannot be 29. People v. Moore, 48 Hun, 619, 1 granted to review a determination in a N. Y. Supp. 405. civil action or special proceeding by a 30. People ex rel. Dawkins v. Frost, court of record, or a judge of a court 139 App Div. 498, 114 N. Y. Supp. of record. Beardsley v. Dolge, 143 N. 209 ; People ex rel. Plattner v. Warden, Y. 166. etc., 103 Misc. 330, 170 N. Y. Supp. 6 ; 33. People ex rel. Guibord v. Kel- People ex rel. v. Murray, 62 Hun, 30, logg, 33 App. Div. 176, 47 N. Y. Supp. 16 N. Y. Supp. 335. 1033. 31. See, chapter on Habeas Corpus 34. See also, Lynde v. Noble, 20 and Certiorari to Inquire into Cause Johns. 80 ; Derlin v. Piatt, 11 Abb. 398 ; of Detention. Matter of Hamilton, 58 How. 290. 32. The rule of the common law CEETIORAKI. 189 under the provisions of the Agricultural Law, section 139c, by a justice directing a person to kill a dog found to be vicious f^ or the determination of the Commissioner of Labor that a mimicipal contractor is violating the section of the Labor Law, prescribing the wages payable to laborers on municipal contracts for eight hours ' work f^ or an adjudication of con- tempt though the warrant of commitment has not been issued, as the order for the warrant is regarded as the final adjudi- cation.^ A determination by the railroad commissioners that a cer- tificate of public convenience and necessity shall issue was held to be a final determination of the rights of the owners of land through which the railroad will pass, if constructed, as to the question of public convenience and necessity.^' Where the charter of a village provided for a suit against the village on a claim, it was held, that the determination by the board of trustees refusing to audit and allow a bill for ser- vices rendered in executing commitments of the police justice, in the manner prescribed by the charter, was not a final deter- mination which could be reviewed by certiorari.^^ C. State officers. The acts of State officers are, as a general rule, subject to review by certiorari under the same general principles as ap- ply to other public officers. Thus, the decisions of the Comp- troller relative to the sale of lands for taxes may be reversed through an order of certiorari.^" But a settlement of an ac- count for taxes against a corporation by the Comptroller, under Laws of 1889, chapter 463, -v^^ill not be reviewed, as his decision may be revised and readjusted by him.^^ A writ of certiorari may be issued to review the action of the Secretary of State in refusing to file and record a certifi- cate of incorporation on the ground that the name of the pro- posed corporation is the same as that of an existing domestic 35. People ex rel. Eenshaw v. Qillea- 39. People ex rel. Qorr v. Schoon- pie, 25 App. Div. 93, 48 N. Y. Supp. over, 43 App. Div. 539, 60 N. Y. Supp. 882. 127. 36. Matter of Keystone State Const. 40. Clark v. Davenport, 95 N. Y. Co. V. Williams, 152 App. Div. 575, 137 4T8; People ex rel. Forest Com'rs v. N. Y. Supp. 405, afl'd, 207 N. Y. 767. Campbell, 156 N. Y. 64; People v. 37. People v. Donohue, 22 Hun, 470. Chapin, 39 Hun, 230. 38. People ex rel. Steward v. R. R. 41. People ex rel. v. Wemple, 57 Com'rs, 160 N. Y. 202. Hun, 594, 11 N. Y. Supp. 246. 190 CERTIOKAKI. corporation or so nearly resembles such names as to be calcu- lated to deceive.^ An order of the Public Service Commission overruling a demurrer to a complaint having as its object the reduction in the price of natural gas, is in no sense a " determination " within the meaning of section 1285, and does not constitute an order in the sense that it may be reviewed by certiorari.^^ The action of the port wardens of the port of New York in adopting rules under section 2126 of the Consolidation Act cannot be reviewed by certiorari, since the making of rules, orders, and regulations was confided to their discretion and not in any sense judicial, but was an ordinary administrative or executive act. But, if the board in attempting to enforce a rule which it had made, but which was in excess of the authority conferred upon it by the Legislature, fined or con- victed a pilot, its action could be reviewed by certiorari.** Commissioners of the Land OfBce may exercise their dis- cretion in making a grant, but their decision as to who is the owner of adjacent uplands is a judicial one and reviewable upon certiorari where such determination involves the ques- tion of the relator's title.*^ A determination of the Commissioners of the Land Office conveying under chapter 22 of the Laws of 1916 the interest of the State in lands under navigable waters to a village as a public park, with permission to the village to sell a certain parcel of the land to another in which owners of the upland claim that the conveyance can only be made to them, is sub- ject to review by certiorari upon petition by said owners. The Commissioners having heard and decided the claims of said owners in one preceding and having treated all parties as hav- ing a common interest, are in no position to object to a review of their determination under one petition for certiorari joined in by all the interested parties.*® Certiorari will not lie to determine the right of the State Commissioner of Excise to take an enumeration of the inhabit- ants of a city, pursuant to the Liquor Tax Law, and to in- 42. People ex rel. Columbia Co. v. 124 App. Div. 153, 108 N. Y. Supp. O'Brien, 101 App. Div. 296, 91 N. Y. 726. Supp. 649. 45. People ex rel. Burnham v. Jones, 43. People ex rel Pennsylvania Gas. 112 N. Y. 609. Co. V. Public Service Comm., 181 App. 46. People ex rel. Moenig v. Com'rs Div. 147, 168 N. Y. Supp. 59. of Land Office, 186 App. Div. 139, 173 44. People ex rel. Stillwell v. Gunner, N. Y. Supp. 649. CERTIORAKI. 191 crease the cost of liquor tax certificates in such city, when, since the issue of said writ, a State census of the inhabitants of said city has been taken and the relator paid the increased sum without a demand that the certificate issue at the former cost, but with a mere protest at said increased eost5 D. Supervisors and boards of audit. An order of certiorari may be granted to review the acts of boards of supervisors or other auditing boards, so long as the determinations of which coinplaint is made are judicial in their nature.^^ The most frequent use of the remedy is to correct errors in auditing of claims.^^ Where an auditing board passes on a claim and disallows it, either in whole or part, the sole remedy of the claimant is to review the deter- mination, if erroneous, by certiorari; an action against the board will not lie.^° 47. People ex rel. Flinn v. Callinan, 111 App. Div. 33, 97 N. Y. Supp. 194. 48. People v. Supervisors of West- chester, 57 Barb. 377. Costs on equalization appeal. — The remedy has been granted to review the action of a board of supervisors in fixing the amount of costs on an equali- zation appeal. People ex rel. Burhans V. Supervisors of Ulster, 33 Hun, &07. 49. People v. Supervisors of Madi- son, 51 N. Y. 442; People ex rel. Mar- tin, Bing & Co. V. County of West- chester, 57 App. Div. 135, 67 Supp. 981; People ex rel. Andrus v. Board of Su- pervisors of Saratoga County, 106 App. Div, 381, 94 N. Y. Supp. 1013; People ex rel. Leitner v. Sipple, 109 App. Div. 788, 96 N. Y. Supp. 897; Matter of Equitable Trust Co. v. Hamilton, 177 App. Div. 390, ,164 N. Y. Supp. 58; People ex rel. O'Mara v. Supervisors of Cayuga County, 16 N. Y. Supp. 256, 40 St. Eep. 239. Determination not final — While under subdivision 1 of section 1286 certiorari cannot issue where the de- termination of the inferior body is not final, it has been held that where a board, of auditors reject a claim for insuf- ficiency of proof as to its nature and extent, but allow a smaller amount, such partial rejection is a final deter- mination on the merits which may be reviewed by certiorari. When, however, in the case above stated the claimant failed to attend and itemize his claim before the board at an adjourned day, of which he had notice, such claimant is not entitled upon certiorari to an order awarding him the total amount of the claim. People ex rel. v. Bd. of Auditors of Hannibal, 65 Hun, 414, 20 N. Y. Supp. 165. Reconsideiation. — A board of town audit which has acted upon a claim may reconsider its action and audit the claim, although in the meantime certi- orari has issued to review the prior audit, and the subsequent action is not brought up for review. Matter of Weeks, 106 App. Div. 45, 94 N. Y. Supp. 468. 50. New York Catholic Protectory v. Rockland County, 212 N. Y. 311; People ex rel. Anderson v. Snedecker, 75 Misc. 194, 13'2. N, Y. Supp, 765; Murphy v. Benton, 86 Miac, 72, 148 N. Y, Supp. 273. 192 CERTIORABI. Where a bill against a county for services is not based on any agreement, express or implied, but the measure of com- pensation is the reasonable value of the services, the board of supervisors has a right to exercise its judgment and dis- cretion, and its determination will not be reviewed on cer- tiorari unless it appears to have been clearly erroneous and against the weight of the testimony upon which they acted.^^ An audit of a bill will not be set aside on certiorari because of a mistake in disallowing an item which is small in amount as compared with the total amount of the claim, especially where items largely in excess of such item have been im- properly allowed.^^ But the remedy is available to review other acts of a board of supervisors, such as the correction of items illegally included in a tax levy and warrant.^^ When, however, the action of a board of supervisors is legislative or ministerial in its character, it cannot be re- viewed on certiorari.^* In passing resolutions to raise moneys supervisors do not act judicially, and certiorari does not lie.^^ And the selection of a newspaper to publish the session laws in an administrative act which is not reviewable by cer- tiorari.^^ And the act of a board of supervisors in appoint- ing a commissioner of elections designated by county chair- man is not judicial, and therefore is not subject to review by certiorari.^'' The acts of supervisors in distinguishing between town and county poor, pursuant to the Poor Law, and in assessing a 51. Matter of Lanehart, 33 App. Div. thority or contrary to law the relator 2, 53 N. Y. Supp. 671. has a legal remedy under section 16 of 52. People ex rel. Caldwell v. Super- the County Law. People ex rel. Toms, visors of Saratoga Co., 45 App. Div. v. Bd. of Supervisors, 199 N. Y. 150. 43, 60 N. Y. Supp. 1133. 54. People v. Supervisors, 35 Hun, 53. People V. Supervisors of West- 131. Chester, 57 Barb. 377. 55. People v. Supervisors, 43 Barb. Levy of tax. — ^While the Supreme 333 Court has the power to review by cer- 56. People ex rel. K. & J. Co. v. tiorari, it will not, in the exercise of Wiggins, 199 N. Y. 382; People ex rel. its discretion, review the action of a Guernsey v. Somers, 153 App. Div. 633, board of supervisors in levying the 138 N. Y. Supp. 1136; aff'd, 208 N. Y. general tax for town and county pur- 621. Compare, People ex rel. Hall v. poses where the alleged defects are in Ford, 127 App, Div, 444, 113 N. Y. the auditing of town and county Supp. 130. charges and including them in the tax- 57. Matter of Carp, 179 App. Div. roll. Such action is quasi- judicial. If 387, 166 N. Y. Supp. 343; aff'd, 321 such an assessment is made without au- N. Y. 643. CEETIORAEI. 193 town for the support of its poor, are legislative and not judi- cial, and cannot be reviewed by certiorari.^^ The equalization by the board of supervisors of assessors' valuation among several towns cannot be reviewed by certiorari, because the remedy is by an appeal to the State Tax Commissioners.^* The action of supervisors in passing a resolution for the improvement of town roads cannot be reviewed on certiorari.^" The functions of a town board conducting a town election are not judicial, and certiorari will not lie to review their pro- ceedings.®^ £. Municipal officers or boards. Certiorari is frequently the proper remedy to review the proceedings of municipal bodies.^^ In order, however, to war- rant interference with a municipal corporation by certiorari, the act must be plainly judicial.®^ Members of the board of health of the city of New York are administrative, not judi- cial officers.** The determination of a board of health as to the existence 58. People ex rel. Allen v. Super- visors, 113 App. Div. 773, 99 N. Y. Supp. 348. 59. People ex rel. Hill v. Supervisors, 49 Hun, 476, 3 N. Y. Supp. 557. 60. People ex rel. Village of Jamaica V. Supervisors of Queens, 131 N. Y. 468. 61. People ex lel. Van Sickel v. Austin, 20 App. Div. 1, 46 N. Y. Supp. 536. 62. McCutcheon v. Terminal Station Commission, 88 Mise. 148, 150 N. Y. Supp. 850; People ex rel. Wohl v. Leo, 109 Misc. 448, 178 N. Y. Supp. 851; Matter of McLean, 6 N. Y. Supp. 231; People V. City of Eochester, 21 Barb. 656; Heywood v. City of Buffalo, 14 N. Y. '534; People v. City of TTtica, '65 Barb. 9; Bouton v. Brooklyn, 2 Wend. 395. Election of member. — In proceedings to review the action of the board of aldermen in determining the election of one of its members, in order to review its action in disposing of marked bal- 13 lots, the relator should apply for a writ requiring the board to specifically re- turn the number of uncontested bal- lots given for each party, the ballots in dispute and its action or determination on each of such disputed ballots and the grounds therefor. People ex rel. Krulish v. Fornes, 175 N. Y. 114. Liquor tax certificate. — ^The order of certiorari lies only to inferior courts and oflScers exercising judicial powers; it does not lie to review the acts of the special deputy commissioner of excise nor of the superintendent of buildings in the city of New York in revoking a liquor tax certificate for noncompliance with the local and State laws with re- spect to hotels, the proceedings not in- volving a judicial act. Matter of Leve- rant, 110 App. Div. 371, 97 N. Y. Supp. 272. 63. Matter of Mt. Morris Sq., 2 Hill, 14. 64. People ex rel. Lodes v. Depart- ment of Health, 189 N Y. 187. 194 CERTIORARI. of a nuisance is not generally reviewable by certiorari.^ But boards of health in towns have been subjected to certiorari proceedings.^^ Certiorari does not lie to review a corporate resolution appropriating money for a public square.^^ The refusal of the commissioner of public charities of the city of New York for the borough of Richmond to certify bills for the maintenance of children duly committed to the care of the Richmond County Society for the Prevention of Cruelty to Children by magistrates is an executive or an administra- tive act and cannot be reviewed by certiorari.®^ After a municipal license to conduct an employment agency would have expired by its own time limitation, certiorari will not lie to review a revocation of the license made during its term.*'" A superintendent of buildings in the city of New York, in conducting the hearing in a proceeding for the cancellation of a plumber's license under authority of the city charter, is acting in a judicial capacity, and therefore his action is sub- ject to review by certiorari.™ The order is not available to review the action of a city board in annulling a contract for a breach thereof by the con- tractor, and for employing laborers at less than the prevailing rate of wages, and requiring them to work more than eight hours a day, since the determination of the board is not of a judicial character.'^ The action of a board of trustees of a village in fixing, under chapter 430, Laws of 1895, a " fair 65. Copcutt V. Bd. of Health, 140 Fayette, 83 App. Div. 571, 82 N. Y. N. Y. 1. Supp. 31. 66. People ex rel. N. Y. C. & H. R. 67. Matter of Mt. Morris Sq., 2 Hill, E. E. Co. v. Bd. of Health of Seneca 14. Falls, 58 Hun, 595, 598, 12 N. Y. Supp. 68. People ex rel. Eiohmond Co. Soc. 5&2, 35 St. Eep. 413. See also. People for Prev. of Cruelty to Children v. ex rel. v. The Bd. of Health of Seneca Feeney, 43 App. Div. 376, 60 N. Y. Falls, 35 St. Eep. 411, 12 N. Y. Supp. Supp. 103. 562. 69. People ex rel. Pechtold v. Bo- Notice of proceedings. — ^An order of gart, 123 App. Div 872, 107 N "^. certiorari should not issue to review the Supp. 831. action of a town board of health impos- 70. People ex rel. Browdy v. McDer- ing a fine upon the relator in proceed- mott, 169 App. Div. 755, 155 N. Y. ings of which he had no notice and to Supp. 333. collect which fine an action is threat- 71. People ex rel. Dumary v. Van ened, since in such action he may liti- Alstyne, 53 App. Div. 1, 65 N. Y. Supp. gate the validity of the fine. People 451. ex rel. Greenleaf v. Bd. of Health of CERTIORARI. 195 reasonable compensation " for the services of a member of the village board of health, is administrative or legislative in its nature, and consequently cannot be reviewed by a writ of certiorariJ^ The granting or denying of a license to operate a moving picture show is not a judicial act which can be re- viewed by certiorariJ^ The unlawful acts of district water commissioner may be reviewed by certiorari J* A proceeding to remove the head of a department under the charter of the city of New York is judicial and, therefore, sub- ject to review by certiorari.'^ Where a statute requires, before removal of a city officer, written charges, a hearing thereof, sworn testimony reduced to writing and judgment as to the sufficiency of the testimony to warrant removal, proceedings thereunder are judicial in character.™ The official action of a commissioner of buildings in remov- ing an employee by filing a statement of his reasons in writ- ing which are sufficient upon their face and after the removed person had an opportunity for explanation, is not a judicial act in nature or character and is not reviewable on cer- tiorari." The action of the mayor of the city of New York in remov- ing the aqueduct commissioners, appointed and acting under the Laws of 1883, chapter 490, and the acts amendatory there- of, by a written notice without trial or hearing, is not review;- able by certiorari.''^ Under section 648 of the Greater New York charter, pro- viding that each commissioner of buildings shall have power to remove subordinate officers at pleasure, and that no pro- vision as to suspension or other punishment shall be construed to abridge the commissioner's right to dismiss any inspector appointed by him or any predecessor, a building inspector is within the exception to section 1536, providing that all clerical and other subordinate officers " not subject to removal with- 72. People ex rel. Smith v. Village of 76. People ex rel. Loevin v. Griffing, Haverstraw, 23 App. Div. 231, 48 N. T. 166 App. Div. 538, 152 N. Y. Supp. Supp. 740. 113. 73. Matter of Whitten, 152 App. 77. People ex rel Kennedy v. Brady, Div. 506, 137 N. Y. Supp. 360. 166 N. Y. 44. 74. People ex rel. Farley v. Winkler, 78. Matter of Eyan, 66 Misc. 481, a03 N. Y. 445. 122 N. Y. Supp. 94. 76. People V. Nichols, 79 N. Y. 582. 196 CEHTIOKARI. out cause " shall continue to hold their respective positions without prejudice; and such inspector can be removed with- out trial, so that a hearing granted him prior to removal is not a judicial proceeding, and a dismissal pursuant to such hearing cannot be reviewed by certiorari.™ Where a member of the street cleaning department of the city of New York was dismissed without having been given the notice of the proposed action required by section 537 of the charter, it was held that his reinedy was not by certiorari, as the commissioner never obtained jurisdiction to make the order, and there was nothing to review by certiorari.^" F. Police commissioner or board. A certiorari proceeding is frequently employed to review the acts of police commissioners or a police board in removing a member of the police force.*^ In general, it may be stated that an order of certiorari is the proper remedy to review the determination.^^ While a proceeding to remove a police officer is not subject to the strict rules held in civil and criminal actions, it is never- theless a trial, and the determination of the commissioner on such trial is in the nature of a judicial or semi- judicial func- tion; and is properly reviewed by certiorari.^ It is proper, however, for the Legislature to provide that the decision of the commissioners, shall be final and not subject to review by the courts.*** And if the statute permits the termination of the 79. People ex rel. Scheel v. Guil- People ex rel. Buckley v. Roosevelt, 19 foyle, 65 App. Div. 498, 73 N. Y. Supp. App. Div. 431, 46 N. Y. Supp. 517, it 891. ^ was held that a writ of certiorari would 80. People ex rel. Lahey v. 'VVood- not lie to review the action of the po- bury, 113 App. Div. 79, 98 N. Y, Supp. lice commissioners of the city of New 143. York acting under the Civil Service 81. People ex rel. Dougan v. Greene, Law as examiners of an applicant for 97 App. Div. 404, 89 N. Y. Supp. 1067. promotion in the police force of the Resignation. — ^Where police commis- city, sioners accept the voluntary resignation 82. People ex rel. Mitchell v. La of a police ofiScer and proceedings have Grange, 3 App. Div. 444 37 N. Y. not been instituted by them for his re- Supp. 991 ; People ex rel. Streubel v. moval, their action cannot be inquired York, 45 App. Div. 503 61 N. Y. Supp. into on certiorari. People ex rel. 400; People ex rel. Hoffmann v. Part- Goodwin V. Martin, 10 N. Y. Supp. ridge, 93 App. Div. 473, 87 N. Y. Supp. 512, 33 St. Eep. 543. See s. c. on sec- 680. ond appeal, 66 Hun, 88, 49 St. Eep. 83. People v. Waldo, 313 N. Y. 156. 736, 63 St. Eep. 295. 34. People ex rel. Miller v. Peck, 73 Application for promotion. — In App. Div. 89, 76 N. Y. Supp. 328. CERTIOEABI. 197 employment of a police ofi&eer without a judicial hearing, there can be no remedy by certiorari.**^ Or, if the statute provides for a trial, but none has been had, the remedy for reinstate- ment is by mandamus.^ The act of the police commissioner of the city of New York in terminating the employment of a jjatrolman at the end of his probationary period, upon the ground that his conduct had been unsatisfactory, while it in- volves the exercise of judgment and discretion, is not in itself such a judicial act that it can be reviewed by certiorari.^'^ Certiorari will not lie to review the refusal of a theatrical license by a police commissioner, his act being discretionary and in no sense judicial.*** Certiorari does not lie to review a determination of the police commissioner of the city of New York revoking the license of engineers employed in that department after a trial of charges against them pursuant to section 343 of the charter, as it was an administrative, not a judicial, act.^' An order of certiorari may be granted to review the action of police commissioners in designating newspapers to publish a list of candidates for election."" G. Fire department. The removal of a member of the city fire department, under a provision in the charter which provides for suspension by a commissioner until the board " shall convene and take ac- tion in the matter ; provided, however, that such member shall not remain so suspended for a longer period than thirty days without an opportunity of being heard in his defense; and upon hearing the proofs in the case a majority of such com- missioners may discharge or restore," is subject to review by certiorari, the proceeding being a judicial one in its nature.^^ But the removal of the engineer of the fire department of 85. People ex rel. Graveline v. Ham, 89. People ex rel. Keating v. Bing- 59 App. Div. 314, 69 N. Y. Supp. 283. ham, 138 App. Div. 736, 122 N. Y. 86. Matter of Elder v. Bingham, 118 Supp. 708; dism'd, 200 N. Y. 511. App. Div. 25, 103 N. Y. Supp. 617; 90. People ex rel. Press Pub. Co. v. aff'd, 189 N. Y. 509. Martin, 72 Hun, 369, 55 St. Eep. 453, 87. People ex rel. Katz v. Woods, 171 25 N. Y. Supp. 775. App. Div. 516, 157 N. Y. Supp. 786. 91. People ex rel. Ellett v. Flood, 64 88. Armstrong v. Murphy, 65 App. App. Div. 209, 71 N. Y. Supp. 1067. Div. 126, 72 N. Y. Supp. 475; People 92. People ex rel. Payntar v. Glea- ex rel. Bojfiglio v. Baker, 67 Mise. 539, son, 63 App. Div. 435, 71 N. Y. Supp. 124 N. Y. Supp. 751. 700. 198 CEKTIOKAEI. Long Island City by the fire commissioners thereof, has been held not reviewable by certiorari.'-*^ The determination of the fire commissioner in removing an employee, when within his statutory powers, is not reviewable on certiorari."^ H. Civil service boards. The determination of a municipal civil service commission in classifying positions in the public service, although involv- ing the exercise of Judgment and discretion, is more of a legis- lative or executive character than judicial or quasi-judicial, and is, therefore, not reviewable by certiorari.*** The court will not conduct or supervise civil service exam- inations nor review them by certiorari, the official acts of the commissioners not being judicial in a technical sense but ex- ecutive, ministerial and administrative.'^ Under section 21 of the Civil Service Law giving prefer- ences to honorably discharged soldiers, etc., mandamus is the remedy pointed out for noncompliance with its provisions, and certiorari is the remedy where an appointee is entitled to a trial before removal."^ I. Military boards. Certiorari will not lie to review the action of the Governor, as commander-in-chief, in disbanding a company of militia under the Military Code."' Unless military tribunals are excepted from the general rule, their judicial determinations are subject to review by means of this ancient and important form of remedy ; they are not expressly excepted either by the Military Code or the Code of Civil Procedure. 98 93. People ex rel. Lee v. Adamson, 86. People ei rel. Donnelly v. Har- 171 App. Div. 655, 157 N. Y. Supp. vey, 127 App. Div. 211, 111 N. Y. Supp. 463. 167; People ex rel. Long v. Whitney, 94. People ex rel. Schau v. McWil- 143 App. Div. 17, 137 N. Y. Supp. 554. liams, 185 N. Y. 93; overruling, People See also, People ex rel. Eyan v. Wells, ex rel Sims v. Collier, 175 N. Y. 196. 176 N. Y. 462; People ex rel. O'Keefe And see People ex rel. Mack v. Burt, v. Hynes, 101 App. Div. 454, 91 N. Y. 65 App. Div. 157, 72 Supp. 567; aff'd Supp. 1032. without opinion, 170 N. Y. 620; Bald- 97. People ex rel. v. Hill, 59 Hun, win V. Eice, 100 App. Div. 241, 89 624, 13 N. Y. Supp. 186, 637; aff'd, Supp. 738; aff'd, 183 N. Y. 55. 126 N. Y. 497. 95. People ex rel. Caridi v. Creel- 98. People ex rel. Smith v. Hoffman, man, 150 App. Div. 746, 135 N. T. 166 N. Y. 462. Supp. 718. CERTIORAKI. 199 The remedy lies to review the proceedings of a court- martial convicting the petitioner.^^ But the decision of a court- martial cannot be reviewed on certiorari if the court had jurisdiction of the subject-matter and of the person of the accused, and if there was any evidence in support . of the charges and specifications.^ The board of examination appointed to determine the gen- eral fitness of a person for service as a commissioned officer in the National Guard of the State, acts judicially in the mat- ter, subjecting its action to review in the civil courts by cer- tiorari ; but the order appointing the board is not reviewable.^ The members of a military board of examination and the Adjutant-General as the custodian of its record and report are the proper parties to whom the order of certiorari should be directed ; but the Governor, whose action upon its findings is executive, is not a proper party .^ J. School matters. The decisions of the Commissioner of Education, which under the provisions of the Education Law are made final and exempt from review by the courts, are those upon appeals to him from the decisions of local officers in the administration of the laws relating to the common schools. The provision of the statute exempting his decisions made upon such appeals from review by the courts has no application to an order made by him in the first instance removing school officers from office.* The removal of a teacher by local boards is generally subject to appeal to the Commissioner of Education, and hence is not reviewable by certiorari.^ A school board may have power to remove a janitor on the complaint of one of its members without a hearing, and the fact that he is given a hearing, or that one of the by-laws of the school board provides for complaint to, and hearing by, 99. People v. Townsend, 10 Abb. N. 4. People ex rel. Light v. Skinner, C. 69; Matter of Brackett, 27 Hun, 159 N. Y. 162; Matter of Light, 30 605. App. Div. 50, 51 N. Y. Supp. 743, 85 1. People ex rel. v. Band, 41 Hun, St. Eep. 743. 529 5 St. Eep. 31. 5- People ex rel. Walrath v. O'Brien, 2. People ex rel. Smith v. Phisterer, 112 App. Div. 97, 97 N. Y. Supp. 1115. 66 App. Div. 52, 73 N. Y. Supp. 124. See also. People ex rel. Everitt v. Hub- 3. People ex rel. Smith v. Hoffman, bell, 38 App. Div. 194, 56 N. Y. Supp. 166 N. Y. 463. 642. 200 CERTIORAKI. a committee of its own body, does not make the action of the board judicial, and it is not subject to review by certiorari.'^ Where the mayor of a city removes a school commissioner by an order reciting that the act is for the good of the schools, without any hearing or any proceedings taken, the removal does not include a judicial determination, and the right of the mayor to remove such officer cannot be reviewed by cer- tiorari.'' The action of the board of education of the city of New York, refusing the application of a teacher in one of the pub- lic schools of the borough of Brooklyn for a license to enable her to teach in a higher grade than she was employed in, not being a judicial act, is not reviewable by certiorari.^ E. Highway matters. The decision of a County Court confirming the report of commissioners appointed to lay out a highway cannot be re- viewed by certiorari, because the petitioner has his remedy by appeal.** So, too, certiorari will not lie to review the order of a County Court appointing commissioners to certify to the necessity of altering a highway." Likewise, the acts of the commissioners in laying out or altering a highway are subject to the action of the County Court, and hence are not subject to an order of certiorari.^ The action of a town superintendent of highways in filing a certificate of qualified abandonment of a town highway does not finally determine the rights of the parties and is not, therefore, reviewable by certiorari.^ The action of the Com- missioner of Highways of the State in canceling a contract for the construction of a State highway is wholly administra- 6. People ex lel. Purcell v. Simon- Supp. 29. son, fi6 App. Div. 18, 7S N. Y. Supp. 10. People ex rel. Hanford v. 957. Thayer, 88 Hun, 136, 34 N. Y. Supp. 7. People ex rel. Howe v. Conway, 592, 68 St. Eep. 280. 59 App. Div. 829, 69 N. Y. Supp. 837. 11. People ex rel. Hanford v. Thayer, 8. Walker v. Maxwell, 68 App. Div. 88 Hun, 136, 34 N. Y. Supp. 592; 196, 74 N. Y. Supp. 94. People ex rel. v. Hosier, 56 Hun, 54, 8 9. People ex rel. R. E. Co. v. County N. Y. Supp. 621. See also, People ex Court, 152 N. Y. 214; Matter of Tay- rel. v. Stedman, 57 Hun, 280, 10 N. Y. lor, 8 App. Div. 395, 40 N. Y. Supp. Supp. 787. (899; Compare, People ex rel. Titts- 12. Matter of Marvin, 91 Misc. 287, worth V. Nash, 38 St. Kep. 730, 15 N. Y. 155 N. Y. Supp. 28. CERTIOKARI. 201 tive and not subject to review by certiorari.^^ The remedy of certiorari does not lie to review the action of the Highway Department in sustaining a protest to the acceptance of a highway built by the relator as contractor." Certiorari is not the proper remedy to review the action of the State Commissioner of Highways in locating the route for an improved State highway.^^ Certiorari lies to commis- sioners of appraisal to review their proceedings in making an award of damages in street opening case.^^ When the New York city charter did not provide that the review by the board of revision of assessments should be final, it was held that certiorari would issue to review the deter- mination of the board of assessors and of the board of re- vision of assessments as to the damages caused by a change of street grades." But since the charter has been amended to expressly provide that a party interested in an award made for. damages caused by a change of street grade may appeal to the board of revision of assessments and that the deter- mination of such board shall be final and conclusive, it is held that an award made to an abutting owner by the board of assessors cannot be reviewed by certiorari.^* L. Assessment for local improvements. Certiorari lies to review a municipal assessment for a local improvement where there has been an essential departure from the statute in principle of assessment." Certiorari is an appropriate remedy to review proceedings for the opening and grading of streets.^" It has been granted to review an assessment for opening a sewer; for paving streets; for grading avenues; and for the construction of a bridge.^'^ 13. Matter of Standard Bitulithie Const Co., Inc., v. Ormond, 181 App. Co., 212 N. Y. 179. Div. 242, 168 N. Y. Supp. 255. 14. People ex rel. Cooper v. Duffey, 19. Leroy v. Mayor of New York, 20 169 App. Div. 901, 153 N. Y. Supp. Johns. 430; Starr v. Trustees of 713. Eochester, 6 Wend. 564; People v. City 15. Matter of Sherman, 76 Mise. 45, of Rochester, 21 Barb. 656. See also, 133 N. Y. Supp. 93. Ex parte Mayor of Albany, S3 Wend. 16. Matter of Fitch, 147 N. Y. 337. 277. 17. People ex rel. Uvalde A. P. Co. 20. People ex rel. Ackerly v. City of V. Seaman, 217 K. Y. 70. Brooklyn, 8 Hun, 56. 18. People ex rel. Crane v. Hahlo, 21. People v. Mayor of Brooklyn, 9 228 N. Y. 309; People ex rel. Globe Barb. 535; People v. City of Brooklyn, 202 CEETIOKAKI. Upon a common-law certiorari to review an assessment for a public improvement, if it appears from the record that, as a matter of fact, the assessment of the relator's prop- erty is unequal as compared with the assessment of other property similarly situated, and is unjust, the court is at liberty to correct such assessment even though the rule or gen- eral principle upon which the assessment was made is not an illegal or erroneous one.^^ To vacate an assessment on the ground that the assessors erred in their determination as to what property was benefited, the remedy is by certiorari, not by suit in equity, but otherwise if the assessors proceed on a wrong rule of law.^^ The determination of the assessors as to who are benefited by an improvement, and the extent of such benefit, if they are made exclusive judges of such questions by city charter, cannot be reviewed upon certiorari except for errors of law.''* A failure of assessors, in assessing damages for the change in grade of a street for the construction of 'bridge approaches under chapter 716 of the Laws of 1896, to hold that there had been a former recovery by the claimant of the same damages, is, if erroneous, an error of law which may be reviewed by certiorari.^^ The order will not be granted if the petitioner has any other adequate remedy.'"' The court will not, on certiorari, vacate proceedings for a local improvement for an irregularity which does not go to the entire assessment, where there is a sufficient remedy otherwise for the irregTilarity.^^ Where the action of a board of assessors in rejecting a 49 Barb. 136; People v. City of Roch- street is reviewable by certiorari, and ester, 21 Barb. 656; Bouton v. Presi- an action to remove a cloud upon the dent, etc., 2 Wend. 395 ; Leroy v. title does not lie. N. Y. C. & H. E. B. Mayor, 20 Johns. 430 ; Ex parte Mayor E. Go. v. City of Buffalo, 67 Mise. of Albany, 23 Wend. 277; People v. 642, 122 N. Y. Supp. 1058. City of Utica, 65 Barb. 9. 24. People ex rel.' Davidson v. Gilon, 22. People ex rel. Connelly v. Eeis, 126 N. Y. 157; People ex rel. James v. 109 App. Div. 748, 96 N. Y. Supp. Gilon, 126 N. Y. 640, 37 St. Eep. 23. 597. 25. People ex rel. City of New York 23. Kennedy v. City of Troy, 77 N. v. Lawrence, 48 Misc. 52, 94 N. Y. Y. 493. Supp. 920. Under the charter of the city of 26. Matter of Eighteenth St., 17 Buffalo the determination by the board Abb. Pr. 324. of assessors of the question whether 27. People v. City of Brooklyn, 14 property of a railroad company is bene- Abb. N. S. 115. fitted by the grading of a contiguous CERTIORARI. 203 claim has been confirmed by the board of revision of assess- ments, such confirmation is final in the absence of any fraud or violation of law aifecting the result; and an order of cer- tiorari will not be issued to review the determination made by the board of assessors and by the board of revision of assess- ments where the claimant's sole contention is that upon the evidence the deterjnination was erroneous.^^ The proceedings of a public improvement commission in awarding a contract for curbing and paving are ueither judi- cial nor quasi-judicial and hence not subject to review by cer- tiorari before the assessment of a tax.^^ ARTICLE III. WHAT COURT MAY GRANT ORDER, AND WITHIN WHAT TIME. A. Civil Practice Act, § 1287 Court by which order granted. A certiorari order can be granted only out of the supreme court, except in a case where another court is expressly authorized by statute to grant it. B. Civil Practice Act, § 1288. Limitation of time for order. Subject to the provisions of the next section, a certiorari order to review a determination must be granted and served within four calendar months after the determination to be reviewed becomes final and binding, upon the petitioner or the person whom he represents, either in law or in fact. C. Civil Practice Act, § 1289. Grant of order after removal of disability. The appellate division of the supreme court may grant the order at any time within twenty months after the expiration of the time limited in the last section, where the petitioner, or the person whom he represents, was at the time when the determination to be reviewed became final and binding upon him, either 1. Within the age of twenty -one years; or 3. Insane; or 3. Imprisoned on a criminal charge, or in execution upon conviction of a criminal offence, for a term less than for life. D. The time limitation. Before the enactment of sections 2125 and 2126 of the Code of Civil Procedure, now sections 1288 and 1289 of the Civil 28. People ex rel. Eothschild v. Muh, 29. People ex rel. North v. Feather- 101 App. Div. 423, 92 N. Y. Supp. W; stonaugh, 172 N. Y. 112. aff'd, 133 N. Y. 540. 204 CERTIORAEI. Practice Act, there was no statute or rule of law prescribing any fixed period within which certiorari must be applied for, and the granting of the same was always a matter of dis- cretion.^" Under the present law, except in certain cases of disability, the order must be granted and served within four months after the determination in question becomes final and binding.^^ The four months' limitation applies to a certiorari brought on the ground of a lack of jurisdiction as well as if brought on any other ground.^^ The expiration of the four months' limitation opposes an insuperable bar to the issuance of the order.^ But, on the other hand, the order can be granted within the four months' period, although the board making the determination has lost its jurisdiction over the proceedings.^* The provision of section 30 of the Civil Prac- 30. People ex rel. Smith v. Cooper, 22 Hun, 515. 31. Chittenden v. Wurster, 152 N. Y. 345; People ex rel. Traphaghen v. King, 13 App. Div. 400, 42 N. Y. Supp. 961; People ex rel. Bronx Gas. Co. V. Barker, 22 App. Div. 161, 47 N. Y. Supp. 1C20; appeal dism'd, 155 N. Y. 308 ; City of Buffalo v. Gas Co., 82 Misc. 304, 143 N. Y. Supp. 716 ; People ex rel. Perry v. Stark, 52 Hun, 611, 4 N. Y. Supp. 820. Injunction. — The collection of an assessment will not Be restrained by an injunction where the plaintiff has lost the remedy by certiorari to review the same, owing to the running of the limitation of section 1288. Postal Tel. Cable Co. v. Grant, 11 N. Y. Supp. 323. Police officer. — Under the New York city charter of 1897, which limits to two years the time within which a dis- missed member of the police force may institute a proceeding for reinstate- ment, only one who was a member of the police force at the time the charter took effect, or thereafter, is entitled to the benefit of the two years' limita- tion ; a member of the police force of a village incorporated in the city, who was dismissed in the month preceding, is limited to four months thereafter. People ex rel. Tucker v. York, 47 App. Div. 552, 62 N. Y. Supp. 662. The provision of chapter 457 of the laws of 1881, which required that a writ of certiorari to review the determination of police commissioners removing a member of the police force must be granted and served within thirty days after the relator was notified of his removal, is not enlarged by the four months' limitation, given by section 2125, Code of Civil Procedure (now section 1288 of Civil Practice Act.) These statutory provisions are not in- consistent though they describe differ- ent limitations; and the special limi- tation of the Laws of 1881 is of para- mount authority in any case arising thereunder. People ex rel. Dunnigan v. Com'rs of Police, 47 Hun, 408; aff'd without opinion, 110 N. Y. 681. 32. People ex rel. Springsted v. Trustees of Cobleskill, 49 St. Rep. 48, 20 N. Y. Supp. 920. 33. Jordan v. Bd. of Education, 14 Misc. 119, 69 St. Rep. 623, 25 Civ. Pro. 89, 35 N. Y. Supp. 247. 34. People ex rel. Village of Brock- port V. Sutphin, 166 N. Y. 163 ; People ex rel. Sehau v. Whittet, 100 App. Div. 176, 91 N. Y. Supp. 675; rev'd on other CERTIOEABI. 205 tice Act which provides that the Statute of Limitations can only be taken advantage of by answer, does not apply to the limitation to certiorari, and, therefore, it is not necessary to take advantage of such section by setting it up in the return.^^ Where a relator in certiorari proceedings is out on bail and had full liberty pending an indictment, he is subject to the four months ' limitation of section 1288, and cannot avail him- self of the enlargement of time given by subdivision 3, section 1289.^'' It is to be noted that the determination must become binding before the time limitation begins to run.^'^ The board must generally issue its formal decision before the limitation will commence to run.^^ If notice of the determination is re- quired before it becomes binding, the four months' period does not begin to run until such notice is given.^** Under some statutes the determination will not be binding until it is tiled in the proper office.^" The fact that an appeal has been brought to review such determination does not suspend during its pendency the running of the statute.''^ E. Court to which application is presented. The Civil Practice Act continues the practice of permitting t an application for certiorari to be made either to the Appel- grounds, 1»5 N. Y. 92; Martin v. Sy- Y., 16 St. Kep. 946, 3 N. Y. Supp. 141. monds, 4 Mise. 6, 23 N. Y. Supp. 689; 37. People ex rel. Tabor v. Adams, Compare, People ex rel. Jonas v. Town 45 St. Kep. 270, 18 N. Y. Supp. 441. Auditors of Hempstead, 49 App. Div. 38. People ex rel. N. Y. C, etc., E. 4 63 N. Y. Supp. 114 ; People V. Super- E. Co. v. Public Service Com'rs, 195 visors of Eensselaer, 34 Hun, 266. N. Y. 157. 35. People ex rel. McNeary v. Mac- 39. People ex rel.- Lahey v. Wood- Lean, 64 Hun, 206, 19 N. Y. Supp. 56, bury, 103 App. Div. 333, 92 N. Y. Supp. 46 St. Eep. 99; People ex rel. Conner 444; People ex rel. Swartwout v. Vil- V. Purroy, 19 Supp. 907, 22 Civ. Proc. lage of Port Jervis, 23 Misc. 317, 52 N. 116. Y. Supp. 59, 86 St. Eep. 59. Objection on appeal. — Where notice 40. People ex rel. Dinsmore v. Vande- of motion for an order of certiorari is water, 83 App. Div. -60,* 82 N. Y. Supp. served within the four months after the 636 ; People v. Dowling, 84 Mise. 201, determination sought to be reviewed, 146 N. Y. Supp. 919; afE'd, 184 App. though the application is not heard un- Div. 911, 148 N. Y. Supp. 1137. til after the four months had elapsed, 41. People ex rel. Cook v. Hildreth, if the objection of the Statute of Limi- 126 N. Y. 361. tations is not taken at the hearing it Effect of reversal of judgment. — will not be available upon appeal. Where the action of a town board upon People ex rel. O'Shea v. Lantry, 44 a claim was sought to be reviewed by App. Div. 392, 60 N. Y. Supp. 1009. mandamus, and the determination made 36. Matter of Squire v. City of N. that the writ issue was reversed upon 206 CERTIOEAEI. late Division or to the Special Term.*^ The fact that the ap- plication for the writ may be made either at Special Term or in the Appellate Division does not effect the right of the lat- ter court to review a Special Term decision, though the ap- plication was first made to the Special Term.^^ In the first judicial district an order of certiorari may be granted by a justice of the Supreme Court at chambers, but it should be entered in the minutes of the clerk, though a failure to make the entry would not invalidate the writ.*^ ARTICLE IV. PETITION AND NOTICE OF APPLICATION. A. Civil Practice Act, § 1290. Application for order. An application for tlie order must be made by or in beihalf of a person aggiieved by the determination to be reviewed; must be founded upon a verified petition, which may be accompanied by other written proof; and must show a proper case for the granting of the order. It can be granted only at a appeal, on the ground the claimant's remedy was by certiorari, and within two months after the decision of the Court of Appeals and within a year after that of the Appellate Division certiorari proceedings were brought, it was held that they were not barred by the four months' limitation, but fell within the provisions of section 405 of the Code of Civil Procedure, now sec- tion 33 of the Civil Practice Act. People ex rel. McCabe v. Snedeker, 106 App. Div. 89, 94 N. Y. Supp. 319. 42. Incidental motions. — It is only the hearing of the merits which is to be had at the General Term. All inciden- tal motions ahOuld be heard at Special term. People ex rel. McNeary v. Mac- Lean, 64 Hun, 206, 19 N. Y. Supp. 56, 46 St. Eep. 99. The writ would only be granted at a General or a Special Term of the Court; but when the order granting the writ showed by the caption that the writ was regularly granted at Special Term, at a time and place when a term for hearing ex parte motions might have been held, and that it was allowed by one of the justices of the court, this should be held conclusive on a mo- tion to quash. People ex rel. Burhaus v. Supervisors of Ulster, 19 Week. Dig. 308. Appellate Division. — ^Under section 1290 of the Civil Practice Act, the order can be granted only at a term of the Appellate Division of the Supreme Court or at Special Term. County Court. — Under subdivision 1 of section 27 of the Liquor Tax Law, providing that a writ of certiorari to review the action of a county treasurer in refusing to issue a liquor tax license may be issued by a county judge or a justice of the Supreme Court, the County Court, as such, has no jurisdic- tion to issue the writ. This objection may be taken at any time. People v. Slopum, 161 App. Div. 733, 146 N. Y. Supp. 556. 43. Matter of Light, 30 App. Div. 50, 51 N. Y. Supp. 743. 44. People ex rel. Grout v. Stillings, 76 App. Div. 143, 78 N. Y. Supp. 942. CEKTIOKAKI. 207 term of the ajipellate division of the supreme court or at a special term, and the granting or refusal thereof is discretionary with the court. B. Civil Practice Act, § 1291. Notice of application. Unless otherwise provided by rule, the court to which the application for the order is made, in its discretion, may require or dispense with notice. A notice, when notice is necessary, must be served, with copies of the papers upon which the application is to be made, upon the body or officer whose determination is to be reviewed, or upon such other person as the court directs, as prescribed in this article for the service of a certiorari order. The service must be made at least eight days before the application, unless the court by an order to show cause prescribes a shorter time. Where notice is given, the person served may produce affidavits, or other written proofs, upon the merits, in opposition to the application. C. The petitioner. The petition must be made by or in behalf of the person ag- grieved by the determination to be reviewed.^^ It may be verified by the attorney whose authority will be presumed.*" If it appears upon the face of the papers to review the peti- tioner's removal from an office, that he was never entitled to the office, he is not " a person aggrieved by the deter- mination.*^ 45. People ex rel. Blakalee v. Com'rs, 135 N. Y. 449; People ex rel. Town of Oyster Bay v. Woodruff, 64 App. Dlv. 239, 71 N. Y. Supp. 1044; People ex rel. Cole v. Cross, 87 App. Div. 56, 83 JSr. Y. Supp. 1083 ; People ex rel. Sweet V. Eaymond, 131 App. Div. 160, 115 N. Y. Supp. 275 ; People v. Schell, 5 Lans. 352. The Forest Commission was a proper relator in certiorari proceedings under the Code of Civil Procedure, and such commission could act in the names of the individual members composing it, or could act as a body. People ex rel. Forest Com. v. Campbell, 152 N. Y. 56. The board of fire conunissioners of Auburn has the power to dissolve vol- unteer hose companies, and "a person aggrieved" does not include a member of such company. People ex rel. Healey V. Fire Com'rs, 27 App. Div. 530, 50 N. Y. Supp. 506. Electric company.^The relator, a company which has for many years furnished electricity for light, heat and power in the boroughs of Manhattan and the Bronx, is directly interested in a proceeding which involves the deter- mination of the right of the petitioner to place wires for those uses in those boroughs or acquire property or con- struct a plant to be used in competition with it. The Public Service Commis- sion legally permitted it to become a party to the proceeding and the deter- mination adverse to it after its inter- vention is reviewable under certiorari upon its application as the party ag- grieved thereby. People ex rel. N. Y. Edison Co. v Willcox, 207 N. Y. 86. Owner of lands sold for taxes. — People ex rel. Wright v. Chapin, 104 N. Y. 369. ' 46. Matter of Belmont, 40 Misc. 133, 81 N. Y. Supp. 280; aff'd, 83 App. Div. 643, 82 N. Y. Supp. 1110. 47. People ex rel. Russell v. The Com'rs, 76 Hun, 146, 27 N. Y. Supp. 548, 57 St. Rep. 305. 208 CERTIORARI. Every citizen has been said to be interested in the proper pubhcation of the session laws, and a relator who claims that his paper is eligible for designation has a sufi&cient interest to raise by certiorari the question of a proper selection.^^ D. Contents of petition. In the early history of the writ of certiorari in this State, the application therefor was founded on an affidavit.*^ The proceeding is now started by a petition. Before taking action, the court shall be satisfied that the remedy is essential to pre- vent some substantial injury to the applicant, and that the ob- ject aimed at by him would not, if accomplished, be produc- tive of great inconvenience or injustice.^" The object of the petition is only to get the order, and if it be insufficient to authorize the order to be granted, a motion should be made to dismiss it and quash the order before mak- ing the return, and if the respondent joins issue on the order by making return to it he waives the insufficiency of the peti- tion.^^ The petitioner must show that he is entitled to main- 48. People ex rel. Hall v. Ford, 137 App. Div. 444, IIS'N. Y. Supp. 130. Newspaper published. — ^Where the common council of the city of New Koohelle, pursuant to the charter, has designated two political newspapers as representing the two principal political parties of the city, the publisher of a newspaper not designated, claiming that his paper rather than one desig- nated represents one of the principal political parties, cannot review the de- termination by certiorari in the ab- sence of proof that there are no other papers in the city which fairly repre- sent that party, for he is not a "party aggrieved" within the meaning of sec- tion 2127 of the Code of Civil Pro- cedure. Moreover, where the period for which the appointments were made has expired and the applicant has not pub- lished any official notices, he is not en- titled to the writ, for even if the desig- nations were erroneous the city would not be liable to him for services ren- dered. People ex rel. Sweet v. Ray- mond, 131 App. Div. 160, 115 N. Y. Supp. 275. 49. Fitch V. McDowell, 7 Cow. 537. Title. — ^The affidavit should not be entitled. Haight v. Turner, 2 Johns. 371; Whitney v. Warner, 2 Cow. 499. 50. People v. Mayor, 5 Barb. 43; Conover v. Derlin, 24 Barb. 641. An amendment to a petition for certiorari, allowed two years and three months after the allowance of the orig- inal writ, which does not change the averments in the original petition, but states in detail one of the particulars on which they were based, was held not an amendment designed to change the cause of action, and, being made before respondent filed his return, was properly allowed. People ex rel. Syper- rek V. McAdoo, 125 App. Div. 673, 110 N. Y. Supp. 140. 51. Matter of City of New York v. Sloat, 116 App. Div. 815, 102 N. Y, Supp. 1. CERTIOEAEI. 209 tain the proceeding. And he must state facts, not conclusions of law.*^ Matter not assigned as error in a petition for certiorari will not be considered in the review.*^ Where the allegations of the petition and the order are indefinite, the remedy is by motion, before filing the return, to make them more definite and certain.^* In order to review the action of the president of the board of aldermen of the city of New York in canceling the license of an auctioneer, the petitioner is not required to set out in full the evidence taken on the hearing, but need only make out a prima facie case showing that he was removed on an insuf- ficient charge or upon one unsupported by the evidence.^ An allegation in the petition that the relator is informed and believes that certain affidavits were considered upon the hearing of the matter sought to be reviewed, without disclos- ing the source of the information and the grounds of belief, does not call upon the respondent for a categorical denial, and the omission of such denial does not amount to an admission of the principal fact.^" The objection that an amendment to a petition for certiorari was improperly allowed must be by motion to quash, and not by an averment in the return, since it presents an original question which must be heard at the Special Term.^'' 52. Conclusions. — The relator bring- that the contract for the work was not ing a proceeding for reinstatement in made before the assessment was levied public office must allege more than that as required by the provisions of the on a day specified he was duly ap- city charter. People ex rel. Lehigh pointed to the office, which is merely a Valley Ry. Co. v. City of Buffalo, 57 conclusion, and must set forth the facts Misc. 10, 107 N. Y. Supp. 689. making his appointment legal, as that 53. People ex rel. McCollum v. Scan- he passed the requisite civil service ex- nell, 56 App. Div. 51, 67 N. Y. Supp. amination; as otherwise he may have 433. been an officer de facto only. Matter 54. People ex rel. N. Y. C. & H. R. of Meehan v. Flaherty, 119 App. Div. R. R. Co. v. Budling, 2/5 App. Div. 373, 128, 103 N. Y. Supp. 1058. 49 N. Y. Supp. 484. Local assessment. — ^A petition for a 55. Matter of Rosenthal, 133 App. writ of certiorari to review an assess- Div. 733, 118 N. Y. Supp. 241. ment for a municipal improvement, 56. People ex rel. Rosenberg v. which alleged that the assessment was Greene, 101 App. Div. 33, 91 N. Y. void for the reason that it was not Supp. 803. made "in complian&e with the general 57. People ex rel. Syperrek v. Mc- or special provisions of law for the Adoo, las App. Div. 673, 110 N. T. levying" of such assessment, was held Supp. 140. insufficient to present the objection 14 210 CEETIORAEI. E. Form of petition to review action of town auditors. To the Supreme Court of the State of New York: The petition of Frank G. Sherwood respectfully shows : First : That he is, and was at all the times hereinafter mentioned, over the age of twenty-one years, a citizen of the State of New York, residing in the town and village of Albion, in the county of Orleans, N. Y. That he is, and was at all times hereinafter mentioned, a regu- lar, licensed and practicing physician and surgeon, duly licensed to practice as such in the town of Albion and county of Orleans, N. Y. Second : That the board of town auditors of the said town of Al- bion is composed of Hervey Blood, J. Frank Kirby and Seymour Almstead, and that they and no others now do, and have since the 1st day of January, 1904, constituted the board of town auditors of the said town of Albion. Third: That on or about the 16th day of June, 1904, your peti- tioner was duly appointed, pursuant to the provisions of section 20 of the Public Health Law of the State of New York, as amended, to the of- fice of health officer of the town of Albion, Orleans County, N. Y., a cer- tificate of which appointment is hereto annexed and marked exhibit ''A" and forms a part of this petition; and that on or about the 18th day of June, 1904, your petitioner's said appointment as said health officer was duly accepted by the State Civil Service Commission, and that your petitioner was on or about the said last date' notified of such acceptance by such commission by the letter and certificate hereto annexed and marked exhibit "B" which he received from the secre- tary of said commission, and which said "B" forms a part of this petition. That immediately upon his being so appointed and after having received the said notification, your petitioner duly qualified and entered upon his duties of the office of said health officer. Fourth : That pursuant to section 21 of the Public Health Law of the State of New York, as amended, the board of health of the said town of Albion, did, on or about the 6th day of October, 1904, in the said town, meet and convene for the purpose of fixing the salary of your petitioner as said health officer in accordance with the appoint- ment and acceptance and statutes aforesaid, and did then and there duly fix the salary of your petitioner as such officer at the sum of two hundred and fifty dollars ($250) per year for the term of office for which he was appointed as aforesaid and in accordance with the pro- visions of exhibits "A" and "B." That a copy and transcript of the minutes of said meeting, duly certified by the clerk thereof and of said board of health, is hereunto annexed and marked exhibit " G " and forms a part of tlais petition. That all of the members of said board of health were present at said meeting as stated in said minutes. Fifth: That your petitioner now is, and ever since his appoint- ment as such as aforesaid on the 16th day of June, 1904, has been acting in the capacity of said health officer of the town of Albion, N. Y., and ever since said date and up to the present time has regu- larly performed the duties of that office. Sixth : That ever since the 24th day of May, 1903, your petitioner has acted in the capacity of health officer of the said town of Albion, CERTIORARI. 211 having been appointed to that position by the board of health of the said town shortly before said date ; that in each and every year he was up to the 16th day of June, 1904, paid his fees by the said town for such services as he performed as such officer; that at the regular an- nual meeting of the said board of town auditors of said town of Al- bion for auditing accounts against said town, held in the month of November, 1904, your petitioner presented to said board an itemized account or bill duly verified by him showing services performed by him as such health officer between November 23, 1903, and the 16th day of June, 1904, and for the fees therefor, wlaich said account or bill amounted to the sum of nineteen dollars ($19) ; and attached thereto your petitioner a] so presented to said board at said time a bill or account for his salary as health officer under the appointment above referred to and included in exhibits "A" and "B," for 148 days salary at the rate of two hundred and fifty dollars ($250) per year, to wit, from the 16th day of June, 1904, to the 12th day of November, 1904, which bill amounted to one hundred and one dol- lars and thirty-eight cents ($101.38) ; that a copy of said bills is hereto annexed and marked exhibit "D," and made a part of this petition. That both of said bills or accounts were, as your petitioner is informed and believes, examined, passed upon, audited and al- lowed by said board at the sum of nineteen dollars ($19) and one hundred and one dollars and thirty-eight cents ($101.38), respec- tively, and as so audited and allowed were certified by said board of town auditors to the town clerk of the town of Albion, N. Y., and to the clerk of the board of supervisors of the county of Orleans; that said accounts were marked by said auditors, ' ' No. 87 ; " and that thereafter an order was duly drawn upon the county treasurer of Orleans county for the amounts aforesaid in favor of your peti- tioner, and that your petitioner has received his money on said order from the town of Albion for the amount of said accounts or bills. Seventh: That at the regular meeting of the said board of town auditors of said town of Albion for auditing accounts against said town, held in the month of November, 1905, and after the 12th day of November, 1905, your petitioner presented to said board an ac- count or bill duly verified by him for his salary and services as said health officer from the 12th day of November, 1904, to the 12th day of November, 1905. That said account or bill amounted to the sum of two hundred and fifty dollars ($250) and that it was for his salarj' for one year as said health officer and that a copy thereof is hereto, annexed and marked exhibit "E," which forms a part of this peti- tion; that as your petitioner is informed and believes, said claim of two hundred and fifty dollars ($250) was audited by said board of two auditors, and was by said board rejected and disallowed, and as so audited, rejected and disallowed was certified by said board of auditors to the town clerk of the said town of Albion, and to the clerk of the board of supervisors of the county of Orleans, N. Y., a cer- tificate of which rejection is entered upon said bill as appears in ex- hibit "E" and that a copy of a certificate of rejection signed by the members of said board of town auditors is attached to said ex- hibit "E." 212 CERTIORAKI. Eighth : Your petitioner further shows that in accordance with and pursuant to section 21 of the Public Health Law of the State of New York, the said boai-d of health of the town of Albion, N. Y.. did,' as he verily believes, duly meet in the said town of Albion, N. Y., on or about the 10th day of December, 1904, and did then and there, in addition to the salary already fixed by them, as alleged in paragraph "Fourth" herein, allow the reasonable expenses of your petitioner in going to, attending and returning from, the annual sanitary con- ference of health officers held within the State, to wit. Albany, N. Y., on December 15 and 16, 1904; that a certified copy of the minutes of said meeting of said board of health is hereto annexed and marked exhibit "P," and forms a part of this petition. Ninth: That pursuant to the allowance of his expenses as afore- said, your petitioner did attend the annual sanitary conference of health officers at Albany, N. Y., on December 15 and 16, 1904, and did then and there incur the expenses set forth in exhibit " G, " here- to annexed and forming a part of this petition, to wit, the sum of twenty dollars and forty cents ($20.40) ; and that said expenses were reasonable. Tenth: That at the meeting of the board of town auditors of the said town of Albion, held at the time and as alleged in the paragraph numbered "Seventh" above, your petitioner presented to said board an account or bill duly verified by him. for his expenses in going to, attending and returning from the sanitary conference, that said bill or account was for the sum of twenty dollars and forty cents ($20.40), and that a copy thereof is hereto annexed, marked exhibit "G," and forms a part of this petition; that attached to said bill or account were a certificate signed by the chief clerk of the State Department of Health to the effect that your petitioner was present at said sanitary conference on December l5 and 16, 1904, and a letter from the State Commissioner of Health, written to Porter C. Bliss, supervisor of the said town of Albion, that was received by said Bliss before the 10th day of December, 1904, and which is referred to in exhibit "G;" that copies of said certificate of said chief clerk and said letter from said State commissioner are hereto annexed and marked respectively exhibits "H" and "I," which form a part of this petition. Peti- tioner further says that he is informed and verily believes that the said bill or account for twenty dollars and forty cents ($20.40), was audited by said board of town auditors at their said meeting, and was by said board of town auditors rejected and disallowed, and as so audited, rejected and disallowed, was certified by said board of audi- tors to the town clerk of the town of Albion, N. Y., and to the clerk of the board of supervisors of the county of Orleans, N. Y. That said account was marked by said board of auditors "No. 123," that a copy of a certificate of rejection, attached to said bill or account, and signed by the members of said board of auditors is attached to exhibit " G, " and forms a part of this petition. Eleventh: That as your petitioner is informed and verily believes, his said bills or accounts for two hundred and fifty dollars ($250), and for twenty dollars and forty cents ($20.40), were rejected and disallowed by said board of town auditors for no valid reason what- CERTIORAEI. 213 ever, that he had during the period mentioned in said bill for two hundred and fifty dollars ($250), performed various valuable serv- ices as health officer of the town of Albion, N. Y., and that the ex- penses contained in his said bill for twenty dollars and forty cents ($20.40) were reasonable and necessarily expended by him as afore- said, and that there was no legal reason why said board of town audi- tors should have rejected and disallowed said 1905 bills and accounts, or either of them. That neither of said bills or accounts have ever been paid, nor any part thereof. Twelfth: That no previous application for an order of certiorari has been made herein. Wherefore, your petitioner prays that an order of certiorari may be granted and allowed by this honorable court directed to Hervey Blood, J. Frank Kirby and Seymour. Olmstead, as and constituting the board of town auditors of the town of Albion, N. Y., commanding them to serve and return to this court all and singular its proceed- ings, decisions and actions as such board in the premises, together with all evidence, data, writings, minutes and memoranda upon which they proceeded as such board or arrived at their determination and conclusion in the premises, to the end that said determinations, con- clusions and proceedings as such board may be reviewed and corrected, and that they or their successorse in office as such board be ordered to audit and allow said bills or accounts at the sums of two hundred and fifty dollars ($250), and twenty dollars and forty cents ($20.40), respectively, together with interest thereon from the date of this petition, and that your petitioner have such other and further relief as to the court may seem just. Dated, November 20, 1905. Frank G. Sherwood, Petitioner. F. rorm of petition by patrolman dismissed from police force. To the Supreme Court of the State of New York: The petition of William J. Eggers respectfully shows : 1. That your petitioner is a citizen of the United States and a resi- dent of the borough of Manhattan, city and State of New York, and v^as such at the time of his trial before the police commissioner here- inafter mentioned. 2. That your petitioner was duly appointed a patrolman on the police force of the city of New York on or about the 30th day of De- cember, 1893, and continued in performance of his duty as such up to about the 26th day of December, 1902, when he was promoted to the rank or grade of detective sergeant by Hon. John N. Patridge, who was then commissioner of police, because of the conscientious, honest and meritorious manner in which he performed his duties as police officer. That on or about the 1st day of January, 1904, William McAdoo, Esq., was appointed the police commissioner of the police department of the city of New York and thereafter and on or about the 25th day of January, 1905, he directed your petitioner to take command of a squad which he formed and which was known as the ' ' Vice Squad ' ' in 214 CERTIOKAKI. said Police Department. Your petitioner was also directed by said police commissioner to make his reports and receive his orders in con- nection with his duties as commander of said "Vice Squad" from "William Howell, secretary to said police commissioner. That your petitioner continued in command of said squad under the orders of said William Howell up to the 15th day of October, 1905, when he was transferred to the detective bureau of Brooklyn, where your petitioner continued in the performance of his duty as a detective sergeant up to about the 15th day of December, 1905. Immediately thereafter your petitioner was suspended from duty without pay and certain charges alleged to have been made by Moses W. Cortwright, chief in- spector, was served upon him. That no preliminary examination or hearing before the said charges were served upon your petitioner was accorded him and as your petitioner is informed and believes the said charges were preferred by said chief inspector under direct or- ders from said police commissioner, after the said commissioner had, in the absence and without the knowledge of your petitionerj con- ducted a secret investigation and had come to the conclusion that your petitioner was guilty. That under said charges your petitioner was accused of being guilty of conduct unbecoming an officer and neglect of duty. The specifica- tions covered several typewritten pages, but consisted briefly of your petitioner having in his possession, custody and control sufficient evi- dence that a crime had been committed, but, notwithstanding, will- fully and knowingly failed to make proper use of said evidence ; and also with failing and willfully omitting and neglecting to produce such evidence before any proper person as required by law, and thereby your petitioner "did willfully neglect his duties in the premises and conduct himself in a manner unbecoming an officer." That yoirr petitioner appeared before First Deputy Police Commis- sioner Thomas F. McAvoy for trial and through his counsel pleaded not guilty to said charges. That although he applied through his counsel for a short delay in order to enable him to compel the attend- ance of a witness whose testimony was most material and important and who had been duly subpoenaed and who refused to appear in obedience to said subpoena, as appears from the affidavit of Jacob Rouss, Esq., one of your petitioner's attorneys, and which M'as re- ceived and marked exhibit "A," yet the application was denied and the case was abruptly closed without affording him an opportunity of compelling the attendance of said witness. 3. Your petitioner further alleges that there was no legal, competent, proper or sufficient evidence adduced at his said trial to prove him guilty of said charges, but nevertheless your petitioner was found guilty and as a punishment therefor dismissed him from the police force by the police commissioner of the city of New York. That, as your petitioner is informed by Messrs. Grant and Rouss, his attor- neys, and verily believes, such judgment of conviction was wholly unwarranted, unjust, unfair, and was the result of prejudice, par- tiality and biased and not because of any sufficient, legal, proper or competent evidence which was adduced at your petitioner's said trial CERTIORAEI. 215 and that the said sentence of dismissal was also illegal, irregular and wholly against the weight of evidence. Wherefore, your petitioner prays that an order of certiorari be granted by this court, directed to Theodore A. Bingham, as police commissioner of the city of New York, commanding him, to certify and return to the clerk of this court all proceedings had and remaining before him in any wise relating to the said trial, conviction and dis- missal of your petitioner as aforesaid. And your petitioner will ever pray, etc. That no previous application for this order has been made to any court or judge. (Add verification.) Petitioner. ARTICLE V. THE ORDER AND STAY THEREON. A. Cml Practice Act, § 1292. Against whom order directed. The order must be directed, against the body or officer whose determination is to be reviewed; or against any other person having the custody of the record or other papers to be certified; or against both, if necessary. Where it is brought to review the determination of a board or body other than a court, if an action would lie against the board or body in its associate or official name, it must be directed against the board or body by that name; otherwise, it must be directed against the members thereof, by their names. B. Civil Practice Act, § 1293. Entry of order. A certiorari order must be entered in the office of tSie clerk of the county designated in the order as the county where the same is returnable, according to the command thereof. C. Civil Practice Act, § 1294. Service of order. A certiorari order must be served as follows, except where different directions respecting the mode of service thereof are given by the court granting it: 1. Where it is directed against a person or persons by name, or by his or their official title or titles, or against a municipal corporation, a certified copy of the order must be served upon each officer or other person against whom it is so directed, or upon the corporation, in the same manner as a summons in an action brought in the supreme court, except as prescribed in the next two subdivisions of this section. 2. Where it is directed against a court, or. the judges of a court, having a clerk appointed pursuant to law, service upon the court or the judges thereof may be made by filing a certified copy of the order with the clerk. 3. Where it is to be served upon any other board or body, or upon the members thereof, it may be served in like manner as prescribed for service upon a like board or body of an alternative mandamus order. Where the certiorari order was granted without notice, copies of the papers upon which the order was granted must be served with the order. 216 CERTIORARI. D. Civil Practice Act, § 1295. Stay of proceedings. Except as prescribed in this section, a certiorari order does not stay the execution of the determination to be reviewed or affect the power of the body or officer against which or wliom it is granted. The court which grants the order, in its discretion and upon such terms as to the security or otherwise as justice requires, may direct that the execution of the determination be stayed pending the certiorari and until the further direction of the court. A bond, undertaking or other security given to procure such a stay is valid and effectual, according to its terms, in favor of a person beneficially interested in upholding the determination to be reviewed, who is admitted as a party to the special proceeding, as prescribed in section thirteen hundred and seventeen of this act. E. Against whom directed. The order should be directed to all persons whose return is necessary to enable the court to determine the regularity or validity of the proceedings to be reviewed.^^ Where the body whose decision is to be reviewed is still legal custodian of the record thereof, and has not delivered the same to any other party by virtue of a statute, certiorari lies against it.^'* Where the acts of single officers do not go to make parts of and com- plete a single transaction, or constitute one entire official act, separate orders must issue to each body or officer whose acts contribute to the completion of the- act complained of.^" But an order directed to different officers having no joint or com- mon duties, but acting independently, is bad.®^ The order may be directed to one whose term of office has expired,^^ although 58. People v. Hill, 65 Barb. 170. R. Co. v. Chapin, 3 St. Eep. 735 ; dist 'g Board of police. — It was formerly People ex rel Marsh v. Delauey, 49 N. held that a certiorari to a board of po- Y. 655; People ex rel. Law v. Com'rs, lice would not run to the individual, 9 Hun, 609; People ex rel. Weeks v. but to the board as a body. People v. Supervisors, 82 N. Y. 375. Cholwell, 6 Abb. Pr. 151. 60. Matter of Woodbine Street, 17 Mayor of city. — ^Where the order is Abb. Pr. 113. granted against the common council 61. People v. Walter, 68 N. Y. 403. of the city to review its decision in 62. Harris v. Whitney, 6 How. Pr. designating a newspaper for public 175; People v. Hill, 65 Barb. 176; printing, the mayor of the city is prop- Couover v. Devlin, 15 How. Pr. 470. erly made a party, although he has no Change of grade. — ^A writ to review voice, vote, or veto in the decision, as the proceedings of a commission to de- he is required by the charter of the termine damages from the change of city to authenticate the acts of the grade of a street may be issued to the common council. People ex rel. Francis commissioners before whom the pro- T. Mead, 17 St. Eep. 661, 3 N. Y. Supp. ceeding was heard, although they have 114. resigned and other commissioners have 59. People ex rel. N. Y., O. & W. K. been appointed in their place, and CERTIORARI. 217 the records of the proceedings have passed into the custody of some other authority. In such a case the person holding the record should be made a party to the proceeding, in order to place the record before the court.®^ The provision in section 1292, that the writ may issue to any person having the custody of the record, or other papers to be certified, as well as to the board or persons making the decision to be reviewed, is in- tended to prevent a failure of justice " through the shuffling of the roll around from one person or officer to another, before its purpose could be made effectual by its service." Thus in reviewing the proceedings of assessors, the town clerk having possession of the assessment-roll is a proper party.^^ When the office is a continuing public office, such as a Comptroller of the State, it properly issues to the person incumbent of the office to review the proceedings of his predecessor.^^ The order must be directed to a board of village trustees, and not to the corporation as such, where the action of the trustees is sought to be reviewed."® The order should run to individual overseers of the poor, and not to them in their official capacity."'' And to correct errors of a board of assessors or revision, certiorari must run to the board and not to the cor- poration."^ Where the order is against a mere department of a city, and no action could be brought against it by its official name, an order directed to such board is irregular ; it should be directed to the members of the board " by their names. ""^ But, where the city department whose decision is sought to be reviewed is an incorporated body, able to sue or be sued in its own name, the order properly issues against it, under its corporate name.''" where their return is full and complete, 66. People v. Trustees, 1 Hun, 593. and shows that all the testimony, ree- 67. Overseers of Greenville v. Bishop, ords, and proceedings are still in their 2 How. Pr. 195. custody, it is not necessary to join 68. People v. Mayor, 19 Hun, 73. An their successors. People ex rel. Grout v. order of certiorari must be addressed to Stillings, 75 App. Div. 569, 78 N. T. the board of assessors, or to all the Supp. 333. members of the board, and not merely 63. People ex rel. Heiser v. Gilon, to those who signed the roll. People 121 N. Y. 559; People ex rel. Cook v. ex rel. Benedict v. Eoe, 35 App. Div. Hildreth, 5 N. Y. Supp. 308. 107, 49 Supp. 227, 83 St. Eep. 227. . 64. People ex rel. v. Burhans, 25 69. People ex rel. R. R. Co. v. Bd. of Hun, 186. Com'rs, etc., 97 N. Y. 43. 65. Matter of the Tax Com'rs v. 70. People ex rel. Titzgibbons v. Tiffany & Co., 80 Hun, 488, ©2 St. Trustees, 1 App. Div. 186, 37 N. Y, Bep. 394, 30 N. Y. Supp. 494. Supp. 168. 218 CERTIOEABI. The city is not a necessary party to a proceeding to review a determination by a board appointed under a special statuteJ^ To review an order of commissioners of highways/^ directing the removal of an encroachment, it must be directed to the commissioners. An order to review the proceedings of a judge out of court should be directed to the judge, and not to the court of which he is a member J^ It seems that the di- rection of an order of certiorari to persons who composed a majority of the Democratic members of a board of super- visors, which majority made the determination complained of, is not improper under provisions of section 1292J* F. Contents of order. Before the adoption of the Civil Practice Act, certiorari was prosecuted by a writ instead of an order. The writ was re- quired to run in the name of the People, and not in the name of an individual.™ The writ was tested, signed, and sealed, and an indorsement made upon it signed by the clerk, showing that the writ had issued by order of the court.™ It recited the names of the parties and set forth the cause of complaint with the proceedings, and the wish of the people to be certified of them, and directed the judge or other officer or tribunal to certify and return the record to the Supreme Court at a speci- fied time named therein as the return day of the writ, so that the court might then and there cause to be done what of right ought to be done, and was directed to the tribunal whose pro- ceedings were sought to be reviewed." The writ directed that the true record be certified and re- turned, and upon it alone the final adjudication should be 71. Matter of Belmont, 40 Misc. 133, 75. Wildy v. Washburn, 16 Johns. 49 ; 81 N. Y. Supp. aSO; aff'd, 83 App. Div. People v. Judges of Suffolk, 24 Wend. 643, 82 N. Y. Supp. 1110. 249. , 72. People v. Com'rs of Highways, 76. Mott v. Com'rs of Highways, 19 30 N. Y. 72. Wend. 640. 73. People v. Kelly, 35 Barb. 444. Seal. — The writ must be issued. Town bonds. — The writ will properly under seal of the court, but the omis- issue to a judge to review proceedings sion of the seal does not make the on town bonding, even after the pro- writ void and the defect may be cured ceedings have been completed and the by amendment. People ex rel. H. & M. record filed with the county clerk. E. E. Co. v. Assessors of Herkimer, ' 6 People v. Smith, 45 N. Y. 772. Civ. Proc. 297. 74. People ex rel. Baldwin v. Barnes, 77. People v. Cholwell, 6 Abb. Pr. 17 App. Div. 197, 45 N. Y. Supp. 356. 151. CEETIORARI, 219 based.™ A motion to amend the writ by setting up additional grounds could not be made upon the argument of the case.™ The court had no power on a writ of certiorari to direct the commissioners of estimate and assessment,, appointed under the provisions of the Greater New York charter upon chang- ing the grade of a street, to state in their return what evi- dence in the case was brought to their attention ; or what evi- dence was produced on certain facts ; or upon what principles they acted; or what facts they assumed as a basis for their awards ; or whether they considered benefits and, if so, what benefits and to whom, for the purpose of compelling them to make an analysis of the evidence in accordance with the re- lator's theory of the case, and to elaborate their own theory as to offsetting benefits. Where the petition alleged that rulings upon questions arising upon the trial were reserved, but did not state the par- ticular questions, or that any requests for such rulings were made, or show any prejudice to relator's rights from adverse rulings, the writ could not require the commissioners to specify all their rulings adverse to relator as to which deci- sion was reserved on the trial.^" Cr. Vacating order. Under the former practice, if the writ was improvidently granted or was insufficient, the practice was a motion to quash the writ.^^ Under the Civil Practice Act, the remedy, no doubt, is a motion to vacate the order of certiorari. The writ could be quashed if it was insufficient on its face ; if the allegations of the petition were insufficient in law,*^ if it was 78. Matter of Rosenthal, 133 App. How. Pr. 141; People v. Overseers, 44 Div. 733, 118 N. Y. Supp. 241. : - Mi Barb. 467; People v. Superviaors, 57 79. People ex rel. Gould v. Barker, ^Barb. 377; People v. Delaney, 49 N. 14 Misc. 586, 70 St. Rep. 626, 35 N. T.; Y. 655; Starkweather v. Seeley, 45 Barb. Supp. 22'5. 165; People v. Schell, 5 Lans. 352; 80. People ex rel. Astor v. Stillings, People v. Common Council, 65 Barb. 9. €8 Misc. 55, 124 N. Y. Supp. 939. The writ will not be quashed, though 81. People V. Peabody, 26 Barb. 437 ; |ihb application therefor failed to state Devlin v. Piatt, 20 How. Pr. 167; Cale- that no previous application for the donian Co. v. Trustees, 7 Wend. 665 ; writ had been made. People ex rel. Golden v. Botts, 12 Wend. 234 ; People Brodie v. Cox, 14 St. Rep. 632. V. Stryker, 24 Barb. 650; People v. 88. People ex rel. Brownell v. Asses- Supervisors, 15 Wend. 198; People v. sors of Buffalo, 193 N. Y. 248. Mayor, Z Hill, 14 ; Brown v. Wesson, 1 220 CEBTIOEAEI. not properly directed f^ if it was improperly issued;^ if it was granted to review a proceeding before its termination;^ or for failure to prosecute for an unreasonable time.^^ In some of the earlier cases it was thought that a motion to quash a writ of certiorari could not be made until return had been made to the writ; but before the adoption of the Civil Prac- tice Act it was settled that the motion could be made and de- cided before the return day.^^ The Civil Practice Act would seem to make no change in this principle, and hence it is thought that a motion to vacate the order may be made be- fore the return. Section 132 of the Civil Practice Act author- izes the motion to be heard by the Appellate Division.**^ It was not the practice to quash the writ at a hearing where there was a retiirh. Upon such hearing the court should make a final order, either annulling, confirming, or modifying the determination undi^r review.*"* Moving for an amended return was not a waiver of motion to quash.'"* A motion to quash a writ of certiorari could be granted either upon the j)a]3ers upon which it was granted or upon ad- ditional affidavits."^ The granting of the certiorari is dis- cretionary with the court,"^ and similarly the vacating of the 83. Devlin v. Piatt, ZO How. Pr. 167 ; v. Public Service Comm., 101 Misc. 10, Ball V. Warren, 16 How. Pr. 379. 166 N. Y. Supp. 835; Matter of City of If improper parties are joined or New York v. Nixon, 111 Misc. 334, errors assigned not warranted by the 183 N. Y. Supp. fi. record, such part of the proceedings as 88. People ex rel. Joline v. Willcox, are illegal may be quashed or corrected, 139 App. Div. 267, 113 N. Y. Supp. and the rest affirmed if they are inde- 861; aff'd, 194 N. Y. 383. pendent of each other. People v. A motion to quash a writ of cer- Supervisors, 57 Barb. 377. tiorari could only be made in the dis- 84. People ex rel. v. Stillwell, 19 N. trict where the writ is obtainable, or in Y. 531 ; People ex rel. v. Mayor, 2 Hill 9 ; a county adjoining the district. People People V. Com'rs, 10'3 N. Y. 371; Dev- v. Cooper, 57 How. Pr. 463. lin V. Piatt, 20 How. Pr. 167. 89. People ex rel. W. S. R. R. Co. v. 85. People v. Peabody, 5 Abb. Pr. Pitman, 9 St. Rep. 469. Compare, 194; Comstock v. Porter, 5 Wend. 98. People v. McDonald, 2 Hun, 70. 86. People ex rel. v. French, 53 Hun, 90. People v. McDonald, 2 Hun, 70. 637, 6 N. Y. Supp. 431. 91. People ex rel. Brooklyn Heights E. 87. People ex rel. Miller v. Peck, 73 R. Co. v. Public Service Comm., 101 App. Div. 89, 76 N. Y. Sapp. 328; Misc. 10, 166 N. Y. Supp. 825. People ex rel. Hagerty v. McClellan, 92. See, supra. Art. II. — ^B-3. Dis- 107 App. Div. 272, 94 Supp. 1107; cretion of court. People ex rel. Brooklyn Heights K. Co. CEETIORAEI. 221 order is within the discretion of the court.**^ Hence, there is presented no question for review in the Court of Appeals.^* H. Stay of proceedings. The order of certiorari does not per se operate as a stay of proccodings."^' In this respect the statute does not enlarge the right to have a stay in a certiorari proceeding, for at common law the writ effected a stay of proceedings.''^ The statute is thought to require the order for a stay to accompany the writ and to, be a part of it, and the stay will be refused where there is a considerable lapse of time between the granting of the order and the application for the stay."^ An order of certiorari to review a determination of the fire commissioner of the city of New York dismissing for cause and after a hearing the chief of the city fire department, should not contain a provision staying execution of the deter- mination until review is had.^ ARTICLE VI. RETURN TO ORDER AND PROCEEDINGS THEREON. A. Provisions of the Civil Practice Act. 1. Civil Practice Act, § 1296. Time and place of return. A certiorari order miust be made returnable, within twenty days after the service thereof, at the oflSce of the clerk of the court. If it was granted by the supreme court, it must be made returnable at the office of the clerk of the county designated therein wherein the determination to be reviewed was made; and if the county designated in the order is not the proper county, the court, 93. People ex rel. Mayor v. Mc- 96. People ex rel. Croker v. Sturgis, Oarthy, 102 N. Y. 63-5; People ex rel. 39 Mise. 448, 80 N. Y. Supp. 194; Smith V. Com'rs., 103 N. Y. 370; People ex rel. Brooklyn R. Co. v. Public Jones V. People, 9 Week. Dig. 254. Service Co., 110 Misc. 509, 181 N. Y. 94. See, infra. Art. X, Appeals. Supp. 790. 95. People v. Supervisors of Albany, 97. People ex rel. N. Y., etc., K. B. 23 Week. Dig. 568. Co. v. Bd. of Aldermen, 10 Abb. N. C. A grand jury has jurisdiction to 34 indict a defendant, notwithstanding the The stay will be vacated on motion pendency of certiorari proceedings in where it has been granted ex parte, his behalf, to review the action of the People ex rel. Croker v. Sturgis, 39 magistrate by whom he had previously Misc. 448, 80 N. Y. Supp. 194. been committed to await the action of 98. People ex rel. Croker v. Sturgis, the Supreme Court. People v. Fried- 39 Misc. 448, 80 N. Y. Supp. 194. man, 205 N. Y. 161. 222 CERTIORAEI. upon motion, may amend the order accordingly. Thereupon all papers on file must be transferred to the clerk of the county where the order is made return- able by the amendment. 2. Civil Practice Act, § 1297. How return made. The clerk with whom a certiorari order is filed, and each person upon whom a certiorari order is served, as prescribed in section twelve hundred and ninety- four of this act, must make and annex to the copy of the order filed with or served upon him, a return, with a transcript annexed, and certified by him, of the record of proceedings, and a statement of the other matter specified in and required by the order. The return must be filed in the office where thp order is returnable, according to the command thereof. 3. Civil Practice Act, § 1298. Defect or omission in return. If a return is defective, the court may direct a further return. An omission to make a return as required by a certiorari order or by an order for a further return may be punished as a contempt of the court. But a judge or clerk shall not be thus punished, unless the petitioner, before the tiirie when the return is required, pays him for his return the sum of two dollars, and, in addition, ten cents for each folio of the copies of papers required to be returned. 4. Civil Practice Act, § 1299. Subsequent proceedings as in action. After a certiorari order has been granted, the time to make a return to the petition and order may be enlarged, or any other order may be made, or proceeding taken, in the cause, in relation to any matter not provided for in this article, as a similar proceeding may be taken in an action brought in the same court and triable in the county where the order is returnable. 5. Civil Practice Act, § 1301. Order and return after term of office. A certiorari order may be granted against, and a return may be made by, an officer whose term of office has expired. Such an officer may be punished for a failure to make a return as required by the order, or to make a further return as required by an order for that purpose. 6. Civil Practice Act, § 1302. Bringing in third person. Upon the application of a person specially and beneficially interested in upholding or annulling the determination to be reviewed, the court, in its discretion, may admit him as a party in the special proceedings, upon such terms as justice requires. In a proper case, a term of the appellate division of the supreme court at which the cause is noticed for hearing and is placed upon the calendar may direct that notice of the pendency of the special pro- ceeding be given to any person in such a manner as it thinks proper, and may suspend the hearing until notice is given accordingly. CERTIORARI. 223 B. Form and contents of return. 1. By whom made. . The return to an order of certiorari should be made by the tribunal or officers to whom it is directed, even though the term of their office has expired.'^ It should be made by a majority of the board to whom the order is directed.^ A return signed by the chairman and clerk of a board of supervisors is good, if it was authorized by the majority of the board, although not signed by such majority.^ A record in the Appellate Division on a certiorari directed to the Public Service Commission and to a public service cor- poration, should contain the return of the latter as well as that of the commission.^ Generally, there can be only one return to a writ of cer- tiorari, unless a second return is directed or permitted by the court because the first one was defective or insufficient in form. If the original return is false in fact, the remedy is by an action for a false return. When a certiorari is issued to review the determination of a board or body composed of two or more persons, the return is to be made in the name of the board or body, and may be executed by a majority of the mem- bers thereof. A separate return made by a single member of a board should be disregarded and cannot be made the basis of action by the court.* 2. Sufficiency of retnrn. The officers to whom an order of certiorari is issued, are re- quired to make return only to those matters specified in the order.^ The hearing is on the order and the return ; and the 99. People v. Peabody, 6 Abb. sas ; assessors cannot be required to give a Harris v. Whitney, 6 How. Pr. 175. bill of particulars of the items eom- And see, supra, Art. V — E. Against posing their award of damages sus- whom directed. tained by property owners by a change 1. People V. Cholwell, 6 Abb. Pr. 151. of grade, nor are they required to state 2. People ex rel. v. Webb, 66 Hun, the method by which they have arrived 632 21 N. Y. Supp. 298. at their conclusion. People ex rel. 3. People ex rel. New York Edison Heiser v. Gillon, 51 St. Rep. 825, 23 N. Co. v. Willeox, 149 App. Div. 671, 134 Y. Supp. 238. K. Y. Supp. 241. Finding of guilt. — A return by the 4. People ex rel. Lester v. Eno, 176 police commissioner to a writ of eer- N. Y. 513. tiorari commanding him to make a re- 5. People V. Dains, 38 Hun, 43. turn of all proceedings had or things Bill of particulars. — ^A board of done ' ' in any way or manner relating ' ' 224 CBKTIOKARI. papers on which the order was made are considered only in determining tlie jurisdiction of the court to issue it, and pos- sibly as establishing such matters as are embraced therein and omitted from the return.^ The return should, in addition to the transcript of the record of proceedings, state the whole truth in respect to the other matters specified in and required by writ.'' If the determination to be reviewed was based on testimony taken by the tribunal, the testimony should be re- turned.^ Although the return does not state that the wit- nessses were sworn, where it does state that the charges to the dismissal of a detective in the police department, which omitted a written finding of guilt and recom- mendation of dismissal made by the deputy commissioner before whom the detective was tried and a certain dia- gram used on the trial, was insuflScient. People ex rel. Parker v. Bingham, 57 Misc. 28, 106 N. Y. Supp. 1079. Cancellation of tax sale. — It is a sufBlcient return by a Comptroller of the evidence on which he acted in can- celing a tax sale, where he returned the year, volume, and page of the State re- port on which he relied, without setting out the same in haeo verba. People ex rel. V. Wemple, 67 Hun, 495, 22 N. Y. Supp. 497; rev'd on other grounds, 139 N. Y. 249. Railroad commissioners. — Upon a cer- tiorari procured by a railroad com- pany to review the determination of the Bailroad Commissioners certifying in behalf of another railroad company that public convenience and necessity require the construction of a railroad, a return of the proof as to the bona fides of the enterprise projected and the financial ability to carry it out, can- not be required. People ex rel. N. Y., New Haven, etc., R. E. Co., v. E. E. Com'rs of N. Y., 76 App. Div. 302, 78 N. Y. Supp. 750, 79 N. Y. Supp. 1143. 6. People V. Dains, 38 Hun, 43; People V. French, 25 Hun, 111. Petition on information and belief. — The allegation in the petition for cer- tiorari to review the action of the police commissioner in removing relator as pa- trolman, that relator is informed and believes that certain affidavits were considered by respondent, where the source of information and grounds of belief are not disclosed, is not an alle- gation of fact which requires a denial. People ex rel. Rosenberg v. Greene, 101 App. Div. 33, 91 N. Y. Supp. 803. Negative pregnant. — ^When the peti- tion states certain persons to be owners of the fee in a highway as recorded, a return denying such ownership, whether open to criticism as containing a nega- tive pregnant or not, is sufficient on appeal. People ex rel. Burnett v. Van Brunt, 99 App. Div. 564, 90 N. Y. Supp. 845. 7. People ex rel. Gage v. Lohnas, 54 Hun, 608, 8 N. Y. Supp. 106, 28 St. Eep. 248. Licensing plumbers. — A return to a certiorari to review the decision of the examining board of plumbers in refus- ing an application for a license is in- sufficient, though setting out the ques- tions and answers on the hearing, if it does not allege that any of the ques- tions were incorrectly answered, or show that sueh answers were incorrect or defective. People ex rel. v. Scott, 86 Hun, 174, 33 N. Y. Supp. S29. 8. People ex rel. Simermyer v. Roose- velt, 2 App. Div. 49-8, 74 St. Rep. 430, 37 N. Y. Supp. 1083. CERTIORARI. 225 against the policeman were duly tried, heard, and examined in the manner required by law, and by the rules of the depart- ment, the swearing of witnesses will be presumed.^ A return by commissioners appointed to determine the necessity of the highway, which omits no part of the record, and includes all the evidence on which the committee acted, and states that it reached its conclusion from the evidence and from personal inspection, is not defective.^'^ The opinion of counsel on the questions submitted to the tribunal, should not form part of the return." Where a proceeding is in a tribunal of inferior jurisdiction it is necessary that the return to the writ show that the tribunal had authority to act in making the order, for there is no presumption in favor of the authority and jurisdiction of inferior magistrates or tribunals exercising, judicial func- tions." It is no excuse for failure on the part of an officer required to make a return according to the terms of the order that the directions contained therein are not pertinent to the griev- ances alleged ; but the return must be made as ordered, unless a modification is obtained on motion.^^ 3. Authentication. The return need not be under the seal of the court, body, or officer making it." Nor need it be verified.^ The return is an official act, and| the certificate thereto annexed is deemed suffi- cient authentication.^^ 4. Prepayment of fees. In some cases the prepayment of fees for the making of the return is necessary before the making of the return can be compelled." 9. People ex rel. Killilea v. Boose- 14. Scott v. Eushman, 1 Cow. 212. -velt, 7 App. Div. 308, 40 N. Y. Supp. 15. People ex rel. Jones v. Diehl, 45 117. App. Div. 631, 61 N. Y. Supp. 1145; 10. People ex rel. v. Mellville, 7 People ex rel. Updyke v. Gillon, 18 Civ. Misc. 214, 27 N. Y. Supp. 1101. Pro. Ill, 9 N. Y. Supp. 244. 11. People ex rel. v. Gillon, 56 Hun, 16. People ex rel. Jones v. Diehl et 641, 9 N. Y. Supp. 690. al., 45 App. Div. 631, 61 N. Y. Supp. 12. People V. Waldo, 212 N. Y. 156. 1145. 13. People ex rel. Fitzgerald v. Fiet- 17. Civil Practice Act, section 1298.- ner, 37 App. Div. 362, 56 N. Y. Supp. 93. 15 226 CERTIOEAKI. Where a board of supervisors refuses to make a return un- til the fees are paid, it should state the amount of the fees demanded.^** Section 67 of the Public Officers' Law, which provides that public officers upon whom a duty is imposed by law must ex- ecute the same without fee or reward, does not apply to com- pel a board of supervisors to make a return to the writ of cer- tiorari without the payment of the fees.^' C. False, defective or incorrect return. If the return be false, the only remedy of one aggrieved is an action for a false return.^" In such a case he has no remedy by motion for a further return.^^ But, if the return is evasive or insufficient or is defective in that a material matter is omitted, the remedy of the party to move for a further re- turn under section 1298 of the Civil Practice Act.^^ If he fails to move for a further return, the return as submitted is deemed eomplete.^^ 18. People ex rel. v. Bd. of Super- visors of Fulton County, 65 Hun, 623, 20 N. Y. Supp. 280: 19. People ex rel. Sutliff v. Super- visors, 64 Hun, 376, 46 St. Rep. 471, 19 N. Y. Supp. 773. 20. People ex rel. P. P. Co. v. Mar- tin, 142 N. Y. 235; People ex rel. City of New York v. O 'Toole, 146 App. Div. 133, 130 N. Y. Supp. 567; People ex rel. V. Gilon, 9 N. Y. Supp. 243, 18 Civ. Proc. 109; People v. Campbell, 50 N. Y. Super. Ct. 82. 21. People ex rel. TJpdyke v. Gilon, 18 Civ. Pro. Ill, 9 N. Y. Supp. 244. 22. People v. Fire Com'rs. 73 N. Y. 437; People ex rel. P. P. Co. v. Martin, 142 N. Y. 235; People ex rel. Miller v. Wurster, 149 N. Y. 554; People ex rel. McMillen v. Vanderpoel, 35 App. Div. 73, 54 N. Y. Supp. 436 ; People ex rel. Campbell v. Partridge, 99 App. Div. 419, 91 N. Y. Supp. 258; aff'd, 180 N. Y. 542; People ex rel. New York Edi- son Co. V. Wilcox, 149 App. Div. 671, 134 N. Y. Supp. 241; People ex rel. McGerald v. Woods, 174 App. Div. 896, 159 N. Y. Supp. 1135; People ex rel. Parker v. Bingham, 57 Misc. 28, 106 N. Y. Supp. 1079 ; People ex rel. Higgins v. Grant, 58 Hun, 160, 19 Civ. Proc. 318, 11 N. Y. Supp. 505, 33 St. Eep. 810; People V. Campbell, 50 N. Y. Super. 82. Comnion law. — The power to order a further return existed at common Law. People ex rel. Higgins v. Grant, 58 Hun, 160, 19 Civ. Proc. 318, 11 N. T. Supp. 505, 33 St. Eep. 810. Appointment of referee. — The prac- tice of appointing a referee to take proof as to an alleged conversation, and of requiring the police commissioner, after the referee has reported to the court that the alleged conversation ac- tually took place, to make a further re- turn consisting of a copy of the ref- eree's opinion, is illegal and unauthor- ized. People ex rel. Campbell v. Part- ridge, 99 App. Div. 410, 91 N. Y. Supp. 258; aff'd, 180 N. Y. 542. 23. People ex rel. Gage v. Lohnas, 54 Hun, 608, 28 St. Eep. 248, 8 N. Y. Supp. 10,6; People ex rel. Quinn v. Eobb, 31 St. Eep. 642, 9 N. Y. Supp. «33. CERTIOKAKI. 227 The court cannot correct or amend a return in certiorari proceedings. The only power of the court is to direct a further return to be made by the board, body or officer whose action is sought to be reviewed.^* A return is generally con- clusive on the matters therein stated:^^ Additional affidavits may be submitted to the court, only when, by reason of the disability of an officer, a complete return cannot be compelled, or when a question of jurisdiction is involved.^^ But a further return will be directed unless the board, whose determination is under review, certifies that all its acts are contained in the return.^'' Where the person upon whom an order of certiorari has been served has made a return of all the facts and matters required by the order, the court has no power to require him to make a further return of other facts.^^ Where matter is in- serted in the return which is concededly irrelevant, the court may order it stricken out.^^ But it cannot strike out objectionable parts without order- ing a further return, where the prior return is left imperfect and meaningless.^" And generally the proper practice is to disregard the irrelevant matter rather to strike it out.^^ D. Conclusiveness of return. Except as a further return may be required,^^ or additional affidavits may be received by the Appellate Division,^ the re- 24. People ex rel. City of New York 641; lev'd, 198 N. Y. 433. V. O 'Toole, 146 App. Div. 133, 130 N. 30. People ex rel. Utica Sunday Tri- Y. Supp. 567. See also, People ex rel. bune Co. v. Williams, 140 App. Div. 58, Benedict v. Eoe, 25 App. Div. 107, 49 134 N. Y. Supp. 328; rev'd, 200 N. Y. N. Y. Supp. 227 ; People ex rel. Grogan 525. V. York, 51 App. Div. 503, 64 N. Y.. 31. People ex rel. Higgins v. Grant, Supp. 736. 58 Hun, 160, 33 St. Rep. 810, 19 Civ. 25. See, infra. Art. VI.— D. Conclu- Pro. 318, 11 N. Y. Supp. 505; People sivcness of return. ex rel. v. Webb, 66 Hun, 632, 21 Supp. 2G. See, infra, Art. VII — B, E. Ad- 398; People ex rel. v. Melville, 7 Mise. ditional affidavits. 214, 27 Supp. 1101 ; People v. Mayor, 2 27. People ex rel. v. MaeLean, 61 Hill, 9 ; Leroy v. Mayor, 20 Johns. 430 ; Super. Ct. 458, 19 N. Y. Supp. 548. Lawton v. Com'rs, 3 Caines, 179; 28. People ex rel. Meehan v. Greene, Stone v. Mayor of New York, 35 Wend. 103 App. Div. 393, 92 N. Y. Supp. 157. 1112; People ex rel. Lovell v. Melville, 32. See, supra. Art. VI — C. False, 58 St. Rep. 557, 7 Misc. 214, 37 N. Y. defective or incorrect return. Supp. 1101. 33. See. infra, Art. VII — B. E. Ad- 29. People ex rel. Joline v. Wilcox, ditional affidavits. 134 App. Div. 563, 119 N. Y. Supp. 228 CEKTIOKABI. turn, as submitted is conclusive as to the matters therein stated.^* If false, the remedy of an aggrieved party is an ac- tion for false return.^^ The court will not look to the petition for the facts, except as they are admitted by the return.^^ Denials and allegations in a return must be held true, so far as they join issue with material allegations of the peti- tion.^'' But, when the return is silent as to material allegations of fact contained in the petition the presumption is that the oflScers making the return intended to admit those alle- gations.^^ But this presumption does not extend to con- clusions of law, which are not admitted even if not denied.^^ And the court is not bound by opinions or conclusions in the return.*" 34. People ex rel. P. P. Co. v. Mar- tin, 142 N. Y. 235 ; People ex rel. Alex- ander V. Brady, 50' App. Div. 372, 63 N. Y. Supp. 1089; People ex rel. Hart v. York, 73 App. Div. 445, 77 N. Y. Supp. 43; afE'd, 174 N. Y. 533; People ex rel. Pitzpatrick v. Greene, 97 App. Div. 502, 90 N. Y. Supp. 162; People ex rel. Lovett V. Miller, 101 App. Div. 291, 91 N. Y. Supp. 639 ; People ex rel. Melody V. Pound, 111 App. Div. 395, 97 N. Y. Supp. 700; People ex rel. Storey v. Butler, 124 App. Div. 148, 108 N. Y. Supp. 848 ; People ex rel. Barclay v. Holmes, 90' Misc. 63, 154 N. Y. Supp. 163 ; People ex rel. Lee v. Adamson, 171 App. Div. 655, 157 N. Y. Supp. 462; People ex rel. Gage v. Lohuas, 64 Hun, 608, 28 St. Kep. 248, 8 N. Y. Supp. 106 ; People ex rel. Crouk v. Weld, 6 St. Rep. 175. Statutory certiorari. — A remedy of certiorari given under some statutes may be different in that the return is not conclusive. People ex rel. Man- hattan E. Co. V. Barker, 152 N. Y. 431. 35. See, supra, C. False, defective or incorrect return. 36. People ex rel. Miller v. Wurster, 149 N. Y. 554; People ex rel. Bernstein V. LaPetra, 171 App. Div. 269, 157 N. 1'. Supp. 386. 37. People ex rel. Lester v. Eno, 176 N. Y. 513; People ex rel. Burnett v. Van Brunt, 99 App. Div. 564, 90 N. Y. Supp. 845; People ex rel. Hubert Apartment Assoc, v. Kelsey, 110 App. Div. 617, 96 N. Y. Supp. 745; aff'd, 184 N. Y. 573. 38. People ex rel. Keim v. Desmond, 186 N. Y. 232; People ex rel. MeGuire V. Monroe, 97 App. Div. 283, 89 N. Y. Supp. 929. While the Appellate Division is con- cluded, upon review, by statements of fact contained in the return of the re- spondents material to the controversy, yet as regards material facts contained in the petition and admitted by the re- turn by the respondents being silent , concerning the same or otherwise not controverting them, it is the duty of the court to consider such facts con- tained in the petition and accompany- ing papers in connection with the ma- terial facts stated in the return; and mere opinions or conclusions contained in a return do not have the effect to controvert material statements. People ex rel. Sherwood v. Blood, 120 App. Div. 614, 105 N. Y. Supp. SO. 39. People ex rel Vil. of Brockport V. Sutphin, 166 N. Y. 163. 40. People ex rel. Blossom v. Bd. of CERTIORARI. 229 E. Bringing in additional parties. While section 1302 of the Civil Practice Act permits a party interested in upholding the decision to be brought in as a party defendant, yet where such party has not been brought in, he has no right to appeal from the decision of a court. His interests are protected by the appeal of the other respond- ents ; though it seems that such party could be heard upon ap- peal by permission of the court.^^ The provisions of section 1302 are permissive, and parties must avail themselves there- of in order to be heard.^ The party can only be brought in by the court before which the matter is brought to a hearing. It cannot be done upon appeal.^^ Where, in a proceeding by a railroad company by certiorari to review its assessment on the ground that it is excessive compared with that of other property on the same roll, an- other railroad company, the only one on the roll, is mentioned in the petition as being under-assessed, and much of the evi- dence relates to such assessment and the property of such rail- road is being considered item by item, the court may, in its discretion, under section 3302, permit such company to inter- vene upon the ground that it is " specially and beneficially in- terested in upholding the determination to be reviewed."** ARTICLE VII. HEARING AND QUESTIONS TO BE DETERMINED. A. Civil Practice Act, § 1300. Hearing upon return. The cause must be heard at a. term of the appellate division of the supreme court held within the judicial department embracing the county where the order was returnable. Either party may notice it for hearing at any time after the return is complete. Except as prescribed in the next section, it must be heard upon the order and return and the papers upon which the order was granted. Supervisors of Westchester, 116 App. 17 St. Rep. 665, 2 N. Y. Supp. 117. Div. 844, 102 N. Y. Supp. 402 ; People 43. People ex rel. B., L. & W. R. Co. ex rel. Kinsella v. Wurster, 89 Hun, 6, v. County Court, 92 Hun, 13, 37 N. Y. 35 N. Y. Supp. 89, 69 St. Rep. 446. Supp. 869. 41. People ex rel. Burnhans v. Jones, 44. People ex rel. New York Central, 110 N. Y. 511. 6*<'- ^- ^- ^°- ^- Slock, 178 App. Div. 42. People ex rel. Francis v. Mead, 251, 164 N. Y. Supp. 962. 230 CERTIORARI. B. Civil Practice Act, § 1303. Additional affidavits or proofs in certain cases. If the officer or other person whose duty it is to make a return dies, absconds, removes from the state, or becomes insane, after the order is granted and before making a return, or after making an insufficient return, and it appears that there is no other officer or person from whom a sufficient return can be pro- cured by means of a new certiorari order, the court, in its discretion, may permit affidavits, or other written proofs, relating to the matters not suffi- ciently returned, to be produced, and may hear tlie cause accordingly. The court, in its discretion, also may permit either party to produce affidavits, or other written proofs, relating to any alleged error of fact, or any other ques- tion of fact, which is essential to the jurisdiction of the body or officer to make the determination to be reviewed, where the facts in relation thereto are not sufficiently stated in the return, and the court is satisfied that they cannot be made to appear, by means of an order for a further return. C. Civil Practice Act, § 1304. Questions to be determined. The questions involving the merits to be determined by the court upon the hearing are the following only: 1. Whether the body or officer had jurisdiction of the subject matter of the determination under review. 3. Whether the authority conferred upon the body or officer in relation to that subject matter has been pursued in the mode required by law in order to authorize it or him to make the determination. 3. Whether, in making the determination, any rule of law affecting the rights of the parties thereto has been violated to the prejudice of the petitioner. 4. Whether there was any competent proof of all the facts necessary to be proved in order to authorize the making of the determination. 5. If there was such proof, whether, upon all the evidence, there was such a preponderance of proof against the existence of any of those facts that the verdict of a jury, affirming the existence thereof, rendered in an action in the supreme court triable by a jury, would be set aside by the court as against the weight of evidence. D. Limited to return and accompanying papers. Section 1300 requires the cause to be heard upon the order and return and the papers upon which the order was granted.'*^ It is not, however, the intention of this provision 45. People ex rel. Hovey v. Leaven- show that they considered the relator's worth, 90 Hun, 48, 35 N. Y. Supp. 445, record on the question of his guilt as 69 St. Rep. 857. well as the question of punishment, Dismissal of policeman. — ^Upon cer- when that fact is not disclosed by the tiora'ri to review the action of the record of their official proceedings, board of police commissioners of the People ex rel. Began v. York, 78 App. city of New York in dismissing the re- Div. 433, 80 N. Y. Supp. 300; aff'd lator from the police force, members without opinion, 174 N. Y. 533. Where of the board should not be permitted to the commissioner's return in a proceed- CERTIOEAEI. 231 to overthrow the well established doctrine that the return is conclusive as to the matters of fact stated therein.*® The in- tention seems to be that, if the return is silent as to a certain matter, the affidavits or papers on which the order was granted may be resorted to for the purpose of including facts not set out in the return.*'' The section does not mean that the court is at liberty to look beyond the return and to consider the facts contained in the accompanying papers, unless the return to the writ made by the respondent should be an admission made to those facts or an equivalent to an admission.** Affidavits upon the part of the relator not used on the ap- plication and first presented when the matter is heard thereto are no part of the return, and are not admissible in the case.*^ But, where the return practically admits all the allegations of the petition, such allegations may be considered by the court.^" Where the return meets all the allegations of the order and the papers upon which it was granted, and tra- verses them, then the hearing must be confined to the facts stated in the return, but where the return admits the facts of the order or the papers upon which it was granted, or is silent as to them, then such facts become important, and must be considered upon the hearing.^^ The court cannot regard as within the return proceedings of the board subsequent to the issue and service of the order.^^ ing to dismiss a fireman shows only Where the petition contains a great that his record was before the commis- mass of facts which are not pertinent sioner, and it does not affirmatively ap- to the review, it seems that all the pear that it was used improperly to de- court will consider are the facts which termine the fireman's guilt, the court show that a proper case existed for is- reviewing the proceedings on certiorari suing the writ. People ex rel. Kidd v. will assume that it was used for a Com'rs, 25 N. Y. Supp. 874. proper purpose. People v. Seannell, 56 49. People ex rel. Sprague v. Bd. of App. Div. 51, 67 N. Y. Supp. 433. Excise, 91 Hun, 94, 36 N. Y. Supp. 46. People ex rel. McCarthy v. 678. French, 35 Hun, 113. See, supra, Art. 50. People ex rel. White v. Clinton, VI — D. Conclusiveness of return. 38 App. Div. 478, 51 N. Y. Supp. 115. 47. People ex rel. McCarthy v. 51. People ex rel. Peck v. Com'rs of French, 35 Hun, 112. Brooklyn, 106 N. Y. 67. 48. People ex rel. Miller v. Wurster, 52. Matter of Weeks, 97 App. Div. 149 N. Y. 554, 25 Civ. Pro. 370. 131, 89 N. Y. Supp. 836. 232 CEETIORAEI. E. Additional affidavits. Additional affidavits will not be considered upon the hear- ing except for the purposes set forth in section 1303, that is to say, for the purpose of showing facts essential to the juris- diction of the body or officer to make the determination to be reviewed ; or when the officer whose duty to make a return has died, absconded, or removed from the State, etc.^ It applies only where the court is satisfied that the facts cannot be made to appear by an order for a further return.^* The court cannot consider affidavits tending to show that the return is false, nor refer it to a referee to ascertain the truth. The remedy, if such is the case, is only by an action for a false return.^^ After argument and after several months have elapsed since the filing of the return, the court will not permit the introduction of affidavits.^^ Affidavits which are merely cumulative should not be considered upon the hear- ing.^^ F. Questions determined. 1. In general. Before the enactment of the Code of Civil Procedure, there was a serious conflict of authority as to the questions which could be raised by a writ of certiorari.^* Some of the decisions restricted the review to determining whether the tribunal had jurisdiction to render the determination in question.^^ Others extended the right of review to questions of law, permitting a reversal for a violation of any rule of law to the prejudice of the petitioner."" But it was quite generally thought that 53. People ex rel. Simons v. Murray, 57. People ex rel. Shields v. Hayden, 14 Misc. 177, 69 St. Eep. 815. See also 7 Misc. 293, 27 N. Y. Supp. 893, 58 St. People ex rel. Kidd v. Com'rs of Ex- Eep. 544. cise, 25 Supp. 874; People ex rel. 58. Baldwin v. City of Buffalo, 35 Sprague v. Bd. of Excise, 91 Hun, 99; N. Y. SSO; People v. Smith, 45 N. Y. People ex rel. MoMillen v. Vanderpoel, 772. 35 App. Div. 73; People ex rel. Schulz 59. Birdsall v. Phillips, 17 Wend. V. Bd. of Con. and Appor. of Albany, 464; Allyu v. Com'rs, 19 Wend. 342; 39 App. Div. 30, 56 N. Y. Supp. 334. Miller v. Bush, 21 Wend. 651; People 54. People ex rel. Campbell v. Part- v. N. Y. City, 2 Hill, 9 ; People v. Judge ridge, 99 App. Div. 410, 91 N. Y. Supp. of Columbia, a Hill, 398 ; Haviland v. 258; aff'd, 180 N. Y. 542. White, 7 How. Pr. 154. 55. People v. Mayor of Syracuse, 6 60. People v. Assessors of Brooklyn, Hun, 652; People v. Byken, 6 Hun, 625. 39 N. Y. 81; People v. Smith, 45 N. Y. 56. People ex rel. S. C. O. Co. v. 772; People v. Eddy, 57 Barb. 593; Wemple, 61 Hun, 85, 39 St. Eep. 738, People v. Carrington, 3 Lans. 368 1-5 N. Y. Supp. 447. CEETIORABI. 233 the courts could not review the facts and reverse the deter- mination because it was against the weight of evidence,^^ though a review of the facts was allowed in some cases.^^ Errors in the admission or rejection of evidence could not be reviewed by certiorari.^^ The questions which may be deter- mined on the hearing are now stated in section 1304 of the Civil Practice Act, which substantially follows the language of section 2140 of the Code of Civil Procedure.^* The provis- ions of section 1305 relating to the final order do not enlarge the jurisdiction under section 1304.^^ 2. Jurisdiction. One of the offices of certiorari is to inquire into the juris- diction of the body or officer making the determination which is the subject of review.®" Where it appears by the return that the inferior tribunal was entirely without jurisdiction, it is wholly immaterial whether the relator raised the objection below.®^ There is no presumption of jurisdiction in favor of 61. People V. Steele, 56 N. Y. 664; People V. Board of Police, 69 N. Y. 408; People v. Duell, 16 How. Pr. 43; People V. Canal Bd., 7 Lans. 320. 62. Anderson v. Prindle, 83 Wend. 616; Niblo v. Post, aS Wend. 380; Ben- jamin V. Benjamin, 5 N. Y. 383 ; More- head V. HoUister, 6 N. Y. 309; Brick V. Binninger, 3 Barb. 391; People v. Rochester, 21 Barb. 656; Carter v. Newbold, 7 How. 166. 63. People v. Hair, 29 Hun, 125. 64. People ex rel. O'Neill v. Bing- ham, 133 App. Div. 667, 117 N. Y. Supp. 439. Liquor Tax Law. — ^Upon certiorari to review the refusal of a county treas- urer to grant a liquor tax certificate the court has no power to inquire into the validity of an election upon the ques- tion of local option, or to require the town clerk and election officers to make a return of their proceedings. People ex rel. Smith v^ Hamilton, 29 Misc. 465, 61 N. Y. Supp. 979. Local assessment. — On certiorari to • a city to review proceedings on assess- ment of expenses for a bridge, the court will not, as ground for setting aside the assessment, consider the va- lidity of a contract for building the bridge. People v. Common Council, 5 Lans. 142. Objections not made before the board, whose decision is under review, cannot be considered upon the hearing. People ex rel. Hecker, Jones, Jewell Milling Co. v. Barker, 67 St. Kep. 755, 33 N. Y. Supp. 1019. 65. People ex rel. Kent v. Bd. of Fire Com'rs, 100 N. Y. 82. 66. People ex rel. Springsted v. Trus- tees of Cobleskill, 49 St. Eep. 48, 20 N. Y. Supp. 920; People ex rel. Cook V. Hildreth, 126 N. Y. 360, 37 St. Eep. 393; People ex rel. Manhattan E. Co. V. Baker, 153 N. Y. 430; People ex rel. County of Delaware v. State Tax Com- mission, 184 App. Div. 691, 173 N. Y. Supp. 445. 67. People v. Eobertson, 26 How. Pr. 90. :234 CEBTIOKAKI. the acts of inferior courts, and such a court must, when ques- tioned, show that it acted within its jurisdiction.*^ 3. Regularity of proceeding. Under subdivision 2, the courts may reverse a deter- mination of an inferior tribunal when the authority conferred upon such tribunal has not been pursued in the mode required by law to authorize it to make the determination. Thus, if a public officer or employee is entitled to notice before his re- moval and he receives no notice, the determination may be reversed by the courts.*^ Likewise, if the officer did not have an opportunity to be heard on the charges against him, the determination may be reversed.™ Or, if the determination for the removal of the official was induced by threats, it may be annulled.'^ The determination of the tribunal will be reversed by the courts, if the accused on the whole ease did not have a fair trial ;^^ or if the witnesses were not sworn on the hear- ing f^ or if the charges against the officer are not such as jus- tify his removal.''* A refusal to grant an adjournment of the 68. People ex rel. Dougan v. Greene, 97 App. Div. 404, 89 N. Y. Supp. 1067. 69. People ex rel. Jordan v. Martin, 153 N. Y. 317; People ex rel. McCabe V. Constable, 27 App. Div. 74, 50 N. Y. Supp. 121. 70. Matter of Eeddy, 148 App. Div. 725, 132 N. Y. Supp. 937; People ex lel. Lee v. Doolittle, 44 Hun, 295. 71. People ex rel. MeQuire v. Mon- roe, 97 App. Div. 283, 89 N. Y. Supp. 929. 72. People ex rel. Muldoon v. Hay- den, 7 Misc. 278, 27 N. Y. Supp. 881, 58 St. Rep. 537. A fair trial of a member of the New York police force requires that the ac- cused shall be confronted by the wit- nesses against him and given an oppor- tunity to hear their statements under oath, and to cross-examine them to a reasonable extent. Hearsay evidence cannot be received; evidence cannot be taken in the absence of the accused, and the trier of the fact can find facts only on the evidence and not on his own knowledge, except such facts as may be the subject of judicial notice; hence it is error for a deputy commis- sioner to act upon private information received in the absence of relator and for that reason reject the evidence of an important witness. Matter of Greenebaum v. Bingham, 301 N. Y. 343. 73. People ex rol. Streubel v. York, 45 App. Div. 503, 61 N. Y. Supp. 400. 74. People ex rel. Devaney v. Greene, 89 App. Div. 296, 85 N. Y. Supp. 866. Refusal to testify. — The fact that a member of the police force of the city of New York, while being tried before a deputy commissionor of the police de- partment upon charges preferred against him, refuses under the advice of counsel to testify on behalf of the' prosecution, does not constitute such insubordination as will justify his dis- missal from the force, particularly where it appears that the accused mem- ber subsequently took the stand in his own behalf and was cross-examined at length by the. prosecution. People ex rel. Schauwecker v. Greene, 96 App. Div. 249, 89 N. Y. Supp. 343. CEKTIOKAKI. 235 hearing upon proper grounds, may justify the interference of the courts.''^ 4. Violation of law affecting rights of parties. The question " whether in making the determination any rule of law affecting the rights of the parties thereto has been violated to the prejudice of the relator ' ' is open to review in the courtsJ^ Thus, as a general proposition, if a board or in- ferior tribunal renders a decision under a misapprehension of the law relating to the matter, the error will be corrected by certiorari." Reporting infraction of rules. — The failure of a police sergeant of the city of New York to report an infrac- tion of the rules of the department within less than twenty-four hours after knowledge of such infraction, but not of the identity of the persons guilty of such infraction, has been brought to his notice, will not justify the dismis- sal of the police sergeant. People ex rel. Schauwecker v. Greene, flfi App. Div. 349, 89 N. Y. Supp. 343. 76. People ex rel. Devery v. Martin, 13 Misc. 22, 67 St. Eep. S50, 33 N. Y. Supp. 1000. See also. People ex rel. Downes v. Greene, 96 App. Div. 1, 88 N. Y. Supp. 1060; afiE'd, 181 N. Y. 550; People ex rel. Coughlin v. Web- ster, 98 App. Div. 581, 90 N. Y. Supp. 723. A police commissioner has authority to pass upon the question of the suf- ficiency of the ground presented for an adjournment. The determination is i matter of discretion governed by no hard and fast rule. People ex rel. O 'Keill V. Bingham, 132 App. Div. 667, 117 N. Y. Supp. 429. 76. People ex rel. Brisbain v. Zoll, 97 N. Y. 208; People ex rel. Cook v. Hildreth, 126 N. Y. 364 ; People ex rel. Manhattan R. Co. v. Baker, 152 N. Y. 430; People ex rel. McAleer v. French, 119 N. Y. 502; People ex rel. Hogan V. French, 119 N. Y. 493 ; People px rel. O'Callaghan v. French, 123 N. Y. 636; People ex rel. Kasschau v. Police Com'rs, 155 N. Y. 40; People ex rel. Shuster v. Humphrey, 156 N. Y. 231; People ex rel. Grogan v. York-, 166 N. Y. 582; People ex rel. Smith v. Hoff- man, 166 N. Y. 462; People ex rel. Clarke v. Roosevelt, 168 N. Y. 488; People ex rel. Shiel v. Greene, 179 N. Y. 195; People ex rel. Haverty v. Barker, 1 App. Div. 533, 37 N. Y. Supp. 555; affi'd, 149 N. Y. 607; People ex rel. Troy Press Co. v. Common Council of City of Troy, 114 App. Div. 354, 99 N. Y. Supp. 1045; modif'd, 186 N. Y. 548; People ex rel. Long v. Whitney, 143 App. Div. 17, 127 N. Y. Supp. 554; People ex rel. County of Delaware v. State Tax Commission, 184 App. Div. 691, 172 N. Y. Supp. 445; People ex rel. Wohl v. Leo, 109 Misc. 448, 178 N. Y. Supp. 851. Local assessment. — On a certiorari to review an assessment for a street improvement, the objection that the premises assessed were not benefited does not present a question of law, un- less the determination fixing the assess- ment district was not supported by competent proof, or was opposed by a strong preponderance of the evidence. Matter of Phelps, 110 App. Div. 69, 96 N. Y. Supp. 8«2. 77. People ex rel. Babylon R. R. Co. V. Com'rs, 32 App. Div. 179, 52 N. Y. Supp. 908; aff'd, 158 N. Y. 711. 236 CERTIOKAEI. Where a town board refuses to audit the claim of a con- tractor at its full amount, but assumes conditionally to audit the claim for a less amount, a rule of law has been violated to the prej.udice of the relator under subdivision 3, and in such case the court has power to amend and modify the determin- ation of the town board.'^^ And, where a board of supervisors neglects to pass upon the items of a claim presented for audit, their decision will be reversed.'^^ 6. Determination against weight of evidence. The court has authority under subdivision 4 to determine whether there was any competent proof of the facts necessary to be proved in order to authorize the making of the deter- mination in question.^" And, moreover, under subdivision 5, it may review the evidence and hold that the determination under review was against the weight of evidence.^ When a determination could not stand had it been the verdict of a jury, it will be set aside under subdivision 5.^^ But the pre- 78. People ex rel. Groton. Co. v. Town Bd. of Campbell, 92 Hun, 585, 36 N. Y. Supp. 1062. 79. People ex rel. SutlifE v. Super- visors, 74 Hun, 251, 26 N. Y. Supp. 610, 55 St. Kep. 891. 80. People ex rel. Haverty v. Barker, 1 App. Div. 533, 37 N. Y. Supp. 555; aff'd, 149 N. Y. 607; People ex rel. Stephenson v. Greene, 92 App. Div. 243, 87 N. Y. Supp. 172. An order of the Appellate Division dismissing a writ of certiorari and unanimously affirming the proceedings before a police commissioner, dismiss- ing a policeman from the department, necessarily includes a decision that there was evidence supporting, or tend- ing to sustain, the finding of the com- missioner that the relator was guilty of the charges made against him. People ex rel. Stephenson v. Bingham, 305 N. Y. 168. 81. People V. Zoll, 97 N. Y. 203; People ex rel. McAleer v. French, 119 N. Y. 507 ; People ex rel. O 'Callahan v. French, 123 N. Y. 636; People ex rel. Cook V. Hildreth, 126 N. Y. 364; People ex rel. Manhattan K. Co. v. Baker, 152 N. Y. 430 ; People ex rel. N. Y. C, etc., R. E. Co. v. Public Service Com'rs, 195 N. Y. 157. See People ex rel. Strauss v. Eoosevelt, 2 App. Div. 536, 38 N. Y. Supp. 27; People ex rel. Walker v. Eoosevelt, 26 App. Div. 183, 49 N. Y. Supp. 975; People ex rel. Mc- Cormick v. Partridge, 95 App. Div. 323, S8 N. Y. Supp. 657; People ex rel. Dwyer v. Hogan, 101 App. Div. 216, 91 N. Y. Supp. 715; People ex rel. Byrne V. Baker, 140 App. Div. 137, 124 N. Y. Supp. 1056; People v. Jordan, 1 Civ. Proc. 328; People v. Fire Com'rs, 30 Hun, 376; People ex rel. A. C. & D. Co. V. Wemple, 60 Hun, 234, 38 St. Eep. 23, 14 N. Y. Supp. 863 ; People ex rel. Welch V. French, 15 St. Eep. 109. 82. People ex rel. Sampson v. York, 35 App. Div. 430, 54 N. Y. Supp. 835; People ex rel. McElearney v. Monroe, 106 App. Div. 607, 94 N. Y. Supp. 366 ; People ex rel. Madigan v. Sturgis, 110 App. Div. 1, 96 N. Y. Supp. 1046; People ex rel. Mahoney v. McLean, 33 St. Eep. 966, 11 N. Y. Supp. 487. A police commissioner in hearing CERTIORARI. 237 ponderance of proof against the determination must be such that, if the determination was based on a verdict by a jury, the court would set it aside.^^ Where the verdict of a jury would be conclusive as to the fact, the determination of the lower tribunal is likewise conclusive.^* The decision of a commissioner or board dismissing an em- ployee will not be reversed, if the evidence was sufficient to support it, although the court might have come to a different conclusion.^ On a trial of an officer before a police commissioner for neglect of duty and conduct unbecoming an officer, the rule of reasonable doubt applicable in criminal cases does not ob- tain.^^ The review of the facts ends with the Appellate Di- vision, and the Court of Appeals cannot reverse on that ground.*^ 6. Admission or rejection of evidence. Errors in the reception or rejection of evidence by the tribunal whose proceedings are under review should be dis- charges against an ofB.cer is vested with the function of passing upon the credi- bility of witnesses and the weight of their evidence, and with a wide discre- tion in making his determination, which will not be disturbed unless there is an absence of evidence to sustain it. People ex rel. Brown v. Greene, 106 App. Div. 230, 94 N. Y. Supp. 477; aff'd, 184 N. Y. 565. Stale charges.^-The fact that charges against the superintendent of a ceme- tery are stale, and have once been con- sidered and dismissed by a former mayor, may be considered on certiorari to review the discharge of the superin- tendent by a subsequent mayor. People ex rel. Dwyer v. Hogan, 101 App. Div. 216, 91 N. Y. Sapp. 715. 83. People v. Waldo, 212 N. Y. 174 ; People ex rel. Shaefer v. Martin, 28 App. Div. 74, 50 N. Y. Supp. 897; People ex rel. Hunt v. Priest, 90 App. Div. 520, 85 N. Y. Supp. 481; People ex rel. Lovett v. Miller, 101 App. Div. 291, 91 N. Y. Supp. 639; People ex rel. Leet V. Heins, 127 App. Div. 930, 112 N. Y. Supp. 139; People ex rel. Allen v. Welles, 14 Misc. 226, 35 N. Y. Supp. 672; People ex rel. Foley v. French, 20 St. Eep. 913, 4 N. Y. Supp. 172; People ex rel. O 'Sullivan v. French, 27 St. Rep. 87, 7 N. Y. Supp. 489; People ex rel. Dolan v. McLean, 32 St. Eep. 639, 11 N. Y. Supp. 111. 84. People ex rel. Doherty v. Part- ridge, 88 App. Div. 60, 84 N. Y. Supp. 779 ; People ex rel. Irving v. French, 6 N. Y. Supp. 394; People ex rel. Win- chell V. McLean, 13 N. Y. Supp. 343, 36 Sti Bep. 999. 85. People ex rel. Gear v. Dalton, 52 App. Div. 627, 65 N. Y. Supp. 426; People ex rel. Doherty v. Com'rs, 84 Hun, 64, 32 N. Y. Supp. 18, 65 St. Eep. 175. 86. People ex rel. Cunningham v. Bingham, 134 App. Div. 602, 119 N. Y. Supp. 417. 87. People ex rel. O 'Callahan v. French, 123 N. Y. 636. 238 CEETIOEAEI. regarded by the court if the tribunal has jurisdiction of sub- ject-matter of the investigation, and had conducted its pro- ceedings in the mode required by law, where there is sufficient competent evidence upon which the tribunal would be author- ized to make the determination.^^ But it is thought that a re- fusal to receive evidence absolutely essential to the protection of either of the parties would constitute an erroneous ruling of law affecting the rights of the parties within the sub- division 3.^^ If evidence is admitted without objection, its competency cannot be passed upon by certiorari.^" A determination of the State Commissioner of Education removing a school commissioner from office for willful dis- regard of duties, will not be reversed because the State Com- missioner based his determination, not only upon the evidence at the hearing, but also upon records in his office, consisting of letters sent and received, even though they were not called to the attention of the person removed upon the hearing.^^ 7. Matters committed to discretion of lower tribunal. Certain matters are confided to the discretion of inferior tribunals, and the courts will not interfere with the exercise of this discretion.^^ Thus the penalty or punishment imposed upon a police officer after the hearing of charges against him and a finding of guilty, is a matter within the discretion of the police board or commissioners, and certiorari cannot be invoked to review such discretion.^^ 88. People ex rel. O'Shea v. Lantry, Draper, 142 App. Div. 102, 127 N. Y. 44 App. Div. 392, 60 N. T. Supp. 1009; Supp. 14; aS'd, 202 N. Y. 612. People ex rel. County of Delaware v. 92. People ex rel. v. Fire Com 'rs, 100 State Tax Commission, 184 App. Div. N. Y. 82; People ex rel. Stephenson v. 691, 172 N. Y. Supp. 445; People ex Greene, 92 App. Div. 243, 87 N. Y. rel. Schabacker v. State Assessors, 47 Supp. 172; People ex rel. Hagerty v. Hun, 452, 14 St. Eep. 309 ; People ex McClellan, 107 App. Div. 272, 94 N. Y. rel. Sutliff V. Supervisors, 74 Hun, 251, Supp. 1107; People ex rel. Berlin v. 26 N. Y. Supp. 610, 55 St. Eep. 891 ; Bingham, 124 App. Div. 553, 108 N. Y. People ex rel. Burby v. Common Coun- Supp. 933; Jordan v. Bd. of Educa- cil of Auburn, 85 Hun, 601, 67 St. Eep. tion, 14 Misc. 119, 69 St. Eep. 623, 25 3, 33 N. Y. Supp. 165; People ex rel. Civ. Pro. 89, 35 N. Y. Supp. 247; Law- Burbey v. Common Council, 85 Hun, ton v. Com'rs of Cambridge, 2 Caines, 612, 67 St. Eep. 3, 33 N. Y. Supp. 165. 179; People v. Bd. of Education, 3 89. People ex rel. Schabacker v. Hun, 177; People v. Carr, 23 N. Y. State Assessors, 47 Hun, 452, 14 St. Supp, 113; People ex rel. Kidd v. Eep. 309. . Com'rs of Excise, 25 N. Y. Supp. 874. 90. People v. Sanders, 3 Hun, 16. 93. People v. Waldo, 212 N. Y. 174; 91. People ex rel. Woodward v. People ex rel. Downes v. Greene, 96 CEBTIOKAKI. 239 Likewise, the sufficiency of a plea of ignorance of the rules of the department as an excuse for a violation of such rules by a police officer, is for the commissioner to determine.^* The sufficiency of the excuse for the dereliction of duty, where the act is admitted or established, is a matter solely within the discretion of the police tribunal."^ ARTICLE VIII. FINAL ORDER. A. Civil Practice Act, § 1305. Final order upon hearing. The court, upon the hearing, may make a final order annulling or confirming, wholly or partly, or modifying, the determination reviewed, as to any or all of the parties. B. Civil Practice Act, § 1306. Award of restitution. Where the determination reviewed is annulled or modified, the court may order and enforce restitution in like manner, with like effect and subject to the same conditions as where a judgment is reversed upon appeal. C. Civil Practice Act, § 1308. Entry and enrollment of final order. The final order of the court must be entered in the office of the derk where the certiorari order was returnable. But before it can be enforced, an enroll- ment thereof must be filed. For that purpose, the clerk must attach together and file in his office the papers upon which the cause was heard, a certified copy of the final order, and a certified copy of each order which in any way involves the merits or necessarily affects the final order. D. Civil Practice Act, § 1309. Effect of filing of enrollment. The filing of the enrollment in the office of the clerk where the final order is entered, as prescribed in the last section, is a sufficient authority for any proceeding, by or before the body which, or the officer who, made the determina- tion reviewed, which the final order of the court directs or' permits. But where the execution of the final order is stayed by an appeal to the court of appeals, the proceedings below are stayed in like manner. App. Div. 1, 88 N. T. Supp. lO&O; 95. People ex rel. Masterson v. aff'd, 18.1 N. Y. 550. Compare People French, 110 N. Y. 498; People ex rel. ex rel. Clarson v. French, 1 N. Y. Supp. Sampson v. York, 35 App. Div. 430, 54 878. N. Y. Supp. 835; People ex rel. Hogan 94. People ex rel. Daly v. Greene, 91 v. French, 27 St. Rep. 130, 7 N. Y. App. Div. 58, 86 N. Y. Supp. 333; Supp. 460; rev'd, 119 N. Y. 502. aff'd, 178 N. Y. 617. 240 CEETIOKAEI. E. Modification of determination. Before the enactment of section 2141 of the Code of Civil Procedure, now incorporated in section 1305 of the Civil Prac- tice Act, the courts had no power to modify the determination of the lower tribunal. They could only affirm or reverse the proceedings.'^ The present section is to be read in connection with section 1304 defining the questions to be determined, and simply gives the power to correct an erroneous determination instead of reversing it absolutely.'^ The court cannot modify except on the grounds specified in section 1304.'^ There is no authority which allows the Appellate Division to modify a determination as to a matter confided to the discretion of the inferior tribunal."' Where the ground upon which the determination removing a public officer or employee is annulled or reviewed by cer- tiorari is the receipt or consideration of incompetent evidence, or other action prejudicial to the relator's right to a fair jfcpial, and is not intended as a final determination of the charges on the merits, which would preclude a rehearing thereof under pain of punishment for contempt, the court may reinstate the relator and remit the matter to the body, board or officer whose determination is under review for further consideration or for rehearing, which may be on the same charges or on a re- newal thereof, or on those and additional charges.^ Where a relator has been unlawfully discharged from a public office in 96. Baldwin v. Calkins, 10 Wend, on the ground of an erroneous refusal 167; People v. City of Brooklyn, 14 to admit testimony, the petitioner can- Abb. N. S. 115; People v. Ferris, 36 not object to a rehearing before the N. Y. 218. commissioners, on the ground that he 97. People ex rel. Town of Hemp- is thereby tried a second time for the stead V. Tax Com'rs, 214 N. Y. 594. same offense. People ex rel. McCormick 98. People v. Bd. of Fire Com'rs, v. McClave, 29 St. Rep. 368. 100 N. Y. 82; People ex rel. Town of Condition on reversal — The relator, Hempstead v. Tax Commissioners, 214 having been found to have been il- N. Y. 594. legally dismissed from the police force, 99. People ex rel. Burns v. Purroy, held, nevertheless, that a condition of 46 St. Kep. 910, 19 Supp. 713 ; People reversing the judgment of dismissal ex rel. Kent v. Bd. of Fire Com'rs, 100 should be by his waiving a claim for N. Y. 84. See, also, People ex rel. salary for the two years during which Masterson v. French, 110 N. Y. 498. he had failed to apply for a writ of 1. People ex rel. Long v. Whitney, certiorari. People ex rel. Synder v. 143 App. Div. 17, 127 N. Y. Supp. 554. Partridge, 83 App. Div. 262, 82 N. Y. Second triaL — ^Where the removal of Supp. 109. a police officer is reversed on certiorari. CEETIORAKI. 241 anticipation of an event in wliich his discharge might have been lawful, the court in reinstating him will not so modify the decision of the court below as to allow him salary only to the date upon which he might have been properly discharged. He is entitled to be restored to the position.^ Where a school trustee in making an assessment has juris- diction of the persons and subject-matter taxed, the" fact that the tax is erroneous does not invalidate the whole assessment, because such error may be corrected and modified under sec- tion 1305.3 On a certiorari to review the action of a common council in levying a sewer assessment, the Appellate Division has no power to modify the assessment, but if error is found, the matter should be remitted to the common council for further consideration.^ Upon, reversing the action of a town board in rejecting as a whole a bill which the board had authority to reduce in amount, the court should remit the proceedings to the board mth instructions to audit as required by law.^ F. Bestitution. The court upon annulling or modifying a decision may order and enforce restitution in like manner and with like effect, and subject to the same conditions, as where a judgment is reversed upon appeal.® Where there has been an erroneous assessment, and such assessment had been paid, the whole determination need not be reversed but may be modified, and restitution may be ordered under section 1306 to those who have so paid the assessment.'' ARTICLE IX. COSTS. A. Civil Practice Act, § 1307. Costs. Costs, not exceeding fifty dollars and disfcursements, may be awarded by the final order in favor of or against either party, in the discretion of the court. 2. People ex rel. Dean v. Brookfleld, port v. Sutphin, 166 N. Y. 163. 1 App. Div. 67, 37 N. Y. Supp. 107. 6. See sections 539, 587, Civil Prac- 3. Norris v. Jones, 7 Misc. 198, 27 tice Act. Spe Haebler v. Myers, 132 N. Y. Supp. 209. See same case on ap- N. Y. 367, 44 St. Eep. 405, 28 Abb. N. peal, 81 Hun, 313. C. 179. 4. People ex rel. Empire v. Smith, 7. People ex rel. N. Y., O. & W. R. 216 N. Y. 95. R- Co. v. Chapin, 42 Hun," 241. 5. People ex rel. Village of Brock- 16 242 CEBTIOEAKI. B. When allowed. At common law no costs were allowed on a writ of cer- tiorari f but under section 1307, costs may be awarded, in the discretion of the court, at not exceeding fifty dollars and dis- bursements.^ The section above does not apply to a certiorari to review an assessment under the Tax Law.^** If the respond- ent is successful, it is thought that he is not entitled to in- creased costs under section 1479 of the Civil Practice Act, formerly section 3258 of the Code of Civil Procedure, allow- ing increased costs in certain cases where the defendant is a public officer." Costs are granted or withheld in its discretion by the Appel- late Division, upon the order itself and not upon the original trial which is sought to be reviewed.^^ Where the petitioner delays the hearing on an order of cer- tiorari for more than a year after its issuance, costs and dis- bursements should be denied to him because of such delay .^^ Although the Court of Appeals has reversed a dismissal of the writ by the Appellate Division, and also the determination of a police commissioner dismissing a police officer, " with costs to abide the event," nevertheless the Appellate Division may deny costs to the successful relator in its discretion." Where the judgment of a court-martial is brought into the Supreme Court on an order of certiorari, and there reversed, the respondent is personally liable for costs awarded by the final order and may be adjudged guilty of contempt for non- payment.^^ 8. People V. Metropolitan Police Bd., 11. People ex rel. Hall v. Town Audi- 39 N. Y. 506. tors, 43 App. Div. 350, 59 N. Y. Supp. 9. People ex rel. Hall v. Town Audi- 10. tors, 42 App. Div. 350, 59 N. Y. Supp. 12. People ex rel. Shiels v. Greene, 10; O'Neil v. Mansfield, 47 Misc. 516, 114 App. Div. 168, 99 N. Y. Supp. 679. 95 N. Y. Supp. 1009. 13. People v. Waldo, 163 App. Div. 10. People ex rel. Niagara Palls Co. 345, 147 N. Y. Supp. 848. V. Eussell, 57 Hun, 55, 10 N. Y. Supp. 14. People ex rel. Shiels v. Greene, 392, 33 St. Eep. 31; People ex rel. 114 App. Div. 168, 99 N. Y. Supp. 679. Fairchild Co. v. Coleman, 18 Abb. N. C. 15. Matter of Leary, 30 Hun, 394. 247. See Tax Law. CERTIORABI. 243 ARTICLE X. APPEALS. A. Discretion of Appellate Birision. The granting, withholding or vacating of an order of cer- tiorari may be a discretionary act on the part of the Supreme Court ; and, if the court so acts as a matter of discretion, the Court of Appeals will not hear the case.^^ Thus, an appeal has frequently been denied from an order quashing a writ of cer- tiorari under the former practice." An order of the Appellate Division simply dismissing a common-law writ of certiorari without affirming the proceed- ings, or in any way passing upon the questions sought to be reviewed, was held to be a discretionary order, not reviewable by the Court of Appeals. The discretionary character of such an order could not be altered by recourse to the opinion of the court below.^* But, if the court did not exercise its dis- cretion in the matter, but quashed the writ upon the ground of want of power to issue it, or quashed it in a case not author- ized by law, it was held that a review could be had in the Court of Appeals.^^ And, where an order was made denying a motion to quash a writ issued in a case not reviewable by certiorari, it was held that an appeal could be taken to the Court of Appeals.^" The quashing of writs of certiorari, on the specific ground that the relator had no power or authority to obtain or prose- 16. People V. McCarthy, 103 N. Y. final order and, hence, not appealable 630; People ex rel. Toms v. Bd. of to the Court of Appeals. People ex rel. Supervisors, 199 N. Y. 150; People ex Long Acre E. L. & P. Co. v. Public rel. Leo v. Hill, 37 St. Rep. 115, 13 N. Service Commission, 199 N. Y. 354. Y. Supp. 188; aff'd, 136 N. Y. 503; 17. People v. Bd. of Police Com'rs, Jones V. People, 9 Week. Dig. 354. 83 N. Y. 506; People v. Haneman, 85 Order not final. — On a denial of an N. Y. 655; People v. Board of Police application made by relator to the Pub- Com'rs, 86 N, Y. 639; People ex rel. lie Service Commission relator obtained Mayor v. McCarthy, 103 N. Y. 643 ; a writ of certiorari, which was sus- People ex rel. O'Connor v. Supervisors, tained by the Appellate Division by an 153 N. Y. 374. order directing that the determination 18. People ex rel. Coler v. Lord, 157 of the Commission be annul'ed and the N. Y. 408. subject-matter of the application be 19. People v. McCarthy, 103 N. Y. referred back to such Commission "for 635; People v. Com'rs, 103 N. Y. 370. consideration and action within the 20. People v. Board of Commis- limits of its authority." Held, not a sioners, 97 N. Y. 37. 244 CEETIORAKI. cute them, was not exempt from review on appeal on the ground that it was an exercise of discretion.^^ The order of the Appellate Division in sustaining a writ of certiorari against a public service commission and finally an- nulling the order of the commission without granting a re- hearing, was reviewable by the Court of Appeals.^^ Even in a case where the Court of Appeals had power to review the determination, it could not decide the question whether the weight of evidence is against the determination.^^ Where a determination of an inferior tribunal has been re- versed on certiorari by the court, on the ground of being against the weight of evidence, such reversal will not be re- viewed by the Court of Appeals.^^ If there is any evidence fairlj^ sustaining the determination, the Court of Appeals will not interfere therewith. Nevertheless, where there is no real conflict in the evidence, and there is thus a substantial failure in evidence to sustain a determination, the Court of Appeals will review the same and reverse the decision.^'' Where the action of the board has been unanimously af- firmed by the Appellate Division of the Supreme Court, the Court of Appeals has no jurisdiction to review the questions of fact involved.^^ 21. People ex rel. Forest Commission Featherstonnaugh, 172 N. Y. 112. V. Campbell, 152 N. Y. 51. 24. People ex rel. McCabe v. Bd. of 22. People ex rel. New York & Fire Com'rs, 106 N. Y. 261, 8 St. Kep. Queens Gas. Light Co. y. McCall, 219 698. N. Y. 84. 25. People ex rel. Coyle v. Martin, 23. People v. French, 92 N. Y. 306; 142 N. Y. 354. People ex rel. O 'Callahan v. French, 26. People ex rel. Loughran \. Eail- 123 N. Y. 636; People ex rel. North v. road Com'rs of N. Y., 158 N. Y. 421. CERTIORARI TO REVIEW ASSESSMENT. See Tax Law. CHATTELS, FORECLOSURE OF LIENS UPON.* ARTICLE I. Statutory provisions. A. Lien Law, § 206. Enforcement by action; when and in what courts, B. Lien Law, § 207. Warrant to seize chattel; proceedings thereupon. C. Lien Law, § 208. Judgment. D. Lien Law, § 309. Action in inferior court. E. Lien Law, § 210. Application. ARTICLE II. Discussion of statutory provisions. A. History of statute. B. Nature of remedy. C. Necessity of demand. B. Parties. E. Defenses. r. Issuance of warrant. o. Wrongful sale or seizure. ARTICLE IIL Precedents. A. Complaint. B. Bond. C. AflBdavit for warrant. D. Warrant. E. Complaint in action for receiver. ARTICLF I. STATUTORY PROVISIONS, A. Lien Law, § 206. Enforcement by action; when and in what courts. An action may be maintained to foreclose a lien upon a chattel, for a sum of money, in any case where such a lien exists at the commencement of the action. The action may be brought in any court, of record or not of record, which would have jurisdiction to render a judgment, in an action founded upon a contract, for a sum equal to the amount of the lien. (See B., C. & G. Consol. L., 2nd Ed., p. 4935.) B. Lien Law, § 207. Warrant to seize chattel; proceedings thereupon. Where the action is brought in the supreme court, in the city court of the city of New York, or a county court, if the plaintiff is not in possession of the * For the foreclosure of chattel mortgages and contracts of conditional sales, see Griflin & Curtis on Chattel Mortgages and Conditional Sales. See also, B., C. & 6. Consolidated Laws. [245] 246 CHATTELS, FORECLOSURE OF LIENS UPON. chattel, a warrant may be granted by the court, or a judge thereof, command- ing the sheriff to seize the; chattel and safely keep it to abide the final judg- ment in the action. The provisions of title third of chapter seven of the Code of Civil Procedure apply to such warrant, and to the proceedings to procure it, and after it has been issued, as if it was a warrant of attachment, except as otherwise expressly prescribed in this article. (See B., C. & G. Consol. L., 2nd Ed., p. 4935.) C. Lien Law, § !208. Judgment. In an action brought in a court specified in the last section, final judgment in favor of the plaintiff, must specify the amount of the lien, and direct a sale of the chattel to satisfy the same and the costs, if any, by a referee appointed thereby, or an officer designated therein, in like manner as where a sheriff sells personal property by virtue of an execution; and the application by him of the proceeds of the sale, less his fees and expenses, to the payment of the amount of the lien, and the costs of the action. It must also provide for the payment of the surplus to the owner of the chattel, and for the safe keeping of the surplus, if necessary, until it is claimed by him. If a defendant, upon whom the summons is personally served, is liable for the amount of the lien, or for any part thereof, it may also award payment accordingly. (See B., C. & G. Consol. L., 2nd Ed., p. 4fl»6.) D. Lien Law, § 209. Action in inferior court. Where the action is brought in a court, other than one of those specified in section two hundred and seven, if the plaintiff is not in possession of the chattel, a warrant, commanding the proper officer to seize the chattel, and safely keep it to abide the judgment, may be issued, in like manner as a war- rant of attachment may be issued in an action founded upon a contract, brought in the same court; and the provisions of law, applicable to a warrant of attach- ment, issued out of that court, apply to a warrant, issued as prescribed in this section, and to the proceedings to procure it, and after it has been issued; except as otherwise specified in the judgment. A judgment in favor of the plaintiff, in such an action, must correspond to a judgment, rendered as pre- scribed in the last section, except that it must direct the sale of the chattel by an officer to whom an execution, issued out of the court, may be directed; and the payment of the surplus, if its safe keeping is necessary, to the county treasurer, for the benefit of the owner. (See B., C. & G. Consol. L., 2nd Ed., p. 493'6.) E. Lien Law, § 210. Application. Sections two hundred and six to two hundred and nine inclusive do not affect any existing right or remedy to foreclose or satisfy a lien upon a chattel without action; and they do not apply to a case, where another mode of enforcing a lien upon a chattel is specially prescribed by law. (See B., C. & 6. Consol. L., 2nd Ed., p. 4937.) CHATTELS, FORECLOSURE OF LIENS UPON. 247 ARTICLE II. DISCUSSION OF STATUTORY PROVISIONS. A. History of statute. To some extent, the statutory provisions in question are founded upon Chapter 738 of the Laws of 1869, which pro- vided for the enforcement of hens of innkeepers, boarding house keepers, mechanics, workmen or bailees, upon chattel property. That statute did not contain the provisions of the present act relating to the issuance of a warrant for the seizure of the property. The provisions were in the Code of Civil Procedure until 1909, when they were repealed and re- enacted in the Lien Law. B, Nature of remedy. As a general proposition, an action in equity lies to fore- close a chattel mortgage or a lien on personal property;^ and this right of actions seems to have been preserved by sections 206-210 of the Lien Law. But the statute does not apply to the foreclosure of liens on choses in action.^ The action may 1. Briggs V. Oliver, 68 N. Y. 336; two of the defendants and the sheriff and see Griffin & Curtis on Chattel claimed their liens were prior to that Mortgages and Conditional Sales (3rd of plaintiff's mortgage because of his ed.), p. 156, for a thorough discussion omission to renew it by refiling; that of the foreclosure of chattel mort- the property if sold in bulk would produce enough to pay all the liens. Sale under receiver. — Ostrander v. but would bring much less if sold sep- Weber, 114 N. Y. 95, was an action arately with the conflicting claims brought by the plaintiff alleging that thereon; the complaint asked for the he was the holder of a chattel mort- appointment of a receiver with au- gage covering a portion of the furni- thority to sell the property in bulk ture and fixtures of a hotel, that one and distribute the proceeds under the defendant was the holder of two direction of the court, and in aocord- junior mortgages covering portions of anoe with the rights and priorities of said property and some not covered the parties; it was held, per Potter, by plaintiff's mortgage, another de- J., that the claimant set forth several fendanit held still another mortgage subjects of equitable jurisdiction, covering all of said property; that the among others the foreclosure of chat- sheriff, by , virtue of a judgment and tel mortgages, citing Briggs v. Oliver, execution in favor of still another de- 68 N. Y. 336; Hart v. Ten Eyck, 2 fendant against the person holding the Johns. Ch. 99; Thompson v. Van Vech- property and carrying on the hotel, ton, 5 Duer, 624; Charter v. Stevens, had levied upon said property and 3 Den. 33, and held the action well was proceeding to sell the same; that brought. 248 CHATTELS^ FOEECLOSUKE OF LIENS UPON. be brought to enforce a common law lien, such, as that of a mechanic having possession of the property.^ Moreover, a warrant of seizure may be granted in eases where it is sought- to foreclose a lien upon a chattel which is not in the possession of the plaintiff. Hence, the statutory provisions in question are applicable to the foreclosure of a lien under Lien Law, 160-163, for the services of a stallion.* The foreclosure of chattel mortgages is a notable illustration of the power to maintain the action when the property in question is not in the possession of the plaintiff.^ When a chattel mortgage is foreclosed in an equitable action, the form of the pleading, the mode of procedure and the jurisdiction of the court, are the same as in actions to foreclose real estate mortgages, ex- cept as modified by the provisions of the Lien Law under con- sideration.^ C. Necessity of demand. A demand for payment of a debt secured by a chattel mortgage, which does not fix a time therefor, is unnecessary, and the mortgagee may foreclose at any time.'^ D. Fatties. A mortgagor is a necessary party defendant in an action by a mortgagee of chattels against a" storage company to whose premises the chattels have been taken by the mortgagor, after default and demand, as such mortgagor has the right of re- demption which may be of value, and moreover should be bound by the judgment.^ 2. Matter of Wilson, 2 Civ. Pro. R. court. Page v. Boggess, 41 Misc. 46, 343. 83 N. Y. Supp. 569. The right to foreclose a lien upon 3. Ohatfleld v. Campbell, 35 Misc. collateral has always been recognized. 355, 71 N. Y. Supp. 1004, affirmed It has long been held that a nonpay- without opinion, 75 App. Div. 631. ment of the debt authorized the 4. Tuttle v. Dennis, 58 Hun, 35, 33 pledgee to file a bill for the foreclosure St. Rep. 445. of the pledge and proceed to a judicial 5. Blake v. Corbet, 31 St. Eep. 31; sale. It is also held that the owner aff'g, 12 St. Rep. 650. of collaiteral may maintain an action 6. Lembeck & Betz Brewing Co. v. to fix the amount due, and to fore- Sexton, 184 N. Y. 185. close the lien by a sale of the security, 7. Stearns v. Oberle, 47 Misc. 349, although he has a right to sell such 94 N. Y. Supp. 37. See also Spaulding security without action. The provis- v. American Wood Board Co., 26 App. ions of section 206 are not exclusive. Div. 237, 50 N. Y. Supp. 23. They are unnecessary and do not 8. Fishel v. Hamilton Storage Co., 42 widen or affect the jurisdiction of the Misc. 532, 86 N. Y. Supp. 196. CHATTELS, FORECLOSURE OF LIENS UPON. 249 E. Defenses In an action to foreclose a chattel mortgage, there can he no litigation of title paramount or hostile to the mortgagee.'^ The wife of one who has given a chattel mortgage upon a piano to secure the payment of the purchase price, who, after being deserted by her husband, is made defendant in an action of foreclosure without prayer for personal judgment against her, cannot defend except upon the ground that she is not in possession. When her possession and the default in payment are undisputed, the mortgagor is entitled to a judgment of foreclosure, irrespective of whether the defendant or her hus- band executed the mortgage.-^" It is not a defence in an ac- tion to foreclose a chattel mortgage that the goods covered by it did not correspond with the sample by which plaintiff sold them to defendant.^^ An answer alleging that a chattel mort- gage was procured by fraudulent and false representations, made at the time of its execution, does not sufficiently set up the defense of fraud in procuring the execution of the mort- gage to authorize the introduction of evidence in support of the same.^^ The promise of a chattel mortgagee to forbear or extend the time of payment of the mortgage debt actually due, based on the promise of the mortgagor to pay the same with interest on a later date, is without consideration and consti- tutes no defence to the foreclosure of the mortgage.^^ Where default in making payment as required by a chattel mortgage was admitted on foreclosure, a judgment for defendant, based on a breach of warranty of title, is not sustained in the absence of evidence of damage, merely on proof that some of the mort- gaged goods were taken from defendant under claim of a prior chattel mortgage, the existence of which was not shown." r. Issuance of warrant. In a proceeding to foreclose a chattel mortgage after de- fault, the plaintiff is entitled to the warrant of seizure of the mortgaged chattels, without setting forth in his moving papers the matters required by the Civil Practice Act relative 9. Lembeck & Betz Brewing Co. v. 12. Beadleston & Woerz v. Furrer, Sexton, 184 N. Y. 185. 102 App. Div. 544, 92 N. Y. Supp. 879. 10. Wuertz v. Wuertz, 122 App. Div. 13. Eepelow v. Walsh, 98 App. Div. 433, 107 N. Y. Supp. 429. 320, 90 N. Y. Supp. 651. 11. Wallace v. iLecni, 104 N. Y. 14. Hanson v. Kassmayer, 91 N. Y. Supp. 392. Supp. 755. 250 CHATTELS, FORECLOSURE OF LIENS UPON. to' the issuance of a warrant of attachment.^^ Thus the affi- davit for the warrant need not state that the claim is due over and above any counterclaims known to the plaintiff.-^^ But the provisions of the Civil Practice Act, section 952 et seq. relative to the discharge of the warrant upon the giving of an undertaking, may be applicable to an action of foreclosure." Or. Wrongful sale or seizure. A purchaser of a mortgagor's assets who claims that assets not covered by the mortgage have been wrongfully sold on foreclosure' should proceed in replevin or trover, and not by opening the judgment.^^ Where a warrant is issued pursuant to the provisions of section 207, and the sheriff, pursuant to the warrant, which is regular on its face, takes the chattel from the actual possession of a person not a party to the ac- tion, who claims to be and is, in fact, the owner thereof, such a person can, after a demand for the chattel and refusal of the sheriff to restore it, maintain an action against him to re- cover the chattel.-^' In an action to foreclose a mortgage on real estate the de- fendants counterclaimed for damages for selling under a chat- tel mortgage personal property on the mortgaged premises in violation of an agreement to first satisfy the claim out of the real estate if possible, but, as the sale under the chattel mort- gage was of defendants' interest only, and as they had then transferred their interest, and the chattels were not disturbed, it was held that the counterclaim was properly dismissed, since defendants were not damnified.^" 15. Coiro V. Baron, 158 App. Div. 25 Misc. 320, 54 N. Y. Supp. 570. 591, 143 N. Y. Supp. 853, overruling Action on bond given by plaintiff Faraci v. Mailer, 154 App. Div. 303, for seizure of chattels. See Karp v. 138 N. Y. Supp. 961; People ex rel. Bass, 107 Misc. 217, 177 N. Y. Supp. Mehlin & Sons Piano Co. v. Lauer, 80 462. Misc. 438, 141 N. Y. Supp. 299. Se« 18. Beebe v. Richmond Power Co., 6 Civil Practice Act, § 903. App. Div. 187, 40 N. Y. Supp. 1013. 16. Blake v. Corbet, 44 Hun, 344; 19. Carpenter v. Lott, 31 Hun, 348. Blake v. Crowley, 8 St. Rep. 796. 20. McEchron v. Martine, 111 App. 17. Kee v. Hip Sing Tong Society, Div. 805, 97 N. Y. Supp. 951. CHATTELS, FORECLOSURE OF LIENS UPON. 251 ARTICLE III. PRECEDENTS. A. Complaint. SUPREME COURT— Ulster County. GEORGE DUMOND agst. GEORGE ROBINSON, ISAAC AN- DERSON AND JOHN ROUND, Con- stable. The plaintiff herein shows to the court, that heretofore, and on the 3d day of November, 1905, one George Robinson, the owner of the chattels therein described, made, executed, and delivered to one George 'Kelly, an instrument in writing, of ^hich the following is a copy : (Here insert Mortgage.) That said mortgage was duly filed in the town clerk's office of the town of Shandaken, where the defendant resided at the time of the execution, and filing thereof on the 5th day of November, 1905, and where said chattels were situated at the time of such execution and filing ; that the said instrument was duly sold, transferred and assigned to this plaintiff, by the said Kelly, on the 19th day of April, 1905, and he is now the holder and owner thereof ; that the sum secured by said mortgage is due and payable, and that the same remains unpaid, and there is now due and secured by said mortgage the sum of $125, with interest thereon from the 3d day of November, 1905 ; that the defend- ant Robinson has caused a pair of oxen described in said mortgage to be removed from said town of Shandaken, and the said property is now claimed to be owned by the defendant Issac Anderson, who has refused to deliver the same to the possession of this plaintiff, although the possession thereof has been demanded from him ; that the defend- ant Round, claiming to act on behalf of the defendant Anderson, now has and retains possession of said oxen described in the said mortgage, and refuses to deliver the possession of the same to this plaintiff, al- though plaintiff has demanded possession thereof from said defend- ant. Wherefore plaintiff demands judgment for the foreclosure of said mortgage, and sale of the chattels therein described by a proper person to be designated by the court, and that the proceeds.be applied to the payment of the amount due plaintiff and the costs of the action, and that plaintiff have judgment against defendant Anderson for any costs which may accrue in the action which cannot be satisfied out of the fund realized from the sale of said chattels after first paying plaintiff the amount due him and secured thereby. BERNARD & FIERO, Plaintiff's Attorneys. 252 CHATTELS^ FORECLOSURE OF LIENS UPON. B. Bond. SUPREME COURT— Ulster County. GEORGE DUMOND agst. GEORGE ROBINSON, ISAAC AN- DERSON AND JOHN ROUND, Con- stable. Whereas, the above-named George Dumond, as plaintiff, has com' menced, or is about to commence, an action by summons for the fore- closure of a lien on a chattel against the above-named defendants, and has made, or is about to make, application for a Avarrant, to seize such chattels, described in the complaint, according to the provisions of the Lien Law : Now, therefore, we, George Young, of Wawarsing, by occupation a paper manufacturer, and Charles Brodhead, of the city of Kingston, by occupation a deputy sheriff, do hereby jointly and severally under- take, promise and agree to and with the said defendants, that if the defendants recover judgment, or if the warrant is vacated, the plain- tiff will pay all costs which may be awarded to said defendants, and all damages which they may sustain by reason of the said warrant, not exceeding $250. Dated, April 22, 1906. CHARLES BRODHEAD, GEO. YOUNG. G. Affidavit for warrant. (Title.) Ulster County, ss.: George Dummond, of the city of Kingston, being duly sworn, says, that he is the owner and holder of a chattel mortgage given by George Robinson to George 'Kelly on November 3, 1905, and filed in the town clerk's ofSce of the town of Shandaken, when said Anderson then resided and where the chattels therein described were then located, on the 5th day of November, 1905, for the purpose of secur- ing the payment of the sum of $125, with interest thereon on the first day of April, 1906 ; that the property pledged in and by said mortgage consists of one p^ir four-year-old brindle steers, one light-red large cow seven years old, one yearling heifer, a line back; that the whole of said sum is due, with interest thereon, and remains unpaid, and this deponent has brought this action to foreclose the lien of said mort- gage ; that the pair of oxen described in said mortgage are now in the possession of the defendants, Isaac Anderson and John Round, the said Anderson claiming to be the owner thereof and the said John Round claiming to be entitled to the possession thereof, and both said defendants refuse to deliver the possession of the said oxen to this CHATTELS, FOKECLOSUKE OF LIENS UPON. 253 plaintiff ; that the said defendants, Anderson and John Round, reside at the town of Union Vale, in the county of Dutchess, and said oxen are at said town of Union Vale in said county. (Jurat.) GEORGE DUMOND. D. Warrant. The People of the State of New York to the Sheriff of the County of Dutchess: Whereas, in an action brought in this court, an application has been made to the justice granting this warrant, by George Dumond, plaintiff, for a warrant to seize and safely keep the chattels hereinafter described, to abide the final judgment in said action in which George Dumond is plaintiff, George Robinson, Isaac Anderson and John Round, constable, are defendants. And it appearing by affidavit to the satisfaction of the justice granting this warrant, that a cause of action, such as is specified in section 206 of the Lien Law, exists in favor of the plaintiff and against the defendants, to foreclose a lien for the sum of $125, with interest thereon from November 3, 1905, upon said. chattels, and that the plaintiff is not in possession of said chattels, and the plaintiff having given the undertaking required by law : Now you are hereby commanded to seize the following chattels, to wit : One pair four-year-old brindle steers, being a part of the chattels described in the complaint in this action, or so much thereof as may be found in your county, and to safely keep the same to abide the final judgment in the action, and that you proceed herein in the manner and make you return within the time required of you by law. Given under the hand of one of the justices of the Supreme Court at [l. s] the chambers in the city of Kingston this 10th day of April, 1906. A. B. PARKER, BERNARD & FIERO, Justice Supreme Court. Plaintiff's Attorneys. Jacob D. Wurts, Clerk Supreme Court in and for Ulster county. E. Complaint in action for rceirer. SUPREME COURT— Ulster County. James E. Ostrander agst. John Weber, Horace Humphrey, Rob- ert Loughran, Joseph H. Riseley, as Sheriff of Ulster County, Emma Brigham, Daniel 'Council and Oliver H. Brigham. 1 114 N. T. 95. The plaintiff herein respectfully shows to this court : ■First. That heretofore and on or about the 8th day of January, 1883, the defendants Emma Brigham and Daniel O'ConnelL consti- 254 CHATTELS, FORECLOSUKE OF LIENS XJPOIT. tUting the firm of Brigham & 'Connell, doing business at the city of Kingston, made, executed and delivered to one John D. Sleight a certain chattel mortgage on personal property then and now at the hotel known as the Mansion House, in said city, a copy of which is hereto annexed and marked Schedule "A." That thereafter and on or about February 22, 1883, the said John D. Sleight made and executed an assignment of said mortgage to this plaintiff as and for security for a certain indorsement made by him of notes of said Brigham and 'Connell given to the said Sleight for the purchase price of the said property so mortgaged and for renewals thereof, a copy of which is hereto annexed and marked schedule "A. 2." That the plaintiff on December 16, 1883, indorsed a renewal note of said Brigham and 'Connell, so securerd by said assignment, at three months, which note became due at the State of New York National Bank on March 19, 1883, and was protested for non-pay- ment, and this plaintiff has been obliged to pay the same and is now the owner and holder thereof, and that by the terms of said assign- ment he is entitled to all the rights and benefits accruing or belong- ing to the holder of said chattel mortgage and to enforce the same to the amount so paid by him with interest thereon. That the defendant, the State of New York National Bank, holds two notes made by said Brigham and 'Connell as part of the pur- chase price of said furniture, and, as this plaintiff is advised and be- lieves, protected by said mortgage, such notes aggregating the sum of about $200. The said notes represent all the liabilities secured by said mortgage. That said mortgage was duly renewed on January 29th, 1884, and has not since been renewed. Second. That on the 12th day of February, 1885, the defendant Oliver H. Brigham, who had become the purchaser of the personal property formerly owned by the firm of Brigham and 'Connell, including the property described in Exhibit "A," made and executed a chattel mortgage on certain of the property so acquired, including a part or the whole of the property covered by Exhibit "A" to the defendant John "Weber to secure certain liabilities, contingent or otherwise, on the part of said Brigham to said Weber, a copy of which said mortgage is hereto annexed and marked Schedule "B," which said mortgage was delivered to said Weber and filed in Ulster county clerk's office on the 13th day of February, 1885. That said mortgage was taken by said defendant Weber to secure a precedent debt, and he parted with no value therefor; that the defendant Weber well knew of the existence of this mortgage now held by this plaintiff, and that a large sum remained unpaid thereon, and that by its terms said mort- gage was expressly made subject to the mortgage held by plaintiff, and that the same is subject and second to the said mortgage. Exhibit "A," and that plaintiff is entitled to be first paid the amount of said claim out of the proceeds of the property covered by said Exhibit "A." That said Weber claims that his said mortgage is a prior lien and entitled to be paid before the mortgage held bv plaintiff, for the reason that said plaintiff's mortgage was not filed before January CHATTELS, FOEECLOSURB OF LIENS TJPON. 255 29th, 1885, and claims it is to be first paid out of the proceeds of the property. Third. That on the 17th day of January, 1885, the defendant Loughran obtained a judgment against defendant Oliver H. Brig- ham, in Supreme Court, Ulster county, for the sum of $613.89, and issued execution thereon to the sheriff of Ulster county, and defendant Riseley, on the 7th day of March, 1885, and the said sheriff on the 16th day of March, 1885, levied on a portion or the whole of the prop- erty covered by the said Exhibits A and B and also on certain prop- erty covered by a mortgage held by one Horace Humphrey, hereinafter set forth, and is about to proceed to sell the same to make the amount of said execution. That as to the claim of priority made by said sheriff, this plaintiff is not advised now as to the manner of sale or the nature or extent of the lien claimed for said levy. Fourth. That on or about the 12th day of April, 1884, and the 27th day of May, 1884, the said firm of Brigham and 'Connell, they then being owners of the property made, executed and delivered two cer- tain chattel mortgages to the defendant Horace Humphrey, to secure him from liability as therein set forth, a copy of which mortgages are annexed and marked Schedules "C" and "D" respectively. That such mortgage covers a portion of the property mentioned and described in the said Weber mortgage and a portion of the property levied on under the judgment held by defendant Loughran. That said Humphrey threatens to taJke possession of said property Under and by virtue of his said mortgage. Fifth. That the said property covered by said mortgages and levy consists of hotel furniture and fixtures of the hotel known as the Mansion House, at Rondout, in the city of Kingston, That much of the value of the said property depends upon the business of the hotel, and the property is of much greater value as a whole located on the premises in connection with the lease and business of the hotel than if sold separately. That the defendant Oliver H. Brigham is willing and desirous of disposing of the lease and good will of the business, in case a purchaser can be had. That the property is of sufficient value to pay all the liens above set forth, in case it can be sold in bulk to remain in the hotel, and will, as this plaintiff verily believes, satisfy all liens upon it. That this plaintiff is informed and believes that a purchaser can be had for the property in case a good title, free from incum- b'rances, can be given for all the furniture and fixtures, all of which are covered by one or more of the liens hereinbefore set forth. That in case the property is seized and sold under the different liens, this plaintiff is advised and verily believes that by reason of claim of priority raising difficult questions of law, persons desiring the property will be unwilling to bid and the property is likely to be sacrificed, and this plaintiff's claim, secured by his said mortgage, lost in whole or in part. That, as this plaintiff is informed and believes, it will, by reason of the claim as to priority, be unsafe for the parties interested to' bid 256 CHATTELS, FOEECLOSUKE OF LIENS UPOK. with reference to their own liens, for their protection, thus preventing the property from bringing its value or a fair proportion thereof. Wherefore, this plaintiff asks that all further proceedings on the part of persons, holding liens on the said property to enforce their said liens, be stayed pending the appointment of a receiver of said property, and that a receiver of said property be appointed and directed by this court to operate and manage the same, until a sale can be made advantageous to this plaintiff and the other parties thereto, and that a sale of said property be made at an early day, free and clear from the liens herein set forth, and the moneys realized be paid into court by the receiver, and the rights of the parties thereto determined by the court, and the proceeds distributed according to the priorities of the several liens and the rights of the parties, and that the plaintiff have costs of this action out of the said fund, and that he have such other and further relief as may be just and equitable. BERNARD & FIERO, Attorneys for Plaintiffs. CHILDREN, ADOPTION OF. See Adoption. CIVIL CONTEMPTS. See Contempts. CLAIM TO REAL PROPERTY, ACTION TO DETERMINE.* ARTICLE I. A. History of action. B. Nature of action. A. B. C. D. E. F. G. H. I. J. K. History and nature of action. ARTICLE II. When action maintained, and what must be alleged. Real Property Law, § 500. Who may maintain action. Real Property Law, § 501. Complaint. Real Property Law, § 512. This article applies to corporations. Title of plaintiff. Possession of plaintiff. Claim of defendant. Infant defendants. Complaint. Precedent for complaint. Joinder of parties. Temporary injunction. Proceedings when defendant pleads title. Proceedings the same as in ejectment. Proceedings when defendant claims in rever- ARTICLE III. Proceedings after joinder of issue. A. Real Property Law, § 502. Proceedings when defendant denies plaintiff's title. B. Real Property Law, § 503. C. Real Property Law, § 504. D. Real Property Law, § 505. sion or remainder. E. Defenses, in general. F. Trial similar to ejectment. ARTICLE IV. Judgment and its effect. A. Real Property Law, § 506. Judgment awarding defendant possession. B. Real Property Law, § 507. Judgment for plaintiff. C. Real Property Law, § 508. Effect of judgment. D. Judgment. E. Costs and allowances. * For further discussion of the action to determine a claim to real property, see Weed's Practical Real Estate Law; Aron's Gist of the Real Property Law; B., C. & 6. Consolidated Laws. [257] 17 258 CLAIM TO REAL PROPERTY. ARTICLE V. Proceedings against woman claiming dower. A. Real Property Law, § 509. Action to determine widow's dower. B. Real Property Law, § 510. Proceedings, if plaintiff admits defendant's claim. C. Real Property Law, § 511. Proceedings when defendant's claim is denied. D. Complaint. ARTICLE I. HISTORY AND NATURE OF ACTION. A. History of action. To remedy the necessity for some form of procedure by which claim of title to real property could be quieted by action taken on behalf of the owner in possession, the Revised Statutes provided a remedy by way of proceedings for deter- mination of claims to real estate, to be taken by any person in possession, claiming the fee for life, or for a certain term, by service of notice upon the claimant. The old Code of Pro- cedure, section 449, enacted that these proceedings might be prosecuted by action, and from this arose much confusion, it being held in an early case,^ that the section was inoperative. Subsequently it was held that either the remedy provided by the Revised Statutes or by the Code of Procedure might be prosecuted.^ The remedy under the Code was a special pro- ceeding, not an action.^ The Code of Civil Procedure substan- tially re-enacted the provisions of the Revised Statutes, and the remedy became an action. Tt was incorporated in sections 1638-1650. It forms no part of the Civil Practice Act, but is now article 15 of the Real Property Law, constituting sec- tions 500-512 thereof. B. Nature of action. An action to quiet the title to real estate in an established equitable jurisdiction, but is to be distinguished from an ac- tion under the Real Property Law.* An action to determine 1. Crane v. Sawyer, 5 How. Pr. 372. len, 110 U. S. 15; Center v. Weed, 63 2. Fisher v. Hepburn, 48 N. Y. 51; Hun, 560, 44 St. Rep. 463, 18 N. Y. Barnard v. Simms, 42 Barb. 304. Supp. 554; aff'd, 138 N. Y. 532. 3. Bumham v. Onderdonk, 41 N. Y. Distinguished from equity suit to 425; Fisher v. Hepburn, 48 N. Y. 51. quiet title. — In King v. Ross, 28 App. 4. NicoU V. Trustees of Huntington, Div. 371, 51 N. Y. Supp. 138, appeal 1 Johns. Ch. 166; Wiekliffe v. Owings, dismissed 156 N. Y. 681. it was said: 17 How. (U. S.) 47; Holland v. Chal- "The only difference between the CLAIM TO KEAL PROPERTY. 259 a claim to real property is purely a statutory action.^ The right of a party in possession to maintain an action against one out of possession for the purpose of trying title, did not exist at common law.^ And the remedy will not lie unless the conditions prescribed in the statute are fulfilled^ The proceeding is in no way governed by the principles of the common law, and to give the court jurisdiction the pro- ceeding must come within the provisions of the statute, and the facts bringing it within the statute must appear by the complaint.^ While the action is statutory, equitable rules may be applied to reach a proper determination, for the purpose of the statute is to enlarge and supplement pre-existing equitable remedies.^ While the action has many of the characteristics, and in some respects is a substitute for the action in equity to re- equitable action and this action for the determination of claims to real property ia found in the fact that, after this action has been commenced, the law permits the defendant who is brought in as a claimant to set up hia own title and to demand affirmative relief, as in an action of ejectment; and it provides that, when that has been done, if the defendant asks for affirmative relief, the subsequent pro- ceedings, including the trial, judgment and execution, are the isame as if it were an action of ejectment." Equitable jurisdiction sought. — If all of the parties invoke the equitable jurisdiction of the court, it has power to determine every question involved in accordance with equitable practices. Eidlitz v. French, 105 Misc. 163, 173 N. Y. Supp. 646, citing Crocker v. Manhattan L. Ins. Co., 61 App. Div. 237. Cancellation of Deed. — An action to set aside a deed on account of the in- competency of the grantor, is not an action for the "determination of claim" to real estate. Bridges v. Miller, 2 Dner, 683; Peck v. Brown, 2 Rob. 119. An action to have taxes assessed on real property adjudged to 'be void and to cancel certificates issued on a sale for unpaid taxes cannot be regarded as an action to determine a claim to real property, where the complaint does not show that, at the commence- ment of the action and for the pre- ceding year, the lands had been in possession of the plaintiff or his predecessors in title, as required by section 501. Hicinbothem v. Village of Xorth Pelham, 144 App. Div. 698, 129 N. Y. Supp. 715. Quieting Title under section 360 of Real Property Law. — ^A special pro- ceeding is authorized by sections 360- 366 of the Real Property Law, for quieting title, when real property has been conveyed by a sheriff or referee pursuant to a judicial decree and the decree has been lost or destroyed. 5. King V. Ross, "28 App. Div. 371, 51 N. Y. Supp. 138; Vanderveer Cross- ings V. Rapalje, 133 App. Div. 203, 117 N. Y. Supp. 485. 6. Lewis V. Howe, 174 N. Y. 340. 7. Lewis V. Howe, 174 N. Y. 340; Vanderveer Crossins v. Rapalje, 133 App. Div. 203, 117 N. Y. Supp. 485. 8. Bailey v. Southwick, 6 Lans. 356; Austin v. GoodriA, 49 N. Y. 266. 9. Holden v. Crolly, 153 App. Div. 254, 138 N. Y. Supp. 23. 260 CLAIM TO REAL PBOPERTY. move the cloud from title, the right of an action in equity re- mains in cases where the statute is not sufficiently broad to afford relief.^" But it has been said that the statute is an exclusive remedy for any issue coming within the scope of its provisions, and an action in equity will not lie to accomplish the purposes for which those sections were provided, unless special facts are al- leged showing that the remedy at law provided by them is not adequate and that resort must be had to a court of equity to secure proper relief.^^ In a case where a litigant has a remedy in equity to quiet the title, he is not required to comply with- the requirements of the statute under consideration.^ ARTICLE II. WHEN ACTION MAINTAINED, AND WHAT MUST BE ALLEGED. A. Real Property law, § 500. Who may maintain an action. Where a person has been, or he and those whose estates he has, have been for one year in possession of real property, or of any undivided interest therein, claiming it in fee, or for life, or for a term of years not less than ten, he may maintain an action against any other person to compel the determination of any claim adverse to that of the plaintiff which the defendant makes, or which it appears from the public records, or from the allegations of the com- 10. See Kent v. Church of Sain* act, and, consequently, his only rem- Michael, 136 N. Y. 10; Livingston v. edy is in equity. Moore, 15 App. Div. 15, 44 N. Y. Alternative action. — In Mitchell v. Supp. 125; appeal dismissed, 161 Einstein, 42 Misc. 358, 86 N, Y. N. Y. 602; Center v. Weed, 63 Hun, Supp. 759, reversed, 105 App. Div. 560, 18 N. Y. Supp. 554; aff'd, 138 413, 94 N. Y. Supp. 210, it was held N. Y. 532. that one may maintain an action to Deed not delivered. — In Letson v. determine claims to real propertv, if Letson, 81 App. Div. 556, 80 N. Y. he proves legal title, as possession is Supp. 1032, it was held that one of deemed to follow it, and he may main- several heirs at law of an intestate, tain an equitable action to remove a who alleges that a recorded convey- cloud on title, if he had actual pos- ance executed by the intestate to an- session at the time of the commence- other heir at law was never delivered ment of the action; it being held that by such intestate, may, although not the complaint could be construed ini in possession , of the premises, main- the alternative as an action under sex- tain an action in equity to have such tion 500, or an equity suit to remove conveyance declared void and the rec- cloud upon title. ord thereof cancelled. In such a case 11. Pure Strain Farm Co. v. Smith, the plaintiff could not maintain an ac- 99 Misc. 108, 163 N. Y. Supp. 615. tion of ejectment against the grant^'e 12. Meyer v. Wilcox, 136 N. Y. unless he was actually ousted by his Supp. 337. CLAIM TO REAL PROPERTY. 261 plaint, the defendant might make to any estate in that property in fee, or for life, or for a term of years not less than ten, in possession, reversion or remainder, or to any interest in that property, including any claim in the nature of an easement therein, whether appurtenant to any other estate or lands or not, and also including any lien or incumbrance upon said property, of the amount of value of not less than two hundred and fifty dollars. But this section does not apply to a claim for dower. B. Real Property Law, § 501. Complaint. The complaint in such an action must set forth facts showing: 1. The plaintiff's right to the real property; whether his estate therein is in fee, or for life, or for a term of years not less than ten; and whether he holds it as heir, devisee or purchaser, with the source from or means by which his title immediately accrued to him. 2. That the property, at the commencement of the action was, and, for the one year next preceding, has been in bis possession, or in the possession of him- self and those from whom he derives his title, either as sole tenant, or as joint tenant, or as tenant in common with others. 3. That the defendant unjustly claims, or that it appears from the public records or from the allegations of the complaint, that the defendant might unjustly claim an estate or interest or easement therein, or a lien or incum- brance thereupon of the character specified in the last section. The complaint must describe the property claimed with common certainty, by setting forth the name of the township or tract and the number of the lot, if there is any, or in some other appropriate manner, so that from the description possession of the property claimed may be delivered where the plaintiflF is entitled thereto, and may contain an allegation that no personal claim is made against any defendant other than a defendant who shall assert a claim adverse to the claim of the plaintiff set forth in the complaint. The demand for judgment may be to the effect that the defendant and every person claiming under him be barred from all claim to an estate in the property described in the complaint, or from all claim to an interest or ease- ment therein, or a lien or incumbrance thereupon, of the character specified in the last section, or it may combine two or more of said demands with other demand for appropriate relief. C. Real Property Law, § 512. This article applies to corporations. An action may be maintained, as prescribed in this article, by or against a corporation, or by or against an imincorporated association, as if it was a natural person, or such an action may he maintained by or against the receiver or other successor of any such corporation or association. D. Title of plaintiff. In order to maintain the action, the plaintiff must show not only possession of the premises for the year past,^^ but 13. See, infra, E, Possession of Plaintiff. 262 CLAIM TO REAL PEOPEETY. also that such possession was under a claim of title as pre- scribed in section 500." It has been said, however, that one seized of a vested remainder in fee, the possession being in the tenant for life, can take the proceeding.^^ One having the entire equitable title to the premises may be permitted to maintain the action.^^ But, where by the will of a testatrix her executors are di- rected to convert her estate into money and pay her debts and funeral expenses, and the remainder of the proceeds and avails is given to the testatrix's children, and authority is also given to the executors to sell and convey the testatrix's real property to carry into effect her will, no trust is created in the executors and they are not the owners of the fee of the testatrix's real property within section 500 of the Real Prop- erty Law, and are unable to maintain an action to determine a claim thereto." As a general rule, the plaintiff is not re- quired to show anything more than one year's possession under his title. If the defendant has a title, he is bound to produce and prove it.^^ One who has been in possession for one year may maintain the action and compel the defendant to prove his title, but if plaintiff shows only possession under an unfounded claim, evidence of possession and occupation by defendant prior to plaintiff's entry, may be a good defence.^^ The action is not maintainable for the purpose of obtaining an adjudication that the plaintiff has easements- in certain property.^" Wliere, on the failure of the grantee of property to fulfill the conditions of the grant, the grantor enters into possession and sues for the cancellation of the deed, the ac- tion will be regarded as one incidentally to determine a claim to the property under the statute.^^ Where a lease of agricultural lands for twenty-five years is 14. Death of plaintiff.— Where the 383; affg, 93 App. Div. 190, 87 N. Y. plaintiff in the action has died after a Supp. 563. judgment againat him had been va- 17. Stevens v. Fogle, 73 Misc. 417, cated, the action may be revived 130 N. Y. Supp. 1082. against a devisee of the subject-mat- 18. Carnaad v. Simms, 42 Barb. 304. ter of the suit, and he may be com- 19. Ford v. Belmont, 69 N. Y. 567. pelled to proceed therein. Such de- 20. Consolidated Ice Co. v. Mayor, viseo takes subject to all the incum- etc., of New York, 166 N. Y. 92; aff'g, brances upon his devise. Higgins v. 53 App. Div. 260, 65 N. Y. Supp. 912. Mayor of New York, 45 St. Eep. 696. See also Munter v. Kobre, 107 Misc. 15. Barron v. Martense, 4 Alb. 261, 177 N. Y. Supp. 393. L. J. 93. 21. Norton v. Valentine, 151 App. 16. Brown v. Doherty, 185 N. Y. Div. 392, 135 N. Y. Supp. 1084. CLAIM TO REAL PROPERTY. 263 executed in consideration of an agreement that the lessee shall maintain the lessor for life, and later the lessor deeds the same land to his son, which deed is not recorded until after the lessor's death, an action is maintainable under the statute by the lessee as one brought to determine plaintiff's rights in the property in question and to quiet his title to the same.^^ Where deeds of conveyance between tenants in common of certain land leave the record title to a part thereof uncon- veyed, the heirs and devisees of one of the tenants in common may bring an action against the heirs, devisees and executors of the other tenant in common, to compel the determination of plaintiff's claim which was not conveyed.^^ E. Possession of plaintiff. To maintain the action, the plaintiff must show possession of the land in dispute at the time of the commencement of the action, and such possession must be under claim and color of title, and must have been continuously maintained by him, or those' under whom he claims, for a year preceding.^* The purpose of the provision that plaintiff must have been 22. Parmely v. Showdy, 86 Misc. 634, 148 N. Y. Supp. 1086. 23. Hamilton v. Hamilton, 78 Mac. 557, 139 N. Y. Supp. 1095. 24. Bohn v. Hatch, 133 N. Y. 64; Lewis V. Howe, 174 N. Y. 340; afif'g, 64 App. Div. 572, 72 N. Y. Supp. 851; Ludlow V. Rector, etc., St. John's Ohm-ch, 207 N. Y. 689; reversing, 144 App. Div. 207, 136 N. Y. Supp. 79; Purdy V. Collyer, 26 App. Div. 338, 49 N. Y. Supp. 665; Howarth v. How- arth, 67 App. Div. 354, 73 N. Y. Supp. 785; Vandeirveer Crossings v. Rapalje, 133 App. Div. 203, 117 N. Y. Supp. 485. Vacant lands. — The action cannot be maintained, if the lands have been unfemced and vacant for a part of the previous year. Boyfeton v. Wheeler, 61 N. Y. 521. Posseasion by the plaintiff cannot be based upon the theory that possession foUowis the legal title to unoccupied lands, if the complaint fails to allege that they are unoccupied and where the time of the acquisition of the legal title by the plaintiff is not stated. Hicinbothem v. Village of North Pelham, 144 App. Div. 698, 129 N. Y. Supp. 715. Possession before receipt of deed. — Wheire the period between the date of the deed and the commencement of the laiction was less than the statutory period, and the husband of plaintiff had been in poaisession for many years, defendants moved to dismiss the complaint on the ground that plaintiff had not been in possession the length of time required by the Code; and it was held, that the mo- tion was properly denied, as the plaintiff and the one whose estate she held had been in possession for the re- quired time, which was all that was requisite; that it was not essential that the possession for that period should have been adverse to defend-- ant's claim. Didfendorf v. Diefendorf, 132 N. y. 100. 264 CLAIM TO REAL PROPERTY. in possession for at least a year is to prevent suits by tran- sient occupants who might go into possession for that pur- pose only.^^ A wrongful entry by another person, does not dis- turb the continuance of the plaintiff's possession ;^^ but a grantee, who has never been in possession of the land con- veyed, may not sue to compel the determination of his claim.^'' If the defendant has been enjoying the sole possession of the property, the action must be dismissed.^* A claimant who has not been in actual possession for a year prior, and who has no record title other than a void tax sale or legal seizin so as to constitute constructive possession, is not entitled to maintain such action, no matter how defective the defendant's title may be.^^ The possession must be such as would enable the adverse party to maintain ejectment founded on the fact alone; the rule that possession, once shown, is presumed to continue, is not sufficient.^" But, although some of the earlier cases are to the contrary,^^ it is not necessary that the possession of the plaintiff be an actual possession ;^^ a constructive possession may be sufficient to authorize the maintenance of the action.^^ Especially is this true, when the constructive possession is supported by a clear paper title.^* Thus, the possession of a tenant is the possession of his 25. Hulbert v. Hulbert, 86 Misc. N. Y. Supp. 1100. 662, 149 N. Y. Supp. 568; aflf'd. 165 32. Whitman v. City of New York, App. Div. 858, 151 N. Y. Supp. 221. 85 App. Div. 468, 83 N. Y. Supp. 465; 26. Dona,bue v. O'Connor, 5 Super. modifying, 39 Misc. 43, 78 N. Y. Ct. 278. Supp. 820; Mulkins v. Snow, 106 27. Hershey v. Robson, 121 'N. Y. Misc. 556, 175 N. Y. Supp. 41; affirmed Supp. 167. without opinion, 178 N. Y. Supp. 905, 28. Hoyt V. Forreat, 56 Misc. 147, 180 N. Y. Supp. 945. 106 N. Y. Supp. 1083. 33. Neale v. Walter, 128 App. Div. 29. Weichers v. McCormick, 122 827, 112 N Y. Supp. 1041; Qason v. App. Div. 860, 107 N. Y. Supp. 835. Stewart, 23 Misc. 177, 51 N. Y. Supp. 30. Cleveland v. Crawford, 7 Hun, 1100; Maganetite Mining Co. v. Wil- 616. . more Realty Co., 142 N. Y. Siipp. 31. Van Wagener v. Batsford, 13 1094; compare, Merritt v. Smith, 50 Week. Dig. 381. App. Div. 349, 63 N. Y. Supp. 1068. Amendment of statute. — The reason Constructive possession is "the pos- for the change in the rule as to con- session in law which follows in the structive possession will be found in wake of title." Maganetite Mining an amendment made to the statute in Co. v. Wilmore Realty Co., 142 N". Y. 1891, which eliminated the word "ac- Supp. 1094. tual" before the word "possession." 34. Kiowa Realty .Co. v. Molenaor, Clason V. Stewart, 23 Mis«. 177, 51 98 Misc. 694, 165 N. Y. Supp. 131. CLAIM TO REAL PEOPERTY. 265 landlord, and a person in the possession of land by his tenant may maintain the action.^^ The possession is sufficiently shown by proof that a tenant of plaintiff's grantor fenced the property and used it for at least a year for pasturage and as a yard for stock, although the tenant never recognized the plaintiff's title nor knew that the property had been conveyed to her.^^ But it has been held that the action cannot be maintained while property is in the hands of a receiver appointed by the court.^^ F. Claim of defendant. It is essential as one of the elements of the action that the defendant make an adverse claim to the property, or that it appear from the public records or the allegations of the com- plaint that he might make such a claim.^^ The claim sought to be determined must be adverse to that of the party in possession.^^ A tenant, in asserting ownership and a right to remove fix- tures which have become a part of the real estate, may be con- sidered as claiming an interest in the property under section 500.*" 35. Mulkins v. Snow, 106 Misc. 556, 175 N. Y. Supp. 41; affirmed without opinion, 178 N. Y. Supp. 905, 180 N. Y. Supp. 945; King v. Townsend, 78 Hun, 380, 29 N. Y. Supp. 181. 36. Merritt v. Smith, 27 Misc. 366, 58 N. Y. Supp. 851; afiF'd, 50 App. Div. 349, 63 N. Y. Supp. 1068. 37. Walker v. Pease, 17 Misc. 416, 41 N. Y. Supp. 219. 38. Dull V. Eohr, 13 Misc. 530, 35 N. Y. Supp. 523. Claim in answer. — It must appear that the claim was made before the commencement of the action, and an assertion of a claim in the defendant's answer is not suiBcient, unless the an- swer admits that the defendant claimed an estate in the land prior to the commencement of the action. Brown v. Teel, 59 Hun, 91, 13 N. Y. Supp. 142, 35 St. Rep. 507; affirmed without opinion, 128 N. Y. 678. Intervention. — In an action to deter- mine a claim to real property, one who claims no interest in the property may not be allowed to inteirvene for the purpose of establishing the rig'ht of one of the parties thereto, even though he asserts an interest in the question to be decided in the action. People V. Fiaher, 209 N. Y. 392. 39. Onderdonk v. Mott, 34 Barb. 106. A bona fide purchaser of real prop- erty cannot maintain the action against a, judgment creditor of a for- mer owner who conveyed the property to defraud his creditors before the re- covery of the defendant's judgment, as the defendant's claim is not adverse to that of plaintiff. Kothe v. Wilson, 45 N. Y. Supp. 649. 40. Robinson v. Pratt, 151 App. Div. 738, 136 N. Y. Supp. 98. Term less than ten years. — The owner of land cannot maintain an ac- tion to compel the determination of a claim to real property against an al- leged assignee of her subtenant to 266 CLAIM TO REAL PROPERTY. Where the plaintiff is the owner of the property described in the complaint and the defendant claims she was divested of that title by deed made by the sheriff, and the plaintiff claims that such deed was void, the action comes within the statute.^^ A tax deed of the property, which the plaintiff asserts to be void, is sufficient to warrant the action.*^ Moreover, the ac- tion has been maintained to cancel illegal assessments;^^ and tax liens." The owner of real estate may maintain the action .to determine the existence of an easement in the property claimed by the defendant. But the right claimed by the defendant need not necessarily be technically an easement so long as the claim is "in the nature of an easement" and includes the elements of a claim to domination over plaintiff's property for the benefit and ad- vantage of the defendants. Such a claim, although created by covenant, and not by grant, is frequently spoken of judicially as an easement, and is held to be such an incumbrance upon land as to justify the refusal of a vendee to accept the title.^ determine plaintiff's right to posses- sion, when the remainder of the de- fendant's term is less than ten years and a temporary injunction in such an action restraining defcjndant from maintaining summary proceedings against subtenant is unauthorized. Hollister v. Wohlfeil, 115 App. Div. 400, 100 N. Y. Supp. 907. 41. Brown v. Crabb, 156 N. Y. 447; Oilman v. Tucker, 13 N. Y. Supp. 804. iZ. Bum'liam v. Onderdonk, 41 N. Y. 425; Loomis v. Semper, 38 Misc. 568, 78 N. Y. Supp. 74; Steams v. Al- bany Syndicate, 93 Misc. 597, 158 N. Y. Supp. 553. 43. French v. City of New Rochelle, 141 App. Div. 8, 125 N. Y. Supp. 677. Presumption of validity. — In an ac- tion brought to cancel an assessment on plaintiff's property on the ground that it was illegal and void because made in excess of the jurisdiction of the common council in creating the district of assessment, it will be pre- sumed that the common council did establish a district of assessment con- taining all the property likely to be benefited by the improvement and, in the absence of fraud or bad faith, its action is conclusive. Grovers v. City of New Rochelle, 95 Misc. 352, 159 N. Y. Supp. 221. 44. Expired lien. — When the lien has expired by reason of the lapse of ten years it must be shown that the taxes are an apparent lien, that the municipality unjustly claims that such lien is valid or that it appears from the public records that such a claim might unjustly be made. In such a. ease there can be no presumption that the proceedings to enforce the lien have been stayed or that the city can make such a claim, and where the necessary element of an apparent lien is absent and the city makes no claim of a lien, the court is without juris- diction to grant relief. Hall v. City of Lookport, 153 N. Y. Supp. a9«. 45. Dime Savings Bank v. Butler, 167 App. Div. 257, 152 N. Y. Supp. 633; aff'd, 215 N. Y. 708. See also Porter v. Denny, 170 App. Div. 546, 156 N. Y. Supp. 1016. CLAIM TO KEAL PROPERTY. 267 An owner of a plot, of land may sue to determine the val- idity of a claim asserted by owners of property in the same block, to a right to exercise dominion over plaintiff's plot, to the extent that it may not, without their consent, build upon or use its land unless it complies to certain restrictions.*^* Whether a lien on the property has been discharged is a proper matter for litigation in such an action.^^ The limi- tation in section 500 as to the sum of $250 applies only to the case where the claim of the defendant is simply for a lien or incumbrance.*'' G. Infant defendants. Before an amendment to the statute in 1891, the action could not be maintained against infants,*^ but the exception relative to infants was eliminated in that year. If an infant interposes merely a general answer submitting his rights to the court, it has the effect of requiring the plaintiff to prove the allegations of the complaint. If he fails, the action is dis- missed, but affirmative relief is not granted the infant.*^ H. Complaint. The complaint must show the facts bringing the case within the statute.™ It must specifically state the plaintiff's right to the property, and should give the source of his title. It is evidently intended that the source of the party's title should be given specifically. It would serve no useful pur- pose otherwise. If a statement that title came from the State 45a. See Dime Savings Bank v. But- subrogated to the rights of the mort- ler, 88 Misc. 698, 153 N. Y. Supp. 448; gagees, cannot defend the action on aff'd, 167 App. Div. 257, 152 N. Y. the ground that there is no claim of Supp. 633; aff'd, 315 N. Y. 708. title adverse to plaintiff. Livingston 46. Livingston v. Moore 15 App. v. Moore, 15 App. Div. 15, 44 N. Y. Div. 15, 44 N. Y. Supp. 125; appeal Supp. 125; appeal dismissed, 161 dismissed, 161 N. Y. 602. N. Y. 602. Cancellation of mortgage. — The ac- 47. Loomis v. Spencer, 38 Mis«. 568, tion will lie in behalf of a surety on 78 N. Y. Supp. 74. a city contract, who has given to his 48. Bailey v. Briggs, 56 N. Y. 407. co-sureties a bond and mortgage on 49. Berger v. Horsfeld, 188 App. his real estate to indemnify them, for Div. 650, 176 N. Y. Supp. 854. the cancellation of the mortage, as a 50. Austin v. Goodridh, 49 N. Y. lien or incumbrance on the estate, 266; Bailey v. Briggs, 56 N. Y. 407. where the liability of the sureties has Amendments.— The same right to been discharged by an alteration of amendment of pleadings exists as in the contract not consented to by other actions. Brown v. Leigh, 49 plaintiff, and the city, claiming to be N. Y. 78. 268 CLAIM TO REAL PEOPEKTY. or by act of the legislature without giving any particulars, was a compliance with the provision, the latter would seem to be an unnecessary requirement. The object is to require the particulars of the title to be given.^^ The plaintiff must allege that he has been in possession of the premises for the required period.^^ Where it is alleged that plaintiffs have been the owners in fee of the property since 1898, their possession will be deemed to be under claim of a title in fee.^^ A complaint alleging seizin in the plaintiff and actual pos- session of the premises for the necessary period previous to the commencement of the action, will bring the case within the provisions of sections 500 and 501.^^ An allegation that the plaintiff has been for more than one year " seized " and " possessed " of the land is sufficient, al- though it be also alleged that the land is ' ' vacant and not ac- tually occupied."^ The complaint sufficiently states the plaintiffs' title and possession for a year prior to the action and that the defend- ant unjiistly claims an interest or easement therein, where it alleges that the plaintiffs acquired a title in fee simple by pur- chase, that the premises have been in their possession for the year next preceding the commencement of the action, and sets forth the facts upon which the defendants base a claim to an easement over a former carriageway.^^ A complaint alleging that the plaintiff is the owner of a certain piece of real property and that defendants unjustly make claim to an easement or an interest therein in the nature of a restriction upon the kind of building that may be erected thereon, states facts sufficient to constitute a cause of action.^^ It is not necessary, in order to state a cause of action under this article, that the plaintiff should allege in the complaint that he is the sole owner in fee of the premises therein de- scribed. Sole ownership is fairly implied from an allegation 51. Hooper v. City of New York, 96 196, 114 N. Y. 256. Misc. 47, 160 N. Y. Supp. 14. 55. Neale v. Walter, 128 App. Div. 52. Howarth v. Howarth, 67 App. 827, 112 N. Y. Supp. 1041. Div. 354, 73 N. Y. Supp. 785. 56. Norris v. Hoffman, 133 App. 53. Norris v. Hoffman, 62 Misc. 385, Div. 596, 118 N. Y. Supp. 156; aff'd, 115 N. Y. Supp. 890; aff'd 133 App. 197 N. Y. 578. Div. 596, 118 N; Y. Supp. 156; aff'd, 57. Dime Savings Bank v. Butler, 197 N. Y. 578. 215 N. Y. 708; aff'g, 167 App. Div. 54. Pearce v. Moore, 23 St. Rep. 257, 152 N. Y. Supp. 633. CLAIM TO REAL PROPERTY. 269 that the plaintiff is the owner in fee, and the allegation that plaintiff has been in possession of the land since he acquired his title is equivalent to an allegation that he has been in pos- session as sole tenant.^^ As to the claim which the defendant makes to the property, it is sufficient if the complaint alleges that the defendant unjustly claims an interest in fee ( or what- ever the case may be) without giving further details of the claim.®^ A complaint alleging that ' ' the defendant unjustly claimed an estate in the premises in fee, for life or for a term of years, not less than ten years, or in reversion or remainder by virtue of a lease or conveyance made by a party named, which lease or conveyance and all rights thereunder, the defendant claims to own, is sufficient.^" The complaint must allege that the de- fendants unjustly claim title to the premises in question, and must, in its prayer for judgment, notify defendants that un- less they appear and assert their claim they will be forever barred. A complaint alleging a dotibtful will, and asking its construction, is not enough.^^ Where a complaint contains allegations sufficient to sustain the action, a judgment to that effect may be rendered although there are other allegations not necessary to such action and although the prayer for relief is in part inappropriate.^^ I. Precedent for complaint. SUPREME COURT. -1 EDWARD STAMM | agst. J.122N. T. 48. GEORGE H. BOSTWICK. I The plaintiff complains of the defendant, and alleges that hereto- fore, and on or about the 27th day of October, 1867, one Eliza Ander- son died in the city of New York, seized and possessed in fee simple absolute of the following described lands and premises: 58. King V. Townsend, 78 kun, 380, Hun, 91, 35 St. Rep. 507, 13 N. Y. 29 N. Y. Supp. 181, reversing 23 CiT. Supp. 142; afiinned without opinion, Pro. R. 326. 128 N. Y. 678. 59. Dime Savings Bank v. Butler, 60. Phillips v. Rome, etc., R. R. Co., 167 App. Div. 257, 152 N. Y. Supp. 30 St. Rep. 41. 633; aflf'd, 215 N. Y. 708; King v. 61. Bailey v. Briggs, 56 N. Y. 407. Townsend, 78 Hun, 380, 29 N". Y. 62. Doscher v. WycoflF, 132 App. Supp. 181; compare. Brown v. Teel, 59 Div. 139, 116 N. Y. Supp. 389. 270 CLAIM TO REAL PROPERTY. (Here insert description.) That the said Eliza Anderson left a last will and testament dated August 22, 1866, which was duly admitted to probate, and recorded in the office of the surrogate of the county of New York, in Book No. 172 of Wills, at page 223, on the 7th day of January, 1868, which will was executed in due form of law to pass the title to real estate, and in and by which will the said testatrix devised the premises here- inabove described to her adopted daughter Eliza Anderson, for the term of her natural life, and from and immediately after her death, unto the lawful issue of the said devisee, Eliza Anderson, her surviv- ing, his, her or their heirs and assigns forever; that the said Eliza Anderson, immediately upon the death of the said testatrix, entered into possession of the said land and premises, and continued in pos- session thereof as such devisee and life tenant until the 11th day of February, 1875, when she died; that during the lifetime of the said devisee, Eliza Anderson, and on the 22d day of January, 1868, she intermarried with the plaintiff, and thereafter, and on the 6th day of January, 1869, gave birth to a lawfully begotten child, ElizalDeth Stamm, and upon her death, as aforesaid, left the said Elizabeth, her sole issue, her surviving; that the said Elizabeth Stamm thereupon entered into possession of the said lands and premises, and continued in possession thereof, as owner in' fee simple absolute, under and by virtue of the aforesaid devise, until the 10th day of September, 1881, when she died seized thereof, intestate, unmarried, and leaving this plaintiff, her father, her surviving and her sole heir at law; that this plaintiff thereupon entered into possession of the said lands and prem- ises as such sole heir at law of the said Elizabeth Stamm, and has ever since continued, and now is in possession thereof; that the plaintiff has an estate in said lands and premises in fee-simple absolute, as the sole heir of the said Elizabeth Stamm, deceased; that he is now, and he and those whose estate he has, and from whom he derives his title as aforesaid, have been for more than three years last past in the actual possession of said lands and premises, claiming the same in fee ; that the above-named defendant unjustly claims an estate in fee, in and to the said lands and premises and molests and interferes with the quiet enjoyment and possession of the same, by this plaintiff. Wherefore, the plaintiff demands judgment against the said defend- ant, that he and every and all persons claiming under him be forever barred from all claims to any estate of inheritance, or freehold, or for a term of years, not less than ten, in possession, reversion, or remainder in the lands and premises hereinabove described, and be forever re- strained and enjoined from molesting or in any way interfering with the quiet enjoyment and possession thereof by this plaintiff, and that plaintiff have his costs of the action. COUDBRT BROTHERS, Plaintiff's Attorneys. CLAIM TO REAL PROPERTY. 271 J. Joinder of parties. Owners of distinct, parcels of land may not bring a suit under tliis statute to enjoin the maintenance of various ac- tions of ejectment, involving each of such parcels, by alleging that the deed under which the defendants hold was void, and that the ejectment actions were brought in bad faith. The plaintiffs are not so joined in interest that they may join as parties in a single suit.^^ But different claimants of separate parcels all denying plaintiff's rights on the same ground, and claiming title from the same source, may be imited as defendants.''* K. Temporary injunction. Where, in an action brought under the statute, it is shown that there is danger that the possession of the plaintiff will be unlawfully molested or disturbed during the progress of the action, an injunction may be granted restraining defendant from such interference.^^ And an injunction will be granted pendente lite against defendants who have brought ejectment suits against plaintiff's land, restraining all proceedings in any of the suits until the final determination of the action to determine the claim.^® ARTICLE III. PROCEEDINGS AFTER JOINDER OF ISSUE. A. Real Property Law, § 502. Proceedings when defendant denies plaintiff's title. If the defendant, in his answer, puts in issue the matters specified in sub- division second of the last section, and succeeds upon that defense, final judg- ment must be rendered in his favor, dismissing the complaint, and awarding to him costs against the plaintiff. B. Real Property Law, § 503. Proceedings when defendant pleads title. The defendant may, in his answer, either with or without the defense speci- fied in the last section, set forth facts, showing that he has an estate in the property or any part thereof, adverse to the plaintiff, in fee, or for life, or G3. Prospect Park & Coney Is'and 65. iStawm v. Bostwick, 30 Hun, 70. E. R. Co. V. Morey, 155 App. Div. 347, 66. Cuthbert v. Chauvet, 14 N. Y. 140 N. y. Supp. 380. Supp. 62, 37 St. Rep. 564; aff'd, 14 64. Fisher v. Hepsbura, 48 N. Y. 41. N. Y. Supp. 385, 37 St. Rep. 941. 272 CLAIM TO REAL PBOPEKTY. for a term of years not leas than ten, in possession, reversion, or remainder, as in a complaint for the same cause of action; or the defendant may set forth facts showing that lie has an interest or an easement in, or a lien or incumbrance upon, said property ; and thereupon he may demand that the complaint be dismissed, or any judgment to which he would be entitled in an action brought by him to recover that estate in said property, or to enforce in any manner the interest or easement therein, or the lien or incumbrance thereupon which he asserts; or he may combine any two or more of said demands. C. Real Property Law, § 504. Proceedings the same as in ejectment. Where an issue of fact is joined in an action brought as prescribed in this article, unless the defendant merely demands that the complaint be dismissed, if the defendant claims an estate in said property, the subsequent proceed- ings, including the trial, judgment and execution, are the same as if it was an action of ejectment, except as otherwise expressly provided by law; if the defendant claims an interest or easement in, or a lien or incumbrance upon, said property, the subsequent proceedings are the same as if it was an action brought by the defendant to establish or enforce the said interest, easement, lien or incumbrance, and the court may award any appropriate relief except as otherwise expressly provided by law. D. Real Property Law, § 505. Proceedings when defendant claims in reversion or remainder. Where the defendant claims the property in question, or any part thereof, by virtue of an estate in remainder or reversion, he need not establish a right to the immediate possession thereof; but where the verdict, report, or decision finds that he has such an estate, it must specify the time when, or the con- tingency upon which, he will be entitled to possession; and final judgment to that effect must be rendered accordingly, without damages. In such a case, an execution for the delivery of the possession of the property may be issued upon the judgment; but only by the special order of the court, made upon an application by the defendant, or a person claiming under him, and satisfac- tory proof that the time has arrived when, or the contingency has happened upon which, the applicant is entitled to possession by the terms of the judg- ment. E. Defenses, in general. The same defenses may be set up to defeat the right of plaintiff to relief as in other actions."^ If the plaintiff fails to prove possession, the defendant may have the complaint dismissed, but in order that he may have the judgment in his own favor he must prove his own title. Want of title in the plaintiff is not sufficient.®* 67. Hammond v. Tillotson, 18 Barb. Brown, 26 How. 350. 332; Ford v. Belmont, 35 Super. Ct. 68. Benson v. Townsend, 7 N. Y. 135; aff'd, 69 N. Y. 567; Peck v. Supp. 162, 26 St. Rep. 644. CLAIM TO REAL PEOPERTY. 273 Where the defendant by an answer simply denies plaintiff's possession and not his title, and does not allege title or pos- session in himself, he is not entitled to a judgment for affirma- tive relief.^^ Where the plaintiff only shows possession under an unfounded claim, evidence of actual possession and occu- pation by the defendant, prior to the entry of the defendant, is a sufficient defense.™ If the defendant has a title he is bound to produce and prove it. The plaintiff is not required to show anything be- yond possession as required by the statute, if it be put in issue by the answer ; as to the title, the defendant is the actor and he is bound to prove it.''^ Where both a lessor and a lessee of the corporation were made defendants as having a claim, and both appeared and neither disclaimed by their pleadings or in any manner on the trial, and no motion was made to dismiss the complaint, the defendant cannot urge there was nothing to show that the lessee company made a claim against plaintiff, and that, there- fore, as to it the complaint should havebeen dismissed.''^ AKTICLE IV. JUDGMENT AND ITS EFFECT. A. Real Property Law, § 506. Judgment awarding defendant possession. Where a final judgment, in favor of the defendant, determines that he is entitled to the immediate possession of the property, it must award him pos- session accordingly. The final judgment must also award to him his damages for the withholding of his property, as in an action of ejectment. B. Real Property Law, § 607. Judgment for plaintiff. Final judgment for the plaintiff must be to the effect that tihe defendant, and every person claiming under him, by title accruing after the filing of the judgment-roll, or of the notice of the pendency of the action, as prescribed by law, be forever barred from all claim to any estate of inheritance, or for life, or for a term of years not less than ten, in the property; or such judgment must be that the defendant and every person claiming under him., as above stated, be forever barred from all claim to any interest or easement in, or lien or incumbrance upon, the said property, of any kind or nature whatsoever, or of any particular interest, easement, lien or incumbrance specified in said judg- 69. Berger v. Horsfeld, 188 App. 70. Ford v. Belmont, 69 N. Y. 567. Div. 650, 176 N. Y. Supp. 854; King 71. Barnard v. Sims, 42 Barb. 304. V. Townsend, 78 Hun, 380, 29 N. Y. 72. Philips v. R. W. & 0. R. R. Co., Supp. 181. 30 St. Rep. 41, 9 N. Y. Supp. 799. 18 274 CLAIM TO REAL PROPERTY. ment; and the court may direct any instrument purporting to create any such interest, easement, lien or incumbrance to be delivered up or to be canceled of record; or two or more of said forms of judgment may be awarded in the same action. If such a judgment is taken upon tlie defendant's default in appearing or pleading, it shall not award costs to either party, unless it be taken upon a default in answering, after the decision of a demurrer to the complaint. A defendant against whom no personal claim is made in the com- plaint shall not be entitled to costs unless awarded by the court when such defendant asserts in his answer and establishes a claim in said lands adverse to the claim of the plaintiff in said action. C. Real Property Law, § 508. Effect of judgment. A final judgment in favor of either party, in an action brought as prescribed in this article, is conclusive against the other party, as to th« title established in the action; and also against every person claiming from, through, or under that party, by title accruing after the filing of the judgment-roll, or of the notice of the pendency of the action, as prescribed by law. A new trial of said action after judgment shall not be granted as a matter of right, but the court may, in its discretion in the interest of justice, grant a new trial upon an application made by any party within one year after said judgment. But where a defend- ant is an infant, an idiot, a lunatic, an habitual drunkard, or imprisoned on a, criminal charge or in execution upon conviction of a criminal offence for a term less than life, the said defendant shall have the right, within one year after his disability is terminated, to apply for and obtain a, new trial of said action, and the representatives of such a defendant shall have the same right within one year after the death of said defendant, if such death occurs while the disability continues. Upon any new trial of an action, brought as prescribed in this article, the record of the evidence given upon the previous trial, may be again offered to the court by either party, and may be received in evidence, in case the same evidence cannot be again procured. The courts may make such rules and orders as to preserving the record of the evidence given in such actions and perpetuating the proofs produced therein, either with or without the awarding of any other relief to the party whose proofs are so perpetuated, as shall be necessary or proper, and may embrace such directions in the judgment. D. Judgment. A judgment duly entered after a trial of the issues is con- clusive, and the aggrieved parties must seek relief according to the ordinary practice of the court as to new trials and ap- peals.''^ But it has been held that where there was no allegation in the complaint that the plaintiff was ever in possession of the 73. Malin v. Rose, 12 Wend. 258; plaintiff having established his title, it Maltonner v. Dimnick, 4 Barb. 566. was held that the judgment should Judgment against city.— In an ac- provide that the city be forever barred tion brought to determine what rights from all claim to any estate, in the the city of New York had in lands property described in the complaint granted to plaintiff's predecessor, other than that lying within ■ the CLAIM TO REAL PROPERTY. 275 property, and it appears that neither the defendant nor any- other person ever asserted an adverse claim thereto, the judg- ment was without effect and a title depending thereon is un- marketableJ* But, where a complaint contains allegations sufficient to sustain the action, a judgment to that effect may be rendered, although there are other allegations not necessary to such action and although the prayer for relief is in part inappro- priateJ^ The court, as in other causes, has power to open a judgment entered on failure to answer.™ A defendant in an action of this kind, who has answered and appeared upon the trial solely for the purpose of demand- ing a jury trial, and upon a denial of that demand, has with- drawn from further participation in the trial, is entitled to appeal from a judgment in favor of plaintiff.''' When judg- ment is ta;ken by default, it is not necessary to make a de- cision separately stating the findings of fact and conclusions of law ; but it is sufficient if the court, in conformity with the practice in equity, sign' the judgment.''^ It has been held that section 508 does not confer upon infants an absolute right to a new trial.''^ E. Costs and allowances. If the complaint is dismissed, the defendant is entitled to costs as matter of right,^" but an unsuccessful defendant is not entitled to costs.^' A defendant who claims no interest, in order to avoid lia- bility for costs, should appear and disclaim ; by so doing, the burden is thereupon thrown on plaintiff of establishing the fact that defendant has claimed, and upon his failure to do so the complaint should be dismissed as to such defendant, with costs.^^ Costs may be given to the plaintiff, but they limits of the street designated, or of 77. King t. Ross, 28 App. Div. 371, any interest or easement therein, or 51 N. Y. Supp. 138; appeal dismissed, lien or incumbrance thereon. Whit- 156 N. Y. 681. man v. City of New Yorlt, 85 App. 78. Tyler v. Jahn, 109 Misc. 425, Div. 468, 83 N. Y. Supp. 465; modify- 178 N. Y. Supp. 689. ing 39 Misc. 43, 78 N. Y. Supp. 820. 79. Kusgold v. Behrman, 114 Misc. 74. Lese v. Metsinger, 54 Misc. 151, 682. 105 N. Y. Supp. 888. 80. Tanner v. Tibbits, 19 Wend. 75. Dostfher v. Wyckoff, 132 App. 133; Rugen v. Collins, 8 Hun, 384. Div. 139, 116 N. Y. Supp. 389. 81. Renwick v. Weeden, 135 App. 76. Mann v. Provost, 3 Abb. 446; Div. 695, 120 N. Y. Supp. 532. Rosevelt v. Giles, 7 Hill, 166; Wil- 82. Davis v. Read, 65 N. Y. 566. liams V. Cox, 6 Wend. 519. 276 CLAIM TO REAL PEOPERTY. should be charged against the defendants, not made payable out of the property.**^ Under section 1474 of the Civil Prac- tice Act, relating to additional allowances, the successful plaintiff is entitled to such an allowance.^* But, if the referee fails to find the value of the property, the clerk has no power to receive evidence to determine such value as a basis for an extra allowance.^ F. Trial similar to ejectment. If the defendant in his answer claims title, the trial must be had as in an action of ejectment; that is to say, before the court and jury.*^ There is a right- to a jury trial, unless the defendant merely demands a dismissal of the complaint, or the jury trial is waived.^ The only difference between the equitable action and this action for the deter- mination of the claims to rea,l property is found in the fact that, after this action has been commenced, the law permits the defendant who is brought in as a claimant to set up his own title and to demand affirmative relief, as in an ac- tion of ejectment; and it provides that, when that has been done, if the defendant asks for affirmative relief, the subse- quent proceedings, including the trial, judgment and ex- ecution, are the same as if it were an action of ejectment. If, however, the defendant makes no claim for affirmative relief, the action proceeds precisely as any other action to quiet title, and is tried on the equity side of the court at a Special Term 83. Renwick v. Weeden, 135 App. one to determine a claim to real prop- Div. 695, 120 N. Y. Supp. 532. erty under the provisions of the statute, 84. Fisher y. Hepburn, 48 N. Y. 41. but has its sanction in the general See note: 8 Civ. Proe. Rep. 214. jurisdiction of a court of equity, see- But see, Renwick v.' Weeden, 135 App. tion 504, making the procedure the Div. 695, 120 N. Y. Supp. 532, where same as in an action of ejectment an extra allowance was denied. where the defendant claims an estate, 85. Newton v. Reid, 24 Week. Dig. has no application. Garty Estates v. 472. Bronx Parkway Commission, 177 App. 86. Ryan v. Murphy, 116 App. Div. Div. 6, 163 N. Y. Supp. 950. 242, 101 N. Y. Supp. 553; New York Sufficiency of allegations of title b-/ Institution for Deaf and Dumb v. defendant. Hooper v. City of New aty of New York, 181 App. Div. 184, York, 96 Misc. 47, 160 N. Y. Supp. 14. 168 N. Y. Supp, 755; Berger v. Hors- 88. Ryan v. Murphy, 116 App. Div. feld, 188 App, Div. 650, 176 N. Y. 242, 101 N. Y. Supp. 553; Pure Supp. 854. Strains Farm Co. v. Smith, 99 Misc. Reformation.— As a, suit for the re- 108, 163 N. Y. Supp. 615. formation of a referee's deed is not CLAIM TO REAL PROPERTY. 277 and without a jury.^^ The fact that both parties have noticed the cause for trial at Special Term as an equity action, does not constitute an absolute waiver by the defendant of his right to a jury trial, and the ease may be sent to Trial Term.^° Nor does a defendant lose the right to a jury trial, because his answer couples an equitable defence with his defence that he is the legal owner of the property .^^ The burden of establish- ing by a fair preponderance of the evidence that the defend- ants' claim to the premises was unjust, is on the plaintiffs.^^ But, if the defendant claims title to the property and seeks affirmative relief, he must establish it as in an ejectment ac- tion in which he is the plaintiff.^^ If the plaintiff proves that she has been in possession of the premises under a claim of title in fee for more than a year prior to the commencement of the action, puts in evidence her deed, and gives evidence tending to show that her grantor had been in possession of the premises many years, while the defendants offer no com- petent evidence that they have any title, a judgment in plain- tiff's favor entered on a verdict directed by the court will be affirmed.^* Proof that the premises were assessed to the plaintiff as owner is admissible as tending to show a claim thereto on his part, and the jury may determine whether de- fendant has title to the whole or part of the premises.^^ AKTICIE V. PROCEEDINGS AGAINST WOMAN CLAIMING D0WER.96 A. Real Property Law, § 509. Action to determine widow's dower. A person claiming, as owner, an estate in fee, for life, or for years, in real property, may maintain an action against a woman, who claims to have a right of dower in the whole or a part of the property, to compel the determi- nation of her claim. But such an action cannot be commenced until after the expiration of four months after the death of defendant's husband. If the defendant is under any of the disabilities specified in the last section, the pro- visions of that section relating to new trials and to perpetuating proofs, shall apply to her case. 89. King V. Ross, 28 App. Div. 371, 913, 96 X. Y. Supp. 1002. 51 N. Y. Supp. 138; appeal dismissed, 93. Merritt v. Smith, 27 Misc. 366, 156 N. Y. 681. 58 K. Y. Supp. 851; aflf'd, 50 App. 90. Storandt v. Wakelee, 188 App. Div. 349, 63 N. Y. Supp. 1068. Div. 152, 177 N. Y. Supp. 535. 94. Hill v. Mowbray, 146 App. Div. 91. Storandt v. Wakelee, 188 App. 507, 131 N. Y. Supp. 727. Div. 152, 177 N. Y. Supp. 535. 95. Hager v. Hager, 38 Barb. 92. 92. Brown v. Brown, 110 App. Div. 278 CLAIM TO KEAX, PROPERTY. B. Real Property Law, § 510. Proceedings, if plaintiff admits defend- ant's claim. In an action brought as specified in tlie last section, if the complaint admits the defendant's right of dower in the property described therein, or any part thereof, it must demand judgment that her dower be admeasured. In that case, if the defendant does not, by her answer, set forth facts showing that she is entitled to a greater right of dower, or another estate or interest in the property, than is so admitted, and demand judgment therefor, as if she was the plaintiff in an action for dower, the court must render an interlocutory judgment, directing her dower to be admeasured, with or without damages for its detention, as in an action for dower. The subsequent proceedings are the same, as if the defendant had, as plaintiff, recovered an interlocutory judg- ment in an action for dower. C. Real Property Law, § 511. Proceedings when defendant's claim is denied. Where the plaintiff insists, in his complaint, that the defendant has not a right of dower in the property, he must demand judgment that she be forever barred from such a claim. In that case, or where the plaintiff admits a right of dower in the defendant, and the defendant in her answer demands judg- ment for a greater right of dower, or another estate or interest in the prop- erty, than is so admitted, the provisions of this article, relating to an action to compel the determination of an adverse claim in fee, or for life, or for a term of years not less than ten, apply to all proceedings subsequent to the answer. D. Complaint. Where a complaint sets forth that the defendant was the wife of a person who died seized of the lands of which the plaintiff is seized in fee, subject to defendant's dower, while not setting forth facts sufficient to maintain ejectment, it is sufficient for the purpose of the relief asked for, that defend- ant's dower be admeasured and set off to her.^^ Section 509 is not applicable to an action to partition real property, al- though the wife of a tenant in common is made a party de- fendant and his share is alleged in the complaint to be sub- ject to her inchoate right of dower.^^ Where the complainant admits the right of dower, it is not necessary to allege that the defendant claims dower; such an allegation is only necessary where plaintiff denies defendant's right and seeks an adjudication barring her.^^ 96. Dower. — For a discussion- the 24 Week. Dig. 167. law of dower and the practice for the 98. Diehl v. Lambert, 9 CSv. Pro. R. assignment thereof, see Dower. 267. 97. Lindon v. Doetsch, 40 Hun, 239, 99. Linden v. Dotsch, 40 Hun, 239. COMMITTEE OF INCOMPETENT * ARTICLE I. Jurisdiction of coutts. A. Civil Practice Act, § 1356. Jurisdiction of supreme court; concurrent jurisdiction of county court. B. Civil Practice Act, § 1357. Duty of court having juriadicion. C. Civil Practice Act, § 1358. Jurisdiction of court to be exercised by com- mittee. D. Historical statement. E. Authority over incompetents for whom no committee has been appointed. F. County Court. G. Who are incompetent persons. ARTICLE II. Petition, A. Civil Practice Act, § 1359. Petition for committee ; by whom made. B. Civil Practice Act, § 1360. Notice of presentation of petition. C. Rules of Civil Practice, Rule 285. Person; how designated in proceedings for appointment of committee. D. Rules of Civil Practice, Rule 286. Petition for committee; where to be presented. E. Rules of Civil Practice, Rule 287. Contents of petition. F. Contents of petition. G. Accompanying affidavit. H. Petition by stranger. I. Notice of application. J. Form of petition. K. Another form of petition. L. Form of affidavit to accompany petition. M. Form of affidavit of physician to accompariy petition. N. Form of order as to notice of presentation. 0. Form of notice of presentation. ARTICLE III. Commission. A. Civil Practice Act, § 1364. Order for commission, or for trial by jury in courts. B. Civil Practice Act, § 1365. Contents of commission. C. Civil Practice Act, §. 1366. Jury to be procured; proceedings thereupon. D. Hearing on application for commission. E. Notice to incompetent. F. Form of order appointing commission. G. Form of precept to commissioner. * For a further discussion of matters relating to the committees of Incom- petent persons, see Heaton's Surrogate's Courts; B., C. & G. Consolidated Laws. [279] 280 COMMITTEE OF INCOMPETENT. ARTICLE IV. Injunction and lis pendens. A. Civil Practice Act, § 1361. Notice of pendency of proceeding; effect. B. Civil Practice Act, § 1363. Injunction. ARTICLE V. Hearing and inquisition. A. Civil Practice Act, § 13'67. Proceedings upon the hearing. B. Civil Practice Act, § 1368. Return of inquisition and commission. C. Civil Practice Act, § 13&9. Expenses of commission. D. Civil Practice Act, § 1370. Proceedings upon trial by jury in court. E. Civil Practice Act, § 1371. Subject of inquiry in cases of lunacy. F. Oath of office by commissioners. G. Notice to alleged incompetent. H. Authority of commissioners. I. Jury. J. Rights of alleged incompetent. K. Finding as to period of incompetency. L. Inquisition. M. Form of commissioners' oath. N. Form of precept to sheriff and return by sheriff. 0. Form of notice of hearing. P. Form of oath to juror. Q. Form of inquisition. ARTICLE VL Proceedings on return of commission. A. Civil Practice Act, § 1372. Proceedings upon verdict, or retiu'n of com- mission. B. Civil Practice Act, § 1373. Costs and disbursements. C. Application for committee. D. Action of court on petition. E. Refusal to appoint committee on finding of incompetency. F. Selection of committee. G. Costs. H. Effect of decree in inquisition. 1. Form of petition for appointment of committee. J. Notice of application. K. Form of order appointing committee. ARTICLE VII. Foreign committee. A. Civil Practice Act, § 1363. When foreign committee may be appointed. B. Discussion of statute. COMMITTEE OF INCOMPETENT. 281 ARTICLE VIII. When incompetent is in state institution. A. CSvil Practice Act, § 1374. Application and proceedings where incom- petent is inmate of state institution. B. Application of statute. C. Form of petition by superintendent of state hospital. ARTICLE IX. Powers and duties of committee. A. Gteneral powers and duties of committee. 1. Civil Practice Act, § 1377. Control, duties and powers of committee. 2. General duties of committee. 3. Control of court. 4. Representative of incompetent. 5. Title of committee. 6. Maintenance of incompetent. 7. Investments. 8. Sale or mortgage of lunatic's property. B. Bond. 1. Civil Practice Act, § 1375. Security to he given hy comjnittee. 2. Liability of surety. C. Actions hy committee. 1. In general. 2. Actions relating to real property. 3. Mistake of committee. 4. Annulment of marriage. 5. Security for costs. 6. Action by guardian ad litem of incompetent. D. Enforcement of claims against estate of incompetent. 1. Under Debtor and Creditor Law. 2. Action against incompetent before inquisition. 3. Service of process on lunatic. 4. Leave of court for action against committee. 5. Security for costs. 6. Payment of claim on petition. 7. Liability of committee in representative capacity. ARTICLE X. Inventory and accounting by committee. A. Civil Practice Act, § 1378. Inventory and account by committee. B. Civil Practice Act, § 1379. Annual examination of accounts and inventories. C. Civil Practice Act, § 1381. Intermediate and final accounting of committee. D. Action for accounting. E. Action at law against committee. P. Involuntary accounting. G. Special guardian for incompetent. H. Reference. 282 COMMITTEE OF INCOMPETENT. , I. Expenditures of committee. J. Allowance to attorney for committee. ' K. Negligence of committee. L. Effect of decree settling accounts. M. Form of inventory. N. Form of account. O. Form of petition for settlement. P. Form of order that notice of application be given to parties interested. Q. Form of notice of application of committee for leave to render account, etc. R. Form of order authorizing committee of incompetent person to render account. S. Form of order appointing special guardian for incompetent person. T. Form of consent of special guardian. U. Form of report of special guardian. V. Form of order settling accounts. ARTICLE XI. Compensation of committee. A. Civil Practice Act, § 1376. Compensation of committee. B. Discussion of statute. ARTICLE XII. Removal of committee. A. Civil Practice Act, § 1380. Proceedings for removal of committee. B. Procedure. ARTICLE XIII. Restoration of property. A. Civil Practice Act, § 1382. Restoration of property. B. Tests of^a^overy. C. Procedure^n general. D. Partial restoration. E. Habitual drunkard. F. Expenses of committee opposing petition. G. Effect of restoration. H. Form of order discharging committee. ARTICLE XIV. Death of incompetent. A. Civil Practice Act, § 1383. Death of incompetent; duty of committee. B. Termination of committee's power. C. Duty to account. COMMITTEE OF INCOMPETENT. 283 ARTICLE I. JURISDICTION OF COURTS.a A. Civil Practice Act, § 1356. Jurisdiction of supreme court; con- current jurisdiction of county court. Tile jurisdiction of the supreme court extends to the custody of the person and the care of the property of a person incompetent to manage himself or his affairs in consequence of lunacy, idiocy, hahitual drunkenness, or imbecility arising from old age or loss of memory and understanding, or other cause. Where a county court has jurisdiction of those matters, concurrent with that of the supreme court, tlie jurisdiction of the court first exercising it, as pre- scribed in this article, is exclusive of that of the others with respect to any matter within its jurisdiction for which provision is made in this ai'ticle.b B. Civil Practice Act, § 1357. Duty of court having jurisdiction. The court exercising jurisdiction over the property of either of the incom- petent persons, specified in the last section, must preserve his property from waste or destruction ; and, out of the proceeds thereof, must provide for the payment of his debts and for the safe keeping and maintainance, and the educa- tion, when required, of the incompetent person and his family. C. Civil Practice Act, § 1358. Jurisdiction of court to be exercised by committee. The jurisdiction specified in this article, must be exercised by means of a committee of the person, or a committee of the property or of a particular portion of the property, of the incompetent person, appointed as prescribed a. Commitment of insane person to Supreme Court has authority under state hospital. — ^An application for the section 1384 of the Civil Practice Act commitment of an insane person to a to compel the specific performance of state hospital, is not a, special pro- certain contracts made by incompetent oeeding as defined by section 5 of the persons or their ancestors. The pur- Civil Practice Act. Such a proceeding pose of the proceeding is analogous to is for the protection of the alleged luna- that of the proceeding for the sale of tic and for the protection of society. an incompetent's real estate, and hence The petitioner neither gains nor loses the matter is discussed in the chapter by order entered therein. No right is relating to that subject, enforced, no wrong is redressed, no b. Executor of non-resident testa- public offense is punished, and the ap- tor. — Jurisdiction of the appointment peal therein is not an appeal as from of a committee of the property of an a final order in a special proceeding. incompetent is in the Supreme Court (See Insanity Law, §§ 80 et seq. See of this State, where the property is B. C. & G. Consolidated Laws, 2nd ed., in the possession of a resident execu- p. 3799, et seq.) Matter of Murtaugh, tor of a non-resident testator. In re 117 App. Div. 302, 102 N. Y. Supp. Dalrymple (1916), 163 N. Y. Supp. 176. 233. Contracts of incompetents. — The 284 COMMITTEE OF INCOMPETENT. in tliis article. The committee of tlie person and the committee of the property may he the same individual or different individuals, in the discretion of the court. D. Historical statement. Jurisdiction is inherent in the State over unfortunate per- sons within its limits who are idiots and who have been de- prived of the use of their mental faculties ; and it is its duty to protect the community from the acts of those persons who are not under the gTiidance of reason, and also to protect them, their persons, and property from their own disordered and insane acts. During the early history of the State the custody of lunatics and incompetent persons was intrusted to the chancellor and the Court of Chancery, and the proceed- ings with reference thereto were largely in the discretion of the chancellor ; but the custom prevailed on his part, in order to inform his conscience, to require a trial by jury on the question of the insanity of the person in all cases of doubt, where proceedings were taken with reference to his commit- ment and the disposal of his property.-^ Since 1842 the pro- ceedings have been governed by legislative enactment. Since the powers of the Court of Chancery devolved on the Supreme Court in 1846, the Supreme Court has had general jurisdic- tion over incompetent persons and the care of their persons and property." That jurisdiction and the manner of its exer- cise may be regulated by the Legislature. Where this has not been done, it is to be exercised according to the established practice of the courts in lunacy cases.^ The original chancery jurisdiction was not circumscribed or limited by the Code of Civil Procedure, for the provisions thereof referred to the peo- cedure to be adopted in appointing the committee and defining his duties rather than in defining the jurisdiction of the court over the person and property of the incompetent.* The Civil Practice Act makes no material change from the practice out- lined by the Code of Civil Procedure. If the provisions of the Civil Practice Act prescribe the way in which the power shall be exercised, such provisions must be followed ; but if it does not regulate the manner in which the power shall be exercised, 1. Sporza V. German Savings Banlc, 14 Abb. N. C. 502. 192 \. Y. 8; Matter of Andrews, 192 3. Wurster v. Armfield, 175 N. Y. N. Y. 514. 256. 2. Matter of Blewitt, 131 N Y. 4. Matter of Lofthouse, 3 App. Div. 546; Agricultural Ins. Col v. Barnard, 139, 38 N. Y. Supp. 39. COMMITTEE OF INCOMPETENT. 285 then it becomes the duty of the court to determine the mode and manner in which the power can be best exercised to effect the end desired.^' E. Authority over incompetents for whom no committee has been appointed. Incompetent persons are wards of the court, upon which a duty devolves of protection both as to their persons and prop- erty ; and this duty is not limited to cases only in which a com- mittee has been appointed, but extends to all cases where the fact of incompetency exists.'' The court may appoint a guar- dian ad litem for a lunatic, although he has not been judicially declared insane in proceedings instituted for that purpose.'^ Where a defendant, who has a substantial interest in a con- troversy, is non compos mentis, but has not been judicially de- clared insane, and the court, under the provisions of section 226 of the Civil Practice Act, directs that the summons be de- livered on her behalf to a third person, the duty of such third person is not confined to the mere receiving of the summons, but the order directing the delivery of the summons to him should be sufficiently broad to enable him to look after the in- terests of the incompetent defendant at every stage of the action.** Though the Civil Practice Act gives the courts power to declare a person incompetent to manage his affairs, yet previous to declaration, the lunatic is not prohibited from bringing an action, as his legal status is not changed until the court has interposed its, jurisdiction and finally declared him to be of unsound mind." The courts have no power to dispose of the property of a lunatic or appoint a committee and order a sale of his property, until the proper proceedings are inaugurated and a commission has been returned." The Supreme Court, however, has inherent power to pro- tect the interests of incompetents, in addition to the power expressly conferred upon it by the Civil Practice Act for that purpose. ^^ 5. American Mortgage Co. v. Dewey. 808, 35 Civ. Pro. 48. 106 App. Div. 389, 94 N. Y. Supp. 808, 9. Runberg v. Johnson, 11 Civ. 35 av. Pro. 48. Proc. 283. 6. Wurster v. Armfield, 175 N. Y. 10. Matter of Dunn, 64 Hun, 18, 18 256. N. Y. Supp. 723, 45 St. Eep. 830; Ex 7. Hanley v. Brennan, 12 Civ. Proc. parte Payn, 8 How. Pr. 220. ]51. 11. American Mortgage Co. v. 8. American Mortgage Co. v. Dewey, Dewey. 106 App. Div. 389, 94 N. Y. 106 App. Div. 389, 94 N. Y. Supp. Supp. 808. 286 COMMITTEE OF INCOMPETEN': F. County Court. Section 67, subdivision 4, contains the statutory authority for the jurisdiction of the County Court in proceedings for the appointment of a committee for an incompetent person.-"^- By this subdivision, the County Courts have concurrent jurisdiction with the Supreme Court over the custody of the person and the care of the property of a resident of the county who is incompetent to manage his affairs ; but by section 1356 the court, on exercising this jurisdiction, has exclusive juris- diction with respect to any matter within its jurisdiction for which provision is made. Therefore, when the County Court had first attained jurisdiction, the Supreme Court cannot make an order for the payment of the lunatic's debt.-^^ The court originally acquiring jurisdiction in proceedings for the appointment of a committee of an incompetent has jurisdiction to determine the allowance to the committee for compensation, counsel fees, and expenses for the board and maintenance of the lunatic and costs of the proceedings." Where, in violation of the exclusive jurisdiction of the county court, an action is brought in the Supreme Court, the objec- tion that the County Court has exclusive jurisdiction may be taken for the first time on appeal.^^ Where proceedings have been taken in the County Court to have a person, already in a hospital, declared a lunatic, the Supreme Court will not take jurisdiction on an application for his discharge, on the ground that he was not personally served with notice of the presentation of the petition.^^ Although the County Court is not a court of equity, yet, where, by virtue of sections 67 and 1356, it once acquires jur- isdiction in proceedings for the appointment of a committee of a lunatic, any equitable claim presented by the committee in asking for its discharge will be disposed of on equitable principles in order to save the expense and annoyance of further litigation." 12. Matter of Haslett, 188 App, Div. 208, 176 N. Y. Supp. 800; re- versed on other grounds, 227 N. Y, 145. 13. People ex rel. Kenfield v. Lyon 31 N. Y. Supp. 942, 64 St. Rep. 737. 14. Matter of Haslett, 188 App Div. 208, 176 N. Y. Supp. 800; re- versed on other grounds, 227 N. Y 145; Matter of Bd. of St. Opening, 89 Hun, 525, 35 N. Y. Supp. 409, 69 St. Rep. 796. 15. Matter of Wing, 83 Hun, 284, 64 St. Rep. 736, 31 N. Y. Supp. 941. 16. Matter of Bellenger, 32 Misc. 414, 66 N. Y. Supp. 531. 17. Matter of Forkel, 8 App. Div. 397, 40 N. Y. Supp. 847. COMMITTEE OF INCOMPETENT. 287 G. Who are incompetent persons. The jurisdiction over incompetent persons, as discussed in this chapter, extends to a person incompetent to manage him- self or his affairs in consequence of lunacy, idiocy, habitual drunkenness, or imbecility arising from old age or loss of memory and understanding, or other cause.^ The terms " lunatic " and " lunacy " are defined by statute to include every form of unsoundness of mind except idiocy .^^ 18. Non compos mentis defined. — In Stewart's Executor v. Lispenard, 26 Wend. 255, Coke, 1 Inst. 246, quoted by Blacbstone, 1 Comm. 343, is cited, as to what constitutes lunacy, idiocy, and habitual drunkenness, to this effect : " Non compos mentis is the most legal term for all defects of the mind which the law notices. Non compos mentis is of four kinds: "1. Idiota, which from his -maturity by a perpetual infirmity is non com- pos mentis. " 2. He that, by sickness, grief, or other accident wholly loses his mem- ory and understanding. " 3. A lunatia that hath sometimes his understanding and sometimes not. " 4. Lastly, he that for a time de- presiseth himself by his own vicious act of his memory and understanding, a.s he that is drunken." Imbecility,— In Delafield v. Parrish, 25 N. Y. 9, what constitutes imbecil- ity and want of testamentary ca- pacity, as distinguished from idiocy is very fully considered in the dissenting opinion of Gould, J. Selden, J., also discusses the subject in his opinion at page 103. Habitual drunkard. — Chancellor Walworth, in the Matter of Tracey, 1 Paige, 580, says with reference to what constitutes an habitual drunk- ard: "But very eorroneous impres- sions seem to have gone abroad on this subject. It is supposed by many that the prosecutor in such cases is bound to prove aflSrmatively, that an habitual drunkard is incapable of laanaging his affairs; on the contrary, the fact that a person is for any con- siderable part of his time intoxicated to such a degree as to deprive him of his ordinary reasoning faculties is prima facie evidence at least that he is incapacitated to have the control and management of his property.'' The court of chancery had the cus- tody and control of the person as well as of the estate of an habitual drunk- ard, and could exercise that control by means of a, committee, as in the case of a lunatic. Matter of Lynch, 5 Paige, 120. In the Matter of Brown, 4 Duer, 613, the nature and extent of the power to take the person and property of lunatics and habitual drlmkards into especial custody was reviewed. An idiot or natural fool is one that hath no understanding from his na- tivity and, therefore, is by law pre- sumed never likely to attain any. 1 Bl. Com. 302. People v. Lake, 2 Park. Cr. 215, defines idiocy as a total want of reasoning powers growing from a malformance of the organ of thought at the time of birth. Idiocy and imbecility distinguished. —In Odell V. Buck, 21 Wend. 142, the distinction is made between idiocy and imbecility by Judge Bronson stat- ing of the person whose mental ca- pacity was under consideration that he was not an idiot or one that hath no underistanding from. Ms nativity, that although a man of imbecile mind, he had reason and understanding. 19. General Construction Law, sec- tion 28. (See B. C. & G. Consolidated Laws, 2nd ed., p. 3037.) 288 COMMITTEE OF INCOMPETENT. The word " lunacy," includes imbecility arising from. old age and loss of memory or understanding.^" A person may from old age become so weak and incapacitated as to justify the appointment of a commission.^^ The test of the right to control property is not competency to manage a particular estate, but mental health and consequent fitness for the man- agement of the common and ordinary affairs of life.^^ Incompetency, under section 1356, does not include mere weakness of mind, nor lack of business capacity, still less want of business experience.^^ One is not incompetent to manage one's affairs, because he is lacking in the sagacity that makes for success in business.^* A person born deaf and dumb is not necessarily an idiot."® Though a belief in spiritualism may not be inconsistent with business capacity and judgment, yet where a person has be- come convinced in the reality of communications from the dead to a degree where the disposition of his property and his personal action is governed by the direction of deceased per- sons, and he is about so to dispose of hi's property, etc., a case is presented which calls for an investigation as to his com- petency.^* ARTICLE n. PETITION. A. Civil Practice Act, § 1359. Petition for committee ; by whom made. An application for the appointment of sucli a committee muat be made by petition, whicli may be presented by any person. . Where the incompetent person has property which may be endangered in consequence of his incompetency, and no relative or other person applies for the appointment of a committee of his property, the overseer or superintendent of the poor of the town, district, county or city in which he resides, or, where there is no such officer, the officer or officers performing corresponding functions under another official title, must apply to the proper court for the appointment of such a committee; and the expenses of conducting the proceedings thereupon must be audited and allowed in the same manner as other official expenses of those officers are audited and allowed. 20. Matter of Preston, 113 App. 23. Matter of Brugh, 61 Hun, 193, Div. 732, 99 N. Y. Supp. 312. 16 N. Y. Supp. 551. 21. Jackson v. King, 4 Cow. 207; 24. Matter of Case, 214 N. Y. 199. Matter of Ma,son, 1 Barb. 437; Mat- 25. Brower v. Fisher, 4 Johns. Ch. ter of Barker, 2 Johns. Ch. 232. 441. 22. Matter of Williams, 24 App. 26. Matter of Beach, 23 App. Div. Div. 247, 48 N Y. Supp. 475. 411, 48 N. Y. Supp. 437. COMMITTEE OF INCOMPETENT. 289 B. Civil Practice Act, § 1360. Notice of presentation of petition. The court, unless sufficient reasons for dispensing therewith are set forth in the petition or accompanying affidavit, must require notice of the presenta- tion of the petition to be given to the husband or wife, if any, or to one or more relatives of the person alleged to be incompetent, or to an officer authorized by law to present such a petition. Where notice is required, it may be given in any manner which the court deems proper; and for that purpose, the hearing may be adjourned to a subsequent day, or to another term, at which the peti- tion might have been presented. C. Rules of Civil Practice, Rule 2S5. Person; how designated in pro- ceedings for appointment of committee. In all proceedings for the appointment of a committee of a person incom- petent to manage himself or his affairs, in consequence of lunacy, idiocy, habitual drunkenness, or imbecility arising from old age or loss of memory and understanding, or other cause, he shall be designated "an alleged incompetent person;" and after the appointment of a committee of such person, in all subsequent proceedings the lunatic, idiot, habitual drunkard or imbecile shall be designated "an incompetent person." D. Rules of Civil. Practice, Rule 286. Petition for committee; where to be presented. Except as otherwise provided by statute or rule • for the presentation of a petition in behalf of the state in respect of an inmate of a state institution, if the application is made to the supreme court, the petition must be presented at a special term held within the judicial district, or to a justice of said court within such judicial district at chambers, where the person alleged to be incompetent resides; or if he is not a resident of the state or the place of his residence cannot be ascertained, where some of his property is situated, or the state institution is situated of which he is an inmate.27 E. Rules of Civil Practice, Rule 287. Contents of petition. The petition in such proceeding must be verified by the petitioner, or by his attorney, and must state facts showing a case specified in article eighty-one of the civil practice act, or be accompanied with proof, by affidavit, of such facts, and: 1. It shall set forth the names and residences of the husba:nd or wife, if any, and of the next of kin and heirs, of the person alleged to be incompetent, as far as the same are known to the petitioner, or can be ascertained by him with reasonable diligence. 2. State the probable value of the property possessed and owned by the alleged incompetent person, and what property has been conveyed during said alleged incompetency, and to whom, and its value and what consideration was paid for it, if any, or was agreed to be paid. 27. Judicial district of residence.— incompetent resides. Matter of An- The petition must be presented in the draws, 139 App. Div. 586, 114 N. Y. judicial district in which the alleged Supp. 351. 19 290 COMMITTEE OF ISTCOMPETENT. F. Contents of petition. Section 2325 of the Code of Civil Procedure formerly pre- scribed the contents of the petition.^^ Under that section, a petition was defective if the matters alleged therein, relating to the mental condition of the alleged incompetent, were averred upon information and belief with- out any statement as to the source of information on which the belief is predicated.^^ But, where every fact in a petition was stated positively as of the petitioner's own knowledge, a verification was sufficient which stated that the petition was true of the petitioner's own knowledge except as to facts therein stated to be alleged on information and belief, etc.^" After the return of an in- quisition finding sufficient facts, it was too late to question the allegations of the petition.^^ G. Accompanying affidavit. Before the enactment of the Civil Practice Act, section 2325 of the Code of Civil Procedure in terms required an affidavit of the facts to accompany the petition.^^ But it was held that an independent affidavit was not necessary to give the court In Matter of Bischoff, 80 App. Div. a committee of an alleged incompetent 326, 80 N. Y. Supp. 917, it was lieJd contain allegations which, if true, the fact that the petition for the ap- would presumptively require the ap- pointment of a committee of an al- pointment of a commission, the court leged incompetent was not presented is obliged to send the matter to a in a judicial district in which the al- jury or commission for a hearing and leged incompeteJit resides, was an ir- cannot try the matter in the first in- regularity which renders the proceed- stance upon aifidavits, although upon ings invalid, citing Matter of Porter, all the affidavits for and against, the 34 App. Div. 147, 54 N. Y. Supp. 654. court be of opinion that if such were In the latter case it was held that the evidence given upon the hearing while the proceeding was irregular it the proceedings should be dismissed or was not void. the finding of incompetency set aside. The practice of issuing commission Matter' of Milchsack, 43 Misc. 586, 89 in proceedings for the appointment of N. Y. Supp. 524. an alleged incompetent while a trial 29. Matter of Bischoflf, 80 App. Div. term is in session is not a.pproved by 326, 80 N. Y. Supp. 917. the courts. Matter of Wills (1914), 30. Matter of Curtiss, 134 App. 162 App. Div. 775, 147 N. Y. .Supp. Div. 547, 119 N. Y. Supp. 583; aflf'd, 930. 197 N. Y. 583. 28. Trial on afSdavits. — Where the 31. Ex parte Zimmer, 15 Hun, 214. petition and accompanying affidavits 32. Matter of Hoyt, 20 Abb. N. C. in proceedings for the appointment of 162. COMMITTEE OF INCOMPETENT. 291 jurisdiction, if the facts appeared in the verified petition.^ The present court rule is not so strict as the former provision of the Code, and the accompanying affidavit does not seem to be necessary. H. Petition by stranger. The statute permits even a stranger to petition for a com- mission to examine as to the sanity of another person within the jurisdiction of the court.^* But the rule was the same be- fore the enactment of the statute,^ though a stronger case is required on the application of a stranger than on the petition of a near relative.^^ A distant relative may present the peti- tion, although he is not a resident of this State.^^ I.. Notice of application. Notice of the presentation of the petition, as required by section 1360, should be given to the relatives of the alleged in- competent person.^^ But section 1360 does not require notice to be given to the relative of an alleged incompetent person when the application for the appointment of the committee is made by the husband or wife.^^ And jurisdiction does not depend upon notice given to all of the next of kin, and in the absence of any suggestion of in- jury to the lunatic, because of non-service upon one of them, an objection taken thereto should be disregarded.^" It may not be necessary to give notice to the incompetent that the petition Physician. — It was not necessary to 889, 110 N. Y. Supp. 1104; appeal dis-' accompany the petition with the affi- missed, 194 N. Y. 541. davit of a physician, to give the court Nephew. — The Supreme Court will power to appoint a commission, al- take jurisdiction on the petition of the though in cases of lunacy it was usual nephew of an alleged lunatic aocom- to do so. Matter of Zimmer, 15 Hun, panied by affidavits of the mother and 214. See section 352 of the Civil sister of the alleged lunatic, if not Practice Act as to privileged com- upon the petition of the nephew alone, munications by physicians. Matter of Chapman, 43 App. Div. 231, 33. Matter of Curtiss, 134 App. Div. 59 N. Y. Supp. 10^5; rev'd, 162 N. Y. 547, 119 N. Y. Supp. 556; aflf'd, 197 456. N. Y. 583. 38. Matter of ' Bennett, 5 N. Y. 34. Matter of Burke, 125 App. Div. Supp. 373. 889, 110 N. Y. Supp. 1104; appeal dis'- 39. Matter of Parke, 15 Misc. 662, missed, 194 N. Y. 541. 37 N. Y. Supp. 1067. 35. Hughes v. Jones, 116 N. Y. 74. 40. Matter of Cook, 25 St. Rep. 64, 36. Hughes v. Jones, 116 N. Y. 74. 6 N. Y. Supp. 720. 37. Matter of Burke, 125 App. Div. 292 COMMITTEE OF INCOMPETENT. is presented, if he receives notice of the execution of the com- mission and of the application for the appointment of the committee.*^ But it is safer practice to give notice to the in- competent of the presentation, unless, upon a clear case show- ing it to be improper or unsafe to give such notice, an order is made by the court dispensing with it.*^ While failure to give personal notice of the presentation of the petition to have a person declared incompetent, and to afford him opportunity to traverse the allegations therein, may not be fatal to the proceedings in which his incompetency was found, it affords ground for granting a request that he be permitted to traverse the allegations and be heard upon the appointment of commissioners and before a newly summoned jury.^3 J. Form of petition. COUNTY COURT— Ontabio County. In the Matter of the Application FOR Appointment of a Committee OF THE Person and Property of EUGENE P. CLARK, an Alleged Incompetent Person. 175 N. Y. 139. -J To the County Court of Ontario County: The petition of Howland P. "Wells respectfully shows: That your petitioner is the brother-in-law of the above-named Eugene P. Clark, and resides at Palmyra, N. Y. That the said Clark is of the age of about forty-nine years and re- sides in the town of Manchester, N. Y. That for many years prior to July 27, 1898, the said Clark resided on the premises, a part of which he now occupies, with his mother, who cared for him and transacted his business for him ; that the mother of said Clark died on or about the 27th day of July, 1898, since which time said Clark has resided on said premises with one Philip Powers, who works the land and occupies a part of the house. That the said Clark is incompetent to manage himself or his affairs and if of weak mind and easily worked upon by any persons who obtain a controlling influence over him. That the said Clark is possessed of personaL property in the sum of about $1,000, and is seized of real estate worth about $2,800, which is de- scribed as follows : Situate partly in the town of Parmington and partly m the town of Manchester, and bounded as follows, viz. : (In- 41. Gridley v. College of St. Francis 83 N. Y Supp 941 ""YiVfJ ""• ^'- ''^- 43. Matter of Sweeney, 81 App 42. Matter of Blewitt, 131 N. Y. Div. 231, 81 N Y Supt) 47 541; Matter of Coffin, 41 Misc. 131, COMMITTEE OF INCOMPETENT. 293 sert brief description.) That the said Eugene P. Clark has never been married and that his heirs-at-law and next of kin and their places of residence are as follows, to wit : Mary E. Payne, residing at Farmington, N. Y. ; A. Jeanette Wells, wife of your petitioner, residing at Palmyra, N. Y., sisters of said Clark, and Truman S. Clark, a half-brother, whose last known place of residence was Bodie, Cal., but whether now living or dead your petitioner knoweth not. That all of said persons are of full age. That the said Eugene P. Clark has never had a committee appointed of his person and estate. Wherefore, Your petitioner prays that a committee may be ap- pointed of the person and estate of the said Eugene P. Clark, and that a commission may issue out of and under the seal of this court to in- quire as to the competency of the said Clark. (Verification.) Hovpland P. Wells. (Affidavits confirming and showing in detail facts corroborative of the allegations of the petition.) K. Another form of petition. To the Supreme Court of the State of New York: The petition of Eveline 0. Littell of No. 73 Centre street, West Haven, Conn., respectfully shows : That she is a niece of Margaret Gray, formerly of Glenmont, town of Bethlehem, Albany county, N. Y., who is incompetent to manage herself or her property and affairs by reason and in consequence of acute melancholia and senile dementia. That said Margaret Gray attained her eighty-fifth birthday in Au- gust last, and is in feeble physical condition. That she resided at Glenmont, in said town of Bethlehem, for up- ward of thirty-five years; in conjunction with her sister, Mary Gray, who died at said place on the 26th day of April last past, was in the eighty-seventh year of her age. That the said Margaret Gray is possessed of personal property of the value, as your petitioner verily believes, of upward of $10,000, or such was the value of her personal estate within a year last past, consisting of moneys in bank, bonds and other securities and personal property. That until on or about the 11th day of May last past she was the owner in fee of that farm and real property which she occupied for so many years consisting of ten acres which she purchased in or about the year 1894, paying therefor the sum of $4,800 or thereabouts, and which on said 11th day of May was of substantially that value. That on said 11th day of May, 1906, said Margaret Gray conveyed said real property to Emeline Wheeler and Rosanna Locke, the con- sideration expressed in said deed being the sum of $500, together with the agreement on the part of the grantees to take care of the said Margaret Gray during the rest of her life, which deed was recorded in the Albany county clerk's oflBce in book 543 of deeds, pa^e 376. 294 COMMITTEE OF INCOMPETENT. That the said Margaret Gray is a single person, never having been married ; that her father and mother are both dead, and her only heirs- at-law and next-of-kin are and reside as follows: (Here insert names, relationship and addresses.) All of whom are of full age and sound mind. (If not so state.) That the said Margaret Gray for upward of a year last past con- stantly labored under delusions whereby she repeatedly asserted that all her family, friends or relatives had committed suicide, or would commit suicide, and that some of them were about to chloroform her for the purpose of killing her ; on another occasion she repeatedly as- serted that she was to be tried for manslaughter and sure to be con- victed; and again that certain of her relatives who have been incar- cerated in prison are now out on bail, all of which are a delusion and due solely to the mental unbalance of the mind of the said Margaret Gray. And your petitioner further alleges that heretofore and on or about the 23d of June, 1906, the said Margaret Gray was removed from said home in Glenmont to the Albany Hospital where she ever since has been and is now confined in Pavilion F as a lunatic, incapable of man- aging herself or her affairs or property. Wherefore, Your petitioner prays that a committee of the person and property of the said Margaret Gray be appointed, and that a com- mission issue out of and under the seal of this court to inquire into the apparent lunacy of the said Margaret Gray, and for such other and further order or relief in the premises as to the court seems meet and proper. Dated, January 18, 1907. Eveline 0. Littell, ( Verification. ) Petitioner. L. Form of affidavit to accompaay petition. STATE OP NEW YORK,| County op Saratoga, j ss. George W. Marcellus, being duly sworn, says that he resides at Ballston Spa, N. Y., and is a nephew of Margaret Gray, who for many years resided at Glenmont, Albany county, N. Y., and up to or about the 20th day of June, 1906, when she was removed from her home at ' Glenmont to the Albany Hospital, where in Pavilion P, she has been confined ever since. Deponent further says that he resided with the said Margaret Gray until on or about the said 20th day of June, 1906, since the spring of 1893 ; that the said Margaret Gray for upward of nine months last past has been laboring under delusions whereby she has repeatedly asserted that her family, friends and relations had committed or were about to commit suicide, and on other occasions that she was to be tried for manslaughter and electrocuted, and on other occasions that certain of her relatives who had been incarcerated in prison were out on bail, all of which were delusions, and due solely to the mental unbalance of mind of the said Margaret Gray ; that in the opinion of your deponent COMMITTEE OF INCOMPETENT. 295 during such period of time and at the present time, said Margaret Gray is afflicted with what deponent would call nervous insanity, at times very much insane, that in the opinion of deponent she is men- tally incapable of caring for herself, or her property or her estate. X Verification.) George W. Maboellus. M. Form of affidavit of physician to accompany petition. STATE OF NEW YORK, I City and County of Albany,^ ss. J. Montgomery Mosheb, being duly sworn, says that he is, and for upward of fifteen years has been, a practicing physician, residing in the city of Albany, giving special attention the greater part of that time to mental diseases. That he is well acquainted with Margaret Gray, who is now, and for seven months last past, has been confined in Pavilion F of the Albany Hospital. That during that time deponent has observed the said condition of said Margaret Gray, and he is of' the opinion that the said Margaret Gray during that period of time, and now is, suffering from senile dementia, complicated by acute melancholia. That in the opinion of deponent the said Margaret Gray is now, and for such period aforesaid, has been incapable of caring for herself, or her property or estate. That in the opinion of deponent a committee of her person and estate should be appointed to properly care for her affairs and property. That in the opinion of deponent her condition is such that while she has recovered from the acute melancholia, there is no reasonable hope of her recovering her mental equipoise. (Verification.) J. Montgomery Mosheb. N. Form of order as to notice of presentation. (Title.) Upon the within petition and afiidavits, let notice of the presenta- tion of the same and of the application thereupon to this court for the issuance of a commission de lunatico inquirendo to inquire into the alleged incompetency of said Margaret Gray be given to said Margaret Gray and to said George "W. Marcellus, her nephew, heir-at-law and next of kin, and the superintendent or person in charge of the Albany Hospital by service of a copy of said petition, affidavits, notice of presentation of said petition and of this order upon said Margaret Gray and said George W. Marcellus and said superintendent or per- son in charge of the Albany Hospital, personally, on or before Janu- ary — , 1907. Dated, Albany, N. Y., January 23, 1907. Alden Chester, Justice Supreme Court. 296 COMMITTEE OF INCOMPETENT. 0. Form of notice of presentation. (Title.) Take notice that pursuant to the order of the Hon. Alden Chester, a justice of the Supreme Court, therefore notice is hereby given that the petition and affidavits of which the within are copies, with which you are herewith duly served, will be presented to the Special Term of the Supreme Court, to be held at the City Hall in the city of Al- bany, N. Y., on the 26th day of January, 1907, at ten o'clock in the forenoon of that day, or as soon thereafter as counsel can be heard and an application then and there made that the prayer of the said petition be granted. Dated, Albany, N. Y., January 23, 1907. Yours, &c., Mead & Hatt, Attorneys for said Petitioners. To Margaret Gray, alleged incompetent person. To George W. Marcellxts, nephew, heir-at-law and next of kin of said Margaret Gray. To the Superintendent or person in charge of the Albany Hospital. ARTICLE III. COMMISSION. A. Civil Practice Act, § 1364. Order for commission, or for trial by jury in courts. Unless an order is made, as prescribed in the last section, if it presumptively appears, to the satisfaction of the ocurt, from the petition and the proofs accompanying it, that the ease is one of those specified in this article, and that a committee ought, in the exercise of a sound discretion, to be appointed, the court must make an order directing either 1. That a commission issue, as prescribed in the next section, to one or more fit persons designated in the order; or 2. That the question of fact, arising upon the competency of the person with respect to whom, the petition prays for the appointment of a committee, be tried by a jury at a trial term of the court. B. Civil Practice Act, § 1365. Contents of commission. The commission must direct the commissioners to cause the sheriff of a county, specified therein, to procure a jury; and that they inquire, by the jury, into the matters set forth in the petition; and also into the value of the real and personal property of the person alleged to be incompetent, and the amount of his income. It may contain such other directions with respect to the subjects of inquiry or the manner of executing the commission as the court directs to be inserted therein, subject to rules. C. Civil Practice Act, § 1366. Jury to be procured; proceedings thereupon. The commissioners, or a majority of them, immediately must issue a precept to the sherifi" designated in the commission, requiring him to notify -not less COMMITTEE OF INCOMPETENT. 297 than twelve nor more than twenty-four indifferent persons, qualified to serve and not exempt from serving as trial jurors in the same court, to appear before the commissioners at a specified time and place within the county, to make inquiry as commanded by the commission. The sheriff must notify the jurors accordingly, and must return the precept and the names of the persons notified to the commissioners at the time and place specified in the precept. The com- missioners, or a majority of them, must determine a challenge made to a juror. Upon the failure to attend, of a person who has been duly notified, his attend- ance may be compelled; and he may be punished by the court for a contempt^ as where a juror duly notified fails to attend at a trial term of the court. The commissioners may require the sheriff to cause a talesman to attend in place of a juror notified and not attending, or who is excused or discharged; or they may adjourn the proceedings for the purpose of punishing the defaulting juror or compelling his attendance. But it is not necessary to cause any talesman to attend if at least twelve of the persons notified by the sheriff appear and are sworn. D. Hearing on application for commission. On an application for a commission, the court is not limited to matters set out in the petition and affidavits supporting it, but interested parties may be heard in opposition.** The court is not confined to matters set forth in the petition and affidavits in reply, but should determine the question of presumptive incompetency from all the papers before it at the time of the hearing, including those urged against the appli- cation as well as those in favor of it.*^ The court does not de- termine the competency of the alleged incompetent. The mat- ter is not one to be decided on the petition and affidavits, but should be sent to the tribunals authorized to determine the question.*^ The question for the court is whether a trial by the jury should be had.*^ Two things should appear to the satisfaction of the court before it directs a submission to the jury : First, that the person proceeded against is incompetent, and second, that a committee ought in the exercise of a sound discretion to be appointed.*^ Incompetency alone is in- 44. Matter of Burke, 125 App. Div. 46. Matter of Beacih, 23 App. Div. 889, 110 N. y. Supp. 1004; dism'd, 194 411, 48 N. Y. Supp. 437; Matter of N. Y. 541. Milchsaek, 43 Misc. 586, 89 N. Y. Res adjudicata. — An order dismiss'- Supp. 524. ing the petition in a prior proceeding 47. MJatter of Tompkins, 183 App. an which a prima, facie ease was es- Div. 474, 170 N. Y. Supp. 888. tablished is res adjudicata. Matter of 48. Matter of Burke, 125 App. Div. Clarkson, 186 App. Div. 575, 174 889, 110 N. Y. Supp. 1104; appeal dis- N. Y. Supp. 616. missed, 194 N. Y. 541; Matter of 45. Matter of Fox, 138 App. Div. Clarkson, 186 App. Div. 575, 174 43, 122 N. Y. Supp. 889. N. Y. Supp. 616. 298 COMMITTEE OF INCOMPETENT. sufficient, for the situation may be such that no committee is necessary/^ The establishment of a prima facie case does not necessarily require per se a trial by a jury of the ques- tions of fact presented.^" The court is required to exercise a " sound " discretion, which means that special care must be exercised, as a citizen may be deprived not only of possession of his property, but of his personal liberty.^^ E. Notice to incompetent. The alleged lunatic, except in case of confirmed and danger- ous madness, is entitled to, reasonable notice of the time and place of executing the commission, and in th^ earlier cases it was thought that he ought to be produced before the jury for their inspection and examination.^^ Where notice of such proceeding was given to the incom- petent as directed by the court, but her son, the petitioner, took the notice, refused to deliver it to the attorney of the alleged incompetent, and prevented him from consulting with her, it is irregular for the Special Term, although it has juris- diction, to order the issues to be tried before a jury, as the incompetent has not had an unrestricted opportunity to pre- sent her defence.^^ F. Form of order appointing commission. (Caption.) SUPREME COURT— Albany County. In the Matter of MARGARET GRAY, AN AllegSd Incompetent Person. On reading and filing the petition of Eveline 0. Littell, verified on the 16th day of January, 1907, and the affidavits of George W. Mar- 49. Matter of Burke, 125 App. Div. granting an order directing that a 889, 110 N. Y. Supp. 1104; appeal dis- commission de lunatico inquirendo. missed, 194 N. Y. 541. issue. Matter of Burke, 125 App. 50. Matter of Clarkson, 186 App. Div. 889, 110 N. Y. Supp. 1004; dis- Div. 575, 174 N. Y. Supp. 616. missed, 194 N. Y. 541. 51. Matter of Burke, 125 App. Div. 52. Ex parte Russell, 1 Barb. Ch. 889, 110 Supp. 1104; appeal dismissed, 38; ex parte Tracy, 1 Paige, 580. 194 N. Y. 541. 53. Matter of Fox, 138 App. Div. The Appellate Division may review 43, 122 N. Y. Supp. 889. the discretion of the Special Term in COMMITTEE OF INCOMPETENT. 299 cellus and Dr. J. Montgomery Mosher, sworn to on the 19th day of January, 1907, and due proof of personal service thereof and of the order of Hon. Alden Chester, justice of the Supreme Court therefor, and the notice of the presentation of such petition upon said Margaret Gray alleged incompetent, and said George W. Marcellus and Simon Cox, superintendent of the Albany Hospital, on January 23, 1907. After hearing Mead & Hatt, attorneys for the petitioner, and no one appearing in opposition ; it is ordered that a commission, in the form of a writ de lunatico inquirendo, be issued out of and under the seal of this court, in the usual form, directed to Charles S. Stedman, Esq., counsellor-at-law, of the city and county of Albany, N. Y., to inquire by a jury of said county whether the said Margaret Gray is a lunatic and incapable of managing herself and her property, and that the sheriff of said county be instructed in said commission to summon a jury in the manner required by law. It is further ordered that said commission be executed in the city and county of Albany, where the said Margaret Gray resides, and that previous notice of the time and place of such execution be given said Margaret Gray, and to the superintendent or person in charge of the Albany hospital, and to said George "W. Marcellus at least five days before the date thereof, by personal service of such notice upon them respectively. John Feanet, Clerk. G. Form of precept to commissioner. The People of the State of New York to Charles 8. Stedman, of the city and county of Albany, Greeting: Know ye, that we have assigned to you to inquire, by the oath of good and lawful men of the county of Albany, by whom the truth of the matter may be better known, whether Margaret Gray, of the city and county of Albany, is a lunatic with or without lucid intervals by reason of which infirmity she is incapable of governing herself or of managing her affairs or property, or properly caring for her lands, tenements, goods, and chattels, and if so, from what time such in- firmity dates, and in what manner and how such infirmity has mani- fested itself, and whether, while in such condition, the said Margaret Gray has alienated any lands and tenements, and if so to what person or persons, when, where, and after what manner; and also what lands, tenements, goods, and chattels are yet remaining to her, and of what value the lands and tenements alienated by her are, as well as the value of the lands and tenements, goods and chattels by her main- tained, and what the issues and profits thereof amount to by the year, and the value of all her real and personal estate, and who are the nearest heirs and next of kin of the said Margaret Gray, and who would be entitled to her estate in case of her death, and the age of each. Wherefore, we command you that you cause the sheriff of the county of Albany to procure a jury, and that you inquire by the jury into the matters set forth in the petition in this proceeding, verified 300 COMMITTEE OF INCOMPETENT. by Eveline 0. Littell, the 18th day of January, 1907, and also that you inquire into the value of the real estate and personal property of the said Margaret Gray, and the amount of her income therefrom, and the other matters above stated. And that you appoint such day and place, or days and places, for the purpose of holding such inquisition as may be convenient; and that you give at least five days' personal notice of the time and place of the execution of this commission to said Margaret Gray, and to George W. Marcellus, her nephew and next of kin, and to the super- intendent or person in charge of the Albany Hospital ; and that you report the inquisition which you shall thereupon make under the bands and seals of yourselves or a majority of you, together with those of the persons by whom it shall be made, distinctly and plainly, and without delay to our court, together with this writ. Witness, Hon. George H. Fitts, justice of the Supreme Court, at the [l. s.] City Hall, city of Albany, N. Y., this 26th day of January, 1907. George H. Fitts, Justice Supreme Court. John Feanet, Clerk of Said Court. Mead & Hatt, Attorneys for Petitioner. ARTICLE IV. INJUNCTION AND LIS PENDENS. A. Civil Practice Act, § 1361. Notice of pendency of proceeding; effect. In all proceedings taken under this article, if real property or any interest therein is intended to be affected, the petitioner shall file in the clerk's office of each county where the property is situated a notice of the pendency of such proceeding which shall set forth the general nature and object of the proceeding and a brief description of the real property in that county to be affected thereby, and which notice must be filed with the petition or any time there- after and before any final adjudication in the proceeding. The clerk shall index such notice against the name of the alleged incompetent. The pendency of the proceeding is constructive notice from the time of so filing the notice only to a purchaser or incumbrancer of the property affected thereby from or against the alleged incompetent with respect to whom the notice is directed to be indexed. A person whose conveyance or incumbrance is subsequently executed or subsequently recorded is bound by all proceedings taken after the filing of the notice to the same extent as if he was a party to the proceeding. But this provision shall not prevent a jury in a proper proceeding, on sufficient proof, from rendering a verdict that shall over -reach any conveyance or incum- brance theretofore executed by the alleged incompetent, so as to make such conveyance or incumbrance prima facie void. COMMITTEE OF INCOMPETENT. 301 B. Civil Practice Act, § 1362. Injunction. When it satisfactorily appears from the petition and accompanying aflBdavits that any person or persons has or have acquired from the alleged incompetent person real or personal property during the time of such alleged incompetency, without adequate consideration, the court may issue an order, with or without security, restraining such person or persons from selling, assigning, disposing of or incumbering said property, or confessing judgment which shall become a lien upon said property, during the pendency of the proceeding for the appoint- ment of a committee, and said order, in the discretion of the court, may be continued for ten days after the appointment of such committee. Notice of the execution of a commission issued pursuant to the provisions of this article shall be given to the person or persons enjoined, in sucb manner as the court may direct.E4 ARTICLE V. HEARING AND INQUISITION. A. Civil Practice Act, § 1367. Proceedings upon the hearing. All the commissioners must attend and preside at the hearing; and they, or a majority of them, with respect to the proceedings upon the hearing, have all the power and authority of a judge of the court holding a trial term, subject to the directions contained in the commission. Either of the commis- sioners may administer the usual oath to the jurors. At least twelve jurors must concur in a finding. If twelve do not concur, the jurors must report their disagreement to the commissioners, who must thereupon discharge them and issue a new precept to the sheriff to procure another jury. B. Civil Practice Act, § 1368. Return of inquisition and commission. The inquisition must be signed by the jurors concurring therein, and by the commissioners or a majority of them, and be annexed to the commission. The commission and inquisition must be returned by the commissioners and filed with the clerk. C. Civil Practice Act, § 1369. Expenses of commission. The commissioners are entitled to such compensation for their services, as shall be prescribed by rule. The jurors are entitled to the same compensation 54. Appeal. — Although one to whom Supp, 958; dismissed, 199 N. Y. 560. an incompetent has conveyed his Incidental to commission. — An order property has no standing to appeal enjoining one to whom the incompe- from an order directing that a com- tent conveyed his property from dis- mission issue except as she has been posing of or incumbering the same is enjoined from disposing of such prop- incidental to the order for a commis- erty, where it appea,rs that there is eion and falls when it falls. Matter no necessity for a committee, the en- of Vail, 137 App, Div. 220, 121 N. Y. tire order will be reversed. Matter of Supp. 958; dismissed, 199 N. Y. 560. Viail, 137 App. Div. 220, 121 N. Y. S02 COMMITTEE OF INCOMPETENT. as jurors upon the trial of an issue in an action in the same court. The peti- tioner must pay the compensation of the commissioners, sheriff and jurors.54a D. Civil Practice Act, § 1370. Proceedings upon trial by jury in court. Wliere an order is made directing the trial by a jury at a trial term, of the questions of fact arising upon the competency of the person with respect to whom the petition prays for the appointment of a committee, the order must state, distinctly and plainly, the questions of fact to be tried; which may be settled as where an order for a similar trial is made in an action. The court, in that or in a subsequent order, may direct that notice of the trial be given to such persons and in such a manner as is deemed proper. The trial must be reviewed in the same manner, with like effect, and, except as otherwise directed in the order, the proceedings thereupon are the same in all respects as where questions of fact are tried pursuant to an order for that purpose. The court may make inquiry by means of a reference or otherwise, as it thinks proper, with respect to any matter not involved in the questions tried by the jury, the determination of which is necessary in the course of the proceedings. The expenses of the trial and of such an inquiry must be paid by the petitioner. E. Civil Practice Act, § 1371. Subject of inquiry in cases of lunacy. Where the petition alleges that the person with respect to whom it prays for the appointment of a committee is incompetent, by reason of lunacy, the inquiry with respect to his competency, upon the execution of a commission or the trial at a trial term, as prescribed in this article, must be confined to the question whether he is so incompetent at the time of the inquiry; and testimony respecting any thing said or done by him, or his demeanor or state of mind, more than two years before the hearing or trial, shall not be received as proof of lunacy, unless the court otherwise specially directs in the order granting the commission or directing the trial by jury. P. Oath of office by commissioners. The commissioners, before entering upon their duties, must subscribe and take an oath which shall be to the effect that they will faithfully, honestly and impartially discharge the trust committed to them.^^ They cannot exercise any of the functions of their office without taking such oath. 54a. Rules of Civil Practice. Rule Where the casts and expenses ex- 288. Fees and expenses of inquisition ceed two hundred and fifty dollars, in lunacy. — ^On the execution of a besides witness fees and allowances commission of lunacy, the commis- to commissioners, the committee shall sioners, for every day they are em- not be at liberty to pay the same out ployed necessarily in hearing the testi- of the estate in his 'hands, without a mony and taking the inquisition, shall special order of the court, on notice to be entitled to an allowance, to be all parties who have appeared in such fixed by the court, not exceeding ten proceedings, directing such payment, dollars for each day to each of such 55. Civil Practice Act, § 126. commissioners. COMMITTEE OF INCOMPETENT. 303 The taking of an oath is a condition precedent to the right of the commissioners to perform the functions of their office. The oath is one of the safeguards provided by statute for' the protection of the rights of the, individual, and the Legislature, by prescribing the form, made the form of the essence of the act. That which the Legislature has directed the courts can- not declare immaterial. Where two commissioners took the prescribed oath and issued precept to the sheriff to summon the jury, and a third commissioner never took any oath and did not act with the commissioners, the commission was held to have no legal existence and the want of jurisdiction could be asserted collaterally.^^ G. Notice to alleged incompetent. While the provisions of the Civil Practice Act do not in terms require notice to be given to the alleged incompetent, except where he is confined in a State institution, such notice must, nevertheless, be given before the trial of the issue, as, otherwise, the incompetent would be deprived of his consti- tutional right to notice of a hearing affecting his property. The preliminary notice to the incompetent may not be neces- sary to the jurisdiction of the court, but the notice may be given at any time before proceeding to try the question of competency.^'' H. Authority of commissioners. A majority of the commissioners must decide every ques- tion arising upon the execution of the commission.^^ They have no right to dictate to the sheriff as to what jurors shall be summoned.^^ If the jurors find the fact of lunacy and the inquisition is signed by the commissioners, a statement attached to the inquisition, reciting that two of the commissioners do not concur with the finding of the jury, does not affect its validity; for the signing by the commissioners of the finding is mandatory, whatever their views may be.^" The commissioners are entitled to such compensation as is prescribed by rule.^-' The court has no power to award to 56. Matter of BischoflF, 80 App. Div. 59. Matter of Wager, 6 Paige, 11. 326, 80 N. Y. Supp. 917. 60. Matter of Lewis, 57 Misc. 670, 57. Matter of Fo«, 138 App. Div. 109 N. Y. Supp. 1112. 43, 122 N. Y. Supp. 889. 61. See. supra, Art. V-C. Expenses 58. Matter of Arnhout, 1 Paige, 497- of commission. 304 COMMITTEE OF INCOMPETENT. commissioners a sum exceeding ten dollars for each day neces- sarily employed in taking the inquisition and including ser- vices essential to the judicial determination thereof.^^ The fees of the commissioners, the sheriff and the jurors are a proper charge against the estate of a deceased lunatic, not- withstanding his death before the confirmation of the in- quisition.^^ A commissioner appointed by a court or judge may be removed by the court. In case of the death, resig- nation, neglect or refusal to serve, or removal, of any such officer, another person may be appointed in his stead.^* I. Jury. The contesting parties upon a hearing before commissioners should be allowed to challenge jurors in accordance with the ordinary practice of obtaining an impartial jury ; and a per- son ought not to be allowed to sit as a juror who states that he has formed an opinion relative to the inquiry, and that it would require some evidence to overcome it.^^ All the jurors who are sworn and commence should sit during the entire pro- ceeding.^^ The sheriff should not be present at deliberations of jury.*^ Jurors in lunacy proceedings are entitled only to twenty- five cents a day, and their inquisition will be set aside when they are paid more through arrangement with the sheriff made by the petitioner's attorney.^^ J. Eights of alleged incompetent. The alleged incompetent may appear and testify before the jury ; and his counsel may sum up.^^ And a refusal to permit counsel for lunatic to sum up, is error and vitiates the pro- ceedings.™ The jury should inspect the alleged lunatic when possible.'^ 62. Matter of Wills, 162 App. Div. Div. 408, 111 N. Y. Supp. 558; Matter 775, 147 N. Y. Supp. 930. of Sandford, 61 Hun 34, 39 St. Eep. 63. Matter of Lofthouse, 3 App. 809, 15 N. Y. Supp. 291. Div. 139, 38 N. Y. Supp. 39. See Civil Practice Act, § 1504, as to 64. Civil Practice Act, § 81. the fees of trial jurors. 65. Matter of Klo<;k, 19 St. Rep. 69. Matter of Dickie, 7 Abb. N. C. 309, 3 N. Y. Supp. 479. 420. 66. Tebout'a Oasej 9 Abb. Pr. 211. 70. Matter of Church, 64 How. Pr. 67. Matter of Arnhout, 1 Paige, 393. 497. 71. Matter of Russell, I Barb. Ch. 68. Matter of Vanderbilt, 127 App. 38. COMMITTEE OF INCOMPETENT. 305 Where one, not being represented in the proceeding, has befen adjudged a lunatic, he has an absolute right to a rehear- ing, and an impositioh of the payment of costs to date as a condition for opening the " default "is an abuse of the dis- cretion of the court. And, if it is determined on the rehearing that the proceed- ing was not justified, the court cannot by summary order re- quire the alleged incompetent to pay the petitioner or his at- torney any part of the expenses incurred by the petitioner in the proceeding.'^ E. Finding as to period of incompetency. Prior to the enactment of section 2335 of the Code of Civil Procedure, now contained in section 1371 of the Civil Practice Act, the jury was at liberty to inquire and return a statement of the antecedent period over which the lunacy had extended, but now the investigation is confined to the question of in- competency at the time of inquiry, and to permit an intelligent determination of this question, evidence is allowed to be given as to the demeanor and state of mind of the person for not more than two years prior to the hearing, if the court shall specifically so direct.'^ An adjudication that lunacy existed more than two years prior to the date of the in- quisition is unauthorized, for the adjudication must be limited to the fact as it exists at the time of inquiry. Thus, an in- quisition finding that lunacy existed previous to the date of inquisition will be modified by denying confirmation respect- ing the time prior to the inquisition, but such inquest may be confirmed in so far as it is legal.'^ Or a finding that the in- capacity has existed for a given period of time will be stricken out on appeal.'^ If the inquisition finds lunacy prior to the time of hearing, it is not admissible in evidence to show that the testator, whose will was made before the hearing, lacked testamentary capacity.™ A finding that the incompetency ex- 72. Matter of Hammond, 125 App. Eep. 33, 20 Abb. N. C. 287; Sdhank v. Div. 865, 110 N. Y. Supp. 643. Hooper, 160 N. Y. Supp. 627. 73. Boschen v. Stockwell, 324 N. Y. 74. Matter of Grote, 31 Misc. 99, 64 356; Keals v. Weston, 28 Misc. 67, 59 N. Y. Supp. 1035; In re Cook, 6 N. Y. N. Y. Supp. 807; Matter of Grote, 31 Supp. 720; In re Sanford, 8 N. Y. Misc. 99, 64 N. Y. Supp. 1035; Matter Supp. 940. of Schrodt, 32 Misc. 540, 67 N. Y. 75. Matter of Demelt, 27 Hun, 480. Supp. 244; Matter of Demelt, 27 Hun, 76. Matter of Preston, 113 App. 480; Dominick v. Dominick, 10 St. Mv. 732, 99 N. Y. Supp. 312. 20 306 COMMITTEE OF INCOMPETENT. isted at a date prior to the hearing is not even presumptive evidence of the fact." L. Inquisition. An inquisition will be set aside as irregular if it is not signed by the jury.'^^ But a recommendation of the jury that the party, from long confinement and its consequences, may require some tempor- ary guardianship, does not impair the legal effect of the find- ing.™ The finding that he is of unsound mind and mentally incapable of governing himself or his affairs is sufficient ; the word ' ' lunatic ' ' is not requisite.^" But a finding of commissioners to the effect that she "is in- competent, and in consequence thereof is unable to manage herself or her affairs," has been thought insufficient to sup- port an inquisition.^^ Similarly, a finding that the " said in- competent is an incompetent person and unfit to manage his affairs," and " that such infirmity manifests itself in weak- ness of mind," is not sufficient.^^ Likewise, a committee of the property of an alleged incom- petent cannot be appointed where the jury merely finds that he is " incapable of governing- and managing his property, ' ' but that he is not incapable of managing his person.^ M. Form of commissioner's oath. (Title.) MONROE COUNTY, ss.: John Vosburgh, Henry Pierce and Charles R. Mott, being each duly sworn, says, each for himself, that he will support the Constitution of the United States and the Constitution of the State of New York, and that he will faithfully, honestly and impartially discharge the trust committed to him as commissioner in the above-entitled matter under the order herein made by the Supreme Court. Jurat. Signatures. N. Form of precept to sheriff and return by sheriflf. To the Sheriff of the County of Albany, Greeting: Whereas, A commission has issued out of the Supreme Court to me, the undersigned, as commissioner to inquire as to whether Margaret 77. Boachen v. Stockwell, 224 N. Y. 81. Matter of Wendel, 33 Misc. 532, 356. 68 N. Y. Supp. 904, 9 Anno. Gas. 278. 78. Matter of Mason, 51 Hun, 138, 82. Matter of Clark, 175 N. Y. 139. 4 N. Y. Supp. 664. 83. Matter of Penfield, 162 App. 79. Ex parte Dickie, 7 Abb. N. C. 417. Div. 888, 148 N. Y. Supp. 439. 80. Ex parte Rogers, 9 Abb. N. C. 141. COMMITTEE OF INCOMPETENT. 307 Gray, of the city and county of Albany, N. Y., is an incompetent per- son incapable of caring for herself or of managing her property, or estate : Now, therefore, by virtue of such commission, bearing date the 26th of January, 1907, 1 require you to notify not less than twelve nor more than twenty-four indifferent persons, qualified to serve, and not exempt from serving, as trial jurors in the Supreme Court, to ap- pear before me, at the office of Mead & Hatt, 86 State street, Albany, N. Y., on the 4th day of February, 1907, at three o'clock in the after- noon, then and there to inquire on their oaths of the alleged incom- petency of the said Margaret Gray, and of all such matters and things as shall be given in charge, by virtue of said commission ; thereof, fail not at your peril. Given under my hand and seal this 28th day of January, 1907. Charles S. Stedman, [l. s.] As Commissioner. "The following-named jurors have been summoned to inquire into the matters set forth in the within precept, according to the tenor thereof." (Here names of jurors.) Joseph Besch, February 4, 1907. Sheriff. 0. Form of notice of hearing. To Eugene P. Clark: Take notice that a commission to inquire as to your competency to manage yourself or your affairs, issued out of and under the seal of the County Court of Ontario county, and directed to the undersigned, as commissioner, will be executed at Pratt's Hall, in the village of Manchester, in said county, on the 14th day of September, 1899, at ten o 'clock in the forenoon of that day. Dated, September 5, 1899. James A. Robson, Commissioner. Hopkins & Converse, Attorneys for Petitioner. P. Form of oath to juror. You do solemnly swear well and truly to inquire touching the incom- petency of , and of all such matters and things as shall be given to you in charge by virtue of a commission issued out of and under the seal of the court, and now here to be executed and a true inquisition make, according to the evidence. So help you God. 308 COMMITTEE OF INCOMPllTENT. Q,. Form of inquisition. SUPREME COURT— Albany County. 1 In the Matter of MARGARET I GRAY, AN Alleged Incompetent^ Person. An inquisition taken at the office of Mead & Hatt, 86 State street, Albany, N. Y., on the 4th day of February, 1907, before Charles S. Stedman, sole commissioner appointed by virtue of a commission in the nature of a writ de lunatico inquirendo, issued out of and under the seal of the Supreme Court for the county of Albany, and dated January 26, 1907, directed to the said commissioner, to inquire, among other things, into the incompetency of Margaret Gray upon the oaths of twelve jurors, to wit : (Name jurors.) Good and lawful men, who are indifferent persons, qualified to serve, not exempt from serving as trial jurors in said court, who, being summoned, duly sworn and charged, upon their oaths find and say, that the said Margaret Gray is a lunatic and by reason of such infirmity she is incapable of gov- erning herself or of managing her affairs or property, or properly taking care of her affairs, lands, tenements, goods and chattels, and that such infirmity manifests itself in weakness of mind, neglect of her person, loss of memory, and in illusions, and that such infirmity has manifested itself and existed since May 1, 1906, and still continues. That the said Margaret Gray heretofore and while under such in- firmity and while incapable of managing her property as aforesaid on or about the 11th day of May, 1906, being then the owner thereof, in fee, conveyed the farm and real property which she then occupied, consisting of about ten acres, situate in the town of Bethlehem, county of Albany, N. Y., to Emeline Wheeler and Rosanna Locke, the con- sideration expressed in the said deed being the sum of five hundred dollars ($500), and the agreement on the part of the grantees to take care of her during the remainder of her life, which deed was recorded in the Albany county clerk's office, on that day, in book 543 of deeds, page 376. That the said Margaret Gray has no other real estate. That the value of the said personal estate of the said Margaret Gray, consisting of moneys on deposit in various banks and trust com- panies, household furniture, personal ornaments and wearing ap- parel, amounts in all to about the sum of ten thousand dollars ($10,000) and produces an income annually of about five hundred dollars ($500) per year, which is the amount of her income from her various investments and property. That the said Margaret Gray is a single person never having been married, and in her eighty-sixth year ; that her father and mother are both dead, and her only heirs-at-law and next of kin are nephews and nieces, whose names and places of residence are as follows, to wit : (Insert names, etc.) all of full age and sound mind and thev being the persons who would be entitled ;to her estate in case of h?r death intestate. • COMMITTEE OF INCOMPETENT. 309 In testimony whereof, as well the said commissioner as the jurors aforesaid have to this inquisition set their hands and seals the day and year first above written. Charles S. Stedman, [seal.] (Signatures of jurors.) Commissioner. ARTICLE VI. PROCEEDINGS ON RETURN OF COMMISSIOZ.. A. Civil Practice Act, § 1372. Proceedings upon verdict, or return of commission. Upon the return of the commission with the inquisition taken thereunder, or the rendering of the verdict of the jury upon the question submitted to it by the order for a trial by a jury, the court either must direct a new trial or hearing or make such a final order upon the petition as justice requires. B. Civil Practice Act, § 1373. Costs and disbursements. Where a final order is made dismissing a petition, the court, in its discretion, may award in the order a fixed sum as costs, not exceeding fifty dollars and disbursements, to be paid by the petitioner to the adverse party. Where a •committee of the property is appointed, the court must direct the payment by him, out of the funds in his hands, of the necessary disbursements of the petitioner, and of such a sum for his costs and counsel fees as it thinks reasonable; and, in its discretion, it may direct the committee to pay a sum, not exceeding fifty dollars and disbursements, to the attorney for any adverse party. C. Application for committee. It is not essential in proceedings for tlie appointment of a committee of an idiot that the alleged idiot should have notice of the application for the commission. Notice of the time and place for the execution of the writ is sufficient to give the court jurisdiction, and while the alleged idiot should have notice of the motion to confirm the findings of the jury, and for the appointment of a committee, the failure to give such notice does not render the proceedings void.^* The notice may be dispensed with where it is impossible to give it.^^ On the return of an order to show cause in a proceeding for the appointment of a committee of an alleged lunatic, the court should not order that the persons who have filed affi- 84. G.ridley v. College of St. Francis Matter of Demelt, 27 Hun, 480; Mat- Xavier, 137 N. Y. 327. ter of Rogers, 9 Abb. N. C. 141. See also Matter of Maginn, 100 ^ 85. In re Dalrymple, 163 N. Y. App. Div. 230, 91 N. Y. Supp. 814; * Supp. 233. 310 COMMITTEE OF INCOMPETENT. davits shall appear before him and be subject to examination and grant permission to interested parties to examine other witnesses, for the statute requires the issues in such proceed- ing to be tried before a sheriff's or petit jury and there is no authority for a preliminary trial.*^ Children of the alleged incompetent have a right to inter- vene in the proceeding on his behalf and to join with him in an appeal from an order adjudging him to be incompetent.*'' D. Action of court on petition. A committee of an alleged incompetent resident of the State can be appointed only after the issuing of a commission and the determination of a jury, except where the application is made on behalf of the State authorities, and the incompetent is in the State hospital, as provided by section 1374.** A com- mittee cannot be appointed on the certificates of physicians.** An application to confirm or set aside an inquisition of lunacy is addressed to the discretion of the court and brings the case before it on the merits.*" The court has the right and it is its duty to do whatever is most conducive to the interests of the lunatic, to see that he is maintained as comfortably as his cir- cumstances will allow, and that every effort is made to restore him to his health. The interests of the lunatic are the con- trolling considerations and not those of the expectant success- ors to his estate.*^ In response to the petition, no assistance should be refused from those entitled to be heard which will aid the court in exercising its sound discretion.*^ The court is not restricted in its power to grant a new trial 86. Matter of Tompkins, 183 App. inquisition on the mere examination Div. 474, 170 N. Y. Supp. 888. of the supposed lunatic, in connection 87. Matter of Gibbons, 183 App. with the evidence produced before the Div. 302, 171 N. Y. Supp. 69. juT, hut it is improper to do so on 88. Matter of Bergman, 110 App. ex parte affidavits, contradicting the Div. 588, 97 N. Y. Supp. 346; G-aflfney finding, with no excuse for not having V. Brinnier, 110 App. Div. 588, 97 produced the deponents before the N. Y. Supp. 346. jury as witnesses. Matter of Russell, 89. Matter of Corlies, 1 Law Bull. 1 Barb. Ch. 38. 59. 91. The Parsee Merchant, 11 Abb. 90. Matter of Rogers, 9 Abb. N. C. Pr. N. S. 209. 141. 92. Matter of Burke, 125 App. Div. Examination of lunatic. — In a very 889, 110 N. Y. Supp. 1004; appeal dis- clear ease of mistake or prejudice of missed, 194 N. Y. 541. a jury, the court may discharge the COMMITTEE OF INCOMPETENT. 311 to cases where a proper inquisition has been returned; and an inquisition will be set aside for irregularity or where the facts do not justify the finding of the jury.^^ The defendant is entitled to a new hearing if it appears that the finding against him was induced by bias or previously formed opinion.^'' Section 1372 contemplates a judicial determination as to the sufficiency of the evidence taken upon the inquiry .^^ The finding and confirmation of an inquisition should not be set aside for mere irregularity, where there is no room what- ever for doubt of the lunacy .^'^ Nor will it be vacated for in- sufficiency in the allegations of the petition.''^ If an inquisition in lunacy is sufficient to bring the case within the statute the court should notwithstanding any de- fects in the petition and affidavits upon which it is based exer- cise the discretion conferred upon it and either confirm or refuse to confirm the inquisition and should not dismiss the petition because of the defects therein.^^ The court has power in its discretion to direct a new com- niission, where from the evidence or otherwise there is doubt that the jury erred.^^ E. Kefusal to appoint committee on finding of incompetency. The authority of the court to appoint a committee is not to be exercised in all cases, but only where in the sound dis- cretion of the court it appears that a committee is necessary.^ 93. Matter of Mason, 51 Hun, 138, N. Y. Supp. 843. 4 N. Y. Supp. 662. 94. Tebout's Case, 9 Abb. Pr. 211. Second trial. — The court has power 95. Matter of Marks, 84 Misc. 628, to grant a new trial, and an order di- 147 N. Y. Supp. 843. recting such new trial, after a verdict 96. Matter of Williams, 24 App. in favor of the lunatic, will not be re- Div. 247, 48 N. Y. Supp. 475; affd versed on appeal when the evidence is 157 N. Y. 704; Matter of Rogers, 9 conflicting. In re Abby, 6 N. Y. Supp. Abb. N. C. 141; Matter of Lamoree, 437. 32 Barb. 122. New trial at trial term. — A motion 97. Matter of Zimmer 15 Hun, 214. to confirm an inquisition in lunacy, 98. Matter of Clark, 57 App. Div. 5, where the petitioner concedes that 67 N. Y. Supp. 631; Matter of Lewis, oral testimony given before the com- 57 Misc. 670. 109 N. Y. Supp. 1112. missioner a,nd jurors was not tran- 99. Matter of Lasher, 2 Barb. Oh. scribed, will be denied and a new 97. trial of specific questions of fact aris- 1. Matter of Biirke, 125 App. Div. ing upon the petition, to be framed 889, 110 N. Y. Supp. 1004; appeal dis- and embodied in the order, will be di- missed, 194 N. Y. 54; Matter of Vail, rected before a jury at a trial term. 137 App. Div. 220, 121 N. Y. Supp. Matter of Marks, 84 Misc. 628, 147 958; appeal dismissed, 199 N. Y. 560. 312 COMMITTEE OF INCOMPETENT. The necessity for the appointment of a committee is to be determined by the condition of the incompetent at the time of the hearing. Things previously done by him, such as the fact that he conveyed his property, can be considered only for the purpose of determining whether he is incompetent at the time of the hearing.^ Although an aged woman may be found incompetent, the appointment of a committee of her person and property is not justified if her present situation and surroundings assure to her security of fortune, health of body, and happiness of mind.^ Where there is no proof that an incompetent is possessed of or entitled to any property of any kind that a committee appointed by the court could take possession of, a petition for the appointment of a committee of his property will be denied.^ And where it appears that the incompetent is confined upon a criminal charge, the court will not appoint a committee of his person.^ Ordinarily a committee of the person and estate of an in- fant is not appointed, for the general guardian can exercise all the functions of the committee. There is, however, no legal objection to the appointment of a committee of the person and estate of an infant.® F. Selection of committee. The jurisdiction of the Supreme Court over the person and property of a person incompetent to manage himself or his affairs must be exercised by means of a committee of the per- son and a committee of the estate, who may be the same or different individuals in the discretion of the court, and the court is empowered to appoint, control, suspend, or remove such committee or allow him to resign.'' 2. Matter of Vail, 137 App. Div. 7. Matter of Andrews, 192 N". Y. 220, 121 N. Y. Supp. 958; appeal dis- 514. missed, 199 N". Y. 560. Appodntment -witliout notice. — It 3. Matter of Wells, 177 App. Div. has been he.ld t'hat the appointment of 100, 163 N. Y. Supp. 826. a stranger as committee of a Itmatic 4. Matter of Eiabinovitch, 70 Misc. or idiot without notifying those who 288, 128 N. Y. Supp. 567. will succeed such idiot as heir is not 5. Matter of Rabinovitch, 70 Misc. irregular, and will not be set aside on 288, 128 N. Y. Supp. 567. their motion. Matter of Owens, 47 6. Matter of McMillan, 126 App. How. Pr. 150; Pickcrsgill v. Reed, 5 Div. 155, 110 N. Y. Supp. 622. Hun, 170. COMMITTEE OF INCOMPETENT. 313 In the selection of the committee the court should exercise the greatest care in order that the rights of all the parties in- terested may be best subserved. The welfare and happiness of the incompetent himself is the important consideration, but where the committee must maintain more or less intimate re- lations with his relatives, their wishes and interests if they coincide with the incompetent's welfare and happiness ought not to be ignored.^ The interests of the heirs and next of kin are wholly second- ary to the interests of the lunatic, both with respect to his person and estate.^ The guardianship of a lunatic's estate is not a matter of course to be committed to those presumptively entitled to it on his death, but they will be appointed where they appear to be the persons most likely to protect it.^" Al- though the court will exercise care and circumspection in appointing those who might be benefited by the lunatic's death, there is no absolute preference between them and strangers.^^ The keeper of an asylum will not be appointed committee of a lunatic.^^ "Where the person proposed as sub- stitute committee has acted as legal adviser of the former committee whose estate will have to account and his appoint- 8. Matter of Cooper, 105 App. Div. Selection between brothers. — ^Where 449, 94 N. Y. Supp. 270. it appears that the interested parties Reference. — ^VVhere the person are not able to agree upon any person named by the court as committee was as such committee, a brother of the in- a stranger and was vigorously ob- competent with whom he has lived on iected to by the relatives, who pre- a farm and to whom he is much at- sented affidavits tending to show that tached, and to whom he has intrusted the selection was not a wise one, for safe-keeping the care and custody whidh affidavits were contradicted by of notes and certificates of deposit, others presented on behalf of the in- will be appointed committee of his competent; it was held that under person and property, dn preference to the circumstances of the particular a brother from whom he is somewhat case a reference should be ordered to estranged, and who lives five miles take testimony as to the proper per- from the farm of the incompetent, son to be appointed. Matter of though both brothers are equally com- Cooper 105 App. Div. 449, 94 N. Y. petent to administer the trust. MJat- Supp. 270. If the next of kin unite ter of Kane, 66 Misc. 212, 121 N. Y. in a petition and name the proper per- Supp. 667. son or consent in writing, such person 9. Matter of Cook, 25 St. Rep. 64, is usually selected. But if they do 6 N. Y. Supp. 720. not so petition or consent there should 10. Matter of Taylor, 9 Paige, 611. be an order of reference and notice to 11. Matter of Paige, 7 Daly, 155. the next of kin; it is irregular to ap- 12. Matter of O'Connell, 5 Law point a stranger without notice. Matter Bull. 60. of Lamore, 19 How. 375, 32 Barb. 122. 314 COMMITTEE OF INCOMPETENT. ment may expose him to the embarrassment of representing conflicting interests on such accounting, it is not an abuse of discretion for the court to appoint another person.^^ A trust company duly incorporated under the Banking Law may be appointed committee of the estate of lunatics, persons of unsound mind, and habitual drunkards." G. Costs. The granting or refusing of costs in lunacy proceedings is in the sound discretion of the court.^^ They will not be granted against the estate of the lunatic, unless the proceedings were instituted for his benefit and prosecuted fairly and in good faith.^^ The court has power, however, even after the death of the supposed lunatic before confirmation of the inquisition, to charge his estate with costs." Although the proceedings are unsuccessful, the petitioner is not ordered to pay costs as a matter of course, but he will be excused if the petition was made in good faith and upon reasonable grounds.^^ And where one jury found the party of unsound mind, good faith is presumed.^^ But in a proper case, the court may award costs against the petitioner.^" In unsuccessful proceedings the court cannot charge costs of the proceedings against the property of the alleged in- competent.^^ A solicitor who unsuccessfully opposes a com- mission cannot claim costs against the estate, though the court may allow them in its discretion.^^ H. Effect of decree of inquisition. Under the present practice a finding of incompetency is con- fined to the time of the hearing, and creates no presumption of previous incompetency, although the inquisition erroneously 13. Matter of Quinby, 175 App. Div. 18. Matter of McAdams, 19 Hun, 898, 160 N. Y. Supp. 921. 292. 14. Banbing Law, § 185, subd. 6. 19. Matter of Giles, 11 Paige, 338. See B. C. & G. Consolidated Laws, 2nd 20. Matter of Gibbons, 183 App. ed., p. 617. Div. 302, 171 N. Y. Supp. 69. 15. Matter of Folger, 4 Johns. Ch. 21„ Sander v. Larner, 101 App, Div. 170; Matter of Tracy, 1 Paige, 583; 167, 91 N. Y. Supp. 428; Matter of Matter of Russell, 1 Barb. Ch. 39. Hammond, 59 Misc. 365, 112 N. Y. 16. Matter of Beekwith, 3 Hun, 443. Supp. 298. 17. Matter of Lofthouse, 3 App. 22. Matter of Conklin, 8 Paige 450. Div. 139, 38 N. Y. Supp. 39. COMMITTEE OF INCOMPETENT. 315 contains a finding of incompetency for a previous period.^^ But the inquisition, if confirmed by the court, is conclusive as to the competency of the party at the time of the hearing.^* It estabhshes that he is incompetent to make a valid con- tract,^^ and any contract the lunatic thereafter makes is abso- lutely void.^^ The presumption of the continuance of the lunacy is conclusive as to all dealings with the lunatic after the inquisition and until it has been superseded.-^ Actual sanity cannot be shown in support of an agreement made dur- ing that period."^ All persons subsequently dealing with him are deemed to have notice of his incompetency.^^ The proceedings for the appointment of committee of in- competent are not generally open to collateral attack.^" But, where no committee has been appointed, the fact that a person has been found incompetent does not absolutely pre- clude him from changing his residence to another State.^^ aS.Bosehen v. Stockwell, 22'4 N. Y. 356; Schanck v. Hooper, 160 N. Y. 627. See also Jennings v. Hennessy, 26 Misc. 265, 55 N. Y. Supp. 833; aff'd, 40 App. Div. 633, 58 N. Y. Supp. 1142. Under former practice, the jury were authorized to find that the in- competency had existed for a previous period, and such finding wais presump- tive evidence of his incapacity during such period. Banker v. Banker, 63 N. Y. 409; Van Beusen v. Sweet, 51 N. Y. 378; Van Wyck v. Brasher, 81 N. Y. 260; Peck v. Gary, 27 N. Y, 9; Gardner v. Gardner, 22 Wend. 526. 24. Matter of Widmayer, 74 App. Div. 336, 77 N. Y. Supp. 663; Hardy V. Berger, 76 App. Div. 393, 78 N. Y. Supp. 709, 12 Anno. Cas. 118; L'Amo- reaux v. Crosby, 2 Paige, 422. 25. Wallace v. Frey, 27 Misc. 29, 56 N. Y. Supp. 1051; O'Reilly v. Sweeney, 54 Misc. 408, 105 N. Y. Supp. 1033. 26. Hughes v. Jones, 116 N. Y. 67; Carter v. Beckwith, 128 N. Y. 312. 87. Carter v. Beckwith et al., 128 N. Y. 312. 28. Wallace v. Frey, 27 Misc. 29, 56 N. Y. Supp. 1051. 29. Wadswort'h v. Sharpsteen, 8 N. Y. 388. 30. Van Deusen v. Sweet, 51 N. Y. 378; Boschen v. Stockwell, 171 App. Div. 34, 156 N. Y. Supp. 799. Collateral attack. — 'Where an alleged incompetent while sojourning in an- other State was inveigled into an in- sane hospital, and there incarcerated and a guardian appointed for her for the fraudulent purpose on the part of her relatives to get possession of her estate, when in fact she was not in- sane, such proceedingis did not amount either to an adjudication of her non- residence in New York, or as to her insanity, and were open both to direct and collateral attack in proceedings in New York. Matter of Bergmann, 110 App. Div. 588, 97 N. Y. Supp. 346; Gaffney v. Brinnier, 110 App. Div. 588, 97 N. Y. Supp. 346. 31. Matter of Fidelity Trust Co., 27 Misc. 118, 57 N. Y. Supp. 361. 316 COMMITTEE OF INCOMPETENT. I. Form of petition for appointment of committee. SUPREME COURT— Albany County. In the Matter op MARGARET GRAY, AN Alleged Incompetent Person. To the Supreme Court of the State of New York: Petition of Eveline 0. Littell of West Haven, Conn., respectfully shows that heretofore and on the 4th day of February, 1907, Mar- garet Gray, residing in the town of Bethlehem, county of Albany, N. Y., was declared a lunatic and incapable of attending to her busi- ness and affairs, and of earing for her person, by a commission ap- pointed by this court on determination of the jury. That a committee is about to be appointed of the person and estate of said Margaret Gray, and your petitioner is one of her next of kin and heirs-at-law, the other next of kin (names and addresses), and Edward B. Swart, whose residence is and. for many years has been wholly unknown and cannot after diligent inquiry be ascertained, all of whom are nephews and nieces of the said Margaret Gray, and her next of kin. That your petitioner believes that Samuel S. Hatt of the city of Albany, N. Y., to be the proper person to be appointed committee of the person and estate of said Margaret Gray. Wheebpore, your petitioner prays the court that upon filing the security required by law and directed by this court the said Samuel S. Hatt be appointed the committee of the person and estate of the said Margaret Gray, with the usual powers incident thereto. Dated, February 6, 1907. Eveline 0. Littell, ( Verification . ) Petitioner. J. Form of notice of application. (Title.) Take Notice, That upon the commission heretofore and on the 26tli day of January, 1907, issued out of this court in the above-entitled proceeding, and the inquisition taken under such commission and upon the petition of Eveline 0. Littell with copies whereof you are herewith duly served, and upon all other papers and proceedings had and taken herein, this court will be moved at the next Special Term thereof, to be held at the court house, in the city of Kingston, N. Y.; on the 16th day of February, 1907, at the opening of the court on that day, or as soon thereafter as counsel can be heard, that the find- ings of the jury upon the said commission be confirmed with costs of this proceeding, and for the appointment of Samuel S. Hatt or some other suitable and proper person the committee, of the estate and per- son of said Margaret Gray, upon the filing by him of the security re- COMMITTEE OF INCOMPETENT. 317 quired by law and directed by the court, and for such further order and relief, or both, as the court may grant in the premises. Yours, &c., Dated, February 7, 1907. Mead & Hatt, Attorneys for Petitioners. To Margaret Gray, said alleged incompetent person; George W. Marcellus, next of kin of said Margaret Gray, the Superintend- ent or person in charge of the Albany Hospital. K. Form of order appointing committee. (Title.) On reading and filing the inquisition taken under and by virtue of the commission heretofore issued out of this court, from which it ap- pears that the said jury have found that the said Margaret Gray is a lunatic, and that she is incompetent, by reason of such lunacy, of governing herself or of managing her affairs, and that she is seized of certain personal property in the said inquisition specified, and on read- ■ ing and filing the petition of Eveline O. Littell, verified ou February 6, 1907, petitioning for the appointment of Samuel S. Hatt, of the city of Albany, as committee of the person and estate of said Mar- garet Gray, and notice of motion of this application with proof of due and personal service thereof, and of said petition and of said inquisition on said lunatic, Margaret Gray, and upon Jane B. "Wade, the assistant superintendent thereof, and the person in charge of, the Albany Hospital, in Pavilion F, of which said institution said Mar- garet Gray is confined, and upon George W. Marcellus, of Ballston Spa, one of the next of kin of said Margaret Gray, on the 8th day of February, 1907. Now, on motion of Mead & Hatt, of counsel for said petitioner, and after hearing Edward S. Coons, Esq., of Ballston Spa, of counsel for George W. Marcellus, Robert G. Marcellus, Jacob H. Swart, Franklin 0. Swart, Emy M. Swart, Garret H. Oliver and Conrad G. Oliver, next of kin of said Margaret Gray, consenting thereto : It is hereby ordered that the finding of the jury upon the execution of said commission, as set forth in the said inquisition, be and the same is hereby confirmed. And it is further ordered, that Samuel S. Hatt, of the city of Al- bany, N. Y., be and he is hereby appointed the committee of the per- son and estate of the said Margaret Gray, upon executing and filing with this court a bond with the United States Fidelity & Guaranty Co. as surety in the penal sum of twenty thousand dollars ($20,000), approved by a justice of this court, conditioned that he will, in all things, faithfully discharge the trust reposed in him and obey all lawful directions of this court, or of a judge thereof, or of any other court or judge, touching the trust ; and that he will, in all respects, render a just and true account of all money and other property re- ceived by him, and of the application thereof, and of his committee- shir), whenever he is required so to do by a court of competent juris- diction. 318 COMMITTEE OF INCOMPETEITT. And it is further ordered, that a eommission may be issued to such committee, under the seal of this courts upon the approval and filing of such bond in the county clerk's office of the county of Albany, N. Y And it is further ordered, that said committee pay out of the funds in his hands the necessary disbursements of the said petitioner and the sum of three hundred and fifty dollars ($350) for her costs and coun- sel fees, and that said committee also pay to said Edward Coons, Esq., of counsel for said next of kin, the sum of fifty dollars ($50) and his disbursements herein. James A. Betts, Enter in Albany county. Justice Supreme Court. ARTICLE VII. FOREIGN COMMITTEE. A. Civil Practice Act, § 1363. When foreign committee may be appointed. Where the person alleged to be incompetent resides without the state, and a committee, curator or guardian of his property, by whatever name such officer may be designated, has been duly appointed pursuant to the laws of any other state, territory or country where he resides, the court, in its discretion, may make an order appointing the foreign committee, curator or guardian, the committee of all or of a particular portion of the property of the incompetent person, within the state, on his giving such security for the discharge of his trust as the court thinks proper. B. Discussion of statute. Until appolDted by the courts of this State, a foreign com- mittee of a lunatic has no authority over his property in this State.32 A resident committee of the property within this State may be appointed where the foreign committee refuses to act ; and there is no need for an inquisition.^^ A proceeding by the foreign committee of a non-resident incompetent for appointment as committee of property in this State must be commenced by a petition. When a petition is presented, two courses are open : if the incompetent be a non-resident and has been so adjudged in the State of his domicile, our court may in its discretion follow the procedure in section 1363. If the incompetent be not a 32. Matter of Perkins, 2 Johns. Ch. gett, 3 Redf. 294; Matter of Colah. 6 124; Matter of Petit, 2 Paige, 174; Daly, 308. Matter of Ganse, 9 Paige, 416; Matter 33. Matter of Ricker, 89 Misc. 582, of Neally, 26 How. Pr. 402: Matter of 153 N. Y. Supp. 701. Traznier, 2 Redf. 171; Weller v. Sug- COMMITTEE OF INCOMPETENT. 319 non-resident, or, being a non-resident, has not been so ad- judged in the State of his domicile, or if the court in its dis- cretion decline to proceed under section 1363, an inquisition may issue as in other cases. But if an order of appointment has been made under section 1363, an inquisition does not issue.^^ Where the petition shows that the person is insane, and is a resident of New York, and that the so-called guardian who has been appointed for her in another State is not legally such, the New York court had no jurisdiction to appoint him an ancillary committee of such person's person or estate under section 1363.^^ Where there are conflicting claims of non-residents, the pres- ent custodian of his property here may be appointed.^^ Where a non-resident incompetent is the owner of a large estate and is also interested in the income of a certain trust created in tMs State, the court should exercise its discretion in favor of appointing the foreign committee as the committee of the property within the State.^'' ARTICLE VIII. WHEN INCOMPETENT IS IN STATE INSTITUTION. A. Civil Practice Act, § 1374. Application and proceedings where incompetent is inmate of state institution. 1. Where an incompetent person lias been committed to a state institution in any manner provided by law and is an inmate thereof, the petition may be presented on behalf of the state by a state officer having special jurisdiction over the institution where the incompetent person is confined or the superin- tendent or acting superintendent of said institution. 2. The petition must be in writing and verified by the affidavit of the peti- tioner or his attorney to the effect that the matters therein stated are true to the best of his information or belief; it must show that the person for 34. Matter of Curtiss, 134 App. tribunal. Matter of Curtisa, 137 App. Div. 547, 119 N. Y. Supp. 556; aff'd, Div. 584, 122 N. Y. Supp. 468; afi'd, 197 N. Y. 583. 199 N. Y. 36. Attack on foreign decree.— Where it 35. Matter of Bergmann, 110 App. has been adjudged by the court of Div. 588, 97 N. Y. Supp. 346; Gaffney this State that a foreign tribunal ad- v. Brinnier, 110 App. Div. 588, 97 judging a person incompetent and ap- N. Y. Supp. 346. pointing a committee had jurisdiction, 36. Matter of Bartelme, 34 Misc. the foreign decree cannot be attacked 131, 69 N. Y. Supp. 468. collaterally in this State. The incom- 37. Matter of Hollo, 152 App. Div. petent claiming to be restored to 165, 136 N. Y. Supp. 620. sanity should proceed in the foreign 320 COMMITTEE OF INCOMPETENT, whose person or property, or both, a committee is asked has been legally com' mitted to a state institution over which the petitioner has special jurisdiction, or of which he is superintendent or acting superintendent, and is at the tim« an inmate thereof; it must also state the institution in which he is an inmate, the date of his admission, his last known place of residence, the name and residence of the husband or wife, if any, of such person, if known to the peti- tioner, and if there be none known to the petitioner, the name and residence of the next of kin of such person living in this state so far as known to the peti- tioner; the nature, extent and income of his property, so far as the same is known to the petitioner, or can with reasonable diligence be ascertained by him. 3. The petition may be presented to the supreme court at any special terra thereof held either in the judicial district in which such incompetent person last resided or in the district in which the state institution in which he is committed is situated, or to a justice of the supreme court at chambers within such judicial district, or to the county court of the county in which the incom- petent person resided at the time of such commitment, or of the county in which said institution is situated. 4. Notice of the presentation of such petition shall be personally given to such person, and also to the husband or wife, if known to the petitioner, or if none is known to the petitioner, to the next of kin named in the petition, and to the officer in charge of the institution in which such person is an inmate, unless sufficient reasons for dispensing therewith are set forth in the petition or shown by affidavit. M'^hen notice is required, it may be given in any manner which the court deems proper. 5. Upon the presentation of such petition, and proof of the service of such notice, the court or justice, if satisfied of the truth of the facts required to be stated in such petition, immediately may appoint a committee of the person or property, or both, of such incompetent person or may require any further proof which it or he may deem necessary before making such appointment. 6. Upon the presentation of a petition and the appointment of a committee, the court or justice may award costs of the proceeding, not exceeding twenty- five dollars in addition to necessary disbursements, to the petitioner, payable from the estate of the incompetent person, and upon denial of an application to set the same aside, costs as of a motion. 7. The provisions of statute or rule relating to the presentation of a petition for the appointment of a committee of an alleged incompetent person, the pro- ceedings thereon and the appointment of such a committee, shall not apply to applications for the appointment of a committee made on behalf of the state to secure reimbursement, in whole or in part, for maintenance and support in a state institution. B. Application of statute. An incompetent person who has been lawfully committed to a State hospital for the insane under the provisions of the Insanity Law becomes a ward of the State and also of the Su- preme Court, which has the power from time to time to in- quire as to the continuance of the insanity, and also to take in charge the care and preservation of the incompetent's COMMITTEE OF INCOMPETENT. 321 property .^^ The proceedings have been sustained, although there may be a question of the constitutionality of the section, where the alleged incompetent has been confined in the insti- tution without a jury trial, and objection is made by him on that ground to the appointment of a committee.^^ The section does not authorize the appointment of a com- mittee for the estate of a convict, sane when convicted, who has been transferred to the State hospital for insane convicts npon the certificate of the physicians of the prison, but with- out a formal determination as to the convict's incompetency.*" C. Form of petition by superintendent of state hospital. SUPREME COURT — County of New York, First Judicial District In the Matter of the Appointment OF A Committee of the Estate of Ida Jetta, an Alleged Incompet- ent Person and an Inmate of the Manhattan State Hospital. . Sporza V. German Savings Bank, 192 N. Y. 8. . J To the Supreme Court, First District, State of New York: The petition of Dr. William Mabon respectfully shows that he is superintendent of the Manhattan State Hospital, at Ward's Island, New York, and that he is authorized to make application for the ap- pointment of a committee of the estate of the above-named Ida Jetta, under the provisions of section 1374 of the Civil Practice Act. Your petitioner further states upon information and belief that the above-named Ida Jetta is an incompetent person and has been lawfully committed to the Manhattan State Hospital, at Ward's Island, State of New York, in the manner provided by the State Insanity Law, as more fully appears by the petition, order and certificate made for that purpose and now on file in the office of the Manhattan State Hospital. Your petitioner further states that said Ida Jetta was committed to said hospital on or about the 1 6th day of April, 1906, and is now an inmate thereof, as appears by the transcript from the records of said hospital, which is hereto annexed and forms a part of this petition. Your petitioner further states upon information and belief that the last known place of residence of the said Ida Jetta was the borough 38. Sporza v. German Savings Bank, 192 N. Y. 8. 39. Sporza v. German Savings Bank, 192 N. Y. 8; Matter of Walker, 57 App. Div. 1, 67 N. Y. Supp. 647. Name of incompetent. — The court has power, upon the application, to 21 make an order correctly spelling the name of such incompetent. Sporza v. German Savings Bank, 192 N. Y. 8. 40. Trust Co. of America v. State Safe Deposit Co.. 109 App. Div. 665. 96 N. Y. -Supp. 585; aflF'd, 187 N. Y. 178. 322 COMMITTEE OF INCOMPETENT. of Manhattan, in the county of New York and State of New York; and the names and residences of the husband of said Ida Jetta or next of kin, living in the State of New York, so far as known to your peti- tioner, are as follows : Name. Eelationship to patient. Eesiclence. Frank Sporza, Husband. 412 East 5th St., New York. Your petitioner further states, upon information and belief, that the nature, extent and income of the property of the said Ida Jetta, so far as known to your petitioner, or can, with reasonable diligence be ascertained by him, are as follows : Patient has one thousand two hundred and sixty-three dollars and thirty-six cents ($1,263.36) in the German Savings Bank, as evidenced by bank-book No. 369,363, and that said Ida Jetta ,has no other property, real or personal. Your petitioner further states thiat said Ida Jetta is now main- tained and supported by the people of the State of New York, in said hospital, as a public charge, and no previous application has been made by your petitioner, or any person in behalf of the Sta i of New York for the appointment of a committee of her estate. Your petitioner hereby makes application for the appointment of a committee of the estate of said Ida Jetta, for the purpose of having her estate and property, so far as the same shall be required for that purpose, applied for her maintenance and support, in whole or in part, in a State institution and for such other, purposes as may be directed and ordered by any court of competent jurisdiction. And thus your petitioner will ever pray. William Mabon. Dated, Ward's Island, New York, this 27th day of April, 1906. (Add verification.) ARTICLE IX. POWERS AND DUTIES OF COMMITTEE. A. General powers and duties of committee. 1. Civil Practice Act, § 1377. Control, duties and powers of committee. A committee, either of the person or of the property, is subject to the direction and control of the court by which he was appointed, with respect to the execution of his duties; and he may be suspended, removed, or allowed to resign, in the discretion of the court. A vacancy created by death, removal or resignation may be filled by the court. But a committee of the property cannot alien, mortgage or otherwise dispose of real property, except to lease it for a term not exceeding five years, without the special direction of the court obtained upon proceedings taken for that purpose, as prescribed in this act. A committee of the property may maintain in his own name, adding his official title, any action or special proceeding which the person with respect to whom he is appointed mig'ht have maintained if the appointment had not been made. COMMITTEE OF INCOMPETENT. 323 2. General duties of committee. The duties of the committee of the person are very delicate and important, being to administer all the comfort and amusement the nature of the case will admit or the funds of the lunatic afford. He should be treated with great kindness, and all reasonable means of restoration should be employed, and, so far as necessary for this purpose, the expectations of the next of kin and all others disregarded ; the great principle that pervades all orders in cases of lunacy is solely and ex- clusively his interest and comfort.''^ The first duty of the committee of a lunatic is to provide for the comfort and care of the lunatic so far as is compatible with his estate, but, if he receives such care, it is immaterial that he is kept in a hospital where no charge is made for his care, or where his services are sufficieBt to pay therefor.^ It is the paramount duty of the committee of a lunatic to attend to his personal wants and comforts and to furnish him, so far as the funds in his hands will allow, with not only all the necessaries of life, but all the proper recreation and amuse- ments consistent with his former habit of living. It is his duty likewise to avail himself of medical advice, and other reasonable means that may tend to the restoration of his ward, or the amelioration of his condition. The care, health, and comfort of the lunatic alone are to be considered, and this without reference to the interests of the next of kin, heirs-at- law, and expectants.^ 3. Control of court. The committee merely represents the court in the exercise of its power over the property of incompetents, and is subject to the order of the court with respect to the care, management, and disposition of such property.^* The committee is but the hand of the court, moving only as moved by the dominant will.^^ A committee may ask the court for instructions concerning 41. Matter of Burr, 17 Barb. 9. N. Y. Supp. 775. See also Butler v. 42. Matter of Nutting, 74 App. Jarvis, 51 Hun, 248, 4 N. Y. Supp. Div. 468, 77 N. Y. Supp. 696. 137; Runberg v. Johnson, 11 Civ. Pro. 43. Matter of Reed, 18 Misc. 285, 41 283; Matter of Grout, 83 Hun, 27, 31 N. Y. Supp. 156; Matter of Brayer, N. Y. Supp. 602, 64 St. Rep. 340; 57 N. Y. Supp. 957. Foorbell v. Denton, 53 App. Div. 402, 44. Pharis v, Gere, 110 N. Y. 336; 65 N. Y. Supp. 1120. Matter of Horton, 18 Misc. 406, 42 45. Pharis v. Gere, 110 N. Y. 336. 324 COMMITTEE OF INCOMPETENT. tlie scope of his power to deal with the estate in his hands, or, in case the existence of the power is clear, hut discretionary, to seek the wisdom of exercising it in a particular method.^^ As the committee merely represents the court in the exercise of its jurisdiction over the property of the incompetent per- son, where the estate has been benefited by the collection of claims by an attorney employed to do so, the court will enter- tain an application by the attorney for payment, and will order the committee to pay for such services from the funds." But, after the discharge of the committee, the court has no further jurisdiction over the property of the former incom- petent.'*^ 4. Representative of incompetent. After an adjudication of lunacy has been made and con- firmed, and a committee appointed and qualified, the com- mittee occupies the same place and fills the same position as the lunatic in regard to his personal estate and property. He has the same right to deal therewith as the lunatic enjoyed before inquisition found, and is his representative in respect to all matters connected with the estate.*^ 5. Title of committee. A committee takes no title to the real or personal estate of a lunatic. He is a mere bailiff to take charge of the property and to administer it subject to the direction of the court, and his possession is the possession of the court. Through him the court preserves the property intrusted to it, but the legal title to the property remains as before. Nothing is taken from the lunatic but its control and management.^" Where a person who has been declared incompetent was en- titled to one-half of the rents of certain premises which were collected by an administratrix, it was held that she was bound 46. Kent v. West, 33 App. Div. 112. 53 N. Y. Supp. 244; Forbell v. Deji- 53 X. Y. Supp. 244; appeal digmissed, ton, 53 App. Div. 402, 65 N. Y. Supp. 163 N. Y. 589. 1120; Scribner v. Young, 111 App. 47. flatter of Horton, 18 MUc. 406, Div. 814, 97 N. Y. Supp. 866; Moore 42 N. Y. Supp. 775. v. Flagg, 137 App. Div. 338, 122 N. Y. 48. Matter of Dowd, 19 Misc. 688, Supp. 174. 44 N. Y. Supp. 1094. Payment of funds to foreign com- 49. Viets V. I'nion Nat. Bank of mittee. See Matter of Rhoades. 184 Troy, 101 N. Y. 509, App. Div. 658, 172 X. Y. Supp. 399. 50. Kent v. West, 33 App. Div. 112, COMMITTEE OF INCOMPETENT. 325 to pay them over to his committee as collected, and could not retain them until annual accountings were had before the surrogate.^^ 6. Maintenance of incompetent. It is, of course, the duty of the committee to provide for the maintenance of the incompetent. Moreover, if the con- dition of the estate justifies the expenditure, it may be proper for the court to provide for the support of near relatives, where it appears that the incompetent would have provided for their support had he been of sound mind.^^ Spending money should not be allowed by the committee to a drunkard.^^ If any person is furnishing an habitual drunkard with the means of intoxication, the committee should apply to the court for an order restraining all persons from furnishing the drunkard with ardent spirits or means of obtaining it without the sanction of the committee, and a violation of the order, after notice, will be punished as a contempt.^* The committee of a lunatic, by taking possession of property leased by a lunatic, and continuing it for the use of the estate, makes him- self liable in the same manner as an executor or trustee.^^ Where a lunatic continued to reside with his family after inquisition, and parties ignorant of the commission furnished him groceries, the bill was ordered paid by the committee.^^ 7. Investments. Where the committee of an incompetent comes into pos- session of securities which constitute a good investment and the principal is not presently needed for use, it is not the duty of the committee to convert the securities into cash, but he may hold them as an investment. Where the committee receives and holds securities which it does not become his duty to turn into cash, he should be com- 51. Matter of Cowen, 105 App. Div. Judgments by an innkeeper for ar- 596, 94 N. Y. Supp. 303. dent spirits sold under such, circum- 52. Matter of Heeney, 2 Barb. Oh. stances were set aside. L'Amoreaux 326; ex parte Lynch, 5 Paige, 120; v. Crosby, 2 Paige, 402. Matter of Willoughby, 11 Paige, 257. 55. Matter of Otis, 34 Hun, 542. 53. .Stephens v. Marshall, 23 Hun, 56. Matter of Wing, 2 Hun, 671. 641. See "Ex parte Cunningham, 2 Hun, 54. Matter of Heller, 3 Paige, 199; 114. Matter of Hoag, 7 Paige, 312. 326 COMMITTEE OF INCOMPETENT. pensated for his services upon the same basis as if he had turned them into cash.^^ 8. Sale or mortgage of lunatic's property. Independent of statute, courts have no authority to sell the real estate of a lunatic, even for the payment of his debts, and even though his heirs-at-law and next of kin consent to such transfer.^* The authority for the sale of the real estate of an incompetent is contained in Article 82 of the Civil Practice Act, and is treated in another chapter of this work.^^ If the committee without the order of the court conveys real prop- erty of the lunatic, no title will be acquired by the transferee which would be good as against the lunatic or his heirs. Nor will it be presumed that the committee has procured the proper order to make such sale."" A committee of a lunatic cannot make a valid deed of the latter 's property, under an order authorizing him to mortgage the same.^^ A mortgage on the real estate of a lunatic made without the authority, of the court is void.^^ A lunatic's committee has no authority to authorize the cutting of timber on a lunatic's land without an order of court; nor can he ratify authority given for that purpose by the lunatic's husband and son.^^ But the committee who invested moneys in a mortgage on realty may release a part of the mortgaged premises with- out applying to the court.'^'' The committee of the person and estate of the lunatic who purchases real estate with the money of the lunatic has no right to take title in his own name as committee, but such title should be taken in the name of the lunatic."^ Where the committee of a lunatic, who owned an undivided interest in real estate, without authority from the court, pur- chases the premises for their fair value, in the name of his 57. Matter of Notman, 103 App. 61. Reals v. Weston, 28 Misc. 67, 59 Div. 520, 93 N. Y. Supp. 82. N. Y. Supp. 807. 58. Walrath v. Abbott, 75 Hun, 450, 62. Corbin v. Dwyer, 30 Misc. 488^. 59 St. Eep. 644j 27 N. Y. Supp. 529. 63 N. Y. Supp. 822; modified, 57 App. 59. See chapter on Infant or In- Div. 630, 68 N. Y. Supp. 1136. competent. Sale of Real Estate of. 63. Scribner v. Young, 111 App. 60. Walrath v. Abbott, 92 Hun, 606, Div. 814, 97 N. Y. Supp. 866. 39 N. Y. Supp. 1134; Johnston v. 64. Pickersgill v. Reed, 5 Hun, 170. Ayres, 18 App. Div. 495, 46 N. Y. 65. People ex rel. Canaday v. Wil- Supp. 132. Mams, 90 Hun, 501, 36 N. Y. Supp. 65. COMMITTEE OF INCOMPETENT. 327 wife, at a partition sale which is open and fair, and the wife subsequently conveys the premises to the committee for a nominal consideration, the latter 's title is not marketable.^^ B, Bond. 1. Civil Practice Act, § 1375. Security to be given by committee. 1. Each of the persons appointed committee of the person or property as prescribed in this article must file in the office of the clerk of court in which such committee was appointed a bond with at least two sureties in an amount to be fixed and approved by the court as follows: That of a committee of the property to be not less than the total of the personal property, the probable rents and profits of real property for two years and the probable income receivable from any funds for two years, as may be proven by affidavit to the satisfaction of the court; that of a committee of the person in such amount as the court shall fix. 2. The conditions of the bonds filed shall be that the committee will in all things faithfully discharge the trust imposed upon him or them, obey all direc- tions of the court in regard to the trust, make and render a just and true account of all moneys and other properties received by him or them and the application thereof and of his or their acts in the administration of his or their trust, whenever so required to do by the court. 3. The court shall have the power to fix the amount of the bond directed to be filed in a greater amount than is herein provided if it so determines and the committee shall, immediately upon receiving after-acquired property not specific- ally covered by the original bond, have approved by the court and file a further bond under the conditions herein set forth. 4. A committee of the property cannot enter upon the execution of his duties until security is given as prescribed herein. A committee of person cannot enter upon the execution of his duties until security is given if required by the court. 5. If more than one person is appointed committee, where a bond is required, the court may in its discretion require only a joint bond for the amount pro- vided for herein.67 66. Taylor v. Klein, 47 App. Div. such with the moneys, or that the es- 343, 62 N. Y. Supp. 4; aff'd, 170 N. Y. tate has actually received them. 571. Thayer v. Erie County Savings Bank, 67. Payment of moneys by bank.— 160 App. Div. 300, 145 N. Y. Supp. 808. A committee of an incompetent person Relating back. — ^Where an order ap- has no authority to take the custody pointing a committee of the person of any funds or property of the es- and estate of an incompetent provides tate until he has qualified by giving that the appointment shall become the required boiid. Hence a bank executed or complete when the com- which pays moneys belonging to the mittee executes and files the prescribed estate of an incompetent person to a bond, the bond when filed does not re- coinmittee before the required bond late back to and qualify the commit- has been executed is liable therefor tee as such from the date of the order, unless it is able to show that the com- Thayer v. Erie County Savings Bank, mittee has since been chargeable as 217 N. Y. 501. 328 COMMITTEE OF INCOMPETENT. 2. Liability of surety. The obligation of the sureties on the bond of a committee of an incompetent is for any failure on the part of the princi- pal to account for and pay over moneys which may legally come into his hands as such committee. The sureties are not responsible for the committee's neglect to pay over proceeds of the lunatic's interest in real estate which such committee has assumed to sell without applying to the court for per- mission to do so, for in such a case, the committee has received the moneys wrongfully.^^ The sureties upon the bond of a committee for an incomptent person are not liable for the con- duct of the committee with reference to the estate prior to the execution of the bond.^^ Where money of the incompetent is deposited by the com- mittee in a private bank maintained by the committee and a partner and the partners become bankrupt, the surety of the committee is liable for the deposits as the committee had no right to use the funds of the incompetent in his own business.™ C. Actions by committee. 1. In general. The committee is authorized by section 1377 of the Civil Practice Act to maintain any action or special proceeding which the incompetent might have maintained had the ap- pointment not been made. The word ' ' may ' ' as used in the statute should not be con- strued as " must " or " shall." The section is permissory only and not mandatory .'^ He may sue on a lost note payable to the lunatic and may offer the indemnity provided under section 333 at the trial in the first instance.''^ He may maintain an action against executors who withhold a share in an estate which has fallen to the lunatic since the committee was appointed, and it is no answer that his bond was not given with a view to his receiving the share.'^ 68. Johnson v. Ayers, 18 App. Div. 71. Skinner v. Tibbita, 13 Civ. Proc. 495, 46 N. Y. Supp. 132. 372. 69. Thayer v. Erie County Savings 72. Cuff v. Heine, 27 Misc. 498, 58 Banlt, 160 App. Div. 300, 145 N. Y. N. Y. Supp. 324; Dupignac v. Quick, Supp. 808. 27 :\Iisc. 500, 58 N. Y. Supp. 341. 70. Matter of Nash, 159 App. Div. 73. Wright v. Hayden, 31 Misc. 116, 46, 144 N. Y. Supp. 403. 63 N. Y. Supp. 796. COMMITTEE OF INCOMPETENT. 329 A deposit with attorneys made by one afterward declared a lunatic for the purpose of beginning a divorce suit, may be recovered by his committee, where the summons had not been served before notice of the rescission, though papers had been prepared, such preparation being of no benefit to the lunaticJ* He may maintain trover for the tortious taking of property from the lunatic.''^ The committee of a lunatic is a " person aggrieved " on certiorari to review an assessment, and, therefore, may re- view such assessment.™ But he cannot ratify a contract of a lunatic made by him after office found, so as to maintain an action upon it.'" 2. Actions relating to real property. Before the enactment of the Code of Civil Procedure, the committee had no authority to institute actions relating to real property, but npw he has such power.''^ He may maintain an action for the partition of real estate in his own name by adding his official title, and he need not make the lunatic a party.™ He may sue in his own name to cancel the sale of a farm to a lunatic, and to procure satisfaction of a mortgage ex- ecuted by him.^" He may maintain an action to set aside a purchase of real property, pending a commission against the vendor as an habitual drunkard.^' 3. Mistake of committee. The committee of a lunatic may invoke the equitable juris- diction of the court for the protection of the lunatic's estate from the neglect or mistake of the committee without the aid of section 1377, whicli seeks only to authorize the committee to bring such actions and institute such proceedings as the lunatic would have had the right to bring or institute had no committee been appointed.^^ 74. Feigenbaum v. Howe, 32 Misc. N. Y. 622; Burnet v. Bookstaver, 10 514, 66 N". Y. Supp. 378. Hun, 481; McKillip v. McKillip, 8 75. Sander v. Savage, 75 App. Div. Barb. 552. 333, 78 jST. Y. Supp. 189. 79. Koepke v. Bradley, 3 App. Div. 76. People ex rel. Canaday v. Wil- 391, 38 N. Y. Supp. 707; aflf'd, 151 liams, 90 Hun, 501. 36 N. Y. Supp. 65. N. Y. 622. 77. Fitzhugh v. Wikox, 12 Barb. 80. Fields v. Fowler, 2 Hun, 400. 235. 81. Griswold v. Miller, 15 Barb. 520. 78. Koepke v. Bradley, 3 App. Div. 82. Haring v. Murphy, 60 Misc. 374, 391, 38 N. Y. Supp. 707; affd, 151 113 N. Y. Supp. 452. 330 COMMITTEE OF INCOMPETENT. 4. Annulment of marriage. An action to annul the marriage of an incompetent upon the ground that he is a lunatic, is statutory, and it cannot be maintained by the committee.^ 6. Security for costs. Under section 1485 of the Civil Practice Act, the court in an action by a committee, in its discretion, may compel the com- mittee to give security for costs. 6. Action by guardian ad litem of incompetent. If no committee has been appointed for an incompetent per- son, or if a committee only of his person has been appointed, the court, by virtue of its inherent duty to protect the inter- ests of incompetents, may appoint a guardian ad litem to maintain an action for his benefit.^^ But, if a committee of the property as well as of the person of the incompetent has been appointed and has qualified, it is thought that he is the proper party to maintain actions in his behalf, and a guardian ad litem will not be appointed.^ Where an action is commenced by the guardian ad litem on behalf of an infant and a committee of his property is subse- quently appointed, the court may order substitution of the committee as party plaintiff, and it is not necessary that the order should be made nunc pro tunc as of the time of the com- mencement of the action.*® S. Enforcement of claims against estate of incompetent. 1. tJnder Debtor and Creditor Law. Chapter 697 of the Laws of 1893 provided a full and com- plete scheme for enforcing payment of debts of an incompe- tent person. This chapter has been made part of Consoli- dated Laws, Debtor and Creditor Law, article 9, sections 250 to 255, which provides for notice to creditors of an incom- petent person to present claims duly verified to the committee, authorizes the committee to compromise claims against the estate of the incompetent, provides for the manner of pay- 83. Walter v. Walter, 217 N. Y. Div. 37, 93 N. Y. Supp. 399. 439. 86. Callahan v. N. Y. C. & H. R. R. 84. Moore v. Flagg, 137 App. Div. R. Co., 99 App. Div. 56, 90 N. Y. 338, 122 N. Y. Supp. 174. Supp. 657. 85. Rankert v. Rankert, 105 App. COMMITTEE OF INCOMPETENT. 331 ment of claims, and distribution of assets of the incompetent among creditors and for a judicial settlement of the accounts of the committee in connection with such payment and adjust- ment of claims against the estate of the incompetent, granting to the courts having jurisdiction over the property of the lunatic, idiot, or habitual drunkard, the powers in relation to such estates, claims, property, and committee which devolve on the courts in relation to assignments and assignees for benefit of creditors. 2. Action against incompetent before inquisition. Before the finding of an inquisition against an incompetent and the appointment of a committee, his lunacy does not pre- vent the maintenance of action against him.*^ He may sue,*^ and he may be sued. A lunatic defendant can voluntarily appear, and the court will appoint guardian ad litem for him in partition.^* If an action be commenced against an incompetent not judicially declared insane, on the subsequent appointment of a committee, the court may enjoin the action or grant leave for its continuance.^** An incompetent person is a necessary party defendant to an action for a slander alleged to have been committed prior to a determination that he is insane, although a committee has been appointed.^^ 3. Service of process on lunatic. Sections 225 and 226 of the Civil Practice Act contain pro- visions for the service of process on a lunatic both before and after inquisition. In case a lunatic has not been so judicially declared, the court may, in its discretion, require the summons to be served upon a person designated in the order. After inquisition the service is to be made on both the in- competent person and the committee, and, when the interest 87. Sanford v. Sanford, 62 N. Y. berg v. Johnson, 5 St. Rep. 860. 553; Prentiss v. Cornell, 31 Hun, 167. 89. Rogers v. McLean, 34 N. Y. 536. 88. A judgment recovered by an al- 90. Grant v. Humbert, 114 App. leged incompetent person will not be Div. 462, 100 N. Y. Supp. 44. vacated on the application of the de- See also Pogue v. Todd, 111 Misc. fendant on the theory that the incom- 296, 181 N. Y. Supp. 127. petent 'had no capacity to appoint an 91. Capen v. Delaney, 128 App. Div. attorney to maintain the siiit. Rum- 648, 113 N. Y. Supp. 50. 332 COMMITTEE OF INCOMPETENT, of the committee is adverse to the lunatic, the court may designate a person on whom service shall be made. And after the inquisition, the court may dispense with ser- vice of summons on the lunatic and service on the committee may be sufficient. The duty of the designated person is not confined to the mere receiving of the summons, but the order directing the delivery of the summons to him should be suffi- ciently broad to enable him to look after the interests of the incompetent defendant at every stage of the action.^^ The regulations of the State Lunacy Commission preclude service on an inmate of a State hospital for the insane, with- out an order of a judge of a court of record granting leave to make such service. Such an order does not constitute leave of the court to bring an action, but such leave is not necessary where there has been no judicial determination of incom- petency.^^ 4. Leave of court for action against committee. An action cannot be commenced against a committee until leave of the court has been first obtained.^* 92. American Mortgage Co. v. Dewey, 106 App. Div. 389, 94 N. Y. Supp. 808. 93. Grant v. Humbert, 114 App. Div. 462, 100 N. Y. Supp. 42. 94. Carter v. Beekwith, 128 N. Y. 312; Smitli v. Keteltas, 27 App. Div. 279, 50 N. Y. Supp. 471. Nunc pro tunc. — Although an action against a person as the committee of an insane person is improperly brought without leave of the court, it has been held that such leave may be granted nunc pro tunc at the time of the trial. Dunham v. Fitcih, 48 App. Div. 321, 62 N. Y. Supp. 905. Appointed after action. — ^The com- mittee of a lunatic appointed in pro- ceedings instituted after an action was begun against the lunatic by attach- ment, undei which her real estate was seized, she being in confinement in a foreign country, may properly be de- nied permission to appear apecifloally in the action for the. purpose of hav- ing it stayed and all proceedings va- cated on the ground that permission had not been granted to sue, though he may come in and defend the action. Carter v. Burrall, 80 App. Div. 395, 81 N. Y. Supp. 30. Pending an action, the defendant was adjudged a lunatic and her com- mittee thereupon substituted as a party; held, a good defense to the ac- tion that no leave had been granted to sue the committee. Matter of Dela- hunty, 18 N. Y. Supp. 395, 44 St. Rep. 836. Mortgage foreclosure. — Proceedings to foreclose a mortgage against an habitual drunkard cannot be taken without leave of the court. Ex parte Parker, 6 Alb. Law. Jour. 324. Waiver of objection. — A committee who has consented to have the rights of the parties litigated on a bill filed cannot afterward object that he had been proceeded against in that man- ner, without leave of the court by which he vreis appointed. Outtrin v. Graves, 1 Barb. Oh. 49. COMMITTEE OF INCOMPETENT. 333 But leave of the court to sue an incompetent person is not necessary unless he has been judicially declared insane and a committee appointed. In the latter case the court takes pos- session of the property of the incompetent through its com- mittee and neither the incompetent nor the committee can then be sued without leave of court. In the absence of such leave an action may be enjoined, a summons set aside or a plaintiff punished for contempt. On the contrary, the court may authorize a suit in order to liquidate a claim against the incompetent even though a committee has been appointed, but the plaintiff obtains no lien prior to other creditors as he has no right to execution.^^ The proper course, where there is a committee, is to petition the court, which may either allow a suit or direct a reference.^ Where the motion for leave to sue is heard on conflicting affidavits it will be granted, where a case is shown, which, if proved, would entitle a party to relief in equity.'^ Permission to sue the committee is not a determination that the petitioner has a cause of action. The court in grant- ing leave to sue is not called upon, and does not advise, upon the question of the committee's liability.'* 6. Security for costs. The plaintiff in an action against the committee of an in- competent cannot be required to give security for costs, merely on the ground that the defendant is a committee and hence may be required to give such security .*' 6. Payment of claim on petition. The court, as incident to its jurisdiction in lunacy, admin- isters the estate of an adjudged lunatic for the protection of creditors, and will apply it to the payment of his debts, the expenses of support and maintenance of the lunatic and his family, and the satisfaction of all obligations, charges, and ex- 95. Grant v. Humbert, 114 App. Div, ham, 4 Denio, 262; Matter of Heller, 3 462 100 N. y. iSupp. 42. Taige, 199; Brasher v. Van Cortlandt^/' 96. MaAter of Hopper, 5 Paige, 189; 2 Johns. Ch. 242, 400 Williams v. Cameron, 26 Barb. 172; 97. Matter of Wing, 2 Hun, 671. Soverhill v. Dickinson, 5 How. Pr. 109; 98. Kent v. West, 33 App. Div. 112, Matter of Wing, 3 Hun, 170; Sandford 53 N. Y. Supp. 244. V, Sandford, 62 N. Y. 553; Robertson 99. Kelly v. Kelly, 77 App. Div. 519, v' Lain, 19 Wend. 649; Clarke v. Dun- 78 N. Y. Supp. 918. 334 COMMITTEE OF INCOMPETENT. penses which legally or equitably ought to be satisfied out of his property.^ After inquisition found and the appointment of a com- mittee of the estate of a lunatic, the court has jurisdiction to direct the application of the estate to the payment of demands existing against it, and this relief may be granted on petition of a claimant.^ An action at law to recover for services rend- ered the committee should not generally be allowed, but resort should be had to the estate, either through an account and a claim duly made upon the property in the hands of a com- mittee, or by direct application to the court for an allowance to be paid out of the funds of the estate. Any person having such claim may resort to this summary remedy.* Where the committee of an incompetent has sufficient funds, he will be compelled to pay a judgment obtained against the incompetent, although such judgment was entered more than ten years prior to the application for such payment.* Where the estate is insufficient to pay the debts, the assets, personal as well as real, must be distributed ratably among all the creditors; and the petitioning creditor is not entitled to a preference.^ Pre-existing liens acquired in good faith are protected in the distribution of the assets.^ A claim for rent under a lease to the lunatic, whether ac- cruing before or after the appointment of a committee, has no intrinsic preference over the other debts, and in the absence of some special equity growing out of the circumstances of the particular case, the landlord comes in simply as a general creditor for the rent unpaid.^ A debt incurred prior to the 1. Carter v. Beckwitli et al., 128 N. lessor does not discharge or affect his Y. 312. covenants in a lease executed before 2. Matter of Otis, 101 N. Y. 580. he was adjudged a lunatic; his estate, See Matter of Haslett, 188 App. Div. in the hands of a committee, will be 208, 176 N. Y. Supp. 800; reversed, iable for whatever damages his lessees 227 N. Y. 145. have sustained because of a breach of 3. Kent v. West, 33 App. Div. 112, a covenant for quiet enjoyment, and to 53 N. Y. Supp. 244. the extent of such damages they are 4. Matter of Drake, 151 App. Div. general creditors, and entitled to have 163, 135 N. Y. Supp. 145. , their claim asceirtained and paid in due 5. Matter of Otis, 101 N. Y. 580; course of administration. The corn- Matter of Wing, 83 Hun, 284, 54 St. mibtee, however, owes no duty to the Eep. 736, 31 N. Y. Supp. 941. lessee of specific performance of the 6. Grant v. Humbert, 114 App. Div. lunatic's covenants, and when the es- 462, 100 N. Y. Supp. 44. tate is chargeable with damages con- 7. Matter of Otis, 101 N. Y. 580. sequent upon their breach, it is enti- Lease by lunatic.-The lunacy of a tied to the protection which the law COMMITTEE OF INCOMPETENT. 335 appointment of a committee, even though in favor of the per- son appointed, should be treated with the same consideration as though it were one existing in favor of a stranger and had been incurred in the administration of the estate.^" 7. Liability of committee in representative capacity. The committee of an incompetent person is not liable in his representative capacity for damages to a person falling through a hole in the floor of a building belonging to his in- competent.^ Where, in an action brought by a committee of an incom- petent person, the defendant recovers judgment for costs, he may not issue an execution against the plaintiff; and an ex- ecution so issued should be vacated on motion.^" In an action brought upon a contract for the board of a lunatic, evidence as to conversation between the plaintiff and the lunatic, at which the committee was not present, and which did not result in a modification of the contract, is properly ex- cluded.^ ARTICLE X. INVENTORY AND ACCOUNTING BY COMMITTEE. A. Civil Practice Act, § 1378. Inventory and account by committee. The provisions of the surrogate court act requiring the general guardian of an infant's property, appointed by a surrogate's court, to file in the month of January in each year an inventory, account and affidavit, and prescribing the form of the papers so to be filed, apply to a committee of the property appointed as prescribed in this article. For the purpose of making that application, the committee is deemed a general guardian of the property; the person with respect to whom he is appointed is deemed a ward, and the papers must be filed in the office of the clerk of the court by which the committee was appointed, or if he was appointed by the supreme court, in the clerk's office where the order appointing him is entered, and, if the incompetent person for whom such committee is appointed has been committed to a state institution and is an inmate thereof, a duplicate of such inventory, account and affidavit shall be filed also by said committee with the superintendent or officer having special jurisdiction over the institution where the incompetent person is confined. In extends to innocence in measuring such N. Y. Supp. 1058. damages. Matter of Strasburger, 132 10. Wesley v. Wood, 72 Misc. 258, N. Y. 128. 131 N. Y. Siupp. 109. 8. Matter of Forkell, 8 App. Div. 11. Lewis v. Mason, 42 App. Div. 397, 40 N. Y. Supp. 847. 423, 59 N. y. Supp. 123. 9. Ward v. Rogers, 51 Misc. 299, 100 336 COMMITTEE OF INCOMPETENT. every case where a committee has used or employed the services of an incom- petent person, with respect to whom he has been appointed a committee, or where moneys have been earned by or received on behalf of sucli incompetent person, the committee must account for any moneys so earned or derived from such services the same as for other property or assets of the incompetent person. B. Civil Practice Act, § 1379. Annual examination of accounts and inventories. In the month of February of each year, the presiding judge of the court by which the committee of the property was appointed, or if he was appointed by the supreme court, the county judge of the county where the order appointing him is entered, must examine, or cause to be examined under his direction, all accounts and inventories iiled by committees of the person and property since the first day of February of the preceding year. If it appears upon the examination that a committee appointed as prescribed in this article has omitted to file his annual inventory or accounting, or the affidavit relating thereto, as prescribed in the last section, or if the judge is of the opinion that the interests of the person with respect to whom the committee was appointed requires that he should render a more full or satisfactory inventory or account, the judge must make an order requiring the committee to supply the deficiency, and also, in his discretion, personally to pay the expense of serving the order upon him. An order so made may be entered and enforced, and the failure to obey it may be punished, as if it were made by the court. Where the examination of the accounts and inventories of committees of incompetent persons provided for herein is made pursuant to the order or direction of a county judge, the expense of such examination as allowed by the county judge directing the examination shall be payable by the county treasurer of the county out of any court funds in his hands, upon the order of the county judge directing such examination. C. Civil Practice Act, § 1381. Intermediate and final accounting of committee. The following provisions regulate intermediate and final accountings of the committee of an incompetent person appointed as prescribed in this article: 1. The committee may apply to the court making the appointment for an order to permit him to render to such court an intermediate judicial account of all his proceedings affecting the property of the incompetent person to the date of the filing thereof. And the court upon examination, in its discretion, may make an order directing that such account be filed with the clerk of the court wihere the application is made, on or before the date determined by the order. 2. The account to be filed pursuant to such order shall be verified and con- tain a just, true and proper statement of all the acts of- the committee, and an itemized statement of the receipts and disbursements of any and all moneys and properties that have come into hand covering the whole of the period for which the accounting is asked. A summary statement shall be included in the account and all vouchers shall be filed therewith. 3. Notice of the filing of such account pursuant to such order and of an application for the judicial settlement thereof shall be given in the manner in which and to the persons to whom notice of application for the appointment COMMITTEE OF INCOMPETENT. 337 of a committee of the person or property of an alleged incompetent person, lunatic, idiot or habitual drunkard is required to be given by this article. 4. Upon the return day of the notice of such application, the court shall have the power to appoint a referee to take and state such account and to . report to the court with his opinion thereon as to all matters embraced in said account. 5. The court shall have power and it shall be its duty to appoint a suitable person as special guardian of the incompetent person for the protection of his rights and interests in said proceeding. 6. Upon the motion for a confirmation of the report of a referee appointed pursuant to the provisions hereof, or, if the accounting be had before the court, upon the court's determination, said account shall be then judicially adjusted, determined, fixed and filed. 7. The compensation of the referee and of the special guardian appointed under the provisions of this section shall in every instance be fixed by the court to be paid out of the estate, if any, of the incompetent person. 8. The judicial settlement of the final account of a, committee shall be made in the same manner, so far as may be applicable, as provided in this section for the judicial settlement of an intermediate account. B. Action for accounting. The Supreme Court has power to pass upon the accounts of a committee and to allow his commissions.^^ Leave will not be granted to discontinue proceedings to compel a committee of a deceased lunatic to account upon the application of the administrator, in order to enable the latter to begin an action for the same purpose in another eourt.^^ E. Action at law against committee. The incompetent or hi s successor is not generally permitted to maintain an action at law against the committee to recover the trust funds in his hands as such committee. But, while the proper method of determining a deceased committee's liability to the estate of the lunatic is by an ad- justment and settlement of his accounts, as such, where his executor not only neglects to plead that the action of trover will not lie, but also neglects to set up that a proceeding for an accounting is necessary to a full adjustment and determin- ation of her liability, or ask that such an accounting be had in the action, but after denying plaintiff's claim, sets up by way of counterclaim sundry items of indebtedness claimed to be due from the lunatic to her, and asks for judgment against the lunatic's estate to that amount, the executor is not entitled 12. Matter of Grout, 64 St. Rep. 340, 13. Matter of Butler, 8 Civ. Proc. 56. 31 N. y. Supp. 602, 83 Hun, 27. 22 338 COMMITTEE OF INCOMPETENT. to complain of a judgment for the plaintiff for the amount found due over and above the counterclaim.^* F. Involuntary accounting. The committee may be required to account independently of his annual and voluntary intermediate accountings.-^* The court has power to require the committee to account at any time.-'^ Ordinarily proceedings are unnecessary to settle the inter- mediate account of a committee of the person of an incom- petent, as the accounts of such committee are filed yearly. But where such committee has an accumulating surplus consisting of a monthly allowance which has not been expended, an ac- counting should be had.^^ G. Special guardian for incompetent. The fact that the special guardian of an incompetent has been allowed and has been paid costs out of the estate on an accounting by the committee of said incompetent does not constitute a waiver of the right of such special guardian to appeal from a decree of the surrogate settling the account. The incompetent is not prejudiced because the special guar- dian has merely received just compensation for his services, and the committee is not prejudiced because the sum was paid out of the estate." In proceedings for the settlements of the account of an ex- ecutor and testamentary trustee, citation having been duly served on an incompetent, who was a necessary party, and on his committee, and the committee having appeared by coun- sel, the decree was sustained, though permission was not ob- tained from the Supreme Court to make the incompetent a party or to serve him with citation.^* H. Reference. The annual accoimts of the committee of a lunatic may be examined by means of a reference.^^ 13a. La Grange v. Merritt, 96 App. 748, 152 N. Y. Supp. 382. Div. 61, 89 N. y. Supp. 32. 17. Matter of Edwards, 110 App. 14. Matter of Arnold, 76 App. Div. Div. 623, 97 N. Y. Supp. 185. 126, 78 N. Y. Supp. 772, 12 Anno. 18. Meeks v. Meeks, 51 Misc. 538. Cas. 168. 100 N. Y. Supp. 667; reversed, 122 15. Matter of Cowen, 130 App. Div. App. Div. 461, 106 N. Y. Supp. 907. 365, 114 N. Y. Supp. 797. 19. Matter of De Eussy, 37 St. Rep. 16. Matter of Bladen, 166 App. Div. 684, 14 N. Y. Stipp. 178. COMMITTEE OF INCOMPETENT. 339 Where the committee of an incompetent person, consisting of several members, applying for permission to account, one of their number desiring to resign, no order of reference to pass the account can be granted, where neither the incom- petent, nor the officer of the institution where she is confined,- have been served with notice of the application and where no special guardian has been timely appointed to represent the incompetent on the accounting.^" Upon an appeal from an order confirming the report of a referee appointed to take and state the account of the com- mittee of an incompetent, the Appellate Division has no power to correct the account.^ I. Expenditures of committee. Upon the accounting, the committee is allowed proper items of expenditure in maintaining the incompetent and discharg- ing the duties of his office.^^ The power of the court to allow costs and expenses incurred by the committee continues up to the final report of the referee to settle his accounts.^^ "Where it has been made to appear that the committee of an incompetent, in the administration of his trust, has neces- sarily incurred counsel fees and other expenses, the court may, in its discretion, provide for the payment of such sum to the committee, but not in the absence of any proof whatever on the subject.^^ Where the estate of the lunatic is large, the committee may be allowed clerk hire out of the estate.^^ The committee of a lunatic should be allowed for moneys 26. Matter of MoCusker, 32 Misc. mittees of incompetent persons, and it 47, 66 N. Y. Supp. 105. was held that the Supreme Court has Zl. Matter of Nutting, 74 App. Div. power to revise or modify the decision 468, 77 N. Y. Supp. 696. of the Court of Common Pleas as to 22. Statute of Limitations. — It has allowances for expenses, etc., made to been held that the committee of a a committee. Butler v. Jarvis, 51 lunatic will not be allowed for expen- Hvm, 248, 4 N. Y. Supp. 137. ditures made more than six years be- 23. Matter of Clapp, 20 How. Pr. fore filing his petition for an accoimt- 385. ing, the Statute of Limitations having 24. Matter of Maxwell, 218 N. Y. run as to the same. Matter of Rob- 88. erts, 52 Misc. 630, 103 N. Y. Supp. 25. Matter of Livingston, 9 Paige, 1017. 440; affirmed, without opinion, 2 Denio, The Court of Common Pleas, before 575. its abolition, had jurisdiction of com- 340 COMMITTEE OF INCOMPETENT. borrowed by him and expended for the support and mainte- nance of the lunatic after the personal estate was exhausted.^" The committee of a lunatic may not be entitled to be credited upon her accounting with sums which she ras de- voted to charity out of the incompetent's income.^^ J. Allowance to attorney for committee. The committee will -be allowed reasonable sums paid for attorney fees incurred in the discharge of the trust.^ And where the estate of a lunatic has been benefited by the services of an attorney employed by the committee to collect a claim, the court has jurisdiction to entertain an application by the attorney for payment, and to order the committee to pay the value of his services from the fund.^ But an allow- ance for services cannot be made to one who has acted as an attorney for the lunatic and the committee without notice to the committee.^" K. Negligence of committee. If the committee neglects to file an inventory or to render his accounts regularly, under oath, in the settlement of his accounts, every intendment will be taken most strongly against him.^ The committee of an habitual drunkard who has been guilty of gross negligence will be charged with costs of proceedings for his removal and to procure a settlement of his accounts.^^ Where the acts of the committee of an incompetent person who is also trustee under the terms of a will creating a trust for the benefit of himself, the incompetent and others, result 26. Matter of Roberts, 52 Misc. 630, entitled to have tiie order resettled so 103 N. y. Supp 1017. as to state the amounts to be paid by 27. Matter of Nutting, 74 App. Div. the attorneys to each of themi. Matter 468, 77 N. Y. Supp. 696. of Brenen, 136 App. Div. 549, 121 28. Matter of Clapp, 20 'How. Pr. N. Y. Supp. 199. 385. 29. Matter of Horton, 18 Misc. 406, Specifying items. — Where on an ap- 42 N. Y. Supp. 775. plication of the attorney of the com- 30. Matter of Clowes, 3 Law Bull, mittee of an incompetent for an allow- 21. ance of costs and disbursements the 31. Matter of Carter, 3 Paige, 146; court reduces the gross sum claimed \Iatter of Seaman, 2 Paige, 409. without specifying what items are dis- 32. Matter of Carter, 3 Paige, 146. allowed or in what proportion they See also Matter of Stevens, 13 Wkly. aro reduced, parties asserting a right Dig. 567, 23 Hun, 641. to be paid out of tht sum allowed are COMMITTEE OF INCOMPETENT. 341 in the enrichment of himself at the expense of the incom- petent, his account as committee should be surcharged.^^ L. Effect of decree settling accounts. The order of the court settling the. accounts of a committee is conclusive on the heirs-at-law and next of kin of the incom- petent who have been notified and have appeared without questioning the accuracy of the account or the legality of the proceeding.^"* The committee of an incompetent who has from time to time presented his accounts, should not on final accounting be compelled to repay to the estate a reasonable monthly pay- ment previously allowed to him.^^ "Where, prior to a proceeding for the judicial settlement of the account of the executor of a testator who sometime after making his will was duly adjudged an incompetent, the ac- counts of the committee of his person and property have been judicially settled, adjusted and determined, the Surrogate's Court is without jurisdiction to inquire into any matter in- volved in said accounting and is bound thereby, and whether the decedent had lucid intervals during the period covered by his committee is wholly immaterial.''^ M. Form of inventory. CHAUTAUQUA COUNTY COURT. In the Matter of the Accounting of JOHN H. SMITH, Committee of HENRY GORDON an Incompetent Person. A just and true inventory of the property of Henry Gordon, an incompetent person, on the 1st day of May, 1910, made pursuant to law, by John H. Smith, committee of said incompetent. The assets of said incompetent in my charge and under my control consist of: A farm lying in the town of Dunkirk, consisting of one hun- dred and fifty acres, valued at : $15,000 Stock thereon, valued at (give details of items) 1,000 33. Matter of Anderson, 211 N. Y. 35. Matter of Cowen, 152 App. Div. 136. 108, 136 N. Y. Supp. 480. 34. Ma.tter of Cowen, 130 App. Div. 36. Matter of Garlick, 96 Misc. 653, 36S, 114 N. Y. Supp. 797. 161 N. Y. Supp. 1113. 342 COMMITTEE OF INCOMPETENT. Thirty shares of bank stock in First National Bank of Buffalo, worth at par value 3,000 Balance of legacy left to Henry Gordon 3,500 Farm produce (itemized) 100 Bond and mortgage on real estate in town of Milton, Monroe county ,. 2,000 A dwelling-house in Dunkirk 2,000 Total assets $27,500 I have made no investments during the year. I have received the following sums: From sales of farm produce $1,000 From interest on bond and mortgage 120 From rent on house 100 From interest on loan- 150 From rent of farm 1,500 From all other sources 500 $3,370 I have paid out for support and maintenance of said Henry Gordon, and taxes and insurance 2,170 In my hands May 1, 1910 $1,200 Chautauqua County, ss.: John H. Smith, the committee of the person and property of the above-named Henry Gordon, an incompetent person, being duly sworn, doth depose and say, that the foregoing inventory and account contain, to the best of deponent's knowledge and belief, a full and true state- ment of all his receipts and disbursements on account of said Henry Gordon, and all money and other personal property of the said Henry Gordon which have come into deponent's hands, or have been received by any other person by his order or authority, or for his use since his appointment, and of the value of all such property, together with a full and true account of the manner in which he has disposed of the same, and of all the property remaining in his hands at the time of the filing of said inventory and account ; and a full and true descrip- tion of the amount and nature of each investment made by him since his appointment, and that he does not know of any error or omission in the said inventory or account to the prejudice of the said Henry Gordon. (Jurat.) (Signature.) N. Form of account. The account of the committee should be in substantially the form of an account rendered by an executor on final accounting in Surro- gate's Court, such schedules being prepared only as are necessary to show clearly the receipt and payment of moneys by the committee. COMMITTEE OF INCOMPETENT. 343 0. Form of petition for settlement. To the Supreme Court of the State of New York: The petition of Samuel S. Hatt of the city of Albany respectfully shows to this court as follows: That proceedings were instituted upon the petition of Eveline 0. Littell, addressed to this court, and verified on the 18th day of Janu- ary, 1907, to have Margaret Gray adjudged an incompetent person incapable of caring for herself or her estate, and Jisking for the ap- pointment of a committee of her person and estate, that such proceed- ings were had and taken therein, that a commission in the nature of' a writ of de lunatico inquirendo was issued out of and under the seal of this court on the 26th day* of January, 1907, directed to Charles S. Stedman, commissioner, to inquire by a sheriff's jury as to the allegations of the said petition, and that such proceedings were had and taken therein, that upon such inquisition it was adjudged that the said Margaret Gray was incompetent and incapable of managing herself or her estate, and that a committee thereof should be ap- pointed; that, thereafter, said proceedings were duly confirmed by Hon. James A. Betts, justice of the Supreme Court, by order granted on the 16th day of February, 1907, and the said Margaret Gray by virtue of such proceeding was thereupon adjudged to be an incom- petent person incapable of earing for herself or her estate, and upon the petition of said Eveline 0. Littell, the next of kin, consenting thereto, your petitioner was, on said February 16, 1907, duly ap- pointed the committee of the person and estate of the said Margaret Gray, and thereafter duly qualified as such by giving the bond re- quired by law, and duly approved by this court and entered upon the discharge of his duties as such and still continues to exercise the same. That the said Margaret Gray is a single person, never having mar- ried, that her father and mother are dead, and that the following are her next of kin and heirs-at-law and reside as follows : (Insert names and addresses.) All of whom are of full age and sound mind. (If not so state.) That the United States Fidelity & Guaranty Company of Balti- more, Md., is surety upon the bonds of your petitioner. That the said Margaret Gray had a nephew, Edward K. Swart by name, whose last known place of residence was Redlands, Cal., but who has not been heard from since on or about the year 1898, and that letters addressed to him since that date, by his brothers, Jacob H. Swart and Franklin 0. Swart, have been returned unopened, and that, as your petitioner is advised by the said Jacob H. Swart and Franklin 0. Swart, he is believed to be dead, and your petitioner alleges that he is presumptively dead. That the said Margaret Gray is a resident of the county of Albany, N. T., but is temporarily sojourning with her niece, said Eveline 0. Littell, at West Haven, Conn. That your petitioner is desirous of rendering an account of his pro- ceedings as committee of the person and estate of said Margaret Gray, and prays that his said accounts be passed upon and judicially settled by this court, and that notice of the application for such accounting 344 COMMITTEE OF INCOMPETENT. shall be given in the manner and to such persons, as the court may- direct, and pursuant to the statute in such case made and provided, and that a suitable and proper person be appointed the special guardian of the incompetent person for the protection of her rights and interests in said proceeding, and that your petitioner may have such other and further order and relief as to the court may seem meet and proper, and your petitioner will ever pray. Samuel S. Hatt. Dated, Albany, N. Y., August 1, 1907. (Verification.) P. rorm of order that notice of application be given to parties interested. (Caption and title.) On reading and filing the petition of Samuel S. Hatt, as committee of the person and estate of Margaret Gray, an incompetent person, dated and verified on the 1st day of August, 1907, -whereby it appears among other things that the said Samuel S. Hatt is desirous of having his accounts, as committee of the person and estate of said Margaret Gray, under order of appointment of date of February 16, 1907, passed, allowed and judicially settled, and praying that notice of ap- plication for such accounting shall be given in such manner, and to such persons as the court may direct and the statute provides and wherein and whereby it appears that the said Margaret Gray, said incompetent, is a resident of the county of Albany, N. Y., but is so- journing temporarily with her niece, Eveline 0. Littell, at West Haven, Conn., and that the only heirs-at-law and next of kin of said Margaret Gray are: (Name parties in interest.) from which it also appears that said Eveline 0. Littell, Jacob H. Swart and Conrad G. Oliver are non-residents of the State of New York, re- siding as follows: (Give residence.) That the United States Fidelity & Guaranty Company of Balti- more, Md., is surety on the bonds of the petitioner. Now on motion of Edward S. Coons, attorney for said petitioner, it is ordered: That presentation of the application for such accounting be made at a Special Term of the Supreme Court of the State of New York, to be held at the City Hall, in the city of Albany, N. Y., on the 24th day of August, 1907, at the opening of the court on that day or as soon there- after as counsel can be heard, and that notice of presentation of such application shall be given to the said Margaret Gray and to the said ,kin of Margaret Gray above-named and to the United States Fidelity & Guaranty Company by service of a copy of this order and of the notice of presentation of such application for said accounting, at least fifteen days before said August 24, 1907, upon the said Margaret Gray, personally, without the State, and likewise upon said Eveline 0. Littell, with whom said Margaret Gray is temporarily sojourning, and upon (names of other parties), respectively, personally, or by leav- ing the same at their last-known places of residence within the State COMMITTEE OF INCOMPETENT. 345 of New York, and upon the said Eveline 0. Littell, Jacob II. Swart and Conrad G. Oliver, by mail, by depositing the same in the pOst- office at Albany, N. Y., contained in a security closed post-paid wrap- per, directed as follows: (Names and addresses of non-residents.) George H. Fitts, Dated, August 1, 1907. Justice Supreme Court. ft. Form of notice of application for leave to render account, etc. (Title.) Take Notice, That pursuant to the order of Hon. George H. Fitts, justice of the Supreme Court therefor, of which the within is a copy, notice is hereby given of the presentation of the application for the accounting of Samuel S. Hatt as committee of Margaret Gray, pur- suant to the terms of said order, to be made to the Special Term of the Supreme Court of the State of New York, to be held at the City Hall in the city of Albany on the 24th day of August, 1907, at the opening of the court on that day or as soon thereafter as counsel can be heard, and that an application will then and there be made that the prayer of the said petition be granted, and said Samuel S. Hatt, as such com- mittee, be permitted to make, render and file accounts of his proceed- ing, as such committee, and the same be passed upon and judicially settled by the court, and that a suitable and proper person be ap- pointed the guardian of said Margaret Gray in said proceeding, and for such other and further relief as to the court may seem meet and proper. Edward S. Coons, Dated, Albany, N. Y., August 1, 1907. Attorney for Petitioner. To parties interested, including surety company. R. Form of order authorizing committee to render account. (Caption and title.) On reading and filing the petition of Samuel S. Hatt, as commit- tee of the person and estate of Margaret Gray, an incompetent per- son, dated and verified the 1st day of August, 1907, praying that he be permitted to make, render and file accounts of his proceedings as such committee, that the same be judicially passed upon and settled by this court, and that a suitable person be appointed guardian of said Margaret Gray in said proceeding, and on reading and filing the order granted by Justice George H. Fitts herein on August 1, 1907, that the presentation- for the application for such accounting be made at this term, and on reading and filing notice, under date of August 1, 1907, of the presentation of the application for such accounting at this term, time and place, with due proof of service of said order and no- tice, pursuant to the terms and provisions of said order, upon all per- sons and in the manner prescribed in said order. Now, on motion of Edward S. Coons, attorney for said petitioner, it is . Ordered, That the prayer of the petitioner be granted, and that the said Samuel S. Hatt, as such committee, be, and he hereby is, per- 346 COMMITTEE OF INCOMPETENT. mitted, authorized and directed to render and file his accounts of pro- ceeding, that the same may be passed upon, and judicially settled, by this court. Enter. George H. Fitts, Justice Supreme Court. S. Form of order appointing special guardian for incompetent person. (Caption and title.) On reading and filing the petition of Samuel S. Hatt, as commit- tee of the person and estate of Margaret Gray, an incompetent per- son, dated and verified the 1st day of August, 1907, praying that he be permitted to make, render and file accounts of his proceedings as such committee, that the same be judicially passed upon, and settled by this court, and that a suitable person be appointed guardian of said Margaret Gray in said proceeding, and on reading and filing the order granted by Justice George H. Fitts, herein, on August 1, 1907, that the presentation for the application of such accounting be made at this term, time and place, and on reading and filing notice under date of August 1, 1907, of the presentation of the application for such ac- counting at this term, time and place, with due proof of service of said order and notice, pursuant to the terms and provisions of said order, upon all the persons and in the manner as prescribed in said order. Now on motion of Edward S. Goons, attorney for said petitioner, it is, Ordered, that Lucius H. Washburn of the city of Albany, N. Y., a competent and responsible person, be, and he hereby is, appointed the guardian ad litem of said Margaret Gray in this proceeding, he having presented to and filed with this court his consent so to act, duly ac- knowledged, and affidavit as to his responsibility, pursuant to the statute in such case made and provided. John Franey, Clerk. T. Form of consent of special guardian. (Title.) I, Lucius H. Washburn, of the city of Albany, N. Y., hereby con- sent to become the guardian ad litem of Margaret Gray in the proceed- ing mentioned in the petition herein, and duly appointed as such by order of the court made at the date hereof. Dated, Albany, N. Y., August 24, 1907. (Acknowledgment.) Lucius H. Washburn. STATE OF NEW YORK, ] City and County of Albany, j **••' Lucius H. Washburn, being duly sworn, says, that he is the person duly appointed by the court as guardian of Margaret Gray, an in- competent person ; that he is of sufficient ability to answer to the said Margaret Gray for any damage that may be sustained by his negli- COMMITTEE OF INCOMPETENT. 347 gence or misconduct in the defense of said proceeding, being worth the sum of one thousand dollars ($1,000) over and above debts and liabilities owed or incurred by him, and exclusive of property exempt by law from execution. Lucius H. Washbubn. Sworn to before me, this 24th day of August, 1907. Anna S. Case, Com. of Deeds, Albany, N. Y. IT. Form of report of special guardian. (Title.) I, Lucius H. Washburn, counsellor-at-law, practicing at the city of Albany, N. Y., having been duly appointed special guardian of Mar- garet Gray, the above-named incompetent, for the purpose of appear- ing for and protecting her interest in the above-entitled proceedings, do hereby report as follows : First : That the interest of said Margaret Gray is, that she is the sole owner of the property mentioned and described in the account of proceedings made and filed by Samuel S. Hatt, her committee. Second: That I have examined the papers, including the petition of said committee, dated and verified August 1, 1907, praying for the judicial settlement of his accounts, the order thereof dated on that day, directing service of notice and order and the proofs of service herein; the account of proceedings and the proposed decree, the vouchers, securities, and other papers belonging to the estate. Third : I do further report that there is no valid objection on the part of said Margaret Gray to the entry of a decree herein, settling the accounts of the said Samuel S. Hatt, committee under orders of ap- pointment of date of June 30, 1906, and February 16, 1907, as ren- dered and filed by him. Lucius H. Washburn, Dated, August 31, 1907. Special Guardian. V. Form of order settling acconnts. (Caption and title.) Samuel S. Hatt of the city of Albany, Albany county, N. Y., the duly qualified and acting committee of the person and estate of the above-named Margaret Gray, having been duly appointed such com- mittee by an order of this court, dated February 16, 1907, and the said Samuel S. Hatt having, applied to. this court by petition, verified the 1st day of August, 1907, praying for a judicial settlement of his accounts as such committee, and the said court having made an order on said August 1, 1907, that notice of the presentation of such ap- plication should be given to (name parties) heirs-at-law and next of kin of said Margaret Gray, and to the United States Fidelity & Guaranty Company, security on the bond of said committee, in the manner and within the time, as prescribed in said order, and that such application be made at a Special Term of this court, to be held at the City Hall, Albany, N. Y., on August 24, 1907, and on said August 24, 1907, at said term, time and place, said committee having ap- 348 COMMITTEE OF INCOMPETENT. peared in person and by Edward S. Coons, of counsel, and filed notice of application for such accounting in behalf of said petitioner, with proof of service thereof upon all of said aforenamed parties in the manner and within the time specified in said order; and no one ap- pearing in opposition thereto, or otherwise, and upon motion, Lucius H. Washburn having been duly appointed the special guardian of said Margaret Gray in the said proceeding, and he having duly filed with the court his consent so to serve, duly acknowledged, and the usual affidavit of pecuniary responsibility and having duly qualified as such guardian, and said Samuel S. Hatt, as such committee, having filed his accounts of proceedings duly verified with the vouchei-s in support thereof, and said accounts and vouchers having been examined by said guardian and found correct, and the matter coming on now to be heard, Edward S. Coons appearing as counsel for said petitioner and Lucius H. Washburn appearing in person as the special guardian, duly appointed for and on behalf of the said Margaret Gray, with respect to this accounting, the next of kin not appearing, and after hearing due proof and examining the accounts presented by said com- mittee herewith, and vouchers in support thereof, it is Ordered and decreed, that the said accounts thus rendered and presented by the said Samuel S. Hatt, committee, be, and the same are hereby, finally and judicially settled, passed and allowed according to the final summary statement. The said committee is charged as follows: With the amount of the invested funds which came origi- nally into his hand $11,023.41 With the appraised value of other property 293.35 With the amount of increase as per exhibit "A" 571.21 Total $11,887.97 The said committee is credited as follows : With property remaining unsold as per schedule "B". . . . $250.85 With amount of schedule "C" 4,482.88 Leaving in his hands the balance of 7,154.24 It is further ordered and decreed, that out of the said sum of $7,154.24, thus in his hands, said committee pay to himself the sum of $217.11, hereby allowed to him as and for his commissions for re- ceiving and paying out according to the statutes in such cases made and provided. It is further ordered and decreed, that the matter of allowance to the committee, for his service as committee of the person of the said Margaret Gray, be held in abeyance until the final accounting, and It is further ordered and decreed, that out of the fund now in his hand, said committee pay to Lucius H. Washburn, as special guardian herein, the sum of $25, as, and for an allowance of costs, hereby allowed him under the provisions of the Civil Practice Act; and to Edward S. Coons, the sum of $200, hereby allowed said committee, as and for counsel fees and other expenses of this accounting, under the COMMITTEE OF INCOMPETENT. 349 provisions of the Civil Practice Act, and $35.91, for disbursements accrued in making service of the notice and order of the presentation of the application for this accounting. It is further ordered and decreed, that the amount remaining in the hands of said committee, after making said payments, hereinbefore directed, to wit, the sum of $6,676.22, is to be taken as a basis for any future accounting of the said Samuel. S. Hatt, as committee, etc. Enter. George H. Fitts, Justice Supreme Court. ARTICLE XI. COMPENSATION OF COMMITTEE. A. Civil Practice Act, § 1376. Compensation of committee. A committee of the property is entitled to the same compensation as an executor, administrator or testamentary trustee. But in a special case where liis services exceed those of an executor or administrator, the supreme court or a county court within the county may allow him such an additional com- pensation for such additional services as it deems just. The compensation of a committee of the person must be fixed by the court and paid by the com- mittee of the property, if any, out of the funds in his hands. The additional compensation authorized by this section may be allowed to the committee upon any judicial settlement made by him, and shall be for such additional services up to and including such settlement.37 B. Discussion of statute. The committee of the person and property of an incom- petent has no right to commissions upon the corpus of the estate until they are awarded to him on the judicial settle- ment of his accounts.^^ As the committee of an incompetent ceases to have power to reduce to possession any property of the incompetent after the latter's death, commissions should not be allowed on the corpus of the estate claimed to have been received after the death of the incompetent, especially where there is no proof that the principal or any part of it was at any time received by the committee.^^ Although the advance of moneys by a committee for the support of an incompetent in excess of the 37. Amount of fees. — See section 285 petent, where no one of the separate of the Surrogate Court Act, as to the .ccounts equals $100,000, althougli the amount of fees. estate exceeded said amount. Matter 38. Matter of Stratton, 76 Misc. 584, . of Wallace, 172 App. Div. 544, 157 137 N. Y. Supp. 311. K Y. Supp. 245. Double commissions should not be 39. Matter of Wallace, 172 App. allowed to the committee of an incom- Div. 544, 157 N. Y. Supp. 245. 350 COMMITTEE 0¥ INCOMPETENT. income received, entitles the committee to reimbursement, he should not be allowed commissions thereon, as he has not re- ceived such moneys.^" The committee of a lunatic on a final accounting is entitled to full compensation for receiving and paying out the property without regard to sums disbursed as expenses. The matter of allowing counsel fees is in the dis- cretion of the court.^^ The court may reduce an extra allow- ance recommended by a referee.*^ An extra allowance to the wife of the incompetent who was one of the committee should be disallowed, where what she did' both for the incompetent and for the interest of her infant daughter was that which duty and natural love and affection dictated, and where her own personal interests were also affected and served by her vigilance and work.^^ Upon the settlement of the account of a committee of the personal property of an incompetent person after his death, the court cannot allow to the late committee, his widow, com- pensation for her personal care of him during the last three years of his life, while suffering from paresis and unable to take care of himself, an extra compensation as the committee of his property.** ARTICLE XII. REMOVAL OF. COMMITTEE. A. Civil Practice Act, § 1380. Proceedings for removal of committee. Where the committee fails to comply with the order within three months after it is made, or where the judge lias reason to believe that sufficient cause exists for the removal of the committee, the judge, in his discretion, may appoint a fit person special guardian of the incompetent person with respect to whom the committee was appointed, for the purpose of filing a petition in his behalf for the removal of the committee and prosecuting the necessary pro- ceedings for that purpose. The committee may be compelled in the discretion of the court to pay personally the costs of the proceedings so instituted. B. Procedure. Section 1380 constitutes a statutory rule of procedure for the removal of a committee, the observance of which is essen- tial to the regularity of the order of removal. This in no man- 40. Matter of Wallace, 172 App. Div. 544, 157 N. Y. Snipp. 245. Div. 544, 157 N. Y. Supp. 245. 43. Matter of Wallace, 172 App. 41. In re Blossom's Estate, 7 N. Y. Div. 544, 157 N. Y. Supp. 245. Supp. 360, 26 St. Rep. 763. 44. Matter of Goff, 62 Misc. 510, 116 42. Matter of Wallace, 172 App. K. Y. Supp. 650. COMMITTEE OF INCOMPETENT. 351 ner impairs the jurisdiction of the court, but merely regulates its exercise.^^ A proceeding to remove the committee of an incompetent person is a continuance of the original proceeding, and all the parties thereto must be made parties to it.*® The parties en- titled to notice of a proceeding for the appointment of a com- mittee should have notice of the proceeding for his removal, and while the latter proceeding is pending no other proceed- ing for the removal of a committee can properly be enter- tained, at least without notice to the parties to the proceeding first instituted.*'' A petition for the removal of a committee should be accom- panied by an application for an accounting, which should pre- cede the hearing of the motion for his removal, in case his ac^ counts are involved in the grounds alleged.*^ If the wife of a lunatic, without probable cause, applies for the removal of a committee, costs may be allowed to the committee and denied to her.-'s ARTICLE XIII. RESTORATION OF PROPERTY. A. Civil Practice Act, § 1382. Restoration of property. Where a person with respect to whom a committee is appointed, as prescribed in this article, becomes competent to manage himself or his affairs, the court must make an order discharging the committee of his property, or the com- mittee of his person, or both, as the case requires, and requiring the former committee to restore to him the property remaining in the committee's hands. Thereupon the property must be restored accordingly. B. Tests of recovery. The test of a man's right to be restored to the control and possession of his property is not his competency to manage a large estate, but his restoration to mental health and his fit- ness for the common and ordinary affairs of life.™ 45. Matter of Andrews, 192 N. Y. 47. Matter of Andrews, 16S N. Y. 514. 514. ' 48. Matter of Arnold, 76 App. Div. The resignation of the committee 126, 78 N. Y. Supp. 772, 12 N. Y. will not be accepted merely because Anno. Gas. 168. the duties have become impleasant. 49. Matter of Lytle, 3 Paige, 251. Matter of Lytle, 3 Paige, 251. 50. Matter of Brugh, 61 Hun, 197, 46. Matter of Osborn, 74 App. Div. 16 N. Y. Supp. 551, 40 St. Rep. 573. 113, 77 N. Y. Supp. 423, 11 N. Y. Anno And see Matter of Chandler, 108 Misc. Cas. 211. 433, 178 N. Y. Supp. 469. 352 COMMITTEE OF INCOMPETENT. C. Procedure in general. Sections 1362 to 1373 of the Civil Practice Act, which con- tain provisions for the issuing of a commission to inquire as to the incompetency of persons, and prescribe the practice therefor, were not intended to apply to an application to supersede a committee of a person adjudged thereby to be in- competent. Such an application is provided for by section 1382.51 Section 1382 applies only to the recovery of the lunatic and not to his death. The court has no power after the death of a lunatic to supersede the commission of lunacy on the ground that the lunatic has been restored to reason.^^ In proceedings for the supersedeas of a commission of the lunatic the manner qf determining the question as to the sanity of the lunatic is in the discretion of the court. The supposed lunatic has no right to have the question of his lunacy submitted to a jury, and the court may determine it either upon affidavits, or personal ex- amination of witnesses, or by sending it to a referee to take evidence and report, or by trial before a jury.^^ The Appel- late Division has the power to review the discretion exercised by the Special Term, but the Court of Appeals is limited in its jurisdiction to the review of questions of law, and, there- fore, cannot retiew the discretion of the Appellate Division.^* The referee should not direct the petitioner to submit to an examination by physicians named by the opponents to enable them to testify ; but the petitioner should be called before the referee and be examined in their presence ; or an examination by physicians agreed upon by both parties should be had.^ D. Partial restoration. Where, after a committee has been appointed, the mind of the lunatic has been restored in part, the court may discharge the proceedings against him partially, so far as to enable him to make a will under judicial supervision, with leave to revoke it wholly without such sanction, retaining, however, control of 51. Matter of Curtiss, 199 N. Y. 36. make an order discharging the com- 52. Matter of Owens, 18 N. Y. Supp. mittee, although he was appointed by 8.50, 44 St. Rep. 306. the Court of Common Pleas. Butler 53. Matter of Blewitt, 138 X. V. v. Jarvis, 51 Hun, 252, 4 N. Y. Supp. 140, 51 St. Eep. 844; Matter of Hanks, 138. 3 Johns. Ch. 567. 55. Matter of Newcomb, 58 App. 5*. Matter of Curtis-s, 199 N. Y. 36, Div. 338, 68 N. Y. S'upp. 988. T^e Supreme Court has authority to COMMITTEE OF INCOMPETENT. 353 Ms property so far as is necessary to protect it.^^ Where committees both of the person and estate have been appointed, the former will not be discharged on the petition of the lunatic, alleging that he is so far restored to reason as to be able to govern himself, if it does not appear that he is yet competent to manage his estate, and no application is made to discharge the committee of his estate.^''^ £. Habitual drunkard. The court will not restore the estate and discharge the com- mittee of an habitual drunkard, except upon proof of a per- manent restoration; there should be a year's voluntary and total reformation.^* F. Expenses of committee opposing petition. The committtee of an incompetent person is entitled to be allowed his reasonable expenses incurred in good faith in op- posing proceedings taken for the discharge of the committee on the ground that the incompetent had completely recovered his mental health, and on habeas corpus, in which decisions adverse to the petitions were rendered.^' And the court may order the payment of the attorney fees for the incompetent to be paid out of his estate, although the petition is unsuccess- ful.«» G. Effect of restoration. After the committee has been discharged on the lunatic's recovery, the court has no further jurisdiction over the prop- erty of the former lunatic, except to pass upon the accounts of the committee. Thus, the court cannot compel the restor- ation of property by one to whom it has been transferred by the former lunatic after the committee has been discharged.^^ 56. Matter of Burr, 2 Barb. Oh. 208. 312; Matter of Larner, 68 App. Div. 57. Matter of Burr, 17 Barb. 9. 320, 74 N. Y. Supp. 70; modified, 170 58. Matter of Hoag, 7 Paige, 312. N. Y. 7. 59. Matter of Lamer, 39 Misc. 377, Gl. Matter of Dowd, 19 Misc. 688, 79 N. Y. Supp. 836. 44 N. Y. Supp. 1094. GO. Carter v. Beckwith, 128 N. Y. 23 354 COMMITTEE OF INCOMPETENT. H. Form of order discharging committee. At a term of the County Court held at the court house in the city of Kingston, Ulster county, N. Y., July 15, 1911 : Present: — Hon. Charles F. Cantine, County Judge of Ulster County. In the Matter op RICHARD ROSS, AN Habitual Drunkard. On reading and filing the petition of Richard Ross, above-named, dated June 20, 1911, setting forth that he has been habitually tem- perate in the use of ardent spirits for twelve months past, and pray- ing for the discharge of his committee, "W. S. Fredenburgh, heretofore appointed in the above matter, and for the restoration of his prop- erty, and on reading and filing the affidavits of John Smith and Hiram Roe, dated, respectively. May 29, 1911, and May 26, 1911, in support of said petition, and upon examining the said Richard Ross, in open court, as to his habits, etc. : It is hereby ordered, on motion of V. B. Van Wagenan, Esq., coun- sel for said Richard Ross, that the said committee, W. S. Freden- burgh, heretofore appointed herein committee of the person and estate of said Richard Ross, be and he is hereby discharged, and that he restore to said Richard Ross the property remaining in his hands, be- longing to the said Richard Ross, after deducting the legal charges and expenses of the said committee. Charles F. Cantine, County Judge of Ulster County. ARTICLE XrV. DEATH OF INCOMPETENT. A. Civil Practice Act, § 1383. Death of incompetent; duty of committee. Where a person, of whose property a committee has been appointed, as prescribed in this article, dies during his incompetency, the power of the comr mittee ceases; and the property of the decedent must be administered and disposed of as if a committee had not been appointed. The committee, in such case, may render to the court by which he was appointed a final account of his proceedings touching the property of the incompetent. Notice of the applica- tion for settlement of such account shall be given, in such manner as the court may direct, to the sureties on the official bond of the committee or the legal representatives of such sureties, and to the executor or administrator of the decedent, if any; and if there be no executor or administrator, to the decedent's husband or wife, and heirs and next of kin, or if any of those persons Aall have died, to his executor or administrator. COMMITTEE OF INCOMPETENT. 355 -' B. Termination of committee's power. The authority of the committee is Hmited to the life of the incompetent.^^ The title to the estate of the lunatic passes, upon his death, into the hands of his administrators.^^ Thereafter, any legal claims against the estate can be en- forced only in the manner prescribed by law.^* The estate of the deceased incompetent is turned over to the executor or administrator, and the debts of the estate are paid by such representative.^^ The representative is entitled to receive any property which belonged to the incompetent at the time of his death.^^ C. Duty to account. The provisions of section 1383 do not relieve the committee of a deceased incompetent from his duty to account in a legal proceeding.*"^ The Supreme Court has inherent jurisdiction of an action by the committee for that purpose, although statutory pro- visions authorize a proceeding by petition for the discharge of a trustee.^^ Where no executor or administrator is ap- pointed oyer a lunatic's estate, the committee may apply to the court for his discharge, on giving notice to the heirs and next of kin.' Upon such discharge the committee should be al- lowed payments made by him before his appointment for claims against the lunatic and for sums expended in the sup- port of the lunatic's children.^^ The fact that the lunatic has died and the committee has been appointed administrator of 62. Matter of Beckwith, 87 N. Y. 84 N. Y. Supp. 15; aff'd, 176 N. Y. 503; Matter of Myer's Estate, 161 607. N. Y. Supp. 1111. 63. Forbell v. Denton, 53 App. Div. Continuance of pending proceeding. — 402, 65 N. Y. Supp. 1120. A person who had been adjudged in- 64. Matter of Beckwith, 87 N. Y. competent died while the court had 503; Carter v. Beckwith et al., 128 under consideration a petition for the N. Y. 312. payment out of the funds in the hands 65. Matter of Dowd, 19 Misc. 688, of the committee the necessary dis- 44 N. Y. Supp. 1094. bursements of the petitioner and his 66. Matter of Myer's Estate, 161 costs and counsel fees; and it was held N. Y. Supp. 1111. that the court had power to have the 67. Downing v. Whitney, 46 App. incompetent person's executor brought Div. 307, 61 N. Y. Supp. 540. into the proceeding and to continue 68. Downing v. Whitney, 46 App. the same, the disbursements, etc., being Div. 307, 61 N. Y. Supp. 540. a charge upon the funds and not an 69. Matter of Forkell, 8 App. Div. ordinary claim against the estate. 397, 40 N. Y. Supp. 847. Matter of Ferris, 86 App. Div. 559, 356 COMMITTEE OF INCOMPETENT. his estate is not available to the sureties on the bond of the committee to exonerate them from liability on the ground that their title passed to their principal as administrator.™ 70. Forbell v. Denton, 53 App. Div. 402, 65 N. Y. Snpp. 1130. COMPTROLLER, DECISION IN TAX CASES. HOW REVIEWED. See Tax Law. CONDEMNATION OF REAL PROPERTY.* ARTICLE I. The power of condenuiation. A. Definition. B. Power lodged in sovereign. C. Limitations on the power of eminent domain 1. Constitution. 2. Question for legislature. 3. Private use. 4. Necessity. D. Compensation must be made. 1. In general. 2. Time of payment. 3. Compensation without interest. 4. Property rights for which compensation is required. 5. Additional servitude on highway. E. Property subject to condemnation. 1. In general. 2. Property already devoted to public use. F. By whom power exercised. 1. Delegation of power. 2. Strict construction of delegated power. 3. Strict pursuance of requirements. 4. Railroads. 5. Street railways. 6. Electric companies. 7. Municipal corporations. ARTICLE n. ' The Condemnation Law. A. Condemnation Law, § 2. Definitions. B. Condemnation I^aw, § 3. Application of this chapter. C. Condemnation Law, § 27. Limitations and exemptions. D. Condemnation Law, § 26. Power of court to make necessary orders. E. The statute in general. F. Nature of proceeding. G. Strict compliance with all requisites. ARTICLE in. Petition and proceedings thereon. A. Contents of petition. 1. Condemnation Law, § 4. Petition; what to contain. 2. Petition in general. * For a further discussion of the questions treated in this chapter, see Weed's Practical Eeal Estate Law; Aron's Gist of the Real Property Law; B., C. & G. Consolidated Laws. [357] 358 CONDEMNATION OF REAL PROPEETY. 3. Information and belief. 4. Verification of pleadings. 5. Description of property. 6. Public use and necessity. 7. Description of owners. 8. Inability to agree with owner. 9. Intention to complete work and that preliminary steps have been taken. 10. Amendment to petition. 11. Variance. 12. Objections to sufficiency of petition. B. The petitioner. C Notice of presentation of petition, and service thereof. 1. Condemnation Law, § 5. Notice to be annexed to petition; service. 2. Condemnation Law, § 6. Service of petition and notice. 3. Who is "owner." 4. Necessity of notice. 5. Purpose of notice. 6. Contents of notice. 7. Bringing in other parties. D. Jurisdiction of courts. E. Joinder of applications. ARTICLE IV. Notice of pendency of action. ARTICLE V. Appearance and answer. A. Condemnation Law, § 7. Appearance of infant, idiot, lunatic or habitual drunkard. B. Condemnation Law, § 8. Appearance. C. Condemnation Law, § 9. Answer; what to contain. D. General appearance. E. Objections on return day. F. Infant. G. Contents of answer. H. Failure to deny allegations. I. Default of owner. ARTICLE VI. Possession of property pending the proceeding. A. Condemnation Law, § 23. Party in possession may stay on giving security. B. Condemnation Law, § 24. Temporary possession pending proceedings. C. Continuance of plaintiif's possession. D. Award of possession to plaintiff. CONDEMNATION OF REAL PBOPEETY. .359 ARTICLE VII. Trial and judgment. A. Condemnation Law, § 11. Trial of issuea. B. Condemnation Law, § 13. Judgment; costs when to defendant; commis- sioners. C. Objections to sufficiency of papers. D. Issues. E. Burden of proof. F. Action of court. G. Reference. H. Judgment. I. Notice of trial. J. Who should be appointed as commissioners. K. Removal or substitution of commissioners. L. Time of first hearing before commissioners. ARTICLE VIII. Hearing befo're commissioners. A. Condemnation Law, § 14. Duties and powers of commissioners. B. General power of commissioners. C. Oath of office. D. Right of landowner to be heard. E. Disagreement. F. Objection of commissioners. G. Examination of piremises. ARTICLE IX. Determinatio'n of value of premises. A. General rules as to allowance of damages. 1. In general. 2. Value to petitioner. 3. As of what time. 4. Damages to property not taken. 5. Availability for more than one purpose. 6. Lands divided into lots. 7. Fixtures. 8. Prior trespass. 9. Allowance for prospective benefits. 10. Consideration of matters outside of record. B. Valuation in particular cases. 1. Allowance for property to be used for water supply. 2. Property taken for railroad purposes. 3. Lands for highway purposes. 4. Lands for canal purposes. 5. Structure on premise?. 6. Leasehold interest. 7. Easements. 8. IilJUi^' to business. 360 CONDEMNATION OF REAL PROPERTY. O. Admissibility of evidence bearing on value. 1. Application of technical rules. 2. Profits from conducting business on premises. 3. Consideration for previous transfer of land. 4. Value of other parcels. 5. Rentals received as bearing on value. ARTICLE X. Report and award. A. Form of report. B. Modification of report by commissioners. 0. Distribution of award. 1. In general. 2. Conflicting claimants. 3. Effect of death of owner. 4. Grantor and grantee. 5. Owner and incumbrancer. 6. Landlord and tenant. 7. Dominant and servient easements. 8. Life tenant and remainderman. 9. Husband and wife. D. Interest on award. E. Rights covered by award. ARTICLE XL Final order and judgment thereon. A. Condemnation Law, § 15. Confirmation or setting aside report; deposit when payable. B. Condemnation Law, § 17. Judgment, how enforced; delivery possession of premises; when writ of assistance to issue. C. Opening of default before comraissioners. D. Receipt of evidence on hearing. E. General grounds for setting aside report. F. Misconduct of commissioners. G. Sending report back to commissioners for correction. H. Modification of report. 1. Amount of damages. J. Receipt of improper evidence. K. Waiver of objections to conduct of appraisal. L. Vacating or modifying order of confirmation. M. Parties on application for final order. N. Order of confirmation as a judgment. O. Conclusiveness of order of confirmation. P. Enforcement of judgment. 'Q. Title acquired by petitioner, ARTICLE Xn. Costs. A. Condemnation Law, § 16. Offer to purchase; costs; additional allowance. B. Trial before appointment of commissioners. CONDEMNATION OF REAL PROPERTY. 361 0. Abandonment and discontinuance of proceedings. D. Costs under special statutes', E. Authority of commissioners. F. Award more favorable than offer. G. No offer made by plaintiff. H. Cases not covered by section 16. 1. Award less than offer. J. Additional allowance. K. Disbursements of owner. L. Several bills of costs. M. Opening default of owner. ARTICLE XIII. Abandonment and discontinuance of proceeding. A. Condemnation Law, § 18. Abandonment and discontinuance of proceeding. B. Eight of discontinuance. O. Imposition of terms. ARTICLE XIV. When objections may be raised. ARTICLE XV. Appeal and new appraisal. A. Condemnation Law, § 19. Appeal from final orders; stay. B. Condemnation Law, § 20. Appeal from judgment by plaintiff. O. Condemnation Law, § 21. When appellajte division may direct a new ap- praisal. D. Appeal to Appellate Division. 1. From what orders allowed. 2. Waiver of right of appeal. 3. Perfection of appeal. 4. Stay of proceedings. 5. Action of Appellate Division. E. Appeal to the Court of Appeals. F. New appraisal. 1. In general. 2. Conclusiveness of second appraisal. ARTICLE XVI. Precedents. A:. Proceeding by village against water company. 1. Petition. 2. Order overruling preliminary objections to foregoing petition. B. Proceeding by City of New York to acquire lands and waters for a water supply. 1. Petition for the appointment of commissioners of appraisal. 2. Order appointing commissioners. 3. Notice of claim for one of the parcels sought to be condemned. 4. Report of commissioners. 362 ' CONDEMNATION OF REAL PROPERTY. 5. Objections to report. 6. Order confirming awards. C. Proceeding by municipal corporation to acquire lands for park. 1. Petition. 2. Notice. 3. Order appointing commissioners. 4. Oatli of commissioners. 5. Report of commissioners. 6. Notice of hearing. 7. Notice of presentation of report. 8. Order confirming report. 9. Notice of application to tax expenses of proceeding. 10. Affidavit by commissioner. 11. Order taxing costs and expenses. D. Proceedings by railroad to acquire land. 1. Notice of presentation of petition. 2. Petition. 3. Order appointing commissioners. 4. Report of commissioners. 5. Exceptions to report. 6. Notice of motion for confirmation of report. 7. Order confirming commissioners'" report. E. Proceeding by a street railway to acquire easement. 1. Petition. 2. Notice of presentation of petition. 3. Answer to petition. 4. Decision at special term. 6. Final order and judgment. ARTICLE I. THE POWER OF CONDEMNATION. A. Definition. The right of eminent domain is the right of the State to take, at any time, the private property of any citizen for pub- lic use upon making just compensation.^ 1. Matter of Simmons, 58 Misc. 581, appropriate, otherwise than by taxa- 109 N. Y. Supp. 1036. tion and its police authority . . . other definitions. — Eminent domain private property for public use.'' Dil- ls that sovereign power vested in the Ion, Mun. Corp. (4tih ed.), § 584. people by which they can, for any Eminent domain is the right of the public purpose, take possession of the nation or the State, or of those to property of any individual upon just whom the power has been lawfully compensation paid to him. Am. & delegated to condemn private property Eng. Enc. Law, Vol. 10 (2d ed.), p. for public use, and to appropriate the 1047. ownership and possession of Such prop- " The right of every government to crty for such use upon paying tlhe CONDEMNATION OF KEAl, PKOPERTY. 363 B. Powec lodged in sovereign.. The power of eminent domain is lodged in the Sovereign.^ Before the organization of our government, this right was exercised throughout the civilized world, and its exercise re- stricted to cases of public necessity and just compensation. The provisions on this subject in the Constitutions of the United States and of the State of New York are only declara- tory of a previously existing universal principle of law.^ It is an attribute of political sovereignty, and constitutional pro- visions relating thereto operate only on the mode of exercis- ing the right.* The Constitution of the United States cannot be so con- strued as to take away the right of eminent domain from the States ; nor does the exercise of such right interfere with the inviolability of contracts. All property is held by tenure from the State and all contracts are made subject to the right of eminent domain.^ The United States government has the power.* And each State has the right by virtue of its statehood, whether that statehood be self-created by treaty or confirmed by Federal authority.'' The State has all the power of eminent domain there is and all that any sovereign has, sub- ject to the limitations of the Constitution.* The sovereign power may delegate the power to municipalities or to public service corporations, but the full power always remains in the State. In theory at least, the title of the citizen to the real estate held by him is derived from the State, and eminent domain is but the resumption by the State of its possession.' owner a due compensation to be as- 9. Right of resumption. — The emi- certained according to law. Cyc, Vol. nent domain, the highest and most ex- 15, p. 557. act idea of property, remains in the 2. Bloodgood V. The Mohawk & government, or in the aggregate body Hudson R. R. Co., 18 Wend. 9, 13. of the people in their sovereign capac- 3. People V. White, 11 Barb. 26. ity; and they have a right to resume 4. People v. B. & O. R. R. Co. 117 the possession of the property, in the N. Y. 150. manner directed by the Constitution 5. West River Bridge Oo. v. Dix, 6 and laws of the State, whenever the How. (U. S.) 507. public interest requires it. This right 6. .United States v. Chicago, 7 How. of resumption may be exercised not (U. S.) 185. only where the safety, but also where 7. Huse V. Glover, 119 U. S. 543; the interest or even the expediency of Illinois Central R.' R. v. Hlinois, 146 the State is concerned, as where the U. S. 387. land of the individual is wanted for 8. People v. 'Adirondack Ry. Co., 160 a road, canal, or other public improve- N. Y. 225. ment. The only restriction upon this 364 CONDEMNATION OF REAL PROPERTY. The taking of private property for public use can be justi- fied only by virtue of the sovereign right of eminent domain.^" Q. Limitations on the power of eminent domain. 1. Constitution. Article 1, section 6 of the New York Constitution provides, " Nor shall private property be taken for public use without just compensation." And section 7 provides that " When private property shall be taken for any public use, the com- pensation to be made therefor, when such compensation is not made by the State, shall be ascertained by a jury, or by the supreme court with or without a jury, but not with a referee, or by not less than three commissioners appointed by a court of record, as shall be prescribed by law. While the express provision of the Constitution against taking private property for public use without just compen- sation was not in the State Constitution until 1821, the pro- vision was based on Magna Charta. It is declaratory of a great and fundamental principle of government, and such right was secured by the provision of the Constitution of 1777, which incorporated into our law so much of the common law of England, and of the acts of the Legislature of the Colony of New York, as together did form the law of the colony on April 19, 1775." 2. Questions for legislature. It belongs to the legislative power to determine for what public purposes private property shall be taken,^ and the necessity or expediency of the appropriation.^^ The power to exercise the right remains dormant, until the legislative power authorizes its use." So, too, it is within the power of the legislature to determine what estate shall be condemned, and, in its discretion, to authorize the taking of any fee or vested estate.-'^ power, in cases where the public or 11. People ex rel. New York Central, the inhabitants of any particular sec- etc., E. Co. v. Priest, 206 N. Y. 274. tion of the State have an interest in 12. BufiFalo, etc., R. Co. v. Brainard, ■ the contemplated improvement as citi- 9 N. Y. 100. zens merely, is that the property shall 13. See infra, Art. I-C-4, Necessity, not be taken for the public use with- 14. See infra, Art. I-F. By whom out just compensation to the owner, exercised. and in the mode prescribed by law. 15. Matter of City of Rochester, 24 Beekman v. Saratoga & Schenectady App. Div. 383, 48 N. Y. Supp. 764. E. R. Co., 3 Paise, 73. See, infra, Art. I-E. Property sub- 10. People V. White, 11 Barb. 26. ject to condemnation. CONDEMNATION OF REAL PROPERTY. 365 3. Private use. Article 1, section 7 of the State Constitution permits the power of eminent domain for private highways and the drain- age of agricultural lands. But, except in those particular cases, private property cannot he taken for private pur- poses.^^ No legislative act can authorize the taking of private property for private purposes." The use must be public.^^ Generally, whether the use to which private property may be devoted by legislative power is in fact public or private is a judicial question, and the courts are not concluded by any declaration of the law-making power, as to the nature of the use.^^ B]it, so long as the intended use of an improvement is not restricted to private parties or private interests, but is open to the whole, it is no valid objection to an exercise of the right of eminent domain that it will benefit one person, or some class of persons, more than others.^" A municipality may under legislative authority, take land, not actually re- quired for the traveled way, in order to find ample space for light and air, beauty and adornment.^^ Whether the use of 16. Matter of Tuthill, 163 N. Y. 133; Sweet Mfg. Co. v. Van der Hoof, 137 App. Div. 492, 121 N. Y. Supp. 842. Private railway switch. — A motion made by a private m.anufacturing cor- poration for permission to construct a railroad switch upon a public high- way for petitioner's private use will be denied where the plan includes the condemnation of lauds belonging to private owners not included in the highway as well as easements in the highway owned by the abutting own- ers by reason of the fact that they own the fee of the highway. Sweet Manufacturing Co. v. Van Der Hoof, 137 App. Div. 492, 121 N. Y. Supp. 842. The easement of an abutting owner in a public street is private property and cannot be condemned except for public use. Sweet Mfg. Co. v. Van der Hoof, 137 App. Div. 492, 121 N. Y. Stipp. 842. 17. Powers v. Bergen, 6 N. Y. 358; Matter of Eureka Warehouse Co., 90 N. Y. 42; Sweet Mfg. Co. v. Van der Hoof, 137 App. Div. 492, 121 N. Y. Supp. 842. 18. Emburg v. Connors, 3 N. Y. 511; Buffalo & N. Y. R. v. Brainard, 9 N. Y. 100; People v. Smith, 21 N. Y. 595. 19. The Waterloo Woolen Mfg. Co. V. Shanahan, 128 N. Y. 345; Matter of Petition of Burns, 155 N. Y. 23; City of Rochester v. Holden, 224 N. Y. 386; Queens Terminal Co. v. Schmuck, 147 App. Div. 502, 132 N. Y. Supp. 159; Ontario Knitting Co. v. State, 147 App. Div. 316, 131 N. Y. Supp. 918; aff'd, 205 N. Y. 409. 20. Matter of Burns, 155 N. Y. 23. Palisades Park. — The condemnation of lands for the purpose of conserving the Palisades of the Hudson river as an adjunct to a public park is for a public use and within the power of the Legislature. Bunyan v. Comrs. of Palisades Interstate Park, 167 App. Div. 457, 153 N. Y. Supp. 622. 21. Matter of Curran, 38 App. Div. 82, 55 N. Y. Supp. 1018. Omamwtal couityaids along bigh- 366 CONDEMNATION OF REAL PROPERTY. the streets is a public use, for wMcli private property is authorized to be taken, will depend upon the object aimed at and whether the plan has such an obvious or recognized char- acter of public utility as to justify the right of eminent domain.^^ A true criterion by which to judge of the character of the use is to determine whether the public may enjoy it by right or only by permission.^^ A contemplated possible limited use by a few, and not then as a right, but by way of permission or favor, is not a public use, and so is not sufficient to authorize the taking of private property against the will of the owner.^^ The fact that the structure intended to be built on land to be taken tends inci- dentally to benefit the public by conferring additional accom- modations for business is not sufficient, if the structures are to remain under private ownership and control, and no right to their use or their management is conferred upon the pub- lic.^^ It is not sufficient that a condemnor intends to devote lands acquired to some public use ; they must be devoted to the specific use, or a part thereof, for which the power to con- demn was given.^^ 4. Necessity. If the use of the lands sought is public, the Legislature, or the instrumentality it employs, is the sole judge of the neces- sity of the condemnation.^'' The necessity of laying out a new street in a city is a matter exclusively for the determination of the city officials.^^ way. — Where the Legislature passed a 25. Matter of Eureka Ware House law to widen a city street twenty feet Co., 96 N. Y. 42. on eaoh side, reserving the added space 26. Queens Terminal Co. v. Sehmuck, for ornamental courtyards, such taking 147 App. Div. 502, 132 N. Y. Supp. was for a public purpose, and ft proper 159. subject for the exercise of the power of 27. Buffalo & N. Y. R. Co. v. Brain- eminent domain. Matter of City of ard, 9 N. Y. 100; Matter of City of New York, 57 App. Div. 166, 68 N. Y. BuflFalo, 189 N. Y. 163; Matter of Pub- Supp. 196; aff'd, 167 N. Y. 624. lie Service Comm., 217 N. Y. 61; Bun- 22. Holmes Electric Protective Co. yan v. Commrs. of Palisades Interstate V. Williams, 228 N. Y. 407. Park, 167 App. Div. 457, 153 N. Y. 23. Matter of Split Rock Cable Co., Supp. 622; People ex rel. Ithaca v. 58 Hun, 351, 12 N. Y. Supp. 116; D., L. & W. R. R. Co., 11 App. Div. aff'd, 128 N. Y. 408. 280, 42 N. Y. Supp. 1011; affirmed, 24. Matter of the Appli-cation of without opinion, 159 N. Y. 545. the iSplit Rock Table Road Co., 128 28. People ex rel. Ithaca v. D., L. N. Y. 408. & W. R. Co., 11 App. Div. 280, 42 CONDEMNATION OF REAL PROPERTY. 367 Whether the pubhc exigency requires the taking of private property for public use is a legislative question, the deter- mination of which, by the Legislature is, generally speaking, final and conclusive.^^ As the exercise of this power is in derogation of individual rights it should be allowed only when the necessity clearly ap- pears, and the proposed use is clearly embraced within the legitimate objects of the power.^" The necessity need not be absolute, a reasonable necessity being all that is required.^^ The mere fact that land proposed to be taken by a railroad company is not needed for the present and immediate pur- poses of the petitioner is not necessarily a defense to a pro- ceeding to condemn it.^^ A railroad corporation in taking land is not limited to its present use, but may acquire for its prospective use, provided the necessity for such use, in the immediate future, is estab- lished beyond reasonable doubt.^^ Where there is no public necessity for the construction of a proposed railroad, the company is not entitled to condemn land for a right-of-way, the promoters being unauthorized to take property for a right-of-way for their own use.^* D. Compensation must be made. 1. In general. When private property is taken for public purposes, the constitutional provisions require compensation to the owner .^ N. Y. Supp. 1011; affirmed, without 32. Matter of S. I. Rapid Transit opinion, 159 N. Y. 545. Co., 103 N. Y. 251. 29. 'City of Rochester v. Holden, 224 33. Matter of Mayor (East 161st N. y. 386. St.), 52 Misc. 596, 102 N. Y. Supp. 30. Matter of Staten Island Rapid 500; afif'd, 135 App. Div. 912, 120 Transit Co., 103 K Y. 251; Erie R. N. Y. Supp. 839; aff'd; 198 N. Y. 606. Co. V. Steward, 170 N. Y. 172; People 34. People ex rel. Potter v. Bd. of ex rel. Hollock v. Purdy, 72 Misc. 122, Railroad Com'rs, 124 App. Div. 47, 108 130 N. Y. Supp. 1077. N. Y. Supp. 288; aflf'd, 192 N. Y. 573. Evidence held sufficient to establish 35. Matter of City of Rochester v. the existence of a reasonable necessity Holden, 224 N. Y. 386; German- Ameri- for the condemnation of land to in- can Real Estate Title Guarantee Co. /. crease the water supply of a city. City Myers, 32 App. Div. 41, 52 N. Y. Supp. of Rome v. Whitestown Water-Works 449; Beekman v. S. & S. R. R. Co., 3 Co., 113 Ap;j. Div. 547, 100 N. Y. Paige, 45; Varick v. Smith, 5 Paige, Supp. 357; aff'd, 187 N. Y. 542. 137; Embury v. Conner, 3 N. Y. 511; 31. People V. Fisher, 190 N. Y. 468. Buffalo & N. Y. R. R, Co. v. Brainard, 368 CONDEMNATION OF EEAl, PROPERTY. An interest in lands in a city is as sacred to the owner as it is in the country, and in either place he is protected by the constitutional provision.^^ The fact that the damages are small and of little financial importance, does not affect the principle involved.^''' All that the Constitution of the State or of the United States or justice requires in a condemnation for a public purpose, is that a just compensation shall be made to the owner ; his property can then be taken without his assent.^* 2. Time of payment. In order to make a lawful taking by the State under eminent domain, the provision for making compensation must pre- exist the taking ;^^ and it must be so definite and certain as to leave nothing open to litigation except the title to the property taken and the amount of damages which the owner may re- 9 N. Y. 100; People v. Smith, 21 N. Y. 595. Designation of court. — If the Legis- lature requires resort to the agency of it court of record to determine the compensation to be made for the tak- ing of lands, it must designate a court, which, with respect to the subject- matters and persons, is competent as possessing local jurisdiction over them. Matter of City of Buffalo, 139 N. Y. 422. Setting off benefits. — ^The provisions of section 822 of the charter of 1901, chap. 466, of the city of New York re- lating to the acquisition of lands for the improvement of the water front and authorizing the setting off of benefits against an award for land to be taken therefor must be regarded solely as an exercise of the power of eminent domain and are unconstitu- tional; since the full value of the land taken, in money alone, without any de- duction for benefits which may result from such use is the measure of that just compensation guaranteed the owner by the Constitution and espe- cially where, as in this case, the city acquires the fee and is under no obliga- tion to continue the public use for which the land was taken. Matter of City of New York, 190 N. Y. 350. Inadequacy of appropriation. — In proceedings by a municipal corporation to acquire title to lands for a public park, the municipality cannot be vested with title except upon payment of the sum appraised as the value of lands taken, and the owner cannot, there- fore, be harmed by the possible inade- quacy of the appropriation. Village of Babylon v. Bergen, 69 Misc. 574, 124 N. Y. Supp. 871. Statute of Limitations. — Before a citizen's right to compensation for property taken for public purposes can be cut off by a Statute of Limitations, notice of the event must be brought home to him by the iState. Matter of City of New York, 212 N. Y. 538. 36. Osborne v. Auburn Telephone Co., 189 N. Y. 393. 37. Matter of Grade Crossing Com'rs, 154 N. Y. 561. 38. Gfarrison v. City of New York, 21 Wall. (U. S.) 196. 39. Remington v. State, 116 App. Div. 522, 101 N. Y. Supp. 952. CONDEMNATION OP REAL PKOPEBTY. OOi) cover.*" But, if provision for payment is so made, tiie actual payment of the compensation need not precede the taking.*^ A statute authorizing the condemnation of lands must pro- vide either that adequate compensation for the lands to be ap- propriated be made before possession or title is acquired, or that payment therefor must be secured beyond a doubt to the owner.*^ A provision of statute law authorizing the taking of private property by the State or one of its municipal cities under the right of eminent domain, without providing for payment prior to or concurrently with the taking, is constitutional if a sure, sufficient, and convenient remedy is provided by which the owner can subsequently compel payment by legal proceed- ings.*^ 3. Compensation without interest. The payment of interest is not a matter of right ; and an act providing for taking property for public use is not uncon- stitutional because, in its provisions for making compensation to the owner, it does not provide for the payment of interest to him from the time of the passage of the act to the time when the award shall be paid.** If the owner obtains the value of his property at the time his title and possession are taken from him, he obtains all the compensation granted by the Constitution.*® 4. Property rights for which compensation is required. A city is without power to take private docks and wharves for a highway without compensating the owners.** Serious and substantial injury to residence property re- sulting from use of soft coal in operating a municipal pump- 40. Litdhfield v. Bond, 186 N. Y. 66, 494; aff'd, 192 N. Y. 319. citing Sweet v. Rechel, 150 U. S. 380, 43. Connolly v. Van Wyck, 35 Misc. 398; Sage v. City of Brooklyn, 89 746, 72 N. Y. Supp. 382; Kelley v. N. y. 189; Matter of Mayor, etc., of Mayor, 89 Hun, 246, 35 N. Y. Supp. N. y., 99 N. Y. 569; Brewster v. Eog- 1109. era Co., 169 N. Y. 73. 44. Matter of City of New York, 41. Litchfield v. Bond, 186 N. Y. 66; 68 Misc. 509, 125 N. Y. Supp. 209. Matter of Gilroy, 32 App. Div. 216, 52 45. Matter of Trustees, etc., 137 N. Y. Supp. 990; Astor v. Thwaites, N. Y. 95. 170 App. Div. 624, 156 N. Y. Supp. 46. City of Buffalo v. D., L. & W. 730. R. R. Co., 68 App. Div. 488, 74 N. Y. 42. State Water Supply Co. v. Cur- Supp. 343; aflarmed, without opinion, tis, 125 App Div. 117, 109 N. Y. Supp. 178 N. Y. 561. 24 370 CONDEMNATION OF REAL PROPERTY. ing station, is an appropriation of property to the extent of the injury.^^ The closing of a street from which one had convenient ac- cess to his lot, will afford him a ground for a claim for damages, though he is left a means of access by way of an intersecting street.^^ Easements of light, air and access are property rights which cannot be talien without just compen- sation.'*^ Compensation is not to be made to one whose lands are not taken, although he suffers consequential damages by reason of the construction of a road.^" A change in the grade of a street does not constitute a tak- ing of property within the meaning of the Constitution, and the abutter is without remedy unless provision therefor is made by statute.^^ But statutes are now generally enacted to provide compen- sation for one damaged by a change of grade.^^ Where the city of New York appropriates the tideway on the Harlem river, the owner of uplands abutting thereon is entitled to compensation for the destruction of his riparian rights, where such taking was not connected with navigation or commerce.^^ The owners of land contiguous to the Mohawk river taken for the Barge canal, are not entitled to compen- sation as owners for the land connected with those uplands under and to the center line of the river.^* A law providing for a residence district in cities of the second class in which no building other than a private dwell- ing, a two-family dwelling, etc., shall be erected, cannot be sustained as the proper exercise of the power of eminent domain, no provision being made for compensation to the owners of property taken.^^ A riparian owner along a creek 47. Gordon v. Silver Creek, 127 App. Ormond, 178 App. Div. 151, 165 N. Y. Div. 888, 112 N. Y. Supp. 54; aff'd, 197 Supp. 179; aff'd, 221 N. Y. 283; In re N. Y. 509. Grant Ave., 152 N. Y. Supp. 13. 48. Egerer v. N. Y. C. R. R. Co., 39 52. People ex rel. Mott Wlieel Works App. Div. 652, 57 N. Y. Supp. 133. v. Hayes, 178 App. Div. 301, 165 N. Y. 49. Bellinger v. City of New York, Supp. 436; modified, 179 App. Div. 962, 181 App. Div. 254, 168 N. Y. Supp. 166 N. Y. Supp. 1109; Matter of Leroy 271. Street, 188 App. Div. 58, 176 N. Y. 50. Barnes v. Southside R. R. Co., 2 Supp. 83. Abb. N. S. 415; Arnold v. H. R. R. Co., 53. Matter of City of New York, 168 49 Barb. 108. N. Y. 134. 51. McCabe v. City of New York, 54. Danes v. State, 219 N. Y. 67. 213 N. Y. 468; People ex rel. Crane v. 55. People ex rel. Lankton v. Rob- CONDEMNATIOK OF EEAL PROPERTY. 371 has a right to the flow of water along his lands, and he cannot be deprived of this right without compensation.^^ 5. Additional servitude on highway. Whether a public service corporation, in seeking to use a street, the fee of which is in the abutting owner, is required to compensate such owner, depends upon whether the proposed use constitutes what is known as an " additional servitude." A steam,^'^ or electric,^^ or elevated,^* or subway^" railway, con- stitutes an additional servitude and entitles the abutting owner to compensation. Likewise such owner is entitled to compensation before a telephone company can maintain its line along the street.®^ E. Property subject to condemnation. 1. In general. The general principle is that all property is subject to the right of eminent domain, irrespective of the use to which it has been already applied or the different estates or interests erts, 90 Misc. 439, 153 N. Y. Supp. 143; aff'd, 171 App. Div. 890, 155 N. Y. Supp. 1133. 56. Van Etten v. City of New York, 226 N. Y. 483. 57. Naked railway route.— riiern is no property in a naked railroad route, existing on paper only, which the State is obliged to pay for when it needs the land covered by that route for a great public improvement, and its officers are authorized to act by appropriate legislation. People v. Adirondack Rail- way Co., 160 N. Y. 225; reversed, 176 U. S. 335. 58. Craig v. Rochester, etc., R. Co., 39 N. Y. 404; Peck v. Sdhenectady Ea,ilway Co., 67 App. Div. 359, 73 N. Y. Supp. 794; aff'd, 170 N. Y. 298. 59. An elevated railway company cannot enlarge its structures on city streets so as to destroy easements of light, air and access of an adjoining owner, unless just compensation is made. Rothschild v. Interborough Rapid Transit Co., 162 App. Div. 532, 147 N. Y. Supp. 1040. 60. Matter of City of New York (New Street), 215 N. Y. 109; Matter of Bd. of Rapid Transit R. R. Com'rs, 128 App. Div. 103, 112 N. Y. Supp. 619; modified, 197 N. Y. 81. 61. Eels V. Am. Tel. & Tel. Co., 143 N. Y. 133; State Line Telephone Co. V. Ellison, 121 App. Div. 499,- 106 N. Y. Supp. 130; New York Telephone Co. v. DeNoyelles Brick Co., 154 App. Div. 845, 139 N. Y. .Supp. 748; aff'd, 209 N. Y. 526; New York Telephone Co. v. State, 169 App. Div. 310, 154 N. Y. Supp. 1059; Andrews v. Delhi & Stam- ford Tel. Co., 36 Misc. 23, 72 N. Y. Supp. 50; aff'd, 66 App. Div. 616, 73 N. Y. Supp. 1129; Hudson River Telei- phone Co. v. Forrestal, 56 Misc. 133, 106 N. Y. Supp. 404. Conduit. — The placing, pursuant to a resolution of the common council of a city, beneath the surface of a street, the fee of which is in the abutting owners, of a conduit for telephone wires owned by a private corporation, which have previously been maintained on poles erected in the street, does not 372 CONDEMNATION OF REAJL PROPERTY. held in it.®^ Public, as well as private rights of the citizen may be condemned.^^ The property of a corporation is equally liable with the property of a private citizen to be taken for public uses.^* It is within the power of the Legislature to determine what estate shall be taken, and to authorize the taking of any fee or vested estate in its diseretion.*^ The right to use running water,^® or the right of a millowner to use the waters of a stream as a propelling power at his mill is an incorporeal hereditament connected with the land, and may be acquired, under the provisions of a statute, upon due compensation being made therefor.^'' But the extent and quality of the in- terest taken should be measured by public convenience and necessity ; and, unless necessary, an unqualified fee cannot be taken by a corporation without express authority .^^ Where a street has been used as a highway for 30 to 40 years, for 20 years of which it has been under the exclusive control of the city, condemnation proceedings should not be instituted to ac- quire a portion of the fee for street purposes, where no ob- jection has been made by the abutting owners to the use of the fee for such purpose and the real object of the proceeding is to afford the city the right to cause the erection of an ele- vated railroad in the street.®^ The Legislature has power to determine what estate shall be taken by the State in land required for public purposes, even if the public use is special and not necessarily perman- ent.™ An easement is a property right which is subject to con- demnation.''^ And the right of eminent domain may be exer- cised over the reversion.''^ Section 464 of the Education Law constitute an additional burden upon 67. Bank of Auburn v. Roberts, 44 the street which will entitle the abut- N. Y. 192; Stamford Water Co. v. ting owners to additional compenea- Stanley, 39 Hun, 424. tion. Castle v. Bell Telephone Co., 49 68. Hudson & Manhattan R. R. Oo. App. Div. 437, 63 N. Y. Supp. 482. v. Wendel, 193 N. Y. 166. 62. Pierce on Railroads, 151, and 69. In re Ely Ave., 150 N. Y. Supp. cases cited. 698. 63. People v. B. & 0. R. Co. 117 70. EWridge v. City of Binghamton, N. Y. 150. 120 N. Y. 309. 64. Prospect Park & Coney Island 71. People v. Haines, 49 N. Y. 587; Co. V. Williamson, 91 N. Y. 522. Ray v. New York Bay Extension R. 65. Matter of City of Rochester, 24 Co., 34 App. Div. 3, 53 N. Y. Supp. App. Div. 383, 48 N. Y. Stupp. 764. 1052. 66. Gardner v. Newburgh, 2 Johns. 72. Heard v. Brooklyn, 60 N. Y. 242. Ch. 161. CONDEMNATION OF REAL PROPERTY. 373 contains restrictions as to the property to be condemned for school purposesJ^ Statutes are strictly construed as to inter- est authorized to be takenJ^ 2. Property already devoted to public use. It is a general principle that where lands have once been acquired or taken for public use they cannot be taken for an- other public use, at least if such other use would interfere with or destroy that first acquired, unless the intention of the Legislature that such lands should be so taken is shown by' express terms or by necessary implication^^ Neither a private nor a municipal corporation can, under a general power to take lands for a public use, take from another corporation having the like power, lands or property held by it for public purpose pursuant to its charter.™ The general rule applies whether the lands in question were acquired by purchase or condemnation.'^'^ The rule only applies where it is sought to deprive the per- son or corporation to which the first public use is granted of a substantial use of the property. An easement may be ac- quired by condemnation in such property, when it may be en- joyed without detriment to the public and without interfering with the use to which the lands are devoted.^^ 73. Board of Education v. O'Kourke, 76. Matter of Rochester Wa/ter 191 App. Div. 317, 181 N. Y. Supp. Com'rs, 66 N. Y. 413; The Matter of 21. And see B. C. & G. Consolidated N. Y. & B. R. R. Co., 20 Hun, 201; In Laws, 2nd edition, p. 2193. re Boston & Albany R. R. Co., 53 N. Y'. 74. People ex rel. Washburn v. Com- 574; Rensselaer & Saratoga R. R. Co. mon Council, etc., of Gloversville, 128 / Davis, 43 N. Y. 137; Brooklyn Park App. Div. 44, 112 N. Y. Supp. 387. Com'rs v. Armstrong, 45 N. Y. 234; 75. Prospect Park & Coney Island N. Y. City, etc., R. R. Ca v. Central Co. V. Williamson, 91 N. Y. 522; Union Telegraph Co., 21 Hun, 261; N. Y. C. & H. R. R. Co. V. City of Buf- Prospect Park & C. I. R. R. Co. v. falo, 200 N. Y. 113; Matter of City of Williamson, 91 N. Y. 552. New York (Saratoga Ave.), 226 N. Y. 77. Matter of City of New York 128; Matter of City of New York (Saratoga Ave.), 226 N. Y. 128; Mat- (Saratoga Avenue), 180 App. Div. 638, ter of City of New York (Seneca Ave- 168 N. Y. Supp. 180; Matter of the nue), 98 Misc. 712, 163 N. Y. Supp. City of Buffalo, 72 Hun, 422, 25 503. N. Y. Supp. 218; Matter of the City 78. Matter of Rochester Water of Utiea, 73 Hun, 256, 58 St. Rep. 80, Com'rs, 66 N. Y. 413; Matter of Folts 26 N. Y. Supp. 564; Matter of New St., 18 App. Div., 568, 46 N. Y. Supp. York (Neponsit Ave.), 77 Misc. 246, 43. See People ex rel. Yonkers v. N. Y. 1 35 N. Y. Supp. 708 ; Matter of City of C. & H. R. R. Co., 69 Hun, 166, 23 New York (Seneca Avenue), 98 Misc. cf. Y. Supp. 456. 712, 163 N. Y. Supp. 503. 374 CONDEMNATION OF fiEAL PROPEETY. Thus, a city authorized to condemn lands for the construc- tion of sewers, may condemn lands when held by a railroad company by purchase and occupied by it for tracks, to the ex- tent of laying a sewer under the tracks, under the same rules as apply to the lands of an individual.™ The mere acquiring and appropriation by one railroad com- pany of certain land to its own use, or even to a specific use, will not prevent another company from taking the same lands for the purpose of crossing or connecting with such other road; but, on the other hand, the road seeking to effect the crossing or connection may not invade or take such lands if the use to which they have already been appropriated will thereby be rendered ineffectual.^" And the general rule does not apply where the second taker is the State itself.*^ Thus, the clause of the State Constitution providing that forest preserves shall be forever kept as wild forest land, does not obtain where the State itself desires to acquire such lands for a public purpose.^^ And land acquired by a railroad by purchase and used for terminal facilities may be taken by the State for a street without special legislation.*^ Where land under navigable waters is acquired for munici- pal purposes the land so taken is subject to the public right of navigation in the waters over the land taken.*^ State lands under the waters of the Hudson river, held by the State as trustee for the public, may be acquired for rail- road purposes.*^ Pursuant to the general rule, it is held that the Eailroad Law does not give authority to a street surface railroad corporation to take lands which are held by a munici- pal corporation in trust, for the use of the public as a public park or common.*® And lands acquired by the commissioners of the Palisades Interstate Park by purchase or otherwise cannot thereafter be acquired in condemnation proceedings 79. Matter of the City of Glovers- N. Y. Supp. 430. ville, 42 Misc. 559, 87 N. Y. Supp. 612. 83. Matter of Alexander Av., 44 St. 80. Jennings v. D., L. & W. E. R. Rep. 546, 17 N. Y. Supp. 933. Co., 103 App. Div. 164, 93 N. Y. Supp 84. Matter of Public Service Comin. 374; aff'd, 199 N. Y. 544. (Montague St.), 224 N. Y. 211. 81. Adirondack R. Co. v. Indian 85. N. Y. C. & H. R. R. Co. v. Mat- River Co., 27 App. Div. 326, 50 N. Y. thews, 70 Misc. 567, 128 N. Y. Supp. S-upp. 245. 138. 82. Ramapo Mountains Water, etc., 86. Buffalo, L. & R. Ry. Co. v. Co. V. Commissioners of Palisades In- Hoyer, 214 N. Y. 236. terstate Park, 177 App. Div. 700, 164 CONDEMNATION OF REAL PROPERTY. 375 instituted by a water power and service company.^ Lands owned by the State and occupied by a public eliaritable cor- poration cannot be acquired by the city of New York for street purposes.*^ Property which has been acquired by a railroad company and which is used and is necessary for the purpose of running and operating the railroad cannot be taken by the city for a street under condemnation proceedings, except by a special legislative authority, and neither the provisions of the Con- solidation Act nor of the New York city charter confer the requisite authority for the purpose.^^ The condemnation of lands along the river front of New York city for use of piers, wharves, etc., is not unlawful as being for a private use, and the fact that the property to be taken is already in use by a railroad company does not pre- vent condemnation proceedings.^" The Legislature may delegate to municipal authorities the power to withdraw from public use what is, in legal contem- plation, a public highway, and appropriate it to some other or quasi--priYate use, subject only to the restriction that the new appropriation shall be in the direction of public utility.^^ F. By whom power exercised. 1. Delegation of power. . The power of eminent domain is lodged in the State,*^ but the legislative body has the general right to delegate the power to municipal corporations,^^ or to private corporations carrying on business of a public nature. The power can only be conferred on a corporation, where it is under the obligation to perform a public, or quasi--pvib\ic, duty.^* When delegating the power, the Legislature may pre- scribe how it shall be exercised.^ After the State has dele- 87. Ramapo M. W. P. & S. Co., Inc., N. Y. 150. V. Seidler, 102 Misc. 272, 168 N. Y. 92. See, supra. Art. 1-B, Power Supp. 737. lodged in sovereign. 88. Matter of City of New York 93. People v. B. & O. E. Co., 117 (Rosebank Ave.), 162 App. Div. 332, N. Y. 150; Wormser v. Brown, 149 147 N. Y. Supp. 638. N. Y..163. 89. Matter of Mayor (East 16l8t 94. Queens Terminal Co. v. Schmuck, St.), -52 Misc. 596, 102 SHipp. 500; re- 147 App. Div. 502, 132 N. Y. Supp. versed, 135 App. Div. 912, 120 N. Y. 159. Supp. 839. d5. Matter of Union Elevated R. Co., 90. Matter of Mayor, 135 N. Y. 253. 112 N. Y. 61. 91. People V. B. & 0. R. R. Co., 117 376 CONDEMNATION OF EEAL PKOPEKTY. gated the power of eminent domain, its power over the sub- ject is not thereby withdrawn. Its sovereign power over the taking of property for public purposes is a power which it cannot permanently alienate as to any property within its jurisdiction.^" As a general proposition it may revoke the delegation, and resume absolute control.'^ 2. Strict construction of delegated power. The authority of a municipal corporation or private corpor- ation to take private property must be expressly conferred.^' Proceedings for condemnation cannot be maintained unless the person instituting them has authority under some statute to acquire title to land for public use.*' No intent to deprive a person of his property rights should be imputed to the lawmaking power, unless it is expressly de- clared, or is to be necessarily implied from the language of the statute, and it is never necessarily implied if it admits of any otber reasonable construction.^ The powers granted will extend no farther than is expressly stated in the act, or than is necessary to accomplish its gen- eral scope and purpose. If there remains a doubt as to the extent of the power, after all reasonable intendments in its favor, the doubt will be solved adversely to the claim of power.^ Authority to take a greater interest and estate than is absolutely necessary to satisfy the language and object of the statute making the appropriation will not be implied.^ Yet the statutes are not to be construed so literally as to defeat the evident purposes of the Legislature.* Before the fee can be taken in the exercise of power of eminent domain, it must 96. People v. Adirondack B. Co., 160 147 N. Y. 701. N. Y. 225; Adirondack R. Co. v. Indian 1. New York Central, etc., R. Co. v. River Co., 27 App. Div. 326, 50 N. Y. Kip, 46 N. Y. 546; Schneider v. City Supp. 245. of Rochester, 160 N. Y. 165. 97. People v. Adirondack Railway 2. New York Central R. Co. v. Kip, Co., 160 N. Y. 225. 46 N. Y. 546. 98. Schneider v. City of Rochester, 3. Leffman v. Long Island R. R. Co., 160 N. Y. 165. 120 App. Div. 528, 105 N. Y. Supp. 99. Matter of Poughkeepsie Bridge 487; Brooklyn, Queens Co. & Suburban Co., 108 N. Y. 483; Brie Railroad Co. R. R. Co. v. Bird, 76 Misc. 62, 134 V. Steward, 170 N. Y. 172; People ex N. Y. Supp. 1; aflf'd, 152 App. Div. 932, rel. Lasher v. City of New York, 134 137 N. Y. Supp. 1112. App. Div. 75, 118 N. Y. 742; aff'd, 198 4. N. Y. C. R. R. Co. v. Kip, 46 N. Y. 439; Matter of Thomson, 86 N. Y. 546. Hun, 405, 33 N. Y. Supp. 467; aff'd, CONDEMNATION OF REAL, PEOFEhTi. 377 appear that such was the intention of the Legislature.^ In all cases where private property is taken for public use, the ex- tent and quality of the interest taken should be measured by public convenience and necessity.^ 3. Strict pursuance of requirements. The power to condemn private property is a stringent and extraordinary one, based upon necessity or an urgent public policy, and hence it is required, not only that the power be strictly construed, but that the prescribed mode for its exer- cise be strictly followed.'' All the prescribed prerequisites to the exercise of that power must be strictly observed and con- formed to. It cannot be presumed that these requirements have been met.^ The power is in derogation of the ordinary rights of private ownership and of the control which the owner usually has of his property, and it is proper to exact from the petitioner that he should fulfill and carry out all the conditions and restrictions imposed by legislative acts imder which he proceeds.^ To sustain the exercise of eminent domain by a body which claims to be a corporation, and as such to take the property of a citizen, it is not sufficient that it is a corporation de facto, but it must be a corporation de jurey As the Legislature in delegating its power of eminent do- main is not bound to act uniformly or in accordance with any particular rule, it may impose any condition on the grant of the power, whether precedent or subsequent, which it be- lieves to be equitable." The right of eminent domain is an attribute of sovereignty 5. Washington Cemetery v. Prospect App. Div. 932, 137 N. Y. Supp. 1112. Park, 68 N, Y. 591; Hudson & Man- 8. Matter of City of Buffalo, 78 hattan R. Co. v. Wendel, 193 N. Y. N. Y. 362. 166. 9. Matter of New York Cable Co., 6. Hudson & Manhattan R. R. Co. v. 104 N. Y. 1. Wendel, 193 N. Y. 166. 10. Matter of N. Y. Cable Co., 104 7. Dyekman v. The Mayor, etc., of N. Y. 1; Matter of Split Rock Cable New York, 5 N. Y. 434; Adams v. S. & Rd. Co., 128 N. Y. 408. W. R. R. Co., 10 N. Y. 328; In re City 11. The Federal government has no of Buffalo, 68 N. Y. 171; Matter of right to interfere with the conditions New York Cable Co., 104 N. Y. 1; which the State may impose upon -the Schneider v. City of Rocheister, 160 exercise of the power. People ex rel. N. Y. 165; Ontario Knitting Co. v. Lasher v. City of New York, 134 App. State, 205 N. Y. 409; Brooklyn, Queens Div. 75, 118 N. Y. Supp. 742; aff'd, Co. & Suburban R. R. Co. v. Bird, 76 198 N. Y 439. Misc. 62, 134 N. Y. Supp. 1; aff'd, 152 378 CONDEMNATION OF REAL PROPERTY. which the State may grant or withhold at its will. When it delegates that right it may impose upon the donee any con- dition that does not encroach upon or abridge any of the con- stitutional rights of those whose property is to be taken. It may require the donee of the right to do more than is de- manded by the Constitution, but it may not permit less to be done. If the donee accepts the right and exercises it, the conditions subject to which it is granted cannot be evaded or ignored.^^ After the Legislature has authorized the taking of property for public use upon certain conditions, it cannot abolish such conditions and act as if none had been attached.^^ 4. Railroads. The Kailroad Law, sections 8, 17, contains a grant of the power of eminent domain to railroads." Railroads are regarded as a public use of property, al- though occupied and used by private corporations.^^ A rail- road company is not disqualified to take proceedings to con- demn land for its benefit by the fact that it has been leased to another company, nor is the rule altered by the fact that the lessee is a foreign corporation.'^ The Legislature may authorize a foreign railroad corpor- ation lawfully operating its road within the State to acquire by condemnation additional lands required for railroad pur- poses." Where land is required for the legitimate purposes of a railroad in respect to its public use, it is subject to con- demnation for such purposes, although the route of the pro- posed road may not pass directly over it.^^ The language of 12. People ex rel. Burhana v. City of Co. v. Union Steamboat Co., 99 N. Y. New York, 198 N. Y. 439. 12. 13. Matter of Southern Boulevard 17. N. Y., N. H. & H. R. R. Co. v. R. R. Co., 58 Hun, 497, 35 St. Rep. 550, Welsh, 143 N. Y. 411; Matter of Ap- 12 N. Y. Supp. 466; aff'd, 144 N. Y. praisal of Lands of Marks, 25 St. Rep. 253. 502, 6 N. Y. Supp. 105; N. Y., N. H. 14. Elevated railroads have the & Hartford R. R. Co. v. Welsh, 52 St. power to acquire lands necessary for Rep. 532, 23 N. Y. Supp. 195. maintenance and accommodation. Man- 18. New York, Lackawanna, etc., R. hattan R. Co. v. Astor, 56 Misc. 353, R. Co. v. Scheu, 33 Hun, 148; affirmed, 107 N. Y. Supp. 666. without opinion, 98 N. Y. 664. 15. Matter of Townsend, 39 N. Y. Removing gravel. — ^Under an earlier 171; N. Y. & H. R. Co. v. Kip, 46 statute it is held that a company can- N. Y. 546 not acquire title to real estate without 18. N. Y., Lackawanna etc., R. R. the owner's consent, simply for the CONDEMNATIOIT OF REAL PROPERTY. 379 the statute, however, does not authorize a railroad corpor- ation to subvert an appropriation of property to other public uses which are inconsistent with the use thereof for a rail- road.^^ A railroad may acquire land outside of its proper route for the purpose of making connections with an intersecting road.^" So, also, a railroad company may institute proceedings to con- demn land after a road has been constructed.^^ A railroad corporation in taking land is not limited to its present use, but may acquire for its prospective use, provided the necessity for such use, in the immediate future, is estab- lished beyond reasonable doubt.^^ But statutes delegating the power of eminent domain are in derogation of common law rights, and are not extended by implication, and must be strictly complied with.^^ The legal existence of a corporation authorized to construct a railroad is the foundation of the right to take property for its use under the right of eminent domain.^* A railroad cannot condemn property until it has procured a certificate of public convenience and necessity, as required by section 9 of the Railroad Law.^^ Before a railroad will be permitted to condemn lands, it must appear that there is a public necessity for the road.^^ But, if some improve- purpose of removing gravel therefrom, aff'd, 192 N. Y. 573. to be used in constructing a distant Necessity. — In Matter of New York part of the road. Matter of N. Y. & Central K. E. Co., 66 N. Y. 407, it was Canada R. R. Co. v. Gunnison, 1 Hun, said by Judge Rapallo, in the opinion, 49g, that "in the case of Rensselaer & Sara- 19. Matter of City of Buffalo, 68 toga Railroad Co. v. Davis, 43 N. Y. N. Y. 171. 137, this court decided that, by the ao. Matter of Brooklyn Elevated Rd. General Railroad Law, the Legislature Co., 32 St. Rep. 1065, 11 N. Y. Supp. had not delegated to railroad corpora- 161. tions the power of determining what 21. Matter of Metropolitan Ed. Co., lands were necessary to be appro- 12 N. Y. Supp. 502. priated to their use for the purposes 22'. Matter of Mayor (East 161at of the incorporation, but that, under St.) 52 Misc. 596, 102 N. Y. Supp. 500. that statute, it was for the court to 23. Adam® v. Saratoga & Washing- determine upon the application by a ton R. E. Co., 10 N. Y. 328; Matter of railroad company to acquire lands, the New York etc., E. Co., 46 N. Y. 546. question of the necessity and extent of 24. Matter of Kings Co. Elevated R. the appropriation, and that the land- E. 1 St. Eep. 512. owner might contest this question. 25. See In re Eochester, C. E. Trac. This necessity is, therefore, made a Co., 118 App. Div. 521, 102 N. Y. Supp. judicial question, and, when contro- 1112' dismissed, 189 N. Y. 522. verted, it is obvious that the facts 26. People v. Eailroad Com'rs, 124 must, in some form, be laid before the App. Div. 47, 108 N. Y. Supp. 288; court to enable it to decide." 380 CONDEMNATION OF EEAl, PKOPEETY. ment is necessary, the necessity of particular lands, as con- trasted with other premises which .might serve the uses of the company, is a matter largely within the discretion of the railroad officials.^^ A railroad company, under the power delegated to it by the General Railroad Act to acquire lands for the purposes of its incorporation, has, to a large extent, the right, to determine the measure of its wants, and to fix upon the location of land to be appropriated subject to the qualification that the purposes for which the land is taken are strictly within its charter, and the lands of private cor- porations are subject to the exercise of the right of eminent domain the same as individuals.^^ The Eailroad Law gives to corporations created under it authority to acquire lands by the exercise of the right of eminent domain, both from individuals and from the State,, for its prospective as well as present uses, provided the neces- sity for such use in the immediate future is established be- yond reasonable doubt. It seems, that as the exercise of this power is in derogation of individual right, it should be al- lowed only when the necessity clearly appears and the pro- posed use is clearly embraced within the legitimate objectsi of the power.^' Passenger depots, convenient and proper places for the storing and keeping of cars and locomotives; proper, secure and convenient places for the receipt and de- livery of freight, and for the safe and secure keeping of property between the time of its receipt and despatch, or after its arrival and discharge, and before delivery, are the ac- knowledged necessities for the running and operating of a railroad, and the right to take lands for those purposes is included in the grant of power given by the General Eailroad Act, which authorizes a railroad corporation to acquire real estate ' ' for the purposes of its incorporation or for the pur- pose of running or operating " its road. It is no objection to proceedings under the act that there are other lands in the same vicinity equally well adapted for the purposes which possibly might be acquired by purchase. The location of the buildings and structures of the company is within the dis- cretion of its managers, and courts will not supervise it ordi- 27. N. Y. €. & H. E. R. Co. v. H. R. R. R. Co. v. The Metropolitan Dailey, 57 Misc. 311, 109 N. Y. Supp. Gas-Light Co., 63 N. Y. 326. 501. 29. In re Staten Island Rapid Tran- 28. Matter of Petition of N. Y. C. & sit Co., 103 N. Y. 251. CONDEMNATION OF REAL PROPERTY. 381 narily.'" But land cannot be taken for station purposes by a railroad company, where no necessity therefor appears.^^ Where the company has immediate need of property for a passenger depot, the opinion of the officers as to its size and location are entitled to great weight unless it appears that, under pretense of the necessities of the company, it is seeking to injure others.^ Eailroad companies are not to be allowed to appropriate lands under the statute not wanted for pres- ent use, but only desired in view of prospective and conjec- tural increase in business; nor lands for building tenements for their servants, or wharves unless they are shown to be necessary for corporate purposes.^^ A railroad company cannot condemn lands to open a high- way to a hotel a third of a mile distant for entertaining its patrons; and the construction of a place for the storage of boats of passengers visiting a watering place on the line of petitioner's railroad is not for railroad purposes, and the land, therefore, is not subject to condemnation.^^ The title to lands under water may be acquired by a railroad company without notice to the owner of the adjoining upland.^^ Proof that additional tracks are needed to enable a company to un- load passengers so as to avoid delays is sufficient to show necessity for lands sought to be condemned.^^ 30. Matter of the New York & Park & C. I. R. R. Co. v. Williamson, Harlem R. R. Co. v. Kip, 46 N. Y. 546. 91 N. Y. 552; Matter of Boston & Al- See also Matter of New York Cen- bany R. R. Co., 53 N. Y. 574. tral & Hudson River R. R., 77 N. Y. 31. Matter of Union Elev. Rd. Co. v. 248. Jewett, 30 St. Rep. 162, 8 N. Y. Supp. Conveniences for passengers. — Where 813. lands have been lawfully appropriated 32. X. Y., West Shore & B. R. R. by a, railroad company for depot pur- Co. v. Towresend, 17 Week. Dig. 469. poses under the right of eminent do- 33. Rensselaer & Saratoga R. R. Co. main, express legislation is necessary v. Davis, 43 N. Y. 137. to justify their appropriation by pro- 34. Matter of Rochester & Glen ceedings in invitum to a different pub- Haven Rd. Co., 12 N. Y. Supp. 566. lie purpose. Where lands were con- 35. Matter of N. Y., W. S. & B. R. demned for depot purposes, it was held R. Co., 29 Hun, 269. that the erection thereon of decora- See also Matter of N. Y., West tions and conveniences for passengers, Shore & Buffalo R. R. Co.j 27 Hun, 57; such as restaurants and music stands, reversed, 89 N. Y, 543. was not such an abandonment of the 36. N. Y., N. H. & Hartford R. R. uses for w'hich the lands were acquired Co. v. Welsh, 52 St. Rep. 532, 23 N. Y. as to produce a forfeiture. Prospect Supp. 195. 382 CONDEMNATION OF KEAL PROPERTY. 5. Street railways. Street railway corporations are invested with the right of eminent domain.^^ The last clause of section 170 of the Railroad Law declaring that " nothing in this section shall be deemed to authorize a street railroad corporation to acquire real property within a city by condemnation " is applicable only to the construction and interpretation of that section and is not intended to re- strict the power of eminent domain, or authority to exercise that power within a city by condemnation proceedings given by other sections of that law to corporations subject to it.^^ An electric railway company may maintain proceedings to condemn an easement, although the road has been construc- ted.38 6. Electric companies. Gas and electric light corporations receive a delegation of the power of eminent domain.^" Where a water power corporation has entered into a con- tract with a city to furnish light for a period of years, and also to supply unlimited power service to all applicants, the condemnation of the right to overflow certain lands, a portion of which are now covered by water of its dam, will be deemed for a public use.*-^ Furnishing light to a municipality is a public service, and a private electric light company in any town or village in this State having contracts with towns or incorporated villages for the lighting of streets may condemn lands to enable it to furnish more electricity under such contracts.^^ The con- struction of a high tension line for an electric railway around a village so as to avoid danger to the inhabitants is a public use for which lands may be condemned.*^ 37. Matter of Application of Roch. Law, § 61. Elec. Ry. Co., 57 Hun, 56, 10 N. Y. 41. Oneonta Light and Power Co. v. Supp. 379; aff'd, 123 N. Y. 351. Sohwarenbaek, 164 App. Div. 548, 150 38. Schenectady Railway Co. v. N. Y. Supp. 76. Lyon, 41 Misc. 506, 85 N. Y. Supp. 40; 42. Matter of E. Canada Creek El. aff'd, 88 App. Div. 201, 84 N. Y. Supp. L. & P. Co., 49 Misc. 565, 99 N. Y. 759. Supp. 109. 39. Matter of Met. Elevated Ry. Co. 43. Syracuse, Lake Shore, etc., R. R. V. Dominiek, 55 Hun, 198^ 27 St. Rep. Co. v. Carrier, 149 App. Div. 411, 134 576, 8 N. Y. Supp. 15. N. Y. Supp. 791. 40. Transportation Corporations CONDEMKATION OF EEAL PROPERTY. 383 7. Municipal corporations. Various provisions of the Consolidated Laws authorize municipal corporations to acquire real estate for municipal purposes. And a municipal corporation authorized by law to take and hold real property for the uses and purposes of the corporation, may, if it is unable to agree with the owners for the purchase thereof, acquire title to such property by con- demnation.^ The power of eminent domain is exercised by municipal corporations in taking property for public parks and high- ways. In the exercise of the right of eminent domain a municip- ality may take land, not actually required for the traveled way, in order to afford ample space for light and air, beauty and adornment, under legislative authority .^^ For the purpose of constructing and maintaining a public sewer, a city may condemn lands of a railroad company to the extent of laying the sewer under its tracks.^^ Eminent domain may be exercised for water-works for the supply of villages and cities.*^ ARTICLE II. THE CONDEMNATION LAW. A. Condemnation Law, § 2. Definitions. The term "person," when used herein, includes a natural person and also a corporation, joint-stock association, the State and a political division thereof, and any commission, board, board of managers or trustees in charge or having control of any of the charitable or other institutions of the State; the term "real property," any right, interest or easement therein or appurtenances there- to; and the term "owner," all persona having any estate, interest, or easement 44. General Municipal Law, § 74. violates the new process of law pro- Land outside of municipality.^The vision of the Fourteenth Amendment common council of the city of Roches- to the Federal Constitution. Matter of ter is not authorized to legislate to City of Rochester, 184 App. Div. 369, affect lands beyond the territorial 171 N. Y. Supp. 12; aff'd, 224 N. Y. limits of the city, and hence has no 386. power to determine the reasonable ne- 45. Matter of Curran, 38 App. Div. cessity for condemning lands outside 82, 55 N. Y. Supp. 1018. the city for the city water supply. ' 46. Matter of City of Gloversville, The provisions of the charter permit- 42 Misc. 559, 87 N. Y. Supp. 612. ting the common council to determine 47. Mayor of New York v. Bailey, 2 that question, and especially so to do Denio, 43; Gardner v. Newburgh, 2 without notice to the land owners, Johns. Ch. 162. 384 CONDEMNATION OF REAL, PKOPERTY. in the property to be taken, or any lien, charge, or incumbrance thereon. The person instituting the proceedings shall be termed the plaintiff; and the person against whom the proceeding is brought, the defendant.48 B. Condemnation law, § 3. Application of this chapter. Whenever any person is authorized to acquire title to real property, for a public use of condemnation, the proceeding for that purpose shall be taken in the manner prescribed in this chapter. C. Condemnation Law, § 27. limitations and exemptions. So mucli of all acts and parts of acts as prescribe a method of procedure in proceedings for the condemnation of real property for a public use is repealed, except such acts and parts of acts as prescribe a method of procedure for the condemnation of real property for public use as a highway, or as a street, avenue or public place in an incorporated city or village, or as may prescribe methods ot procedure for such condemnation for any public use for, by, on behalf, on the part, or in the name of the corporation of the city of New York, known as the mayor, aldermen, and commonalty of the city of New York, or by whatever name known, or by or on the application of any board, department, commissioners or other oifieers acting for or on behalf or in the name of such corporation or city, or where the title to the real property so to be acquired vests in such corpora- tion or in such city; and all proceedings for the condemnation of real property embraced within the exceptions enumerated in this section are exempted from the operation of this chapter. D. Condemnation Law, § 26. Power of court to make necessary orders. In all proceedings under this chapter, where the mode or manner of conduct- ing all or any of the proceedings therein is not expressly provided for by law, the court before whom such proceedings may be pending, shall have the power to make all necessary orders and give necessary directions to carry into effect the object and intent of this chapter, and of the several acts conferring authority to condemn lands for public use, and the practice in such cases shall conform, as near as may be, to the ordinary practice in such court. E. The statute in general. The proceedings for the condemnation of real estate, when they are not prescribed by a particular statute, are now found in the Condemnation Law, being chapter 929 of the Laws of 48. A park is a "public place" within easement therein, or appurtenances the meaning of the statute. Matter of thereto, and lands under water adja- City of Rochester, 102 App. Div. 181,* cent to the upland are appurtenant to 92 N. Y. Supp. 405. the upland. And "owner" includes the Lands under water. — ^The term "real proprietor of such lands. New York property" as used in the Condemnation Central, etc., R. Co. v. Mathews, 144 Law includes any right, interest, or App. Div. 732, 129 N. Y Supp. S28. CONDEMNATION OF EEAL, PROPERTY. 385 1920, and known as chapter 73 of the Consolidated Laws as renumbered by chapter 150 of the Laws of 1921. From 1890 to the time of the enactment of the statute in its present form, provisions of the same substance were con- tained in the Code of Civil Procedure, sections 3357-3384.'*' The statute supplies a complete system of practice in con- demnation proceedings.^" The Condemnation Law merely regulates the procedure for the condemnation of property, and authorizes such procedure only when the person instituting it has authority under some independent statute to acquire the title to real property for a public use.^-^ The purpose of the Legislature in enacting the Condem- nation Law to supplement all laws with reference to the tak- ing of private property for public purposes is clearly evi- denced by its language. The langiiage related not to any par- ticular act, but to all acts. Whenever the Legislature author- ized any person or corporation to take private property for public purposes, this act was to come into operation and pro- vide a method of procedure. It does not authorize the taking of the property of any one, but merely prescribes the methods of judicial' procedure and due process of law in those cases where by virtue of the provision of some other law, the exer- cise of the right of eminent domain has been conferred for public purposes, and the purpose of the enactment was to establish one rule throughout the State by which the rights of persons in their property should be determined.^^ It does not apply to condemnation proceedings brought under the provisions of the Rapid Transit Act.^^ G. Strict compliance with all requisites. Every essential prerequisite to the jurisdiction called for by the statute must be strictly complied with, and this must affirmatively appear on the face of the proceedings in order to give them validity.^* 49. Matter of City of Syracuse, 224 51. Matter of Thomson, 86 Hun, N. Y. 201. 405, 33 N. Y. Supp. 467; aff'd, 147 50. Village of Canandaigua v. Bene- N. Y. 701. diet, 13 App. Div. 600, 43 N. Y. Supp. 52. County of Orange v. Ellsworth, 630,' Brie K. R. Co. v. Steward, 59 98 App. Div. 275, 90 N. Y. Supp. 576. App. Div. 187, 69 N. Y. Supp. 57; 53. Matter of City of New York, 163 Dansville v. Hammond, 77 Hun, 39, 28 App. Div. 10, 147 N. Y. Supp. 1057. 2^. Y. Supp. 454. 54. In re Buffalo, 78 N. Y. 3625 ' ' 25 386 . CONDEMNATION OF REAL, PROPERTY. It is proper to exact of a petitioner in condemnation pro- ceedings that it should fulfill and carry out all the conditions and restrictions imposed by the legislative acts under which it seeks to derive important and valuable rights and privileges ; and so far as the conditions and restrictions, found in the statute proceeded under, relate to the rights of the owners whose property is sought to be taken, the owners are entitled to have the full benefit thereof.^^ In any proceeding to con- demn the private property of a citizen for a public use, all notices and hearings that may tend to give the party to be affected any semblance of benefit must be carefully observed.^ A defective condemnation of lands for school purposes can- not be sustained on the ground that the remedy of the land- owner is an appeal under the Consolidated School Law, for in order to acquire the lands for school purposes the statute must be complied with.^'' F. Nature of proceeding. The proceeding under the Condemnation Law is a special proceeding.^^ It has, however, an analogy to " actions," in that it pro- vides that the parties shall be known as plaintiff and defend- ant and for raising an issue as to the facts stated in the peti- tion by " answer," also for the " trial " of the issues raised thereby, followed by a " judgment ' ' adjudging that the con- demnation of the property is necessary for the public use. The proceeding is purely statutory; and the court possesses only such jurisdiction and powers as are expressly conferred Citizens' Water-Works Co. v. Parry, 59 of Rochester, 102 App. Div. 99, 92 Hun, 202, 13 N, Y. Supp. 490; aff'd, N. Y. Supp. 478; Matter of One Hun- 128 N. Y. 669; Matter of the Village dred Sixty-third St., 61 Hun, 365, 16 of Le Roy, 35 App. Div. 177, 55 N. Y. N. Y. Supp. 120; appeal dismissed, 131 Supp. 149. N. Y. 569. 55. City of Syracuse v. Stacey, 86 New York City. — A proceeding taken Hun, 441, 33 N. Y. Supp. 929. by the city of New York under the 56. People v. Kniiskern, 54 N. Y. 52. Consolidation Act to acquire lands is, See Mills on Eminent Domain, § 95. within the definition contained in sec- 57. Matter of Hemenway, 134 App. tion 5 of the Civil Practice Act, a spe- Div. 86, 118 N. Y. Supp. 931. cial proceeding, and should be heard as 58. N. Y. C. & H. R. R. Co. v. Mar- such proceedings are ordinarily heard, vin, 11 N. Y. 276; Rensselaer & S. R. although no particular method of pro- R. Co. V. Davis, 43 N. Y. 137; Erie cedure is prescribed by that act. Mat- Railroad Co. V. Stewart, 59 App. Div. tor of Mayor, 22 App. Div. 124, 47 187, 69 N. Y. Supp. 57; Matter of City N. Y. Supp. 965. CONDEMNATION OF REAL PROPERTY. 387 by statute, and such other incidental powers as may be neces- sary to effectuate the s.cheme of the statute.^^ The question of ownership, as between conflicting claimants, of property to be condemned, cannot be determined upon a motion before the commissioners of appraisal have made their award; such a method of trial is not a necessary incident to the power con- ferred upon the court by the Condemnation Law.^" ARTICLE III. PETITION AND PROCEEDINGS THEREON. A. Contents of petition. 1. Condemnation Law, § 4. Petition; what to contain. Tlie proceeding shall be instituted by the presentation of a petition by the plaintiflf to the Supreme Court, setting forth the fallowing facts: 1. His name, place or residence, and the business in which engaged; if a cor- poration or a joint-stock association, whether foreign or domestic, its principal place of business within the State, the names and places of residence of its prin- cipal officers, and of its directors, trustees or board of managers, as the case may be, and the object or purpose of its incorporation or association; if a poli- tical division of the 'State, the names and places of residence of its principal officers; and if the State, or any commission or board of managers or trustees in charge or having control of any of the charitable or other institutions of the State, the name, place of residence of the officer acting in its or their behalf in the proceedings. 2. A specific description of the property to be condemned, and its location, by metes and bounds, with reasonable certainty. 3. The public use for which the property is required and a concise statement of the facts showing the necessity of its acquisition for such use. 4. The names and places of residence of the owners of the property; if an in- fant, the name and place of residence of his general guardian, if he has one; As an inquest. — A proceeding to as- observed as will secure a fair hearing certain the compensation to be made from the parties interested in the to the owner of property taken for property. Until the property is ac- public use is in the nature of an in- tually taken and the compensation is quest on the part of the State and is made or provided, the power of the under its control; and to secure a just State over the matter is not ended, estimate of the compensation to be Garrison v. City of New York, 21 made it can vacate or authorize the Wall. (U. S.) 196. vacation of any inquest taken by its 59. Matter of Bronx Parkway direction where the proceeding has Comm., 99 Misc. 397, 164 N. Y. been irregularly or fraudulently con- Supp. 9. ducted, or in which error has inter- 60. Matter of Bronx Parkway vened, and order a new inquest, pro- Comm., 99 Misc. 397, 164 N. Y. vided such methods of procedure be Supp. 9. 388 CONDEMNATION OF REAL PROPEETY. if not, the name and place of residence of tlie person with whom he resides; if a lunatic, idiot, or habitual drunkard, the name and place of residence of his committee or trustee, if he has one; if not, the name and place of residence of the person with whom ho resides. If a non-resident, having an agent or at- torney residing in the State authorized to contract for the sale of the property, the name and place of residence of such agent or attorney; if the name or place of residence of any owner cannot after diligent inquiry be ascertained, it may be so stated, with a specific statement of the extent of the inquiry which has been made. 5. That tlie plaintiff has been unable to agree with the owner of the property for its purchase, and the reason of such inability. 6. The value of the property to be condemned. 7. A statement that it is the intention of the plaintiff, in good faith, to com- plete the work or improvement, for which the property is to be condemned; and that all the preliminary steps required by law have been taken to entitle him to institute the proceeding. 8. A demand for relief, that it may be adjudged that the public use requires the condemnation of the real property described, and that the plaintiff is en- titled to take and hold such property for the public use specified, upon making compensation therefor, and the commissioners of appraisal be appointed to ascer- tain the compensation to be made to the owners for the property so taken. 2. Petition in general. The Condemnation Law requires that all condemnation pro- ceedings shall be taken by petition to the Supreme Court.^^ The facts necessary to give the court or officer jurisdiction must appear in the petition, which alone is to be looked to for the facts upon which the jurisdiction depends.^^ Section 4 prescribes what is necessary to be alleged in the petition,^^ and it is the duty of the petitioner to obey the provisions of section 4 and implicitly and accurately follow its require- ments.^* 3. Information and belief. A petition in condemnation proceedings may state facts on information and belief.^ But it seems that this rule does not apply to the statement of inability to acquire title, which must be stated as a matter of fact within the knowledge of the petitioner.^ Gl. Matter of Hodge, 28 Misc. 104, Hun, 441, 33 N. Y. Supp. 929. 59 N. Y. Supp. 775. 65. Matter of Met. Elev. Ed. Ce., 7 62. Matter of Marsh, 71 N. Y. 315. N. Y. Supp. 707, 26 St. Rep. 968. 6a. City of Johnstown v. Wade, 30 66. Matter of Met. Elev. Rd. Co. v. App. Div. 5, 51 N. Y. Supp. 763. Dominick, 55 Hun, 198, 8 N. Y. Supp, 64. City of Syracuse v. Stacey, 86 151, 27 St. Rep. 576. CONDEMNATION OF REAL PROPERTY. 389 4. Verification of pleadings. "A petition or answer must be verified, and the provisions of the Civil Practice Act relating to the form and contents of the verification of pleadings in courts of record, and the persons by whom it may be made, shall apply to the verification. "^'^ A general agent for the purchase of lands for obtaining rights of way for a railroad corporation is an officer having authority to verify petitions.^* Or an attorney of a railroad may be empowered to verify petitions in its behalf."* 5. Description of property. Extreme accuracy is required in the description of the property sought to be acquired and there must be no uncer- tainty in such description or in the degree or interest sought to be acquired.™ It is the petitioner's duty to insert in the 67. Condemnation Law, § 10. G8. Lackawanna, etc., R. R. Co. -v. Scheu, 33 Hun, 148. 69. Matter of St. Lawrence & Adi- rondack Rd. Co., 133 N. Y. 270. 70. Matter of N. Y. C. & H. R. R. R. Co., 70 N. Y. 191. See People ex rel. Eckerson v. Trustees, etc., 137 N. Y. 88; Hayden v. State, 132 N. Y. 533; Met. Elev. Rd. Co. v. Dominick, 55 Hun, 198, 8 N. Y. Supp. 151. Both general and specific descrip- tions. — Where, in a proceeding under chapter 712 of the Laws of 1901 to ac- quire certain real estate for the con- struction of an extension of the Man- hattan terminal of the New York and Brooklyn bridge, the petition, in one pa,ragraph, described generally the property sought to be acquired, as a whole, including the public streets em- braced therein, and, also, property owned by the city, and, in another paragraph, with more technical pre- cision, described in detail the separate parcels of the same land held in pri- vate ownership, omitting the portions owned by the city and the public streets, a motion to strike out the paragraph containing the more par- ticular description, as irrelevant and immaterial, was denied as matter of discretion; and, although the petition did not allege that the descriptions, were identical, the court would take judicial notice of sufficient facts con- cerning public streets to discover that, on the face of the petition, such iden- tity exists. Matter of City of New York, 48 Misc. 602, 96 N. Y. Supp. 554; aflf'd, 114 App. Div. 912, 100 N. Y. Supp. 1110. Lands voluntarily conveyed. — If the petition of a municipal corporation sets forth the lands it is necessary to acquire for the purposes of extending a city street, it is not necessary to de- scribe any lands which the owners consent to convey to the city. If the petition sets forth that such owners have so consented to convey, the fact that certain property-owners, who had previously agreed to convey to the city, thereafter receded from their agreement, after condemnation pro- ceedings brought against the persons who had not so agreed to convey, does not affect the regularity of the pro- ceedings instituted, nor does the fact that such proceedings have been insti- tuted against one person present any l«gal objections to a subsequent second 390 CONDEMNATION OF REAL PROPERTY. petition an accurate specific description with reasonable cer- tainty, of the precise property rights sought to be condemned, to the end that the proceedings shall comply with the statute, and the property-owner be enabled by the petition to under- stand just what is sought to be taken from him and just what is left, if anything, after the property rights have been taken under the proceedings instituted by the petition.''^ The only property which can lawfully be taken in condem- nation proceedings is the precise property described in the petition.'^ Where the land of the owner is incorrectly described and part is omitted, this does not go to the regularity, but to the effect of the proceeding, and the petitioner does not acquire any more of the land than is expressed in the papersJ^ It is not enough in a proceeding to condemn an interest in land for public purposes to describe the interest sought to be acquired so vaguely as to leave it dependent upon the undis- closed opinion of the condemning party as to the quantum of the interest which it may be deemed necessary to takeJ^ A description which designates the east and west lines of the property as those described in the deed to the present owners, and the south line to be at a specific distance from the south line of the petitioner 's land, is not suflScient.'^^ The petition must show such a description of the land sought to be condemned as will show its location and the boundaries thereof. A defective description cannot be remedied by reference to a description in a deed.'^ A petition asking the condemnation of easements for the erection of a telephone line should definitely describe the ease- proceeding against the lands, of owners within the part of the street in ques- w'hose property it is necessary to have tion, but not described, shown or men- to complete the street opening. City tioned by the maps or plans, memoran- of Johnstown v. Wade, 30 App. Div. 5 dum or petition. Matter of AVillcox (12), 51 N. Y. Supp. 763. (Fourth Ave. Subway), 213 N. Y. 218. 71. City of Syracuse v. Stacey, 86 73. Matter of Newland Av., 15 N. Y. Hun, 441, 33 N. Y. Supp. 929. Supp. 63, 38 St. Rep. 796. 72. Village of Babylon v. Bergen, 68 74. Bell Telephone Co. v. Parker, 187 Misc. 433, 124 N. Y. Supp. 871. N. Y. 299; New York Municipal Ry. The Kapid Transit Act does not give Corp. v. Parkhill, 145 N. Y. Supp. 447. the Supreme Court the power to direct 75. Matter of New York Central, the commissioners of appraisal to de- etc., R. Co., 15 Week. Dig. 20.1. termine the compensation to owners of 76. Matter of N. Y. C. & H. R. R. R. property taken or affected by or in the Co., 70 N. Y. 192. See also Matter of course of the construction of the road N. Y. C. R. R. Co., 20 Barb. 419. CONDEMNATION OF REAL, PEOPEETY. 391 ment to be taken in order that the amount of damages may be determined and the petitioner in the future be confined to the specifications of the petition. The defendant is entitled to know the size, number, and location of the poles, and at what height and in what manner the wires are to be strung. A petition which merely asks " a right of way or easement for the plaintiif's line of telephone wires and fixtures " over the defendant's land is fatally indefinite." •A petition by a board of water commissioners of a village to condemn water rights, specifically describes the property sought to be taken with reasonable certainty where it defines it as water to be diverted from a certain river, at a specified point, in sufficient quantity to furnish a stated minimum sup- ply per day for domestic purposes and a stated maximum supply per day for fire and emergency purposes, and when the description is amplified by reference to other portions of the petition.™ A petition by a railroad company for the right to lay and operate its railroad through a street need not state the degree of interest sought to be acquired in the street, whether fee, easement, or leasehold, nor need it point out to each owner the surrounding conditions and indicate how he in particular is to be affected.™ 77. Suffolk County Telephone Co. v. Law, in that it is not sufficiently spe- Gammon, 113 App. Div. 764j 99 N. Y. cific in stating the extent of the 'right Supp. 295. • which the petitioner desires to acquire Telephone petition insufficient. — "to trim such trees as may be neces- Where a petition in condemnation pro- sary to protect said line from interfer- ceedings, instituted to acquire title to ence," since the precise distance to certain property, describes the property whicfh such trees must be trimmed to to be taken as "an easement or right maintain the safety of the line should of way for the erection, maintenance, be stated in the petition in order that and operation of a line of telephone, the property-owner may be informed said line to consist of" a designated in advance as to the extent of the in- number of poles, to be set at desig- terest which the condemning party nated places, with the right to attach seeks to acquire, in order that the the necessary wires or cables thereto, commissioners may be similarly guided "and with the right to trim trees as in measuring their award. Bell Tele- may be necessary to protect said line phone Co. v. Parker, 187 N. Y. 299. from interference," the petition is in- 78. Village of Champlain v. McCrea, sufficient because it fails to describe 165 N. Y. 264. the property, rights, and easements 79. Dexter & Northern R. R. Co. v. sought to be acquired with sufficient Foster, 64 Misc. 500, 119 N. Y. Supp. particularity to be a compliance with 731. the provisions of the Condemnation 392 CONDEMNATION CP KBAL PROPERTY. The fact that a petition contemplates the acquisition of a fee does not mean an unincumbered fee.^° In a proceeding to acquire water rights for a village water supply, the petition should show whether the fee is sought to be taken or only a right to overflow the land; and, in either case, the land affected should be described by metes and bounds.^ But, the petition by an elevated railroad company to con- struct a railroad through a street need not. show whether it is an easement or a fee of the abutting owners of the street that is sought to be condemned.*^ In a proceeding to acquire riparian rights of one whose re- maining property will be cut off from said rights, it is only necessary to describe the property sought to be acquired.*^ An allegation that the easements sought to be condemned are those " which now are or may be the subject of injury from the construction of said railroad, or incidental to its use," is a sufficient description of the easement to be taken.^ A petition to take water for the use of a company suf- ficiently describes the quantity to be taken where it states the size of the pipe, its grade, and the estimated flow.^ The petition to condemn gravel and stone for the im- provement of a highway should not describe the entire plot of land from which the material is to be taken, but on the con- trary should locate the quarry itself by metes and bounds, as well as the right of way over which the material is to be re- moved, and also those lands contiguous to a quarry in which an easement will be necessary in order to carry on oper- ations.*** A paper so referred to and described that it may be identi- fied beyond a reasonable doubt is made part of the instru- ment the same as if incorporated therein. Schedules giving full description of real estate and the names and places of residence of owners and claimants may be attached to the 80. Matter of Bensel, 140 App. Div. 84. Matter of Brooklyn Elev. Rd. 257, 125 N. Y. Supp. 128. Co. v. Nagel, 75 Hun, 590, 59 St. Eep. 81. Matter of Roe, 59 Misc. 535, 111 161, 27 N. Y. Supp. 669; aff'd, 150 N. Y. Supp. 755. N. Y. 562. 82. Matter of Met. Elev. Rd. Co., 12 85. Matter of Malone Water-Works N. Y. Supp. 506. Co., 38 St. Rep. 95, 15 N. Y. Supp. 649. 83. New Rochelle Water-Works v. 86. Maxon v. Gale, 142 App. Div. Brush, 47 St. Rep. 388, 19 N. Y. Supp. 335, 126 N. Y. Supp. 967. 954. CONDEMNATION OF EEAL PROPEETY. 393 petition; and lliey may form a part of the petition and con- stitute a sufficient compliance with the statute.^^ Where a map annexed to the petition served upon the own- ers does not show their parcel, a description contained in the petition and hased upon survey stations on the center line of the proposed railroad — not laid down upon the ground — does not describe with reasonable certainty the land proposed to be taken.^^ 6. Public use and necessity. Subdivision 3 requires the petition to state the public use for which the property is required and to contain a concise statement of facts showing the necessity of its acquisition for such use.^" The petition should disclose the specific purpose to which it is intended to apply the lands.^" A petition which alleges that premises occupied by a rail- road company are' inadequate for the carrying on of its busi- ness, and the addition of the lands sought to be condemned will be adequate and sufficient, contains facts showing the necessity of the acquisition.^^ The failure to state in a petition by a water company that the water was to be supplied for the extinguishment of fires and for sanitary and other public purposes is cured of the de- fect by the proof adduced on the trial and the finding of the court of a contract in the express terms of the statute.^^ While it is not essential to the city's right to bring eminent domain proceedings, that minute and detailed plans, proper 87. Matter of Washington Park, 52 owners thereon and will necessitate a N. Y. 131. large expense to the city in maintain- 88. Miaroellus Electric Eailroad Co. ing, repairing, lighting, and grading V. Crisler, 33 Misc. 1, 67 N. Y. Supp. the same," that it is useless and not .' 932. desired by the abutting owners therein. 89. Flood Abatement Commission v. Matter of City of Rochester, 102 App. ■ Merritt, 94 Misc. 388, 158 N. Y. Supp. Div. 99, 92 N. Y. Supp. 478. i 289; Matter of New York, etc., R. Co., 90. Matter of N. Y. C. & H. R. E. 64 How. Pr. 216. Co., 5 Hun, 86; aff'd, 66 N. Y. 407. Useless street. — Subdivision 3 is sat- 91. Broadway & 7th Av. Rd. Co., 73 isfled by an allegation that the street Hun, 7, 25 N. Y. Supp. 1080, 57 St. is "unnecessary and useless as a pvb- Rep. 108. lie street, and is a menace to the 92. New Rochelle Water- Works v. health, safety, peace, and good order Brush, 19 N. Y. Supp. 954, 47 St. E«p. of the residents of said city of Roch- 388. ester, and especially to the abutting 394 CONDEMNATION OF REAL PROPEETT. for the awarding of a contract, should first be prepared and approved, yet the improvement must have been planned in a general way, so that the court may see that the determination of the authorities that the land is necessary for the carrying out of the improvement is reasonably warranted.^^ Alle- gations, upon the part of the city, that the property to be taken is required for public park purposes and that the peo- ple in that section of the city are desirous of a place to beautify their section and a place for recreation, are insuffi- cient to authorize condemnation, even where no answer has been interposed. The petition should also show the situation of the neighbor- hood, the extent of the population there, the fact, if it be so, that there is no other or sulficient place for the recreation of the people of the section and such other facts as may bear upon the necessity of the use for public purposes of the land proposed to be taken.^^ 7. Description of owners. The petition is not defective because it fails to state the residence of the defendant property-owner, where he appears before the commissioner of public works of the city and pre- sents and files his claim for damages, so that his identity is established.^^ Where a petition states that the wife of the owner of the fee has an inchoate right of dower therein, it must also state her residence as she is an " owner. "^ 8. Inability to agree with owner. The court has jurisdiction only when the applicant cannot acquire title by purchase, or by the assent of the owner. The law is zealous of the rights of property, and will not permit them to be invaded under the right or color of eminent domain except upon necessity, and when title cannot be ob- tained by purchase and with the consent of the owner. The reasons of the inability must be stated that the court may determine their sufficiency, and also that the owner of the land may negative or disprove them, as the reasons why agree- 93. Matter of City of New York, re Neun), 102 App. Div. 99, 92 N. Y. 104 App. Div. 445, 93 N. Y. Supp. 655. Supp. 478. 94. Matter of Meagher, 35 Misc. 601, 96. The Mareellus Electric R. Co. v. 72 N. Y. Supp. 157. Noah B. Crisler, 33 Misc. 1, 67 N. Y. 95. Matter of City of Rochester (In Supp. 932. CONDEMNATION OF REAL PROPERTY. 395 ment cannot be had may be various, and a petition which fails to state the reasons for disagreement is defective.^'' As a condition precedent to the appointment of commis- sioners, the condemnor must generally prove that he has failed to agree with the owner upon a price for the purchase of the land after an effort made in good faith.^^ An allegation that a village has endeavored to agree upon a price is a sufficient allegation that the trustees thereof have . done 80.'^ A statement that the owner demands an unreason- able price, is sufficient to show a failure to agree.^ Allegations that the plaintiff has attempted in good faith, but has been unable, to agree with the owners of the prop- erty for its purchase, and that the reason is that the owners " demand a sum or price therefor largely in excess of the value thereof," are a sufficient compliance with the statute.^ A petition is sufficient where it states that the petitioner has not been able to acquire title to said land, and that the rea- son of such inability is that the owner refuses to sell the same for any reasonable compensation, and that your petitioner has not been able to agree with the owner or owners of said real estate, or of any interest therein, for the sale of the same to your petitioner.* 97. Matter of Marsh, 71 N. Y. 316; Matter of N. Y. Cable R. R. Co., 36 Hun, 356. 98. Matter of New York, Westches- ter & Boston E. Co., 151 App. Div. 50, 135 N. Y. Supp. 234. See also Matter of Bronx Parkway Commission (1917), 176 App. Div. 717, 163 N. Y. Supp. 882, wherein it appeared that an offer was served on December 30, and on the fol- lowing day a petition for condemna- tion of the lands was verified, which was served on January 3 following (one of the intervening days being New Year's day and the other Sun- day), and it waa held, that the alleged offer was perfunctory and not a gen- uine attempt to come to an agreement. 99. Village of Waverly v. Waverly Water Co., 127 App. Div. 440, 111 N. Y. Supp. 541; aff'd, 194 N. Y. 545. Water company. — ^A petition in a condemnation proceeding which alleges that the board of trustees of a village submitted to the owners of a water company an offer to buy its property and plant to which no answer was made; that the village has been un- able to agree with the owners on a price; that upon two occasions it has requested the owners to make an offer and they have refused; that they have refused to permit an examination of their books to ascertain the extent of the property, and that they have re- fused and neglected to enter into ne- gotiations for the sale of the property, sufficiently shows the inability of the trustees to agree with the owners upon a price. Village of Waverly v. Wav- erly Water Co., 127 App. Div. 440, 111 N. Y. Supp. 541; aff'd, 194 N. Y. 545. 1. Matter of Long Island Rd. Co., 50 St. Rep. 257, 21 N. Y. Supp. 489. 2. Marcellus Electric R. Co. v. Cris- ler, 33 Misc. 1, 67 N. Y. Supp. 932. 3. Matter of Suburban Rapid Tran- sit Co., 38 Hun, 553. 396 CONDEMNATION OF EEAZ, PROPERTY. Under special statutes, it may not be a condition precedent to the right to institute condemnation proceedings that the petitioner should have endeavored to acquire title to the neces- sary lands by voluntary purchase.^ 9. Intention to complete work and that preliminary steps have been taken. A petition must contain a statement of petitioner's in- tention to complete the work.^ An allegation, in the language of the statute, that all the preliminary steps required by law have been taken to entitle the plaintiff to institute proceed- ings, is sufficient, though such allegation is a mere conclusion to be drawn from many facts; but where such allegation is met by a general denial the petitioner must prove every essen- tial condition required by the statute.^ Where a petition complies literally with subdivision 7, but does not state specific facts, it nevertheless confers jurisdic- tion.' 10. Amendment to petition. The right of the court to permit an amendment to the peti- tion has been sustained in numerous cases.^ Thus, the de- 4. Matter of City of New York, 104 its incorporation; that it has paid the App. Div. 445, 93 N. Y. Supp. 655. required sum pursuant to the Railroad 5. Erie & C. N. Y. Ed. Co. v. Walsh, Law; that it ha;s obtained from the 1 App. Div. 140, 37 N. Y. Supp. 996, 73 Public Service Commission the certifi- St. Rep. 539. cate required by law, or, if so, that it Closing alley. — A petition in pro- has been filed or recorded, cannot bj ceeding to close an alley is not defec- urged as preliminary objections, but tive because it fails to allege that the such allegations should be embodied in city intends "in good faith to complete an answer to the petition. Dexter & the work or improvement for which Northern R. Co. v. Foster, 64 Misc. the property is to be condemned," as 500, 119 N. Y. Supp. 731. such an allegation is not vital in such The consent of the Public Service a proceeding. Matter of City of Roch- Commission to a proposed change of ester, 102 App. Div. 99, 92 N. Y. Supp. grade by a railroad corporation is not 478. one of the allegations required to be 6. Dexter & Northern E. R. Co. v. set forth specifically. Long Island R Foster, 64 Misc. 500, 119 N. Y. Supp. Co. v. Sherwood, 136 N. Y. Supp. 752. 731; Flood Abatement Comm. v. Mer- 7. Rochester Rd. Co. v. Robinson, ritt, 94 Misc. 388, 158 N. Y. Supp. 289. 133 N. Y. 242. Preliminary steps.— The failure of a 8. Matter of Suburban Transit Co., railroad company to sufficiently allege, 16 Abb. N. Cas. 152; Matter of Roch- in its petition for the right to lay and ester, Homellsville, etc., Ry. Co., 19 operate its railroad through a street. Abb. N. C. 421; aflf'd 110 N. Y. 119; CONDEMNATION OF REAL PROPERTY. 397 scription of the premises to be condemned may be amended.^ So, too, the petition may be amended so as to state the resi- dence of the persons having an interest in the premises.^" Although in a condemnation proceeding the petition alleges that the lands are owned by the original grantor and that the wife and her husband, who were misnamed, claims to have some interest therein, the proceeding is not thereby invali- dated, if in fact the petition is amended to describe her as the owner and wife of the grantor and she appears, claims to be the owner, and is paid the award." But, if a jurisdictional allegation is omitted in the petition, it cannot well be cured by amendment.^^ And after an order has been made and appealed from, the petition cannot be generally amended.^^ Matter of Metropolitan Transit Co., 7 St. Eep. 477. Terms. — Where a railroad company, while an action is pending by the owners, of the highway to restrain it from entering thereon, obtains an order permitting it to go into imme- diate possession upon depositing $5,000, which is done, an amendment to the petition will be granted on con- dition that the petitioner pay all tax- able costs to date in said action and also all witnesses' fees paid and tax- able, on the part of the owners in the condemnation proceedings to the date of the order, together with an allow- ance to their attorney upon the mo- tion to amend and as ■compensation for his appearance to date before the com- missioners. Matter of Lake Shore & M. S. R. R. Co., 53 Misc. 340, 103 N. Y. Supp. 294. A statute authoriz- ing the taxation of costs upon the dis- continuance in w'hole or in part of street opening proceedings does not apply where the proceedings are merely amended by changing the loca- tion of the proposed street so that it leaves out a part of an owner's prop- erty but retains a substantial part. Matter of City of New York (Senator Street), 159 App. Div. 410, 145 N. Y. Supp. 266. Under the Rapid Transit Act, the city of New York does not have an absolute right to amend a pending condemnation proceeding by bringing into it lands not included in the first instance. Consequently the court has power to prescribe terms as a condition for amending the proceed- ing. Matter of Public Service Comm., 217 N. Y. 183. 9. Maxon v. Gale, 142 App. Div. 335, 126 N. Y. Supp. 967; Matter of Lake Shore & M. S. R. R. Co., 53 Misc. 340, 103 N. Y. Supp. 294; City of Syracuse v. Stacy, 86 Hun, 441, 33 N. Y. Supp. 929, 67 St. Rep. 704. Rights of way. — The court cannot amend the petition, maps and proceed- ings so as to cause the city to with- draw rights of way reserved to the owner, and to grant ways that were not reserved, and thereby reduce the compensation that was due the claim- ant when the title passed to the city. Matter of Simmons, 152 App. Div. 503, 137 N. Y. Supp. 339. 10. Matter of Rochester, etc., R. Co., 45 Hun, 126; afif'd, 110 N. Y. 119. 11. Scheer v. Long Island Railroad Co., 127 App. Div. 267, 111 N. Y. Supp. 569. 12. Stanards Comers Rural Ceme- etery Association v. Brandes, 14 Misc. 270, 35 N. Y. Supp. 1015. 13. Matter of N. Y., West Shore & B. R. R. Co., 89 N. Y. 453. 398 CONDEMNATION OF REAL PROPERTY. 11. Variance. A finding that the defendant is the owner of the premises instead of owning a mere easement therein, as alleged in the petition, does not require a dismissal of the proceedings, and the petitioner will be allowed to continue it for the purpose of acquiring all the defendant's title even if it is necessary to amend some of the allegations of the petition.^* 12. Objections to sufficiency of petition. If the petition does not show the facts required by statute to be stated, the objection may be disposed of before trial.^^ Objections may be taken orally to such a petition.^^ B. The petitioner. Proceedings for the condemnation of land, streams, water, or water rights for a village water supply, under the General Village Law, must be brought in the name of the village and not in the name of the board of water commissioners.^'' A petition for the appointment of commissioners to ap- praise the compensation to be paid for lands to be taken for a town hall may be made by the town board.^^ Under the law which confers upon board of supervisors the right to acquire property, a county by its board of supervisors may proceed under section 92 of the Railroad Law, for the appointment of commissioners to condemn lands necessary to a change in grade crossing; and the words " municipal cor- poration in which the highway crossing is located " are broad enough to include a county .^^ C. Notice of presentation of petition, and service thereof. 1. Condemnation Law, § 5. Notice to be annexed to petition; service. There must be annexed to the petition a notice of the time and place at which it will be presented to a Special Term of the Supreme Court, held in the judicial 14. City of Geneva v. Henson, 195 17. Matter of Eoe, 59 Misc. 535, 111 N. Y. 447. N. Y. Supp. 755. 15. Matter of N. Y., W. S. k B. E. 18. Town Bd. of Jamaica v. Denton, R, Co., 64 How. Pr. 217. 70 N. Y. Supp. 837. 16. Erie & Central New York R. Co. 19. County of Nassau v. Luessen, 69 V. Welch, 1 App. Div. 140, 37 N. Y. Misc. 184, 125 N. Y. Supp. 206. Supp. 996. CONDEMNATION OF REAL PROPERTY. 399 district where the property or some portion of it is situated, and a copy of the petition and notice must be served upon all the owners of the property at least eight days prior to its presentation. 2. Condemnation Law, § 6. Service of petition and notice. Service of the petition and notice must be made in the same manner as the service of a summons in an action in the Supreme Court is required to be made, and all the provisions of article 2.5 of the Civil Practice Act, which relate to the service of a summons, either personally or in any other way, and the mode of proving service shall apply to the service of the petition and notice. If the de- fendant has an agent or attorney residing in this State, authorized to contract for the sale of the real property described in the petition, service upon such agent or attorney will be sufficient service upon such defendant. In case the defendant is an infant of the age of fourteen years or upwards, a copy of the petition and notice shall be served upon his general guardian, if he has one; if not, upon the person with whom he resides. 3. Who is "owner." The term " owner " includes all persons having any estate, interest, or easement in the property to be taken, or any lien, charge or incumbrance thereon.^" A mortgagee,^ or lienor,^^ of the property, is entitled to notice of the proceed- ing. Notice to each of several co-tenants should be given.^^ Both the remainderman and the life tenant are necessary parties.^* One having an equitable interest in the property should receive notice.^^ If a petitioner in condemnation proceedings knows that one is an equitable owner of property sought to be condemned, he must treat him as an owner.^^ Where there are conflicting 20. Condemnation Law, § 2. appears, and which results in an award 21. Matter of Opening of Oneida to him, does not bind the wife's inter- Street, 22 Misc. 235, 49 N. Y. Supp. est or confer any right in the land as 828. to her, and she can maintain an ac- 22. Watson v. N. Y. C. R. R. Co., 6 tion, during the life of her husband, Abb. N. S. 91. See also Watson v. N. to restrain the construction of the Y. C. R. R. Co., 47 N. Y. 157, referring sewer, as a threatened permanent ''n- to another statute. jury to the freehold which will inter- 23. Dyckman v. Mayor of N. Y., 5 fere with her possession. Grossor v. N. Y. 434. City of Rochester, 148 N. Y. 235 Tenants by entirety. — ^When a hus- 24. Matter of Met. Elec. Ry. Co., 12 hand and wife are seized of an estate N. Y. Supp. 506. as tenants by the entirety, a proceed- 25. Matter of Hand St., 52 Hun, 206, ing by a municipality to condemn a 5 N. Y. Supp. 158. right of way for a sewer across the 26, Champlain & Sanford Railroad premises, in which notice is served Co. v. Ostrander, 151 App. Div. 752, upon the husband alone, and he only 136 N. Y. Supp. 1012. 400 CONDEMNATION OF REAL PROPERTY, claims of ownership to the property, all claimants are neces- sary parties.^^ The owner of lands abutting upon navigable waters is a proper party to a proceeding to condemn the lands under water, as he has riparian rights therein even though he has no fee.^^ The owner of the fee in a public street is a proper defend- ant in proceedings for the construction of a sewer in a street.^^ But it is not necessary, where the application is made on be- half of a telephone company, to condemn the right to place its poles and wires in a village street, that the municipal authori- ties be made parties to the proceedings, as no public right is sought to be taken therein, and as the municipality has no estate, interest, or easement in the property sought to be taken, and is not an " owner " within the meaning of sec- tion 5.30 A railroad company by merely filing its map and profile of a proposed extension of its road and serving notice on the oc- cupants of the land therein designated, acquires no lien or property right against the State so as to entitle it to notice as an owner in proceedings by the State to condemn such land.^^ A public service corporation does not acquire prior rights as against the Palisades Interstate Park Commissioners by first filing maps and petitioning the Conservation Commis- sion for an approval of their maps and plans.^^ A village by instituting a proceeding to acquire lands for a sewer admits the landowner's right and cannot take the posi- tion that the lands in question form a part of a public high- way.^^ 4. Necessity of notice. In proceedings under the right of eminent domain personal notice should be given to each person proceeded against.^* A 27. N. Y. C. & H. R. E. R. Co. v. Supp. 79. Matthews, 70 Misc. 567, 128 N. Y. 31. People v. Adirondack Rd. Co., Supp. 138. 160 N. Y. 225; afE'd, 176 U. S. 335. 28. N. Y. C. & H. R. R. R. Co. v. 32. Ramapo Mountains Water, etc., Mathews, 144 App. Div. 732, 129 N. Y. Co. v. Commissioners of Palisades In- Supp. 828. terstate Park, 177 App. Div. 700, 164 Compare, Matter of N. Y., W. S. & N. Y. Supp. '430. B. R. R. Co., 29 Hun, 269. 33. Village of Medina -f. Graves, 113 29. In re Wells, 4 N. Y. Supp. 301. N. Y. Supp. 52. 30. New Union Telephone Co. v. 34..Dyckman v. Mayor, 5 N. Y. 434. Marsh, 96 App. Div. 122. 89 N Y. Map.— Notice of time and place of CONDEMNATION OF REAL, PROPERTY. 401 statute authorizing a condemnation of property without due notice to those interested therein, would be unconstitutional.^ Jurisdiction is obtained in condemnation proceedings by the service of the petition and requisite notice. But, although the Legislature cannot dispense with the giving of notice, it may by statute prescribe the kind of notice, and the mode of giving it.^^ Constructive notice may be given in some cases by publication.^'' Where the person on whom service was to be made, although a resident of the State, was at the time absent in Europe, it was held, that a service on a party of suitable age left in charge of the dwelling-house of such per- son during his absence, was in conformity with the statute under which the proceeding was maintained.^* The occupants served with notice may defend the proceed- ings because of the failure to serve all of the owners.^^ A vol- untary appearance and litigation on the merits waives the giving of the notice.^" But, where a notice of appraisal is de- fective, nothing short of an appearance by the party whose lands are sought to be taken and actual litigation on the merits ought to be regarded as an implied waiver of the de- fect.'^ 5. Purpose of notice. The notice should be given to afford an opportunity to raise questions as to the regularity of the proceedings, as that the petition was not properly verified, or that it does not appear there was a failure to agree with the owner, since it is too late to raise these objections on confirmation of the report.*^ The fact that a copy of the notice of motion for the appoint- ment of commissioners of appraisal in a condemnation pro- filing map and profile is necessary. 38. Matter of N. Y. & Oswego E. R. Wallkill Valley R. R. Co. v. Norton, 12 Co., 40 How. Pr. 335. Abb. N. S. 317; Matter of N. Y. & B 39. Greenwich & J. R. Co. v. Green- R. R. Co., 62 Barb. 85. wich & S. El. R. Co., 75 App. Div. 220, 35. Matter of Opening Oneida Street, 78 KT. Y. Supp. 24; afl'd, 172 N. Y. 462. 22 Misc. 235, 49 N. Y. Supp. 828. 40. Dyckman v. The Mayor, 5 N. Y. 36. H. E. Rd. Co. v. N. Y., L. E. & 434. W. R. E. Co., 83 Hun, 407, 64 St. Rep. 41. Cruger v. H. R. R. R. Co., 12 416, 31 N. Y. Supp. 745. N. Y. 190. 37. Matter of Opening Oneida Street, 42. N. Y. & Brie Ry. Co. v. Corey, 5 22 Misc. 235, 49 N. Y. Supp. 828. How. Pr. 177. 26 402 CONDEMNATION OF EEAL PROPERTY. ceeding was not served on the defendants, is an irregularity of ■which the petitioner cannot take advantage.^^ 6. Contents of notice. The notice of application for the appointment of commis- sioners must state when and where it will be presented. A notice which states that it will be made to the ' ' Special Term of the Supreme Court of N. Y." on a specified day, is not sufKcient.^* 7. Bringing in other parties. If other parties are necessiary in a condemnation proceed- ing, the court has power to bring them in.^ Where, after the filing of a notice of lis pendens in a con- demnation proceeding, and after an order permitting the peti- tioner to remain in possession of the fee of the street, an abut- ting owner who acquires title to the roadbed in a quitclaim deed made in consideration of his agreement to share any re- covery with his grantor, having gained both titles, is entitled to intervene and be made a party defendant in the condem- nation proceedings.*^ One who has, or claims to have, an interest in the lands sought to be acquired, if not named in the petition, has a right to be made a party to the proceedings on timely application to the court, supported by affidavits, which, if true, show him to be a party in interest ; the allegations in the affidavit must be tried by legal evidence and not by counter-affidavit, and the court has no right to impose a condition upon an applicant who makes out a prima facie case.*'' 43. Matter of Manhattan E,. Co. v. condemnation proceedings. N. Y. C. & Meighan, 186 App. Div. 733, 175 N. Y. H. R. R. R. Co. v. Matthews, 70 Misc. Supp. 20. ' 567, 128 N. Y. Supp. 138. 44. Matter of Broadway & 7th Ave. Receiver. — As to bringing in a re- Ed. Co., 69 Hun, 275, 53 St. Rep. 38.. ceiver of the property, see Matter of 23 N. Y. Supp. 609. New York Municipal R. Corp. v. Hol- 45. Matter of Manhattan R. Co. v. liday, 189 App. Div. 814, 179 N. Y. Meighan, 186 App. Div. 733, 175 N. Y. Supp. 238. Supp. 20. 46. Matter of Nassau Electric Rail- The provision of section 193 of the road Co., 173 App. Div. 253, 159 N. Y. Civil Practice Act which authorizes Supp. 473. joining as defendants all persons claim- 47. Matter of N. Y., Lackawanna & ing an interest in the controversy or W. R. R. Co., 26 Hun, 194. real property involved is applicable to CONDEMNATION OF EEAX, PEOPEBTY. • 403 D. Jurisdiction of courts. Proceedings for the condemnation of land under the Con- demnation Law must be taken in court; a judge out of court has no power in respect thereto.*^ The appropriate county in which to lay the venue of and try proceedings for the condemnation of easements in real property is the county in which the property or the bulk thereof is located notwithstanding the provision of section 5 authorizing proceedings to be presented in the judicial dis- trict where the property is located.^^ E. Joinder of applications. The court may appoint commissioners to appraise all the lands proposed to be taken in a county, although owned by different parties. The statute authorizes a joint commission, comprehending all the landowners included in one petition, and there is nothing in the statute to prevent several owners being included in one petition.™ But, while it is more con- venient and less expensive to include all lands and owners in one proceeding, it is not necessary ; and separate applications may be made to the court as to each.^^ ARTICLE rV. NOTICE OF PENDENCY OF ACTION. A. Condemnation Law, § 25. Notice of pendency of action to be filed. Upon service of the petition, or at any time afterwards before the entry of the final order, the plaintiff may file in the clerk's office of each county where any part of the property is situated, a notice of the pendency of the proceeding, stating the names of the parties and the object of the proceeding, and contain- ing a brief description of the property aflfected thereby, and from the time of filing, such notice shall be constructive notice to a purchaser, or incumbrancer of the property affected thereby, from or against a defendant with respect to whom the notice is directed to be indexed, as herein prescribed, and a. person whose conveyance or incumbrance is subsequently executed or subsequently re- corded, is bound by all proceedings taken in the proceeding after the filing of 48. Matter of Broadway and 7th 50. Matter of Lake Shore & M. S. R. Ave. R. R. Co., 73 Hun, 7, 25 N. Y. Co., 53 Misc. 340, 103 N. Y. Siipp. 294; Supp. 1080. Troy & Rutland R. R. Co. v. Cleveland, 49. Manhattan Railway Company v. 6 How. Pr. 238. Farrell, 180 App. Div. 200, 167 N. Y. 51. City of Johnstown v. Wade, 30 Supp. 526. App. Div. 5, 51 N. Y. Supp. 763. 404 CONDEMNATION OF REAL PROPERTY. the notice, to the same extent as if he was a party thereto. The county clerk must immediately record such notice when filed in the book in his office kept for the purpose of recording notices of pendency of actions, and index it to the name of each defendant specified in the direction appended at the foot of the notice, and subscribed by the plaintiff or his attorney. ARTICLE V. APPEARANCE AND ANSWER. A. Condemnation Law, § 7. Appearance of infant, idiot, lunatic or habitual drunkard. If a defendant is an infant, idiot, lunatic or habitual drunkard, it shall be the duty of his general guardian, committee or trustee, if he has one, to appear for him upon the presentation of the petition and attend to his interests, and in case he has none, or in ease his general guardian, committee or trustee fails to appear for him, the court shall, upon the presentation of the petition and notice, with proof of service, without further notice, appoint a guardian ad litem for such defendant, whose duty it shall be to appear for him and attend to his in- terests in the proceeding, and, if deemed necessary to protect his rights, the court may require a general guardian, committee or trustee, or a guardian ad litem to give security in such sum and with such sureties as the court may approve. If a service other than personal has been made upon any defendant, and he does not appear upon the presentation of the petition, the court shall appoint some competent attorney to appear for him and attend to his interests in the proceeding. B. Condemnation Law, § 8. Appearance. The provisions of law and of the rules and practice of the court, relating to the appearance of parties in person or by attorney in actions in the Supreme Court, shall apply to the proceeding from and after the service of the petition, and all subsequent orders, notices and papers may be served upon the attorney appearing and upon a. guardian ad litem in the same manner and with the name effect as the service of papers in an action in the Supreme Court may be made. C. Condemnation Law, § 9. Answier; what to contain. Upon presentation of the petition and notice with proof of service thereof,, an owner of the property may appear and interpose an answer, which must con- tain a general or specific denial of each material allegation of the petition con- troverted by him, or of any knowledge or information thereof sufficient to form a belief, or a statement of new matter constituting a, defense to the proceeding. S. General appearance. The general appearance of a party and the filing of an answer by him, without objection, confers jurisdiction over CONDEMNATION OF EEAi PROPERTY. 405 Mm.^^ He cannot thereafter object to the petition or notice on account of defects therein.^ £. Objections on return day. On the return of the petition, an owner may interpose ob- jections to the sufficiency of the papers. It may then be shown that the petition is not properly veri- fied, or that it does not appear that the petitioner has been unable to agree with the owner.^* An objection that neither the petition nor the map filed in the office of the county clerk shows the extent of land to be taken, or anything more than a line showing the direction of the proposed railroad, should be raised on presentation of the petition.^^ The fact that a petition contains a more or less ambiguous recital not required by the statute, which might be construed to contradict an averment therein, is not available to defeat the proceeding.^^ F. Infant. Where lands were taken under a special statute, it was held that that statute was intended to secure the attendance of some fit person before the tribunal making the appointment, as guardian or attorney to attend personally to the interests of the infant, and that without such appearance the proceed- ings in that case were entirely unauthorized and void, and that until such appearance, jurisdiction was not acquired.^^ G. Contents of answer. Section 9 does not require the defendant in condemnation proceedings to state the value of the property in his answer.^* An objecting landowner who, by a verified answer, puts in issue certain facts alleged in the application, and denies that any power has been given to take the land in question for the 52. County of Orange v. Ellsworth, Co. v. Reynolds, 6 How. Pr. 96; Mat- ^8 App. Div. 275, 90 N. Y. Supp. 576; ter of N. Y. & Jamaica R. R. Co., 21 Matter of New York, etc., R. Co., 33 How. Pr. 434. Hun, 148; Matter of Rochester, etc., 56. County of Orange v. Ellsworth, Co., 19 Abb. N. Cas. 421. 98 App. Div. 275, 90 N. Y. Supp. 576. 53. See, infra. Art. V-E. Objections 57. Hotchkiss v. Auburn, etc., R. on return day. R. Co., 36 Barb. 600. 54. N. Y. & Erie R. R. Co. v. Corey, 58. Matter of Niagara, Iiockport & S How. Pr. 177. Ontario Power Co., Ill App. Div. 686, 55. Matter of Bufifalo & S. L. R. R. 97 N. Y. Supp. 853. 406 CONDEMNATION OF BEAT, PROPEBTY. reason that it is already occupied for a public purpose, is en- titled to have the questions thus presented decided before commissioners are appointed to determine and assess the damage s.^^ The legal existence of a corporation authorized to construct a railroad is at the foundation of the right to take property for its use, under the right of eminent domain ; it is a fact which it is compelled to allege in proceedings to acquire title to lands, and which may be controverted.^"^ An answer in a pro- ceeding to condemn property under the Eapid Transit Act denying that it is necessary to acquire the property sought to be condemned for the purposes set forth in the petition, and containing a defense in substance, alleging that the members of the Public Service Commission which made the application were not really of the opinion that the acquisition of the prop- erty was necessary for the purposes stated in the petition, is insuflScient to raise any permissible issue.^^ Whether the denial of the incorporation of a petitioner, without an affirm- ative allegation that it is not a corporation, is sufficient to raise the issue, is a question which has found different solutions in different departments. The question is discussed in the Chapter on Corporations.^^ An answer must be veri- fied in the same manner as the petition.®^ H. Failure to deny allegations. When the material allegations in the moving affidavit or verified petition in a special proceeding are not denied, they stand sufficiently proved for the purposes of the ultimate order.^* I. Default of owner. If a defendant interpose an answer to the petition, a trial of the issues thus raised must be had.^ Property owners who, although personally served with a petition and notice never appear in the proceedings, are not entitled to notice of any subsequent proceedings.^ 69. Matter of the Mayor, 22 App. cation of pleadings. Div. 124, 47 N. Y. Supp. 965. 64. Matter of Petition of N. Y., L. 60. Matter of B., W. & N. Ry. Co., & W. R. R. Co., 99 N. Y. 12. 72 N. Y. 245. 65. N. Y., O. & W. Ry. Co, v. Mc- 61. Matter of Public Servicei Comm., Bride, 45 Misc. 516, 92 N. Y. Supp. 31. 217 N. Y. 61. 66. Matter of Brooklyn Elevated R. 62. See Corporations, Art. I-D. R. Co., 25 Misc. 120, 53 N. Y. Supp. 63. See, supra. Art. lll-A-4. Verifi- 1087. CONDEMNATION OF EEAl, PKOPERTY. 407 Where tlie defendant in condemnation proceedings has ap- peared but failed to answer and a judgment of condemnation has been entered, the effect is the same as though an answer had been interposed and a trial had of the issues raised.^'' ARTICLE VI POSSESSION OF PROPERTY PENDING THE PROCEEDING. A. Condemnation Law, § 23. Party in possession may stay on giving security. At any stage of the proceeding the court may authorize the plaintiff, if in possession of the property sought to be condemned, to continue in possession, and may stay all actions or proceedings against him on account thereof, upon giving security, or depositing such sum of money as the court may direct to be ield as security for the payment of the compensation which may be finally awarded to the owner therefor and the costs of the ^oceedings, and in -very such case the owner may conduct the proceeding to a conclusion, if the plain- tiff delays or neglects to prosecute the same. When the final award to any owner is less than fifty dollars, in proceedings to condemn a right of way, for telephone or telegraph poles and wires, the allowance of costs, if any, and the amount thereof not exceeding that prescribed by statute, shall be in the discre- tion of the court in any action or proceeding that may have been or may here- after be stayed, if the telephone or telegraph poles and wires, in such action or proceeding so stayed, shall have been erected for more than three years prior to the commencement thereof. B. Condemnation Law, § 24. Temporary possession pending proceed- ings. When an answer to the petition has been interposed, and it appears to the satisfaction of the court that the public interests will be prejudiced by delay, it may direct that the plaintiff be permitted to enter immediately upon the real property to be taken, and devote it temporarily to the public use specified in the petition, upon depositing with the court the sum stated ia the answer aa the value of the property, and which sum shall be applied, so far as it may be necessary for that purpose, to the payment of the award that may be made, and the costs and expenses of the proceedings, and the residue, if any, returned to the plaintiflf, and, in case the petition should be dismissed, or no award should be made, or the proceedings should be abandoned by the plaintiff, the court shall direct that the money so deposited, so far as it may be necessary, shall be ap- plied to the payment of any damages which the defendant may have sustained by such entry upon and use of his property, and his costs and expenses of the proceeding, such damages to be ascertained by the court, or a referee to be ap- pointed for that purpose, and if the sum so deposited shall be insufficient to pay such damages, and all costs and expenses awarded to the defendant, judgment 67. New York Central & H. R. R. R. Co. v Reusens, 151 App. Div. 458, 135 N. Y. Supp. 919. 408 CONDEMNATION OF REAL PROPEETY, shall be entered against the plaintiff for the deficienej-, to be enforced and col- lected in the same manner as a judgment in the Supreme Court; and the posses- sion of the property shall be restored to the defendant. C. Continuance of plaintiff's possession. Section 23 is constitutional.^^ The purpose of that section is to provide for the protection of a plaintiff's possession of property sought to be con- demned, during the pendency of the proceedings taken for that purpose; it does not authorize the court to grant, after an order confirming an award has been entered, an order for- ever restraining the defendants in such proceedings from maintaining actions in respect to the property.®^ "Where the final order has been entered and the award has been made or deposited, the plaintiff is entitled to the pos- session of the property condemned, and the defendants, in case they appeal, may be required to stipulate not to disturb the plaintiff's possession during the pendency of the appeal.™ The section does not authorize the court to restrain owners from maintaining a right of action which accrued prior to the commencement of the condemnation proceedings.''^ Where a railroad company has unlawfully entered upon land under no pretense or claim of right, in defiance of the will of the owner, under no mistake or misapprehension and without color of authority, and thereafter commences a proceeding to acquire title by condemnation, it is not within the provisions of the section empowering the court to authorize the plaintiff to con- tinue in possession.''^ Where the court stated in its order that it appeared to its satisfaction that the plaintiff was in pos- session of the premises, it was assumed on appeal that the court reached the conclusion that the company was in posses- sion under a color of claim, or had acquired possession in good faith.^3 68. Matter of St. Lawrence & Adi- 71. Waite v. Hudson Valley Co., 43 rondack R. Co., 66 Hun, 306, 21 N. Y. Misc. 304, 88 N. Y. Supp. 825. Supp. 131. 72. Matter of St. Lawrence & Adi- 69. Manhattan Ry. Co. v. Taber, 78 rondack R. Co,. 133 N. Y. 270. Hun, 434, 29 N. Y. Supp. 220. 73. Matter of St. Lawrence & Adi- 70. Manhattan Ry. Co. v. Taber, 78 rondack R. Co., 66 Hun, 306, 21 N. Y. Hun, 434, 29 N. Y. Supp. 220. Supp. 131. CONDEMNATION OF REAL, PROPERTY. 409 D. Award of possession to plaintiff. The constitutionality of section 24 has heen sustained, as it is intended to insure to the owner the payment of the value of the premises;''* and it is not necessary that compensation pre- cede the taking of the property.''^ A railroad in condemnation proceedings may be awarded immediate possession of the lands on giving security, al- though the answer puts in issue the necessity of the acquisi- tions of the lands for public use.'^^ While temporary possession of premises pending the con- demnation proceedings may be ordered upon the terms pre- scribed, and the owner thereby may be deprived of possession, he is not divested of title to his land until after the final order of confirmation and payment of compensation.''^ Difficulty arises from applying the section on account of the fact that it assumes to give the owner control of the. amount to be de- posited. The section clearly contemplates that possession shall not be awarded thereunder until the defendant has in- terposed an answer.''^ On the other hand, the purpose of the section is to permit the plaintiff to have possession of the property if the public interests will be prejudiced by delay;™ anxi the defendant should not be allowed to thwart this pur- pose. If the conduct of the defendant, whether in good faith, inadvertently or maliciously, renders a strict compliance with 74. Matter of Niagara, Lockport & sion should not be granted. Central Ontario Power Co., Ill App. Div. 686, New England R. Co. v. Whittley, 159 97 N. y. Supp. 853; Long Island R. E. App. Biv. 468, 144 N. Y. Supp. 270. Co. V. Jones, 151 App. Div. 407, 135 75. See, supra, Art. I-D-2. Time of N. Y. Supp. 954. payment. Necessity of possession.— .Before a 76. Long Island R. Co. v. Jones, 151 petitioner is entitled to temporary pos- App. Div. 407, 135 N. Y. Supp. 954. session of lands pending condemnation 77. Matter of City of Syracuse, 224 proceedings, he must show specific N. Y. 201. facts from which the court can be 78. Peck v. Schenectady Ry. Co., 67 satisfied that the possession of the App. Div. 359, 73 N. Y. Supp. 794; premises is immediately necessary for aff'd, 170 N. Y. 298; New York Central the prosecution of the public improve- & H. R. R. R. Co. v. Reusens, 151 ment. Hence, vi^here the only evidence App. Div. 458, 135 N. Y. Supp. 919; to the effect that the public interests Matter of Village of Canton v. Allen, will be prejudiced by delay is the affi- 180 App. Div. 273, 167 N. Y. Supp. davit of the attorney for the petitioner 665. and of the assistant engineer, stating 79. Matter of Niagara, Lockport & in substance that it is necessary to have Ontario Power Co., Ill App. Div. 686, the immediate possession of the prop- 97 N. Y. Supp, 853. erty to work upon, temporary posses- 410 CONDEMNATION OF REAL, PROPERTY. section 24 impossible, the general authority conferred upon the court by section 26 is sufficiently comprehensive to enable the obvious purpose to be accomplished.^" Hence, it is held that the failure of the defendant to state a value in his answer does not preclude the remedy, but the court will fix the amount to be deposited.^^ A deposit of the fair value of the land, as shown by the petitioner by affidavits founded on its assessed value, is suffi- cient when the contestant at the request of the court refuses to set a value.^^ Or, if the owner interposes an answer grossly overstating the value of the lands sought to be taken, the court is not bound thereby, but will treat the answer as though no value were stated therein.^^ AETICLE VII. TRIAL AND JUDGMENT. A. Condemnation law, § 11. Trial of issues. The court shall try any issue raised by the petition and answer at such time and place as it may direct, of it may order the same to be referred to a referee to hear and determine, and upon such trial the court or referee shall file a deci- sion in writing, or deliver the same to the attorney for the prevailing party, within twenty days after the final submission of the proofs and allegations of the parties, and the provisions of the .Civil Practice Act relating to the form and contents of decisions upon the trial of issues of fact by the court or a referee, and to making and filing exceptions thereto, and the making and settlement of a case for the review thereof upon appeal, and to the proceedings which may be had in case such decision is not filed or delivered within the time herein re- quired, and to the powers of the court and referee upon such trial, shall be ap- plicable to a trial and decision under this chapter. 80. Matter of Niagara, Lockport & grant immediate possession, except Ontario Power Co., Ill App. Div. 686, upon deposit of such sum. Central 97 N. Y. Supp. 853. New England R. Co. v. Whittley, 159 81. Matter of Niagara, Lockport & App. Div. 468, 144 N. Y. Supp. 270. Ontario Power Co., Ill App. Div. 686 82. Matter of Niagara, Lockport & 97 N. Y. Supp. §53; Long Island R. R. Ontario Power Co., Ill App. Div. 686, Co. V. Jones, 151 App. Div. 407, 135 97 N. Y. Supp. 853. N. Y. Supp. 954. 83. N. Y. C. & H. R. R. R. Co. v. Value in affidavit. — ^Wbere an answer Lally, 62 Misc. 506, 115 N. Y. Supp. fails to state the value of the land, 897. but in an affidavit presented opposing Compare Matter of New York, W, the motion for temporary possession & Boston Ry. Co., 51 Misc. 333, 100 the value is claimed to be a certain N. Y. Supp. 388. amount, the court is unauthorized to CONDEMNATION OF REAL PROPERTY. 411 B. Condemnation Law, § 13. Judgment; costs when to defendant; commissioners. Judgment shall be entered pursuant to the direction of the court or referee in the decision filed. If in favor of the defendant, the petition shall be dismissed with costs to be taxed by the clerk, at the. same rates as are allowed, of course, to a defendant prevailing in an action in the Supreme Court, including the allowances for proceedings before and after notice of trial. If the decision is in favor of the plaintiff, or if no answer has been interposed and it appears from the petition that he is entitled to the relief demanded, judgment shall be en- tered, adjudging that the condemnation of the real propertj' described is neces- sary for the public use, and that the plaintiff is entitled to take and hold the property for the public use specified, upon making compensation therefor and the court shall thereupon appoint three disinterested and competent freeholders, resi- dents of the judicial district embracing the county where the real property or some part of it is situated, or of some county adjoining such judicial district, commis- sioners to ascertain the compensation to be made to the owners for the property to be taken for the public use specified, and fix the time and place for the first meeting of the commissioners. Provided, however, that in any such proceeding instituted within the first or second judicial district, such commissioners shall be residents of the county where the real property, or some part of it, is situated, or of some adjoining county. If a trial has been had, at least eight days' notice of such appointment must be given to all the defendants who have appearred. The parties may waive, in writing, the provisions of this section as to the resi- dence of the commissioners, and in that case they may be residents of any county in the State. Where owners of separate properties are joined in the same pro- ceeding, or separate properties of the same owner are to be condemned, more than one set of commissioners may be appointed. No person shall be. appointed such a commissioner in the first or second judicial districts who holds the posi- tion of clerk, private secretary, secretary, or stenographer to any justice or judge of a court of record or to any board of justices or judges of such a court in any department where such justice or judge is engaged in the discharge of the duties of his ofiice. C. Objections to sufficiency of papers. Objections to the sufficiency of the petition and the notice to the defendants, can and should be made on the return day.^* If not so made, they may be waived.^^ 84. Bell Telephone Co. v. Parker, shown. If such objection is overruled, 187 N. Y. 299. then any de,fense to the proceeding by If the petition does not state the way of denial of facts in the petition facts required by the section to be or new matter outside may be set up stated, an objection in that regard can by affidavit or answer, and the issues be raised preliminarily in effect by so formed are to be tried. Matter of way of demurrer, and should be dis- N. Y., W. S. & B. R. R. Co., 64 How. posed of before proceeding to the Pr. 217. merits. If such objection is well 85. See, supra. Art. V-E. Objections taken, the proceeding is dismissed, un- on return day. less a proper cause for amendment is 412 CONDEMNATION OF REAL PROPERTY, Objections to a petition pertaining to defects of minor im- port which could be readily supplied, should be raised specifi- cally, and should not be concealed in general objections of a jurisdictional character.^^ D. Issues. In condemnation proceedings the issues are to be framed and tried as in ordinary actions. An answer in the form pre- scribed by section 9 raises an issue and the petitioner must meet it by proof.*^ If an answering party denies that the petitioner has power to take the land in question for the reason that the land is al- ready occupied for a public purpose, he is entitled to have the question thus presented decided before the appointment of commissioners.** The legal existence of the corporation is at the foundation of its right to acquire property under the right of eminent domain ; it is a fact which it is compelled to allege in its peti- tion, and which may be controverted. If, therefore, by non- performance of a condition of its charter, the corporation has forfeited or lost its corporate rights and powers, the fact may be averred by any one whose land or property is sought to be appropriated in answer to the application.*^ But it is held that it is not competent to inquire into an alleged improper issue of stock, if it appears that valid subscriptions to the ex- tent reqiiired by the statute have been made, and 10 per cent, thereon paid in cash.^" Where an allegation that petitioner has been unable to 86. Matter of City of Rochester^ 102 the proceedings are for damages for App. Div. 99, 92 X. Y. Supp. 478. the change of sidewalk grade in con- 87. City of Syracuse v. Benedict, 86 formity with the provisions of the Vil- Hun, 343, 33 N. Y. Supp. 944. lage Law, the practice, provided for in Purpose of condemnation. — It was the condemnation law for a trial of is- held, in Matter of City of Buffalo, 15 sues by a court or referee must be fol- N. Y. Supp. 123, 39 St. Rep. 417, that lowed only after the appointment of a statement in a proceeding to acquire commissioners. Lester v. Village of the fee in a street, that the lands were Blaisdell, 137 N. Y. Supp. 491. to be used for public purposes, is con- 88. Matter of Mayor, 22 App. Div. elusive as to the purposes for which 124, 47 N. Y. Supp. 965. they are to be used, and that the own- 89. Matter of Brooklyn, etc., R. R. ers cannot show that the common Co., 72 N. Y. 245. council intended to acquire title for 90. Matter of Staten Island Transit the benefit of a railroad company. Co., 38 Hun, 381. Change of sidewalk grade. — When CONDEMNATION OF REAL PROPEKTY. 413 agree with the owner of the property for its purchase and the reasons for such inability are denied by the answer, the alle- gation must be proved on the trial.^^ The objection that the petitioner intends to take more property than is described in the petition, cannot be raised in the condemnation proceed- ing.^^ £. Burden of proof. A denial in the answer of a material allegation contained in the petition, puts the burden of proof on the petitioner to prove the allegation in the petition.^^ Thus, an allegation in the answer that it is not the intention of said railroad company in good faith to construct said pro- posed road puts the burden of proof on the petitioner.^* In proceedings instituted by a railroad company, the burden is on the petitioner to show the necessity of acquiring the property, its intention to complete the road, and its endeavor in good faith to agree with the property-owners.^^ F. Action of court. When a petition, which institutes proceedings for the con- demnation of real property, is properly and duly presented to the Supreme Court, that court is required, if no sufficient cause is shown in opposition, to make an order appointing commissioners to ascertain the compensation to be made to the property-owner.^^ Where the purpose for which the land is to be appropriated is partly legal and partly illegal and it cannot be determined how much of the property is necessary for the legal purpose and how much for illegal purposes, the proceeding will be dis- missed.^'' 91. Flood Abatement Comm. v. Mer- BuflFalo vmder section 417, etc., of the ritt, 94 Misc. 388, 158 N. Y. Supp. 289. Charter (L. 1891, chap. 105), to acquire 92. Matter of N. Y., W. S. & B. R. title to the bed of the river, the Leg- R. Co., 101 N. Y. 685. islature left the question of the pro- 93. Matter of N. Y. Central R. R. priety and necessity of acquiring such Co., 66 N. Y. 407; City of Syracuse v. lands to the determination of the city; Benedict, 86 Hun, 343, 33 N. Y. Supp. and it is not necessary in the proeeed- 944, 67 St. Rep. 614. ing to furnish proof of the necessity 94. In re Staten Island Rapid Tran- ^ for acquiring such lands. Matter of sit Co., 20 V»^eek. Dig. 15. City of Buffalo, 189 K Y. 163. 95. Matter of Met. El. R. R. Co., 12 96. Matter of Southern Boulevard N. Y. Supp. 506. R. R. Co., 146 N. Y. 352. When necessity is question for peti- 97. In re Metropolitan El. Co., 12 tion. — In proceedings by the city of N. Y. Supp. 506. 414 CONDEMNATION OF REAL PROPERTY. A proceeding by a water company to acquire land must be dismissed on its failure to prove the filing of the survey and map required by section 83 of the Transportation Corpor- ations Law.^^ Upon a motion to dismiss the petition at the close of the plaintiff's case, he is entitled to the benefit of every fact that can be found from the evidence and to all reasonable infer- ences warranted thereby .^^ Cr. Reference. Section 11 of the Condemnation Law providing that issues raised by the petition and answer in condemnation proceed- ings may be tried and determined by the court or a referee appointed for that purpose, applies only to issues involving facts essential to be shown as a basis for instituting the pro- ceeding. It is not the meaning of the section that an issue of title framed by such pleadings should be sent to a referee for determination. The Supreme Court has, however, general jurisdiction of the proceeding, and where an issue of title was referred, with other issues, by stipulation of the parties in open court, and the question tried and determined by the referee without objection, the judgment entered upon his re- port is binding upon the parties, so far as jurisdiction is con- cerned.^ The fact that the referee decided that the defendant was the owner of all of the premises in question, even if correct, does not sustain a finding that the condemnation proceedings should be dismissed. The petitioner should be allowed to con- tinue the proceeding for the purpose of acquiring all the de- fondant's title, whether it was tho ownership in fee or not, even if it were necessary to amend the petition.^ When the petition of a railroad corporation seeking to con- demn lands in the city of New York for the use of its road and terminal station shows that all the preliminary steps required by law have been taken, and that certain lands are necessary to such construction, the mere fact that the map showing the route as approved by the board of rapid transit commission- 98. Matter of Citizens' Water-Works 1. City of Geneva v. Henson, 140 Co., 32 App. Div. 54, 52 N. Y. Supp. App. Div. 49, 124 N. Y. Supp. 588. 473. 2. City of Geneva v. Henson, 195 99. Village of Babylon v. Bergen, 68 N. Y. 447. Misc. 433, 124 N. Y. Supp. 871. CONDEMNATION OF EEAL PKOPEETY. 415 ers does not include said lands is no reason for refusing a reference to determine whether such lands are necessary.^ Where the referee's report disposes of the issues and orders judgment to be entered accordingly, judgment may be entered upon filing the report without further application to the court.* H. Judgment. A judgment dismissing the petition entered on a decision in favor of the defendant is a final judgment, but the judgment directing the appointment of commissioners entered on a de- cision in favor of plaintiff is interlocutory.^ Where the de- fendant in condemnation proceedings has appeared but failed to answer and a judgment of condemnation has been entered, the effect is the same as though an answer had been inter- posed and a trial had of the issues raised.^ If the court fails to appoint commissioners or to fix a date for the hearing, the omission may be subsequently supplied.'' The court after judgment by default may allow an amend- ment of the petition and judgment correcting a clerical error in the description of the property condemned.^ r. Notice of trial. There is no provision for notice of trial in condemnation proceedings, section 13 of the Condemnation Law providing that the court shall try the issues at such time and place as it 3. Hudson & Manhat. K. R. Co. v. ment and order, and that their pro- Wendel, 112 App. Div. 822, 93 N. Y. posed answer raises the question of ne- Supp. 341; afl'd, 186 N. Y.' 535. ces&ity and the right to condemn, by 4. Erie & Jersey R. R. Co. v. Brown, reason of a prior appropriation of the 57 Misc. 161, 107 N. Y. Supp. 981; land by the State, a motion to vacate aff'd, 123 App. Div. 655, 107 N. Y. and set aside the judgment and open Supp. 989. the default will be granted. Lehigh 5. Marshall v. Hatfield, 138 N. Y. Valley R. Co. v. Kalb, 110 Misc. 250, Supp. 733. 180 N. Y. Supp. 98. Opening default. — Where a judgment 6. New York Central & H. R. R. R. and ord-er appointing commissioners in Co. v. Reusens, 151 App. Div. 548, 135 a condemnation proceeding was taken N. Y. Supp. 919. on the failure of the attorney of a 7. Matter of Manhat. Ry. Co. v. property owner to carry out inatruc- Stroub, 68 Hun, 90, 52 St. Rap. 44, 22 tions to contest the right of plaintiff N. Y. Supp. 602. to take defendants' property and it ap- 8. Brooklyn Union El. R. R. Co. v. peared that defendants at no time Valance, 123 App. Div. 687, 108 N. Y. consented to the taking of the judg- Supp. 157. 416 CONDEMNATION OF REAL, PKOPEKTY. may direct, or that it may order the same to be referred to a referee to hear and determine.^ J. Who would be appointed as commissioners. The exercise of the right of eminent domain involves a hearing upon notice to the parties interested, the receiving and weighing of evidence, a determination based upon the evi- dence, is judicial in character, and the commissioners should not have an " interest," as the law defines the word, in such proceeding." It is one of the fundamental principles underlying the exer- cise of the right of eminent domain that the Legislature must provide an impartial and disinterested tribunal to ascertain the amount of the compensation and a reasonable opportunity to the parties interested to be heard before such tribunal.^^ Commissioners must be disinterested regardless of whether in a particular case the court may or may not be convinced that they have acted impartially.-^^ The office of commissioners of appraisal is a public trust within the meaning of the Constitution, and the election of such commissioner to the office of justice of the Supreme Court disqualifies him from acting as commissioner.^ In a proeoeding to take lands for railroad purposes, one who has acted as representative and agent of the petitioner in procuring rights of way along the proposed road is not an unbiased commissioner, and the fact that he has acted as such is sufficient to require the setting aside of the award." But a commissioner is not an interested party merely because he is attorney for another railroad which owns the majority of the stock of the plaintiff, there being no proof of bias or prejudice.^^ Commissioners of appraisal appointed in proceedings to condemn land for the purposes of a railroad company are not disqualified by the fact that they were formerly owners of 9. (Erie & Jersey R. R. Co. v. Brown, 13. Matter of Crilroy, 11 App. Div. 123 App. Div. 655, 107 N. Y. Supp. 65, 42 N. Y. Supp. 640. 989. 14. Rochester, Syracuse, etc., Co. v. 10. Matter of City of Rochester, 208 Tolan, 116 App. Div. 696, 101 N. Y. N. Y. 188. Supp. 433. 11. Matter of City of Rochester v. 15. Matter of New York, Westches- Holden, 224 N. Y. 386. ter & Boston R. Co., 151 App. Div. 50, 12. Matter of Terminal Ry., 16 App. 135 N. Y. Supp. 234. Div. 515, 44 N. Y. Supp. 1012. CONDEMNATION OF SEAL PKOPEETY. 417 stock and incorporators of the predecessor of the company bringing the proceeding, where they no longer hold any stock and have no interest in the company.^® The fact that the wife of a commissioner is the cousin of a stockholder does not vitiate the appraisement." The fact that a person has been a city appointee, and is at times employed by the city, or was interested in the passage of the act appointing the commis- sion, does not disqualify him from acting as commissioner in proceeding by the city to acquire land.^^ Section 15 of the Judiciary Law forbidding a judge from acting where he is related to any party within the sixth de- gree, does not apply in a street opening, and though the statute requires that every commissioner to be appointed must be a disinterested person, the fact that one of them is the brother-in-law of a person whose interest is likely to be affected by the proceeding is not a ground for the removal of such commissioner.^* But where the son of one of the com- missioners was appointed as station agent of the petitioner's road, pending the proceeding, it was held sufficient ground to set aside the appraisement.^" And, to make an assessment of lands for a public improvement, the court should not appoint owners of land in the district to be assessed therefor, as they are personally interested in the award by reason of their lia- bility to pay a part thereof.^^ But the interest of a general taxpayer of a municipality is so remote that he is not dis- qualified when such municipality is a party to the proceed- The words ' ' disinterested ' ' and ' ' competent freeholders ' ' as used in section 151 of the Highway Law and in section 13 of the Condemnation Law, in their provisions for the appoint- ment of commissioners of appraisal in condemnation proceed- ings, mean a disinterestedness and a competency like that of a juror, or a judge, and, therefore, in such a proceeding, 16. Matter of Brooklyn Elev. R. R. Mayor, 55 Hun, 476, 29 St. Rep. 376, Co., 32 App. Div. 221, 52 N. Y. Supp. 8 N. Y. Supp. 763. 997. 20. N. Y., W. S. & BuflFalo R. Co. v. 17. Matter of the Albany Northern Townsend, 36 Him, 630. R. E. Co. V Cramer, 7 How. Pr. 164. 21. Matter of Rochester, 208 N. Y. 18. Matter of Mayor, 20 Miac. 520, 572. 46 N. Y. Supp. 640. 22. County of Orange v. Storm King 19. Matter of Ogden Stree,t, 63 Hun, Stone Co., 229 N. Y. 460; reversing, 188, 43 St. Rep. 422, 22 Civ. Vvoq. 12, 191 App. Div. 329, 181 N. Y. Supp. 660. 17 N. Y. Supp. 744; Morris v. The 27 418 CONDEMNATION OF REAL PROPERTY. brought by a county, an owner of realty and a taxpayer there- in is a disinterested person and qualified to act as such a com- missioner.^^ The commissioners must be not only disin- terested, but also competent. Where after the report had been made it was served when one of the commissioners was not a freeholder, in the absence of any allegation of improper conduct on his part, the court is not warranted in setting aside the report on motion by one of the parties who had consented to his appointment.^* A provision of a city charter regarding the condemnation of land for city purposes which provides that one of the com- missioners shall be a resident of the city has been held uncon- stitutional in a case where lands outside of the city limits are to be condemned.^^ A commissioner of appraisal appointed under L. 1915, ch. 724, providing for a commission or board of water supply of the city of New York, becomes ineligible and should be removed from his office when he ceases to be a resi- dent of this State and becomes a resident and voter in another State, even though he still continues to be a freeholder in a county where real estate to be appraised is situated.^^ Although cne commissioner may be disqualified, the fact that his associates sat with him while hearing some of the testimony does not necessarily disqualify them.^ K. Bemoval or substitution of commissioners. The Supreme Court may, in the exercise of judicial discre- tion, remove commissioners appointed by it in condemnation proceedings upon an appropriate application.^^ 23. County of Orange v. Storm King Div. 752, 151 N. Y. Supp. 537. Stone Co., 229 N. Y. 460; reversing, 27. Matter of Bensel, 138 App. Div. 191 App. Div. 329, 181 N. Y. Supp. 660. 581, 123 N. Y. Supp. 365.. 24. Matter of Application of N. Y., 28. Matter of Simmons, 140 App. W. S. & Buffalo E. Co., 35 Ilun, 575. Div. 244, 123 N. Y. Supp. 426. Freeholder. — ^The fact that one of Removal from certain parcels. — ^A the commissioner& was not a free- motion to relieve commissioners of a holder at the time of the application, consideration of the value of certain but became such before he was act- parcels and to appoint new commis- ually appointed, does not affect the sioners for those parcels is in effect a validity of the appraisement. New motion to remove the commissioners. York, etc., R. Co. v. Townsend, 36 Matter of Simmons, 140 App. Div. 244, Hun, 630. 123 N. Y. Supp. 426. 25. Matter of City of Rochester, 184 Rancorous condition of mind. — ^Pro- App. Div. 369, 171 N. Y. Supp. 12; cee,ding to remove a commissioner of aff'd, 224 N. Y. 659. appraisal appointed in condemnation 26. Matter of Simmons, 166 App. proceedings upon the grounds that he CONDEMNATION OF REAL PROPEETY. 419 While the court is authorized to remove commissioners for unfitness not necessarily involving moral turpitude, it will not remove commissioners for an honest error of judgment in the admission of evidence or for the adoption of an erroneous theory of appraisal. The court on an application for the removal of commis- sioners of appraisal will not determine the propriety of their rulings on matters of evidence, or whether certain allowances should have been made in their appraisal. Altliough commissioners of appraisal have held many un- necessary hearings and taken an unreasonable length of time in filing their report, they will not be removed from office for unfairness where their work is practically over and they are ready to report. But it seems the unreasonable delay and un- necessary hearings may be taken into consideration in fixing their compensation and the compensation of the claimant's witnesses.^ It is said that there is no power specified in the Condem- nation Law for the appointment of a successor to a deceased commissioner of appraisal.^" Where after the three commissioners appointed in condem- nation proceedings to appraise the damages caused by the tak- ing of land for railroad purposes had viewed the premises and pending a hearing to take the testimony one commissioner died, the surviving commissioners, under section 14 of the Condemnation Law and section 41 of the General Construc- tion Law, have ample power to continue the work of the com- mission.'^ L. Time of first hearing before commissioiiers. It has been held that an order appointing commissioners, granted five days before the time for the first hearing and en- tered three days before that time, did not give sufficient time to those who had appeared, under the requirements of section IS."" was of a rancorous condition of mind, 29. Matter of Simmons, 140 App. neglected his duties and had appeared Div. 244, 123 N. Y. Supp. 426. as counsel for various clients in other 30. L. S. & M. S. E. Co. v. Mahle, proceedings of a similar character 72 Misc. 129, 129 N. Y. Supp. 288. against the city. Evidence exanrined, 31. L. S. & M. S. R. R. Co. v. Mahle, and held, that an order d«nying the ap- 72 Misc. 129, 129 N. Y. Supp. 288. plication to remove the respondent 32. Manhat. Ry. Co. v. Stroub, 68 should be affirmed. Matter of Low, Hun, 90, 52 St. Rep. 44, 22 N. Y. Supp. 142 App. Div. 533, 127 N. Y. Supp. 26. 602. 420 CONDEMNATION OF REAL, PROPERTY. AHTICIE VIII. HEARING BEFORE COMMISSIONERS. A. Condemnation Law, § 14. Duties and powers of commissioners. The commissioners shall take and subscribe the constitutional oath of oflSce. Any of them may issue subpoenas and administer oaths to witnesses; a ma- jority of them may adjourn the proceeding before them, from time to time in their discretion. Whenever they meet, except by appointment of the court or pursuant to adjournment, they shall cause at least eight days' notice of such meeting to be given to the defendants who have appearerd, or their agents or attorneys. They shall view the premises described in the petition, and hear the proof and allegations of the parties, and reduce the testimony taken by them, if any, to writing, and after the testimony in each case is closed, they, or a, majority of them, all being present, shall, without unnecessary delay, ascertain and determine the compensation which ought justly to be made by the plaintiff to the owners of the property appraised by them; and, in fixing the amount of such compensation, they shall not make any allowance or deduction on account of any real or supposed benefits which the owners may derive from' the public use for which the property is to be taken, or the construction of any proposed improvement connected with such public use. But in case the plaintiff is a railroad corporation and such real property shall belong to any other railroad corporation, the commissioners on fixing the amount of such compensation, shall fix the same at its fair value for railroad purposes. They shall make a report of their proceedings to the Supreme Court with the minutes of the testimony taken by them, if any; and they shall each be entitled to six dollars for services for every day they are actually engaged in the performance of their duties, and their necessary expenses to be paid by the plaintiff; provided, that in proceed- ings within the counties of New York and Kings such commissioners shall be entitled to such additional compensation not exceeding twenty-five dollars for every such day, as may be awarded by the court, and provided that in proceed- ings instituted by a village or any board thereof under this chapter such com- missioners shall be entitled to such additional compensation, not exceeding five dollars for every such day, as may be awarded by the court. B. General power of commissioners. Certain questions are to be determined by tbe court before the commissioners are appointed ;^^ other questions are to be determined by the court after the commissioners have made their report. The power of the commissioners is confined to ascertaining and determining the compensation which should justly be 33. See, supra. Article VII. Trial properly to be decided by the court be- and judgment. fore the appointment of the commis- A stipulation by the attorneys ths.t sioners, will not give them jurisdiction. the commissioners shall have authority Matter of Caffrey, 52 App. Div. 264, 65 to determine a question which was N. Y. Supp. 470. CONDEMNATION OF REAL PROPERTY. 421 made for the property in question.^* They have no power to determine the title to the property as between conflicting claimants.^ The title to land proposed to be taken, as between the pub- lic and the individual, cannot be decided on the application to confirm the commissioner's report.^^ Commissioners in a highway proceeding have no power to determine whether certain structures on the land taken are a public nuisance.^'' But in a proceeding instituted to determine the damages caused by closing a street, it has been held that the principle that a party attempting to acquire title to prop- erty by eminent domain cannot claim that it already has the title or easement which it seeks to condemn, does not apply, and the commissioners have jurisdiction to determine ques- tions of title.^* The power to adjourn rests in the majority of the commissioners.^' C. Oath of office. The commissioners are required by section 14 to take and subscribe the constitutional oath of office. Where, upon an application to confirm the decision and re- port of commissioners appointed under the Highway Law to determine the necessity of laying out a public highway and to assess the damages, it appears from the record that they did not, before entering upon the discharge of their duties, take the constitutional oath of office, as required by the Higliway Law, their proceedings are void ; and an order will be granted vacating and setting aside their proceedings and report.^" The omission from the constitutional oath required to be taken by the commissioners of the word " faithfully " is suffi- cient to invalidate the proceeding, unless the parties can be 34. Matter of N. Y. Municipal R. N. Y. 564; Matter of Wells Ave., 22 Corporation v. Weber, 179 App. Div. St. Rep. 648, 4 N. Y. Supp. 301. 245, 166 N. Y. Supp. 542; modified, 226 37. Matter of Alexander Street, 145 N. Y. 70. App. Div. 495, 129 N. Y. Supp. 944. 35. Matter of Com'r of Public 38. Matter of City of New Yoric Works, 135 App. Div. 561, 120 N. Y. (West 151st Street), 149 App. Div. 55, Supp. 531; afF'd, 199 N. Y. 531; New 133 N. Y. Supp. 894. York Central, etc., R. Co. v. Mathews, 39. In re Newland Ave., 15 N. Y. 144 App. Div. 732, 129 N. Y. Supp. 828. Supp. 63, 38 St. Rep. 796. See, infra. Art. X-C-2. Conflicting 40. Matter of Thompson, 70 Misc. claimants. 285, 128 N. Y. Supp. 604. 36. Matter of Gty of Yonkers, 117 422 CONDEMNATION OF BEAl, PROPEBTY. held to have waived the objection by going on without calling attention to the defect until the report was made.^ D. Bight of landowner to be heard. The owner is entitled to a full opportunity to be heard be- fore the commissioners.^ He has the right to produce before the commissioners, and it is the duty of the commissioners to hear, any and all evi- dence which would be competent in a court of law on similar questions.*^ He has the right to the opening and closing argu- ment in the proceeding.^* A motion to reopen the case, niade to the commissioners after the condemnation proceedings had been closed and be- fore they reported, is addressed to their discretion, with the exercise of which the court will not interfere unless the same has been abused.*^ Where several adjournments were had on account of the failure of the landowner to appear, the commissioners are justified in taking testimony, and a motion to open the default may be properly denied.*^ A landowner who has failed to appear before commission- ers in condemnation proceedings instituted by a railroad com- pany, after having had repeated notices from both the com- missioners and the attorneys for the railroad company that the commissioners would proceed to fix his damages in his ab- sence if he failed to appear, is not entitled to have his default opened, and an award of the commissioners set aside, made on proof before them that in the forenoon of that day the counsel for the railroad company gave the counsel for the landowner notice that the matter had been adjourned until the afternoon, and that the company would then proceed with its proof, and that counsel for the landowner made no reply .^^ 41. Matter of Gilroy, 85 Hun, 424, opinion, 98 N. Y. 664. 32 N. Y. Supp. 891. 45. Matter of Simmons, 58 Misc. 42. N. Y. & Erie R. R. Co. v. Col- 581, 109 N. Y. Supp. 1036. burn, 6 How. Pr. 223. 46. Matter of Met. Ry. Co., 72 Hun, 43. Rochester & Syracuse, R. R. Co. 638, 25 N. Y. Supp. 399, 55 St. Rep. V. Budlong, 6 How. Pr. 467. 760. 44. Matter of N. Y., L. & W. R. R. 47. Matter of Metropolitan Ry. Co., Co., 33 Hun, 148; affirmed without 25 N. Y. Supp. 399. CONDEMNATIOIT OF REAL PEOPERTY. 423 £. Disagreement. The Constitution does not require that three commissioners shall concur in the estimates of the compensation to be made ; the Legislature may make the concurrence of two as valid and effectual as that of all.^ It is not necessary when three commissioners are appointed to ascertain the compensation that all should agree, when all are notified a majority may act ; and in the absence of proof to the contrary, the giving of notice will be presumed.^^ F. Compensation of commissioners. The fees of commissioners appointed in a proceeding to acquire lands, for additional water supply for the city of New York should be equivalent for the work and the time properly required for doing it. The statute does not require a per diem allowance. In applying for an allowance the commissioners should show the time actually and necessarily consumed in their sessions, or submit their full minutes as an indication thereof, and give an estimate of the time taken by them in connection with their business, if any, outside their sessions, and a state- ment of the character and nature of their services. A mere statement of the number of sessions held without particulars as to the time actually and necessarily consumed thereby is not sufficient. Commissioners may apply for fees when a matter dealt with in a separate and distinct report is completed.^* Where it was provided that commissioners should " receive as compensation the sum of $10 per day for each day actually employed," an unimpeached affidavit made by each commis- sioner of appraisal, stating that he has been actually em- ployed as such for a certain number of days, entitles them, prima facie, to compensation at the rate prescribed in the statute.^ But the fee of commissioners appointed in a proceeding to 48. Matter of Mayor, 34 Hun, 441; Short hearings.— In Matter of Sim- aff'd, 99 N. Y. 569. mens (Hill View Reservoir, Sec. No. 49. Astor V. Mayor, 62 N. Y. 580. 1), 146 App. Div. 329, 130 N. Y. Supp. 50. Matter of Bengal (Kensico reser- 773, the evidence was examined and it voir, section No. 6), 141 App. Div. 841, was held, that the amount allowed to 126 N. Y. Supp. 224. the commissioners should be reduced 51. Matter of Collis, 80 App. Div. owing to the fact that some of the 287, 80 N. Y. Supp. 307. hearings did not occupy an entire day. 424 CONDEMNATION OF REAL, PROPEKTY. acquire lands for an additional water supply for New York city cannot be awarded by the court on a mere statement of the number of days they were engaged in inspecting the prop- erty, in conferences, in taking testimony, etc., where they do not show that such time was necessarily consumed, and there is nothing to show the value of their services in that the min- utes of their proceedings are not before the court, or affidavits stating their own opinion as to the value of their services, or that they were necessarily or actually occupied during all of the time for which they claim compensation.^^ While it is true that courts will guard against improper in- fluence and will require the avoidance of the very appearance of evil, yet no rule has yet been established which makes it necessary or proper for the court to set aside the report of commissioners simply because they have charged or received a fair and adequate compensation for the time they have given to their duties, and the services they have performed. This rule has been applied where there was no agreement in advance as to fees, and after the report the commissioners were paid more than legal fees.^^ Where a commissioner dies after the evidence as to damages has been taken and it is stipulated that the testimony taken before the commission while the deceased was a mem- ber thereof shall be used for the purpose of ascertaining the damage and such testimony is so used, the legal representa- tive of the deceased commissioner is entitled to recover for the services rendered by said commissioner up to the time of his death.^ The court is only permitted to award an extra allowance to commissioners in a street opening proceeding in cases which are more difficult than the ordinary proceeding of that char- acter.* If the proceedings embrace a large number of parcels of See also Matter of City of New York, Transit Co., 41 Hun, 393. 77 App. Div. 433, 79 N. Y. Supp. 192, 54. Matter of N. Y. Municipal R. holding that the commissioners are not Corporation v. Weber, 179 App. Div. entitled to charge for attended meet- 245, 166 N. Y. Supp. 542; modified, 226 ings at which nothing was done, or N. Y. 70. See also Matter of 'City of which were unnecessarily adjourned. New York (Union Street), 97 Misc. 52. Matter of Bensel (Ashokan 156, 160 N. Y. Supp. 1062. Reservoir, Section No. 16), 142 App. 55. Matter of City of New York (In Div. 217, 127 N. Y. Supp. 80. re Butler St.), 49 Misc. 609, 99 N. Y. 53. Matter of Staten Island Rapid Supp. 1109. CONDEMNATION OF EEAl. PROPERTY. 425 property and involve unusually difficult questions of law and fact, the commissioners are entitled to extra allowance.^^ An application by commissioners of estimate and assess- ment for an extra allowance under section 1000 of the Con- solidation Act must be made at the time of the taxation of costs, and the court has no authority to make such allowance at any other time or upon notice to the corporation counsel alone.^ Q. Examination of premises. The commissioners should view the premises before hear- ing the evidence of the parties ; and they may re-examine them after the matter has been submitted for their decision.^^ Whether they shall make the view before or after hearing the evidence, is within the discretion of the commissioners.^^ The fact that a view has been had is of material assistance in sus- taining their determination as to the value of the premises taken.^" In determining the amount of damages, they may consider the information they receive from an inspection;®^ and hence the court, not having had this privilege, will hesi- tate to declare their damages insufficient or excessive, except in a clear case.®^ ABTIGIE IX. DETERMINATION OF VALUE OF PREMISES. A. General rules as to allowance of damages. 1. In general. When land is taken by eminent domain the owner is entitled to receive the full value, not the value to the owner or to the 56. Matter of Mayor, 24 Misc. 558, 61. Matter of Daly, 26 App. Div. 54 N. Y. Supp. 64. 326, 49 N. Y. Supp. 795, 83 St. Rep. 57. Matter of Mayor, 29 App. Div. 795; Matter of City of New York, 142 367, 51 N. Y. Supp. 470, 85 St. Rep. App. Div. 665, 127 N. Y. Supp. 379; 470. Matter of Metropolitan R. Co., 70 Hun. 58. Matter of N. Y., L. & W. R. R. 375, 27 N. Y. Supp. 756, 59 St. Rep. Co., 33 Hun, 148. 194. 59. Albany Northern, etc., R. R. Co. 62. Manhattan R. Co. v. O'Sullivan V. Lansing, 16 Barb. 68. 6 App. Div. 571, 40 N". Y. Supp. 326; 60. Matter of City of New York, 129 aflf'd, 150 N. Y. 569. App. Div. 711, 114 N. r. Supp. 68; See, infra. Art. XI-I. Amount of Matter of Washington Avenue, 34 damages. Misc. 655, 70 N. Y. Supp. 599. 426 CONDEMNATION OF REAL PROPEETT. condemnor, but the market value of the property, which is its fair value as between one who wants to purchase and one who wants to sell it.^^ Compensation must be determined by the commissioners upon consideration of the location of the property, -the im- provements made thereon, and its present and prospective earning capacity, in view of the use to which it may be put.^^ The value of land to the owner is not enhanced by the purpose for which the land is taken.^^ Although the commissioner may regard any use for which the property is advantageously adapted, and even a special value to the party condemning by reason of some intrinsic value in the property itself, the real question is what has the owner lost and not what has the party acquiring the property gained.^^ Where property is taken by eminent domain the spirit of the Constitution requires that the owner shall be paid not only the value of the property, but all necessary expenses in- curred by him in fixing that value.^' In a proceeding to con- demn real estate, evidence of loss to personal property not proposed to be taken should not be considered.^* 2. Value to petitioner. The condemnation of private property for public use is not intended to benefit the landowner.^^ What is to be ascertained 63. Matter of Simmons, 130 App. determined by its location, improve- Div. 350, 114 N. Y. Supp. 571; aff'd, ments, and present prospective earning 195 N. Y. 573; Matter of Com'r of capacity. Matter of Mayor, etc., of Public Works, 135 App. Div. 561, 120 N. Y., 74 App. Div. 343, 77 N. Y. N. Y. Supp. 930; aff'd, 199 N. Y. 531; Supp. 566; dismissed, 172 N. Y. 653. Matter of Public Service Comm., 92 65. Matter of Castle Heights, 178 Misc. 420, 155 N. Y. Supp. 985. App. Div. 687, 165 N. Y. Supp. 816. The rule of damages in suits in 66. New York Central, etc., R. R. equity and in proceedings to condemn Co. v. Mills, 160 App. Div. 6, 144 N. Y. lands by eminent domain is the same. Supp. 646. Matter of Bd. of Rapid Trans. R. R. 67. Matter of City of N. Y., 125 Com'rs, 128 App. Div. 103, 112 N. Y. App. Div. 219, 109 N. Y. Supp.' 652; Supp. 619; modified, 197 N. Y. 81. aff'd, 192 N. Y. 569; Brainerd v. State, 64. Matter of Mayor, 74 App. Div. 74 Misc. 100, 131 N. Y. Supp. 221. 343, 77 N. Y. Supp. 566; appeal dis- 68. Matter of Simmons, 58 Misc. missed, 172 N. Y. 653. 581, 109 N. Y. Supp. 1036; aff'd, 130 Dock property.— The compensation App. Div. 350, 114 N. Y. Supp. 571; for dock property taken by the city aff'd, 195 N. Y. 573. must be ascertained by the same 69. Matter of Simmons, 58 Misc. methods adopted in the case of other 581, 109 N. Y. Supp. 1036. property taken for a public use, being CONDEMITATION OF REAL PROPERTY. 427 is the value to the owner of the property or property rights to be taken from him and not the benefits derived by the peti- tioner from the use of such property or rights.™ On the condemnation of lands for the construction of a reservoir to supply the city of New York with water, it is not error to strike out expert testimony as to the value of lands taken, based upon the value in conjunction with other lands included in the reservoir site, upon the value of the reservoir itself, upon the feasibility and cost of conveying the water to the city, and the value of the water itself to the city ; for those matters have no bearing upon the market value of the prop- erty at the time it was taken.'^ 3. As of what time. As a general rule, damages in condemnation proceedings are awarded as of the date when the award is made,'^^ Matter are awarded as of the date when the award is made,''^ un- affected by contingencies which may never arise.''^ But, if, after the making of the award and the confirmation thereof, the property is damaged, the loss should fall upon the owner, and the court has power to set aside an order of confirmation and remit the matter for a new appraisal.''* While the damages must be determined eo instanti as of the time of the award, evidence of past results is entitled to con- sideration in determining the effect of the continuance of the situation.''^ It is the duty of the commissioners of appraisal to receive evidence relating to the condition of the properties down to the time of the trial and to note the effect thereon of the work 70. Matter of E. River Gas Co., 119 York, 81 Misc. 324, 142 N. Y. Supp. App. Div. 350, 104 N. Y. Supp. 239; 949; Matter of City of New York, 108 aflf'd, 190 N. Y. 528. Mis*. 341, 177 N. Y. Supp. 634. 71. Matter of Simmons (Ashokan 73. Matter of City of New York Reservoir, Section 7), 130 App. Div. (Avenue "C"), 151 App. Div. 83, 135 356, 114 N. Y. Supp. 575; aff'd, 195 N. Y. Supp. 259; County of Orange v. N. y. 573. Storm King Stone Co., 180 App. Div. 72. Matter of City of N. Y. (Titus 208, 167 N. Y. Supp. 806. St.), 139 App. Div. 238, 123 N. Y. 74. Matter of People of State of Supp. 1018; Matter of Collis, 144 App. New York, 81 Misc. 324, 142 N. Y. Div. 382, 129 N. Y. Supp. 214; Matter Supp. 949. of Manhattan R. Co. y. Comstoek, 35 75. Matter of Brooklyn Union El. Misc. 326, 71 N. Y. Supp. 941; aflf'd, 74 R. R. Co., 105 App. Div. Ill, 93 N. Y. App. Div. 341, 77 N. Y. Supp. 416; Supp. 924. Matter of People of State of New 428 CONDEMNATION OF KEAL PROPERTY. in fact done at that time. Evidence as to the physical injur- ies which have actually heen inflicted and can he seen, touched, and measured is competent and should he received. All law- ful damages caused hy the proper conduct of the work con- templated by the statute may be included in the award, and the interest and convenience of all parties will be best sub- served by that method.''^ But under some statutes, the title to the property passes to the petitioner at the time the oath of the commissioners is filed ; and under such a statute, the market value of the land at the time of the filing of the oath is the amount to be ascer- tained and awarded, and upon this amount the landowners are entitled to interest from the date of the filing of such oath." 4. Damage to property not taken. Where only a part of a parcel is taken, the value of the part taken does not always form the extent of owner's damages. He is also entitled to compensation to the depreciation in the value of the part not taken.^^ The owner is entitled, not only to the value of the property taken, but also to compensation for damages to the residue caused by the use to be made of the property condemned.'^ Where a portion of a building has been taken, the proper measure of damages is the dit¥erence between the value of the building as it stood before and the value of the remaining portion after the improvement has been finished.^" The measure of damages for the appropriation by the State 76. Matter of Rapid Transit E. R. fishing preserve and summer home, and Com'rs, 197 N. Y. 82. it was held that the owner was enti- 77. Matter of Simmons, 61 Misc. tied to consequential damages in addi- 352, 113 N. Y. Supp. 890. tion to the value of the land actually 78. Matter of Bd. of Pub. Imp., 99 taken. App. Div. 576; 91 N. Y. iSupp. 161; 79. County of Erie v. Fridenherg, Brainerd v. State, 74 Misc. 100, 131 221 N. Y. 389; Matter of N. Y. Munici, N. Y. Supp. 221; Matter of N. Y., L. pal E. Corporation v. Weiber, 179 App. & W. R. E. Co. v. Arnot, 27 Hun, 151; Div. 245, 166 N. Y. Supp. 542; modi- People V. Muh, 100 N. Y. Supp. 62. fied, 226 N. Y. 70; Matter of New Private forest reserve. — In Cooking- York, Westchester & Boston E. Co., 73 ham V. State, 171 App. Div. 80, 156 Misc. 219, 130 N. Y. Supp. 1005; Dun- N. Y. Supp. 867, it appeared that the can v. Nassau Elec. E. E. Co., 127 App. State appropriated part of a private Div. 252, 111 N. Y. Supp. 1117. forest preserve with the effect of prac- 80. Matter of Lexington Ave., 44 St. tically destroying the value of the re- Rep. 532, 17 N. Y. Supp. 872. maining premises as a hunting and CONDEMNATION OF REAL PROPERTY. 429 of a portion of a farm for public use is the difference between the value of the farm before and after such appropriation.^^ If the portion of land left to the owner is without access to any highway, the measure of damages to the owner is the dif- ference in value between the value of the entire property as it was before the taking and the value of the portion left to him, taking into consideration any injury done thereto by isolation from the highway .^^ Where an absolute title in fee is taken in proceedings insti- tuted by a municipal corporation for its condemnation for park purposes, the owner is entitled to an award for the in- jury which will be done to other and abutting land owned by him, which is drained by a system of drains having their out- let through a trunk sewer in the land sought to be taken, be- cause the right to maintain such outlet for the drains is taken away.** .The owner of a building depreciated in value through the taking of adjoining premises used in connection therewith is not estopped from claiming damages by suing and recovering for collapse of such building through negligent prosecution of the public work.^^ But, where in two proceedings pending at the same time, enough of a house is taken in either proceeding to destroy its value, the owner who has elected to prove the value of the house in one proceeding will not be allowed the value of the house in the other proceeding.^ 5. Availability for more than one purpose. Under the constitutional provision requiring just compen- sation a landowner is entitled to receive the fair and reason- able market value of his property at the time of its appro- priation, for its best available uses and purposes.^^ He may 81. Lenhart v. State, 75 App. Div. App. Div. 249, 61 N. Y. Supp. 165; 162, 77 N. Y. Supp. 397. aff'd, 169 N. Y. 231; Matter of East 82. Matter of Simmons, 58 Misc. River Gas Co., 119 App. Div. 350, 104 581, 109 N. Y. Supp. 1036. N. Y. Supp. 239; aflf'd, 190 N. Y. 528; 83. Matter of City of Rochester, 24 Matter of Bronx Parkway Commission, App. Div. 383, 48 N. Y. Supp. 764. 192 App. Div. 412; Matter of Sim- 84. Matter of City of New York, mons, 58 Misc. 581, 109 N. Y. Supp. 214 N. Y. 387. 1036; Trustees of College Point v. 85. Matter of City of New York Dennett, 5 Thomps. & Cook, 217. (Parkway, etc.), 150 App. Div. 432, Speculative elements. — In a proceed- 135 N. Y. Supp. 65. ing to condemn certain vacant lots, 86. City of Syracuse v. Stacey, 45 evidence that the best use to which 430 CONDEMNATION OF REAL PBOPEETY. show its availability for any purpose,^'' although he may have put it to a different use.^ But an inquiry as to all purposes to which the condemned property may be applied, having reference to the existing business or wants of the community, or such as may be reasonably expected in the immediate future, is too broad a rule.^^ Upon an appraisal of a pond for supplying water, the owner is entitled to show, upon the ques- tion of value, that there is not a pond within a radius of six miles that can be made a source of supply.^" While an owner may not show what the property might realize in rentals if improvements were made thereon, he may show the highest utility of the premises. Thus, while he may not show the adaptability of his land for village lots for the purpose of showing the value of the lots if the improvements were made, he may show such adaptability as bearing upon its present market value.^-"^ While he is entitled to receive its market value for any pur- pose to which it is adapted, yet he is not entitled to be paid an enhanced value merely because the land is peculiarly adapted to the use to which it is to be put.^^ they could be put was the erection of three apartment-houseis, the cost of Which would be $75,000, and that the rental value would be between $14,000 and $15,000 » year, was inadmissible, as containing uncertain and specula- tive elements. Matter of Blackwell's Island Bridge in City oi New York, 118 App. Div. 272, 103 N. Y. Supp. 441; appeal dismissed, 189 N. Y. 512. Waterworks. — In Matter of GUroy, 85 Hun, 424, 32 N. Y. Supp. 891, a proceeding instituted by the commis- sioners of public works of the city of New York to acquire real estate for the witer supply of that city, it was held that the commissioners in deter- mining the fair market value of the premises must take into consideration the availability of the property for use in connection with the water sup- ply of New York city. 87. Matter of Union El. R. R. Oo. of Brooklyn, 55 Hun, 163, 7 N. Y. Supp. 853. Compare, Matter of Public Serrico Commission, 92 Misc. 420, 155 N. Y. Supp. 985. The special use to which property sought to be taken is being put at the time of the taking may properly be considered in assessing damages. Mat- ter of Opening Second and Third Streets, 98 Misc. 716, 163 N. Y. Supp. 521. 88. Matter of Gilroy, 26 App. Div. 314, 49 N. Y. Supp. 798; Co. of West- chester V. Wakefield P. Co., 71 Misc. 485, 129 N. Y. Supp. 30. 89i Matter of Bronx Parkway Com., 191 App. Div. 212, 181 N. Y. Supp. 265. 90. Trustees of College Point v. Den- nett, 5 Thomps. & Cook, 217. 91. New York Telephone Co. v. De Noyelles Brick Co., 154 App. Div. 845, 139 N. Y. Supp. 748; affd, 209 N. Y. 526. 92. Matter of Simmons (Ashokan Reservoir, Section 6), 130 App. Div. 350, 114 N. Y. Supp. 571; afl'd, 195 N. Y. 573. CONDEMNATION OF REAL PROPEBTY. 431 In determining the value it is proper to show the condition of the property and its surroundings, the uses to which it has been applied and its capacity for other uses, including that for which it is required ; but a witness cannot give an opinion as to its value for any special use unless purchasers can be found who would pay more for it because of its adaptability to such use.*^ In a proceeding by the city of New York to acquire the right of a person entitled to use, for mill purposes, the outlet of a lake, desired by the city for the protection of its water supply, evidence of the value of the defendant's right with reference to the utility of the lake as a water power is com- petent ; but evidence as to the value of such right with refer- ence to the utility of the lake for storage purposes or as to the value of the water of the lake to the city is incompetent.^* 6. Lands divided into lots. Where land not devoted to a special use has been divided into blocks and lots upon a map by the owner of a plot and sales have been made with relation to streets shown upon the map, although reference is not made to it, the property should prim,a facie be treated as lots and blocks in ascertaining damage.^" A party to condemnation proceedings instituted to acquire several lots with separate buildings thereon may present his claim for adjoining lots so as to entitle himself to " plottage " value (determined by its availability for larger structures and without regard to any building there may be thereon) and it will be considered as one plot, and the commission will not be bound to pay the value of each building, or he may present his claim for adjoining lots on separate parcels and be en- titled to the value of each lot and each building.^^ Whether a supposed enhancement of value by reason of a single ownership of several parcels and consequent control of their subdivision or plottage is an element of value depends 93. Matter of Simmons (Ashokan 95. Matter of N. Y. Municipal R. Reservoir, Section 7), 130 App. Div. Corporation v. Weber, 179 App. Div. 356, 114 N. Y. Supp. 575; aff'd, 195 245, 166 N. Y. Supp. 542; modified, N. Y. 573. 226 N. Y. 70. 94. Matter of Daly, 72 App. Div. 96. Matter of Armory Bd., 73 App. 394, 76 N. Y. Supp. 28; appeal dis- Div. 152, 76 N. Y. Supp. 766. missed, 173 N. Y. 640. 432 CONDEMNATION OF REAL PKOPEETY. upon circiunstances, and is to be determined by the commis- sioners."^ The mere fact that property has been mapped out into lots and that streets, so-called, have been laid down upon the map, does not require the commissioners to consider the property as consisting of city lots.^* Where it appears that land taken by eminent domain is within a half mile of New York city and but a short distance from other settled and improved communities ; that its great- est value is in its availability for building sites, and that other land on the opposite side of the same street, when sold on fore- closure, brought a larger sum divided into building lots than was offered for the parcel in gross, it is improper for the commissioners to estimate the damages by valuing the land as divided into two parcels of one acre and three acres respec- tively. The land should be valued as if divided into building lots.»» 7. Fixtures. Fixtures which have become part of the land are an element of damages.^ An engine placed in a factory for the manufacture of fertil- izer by the owner of the real property and used in the process of such manufacture, resting upon a foundation of concrete sunk in the earth and firmly connected with metal bars laid below the foundation, and a derrick set up in the earth by the owner for like use supported by guys anchored to beams buried in the ground, are fixtures; and the owner is entitled to compensation therefor, where the lands are taken by the State for canal purposes.^ 8. Prior trespass. The Supreme Court has power to make an order directing the commissioners of appraisal to ascertain, in addition to the compensation to be made to the owners for the property to be taken for the public use specified, any damages which 97. City of N. Y., 56 Misc. 306, 107 1. In re Acquiring Certain Property N. Y. Supp. 567. on North River in N. Y., 118 App. 98. Matter of Dept. of Public Parks, Div. 865, 103 N. Y. Supp. 908; aff'd, 53 Hun, 280, 6 N. Y. Supp. 750. 189 N, Y. 508. 99. Matter of Simmons, 141 App. 2. Phipps v. State of N. Y., 69 Misc. Div. 120, 125 N. Y. Supp. 697; aflf'd, 295, 127 N. Y. Supp. 260. 202 N. Y. 606. CONDEMNATION OF REAL PKOPERTY. 433 the defendant owners may have sustained and may thereafter sustain by reason of any entry upon and use by plaintiff of the defendants' property.^ But, it has been held that the commissioners have no right to consider as elements of damages the facts that during the construction of the work soil was deposited on the land sought to be taken and that access thereto was impeded.* "When, subsequent to the revocation of a license to make sewer improvements, worked by a conveyance of the lands, the licensee makes further improvements without the consent of the grantee, he does so as a trespasser, and when the lands are subsequently taken by eminent domain for sewer pur- poses, the owner is entitled to have the enhanced value result- ing from the improvements considered on the assessment of his damage.^ When an owner is entitled to have the improvements made upon his land by the petitioner while a trespasser taken into consideration in ascertaining his compensation, the measure of such compensation is neither the cost of the improvements nor their value, or the value of their use to the petitioner. The true inquiry is, how much do the improvements placed upon the property enhance the value of the land ?^ 9. Allowance for prospective benefits. Conflicting conclusions have frequently been reached by the courts when the question is presented whether an allowance shall be made and deducted from the amount of damages for prospective benefits which, on account of the completion of the contemplated improvement, will accrue to the owner or to other property which he owns. The term " public use," as employed in section 14 of the Condemnation Law, forbidding commissioners to make ' ' any allowance or deduction on account of any real or supposed benefits which the owners may derive from the public use for which the property is to be taken, or the construction of any proposed improvement connected with such public use," de- a. Matter of Manhattan Railway 226 N. Y. 70. Company, 217 N. Y. 682. 5. Matter of Trustees of Village of See also "Wait v. Hudson Valley Ry. White Plains, 124 App. Div. 1, 108 Co., 43 Misc. 304, 88 N. Y. Supp. 825. N. Y. Supp. 596. 4. Matter of N. Y. Municipal R. 6. Village of St. Johnsville v. Smith, Corporation v. Weber, 179 App. Div. 184 N. Y. 341. 245, 166 N y. Supp. 542; modified, 28 434 CONDEMNATIOH OF KEAL PROPERTY. notes such use as the landowner, as one of the public, has the right to make of the public improvement in common with other members of the publicJ When property is taken for railroad purposes, an allowance for prospective benefit to other lands is not generally made.^ In determining the compensation to be made for taking part of a farm for railroad purposes the benefits occasioned it by the use which the public may make of the road cannot be taken into account ; neither can the benefit which may be occasioned to the farm by the fact that its owner can conveniently ride and transport the property on the proposed road be con- sidered.^ And in a condemnation for . a bridge abutment, it was thought that the commissioners should not deduct the value of benefits to portions retained by the owner.^" But, when merely an easement, and no part of the fee, is taken, prospec- tive benefits are sometimes deducted.^^ And, when property is taken for municipal pijrposes, the benefits are frequently deducted from the award.^^ But in a proceeding to appraise damages for the change of grade of a street in a village, under section 59 of the Village Law, it is held that benefits conferred by the paving of the newly-graded street are not properly an offset to the injuries done by the regrading.^^ Where an award in street opening proceedings has been made to a landowner who had previously mortgaged her premises, the city has a right to deduct from the award the amount of an assessment against the owner for the benefit to lands not taken, even though since the vesting of title in the city the mortgage has been foreclosed and a third party has become the purchaser at the sale." 7. Lewiston & Youngstown F. R. Supp. 930; aff'd, 199 N. Y. 531. Co. V. Ayer, 37 App. Div. 571, 50 N. Y. 11. Sutro v. Manhattan Ey. Co , 137 Supp. 50a. N. Y. 593; Lewis v. New York & Har- 8. South Buffalo Ry. Co. v. Kirk- lem R. Co., 162 N. Y. 202; Schmitz v. over, 86 App. Div. 55, 83 N. Y. Supp. Brooklyn Union El R. Co., Ill App. 601; aff'd, 176 N. Y. 301; Matter of Kv. 308, 97 N. Y. Supp. 791. N. Y., W. S. & B. R. R. Co., 35 Hun, 12. Matter of City of New York, 261. 120 App. Div. 849, 105 N. Y. Supp. 9. Lewiston & Youngstown F. R. 750; modified, 190 N. Y. 350. Co. V. Ayer, 27 App. Div. 571, 50 N. Y. 13. Matter of Bradley, 68 Misc. 514, i?iipp. 502. 125 N. Y. Supp. 142. 10. Matter of Com'r of Public 14. Matter of Jones, 178 App. Div. "Works, 135 App. Div. 561, 120 N Y. 654, 165 N. Y. Supp. 896. COS-DEMNATION OT BEAL PROPERTY. 435 Where appraisers Can only determine tlie value of land taken for tHe opening of a street and another board is re- quired to assess the cost of the improvement, they must award a fair value for the land taken, and this cannot be diminished by consideration of enhanced value of the remaining land oc- casioned by the opening of the proposed street.^^ 10. Consideration of matters outside of record. Proceedings before commissioners appointed in condem- nation proceedings kire iiot conducted on the strict lines of trials before courts.^*^ In determining the amount of damages, the commissioners are not limited strictly to the evidence pro- duced before them." If they have taken a view of the premises in question, they may consider the information thereby derived.^^ While they cannot arbitrarily find a valu- ation in excess of the owner's claim or less than the petition- er's concession," to a large extent, the commissioners may base their finding of value on the knowledge derived from a view.^° They are not bound by the evidence of experts.^^ And, while the commissioners cannot disregard the evidence, they may apply their individual knowledge and experience as to the value of the property.^^ In reaching their conclusion as to the value of a given piece of property, the commissioners are guided by their own judg- 15. Matter of 48t'h St., 19 App. Div. Comstock, 74 App. Div. 341, 77 N. Y. 602, 46 N. Y. Supp. 311. Supp. 416; Matter of Brooklyn Union IG. Matter of Staten Island & Mid- El. K. R. Co., 113 App. Div. 817, 99 land R. R. Co., 22 App. Div. 366, 48 N. Y. Supp. 222; aflf'd, 188 N. Y. 553; N. Y. Supp. 274, 82 St. Rep. 874; In re People ex rel. City of New York v. N. Y. El. R. E. Co., 8 N. Y. Supp. 707. Stillings, 138 App. Div. 168, 123 N. Y. 17. Manhat. Ry. Co. v. Comstock, 74 Supp. 349; Matter of City of N. Y., App. Div. 341, 77 N. Y. Supp. 416. 33 Misc. 648, 68 N. Y. Supp. 965; In Special statute. — A different rule re Kings Co. El. R. R. Co., 15 N. Y. may prevail as to the authority of the Supp. 516; In re Dept. of Public Parks, commissioners under a statute which 6 N. Y. Supp. 750; Troy & Boston R. makes no provisions for a view of the R. Co. v. Lee, 13 Barb. 169. premises but contemplates a determi- 21. Matter of City of New York, 129 nation on sworn evidence. People ex App. Div. 711, 114 N. Y. Supp. 68; rel. 'City of New York v. Stillings, 138 Matter of Department of Public App. Div. 168, 123 N. Y. iSupp. 349. Works, 53 Hun, 280, 6 N. Y. Supp. 18. See, supra. Art. VIII-G. Exam- 750, 25 St. Rep. 9; Matter of New ination of premises. York Elevated R. Co., 12 N. Y. Supp. 19. See, infra. Art. XI-I. Amount 858, 35 St. Rep. 944. of damages. 22. Matter of City of N. Y., 67 Misc. 20. Matter of Manhattan Ry. Co. v. 191, 122 N. Y. Supp. 660. 436 CONDEMNATION OF KEAL PROPERTY. ment and experience, rather than by the opinion of witnesses ; and are untrammeled by technical rules of evidence and un- restricted as to their sources of information.^^ The commis- sioners must be governed by their own judgment in deter- mining the damages to landowners, though they may collect information in all the ways which a prudent man usually takes to satisfy his own mind concerning matters of like kind where his own interests are involved.^* B. Valuation in particular cases. 1. Allowance for property to be used for water supply. In the construction and establishment of water-works a municipality has no right to destroy a private system of water-works without condemnation or compensation.^^ In proceedings by a village to condemn a company 's water- works system, constructed under a non-exclusive franchise, and a contract authorizing the village to purchase the prop- erty at the expiration of any five-year period, the compen- sation to be awarded is the market value of the property, in- cluding its franchise and the value of any business under ex- isting contracts which might accrue to a purchaser, but not the value to the petitioners or owners.^^ The availability of property condemned for use in connec- tion with a water supply for a city, but not its value to the city in view of its necessity, may be considered in determining the compensation theref or.^^ The owner is not entitled to more than the fair market 23. Matter of Board of V^ater Com- 581, 109 N.. Y. Supp. 1036; Rondout & missioners, 71 App. Div. 544, 76 N. Y. Oswego R. R. Co. v. De,yo, 5 Lans. 298; Supp. 11; reversed on other grounds, Rondout & Oswego- R. R. Co. v. Field, 176 N. Y. 239; Matter of Town of 38 How. Pr. 187. Guilford, 85 App. Div. 207, 83 N. Y. 25. Boyer v. Village of Little Falls,. Supp. 312; Buffalo, Lockport R. R. 5 App. Div. 1, 38 N. Y. Supp. 1114. Co. V. Phelps, 52 Misc. 315, 102 N. Y. 26. Matter of Bd. of VS^ater Com'rs Supp. 214, citing Matter of Boston of Village of White Plains, 71 App. Road, 27 Hun, 409; Matter of Mayor, Div. 544, 76 N. Y. Supp. 11; reversed,. 99 N^. Y. 569; Matter of Union El. Ry. 176 N. Y. 239, Where it is held that Co., 55 Hun, 163, 7 N. Y. Supp. 853; the commissioners should have in- Matter of Newton, 45 St. Rep. 18, 19 eluded the good-will and franchise of N. Y. Supp. 573; Matter of City of the water company at its full value, Rochester, 137 N. Y. 423; Matter of as provided hy statute. New York, etc., R. Co., 8 N. Y. Supp. 27. Matter of Daly, 72 App. Div. 707. 394, 76 N. Y. Supp. 28; appeal dis- 24. Matter of Simmons, 58 Misc. missed, 173 N. Y. 640. CONDEMNATION OF REAL PROPERTY. 437 value of the lands because of a mere chance or probability that some time in the future it may be used for some purpose to which it is adapted, unless it appears that its actual market value is enhanced by such chance or probability. Thus, where the lands are taken for the construction of a reservoir in connection with the water supply of the city of New York, it is not error to exclude evidence tending to show that the value of the property had been increased because the city had selected that site, in the absence of evidence that the value of the land had been increased by its adaptability for reservoir purposes prior to the condemnation proceedings.^^ In a proceeding to condemn water rights for the city of New York so as to acquire the borders of a stream and lake and prevent pollution by watering cattle, a substantial sum should be awarded for the fee of the lake bed, although the owners are also the owners of the riparian rights of fishing, ice cutting, etc., and water privileges for which a substantial award has been made.^ Where in condemnation proceedings instituted by the city of Syracuse under chapter 291 of the Laws of 1889, as amended by chapter 314 of the Laws of 1890, which author- ized it to condemn and acquire all the water rights of the riparian owners on the outlet of the lake, an award which is made upon the basis of the difference in value of the affected properties with and without the rights condemned, but allows nothing for the value of the right to the water of the lake, or of the right to sell or divert it, is properly made for the reason that the water rights sought to be condemned and acquired did not and could not include such rights.'" 2. Property taken for railroad purposes. The principles upon which compensation is to be made to the owner of lands taken under the Railroad Law have been frequently considered by the courts of this State, and the rule is now established that such owner is to receive as compen- sation, first, the full value of the land taken, and second, where a part only of land is taken a fair and adequate compensation .for all injury to the residue, sustained and to be sustained by 28. Matter of Simmons (Ashokan 872, 116 N. Y. Supp. 334; aff'd, 200 Reservoir, Section 6), 130 App. Div. N. Y. 511. 350, 114 N. Y. Supp. 571; aff'd, 195 30. CSty of Syracuse v. Stacey, 169 N. Y. 573. N. Y. 231; appeal dismissed, 201 U. S. 29. Matter of Monroe, 131 App. Div. 642. 438 CONDEMNATION OF REAL PROPERTY. the construction and operation 'of the railroad. The first element in the award is compensation for land which the rail- road takes, and to which it acquires title, and second, damages which are the result or consequences of the construction of the road upon property not taken, and which the owner still retains. Such damages are generally consequential, and to ascertain them necessarily involves an inquiry into the effect of the road upon the property, and a consideration of all the advantages and disadvantages resulting and to result there- from.^^ The proper inquiry is. What is the entire property now fairly worth in the market, and what will that part not taken be worth when the improvement is made?^^ And gener- al. Newman v. El. R. E. Co., 118 N. Y. 618; Matter of New York Cen- tral, etc., R. Co., 6 Hun, 149; Matter of N. Y., W. S. & B. R. R. Co., 29 Hun, 609; Matter of W. S. & B. R. R. Co., 35 Hun, 262. Lessee. — In estimating the damages to which a lessee , of premises, part of which he uses for drying goods manu- factured in the rest, is entitled for the taking of his drying-ground for rail- road purposes, the commissioners should consider the injury to the property as a whole, the difference in the value of the leasehold interest be- fore and after the land is taken; but the willingness of the lessor to lease another piece of land, suitable for dry- ing purposes, is not admissible. N. Y., V^^est Shora & B. Ry. Co. v. Bell, 28 Hun, 426. Special value for railroad purposes. — Although the measure of damages for lands condemned for railroad purposes is not in any case the value which they will have in the hands of the corpora- tion acquiring them for such purposes, yet where the lands have been im- proved, and where they have, in the hands of the owner, a special value for railroad purposes, and a franchise for their use for such purposes has been granted by the Legislature, a,nd they are held by the owner for s.uch use, or for 'Sale for such use^ the market value of the land for the use of which it is especially adapted becomes the meas- ure of damages and it is proper for the commissioners to receive and consider evidence of all improvements, the loca- tion of the track, and the value of the franchise. Matter of Lackawanna & Western R. R. Co., 27 Hun, 116. 32. The Troy & Boston E. R. Co. v. Lee, 13 Barb. 169; Matter of Utica, etc., R. Co., 56 Barb. 457; Black River & M. E. E. Co. V. Barnard, 9 Him, 104; Matter of The Boston; H. T., etc., R. R. Co., 22 Hun, 176. Electric railroad across farm. — The measure of damages caused by the running of an electric road, across a farm is the difference in the value of the farm before it was crossed and its value after the construction of the road, and in determining its value after the construction of the road it is proper to consider that the house and other farm buildings added largely to the value of the farm as a whole, and that without them the land itself was not worth $100 an acre, but about $55; that these buildings were, not in- jured; that the road divided the farm into two equal parts; and that the part beyond the tracks from the build- ings was really the only portion of the farm that was seriously damaged. Buffalo L. R. Ry. Co. v. Phelps, 52 Misc. 315, 102 N. Y. Supp. 214. CONDEMNATION OF EEAL PROPERTY. 439 ally no deduction is to be made for benefits wMch will accrue to other lauds of tbe owner.^- The office of the commissioners is to determine the compensation to be awarded to the owner of the real estate proposed to be taken; they are to decide questions of present value, and not to speculate in respect to the probable consequences of constructing and operating a railroad.^* Where valuable property was rendered difficult of access from the river by the taking of lands and the construc- tion of railroad, the proper measure of damages is the expense of restoring communication with the river.^ It is competent to show how much other land of the same owner is injured by the use of that taken, and he may give evidence of the value of the land for any purpose for which it is adapted.^^ The owner may show the purpose for which the land was purchased and for which it is intended to be used.^'' The opinions or conjec- tures of witnesses as to the effect the use of the railroad will produce in frightening horses on a turnpike, or as to the necessity of deviating the line of a turnpike at another place, or the cost of diversion, or that a bridge ought to be built by a railroad company at a crossing, or as to the amount of damages the turnpike company will sustain by reason of the crossing of its road are inadmissible.^^ The owner cannot ask to have his land treated as several distinct lots for the pur- pose of increasing the damages, and yet ask that it shall be considered as one tract from which the railroad has taken a part for the purpose of securing damages on the whole.^^ 33. Bohm ■ v. Elevated R. Co., 128 blocks of land were divided by a rail- N. y. 585; Matter of New York, road already built, it was 'held no Westchester & Boston R. Co., 73 Misc. damages could be recovered for injury 219, 130 N. Y. Supp. 1005; Albany & to property upon the opposite, side of Northern R. R. Co. v. Lansing, 16 the track from that taken. Matter of Barb. 68. N. Y. C. & H. R. R. R. Co., 6 Hun, 34. The Canandaigua & N. F. R. R. 149. Co. v. Payne, 16 Barb. 273. Parcels separated by highway.— In 35. Matter of N. Y., W. S. & B. R. case of a dwelling-house and ten acres R. Co., 29 Hun, 646. of land adjacent, and occupied in con- 36. Matter of N. Y., Lackawanna & nection, separated by a turnpike, the W. R. R. Co., 29 Hun, 602. owner of the land was held entitled to 37. Matter of New York, etc., R. have the damages to the whole prop- Co. 6 Hun, 154. «rty estimated, including that on the 38. Troy & Boston R. R. Co. v. west side, of the turnpike. The land Northern Turnpike Co., 16 Barb. 100. should have been treated as a whole 39. Matter of N. Y., Lackawanna & and the damages assessed as a whole. W. R. R. Co., 27 Hun, 151. N. Y„ W. S. & B. R. R. Co. v. Lefever, Lands separated by railroad already 27 Hun, 537. built. — Where lands consisting of 440 CONDEMNATION OF REAL PROPEETY. The owner of premises, who is also the owner of the fee in the adjacent street, may recover damages for the construc- tion and operation of a trolley road in the street, not only to the injury to his easements of light, air, and access, but also for that due to the noise and vibration as a result of the oper- ation of the cars on his property in the street.*" The right of interference by a railroad company with an ad- joining owner's property, by jarring and shaking his dwell- ing-house, and causing smoke, dust, ashes, and cinders to en- ter therein, through the operation of a turntable, is in the nature of an easement; and the effect of a proceeding to ac- quire such right by condemnation is to take out of the owner's .property something of value and transfer it to the company, and justifies an award of substantial compensation, depend- ing upon the condition of the premises, the differences in their value before and after the placing of the turntable, and the effects of its use upon their enjoyment.*^ The owner is entitled to compensation not for injuries from the improper operation of the railroad, but for all damages which the proper construction of the railroad entails.*^ Interference of easements of light, air, and access which were the only rights affected by the running of trains do not constitute basis of recovery.*^ Where a stone embankment in a street on which a railroad has been constructed is increased in height, thereby causing damages to plaintiff's premises exceeding her previous damages, such change is a taking of plaintiff's property en- titling her to damages.** Increase in size of and injurious changes in structures may be a greater user, but an increase in length of trains and change in motive power are not an increased user.*^ Where a railroad company has a prescriptive right to use a structure in the street of specified dimensions, an abutting owner is entitled to the net difference between the effect of a new structure and the old one on her property, less benefits conferred by the latter.**' Incidental changes of the grade of a 40. Am. Bank Note Co. v. N. Y. 44. Wallacli v. N. Y. & H. R. Co., Elev. R. K. Co., 129 N. Y. 252. Ill App. Div. 273, 97 N. Y. Supp. 717. 41. Long Island R. E. Co. v. G-arvey, 45. Bremer v. Manhat. R. Co., 191 159 N. Y. 334. N. Y. 333. 42. South Buffalo Ry. Co. v. Kirk- 46. Foster v. N. Y. C. & H. R. R. over, 176 N. Y. 301. Co., 118 App. Div. 143, 103 N. Y. Supp. 43. Wolf V. Manhat. R. Co., 51 Miac. 531. 426, 101 N. Y. Supp. 493. CONDEMNATION OF REAL PROPERTY. 441 street made necessary by the lawful construction of a railway below the grade of a highway crossed by it, give no claim to abutting owners who may sustain injury.*' Where a strip of land along a bluff overlooking railroad tracks is condemned for railroad purposes, the owner may, on the question of damages, give evidence as to the cost of recon- structing certain buildings on the land not taken, the percen- tage of their depreciation and their present value.*** In case of an elevated railroad, the measure of damages is the difference between the fair market value of the property at the time of condemnation without the structure, and the present market value of the property with the structure in existence.*^ The running of trains below the surface of a street does not interfere with easements of light and air and access ; but the running of them on an elevated structure is a taking of such easements for which compensation is required.^" Where a railroad company, under municipal authority, has erected a bridge over a tract of which the plaintiff owned the fee, and has constructed pillars in the street as an addi- tional support to the bridge, plaintiff's injury is only to the extent that his right of way has been impaired by the obstruc- tions placed in the street, which should be proved by evidence of the difference in value of his adjoining land with his street obstructed and unobstructed.^^ In proceedings by a railroad corporation to acquire a right to lay its tracks in a street or highway, the fee of which is in the owner of the adjoining land, the proper compensation is, first, the full value of the land taken; second, a fair and adequate compensation for all the injury the owner has sustained and will sustain by the making of the railroad over his land ; and for this purpose it is proper to ascertain the effect the conversion of the street into a railroad track will have upon the residue of the owner 's land.»2 Where a railroad company condemns and appropriates to 47. Matter of N. Y. Municipal E. R. Co., 128 N. Y. 436. Corporation v. Weber, 179 App. Div. 50. Caldwell v. N. Y. & H. E.. Co., 245, 166 N. Y. Supp. 542; modified. 111 App. Div. 164, 97 N. Y. Supp. 588. 226 N. Y. 70. 51. Coatsworth v. Lehigh Valley Ry. 48. New York Central, etc., R. R. Co., 115 App. Div. 7, 100 N. Y. Supp. Co. V. Newbold, 166 App. Div. 193, 151 504. N. Y. Supp. 732. 52. Henderson v. N. Y. C. & H. R. 49. Papenheim v. Metropolitan El. R. R. Co., 78 N. Y. 423. 442 coNpKMNAgrioN or heal, pboperty. its own use lands extending along the right of way of another railroad company upon whose right of way the former com- pany is to lay its tracks, the lands taken being required to support the earthwork necessary to the construction of the tracks upon the right of way of the latter company, the one whose lands are taken is entitled to their full value and to such consequential damages, taking into consideration the, ad- vantages and disadvantages of the construction and operation of the railroad, as will result from such use.^^ Where an electric railroad condemns an easement in the bed of a public street, a person owning the fee of the street but not owning the abutting property, is not entitled to an award of substantial damages.^^ A city on whose behalf a rapid transit railroad is being con- structed under a street is liable to an abutting owner owning the bed of the street subject to easement of street use for damages caused by the impairment of the support of his buildings on his abutting land by reason of the proper con- struction of said railroad; and such owner is entitled to the full value of his property actually taken without deduction for benefits, and also to just compensation for the injury done to the remainder. An abutting owner who owns no part of the street has a right to the lateral support of the land in the street, and has a right or easement covered by the statute which entitles him to compensation for all the damages inflicted upon his prop- erty by interference with the lateral support thereof through the proper construction and operation of an underground rail- road.^^ In street opening proceedings damages which may result from future construction of a subway should not be con- sidered, and the provision of the Eapid Transit Act author- izing the city to use streets for such purpose does not alter the rule.^^ 3. Lands for highway purposes. In a proceeding by a city to condemn the lands embraced in the bed of an existing street a substantial award of damages 53. Genesee River R. R. Co. v. Boy- Supp. 473. ington, 60 Misc. 416, 112 N. Y. Supp. 55. Matter of Rapid Transit R. R. 343. ' Com'rs, 197 N. Y. 81. 54. Matter of Nassau Electric Rail- 56. Matter of City of New York, 216 road Co., 173 App. Div. 253, 159 N. Y. N. Y. 104. COlirDEMNATION OF EEAL PEOPEETY. 443 to the owner of a nominal fee who owns no abutting property, or to abutting owners who have no interest in a fee of the street, is unauthorized.^'' And, where a mere right of way is taken for street purposes over lands subject to private ease- ments of passage, the fee of the street remaining to the abut- ting owner, only nominal damages are awarded.^^ But the fee of a street is of substantial value to the abutting owner, and, if taken by a municipality, he will be allowed substantial damages, although others have easements therein;^® but, in such a case, the award will be reduced on account of the ease- ments in the property.^" Where land has been previously dedicated to public use, the measure of damages to land abutting thereon is the depreci- ation in value caused by the city acquiring the fee to the street for street purposes.^^ The owner of an easement, where his right is not extinguished, will not generally be allowed more .than nominal damages.^^ 57. Matter of CSty of N. Y. (Deca- tur Street), 196 N. Y. 286; Matter of City of N. Y. (Edge,water Koad), 138 App. Div. 203, 122 N. Y. Supp 931; aflf'd, 199 N. Y. 560; Matter of City of New York (Titus Street), 152 App. Div. 752, 137 N. Y. Supp. 817; Matter of Pearsall Street, 135 N. Y. Supp. 763; Matter of Hamburger, 165 App. Div. 526, 150 N. Y. Supp. 771; aff'd, 216 N. Y. 643; Matter of Adams, 73 Hun, 581, 56 St. Rep. 234, 26 N. Y. Supp. 422; afl'd, 141 N. Y. 297. An award of $125 in a street open- ing proceeding is not an award of nominal damages; Matter of Six- teenth Street, 142 N. Y. Supp. 376. 58. People ex rel. Washburn v. Com- mon Council, 128 App. Div. 44, 112 N. Y. Supp. 387. 59. Matter of Mayor, 81 App. Div. 215, 80 N. Y. Supp. 732; People ex rel. Washburn v. Common Council, 128 App. Div. 44, 112 N. Y. Supp. 387; Matter of 94th Street, 22 Misc. 32, 49 N. Y. Supp. 600; Matter of Trinity Ave., 35 Misc. 56, 71 N. Y. Supp. 24; reversed, 81 App. Div. 215, 80 N. Y. Supp. 732; Matter of Summit Ave., 35 Misc. 59, 71 N. Y. Supp. 207; Matter of 173d St., 78 Hun, 487, 60 St. Rep. 758, 29 N. Y. Supp. 205; Matter of the Terrace, 39 St. Rep. 270, 15 N. Y. Supp. 775. Mandamus will lie to compel the ap- pointment of commissioners to deter- mine compensation where a street is narrowed, though the strip taken is narrow, and the damage small. Peo- ple V. Delaney, 120 App. Div. 801, 105 N. Y. Supp. 746; modified, 192 N. Y. 533. GO. Matter of 116th St., 1 App. Div. 436, 37 N. Y. Supp. 508; Matter of Edgecomb Rd., 36 Misc. 119, 72 N. Y. Supp. 1073. 61. Mattfer of City of N. Y., 89 App. Div. 490, 85 N. Y. Supp. 858. 62. Reis v. New York, 188 N. Y. 58; Matter of City of New York (New Avenue), 153 App. Div. 164, 138 N. Y. Supp. 107. Gas mains. — ^The revocation of a li- cense granted by a city to lay gas mains in the streets leaves no basis for an award of damages on account of such mains where the land in connec- tion with which they are used is taken 444 CONDEMNATION OF REAL PROPERTY. Where a public highway is taken in condemnation proceed- ings, and it fairly appears that the public authorities would be likely in the near future to abandon it and accept a new one as a complete substitute therefor, the owners of the fee of the highway so condemned may be awarded substantial damages.^^ An owner entitled only to nominal damages for land taken in a street opening proceeding is not entitled to substantial and consequential damages as an owner of abutting lands, for the improvement is supposed to be in the nature of a benefit.** Where it is proposed to open several streets through a cer- tain property the owner may not be allowed in each proceed- ing damages for the destruction of the usefulness of his prop- erty for the purposes for which it had been used.*^ Damages should not be awarded in street opening proceed- ings for the taking of stoops and other parts of buildings which encroach on such portions of the street as have been dedicated to a public use and accepted by the public, without regard to whether or not the abutting owner owned the fee to the center of the street subject to the public easement.** The authorities of a village when condemning lands for the widening of a street must award an abutting owner the value of the land taken. They cannot reduce the award to a nomi- nal sum on account of benefits received, for this would result in taking private property for public use without just com- pensation.*^ The commissioners are not authorized to go outside the for a public improvement. City of bed of the lane be afterward denied N. Y. (Fifteenth and Eighteenth them, and they must be compensated Streets), 56 Misc. 306, 107 N. Y. Supp. for the taking of their easement. 567. Matter of Pinehurst Ave., 67 Misc. Where a lane, over which a rig'ht of 510, 123 N. Y. Supp. 344. way exists by grant in favor of abut- 63. Matter of Board of Water Sup- ting owners, is taken in condemnation ply (H. V. Reservoir), 73 Misc. 231, proceedings for a city street, the abut- 130 N. Y. Supp. 997. ting owners are not entitled to com- 64. Matter of City of New York pensation for loss of the easements of (Titus Street), 152 App. Div. 752, 137 light, air, and access, as the street N. Y. Supp. 817. when opened will afford all that the 65. Matter of Opening Second and easements represent, and if the street Third Streets, 98 Misc. 716, 163 N. Y. ■should be close4 ^compensation for the Supp. 521. loss of the «asements will be made. 66. Matter of Prospect Street, 135 An easement in favor of non-abutting N. Y. Supp. 1034. owners becomes extinguished with no 67. People ex rel. Lyon v. Nelson, right to compensation, if, through the 162 App. Div. 34, 146 N. Y. Supp. 1035. closing of the street, access over the CONDEMNATION OF REAL PBOPEKTY. 445 area of the improvement and award consequential damages to lands not embraced within it.^* In proceedings to condemn land for a public highway, damages to a well on land adjacent to land taken caused by blasting operations in connection with the construction of the highway should be included in the award.^^ In the absence of statute, no matter how much a lot may be damaged for building purposes by a change of grade in the street, the owner is entitled to no damagesJ" But various statutes will be found giving a right to damage for change in grade in particular cases.'^ The Village Law, providing for damages to adjacent landowners caused by a change of grade of a village street, authorizes a recovery although the land in- jured is vacant and unimproved.'^^ And the Commissioners may allow, not only damages to the fee, but,also for diminution in the rental value of the premises from the time of the permanent change of grade, even though apart from the statute there could be no recovery whatever at common lawJ^ An award for damages for a change of grade of a city street must be based upon the testimony and evidence taken before the commissioners ajid not on their individual opinions based upon their view of the premises^* In order that damages may be awarded for injury caused by the change of a street grade it is not necessary that the legally established grade which is changed by the improvement be first physically constructed. Eecovery may be had where the first physical grading of the street is made upon a new and changed grade-'^ Where land is actually taken from the owner for the origi- nal opening of a street, damages may properly be awarded in such proceeding for injury to the land not taken abutting on such street arising from any established grade or future prob- 68. City of New York, 56 Misc. 306, Mamaroneck, 165 App. Div. 755, 151 107 N. Y. Supp. 567. N. Y. Supp. 485. 69. County of Erie v. Fridemberg, 73. Matter of Johns v. Village of 221 N. Y. 389. Salamanca, 129 App. Div. 717, 114 70. Matter of Sixteenth Street, 142 N. Y. Supp. 707. N. Y. Supp. 376. 74. People ex rel. Uvalde Asphalt P. 71. Grade Crossing Act of Buffalo. — Co. v. Seaman, 168 App. Div. 870, 154 See Matter of Grade Crossing Com'rg, N. Y. Supp. 539; aff'd, 217 N. Y. 70. 207 N. y. 52; Matter of Grade Cross- 75. Gas Engine & Power Co. v. City ing Comm., 208 N". Y. 25; Matter of of New York, 166 App. Div. 297, 151 Grade Crossing Com'rs, 209 N. Y. 139. N. Y. Supp. 310; aff'd, 218 N. Y. 661. 72. Matter of Staut v. Village of 446 CONDEMNATION OF REAL PROPERTY. able change of grade that may be made for the purpose of adapting the street to the uses and purposes of public travelJ^ 4. Lands for canal purposes. Where, by the taking of part of a person's land for the Barge Canal, the balance is cut off from access to a canal which was previously enjoyed, the value of the part left must be fixed by reference to the condition in which it will be left after the appropriation with the prospect of securing a new right of way and constructing a new dock and using the new canal with any advantages or disadvantages that may result to the premises from the improvement.''^ By the appropriation for the Barge canal of real estate of a railroad corporation, the State does not incur liability to com- pensate a corporation, none of whose property is taken, be- cause the latter 's lands are cut off from access to the railroad and the railroad company is thereby prevented from carrying out a contract for certain traffic facilities.™ The award to a railroad company where a canal is con- structed through the solid earth embankment of its right of way should include a sum for the maintenance and renewal of a bridge over the canal which the railroad company is re- quired to build.™ In proceedings to acquire compensation for lands appro- priated by the State for Barge canal purposes, a certain sum per square foot for land lying under water based upon the theory that the claimant is the owner in fee of the premises in question is not the proper measure of the value of a franchise to fill in said lands and thereby acquire title to the f ee.^" Where a defective proceeding has been had for the appro- priation by the State for canal purposes of lands belonging to an electric railroad corporation in which said company acquiesced and waived all irregularities, said company upon a subsequent valid appropriation of the lands is entitled to their value at the date of the first appropriation with interest.*^ If the title to the bed of a river is in the State it cannot be 76. Matter of Lafayette Street, 147 K. Co. v. Sohmer, 152 App. Div. 585, N. Y. Supp. 839. 137 N. Y. Supp. 382. 77. Brainerd v. State, 74 Misc. 100, 80. First Construction Co. v. State, 131 N. Y. Supp. 221. 221 N. Y. 295. 78. Frazec Milling Co. v. State, 73 81. Syracuse, Lake Shore, etc., E. R. Misc. 529, 131 N. Y. Supp. 23. v. State, 175 App. Div. 264, 161 N. Y. 79. People ex rel. New York, etc., R. Supp. 477. CONDEMNATION OF BEAL PBOPBRTY. 447 held liable in damages for removing a dam erected by a riparian owner when the State makes use of the bed of the river and the waters flowing over it for Barge canal pur- poses.**^ The mere fact that when a canal comes to be operated, cer- tain lands may be flooded does not of itself entitle a claimant to have such contemplated damages fixed at a hearing for damages based upon the permanent appropriation of other lands.^" 5. Structures on premises. The owner should be compensated for the destruction of all the structures on the land condemned.^^ An appropriation of land, unless qualified when made, is an appropriation of all that is annexed to the land, whether classified as buildings or as fixtures.^ "When structures are well adapted to the character of the land upon which they are erected, the value of the land is en- hanced to the extent of the value of the buildings. In such cases the value of each enters into the total value which must be the measure of the owner's just compensation when his property is condemned for public use.^^ When buildings have an intrinsic value which must be added to the value of the land in order to ascertain the value of the whole, the owner may prove the value of his land and the value of his buildings separately; and the latter may be established by the cost of reproduction after making proper deductions for wear and tear. The result of adding these two quantities is nothing more or less than the value of the land as enhanced by the buildings thereon. This is not a conclusive 8S. Watervliet Hydraulic Co. v. violation of section 1445, of the Greater State, 177 App. Div. 7, 163 N. Y. Supp. New York Charter, which require", the 939. trial justice to view the real property 83. Johnson v. State of New York, to be acquired, the city is precluded 151 App. Div. 361, 135 N. Y. Supp. 496. from introducing evidence of the value 84. Matter of Alexander Street, 145 of such buildings. Matter of City of App. Div. 495, 129 N. Y. Supp. 944. New York, 103 Misc. 581, 170 N. Y. Destruction of buildings. — Where, in Supp. 781. a proceeding brought by the city of 85. Jackson v. State, 213 N. Y. 34; New York to acquire title to certain Matter of Willcox, 165 App. Div. 197, lands as a site for school purposes, it 151 N. Y. Supp. 141. appears that before the case was tried 86. Matter of City of New York, the buildings on said lands were vol- 198 N. Y. 84. .untarily destroyed by the city in direct 448 CONDEMNATION OF REAL PROPERTY. test of market value applicable to all cases, but it is always competent evidence where buildings are well adapted to the land upon which they stand.^^ If, however, the structures are not adapted to the land, their cost of reproduction is of no assistance in determining the value of the premises.^* The measure of damages is neither the cost of the improvements at the time they were erected, nor the present cost of repro- duction, but the amount which the structures have increased and enhanced the value of the land.*^ Where the owner of real property involved in condemnation proceedings places a building on such premises for the pur- pose of securing an increased award, his action is in bad faith, and the property may be regarded as personal property and damages awarded accordingly.^" One who, knowing that lands are to be taken for a street opening, purchases them and erects a building situated partly on the portion to be taken, is not entitled to an award for the building which he subsequently moved to the portions not taken, as when he erected the building there could have been no intention or expectation that it would be a permanent at- tachment to the realty within the street line.^^ 6. Leasehold interests. A tenant, as well as the owner of the fee, is entitled to have his damage fixed. The lessee's interest is to be determined by ascertaining just what interest he had in the lease as a whole, considering 87. Matter of City of N. Y., 198 89. Matter of Simmons, 130 App. N. Y. 84; Matter of City of New York, Div. 350, 114 N. Y. Supp. 571; aff'd, 66 Misc. 488, 122 N. Y. Supp. 321. 195 N. Y. 573; Matter of City of New Easement taken.— Where claimant York, 56 Misc. 311, 106 N. Y. Supp. asks damages for injuries to water 1008. privileges, buildings, etc., caused by 90. Matter of City of N. Y. (Briggs blasting, and an easement only had Avenue), 196 N. Y. 255; Matter of been taken in the land, evidence was City of New York (Parkway, etc)., 150 excluded by the commissioners as to App. Div. 482, 135 N. Y. Supp. 65. the costs of the buildings, etc., claimed Compare, Matter of Mayor, 24 App. to have been injured; held, proper. Div. 7, 49 N. Y. Supp. 119; Matter of Matter of Thompson, 35 St. Rep. 266, City of N. Y. (Briggs Avenue), 118 12 N. Y. Supp. 182. See also Matter App. Div. 224, 102 N. Y. Supp. 1102; of Thompson, 57 Hun, 419, 32 St. Rep. Matter of Baychester Ave. in City of 969, 10 N. Y. Supp. 705. N. Y., 120 App. Div. 393, 105 N. Y. 88. Matter of City of New York, 118 Supp. 241; Matter of Mayor, etc., of App, Div. 272, 103 N. Y. Supp. 441; N. Y., 54 N. Y. Supp. 1066. appeal dismissed, 189 N. Y. 572. 91. Matter of City of N. Y. (Hawk- CONDEMNATION OF REAL PKOPEKTY. 449 the rent he pays, the obligations that he has and will assume tinder his lease, and just what that interest is worth and what its market value is.^^ Where a tenant is in possession, the criterion of his damages is the amount by which the rental value of the land exceeds the rent reserved.^^ Ordinarily, the award to the tenant will he deducted from the award to the landlord.^* The right to remove trade fixtures is given absolutely to a tenant and he has a reasonable time to remove them after the expiration of his term ; but the right to remove fixtures which are distinctly realty is in the nature of a license and must be exercised while the tenant is in possession under the lease that grants it. Upon the taking of a building containing trade fixtures they are to be regarded as real property for the purpose of making compensation and the tenant is under no obligation to remove them where his term has not expired, but the compensation therefor belongs to the tenant.^^ Where the city of New York has condemned a wharf and bulkhead, on which a railroad company, as lessee of the own- ers, maintained certain structures connected by tracks with other structures situated on the opposite side of an interven- ing street, on land leased from the same owners, all the struc- tures, with the tracks and fixtures, being used together, as one plant for a passenger and freight station, the lessee may sur- render and release to its lessors its lease and all claims which, as tenant, it has against the city for the condemnation of the wharf and bulkhead ; but at the same time and in the same in- strument reserve any claim it has for injury to or destruction of its structures and fixtures resulting from the diminished value thereof caused by the severance of the property con- demned by the city.^^ 7. Easements. Where a landowner, having title to the middle of streets laid out by his grantor subject to use for street purposes, con- stone street), 137 App. Div. 630, 122 94. See, infra. Art. X-C-6. Landlord N. Y. Supp. 316; aflf'd, 199 N. Y. 567. and tenant. 92. Matter of City of N. Y. (De- 95. Matter of City of New York, 66 lancey Street), 120 App. Div. 700, 105 Misc. 488, 122 N. Y. Supp. 321. N. Y. Supp. 779. 96. Matter of City of N. Y., 193 93. Matter of City of Buffalo, 1 N. Y. 117. Sheld. 408. 29 450 CONDEMNATION OF EEAL PROPERTY. veyed the lots by metes and bounds and reserved merely his fee in the streets, he is only entitled to a nominal award where the lands are subsequently condemned for municipal pur- poses.^'' When the property taken is not a fee, but an easement for the support by land under water of a railroad track on land abutting, the commissioners charged with awarding as damages the " fair market value " are justified in allowing twelve cents a square foot for the easement as against thirty cents for the fee.^* 8. Injury to business. It is the general rule that loss of business profits or good will are not substantial grounds for damages, and they are not considered in estimating the damages for the taking of the land.'" But statutes in particular cases have authorized the ascertainment of damages to established businesses.^ Thus section 42 of chapter 724 of the Laws of 1905, as amended by chapter 314 of the Laws of 1906, gives a right to damages to any person who, on the date therein specified, had an established business in the counties of Ulster, J^lbany, or Greene, which may have been directly or indirectly decreased 97. Walker v. Mueller, 160 App. Div. ter of Dept. of Public Parks, 53 Hun, 704, 145 N. Y. Supp. 797. 280, 6 N. Y. Supp. 750. 98. N. Y. C. & H. R. R. R. Co. v. Street opening.— Injury to business Untermyer, 133 App. Div. 146, 117 cannot be shown in street opening pro- N. Y. Supp. 443; aff'd, 196 N. Y. 531. ceedings wliere, under the provisions of 99. Matter of Simmons, 58 Misc. the claimant's deed, he is not entitled 581, 109 N. Y. Supp. 1036; aff'd, 130 to carry on business on the premises. App. Div. 350, 114 N. Y. Supp. 571; Matter of Ashland Street, 165 N. Y. aff'd, 195 N. Y. 573; Matter of Dept. Supp. 977. of Public Parks, 53 Hun, 280, 25 St. 1. Quarry business. — In determining Rep. 9, 6 N. Y. Supp. 750; Troy & Bos- the profit of a quarry business reason- ton R. R. Co. V. Northern Turnpike Co., able interest on the fair value of the 16 Barb. 100; Canandaigua & N. F. property involved and a fair average Co. V. Payne, 16 Barb. 273; N. Y., W. of thei improvements and equipment S. & B. E. R. Co. V. Cosack, 35 Hun, should enter into the expense account. 633. Both the quantity and quality of the Machinery. — Commissioners have no stone and the cost of getting it out power to make an award for the loss ready for the market should be taken of an established business or for the into consideration, with other elements, difference in value between the ma- in determining the value of the land chinery as in use and occupation upon sought to be taken. Orleans County the premises and such machinery if Quarry Co. v. State of New York, 172 moved to another manufactory. Mat- App. piv. 863, 159 N. Y. Supp. 30. CONDEMNATION OP KEAL PROPERTY. 451 in value by reason of the acquiring of land by the city of New York for an additional water supply .^ Such statutes contemplate the determination of all such claims in the original proceedings taken therein to acquire the property affected. When, however, the commissioners of appraisal refuse to take evidence as to such damages in a pro- ceeding to condemn the property, a person entitled thereto under the statute can compel the city authorities, by man- damus, to institute a separate proceeding for the deter- mination of the claim.^ Neither the language nor the purpose of the statute indicate that the Legislature intended to confine compensation for in- jury to business conducted upon lands not condemned, and the statute does not exclude from its benefits lands which are condemned.* The damages to the business of the claimant should be determined as far as possible and compensation be made in the same proceedings in which the land is acquired.^ 2. Summer boaiding house and liv- ery stable. — For the purpose of ascer- taining the value of a summer board- ing house and livery stable business in- jured by taking the land on w'hich it was conducted for water supply pur- poses, the capital invested in the busi- ness represents an expense equal to the market value of the interest thereon. There should be charged against the business the rental paid, and against the capital invested in the personal property used, the market rate of in- terest and a reasonable amount for the depreciation of such personal prop- erty. There should be charged against the business the reasonable cost of all laibor necessary to maintain it although .such labor is performed in part by the owner and members of his household. The market value of the produce raised on the farm and fed to the horses in the livery stable business should be charged as an expense the same as if such produce had been purchased. Mat- ter of Board of Water Supply, 211 N. Y. 174. Truck fanning. — See Matter of Board of Water Supply, 89 Misc. 551, 153 N. Y. Supp. 874. Country store. — See Matter of Board of Water Supply, 81 Misc. 19, 142 N. Y. Supp. 83; modified, 159 App Div. 279, 144 N. Y. Supp. 373. Telephone company. — ^Where the commissioners have made an award to a telephone company for the de- struction of its business within an area to be flooded by a proposed reservoir, it is error to award an ad- ditional amount for the, value of the lines and equipment used to supply the subscribers within that district, for the equipment has no value except in connection with said business, for the loss of which the claimant has already been compensated. Matter of Benael, 140 App. Div. 806, 125 N. Y. Supp. 872. 3. People ex rel. Burhans v. City of New York, 198 N. Y. 439. 4. People ex rel. Burhans v. City of N. Y., 198 N. Y. 439. 5. Matter of Bensel (Ashokan Reser- voir, Sec. No. 12), 148 App. Div. 549, 132 N. Y. Supp. 947; Matter of Bensel (Ashokan Reservoir, Sec. No. 18), 148 App. Div. 553, 133 N. Y. Supp. 84. 452 CONDEMNATION OF REAL, PROPERTY. That a person making claim for decrease in the value of an established business is fortunate in developing a business at another place or obtaining favorable employment cannot be uged to mitigate or lessen the damages. A claim for such damages should be ascertained as of the date when the busi- ness is taken or decreased.^ In awarding damages for the condemnation of lands for a water supply the value of a sand bank located on the prem- ises from which sand was taken by the city for the construc- tion of a dam should be considered although prior to the con- demnation the sand bank had but little value.^ C. Admissibility of evidence bearing on value. 1. Application of technical rules. Commissioners are not bound by any narrow or technical rales of evidence.^ The admission of evidence which could not be received by the court is not necessarily fatal to the determination of com- missioners of appraisal.' A report of commissioners appointed to appraise the damage to be occasioned by the taking of land for railroad pui'poses will not be set aside for their improper action in re- ceiving, after the submission of the case and without the knowledge of the landowner, a written statement from the counsel of the railroad containing certain computations of the value of the premises to be taken, which computation had been made orally by the said counsel before the commission- ers at the hearing.^" Upon the hearing before the commissioners a witness was called by the company to prove admissions made by the owner as to the value of his property, and the witness, after stating that he was not certain in his own mind as to just what was said, was allowed, against the defendants* objection, to state " his impression " as to the amount stated; and it was held that this was error:^^ 6. Matter of Board of Water Sup- 207, and cases cited; Matter of New ply, 211 N. Y. 174. York Elev. R. Co., 15 N. Y. Supp. 909. 7. Matter of Simmons, 158 App. Div. 9. Matter of Ne,w York El. Ry. Co.. 206, 143 N. Y. Supp. 141. 29 St. Rep. 190, 8 N. Y. Supp. 707. 8. Matter of Brooklyn Union EI. R. 10. Matter of N. Y., W. 8. & B. R. R. Co., 113 App. Div. 817, 99 N. Y. R. Co. v. Church, 31 Hun, 440. Supp. 222; aff'd, 188 N. Y. 553; Mat- 11. Matter of N. Y., West Shore & ter of Town of Guilford, 85 App. Div. B. R. R. Co., 33 Hun. 231. CONDEMNATION OF REAL PROPERTY. 453 2. Profits from conducting business on premises. Where land used for business purposes is taken, the owner is entitled to show the general character of the business, but not the profits resulting therefrom.^^ Evidence of the profits earned by the proprietors in their ^business is not competent on the question of damages, as the profits of any particular business depend upon a variety of circumstances not connected with the value of the property used.^^ Thus, in proceedings to condemn property used as a mill site, evidence as to the amount of business at the mill and the profits derived therefrom is inadmissible." Where the personal skill, experience and efforts of the owner play too prominent a part, the profits realized from the business constitute but little aid in determining the value of the property; but, where the earnings depend chiefly upon the location, soil or character of the property itself, the profits derived from it may furnish reliable evidence of its value.^^ 3. Consideration for previous transfer of land. The price agreed to be paid for the premises before the initiation of the condemnation proceedings, and at a time not so remote that the evidence lacks probative value, is evidence of its present value.^^ Seventeen months is not so long an in- terval as to render the evidence valueless." The price paid upon a bona fide sale of the same property about the time of the condemnation proceedings furnishes some, though not conclusive, evidence as to its value ; but, in the absence of evidence that it was sacrificed or its sale was forced or that other circumstances exist which would except the case from the general rule, it should be regarded as con- trolling.^^ But the owner of the lands cannot generally establish their 12. Matter of GUroy, 26 App. Div. 16. Matter of Dept. of Public Parks, 314, 49 N. y. Supp. 798. 53 Hun, 280, 6 N. Y. Supp. 750. 13. City of Syracuse v. Stacey, 45 17. Matter of City of N. Y. (Hamil- App. Div. 249, 61 N. Y. Supp. 165; ton Place), 67 Misc. 191, 122 N. Y. aflTd, 169 N. Y. 231; appeal dismissed, Supp. 660. 201 U. S. 642. 18. Matter of City of New Yorlc, 66 14. Matter of Newton, 45 St. Rep. Misc. 488, 122 N. Y. Supp. 321; Mat- 18, 19 N. Y. Supp. 573. ter of City of New York, 171 App. Div. 15. Brainerd v. State, 74 Misc. 100, 834, 157 N. Y. Supp. 1015. 131 N. Y. Supp. 221. 454 CONDEMNATION OF KEAL PROPERTY. value by testimony that he received certain offers for the property.'^* 4. Value of other parcels. There is considerable authority to the effect that a party may not establish the value of his lands by showing what was paid for another parcel similarly situated.^" But the value of other premises in the vicinity of the lands in question is not necessarily excluded in all cases.^^ The admission of evidence on the question of damages, of prices paid for adjacent property, is not grounds sufficient for reversal, where it is the best evidence to be had.^^ Where a parcel sought to be acquired through condem- nation proceedings is located upon the borders of the thickly settled portion of a city, almost within stone's throw of a rail- road station, and with two lines of trolley cars passing by its borders, testimony offered by the owner of said parcel of land to establish its value before and after the taking of the ease- ment therein, by showing the value of various lots or plot sub- divisions thereof, is competent.^^ The market value indicated by sales may be shown oh the cross-examination of an ex- pert.^* But it is improper for the commissioners to allow expert witnesses on redirect examination to testify in regard to sales 19. Matter of City of N. Y. (Croton cannot be shown by evidence of the Park), 142 App. Div. 665, 127 N. Y. price paid for similar property. Mat- Supp. 379. ter of Thompson, 127 N. Y. 463. 20. Matter of City of New York, 142 21. Availability of objection. — An ex- App. Div. 665, 127 N. Y. Supp. 379; ception taken by the owner of one par- Matter of City of New York, 159 App. eel of lands condemned to the exclusion Div. 662, 144 N. Y. Supp. 717. of evidence as to value is not avail- AfSdavits of landowners as to the able to the owner of another parcel relative value of distinct parcels of who did not call the witness, although land proposed to be taken are not com- the testimony related to the price paid petent evidence before the commission- for his lands. Matter of City of New ers to assess the damages and will not York, 142 App. Div. 665, 127 N. Y. be considered by the court upon mo- Supp. 379. tion to confirm the report of commis- 22. Langdon v. Mayor, 133 N. Y. sioners. Matter of Simmons, 58 Misc. 628. ' 581, 109 N. Y. Supp. 1036; aff'd, 130 23. County of Westchester v. Wake- App. Div. 350, 114 N. Y. Supp. 571; field P. Co., 71 Misc. 485, 129 N. Y. aff'd, 195 N. Y. 573. Supp. 30. The value of a water power which 24. Matter of City of New York depends upon locality and adaptability (East 161st Street), 159 App. Div. 662, to the use made of adjoining property 144 N. Y. Supp. 717. CONDEMNATION OF REAL, PROPERTY. 455 of pieces of property about which they had not been interro- gated on cross-examination.^^ But the commissioners need not receive evidence of the value of other parcels which differ radically from the premises in question.^^ The admission of evidence of experts as to the value and rental value of an entire block as a basis for fixing the value and rental value of a separate place therein constitutes error, but is cured when on cross-examination they testify as to the separate values of the various lots constituting the entire parcel; so that it is possible for the trial court to apportion the evidence of aggregate value and apply the proper figures to the parcel in question.^ 5. Rentals received as bearing on value. In a proceeding to condemn land for a public use, the amount of actual rents received is admissible to show the fee value of the property.^ ABTICLE X. REPORT AND AWARD. A. Form of report. Where there has been a succession of appraisals in the same county, one report may embrace all the different parcels.^^ But, where different parties are interested in different parcels, a single award for the whole is improper.^" When the entire property is to be acquired, it is not neces- sary to set out every easement, franchise, and incidental right and the award for the entire property must answer for the compensation of subsidiary rights and interests.^^ The commissioners need not state what additional value they give to land by reason of bulkhead rights adjacent there- i 25. Matter of Blacfcwell's Island Bridge in City of N. Y., 118 App. Div. • Bridge, 118 App. Ddv. 272, 103 N. Y. 272, 103 N. Y. Supp. 441; appeal dis- Supp. 441 ; appeal dismissed, 189 N. Y. missed, 189 N. Y. 512. ; 512. 29. Troy & Rutland E. K. Co. v. 26. Matter of Man'hat. Ry. Co. v. Cleveland, 6 How. Pr. 238. Stuyvesant, 126 App. Div. 848, 111 30. Matter of Daly, 23 App. Div. N. Y. Supp. 222. 232, 48 N. Y. Supp. 731. 27. Shaw V. N. Y. El. E. R. Co., 187 31. Seton v. City of N. Y., 130 App. N. Y. 186. Div. 148, 114 N. Y. Supp. 565. 28. Matter of Blaekwell's Island 456 CONDEMNATION OF KEAL PKOPEKTY. to belonging to the same owner, where they report that they took such rights into consideration and that they increased the value of the land taken.^^ Where the report of commis- sioners appointed to appraise the damages to be awarded to an abutting owner for injuries to his easement or other inter- est in that portion of the street occupied by an elevated rail- way did not set forth the particulars of the damages, as re- quired by the court, it was held, on motion to set the report aside, that there was no such irregularity as required such action, but that the report should be confirmed, and then all questions, both of law and fact, that could in any form be re- viewed on an appeal from an order confirming the report, could be reviewed by the appellate court.^^ Although the majority of the commissioners must sign the report, they need not all be together at the signing, as it in- volves no deliberation or judicial action.^* I'he testimony taken on the hearing and annexed to the re- port is to be considered a part thereof.^ Where in a condemnation proceeding the commissioners appointed have delivered their report with the evidence to the proper agents of the plaintiff, the defendant is entitled to an order that said report and evidence be filed, if the plaintiff has refused to file the same upon demand.^^ B. Modification of report by commissioners. When commissioners to assess damages to lands taken for highway purposes have filed their report, their power of amendment is gone, and a subsequent report has no validity.^'' iTpon application and order of the court, the commissioners may amend or correct their report so as to conform it to the state of facts as they exist. They have no right, however, at the time of such correction, to hear proof by claimants as to damages. After having viewed the premises, and decided upon the amount of damages to be paid, their powers, under the appointment, are exhausted, so far as the amount of damages are concerned, without further order of the court.^* 32. City of N. Y., 56 Misc. 306, 107 36. Matter of City of Syracuse, 182 N. Y. Supp. 567. App. Div. 176, 170 N. Y. Supp. 925; 33. Matter of N. Y. Ele,v. R. K. Co., reversed on other grounds, 224 N. Y. 35 Hun, 414. 201. 34. Rochester, etc., R. R. Co. v. Beck- 37. People ex rel. Mann. v. Mott, 60 with, 10 How. Pr. 168. N. Y. 649. 35. Rondcut & 0. R. R. Co. v. Deyo, 38. N. Y. & Brie R. R Co. v. Corey, 5 Lans. 298. 5 How. N. Y. 177. CONDEMNATION OF EEAL, PROPERTY. 457 The report may be amended by the commissioners to con- form to the facts, by order of the court before it is filed ; but they cannot hear proofs upon such correction.^' Errors in the minutes of testimony attached to the report may be corrected by the commissioners, but an error in the admission of facts is not cured by the certificate of a member of the commission that the report was not affected by such evidence.^" Where the one whose land had been taken by commissioners in opening a street failed to file objections to their award within the time fixed by statute, and no sufficient excuse was given for such failure, and the report had been confirmed and the assessments have been made, the report will not be re- committed for amendment as to such award.^^ Until the report of commissioners in condemnation proceed- ings has been filed or otherwise placed beyond their control, it does not become conclusive upon them, and the fact that one of the commissioners had announced the amount of the award, and that two of them had signed the report, does not con- stitute a decision beyond the power of recall.^ C. Distribution of award. 1. In general. As a general rule compensation is made to the person who is the owner of the premises at the time the title thereto is ac- quired by the condemnor.*^ Presumptively, payment of com- pensation and the passing of title are simultaneous; but the Legislature may assure the owner of his compensation and provide for the passing of title before the amount thereof is determined.** An award is properly made to one who was owner of the equity of redemption at the time the petitioner takes title, 39. N. Y. & Erie E. R. Co. v. Corey, N. Y. 644. 5 How. Pr. 177; People ex rel. Mann v. 43. Van Etten v. City of New York, . Mott, 60 N. Y. 649. 226 N. Y. 483; Matter of Leist, 189 40. N. Y., W. S.; etc., E. R. Co. v. App. Div. 155, 178 N. Y. Supp. 268. Judson, 33 Hun, 293. Cemetery lands. — See Whittemore v. 41. Matter of Lexington Ave., 18 Woodlawn Cemetery, 71 App. Diy. 257, N. Y. Supp. 828. 75 N. Y. Supp. 847. 42. People ex rel. Comstock v. Mor- 44. Van Etten v. City of New York, rison, 54 App. Div. 262, 66 N. Y. Supp. 226 N. Y. 483. 519; affirmed, without opinion, 165 458 CONDEMNATION OF REAL PKOPEKTY. when title does not pass to a purchaser under a subsequent foreclosure.^ Where title to premises has vested by condemnation in the city of New York before sale under foreclosure, the purchaser at the sale is not entitled to the compensation awarded.^^ Damages to property from a change of grade in a street are caused when the physical change in grade is made and the then owner is the one entitled to compensation.*^ An ancillary guardian is not entitled to an award for property of an infant, but it will be refused during the infant's minority, and the in- come paid to the guardian.*^ The remedy which is available to a party upon ascertain- ing that an award has been paid to another is an action for money had and received against the recipient of the award and not a motion to vacate the order under which the money was paid to the other party.*^ 2. Conflicting claimants. Under section 22 of the Condemnation Law, if there are adverse and conflicting claimants to the money, or any part of it, to be paid as compensation for the property taken, the court may direct the money to be paid into the court by the plaintiff, and may determine who is entitled to the same, and direct to whom the same shall be paid, and may, in its discre- tion, order a reference to ascertain the facts on which such determination and direction are to be made. The commissioners appointed in condemnation proceedings have no authority to determine conflicting claims of title to the lands to be condemned. Their sole function is to deter- mine the just compensation to be paid ; and, having paid that into court, it is for the court itself to determine issues as to title, as provided in section 22.™ Where there is a dispute as to the ownership of a parcel condemned the commissioners should ascertain and report its value, making the award to unknown owners,' as they cannot determine a question of title. The award, when confirmed, be- 45. Matter of City of N. Y., 30 Misc. Dept. Public Works, 89 Him, 529, 35 295, 62 N. Y. Supp. 379. • N. Y. Supp. 332, 69 St. Rep. 743. 46. Matter of Washington Ave., 34 49. Matter of City of New York, 209 Misc. 655, 70 N. Y. Supp. 599. N. Y. 127. 47. Matter of Grade Crossing Com'rs, 50. N. Y. C. & H. R. R. Co. v. 209 N. Y. 139. Mathews, 144 App. Div. 732, 129 N. Y. 48. Matter of Estate of Sproat v. Supp. 828. CONDEMNATION OF KEAL PROPERTY. 459 comes conclusive upon all parties, who must then try the ques- tion of title in appropriate proceedings brought for that purpose.^^ The provisions of section 22 are not in violation of the Con- stitution. The money directed to be paid may be deposited in a bank under the order of the court, and when so deposited, it tates the place of the land as to the owner, and is the prop- erty of the parties entitled to compensation. There may be conflicting claimants to the fund, and the intervention of the court may be necessary for its distribution, or for the adjust- ment of liens. The fund is subject to the same liens to which the land was, before being taken. It does not affect the valid- ity of an order, whether it directs the money to be drawn out on ex parte application, or on notice.^^ Where the commissioners are in doubt as to the title of a lot, their award may be made to unknown owners.^ Where an award is made to " unknown owners " and upon application to the court for the payment of the award there appears to be conflicting claimants, the only question to be de- termined is, Who is the unknown owner? When ascertained he is entitled to the award the same as if he had been known and the award made to him by name ; it is immaterial whether he owned an absolute fee or a fee subject to a public easement; the amount awarded must be taken to have been made for his interest whatever it was.^ Where an order of commissioners directed the distribution of an award to unknown owners of land taken by a city for public use and a subsequent order directed that the fund be paid to certain claimants it is error to insert in such latter order a provision that such fund be paid to the claimants or their attorneys, since to authorize its payment to any person other than the owner of the fee of the land taken there should be a power of attorney duly acknowledged so that there may be a public record of the receipt of the money .^ 51. Matter of Com'r of Public 73 App. Div. 152, 76 N. Y. Supp. 766. Works, 135 App. Div. 561, 120 N. Y. 54. Matter of Dept. of Public Parks, Supp. 930; aflF'd,_199 N. Y. 531. 73 N. Y. 560. 52. Matter of N. Y. C. & H. E. E. E. 55.. Matter of the Mayor, 20 App. Co., 60 N. Y. 116. Div. 404, 46 N. Y. Supp. 832; ail'd, 53. Matter of Armory Board, 35 155 N. Y. 638. Misc. 548, 72 N. Y. Supp. 37; reversed. 460 CONDEMNATION OF REAL PROPERTY. 3. Effect of death of owner. Where city acquires title to land for street purposes, the right to the award vests in the owner, and passes to his estate on his death.^^ Where property is taken under condemnation proceedings, a devisee of the property under the will of the owner is not entitled to the award, as the proceeds become personal prop- erty .^'^ But, if he dies before the confirmation of the report, ordinarily the award will pass as realty .^^ 4. Grantor and grantee. The Condemnation Law, section 25, provides for the filing of a lis pendens in a condemnation proceeding. When it is so filed, a change of ownership pending the proceedings does not affect the award, but it is made and perfected as if no convey- ance had been made. As between the vendor and purchaser, they may agree that either one shall be entitled to an award.^^ Pending the proceeding, the owner may sell his property and by agreement provide that all parties preserve those rights which they would have if at the time of the sale title to the property sought to be condemned had vested in the peti- tioner.^" If the title to the property has vested in the peti- tioner before the conveyance, the grantee will not generally acquire the award, unless the terms of the conveyance indicate that the grantor intended to convey such right.^^ If title has vested in the petitioner and the award has been paid, a trans- fer of the premises does not operate to transfer the award, unless it is specifically included.^^ One who has an option to 56. Matter of Reubel, 52 Misc. 604, Brooklyn, 87 Hun, 35, 33 N. Y. Supp. 103 N. Y Supp. 804. 859, 67 St. Rep. 611; aff'd, 147 N. Y. 57. Ametrano v. Downs, 170 N. Y. 703. 388. 60. Matter of City of New York See also Matter of Lyle, 41 Misc. (Sedgwick Ave.), 213 N. Y. 438. 596, 85 N. Y. Supp. 290; Matter of 61. Matter of Mayor (Trinity Ave.), Sarles, 111 Misc. 571, 181 N. Y. Supp. 116 App. Div. 252, 101 N. Y. Supp. 908. 613; Harris v. Kingston Realty Co., 58. City of Brooklyn v. Seaman, 30 116 App. Div. 704, 101 N. Y. Supp. Misc. 507, 62 N. Y. Supp. 601. 1104; Matter of City of N. Y. (Bev- 59. As to when the grantee in a erly Road), 131 App. Div. 147, 115 deed takes the award, see Magee v. N. Y. Supp. 208; Matter of Pierce, 10 City of Brooklyn, 140 N. Y. 265. And N. Y. Supp. 31, 24 Abb. N. C. 134. as to what operates as an assignment 62. Thoren v. Cockburn, 83 Misc. of the award, see Sims v. City of 463, 145 N. Y. Supp. 69. CONDEMNATION OF REAL PROPERTY. 461 purcLase the premises in question has no interest which will entitle him to a part of the award.*^ As the use of a street by a city for an elevated bridge ap- pioach is legal, the compensation for taking the fee should be paid to the one who owned the same when the structure was built and not to his grantee who subsequently took title while the proceeding was pending. Under such circumstances it is presumed that the price paid by the grantee was based on the value of the land in its dam- aged condition.®^ Where title to premises has vested in the city of New York before they have been sold in foreclosure, a purchaser at the sale is not entitled to the award — which may, where the com- missioners are unable to ascertain the names of the owners of the parcel with suflScient certainty, be made to " unknown owners " — but where the award has been transferred in terms, by the decree of foreclosure and the referee's deed, to the purchaser, it must be made to him, and cannot lawfully be made to " unknown owners."®^ 5. Owner and incumbrancer. If the premises taken in the proceeding are subject to a mortgage, the commissioners should apportion the award be- tween the owner and the mortgagee. When an award has been duly confirmed by the courts and the award paid as di- rected therein, a mortgagee who has failed to present and prove his claim, cannot generally maintain an action against the petitioner to recover the mortgage debt.^^ If the land has a value in excess of the amount of the mort- gage, the mortgagee's interest is measured by the face of his mortgage and interest, but if the value of the land is less than the face of the mortgage, then the mortgagee's interest is the value of the land less a proper apportionment of taxes and assessments.*'^ Where the city of New York has acquired in condemnation proceeding, real estate upon which there is a mortgage not in 63. Taggarts Paper Co. v. State, 187 Misc. 655, 70 N. Y. Supp. 599. App. Biv. 843, 176 N. Y. Supp. 97. 66. Merriman v. City of New York, 64. Matter of Citj of N. Y. (New- 227 N. Y. 279. town Creek Bridge), 128 App. Div. 150, 67. Matter of City of New York, 184 112 N. Y. Supp. 531; aflf'd, 195 N. Y. App. Div. 509, 172 N. Y. Supp. 50; ap- 527. peal dismissed, 224 N. Y. 697. 65. Matter of Washington Ave., 34 462 CONDEMNATION OF REAL PKOPEETY. default, the mortgagee loses his specific lien on the property, and acquires in lieu thereof the right to have his interest ascertained and the amount thereof paid by the municipality, and he has no standing to foreclose his mortgage thereafter.^^ Where a mortgage has been given upon property prior to the taking of a portion thereof by a municipality, if, upon a foreclosure and sale after such taking, a deficiency remains, the lien of the mortgage extends to so much of the damages awarded as may be needed to make good the deficiency.^^ Where property is taken by the city of New York, all taxes and assessments which are valid liens upon premises at the time an award therefor is made, may be deducted by the city from such award.'"' But taxes and assessments levied after the city had acquired title to property should not be charged against the awardJ^ A claim by a county for unpaid taxes upon a portion of the award must be established by sufficient evidence to uphold the tax titleJ^ Where the owner of land has agreed to pay an attorney for his services a certain share of the award, such share to be a lien on the property, a charge on the land is not thereby createdJ^ A contract between one whose property has been taken in condemnation proceedings and a corporation, whereby the lat- ter was authorized to proceed in the matter of the owner's claim for damages for which it was to be paid a portion of the award, does not entitle the corporation to a lien on the award.''* 68. Hill V. Wine, 35 App. Div. 520, Co., 90 N. Y. 342. 54 N. Y. Supp. 892; Bryan v. Altieri, Tax lien not considered on ap- 36 App. Div. 623, 55 N. Y. Supp. 152. praisal. — Provisions that all taxes and 69. Matter of Mayor (Morris Ave.), assessments which may be a. lien shall 118 App. Div. 117, 103 N. Y. Supp. 180. be deducted from the award is im- See also Matter of Sohott, 159 App. proper where no further consideration Div. 824, 145 N. Y. Supp. 18. of the tax lien was had on the ap- 70. Carpenter v. City of N. Y., 44 praisal. Matter of So. St. Paul St., 85 App. Div. 230, 60 N. Y. Supp. 633; Hun, 473, 33 N. Y. Supp. 141, 06 St. Deering v. City of N. Y., 51 App. Div. Eep. 766. 402, 64 N. Y. Supp 606. 73. Grigg v. McNulty, 5 Misc. 334, 71. Matter of Morris Ave. in City of 25 N. Y. Supp. 504, 55 St. Rep. 210. New York, 118 App. Div. 117, 103 74. Matter of City of New York, 146 N. Y. Supp. 180. App. Div. 125, 130 N. Y. Supp. 540; 78. Matter of N. Y. C. & H. R. R. afl'd, 204 N. Y. 626 CONDEMNATION OF EEAL PROPERTY. 463 6. Landlord and tenant. "When a tenant is in possession of the premises in question and his lease has a pecuniary value, the commissioners should fix its value and make an award to him of the amount thereof.'^ Where the land is leased the commissioners either appraise the entire value and then apportion it among the fee owners or tenants or in the first instance appraise the value of each separate interest.'^" Or the landlord and the tenant may agree to an apportionment of the damages." Whatever award is made to the tenant, should be deducted from the value of the fee and balance awarded to the fee owner.''^ The compensation for trade fixtures, however, should not be deducted from the amount previously determined to be just compensation to the owner of the land, when the latter amount did not include the value of such fixtures.™ 75. See Matter of Daly, 29 App. Div. 286, 51 N. Y. Supp. 576. Improvements by tenant. — ^Where the fee value of leased premises has been greatly increased by permanent im- provements by the lessee in considera- tion of a reduced rent, it la not error for the commissioners to fix the fee value at a certain sum, and award a portion thereof to the lessee. Matter of N. Y. & Brooklyn Bridge, 19 N. Y. Supp. 953. Privilege of renewal. — ^Where the lease and sublease each contain a priv- ilege of renewal, and it appears that the condemnation proceedings were commenced during the original ti-rms thereof, that the lessee and sublessee were parties to the proceedings, and that at the time the report was made the original terms had expired and it does not appear that the lessee and sublessee ever exercised the privilege accorded to them by the lease and sub- lease to demand a renewal, an award of $1 each to the lessee and sublessee will be sustained. Matter of Pier 39, 62 App. Div. 271, 70 N. Y. Supp. 1127; alT'd, 168 N. Y. 254. 76. Matter of Trustees, 137 N. Y. 95. 77. Matter of City of N. Y., 193 N. Y. 117. See also Matter of City of N. Y., 192 N. Y. 295. 78. Matter of Pier 39, 62 App. Div. 271, 70 N. Y. Supp. 1127; aff'd, 168 N. Y. 254; Matter of City of N. Y. (Delancey Street), 120 App. Div. 700, 105 N. Y. Supp. 779; Matter of Will- cox, 165 App. Div. 197, 151 N. Y. Supp. 14:1. 79. Matter of City of N. Y. (Avenue A), 66 Misc. 488, 122 N. Y. Supp. 321. Value of trade fixtures. — In appor- tioning between the landlord and ten- ant an award for property taken in condemnation proceedings by the city of New York, the tenant is only enti- tled to the value of his lease and to the value of the, right to remove trade fixtures at the expiration thereof, and the latter item only includes the value of the property he 'has a right to re- move after it is severed from the real estate, and not its value based upon what it would cost to install it with a depreciation of its use during the time it has been in use. Matter of City of N. Y., 101 App. Div. 527, 92 N. Y. Supp. 8; aff'd, 182 N. Y. 281. 464 CONDEMNATION OF REAL PKOPEETY. Where wharf property is rented subject to the contingency that the city may, by legal proceedings, take possession of the same, the tenants are not entitled to have the value of their unexpired term ascertained and deducted from the awara made to the landlord for the value of the property taken.^" The criterion of the tenant's damages is said to be the amount by which the rental value of the land exceeds the rent reserved.^^ In ascertaining the value of a lease, it is proper to deter- mine what interest the tenant has, the rent he pays, and obli- gations he assumes and will assume.^^ A lessee in possession of premises appropriated by the State is not compelled to have recourse to the owner for the damages he sustains, but has a claim against the State for such damages, which is not lost by a settlement between the State and the owner and payment of the full value of the property to the latter.^ 7. Dominant and servient easements. Where the owners file a map of land laid out in streets, and containing a declaration that no dedication to public use is in- tended, and convey part of the land with reference to such streets, including in the conveyances land within the street line, the grantees acquire an easement in the land designated as streets, and the owners are only entitled to an award for the value of the land appropriated for the public use after deducting that of the private easement.^^ An award for land taken for a street which is part of an un- opened street, laid out on a private map made by the owner of the land with reference to which he has made conveyances, but which does not appear on the official maps of the city, should be equitably divided between the owner of the fee and the abutting owners who have acquired easements thereon.^ The owner of the fee of land subject to an easement and the owner of the easement are together the " owners " of the land. An award to unknown owners, ma^p in condemnation proceedings for property taken by the city of New York, to open a street, does not constitute an adjudication that a per- 80. Matter of City of N. Y., 168 83. Musanti v. State of New York, N. Y. 254. 73 Misc. 534, 131 N. Y. Supp. 20. 81. Matter of City of Buffalo, 1 84. Matter of Adams, 141 N. Y. 297. Sheld, 408. 85. Matter of St. Nicholas Terrace, 82. In re Delancy St., 120 App. Div. 76 Hun, 209, 59 St. Rep. 109, 27 N. Y. 700, 105 N. Y. Supp. 779. Supp. 765; aflf'd, 143 N. Y. 621. CONDEMNATION OF REAL PROPERTY. 466 son owning an easement, to wMcli the land was subject, is not entitled to any part of the award.^® An owner of perpetual easements of light, air, and access to land, where the servient land has been condemned by the city of New York for the purpose of its board of education, is en- titled to the award for the easements thus appropriated by the city, without any deduction therefrom for taxes and assess- ments existing against the land to which the easements apper- tain.^ 8. Life tenant and remainderman. An award of a gross sum to a life tenant in lieu of the value of his life estate in the property is unauthorized, and the for- mal confirmation of the report does not save the award.^* Where lands, taken by a municipality for a public use are, at the time the title thereto vests in the municipality, owned by A, subject to a life estate of B, in one undivided half there- of, the court has no power to compute the value of B's estate and deduct it from the amount awarded for one undivided half thereof; but the life tenant is entitled to the accrued interest upon one-half of the award during his natural life, although he will be required to give adequate security before receiving the principal.''^ If land is held by life tenants with a remainder over to the children of one of them, it is error to adjudge the ownership of the })rincipal of the award to the child of such .life tenant as representing the remainder, since other children may be born. In such a case, the money should be paid into court under section 22.^° 9. Husband and wife. The inchoate right of dower of a wife must be recognized and protected in all proceedings against her husband.^^ But it has been held that, where, in pursuance of an act of 86. Matter of Bd. of Street Open- 112 N. Y. Siipp. HI; aff'd, 128 App. ing, 27 App. Div. 265, 50 N. Y. Supp. Div. 897, 112 N. Y. wSupp. 1130; aflf'd, 621; aff'd, 158 N. Y. 721. 194 N. Y. 551. 87. Baker v. City of New York, 31 90. Pecksport Con. Ey. Co. v. West, App. Div. 112, 52 N. Y. Supp. 533, 86 47 N. Y.. Supp. 230. St. Rep. 533. 91. Matter of N. Y. & B. B. Co., 75 88. Matter of Tucker, 104 Misc. 617, Hun, 558, 59 St. Rep. 613, 27 N. Y. 172 N. Y. Supp. 701. Supp. 597; aff'd, 60 St. Rep. 874; 89. Matter of Gilroy, 60 Misc. 125, Matter of William St., 19 Wend. 678. 30 466 CONDEMNATION OF EBAL PROPEKTY. the Legislature, lands are taken by a municipal corporation for a public use, upon an appraisement and payment of their value to the holder of the fee, the corporation acquires an absolute right to them, divested of any inchoate right of dower existing in the wife.^^ But an award made to the husband instead of the wife, though she is the actual owner does not necessarily invalidate the proceedings.**^ Where land was owned by a lunatic and his wife as tenants by the entirety, the committee of the lunatic is not entitled to any part of the award, but it should be deposited in court and retained until the death of either tenant and then paid to the survivor, the income in the meantime to be divided equally be- tween the wife and the committee.^^ D. Interest on award. It is a fundamental rule that interest cannot be allowed in any case unless by virtue of some contract, expressed or im- plied, or of some statute, or on account of the default of the party when it is allowed as damages for a default.^^ And, under a special condemnation statute, no interest is recoverable on awards unless provided for therein.^^ The Condemnation Law seems to make no provision for interest, except in a case under section 18 when the proceeding has been abandoned. Under section 17, the. award is docketed as a judgment, and from the time of such docketing it is thought it would carry interest the same as any other judgment. But, unless it is otherwise provided by statute, interest on the award runs only from the date of the filing of the final order.^^ Statutes, however, in particular cases frequently pro- vide for interest on the award. Thus, interest is allowed under the Greater New York Charter when lands are taken for street openings.^^ 92. Moore v. The Mayor of N. Y., 8 9G. Hudson River Tel. Co. v. aty of N. Y. 110. New York, 75 Misc. 266, 132 N. Y. 93. Mitchell v. Village of White Supp. 294; aff'd, 151 App. Div. 942, Plains, 62 Hun, 231, 16 N. Y. Supp. 136 N. Y. Supp. 1138. 828, 41 St. Eep. 787; aff'd, 138 N. Y. 97. Trustees of N. Y. & Brooklyn 627. Bridge Co. v. 3d M. E. Church, 45 St. 94. Matter of Bd. of St. Opening, 89 Rep. 615, 18 N. Y. Supp. 257. Hun, 525, 35 N. Y. Supp. 409, 69 St. 98. See the following cases constru- Rep. 795. ing and applying the statute in New 95. Matter of Trustees, 137 N. Y. 95. York City: Matter of City of New CONDEMNATION OF EEAL PROPERTY. 467 The Highway Law, section 59-a, provides that an award for damages caused to real estate by a change of street grade shall bear interest from the time of the change of grade to the time of payment of the award.®' Where the order of confirmation is opened as a favor to the property-owner, who stipulates to claim only the value of the land as of the value when the original assessment was made, he is estopped from claiming interest on the award made on the rehearing.^ In condemnation proceedings by the city of New York, where, after an original report the matter is sent back to the commissioners with directions to make a different award, the supplemental report should calculate interest up to its date and not to the date of the original report.^ Mortgagees of the premises taken are only entitled to inter- York (West 151st Street), 222 N. Y. 370; People ex rel. Wallaston Realty- Co. V. Craig, 229 N. Y. 23; Matter of Bd. of Street Opening, 21 App. Div. 357, 47 N. Y. Supp. 564; Matter of Bd. of Street Opening, 35 App. Div. 406, 54 N. Y. Supp. 911; Fredrichs v. City of N. Y., 44 App. Div. 274, 60 N. Y. Supp. 724; afif'd, 165 N. Y. 656; Matter of East 175th St., 49 App. Div. 114, 63 N. Y. Supp. 468; affirmed, on opinion below, 162 N. Y. 661; Deering V. City of N. Y., 51 App. Div. 402, 64 N. Y. Supp. 606; Carpenter v. City of N. Y., 51 App. Div. 584, 64 N. Y. Supp. 839; People ex rel. N. Y. City Church v. Coler, 60 App. Div. 77, 69 N Y. Supp. 863; aff'd, 168 N. Y. 644; Mat- ter of City of N. Y. (Montgomery St.), 91 App. Div. 532, 86 N. Y. Supp. 1035; Matter of City of N. Y. (In re Dor- sett), 92 App. Div. 523, 87 N. Y. Supp. 308;. modified, 179 N. Y. 496 j Matter of City of New York, 107 App. Div. 22, 94 N. Y. Supp. 838; aflF'd, 183 N. Y. 57; Matter of Mayor (Morris Ave.), 118 App. Div. 117, 103 N. Y. Supp. 180; Matter of Cammann, 143 App. Div. 223, 128 N. Y. Supp. 124; Matter of Minzesheimer, 144 App. Div. 576. 129 N. Y. Supp. 779; aff'd, 209 N. Y. 272; Matter of Baker, 178 App. Div. i, 164 N. Y. Supp. 867; Matter of City of New York, 187 App. Div. 355, 175 N. Y. Supp. 611; People ex rel. Wal- laston Realty Co. v. Craig, 190 App. Div. 556, 180 N. Y. Supp. 92; Matter of Bronx Parkway Co., 1^1 -A-pp. Div. 387, 181 N. Y. Supp. 657; Matter of Crane v. Craig, 193 App. Div. 791; Matter of Bassford, 36 Misc. 732, 74 N. Y. Supp. 397; aff'd, 71 App. Div. 617, 76 N. Y. Supp. 1009; modified, 172 N. Y. 488; Matter of East 158th St., 39 Misc. 598, 80 N. Y. Supp. 594; Matter of' Guiler, 106 Misc. 451, 174 N. Y. Supp. 703. Wharves and piers.— On awards in proceedings for condemnation of wharves and piers in New York City, only simple interest from the time of the vesting of title in the city can be awarded. Matter of City of New York, 210 N. Y. 451. 99. Matter of 149th Street Realty Co. v. Prendergast, 179 App. Div. 786, 167 N. Y. Supp. 367; aff'd, 222 N. Y. 654. 1. Matter of 181st St., 44 St. Rep. 534, 18 N. Y. Supp. 264. 2. Matter of Mott Haven Canal Docks, 196 N. Y. 175. 468 CONDEMNATION OF REAL, PROPERTY- est on their mortgages to the day when the award became pay- able.^ An award of damages for impairing plaintiff's water sup- ply, delayed for six years, should neither allow interest or past damages.* A landowner should not be permitted to continue in possession of the premises, and be allowed for interest during such occupancy.^ But, if the petitioner takes posses- sion of the premises before the award is made, it may be proper to allow the owner interest from the time the petitioner takes possession.® Where a time is fixed in which an award is made payable by statute, interest on it is to be computed from such time, un- less the owner remains in possession.^ Where the owner of the property neglects, after confirmation, to satisfy mort- gages and convey her property, she cannot maintain an action for interest on the award.* E. Bights covered by award. All elements of damages should be presented to the com- missioners assessing the damages. The appraisement em- 3. Carpenter v. City of N. Y., 51 App. Kv. 584, 64 N. Y. Supp. 839. 4. Village of Port Henry v. Kidder, 39 App. Div. 640, 57 N. Y. Supp. 102. 5. Donnelly v. City of Brooklyn, 121 N. Y. 9; Matter of Trustees, 137 N. Y. 95; Matter of Com'rs of Palisades In- terstate Park, 172 App. Div. 643, 158 N. Y. Supp. 932. Deposit with county treasurer. — Where the amount awarded on a final order in condemnation proceedings has been tendered to the owner whose lands are taken, and on his refusal to accept it has been deposited with the county treasurer by the condemnor to the credit of the owner pursuant to section 15, the deposit is deemed a payment within the provisions of the act, and the owner is not entitled to interest during the period covered by an appeal from the award. He is, how- ever, entitled to any earnings of the money while in the hands of the county treasurer, and also to interest on any additional award secured by the ap- peal, to be computed from the time when the condemnor entered into pos- session of the lands. So, too, he is en- titled to an additional allowance of costs where the award was increased as a result of the appeal. By virtue of section 19, an appeal from an award does not disturb the condemnor's pos- session, and hence, where he has de- posited the amount of the award pur- suant to said section 15, the money re- mains the property of the condemnee, and his rights thereto are not jeopard- ized by his appeal. Matter of Bd. of Water Com'rs, 132 App. Div. 75, 116 N. Y. Supp. 495; aflf'd, 195 N. Y. 502. 6. Matter of New York Municipal R. Corp. V. Holliday, 189 App. Div. 814, 179 N. Y. Supp. 238. 7. Supervisors of Erie v. City of Buffalo, 63 Hun, 565, 45 St. Rep. 365, 18 N. Y. Supp. 635; aflf'd, 138 N. Y. 629. 8. Devlin v. Mayor, 60 Hun, 68, 37 St. Rep. 951, 14 N. Y. Supp. 251; re- versed, 131 N. Y. 123. CONDEMNATION OF KEAL PROPERTY. 469 braces all past, present, and future damages which the im- provement may thereafter reasonably produce. But it is not to be assumed that a railroad will use unsafe appliances or perform a tortious act.^ An award for property along the river will exclude bulk- head rights.^" The restoration of a private road leading to docks upon a river is not the duty of a railroad company which has taken lands of the owner under the water, and the award must compensate him.^^ The right of an owner of lands beneath waters to cut and' harvest ice is appurtenant to the ownership of the soil and must be deemed to have been included in the award made when the land itself was taken.^^ ARTICLE XI. FINAL ORDER AND JUDGMENT THEREON. A. Condemnation Law, § 15. Confirmation or setting aside report; deposit when payable. Upon filing the report of tlie commissioners, any party may move for its con- firmation at a Special Term, lield in the district where the property or some part of it is situated, upon notice to the other parties who have appeared, and upon such motion, the court may confirm the report, or may set it aside for irregularity, or for error of law in the proceedings before the commissioners, or upon the ground that the award is excessive or insufficient. If the report is set aside, the court may direct a rehearing before the same commissioners, or may appoint new commissioners for that purpose, and the proceedings upon such rehearing shall be conducted in the manner prescribed for the original hearing, and the same proceedings shall be had for the confirmation of the second report, as are herein prescribed for the confirmation of the first report. If the report is confirmed, the court shall enter a final order in the proceeding, directing that compensation shall be made to the owners of the property, pursuant to the deter- mination of the commissioners, and that upon payment of such compensation, the plaintifi' shall be entitled to enter into the possession of the property con- demned, and take and hold it for the public use specified in the judgment. De- posit of the money to the credit of, or payable to the order of the owner, pur- suant to the direction of the court, shall be deemed a payment within the pro- visions of this chapter.13 9. Mayor v. Bailey, 2 Denio, 233. N. Y. 269. 10. Matter of Alexander Ave., 44 St. 12. Matter of Daly, 123 App. Div. Kep. 546, 17 N. Y. Supp. 933; Langdon 709, 108 N. Y. Supp. 635; aff'd, 192 v. City of New York, 59 Hun, 434, 37 N. Y. 571. St. Rep. 99, 13 N. Y. Supp. 864; aflf'd, 13. No provision in special statute 133 N. Y. 628. for confirmation. — ^A provision of a 11. Kerr v. W. S. R. R. Co., 127 city charter relating to the condemna- 470 COaSTDEMNATION OF REAL PROPERTY. B. Condemnation Law, § 17. Judgment, how enforced; delivery possession of premises; when writ of assistance to issue. Upon the entry of the final order, the same shall be attached to the judgment roll in the proceeding, and the amount directed to be paid, either as compensa- tion to the owners, or for tlie costs or expenses of the proceeding, shall be docketed as a judgment against the person who is directed to pay the same, and it shall have all the force and effect of a money judgment in an action in the Supreme Court, and collection thereof may be enforced by execution and by the same proceedings as judgments for the recovery of money in the Supreme Court may be enforced. When payment of the compensation awarded, and costs of the proceeding, if any, has been made, as directed in the final order, and a certified copy of such order has been served upon the owner, he shall, upon demand of the plaintiff, deliver possession thereof to him, and in case possession is not delivered when demanded, the plaintiff may apply to the court without notice, unless the court shall require notice to be given, upon proof of such payment and of service of the copy order, and of the demand and non-compliance therewith, for a writ of assistance, and the court shall thereupon cause such writ to be issued, which shall be executed in the same manner as when issued in other cases for the de- livery of possession of real property. C. Opening of default before commissioners. It has been lield that the default of an owner upon the hear- ing before commissioners may be excused by the Supreme Court on motion to confirm the report, and that the report may be set aside and a new hearing directed." And a report of damages may be set aside where landowner declined to produce witnesses before the commissioners, in consequence of erroneous information as to his legal rights.-'^ D. Receipt of evidence on hearing. A motion to confirm or set aside is not a rehearing upon the merits of the matter on which additional proof can be given by either party. It is only where some of the commissioners are alleged to have been guilty of some misconduct or not to be disinterested that affidavits may be read upon those ques- tions.^^ tion of land for a water supply is un- 14. Matter of N. Y. & Lackawanna constitutional where it makes no pro- R. R., 93 N. Y. 385. vision for the confirmation by a court 15. Matter of N. Y., Lackawanna & of the report of the commissioners. W. R. R. Co., 63 How. Pr. 265. See Matter of City of Rochester, 184 App. also N. Y., Lackawanna & W. R. R. Div. 369, 171 N. Y. Supp. 12; aff'd, 224 Co. v, Wolfe, 29 Hun, 602. N. Y. 386. 16. Matter of Town of Guilford 85 App. Div. 207, 83 N. Y. Supp. 312. CONDEMNATION OF REAL PROPERTY. 471 Generally, the court must act solely on the report of the commissioners, and affidavits cannot be used to impeach or contradict it. The report must show that an error has been committed, or that injustice has been done, to enable the court to reverse or set aside the proceedings." E. General grounds for setting aside report. In considering the proceedings of the commissioners, every intendment is in favor of their action.^* Where no irregularity appears to have intervened in any form in what took place before the commissioners, the report cannot be set aside.^^ When the report discloses no erroneous methods of pro- cedure, nor any erroneous principle adopted by the commis- sioners to appraise the damages, it is the duty of the appel- late court to affirm the proceeding.^" It can be stated as a general rule that the report will not be set aside except for error of law or for fraud or imposition, showing bias, prejudice, misconduct, or want of judgment.^^ The court will not interfere unless it appears that some erroneous principle has been adopted, or unless it is clearly shown that the awards are either inadequate or excessive, or that the commissioners have been influenced by passion or prejudice.^^ Confirmation cannot be refused on purely techni- cal objections not going to the merits, or for omissions in no way harmful to a party .^* Where a commissioner signed the report against his will, in obedience to a writ of peremptory mandamus, the order for which was subsequently reversed as improperly granted, the 17. Rondout & Oswego K. R. Co. v. 137 N. Y. Supp. 374; aflFM, 207 N. Y. Field, 38 How. Pr. 187. 686; New York Tel. Co. v. De Noyelles 18. Manhattan Ry. Co. v. O'Sullivan, Brick Co., 154 App. Div. 845, 139 N. Y. 6 App. Div. 571, 40 N. Y. Supp. 326; Supp. 748; affd, 209 N. Y. 526; In re aff'd, 150 N. Y. 569. Pearsall Street, 135 N. Y. Supp. 763; 19. Matter of N. Y. Elevated R. R. In re Sixteenth Street, 142 N. Y. Co., 35 Hun, 417. Supp. 376; In re Lafayette Street, 147 20. Matter of Buffalo & Geneva R. N. Y. Supp. 839; In re Ashland Street, R. Co., 37 St. Rep. 343, 14 N. Y. 165 N. Y. Supp. 977. Supp. 1. ^^ Matter of Grad« Crossing Com- 21. Matter of Chapin, 84 Hun, 490, missioners No. 89, 148 App. Div. 412, 32 N. Y. Supp. 361, 65 St. Rep. 559. 132 N. Y. Supp. 960; Matter of Castle 22. Matter of Public Service Comm. Heights Water Co. v. Price, 178 App. 92 Misc. 420, 155 N. Y. Supp. 985; Div. 687, 165 N. Y. Supp. 816. Matter of Bensel, 152 App. Div. 499, 472 CONDEMNATION OF REAL PROPERTY. order for confirmation of the report should be set aside, as having been done under duress.^* F. Misconduct of commissioners. It is good cause to set aside the report if there has been such carelessness or irregularity on the part of the commis- sioners as amounts to misconduct, by which a party has been harmed. The same reason which would lead to the setting aside of the verdict of a jury, or report of a referee, for the misconduct, palpable mistake, or accident of either, will suffice for the like interference with the report of commissioners.^^ The appraisal may be set aside where it appears that one of the commissioners was disqualified to act as such.^^ The fail- ure of the commissioners to take their oaths of office is suffi- cient ground for setting their report aside.^^ Where, on an application to set aside the report of commis- sioners appointed to take lands for railroad purposes, it ap- pears that the commissioners have talked privately with a person from whom they had obtained information discredit- ing the testimony of the claimant, and that the award to him is greatly inadequate, the report may be set aside.^^ It is not sufficient ground to set aside an appraisal, that during an examination of the premises by the commissioners, 24. Manhattan Ky. Co. v. Tompkins, the commissioners to take the advice 59 App. Div.,572, 69 N. Y. Supp. 668. of petitioner's counsel as to the neces- 25. Matter of N. Y. C. & H. R. R. R. sary legal steps required of the com- Co., 64 N. Y. 60. missioners, such as giving notice, Evidence not sufficient. — See Ter- where nothing is said as to any ques- minal Railway of Buffalo v. Gerbereux, tion of fact to be decided by them; 55 Misc. 1, 104 N. Y. Supp. 737. nor is it misconduct in such case for Drainage commissioners. — ^The award one of the commissioners to subpoena of drainage commissioners is not af- witnesses, instead of causing it to be fected by the fact that one of the pe- done by some other person. Matter of titioners paid the commissioners' hotel Town of Penfield, 69 Hun, 601, 23 bill, since Laws of 1886, chapter 630, N. Y. Supp. 944, 53 St. Rep. 550. provides that in case the necessity for 26. See, supra. Art. VII-J. Who the drain is established, all the ex- should be appointed as commissioners, penses of the commissioners shall be a 27. Matter of Thompson, 70 Misc. lien on the laud benefited, and in case 285, 128 N. Y. Supp. 604; Matter of the necessity for, the drain is not es- 'Gilroy, 85 Hun, 424, 32 N. Y. Supp. tablished, the expense shall be borne 891, 66 St. Rep. 208. by the petitioners; therefore, the peti- 28. Matter of N. Y. C & H. R. R. tioner gained nothing by said payment, Co., 5 Hun, 105. nor was it misconduct on the part of CONDEMNATION OF REAL PROPERTY. 473 one of tliem was separated a part of the time from the others,^^ or that one was not present at most of the hearings.^" A commissioner who has signed a report will not be allowed- to stultify himself by an affidavit that he signed it without reading it or hearing it read.^^ G. Sending report back to commissioners for correction. The court has power, upon a motion to confirm the report of the commissioners, to send the report back to the commis- sioners, with directions to them to specify in a supplementary report such particulars as will indicate the elements of the damages they have awarded or the principle upon which the award proceeded, or both; but such a course should not be taken unless it is made to appear that there is probable cause to believe that the commissioners have made a material error, which neither their report nor their minutes disclose.^^ Such an order is not proper where the moving party merely hopes that he may, by compelling the commissioners to re- spond to certain questions inserted in the order, discoA^er some ground for opposing a confirmation of the report.^^ Where the report of the commissioners is made in general terms, the court has discretionary power to remit the report with instructions to the commissioners to state the grounds of their decision.^* But the exercise of this power is not to be commended, and will not generally be sustained where it does not appear that the commissioners were guilty of misconduct or that there was irregularity in their proceedings.^^ A report may be sent back for an apportionment of the award between joint own- ers.^® And the court may send a report back to the commis- sioners to consider and pass upon the account of benefit, where no allowance or deduction therefor has been made in appraising the damages to respondent's land.^'' 29. Matter of N. Y., Lackawanna & 34. Matter of New York, Westches- W. R. R. Co., 63 How. Pr. 365. ter & Boston R. Co., 73 Misc. 219, 130 30. Matter of Riverside Ave., 83 N. Y. Supp. 1005. Hun, 50, 31 N. Y. Siipp. 735, 64 St. 35. Waterford Elec. L. Co. v. Reed, Rep.' 366. 103 App. Div. 103, 92 N. Y. Supp. 960. 31. Matter of New York, etc., R. 36. Matter of Chapin, 89 Hun, 603, Co., 29 Hun, 1. 34 N. Y. Supp. 1058, 69 St. Rep. 30; 32. Board of Water Com'rs, 25 App. Matter of Daly, 88 Hun, 188, 34 N. Y. Div. 22, 49 N. Y. Supp. 319. Supp. 414, 68 St. Rep. 421. 33. Board of Water Com'rs, 25 App. 37. Matter of Kings Co. Elev. R. R. Div. 22, 49 N. Y. Supp. 319. Co., 35 St. Rep. 367, 12 N. Y. Supp. 198. 474 CONDEMNATION OF REAL PROPEETY. H. Modification of report. Upon an application to confirm the report of the commis- sioners appointed in condemnation proceedings, the court may either confirm or set aside the report, but has no authority to modify it by reducing the award thereby given and afterward to confirm it.^* The report of the commissioners may be affirmed or set aside but it may not be modified or changed in any respect.^' I. Amount of damages. On the motion to confirm the report, the court is authorized by section 35 to set it aside on the ground that the award is excessive or insufficient. Inasmuch as the commissioners are generally authorized to view the premises and to give weight to the information thereby acquired,^ their finding of value will not be disturbed unless it is apparent that injustice has been done," although the court may be of the opinion that the award is larger or smaller than it should be.*^ Every intend- 38. Matter of Central New York Tel. Co., 36 App. Div. 553, 55 N. Y. Supp. 729; People v. Dawson, 87 Misc. 588, 150 N. Y. Supp. 679. 39. Matter of Johns v. Village of Salamanca, 129 App. Div. 717, 114 N. Y. Supp. 707; Manhattan Railway Co. V. O'SuIIivan, 6 App. Div. 571, 40 N. Y. Supp. 326; affirmed, on opinion below, 150 N. Y. 569; Matter of Cen- tral New York Tel. Co., 36 App. Div. 553, 55 N. Y. Supp. 729; Matter of Town of Guilford, 85 App. Div. 207, 83 N. Y-. Supp. 312; Matter of New York Municipal R. Corp. v. HoUiday, 189 App. Div. 814, 179 N. Y. Supp. 238. Compare, Matter of 181st St., 35 St. Rep. 548, 12 N. Y. Supp. 345. 40. See, supra. Art. VIII-G. Exam- ination of premises; and Art. lX-A-10. Consideration of matters outside of record. 41. Long Island R. R. Co. v. Reilly, 89 App. Div. 166, 85 N. Y. Supp. 875; Matter of Citj of N. Y. (Croton River Dam), 129 App. Div. 707, 114 N. Y. Supp. 75; Matter of Corporation Counsel, 188 App. Dir. 668, 177 N. Y. Supp. 318; appeal dismissed, 228 N. Y. 523; Matter of Speedway, 29 Misc. 519, 62 N. Y. S«pp. 424; Matter of Simmons, 58 Misc. 581, 109 N. Y. Supp. 1036; aff'd, 130 App. Div. 350, 114 N. Y. Supp. 571; afif'd, 195 N. Y. 573; Matter of Kings County, 39 St. Rep. 876, 15 N. Y. Supp. 516; Matter of N. Y. El. Ry. Co., 35 St. Rep. 944, 12 N. Y. Supp. 858; Matter of the Dept. of Public Parks, 53 Hun, 280, 25 St. Rep. 9, 6 N. Y. Supp. 750; Matter of N. Y., W^oodhaven, etc., R. R. Co., 21 Hun, 250. The second award under a new ap- praisal will not be disturbed, when there is no legal error or irregularity, and the damages are neither grossly excessive nor insufficient. Southern Boulevard R. R. Co., 49 St. Rep. 732, 20 N. Y. Supp. 769. 42. Matter of Corporation Counsel, 188 App. Div. 668, 177 N. Y. Supp. 318; appeal dismissed, 228 N. Y. 523; N. Y. C. & H. R. R. R. Co. v. Sayles, 52 Misc. 601, 103 N. Y. Supp. 826; Matter of Johns v. Village of Sala- manca, 67 Misc. 521, 122 N. Y. Supp. CONDEMNATION OF EEAL PROPERTY. 475 ment is in favor of their action,^^ and all damages sustained by the owner are presumptively included in the assessment.^* The award will not he disturbed unless the court can clearly see that they have proceeded upon an erroneous principle, or have been influenced by passion or prejudice, or have over- looked or disregarded the evidence.^^ An award will not be set aside upon the ground that it is excessive or inadequate, unless it is palpably so, or unless it appears that the commissioners adopted an erroneous prin- ciple as to damage.^^ An award of damages should not be set aside as excessive unless it is so large as to shock the con- science of the court.^' But, if the award is less than the amount testified to by the petitioner's witnesses or is more than the amount claimed by the owner's witnesses, the action of the commissioners may be said to be arbitrary, and the award will generally be set aside.^^ 488; Matter of N. Y. Elev. R. R. Co., 35 St. Rep. 947, 12 N. Y. Supp. 857. 43. Manhat. R. R. Co. v. O'Sullivan, 6 App. Div. 571, 40 N. Y. Supp. 326; aff'd, 150 N. Y. 569. 44. Furniss v. R. R. Co., 5 Sandf. 551. 45. Matter of Daley v. Smith, 18 App. Div. 194, 45 N. Y. Supp. 785; Matter of Manhattan Ry. Co. v. Com- stock, 74 App. Div. 341, 77 N. Y. Supp. 416; Matter of Brookfield (Sarles claim), 78 App. Div. 520, 79 N. Y. Supp. 1022, 81 N. Y. Supp. 10; re- versed, 176 N. Y. 138; Matter of Bd. of Public Improvement, 99 App. Div. 576, 91 N. Y. Supp. 161; New York Central, etc., R. R. Co. v. Newbold, 166 App. Div. 193, 151 N. Y. Supp. 732; Matter of Castle Heights Water Co. V. Price, 178 App. Div. 687, 165 TSr. Y. Supp. 816. 4G. Matter of Daly, 45 App. Div. 622, 61 N. Y. Supp. 480; Harlem River, etc., R. Co. V. Reynolds, 50 App. Div. 575, 64 N. Y. Supp., 199; Matter of Col- lis, 76 App. Div. 368, 78 N. Y. Supp. 495; Matter of Simmons, 58 Misc. 581, 109 N. Y. Supp. 1036; Matter of N. Y., Lackawanna & W. R. R. Co., 27 Hun, 116; Matter of Boston R. R. Co., 27 Hun, 409; Matter of Newton, 45 St. Rep. 18, 19 N. Y. Supp. 573; Matter of Brooklyn Elev. R. R. Co., 87 Hun, 88, 33 N. Y. Supp. 881, 67 St. Rep. 497; Pecksport Con. Ry. Co. v. West, 79 St. Rep. 644, 45 N. Y. Supp. 644; modified and affirmed, 47 N. Y. Supp. 230. 47. Matter of New York, Westches- ter & Boston R. Co., 73 Misc. 219, 130 N. Y. Supp. 1005; Matter of Mechanic- ville Bridge Co., 83 Misc. 331, 145 N. Y. Supp. 1058. 48. Lenhart v. State, 75 App. Div. 162, 77 N. Y. Supp. 397; Matter of City of N. Y. (Titus Street), 139 App. Div. 238, 123 N. Y. Supp. 1080; Mat- ter of Edelmeyer, 157 App. Div. 773, 142 N. Y. Supp. 726; aflf'd, 210 N. Y. 552; Matter of City of N. Y. (Avenue A), 66 Misc. 488, 122 N. Y. Supp. 321; Matter of Bensel, 68 Misc. 85, 124 N. Y. Supp. 49; N. Y., West Shore & B. R. R. Co. V. Yates, 18 Week. Dig. 272. Exceptional cases. — ^There may be exceptional cases, where the commis- sioners have viewed the premises and acted on information acquired outside of the record, when the report will not be disturbed although the amount does 476 CONDEMNATION OF REAL, PROPERTY. And, if the court is satisfied that they adopted an erroneous theory or applied a wrong principle in making their award of damages, their report should be set aside.^^ Thus, where the report of the commissioners found the damages as existing at date nearly a year prior to the award the court refused to confirm the report.^ So, too, the court is not obliged to confirm the report if it not harmonize with the opinions of ex- perts, but when improper rules have been adopted in arriving at the amount of damages, such variance will aflford strong ground for presuming that such adoption has affected the result. Mat- ter of City of New York, 151 App. Div. 83, 135 N. Y. Supp. 259. As to a case where the court has refused to set aside the report, see Matter of City of New York, 129 App. Div. 707, 114 N. Y. Supp. 75. Smaller than average. — Where the estimates of witnesses are based on elements largely speculative, an award of a smaller sum than the average of the estimates will not be disturbed. R, & H. V. R. R. Co. V. Myers, 43 St. Rep. 734, 17 N. Y. Supp. 311. 49. Waterford El., L., H. & P. Co. V. Reed, 47 Misc. 406, 94 N. Y. Supp. 551; Matter of Opening Second and Third Streets, 98 Misc. 716, 163 N. Y. Supp. 521; Matter of City of New York, 108 Misc. 341, 177 N. Y. Supp., 634; Hill V. M. & H. R. R. Co., 5 Denio, 206; aff'd, 7 N. Y. 152. Wrong principle. — An award against a railroad company authorized to straighten its tracks, involving the changing of the channel of a river by taking out a bend in the course of the stream along which the claimant owned lands, by making an allowance for each running foot of the width of each parcel of land, the total being in excess of the damage involved, held er- roneous as being made upon a wrong principle or palpably excessive. N. Y. Central, etc., Co. v. Domproff, 63 Misc. 211, 116 N. Y. Supp. 924. Value per square foot. — It is a ques- tion of fact whether or not the value of lands per square foot is a proper basis of estimate, and it is not er- roneous to receive testimony as to the value upon such basis, where the tract from which the land is taken is irreg- ular in shape. Matter of New York, Westchester & Boston R. Co., 73 Misc. 219, 130 N. Y. Supp. 1005. Water rights. — ^An award for water rights appropriated will not be set aside because the commissioners un- derstood it settled past as well as future damages, where nothing was in fact claimed or allowed for past dam- ages. The adoption of the cost of the property to the owner, deducting de- preciation, as a basis for computing its value, will not make the award for the appurtenant water rights invalid where the amount thereof was within the evi- dence adduced. Matter of City of Rochester, 57 App. Div. 634, 69 N. Y. Supp. 528; affirmed, without opinion, 167 N. Y. 626. Certificate of commissioners. — The report of the commissioners cannot be affected by a certificate signed by one of them, setting forth the rule adopted by them in estimating the damages, nor will such a certificate cure any error by the commissioners. Matter of N. Y., Lackawanna & W. R. R. Co., 29 Hun, 1. 50. Matter of Manhat. R. Co. v. Comstock, 35 Misc. 326, 71 N. Y. Supp. 941; aff'd, 74 App. Div. 341, 77 N. Y. Supp. 416. CONDEMNATION OF EEAL PEOPEETY. 477 appears to be inequitable and unjust,^^ or if they have disre- garded relevant evidence as to the amount of damages.^^ Where the award of commissioners is fanciful and extrava- gant and without justification, it will be set aside, notwith- standing the general rule that the report of the commission- ers will not be disturbed because the opinion of the court dif- fers from the commissioners as to the amount of damages.^^ An award for damages to a house taken in part for a street opening will not be set aside merely because a house two doors away, testified to be of the same value and from which the same amount of frontage was taken, was allowed $500 more, as the commissioners are not bound by testimony, and can act upon a personal view of the premises.^* J. Receipt of improper evidence. An appraisal made by commissioners who were authorized to view the premises, will not be disturbed for mere errors in the admission of evidence, unless it appears that the com- missioners adopted a wrong principle in reaching their deter- mination.^^ Their award will not be set aside on account of technical errors when it does not appear that substantial in- justice has been done.^^ To warrant the setting aside of the report it must appear, not only that improper testimony was admitted, but that it 51. Matter of City of New York App. Div. 665, 127 N. Y. Supp. 379; (East 161st Street), 159 App. Div. 662, Matter of Bronx Parkway Com., 19-:; 144 N. Y. Supp. 717. App. Div. 412; Matter of City of New 52. Matter of City of N. Y. (Titus York (Avenue A), 66 Misc. 488, 122 Street), 139 App. Div. 238, 123 N. Y. N. Y. Supp. 321; Matter of Mechanic- Supp. 1018. ville Bridge Co., 83 Misc. 331, 145 N. Y. 53. Matter of City of New York Supp. 1058; Matter of City of New (Valley Stream, etc.), 152 App. Div. York (East 161st Street), 159 App. 422, 137 N. Y. Supp. 329. Div. 662, 144 N. Y. Supp. 717; Matter 54. Matter of Washington Ave., 34 of N. Y. Elev. R. R. Co., 40 St. Rep. Misc. 655, 70 N. Y. Supp. 599. 647, 15 N. Y. Supp. 909; Matter of 55. Matter of Daley v. Smith, 18 Thompson, 85 Hun, 438, 32 N. Y. Supp. App. Div. 194, 45 N. Y. Supp. 785; 897, 66 St. Rep. 226; Matter of City Harlem River & P. R. R. Co. v. Rey- of Rochester, 48 St. Rep. 358, 20 N. Y. nolds, 50 App. Div. 575, 64 N. Y. Supp. Supp. 506. 199; Matter of Grade Crossing Com'rs, 56. Village of Port Henry v. Kidder, 52 App. Div. 122, 64 N. Y. Supp. 1074; 39 App. Div. 640, 57 N. Y. Supp. 102; aff'd, 164 N. Y. 575; Matter of Com- Matter of Lackawanna & Western R. esky, 83 App. Div. 137, 81 N. Y. Supp. Co., 27 Hun, 116; Matter of N. Y. El. 1049; reversed, 179 N. Y. 393; Matter R. R. Co., 15 N. Y. Supp. 909. of City of N. Y. (Crotona Park), 14 '2 478 CONDEMNATION OF REAL PROPERTY, affected the result directly and led to an award which was an injustice to one party or the other."'' The fact that commissioners appointed to make awards on the condemnation of lands erroneously admitted evidence of the cost of reproducing certain buildings does not require a reversal if the award is supported by other competent evi- dence, and it is not shown affirmatively that the incompetent evidence led to the adoption of an erroneous principle.^^ If the commissioners reject legal and competent evidence, or mistake the principle that should govern the appraisement, the award should be set aside.^^ An error in the admission of evidence is not cured by the certificate of one of the commissioners that it did not affect the report.™ Where the commissioners, having reserved a motion to strike out evidence establishing the cost of reproducing build- ings and having made their awards, thereafter all certify that before so doing they granted the motion to strike out and dis- regarded the testimony, the evidence must be regarded as having been eliminated before the awards were made.*^ K. Waiver of objections to conduct of appraisal. Where the parties have agreed as to the principles on which the appraisal is to be conducted, the court cannot interfere.®^ Where a landowner has accepted without appeal the adjudi- cation as to his damage, he may not repudiate a part of it and seek a new award for a particular item.^^ L. Vacating or modifying order of confirmation. The award, upon confirmation, does not become a vested right which cannot be destroyed by setting aside the order of confirmation.®^ The court at Special Term has power to vacate its order con- 57. Matter of City of N. Y. (Croton 61. Matter of aty of N. Y. (Croton River Dam), 129 App. Div. 707, 114 River Dam), 129 App. Div. 707, 114 N. Y. Supp. 75. N. Y. Supp. 75. 58. Matter of City of New York 62. Matter of N. Y., Lackawanna & (Croton River Dam), 129 App. Div. Western E. R. Co., 102 N. Y. 704. 711, 114 N. Y. Supp. 68. 63. Matter of Bensel (Catskill Aque- 59. Matter of N. Y. C. R. R. Co., 15 duct, Sec. 13), 151 App. Div. 451, 135 Hun, 63. N. Y. Supp. 915. 60. Matter of N. Y., Lackawanna & 64. Matter of Harmon and Himrod W. R. R. Co., 29 Hun, 1. Streets, 146 N. Y. Supp. 297. CONDEMNATION OF REAL PROPERTY. 479 finning the commissioners' report, and to set aside for care- lessness or irregularity amounting to injurious misconduct, or for palpable mistake or accident. The exercise of this dis- cretion is reviewable in the Appellate Division, but not in Court of Appeals. The Special Term may further proceed to revoke the appointment of the commissioners and appoint new ones. This power is inherent in the court, and not de- pendent on the statute.® An order of confirmation may be set aside as to certain parcels only ; it is not necessary that it be set aside in toto.^^ Where it appears that through a mistake those upon whom the assessments for benefit in street opening proceedings are imposed are burdened with the payment of damages to a building which did not exist when the title vested in the city, the Supreme Court has power to vacate an order confirming the award and to send the matter back to the com- missioners for further report.*'' The order may be modified to correct a mistake of the com- missioners, in failing to make an award for land taken for such street ; but, on opening the proceedings, upon the appli- cation of the owner of such land, a stipulation may be required from such owner to claim only the value of the land at the time of the original assessment, and not its subsequent in- creased value.®^ M. Parties on application for final order. The wife of one of the parties, who had an inchoate right of dower in the property taken and who is not made a party to the proceeding, cannot be heard to object to the confirmation of the report, as her rights and interests are not affected by the proceeding. Nor can the holder of a mortgage upon the property, who is not made a party to the proceeding, be heard to object to the confirmation of the report of the commission- ers, as the lien of her mortgage upon the lands sought to be taken will not be released until she consents or her mortgage is paid ; but she is entitled to have the award applied to the payment of her mortgage and, for the protection of her rights, the money should be paid into court. 65. Matter of N. Y. Central, etc., R. Streets, 146 N. Y. Supp. 297. Co., 64 N. Y. 60. To same effect as 67. Matter of Harmon and Himrod to appeal to Court of Appeals, see Mat- Streets, 146 N. Y. Supp. 297. ter of Prospect Park & C. I. R. R. Co., 68. Matter of Opening 181st St., 12 85 N. Y. 489. N. Y. Supp. 345. 66. Matter of Harmon and Himrod 480 CONDEMNATION OF REAL PROPERTY. Nor can persons who appear in the proceedings simply as taxpayers and do not ask to be made defendants be heard to oppose the confirmation of the awards, where it does not ap- pear that the finding of the commissioners is contrary to the interests of the taxpayers and no complaint is made that the damages are excessive.^^ N. Order of confirmation as a judgment. The confirmation of an award is in the nature of a judg- ment,™ and the statutory limit thereof is twenty years from its date.'^ An award is in effect a judgment for money which is per- sonalty, and the holder has an equitable lien on the land con- demned as security for the payment of the awardJ^ 0. Conclusiveness of order of confirmation. The confirmation of an award finally determines the ques- tions involved, and is conclusive unless vacated or modified by the court. In the absence of non-jurisdictional grounds it can- not be attacked collaterally.^^ The fact that the order of con- firmation has not been recorded does not affect its conclusive character.''* But an order, made after an appeal confirming the report is not conclusive on persons not parties to the appeal or to the subsequent proceedings.'^^ And the determinations of the commissioners as to the mat- ters within their power to decide are the only conclusions of their report which will be confirmed. Any arbitrary or un- founded decision or direction outside of their power is not deemed to be approved by the court.''^ 69. Matter of Bd. of Supervisors, 57 154 N. Y. 381; Matter of Department Misc. 665, 110 N. Y. Supp. 46. of Public Parks, 73 N. Y. 560; Cotter 70. Matter of Department of Public v. New York, etc., E. Co., 27 App. Div Parks, 73 N. Y. 560; Board of Super- 604, 50 N. Y. Supp. 1008; Allen v. visors of Erie Co. v. City of Buffalo, 18 Utica, Ithaoa & Elmira R. R. Co., 15 N. Y. Supp. 635. Hun, 80; Weinekie v. N. Y. C. & H. 71. Board of Supervisors of Erie R. R. Co., 15 N. Y. Supp. 689. County V. City of Buffalo, 18 N. Y. 74. Oberfelder v. Metropolitan El. Supp. 635. R. R. Co., 138 N. Y. 181. 72. New York Central and H. R. R. 75. Cochrane v. Smadbeck, 99 N. Y. Co. V. Cottle, 102 Misc. 30, 168 N. Y. Supp. 5. Supp. 463. 76. Matter of Tucker, 104 Misc. 617, 73. People ex rel. Dady v. Sup'rs, 172 N. Y. Supp. 701. CONDEMNATION OF REAL PROPERTY. 481 p. Enforcement of judgment. An award under earlier statutes may be in its nature and effect a judgment against the petitioner for the payment of money, which in some cases, may be enforced by an action at law or in equity." Such an action is one upon contract, in which the defendant may set up a counterclaim for damages for breach of a prior contract for the sale of the land at an agreed price.''^ On complying with the conditions precedent, as provided by the award, the Supreme Court has power to put the peti- tioner in possession of the property condemned.™ The provisions of section 17 for entering judgment for the amount of the award and enforcement by execution have no application to a proceeding under the Highway Law for the appraisal of a toll bridge, since the method in which the award can be collected is exclusively that pointed out by that statute.^" ft. Title acquired by petitioner. The petitioner does not acquire any greater right or title than that of the parties against whom he proceeded.^^ A railroad company does not acquire the same unqualified title and right of disposition to the real estate taken for the road which individuals have in their lands, but the title to the land is limited in its use for the purpose of the railroad, and it is subject to the exercise of all those powers reserved to the Legislature to which the franchises of the corporation are subject.^^ The title vested in a railroad is also subject to the duty on the part of the company to make and maintain suit- able form crossings, and the right of passage of the former owner over such crossings.^ 77. Cottle V. N. Y., W. S. & B. R. City of Binghamton, 154 N. Y. 391. Co., 27 App. Div. 604, 50 N. Y. Supp. 78. Cottle v. N. Y., W. S. & B. R. R. 1008. Co., 27 App. Div. 604, 50 N. Y. Supp. No necessity for action. — ^An action 1008. against the city of Binghamton to re- 79. Matter of Application of H. R. cover the amount of an award in R. Co., 60 N. Y. 116. street opening proceedings which is 80. Matter of State of New York, commenced on the day on which a 207 N. Y. 582. resolution directing payment of the 81. Anderson v. Rochester, etc., R. award into court on account of adverse R. Co., 9 How. Pr. 553. claims is signed by the mayor and the 82. Albany & Nortbern R. R. Co. v. day before the payment into court is Brownell, 24 N. Y. 345. made is improperly brought, as there 83. Wheeler v. Rochester, etc., R. R, is no necessity therefor. Patterson v. Co., 12 Barb. 227. 31 482 CONDEMNATION OF REAL PKOPERTY. But, upon payment of the value to the owner of the fee, it has been held that the public acquires absolute title divested of the wife's inchoate right of dower.^ As a general rule, the owner's title is not divested and the petitioner acquires no title until the confirmation of the report of the commission- ers.^ Until the confirmation of the report of the commissioners, the owner acquires no vested right in the award.*^ Title vests in the petitioner only when it has fully performed and com- plied with the conditions precedent, and paid or deposited the compensation as required by law.^' But, upon confirmation of the report and the payment or deposit of the award, the former owner loses all interest in the premises.^^ There is generally no reversionary estate in the representatives of the original owner, and the property so acquired may be con- verted to other purposes.^^ Reversion of the land is never contemplated in the assess- ment of damages for lands taken by a corporation; it is re- garded as permanent and the damages are awarded on that basis.^" ARTICLE XII. COSTS. A. Condemnation Law, § 16. Offer to purchase; costs; additional allowance., 1. In all cases where the owner is a resident and not under legal disability to convey title to real property the plaintiff, before service of his petition and notice, may make a written offer to purchase the property at a specified price, which must within ten days thereafter be filed in the office of the clerk of the county 84. Moore v. New York, 8 N. Y. 110; 87. Bloodgood v. Mohawk R. R. Co., Rexford v. Knight, 15 Barb. 627. 18 Wend. 9; Beekman v. Saratoga R. 85. Ryder v. Stryker, 63 N. Y. 136; R. Co., 3 Paige, 45; Clarkson v. H. R. Matter of North 13th Street, 5 Hun, R. Co., 12 N. Y. 304; Ballou v. Ballou, 175; Ballou V. Ballou, 78 N. Y. 325; 78 N. Y. 325. Matter of Mayor (Mount Vernon Ave- 88. Matter of N. Y. & Harlem R. R. nue), 127 App. Div. 650, 111 N. Y. Co., 98 N. Y. 12; Matter of N. Y., W. Supp. 895; aff'd, 193 N. Y. 658; Ni- S. & B. R. R. Co., 94 N. Y. 287. agara Falls, etc., R. R. Co. v. Hotch- 89. Hey ward v. N. Y., 7 N. Y., 314; kiss, 16 Barb. 270; Hudson River R. R. Rexford v. Knight, 11 N. Y. 308; TifiFt Co. V. Cutwater, 3 Sandf. 689. v. City of Buffalo, 82 N. Y. 204; Bird- 86. Schneider v. Rochester, 90 Hun, sail v. Carey, 66 How. Pr. 358. 171, 35 N. Y. Supp. 786, 70 St. Rep. 90. Minor v. N. Y. C. & H. R. R. R. 290; appeal dismissed, 155 N. Y. 619. Co., 123 N. Y. 342. CONDEMNATION OF REAL PROPERTY. 483 where the property is situated; and which cannot be given in evidence before the commissioners, or considered by themt The owner may at the time of the presentation of the petition, or at any time previously, serve notice in writing of the acceptance of plaintiff''s offer, and thereupon the plaintiff may, upon filing the petition, with proof of the maliing of the offer and its acceptance, enter an order that upon payment of the compensation agreed upon, he may enter into possession of the real property described in the petition, and talce and hold it for the public use therein specified. 2. If the ofl'er is not accepted, and the compensation awarded by the commis- sioners does not exceed tlie amount of the offer, with interest from tlie time it was made, no costs shall be allowed to either party. If the compensation awarded shall exceed the amount of the offer with interest from the time it was made, or if no offer was made, the court shall, in the final order, direct that the de- fendant recover of the plaintiff the costs of the proceeding, to be taxed by the clerk at the same rate as is allowed, of course, to the defendant when he is the prevailing party in an action in the Supreme Court, including the allowances for proceedings, before and after notice of trial, and the court may also grant an additional allowance of costs, not exceeding five per centum upon the amount awarded. The court shall also direct in the final order what sum shall be paid to the general or special guardian, or committee or trustee of an infant, idiot, lunatic or habitual drunkard, or to an attorney appointed by the court to at- tend to tlie interests of "any defendant upon whom other than personal service of the petition and notice may have been made, and who has not appeared, for costs, expenses and counsel fees, and by whom or out of what fund the same shall be paid. If a trial has been had, and all the issues determined in favor of the plaintiff', costs of the trial shall not be allowed to the defendant, but the plaintiff shall recover of any defendant answering the costs of such trial caused by the interposition of the unsuccessful defence, to be taxed by the clerk at the same rate as is allowed to the prevailing party for the trial of an action in the Supreme Court. B. Trial before appointment of commissioners. Statutory authority must be found to justify the court in awarding either costs or allowances in a special proceeding for the condemnation of land for a public improvement.^^ If the judgment is in favor of the defendant, the petition is dis- missed with costs under section 13 to be taxed by the clerk at the same rates as are allowed, as of course, to a defendant prevailing in an action in the Supreme Court.^^ A referee 91. Matter of School Street, 162 latter decision affirming the order of App. Div. 158; 147 N. Y. Supp. 195. the Appellate Division "with costs," 92. Only one bill of costs. — Where but one bill of costs can be awarded, the dismissal at Special Term of the Matter of City of New York (Newport petition of a city for the appointment Ave.), 96 Misc. 42, 160 N. Y. Supp. 9; of commissioners in condemnation pro- aff'd, 176 App. Div. 887, 161 N. Y. ceedings was affirmed by the Appellate Supp. 1121. Division and the Court of Appeals, the 484 CONDEMNATION OF REAL, PEOPEKTY. appointed to determine the issues, has no power over the costs, as they are determined by the statute.^^ The only case in which a defendant in condemnation pro- ceedings is entitled to costs upon the preliminary hearing is where he succeeds in having the petition. dismissed.'* There is no authority for granting an extra allowance to a defendant who is successful on the trial of the issues raised by his answer to the petition.^^ The provisions of sections 1.3 and 16 of the Condemnation Law, allowing costs of trial in proceedings to condemn lands, refer to the trial of issues raised by the answer to the petition, which is the only " trial " in such proceedings. When judg- ment is given against defendant, on such issues, plaintiff is entitled to costs before and after notice of trial and to a trial tee.'' But it is held that the petitioner is not entitled to tax costs until the entry of the order finally determining the proceed- ing.^'' If the court neglects to award costs to the petitioner, the county clerk has no power, after the commissioners have appraised the petitioner's damages and the court has con- firmed their report with costs to the petitioner, to tax in favor of the petitioner the costs of the proceedings before a referee, as well as the costs of the proceedings before the commission- ers of appraisal.^^ Where an answer is interposed and a trial is had before a referee, on whose report judgment is en- tered in favor of the plaintiff, the defendants are not entitled to recover the costs of the trial, but only the costs on the pro- ceeding to assess damages before the commissioners arising subsequent to the trial of the issue raised by the petition and answer.^' If the landowners refuse an offer to purchase and interpose an answer denying the material allegations of the petition 93. Marshal v. Hatfield, 138 N. Y. 197, 162 N. Y. Supp. 495; New York, Supp. 733. 0. & W. R. (Do. v. McBrlde, 45 Misc. 94. Dansville R. R. Co. v. Hammond, 516, 92 N. Y. Supp. 31. 77 Hun, 39, 59 St. Rep. 49, 28 N. Y. 97. Matter of N. Y. Municipal Rail- Supp. 454. way Corporation, 176 App. Div. 197, 95. Erie & Jersey Railroad Co. v. 162 N. Y. Supp. 495. Brown, 123 App. Div. 655, 107 N. Y. 98. Matter of Bley v. Village of Supp. 989. Hamburg, 84 App. Div. 23, 82 N. Y. 96. Matter of Bley v. Village, of Supp. 35. Hamburg, 84 App. Div. 23, 82 N. Y. 99. City of .Johnstown v. Frederick, Supp. 35; Matter of N. Y. Municipal 35 App. Div. 44, 54 N. Y. Supp. 412. Railway Corporation, 176 App. Div. CONDEMNATION OF REAL PROPEETY. 485 and alleging that public use does not require the condem- nation of the property, on which issue they are defeated but are successful in obtaining a more favorable award than the sum offered, both parties are entitled to costs,, to wit, the petitioner is entitled to the cost of the trial of the issue before the court and the defendant to a full bill of costs for the pro- ceedings before the commissioners. In such case the trial of the issue as raised by the answer and the proceedings before the commissioners are separate and independent as regards the question of costs.' The fact that the plaintiff became entitled to the costs of the trial of the issue made by the pleadings, does not deprive the defendants of their right to other taxable costs in the pro- ceedings ; the provisions of such section give to a defendant in such proceedings, in case an award is obtained greater than the offer made, an absolute right to taxable costs of which he cannot be deprived by the court.^ i Where the court has awarded costs, its judgment cannot be reviewed in this respect on taxation ; the remedy is by motion to correct the judgment and by an appeal from an order deny- ing such motion, if it is denied, or by appeal from the judg- ment.^ C. Abandonment and discontinuance of proceedings. The costs on an application for " an abandonment and dis- continuance of the proceedigs ' ' are regulated by section 18 of the Condemnation Law.* S. Costs under special statutes. Section 16 of the Condemnation Law may not be applicable to a proceeding maintained under a special statute. In such a case, if the special' statute contains no provisions for costs, the right to costs is governed by section 1454 of the Civil Practice Act, regulating costs in special proceedings gener- ally.^ Under such statute, there is no authority for an addi- 1. Matter of Village of Theresa, 121 5. Matter of aty of Brooklyn, 148 App. Div. 119, 105 N. Y. Supp. 568. N. Y. 107; Matter of Low, 208 N. Y. 2. Manhattan R. E. Co. v. Taber, 78 25; Matter of Grade Crossing Com'ra, Hun, 434, 29 N. -Y. Supp. 220. 20 App. Div. 271, 46 N. Y. Supp. 1070; 3. Matter of Manhattan Railway Co. compare, Matter of City of Buffalo, 79 V. Youmans, 81 Hun, 82, 30 N. Y. Misc. 290, 140 N. Y. Supp. 157. Supp. 566, 62 St. Rep. 562. General Railroad Act.— Proceedings 4. Matter of Village of LeRoy, 35 formerly maintained under the General App. Div. 177, 55 N. Y. Supp. 149. Railroad Act were special proceedings, 486 CONDEMNATION OF REAL PROPERTY. tional allowance to the landowner.^ If, however, the special statute provides that the proceeding shall be conducted under the Condemnation Law, the owner may be entitled to costs under section 16.'' In proceedings under the Village Law to change the grade of a street all proceedings subsequent to the appointment of the commissioners are taken in accordance with the Condem- nation Law, and therefore a landowner who has been awarded damages on account of a change in the grade of a street is en- titled to recover costs of the proceeding subsequent to the ap- pointment of commissioners to be taxed by the clerk at the same rate as is allowed of course to the defendant when he is the prevailing party in an action in the Supreme Court.* and the court had power, in its dis- cretion, to allow costs in such proceed- ings at the rate allowed for similar services under the Code. Matter of Rensselaer & S. R. R. Co. v. Davis, 55 N. Y. 145; Matter of Syracuse, B. & N. Y. R. R. Co., 4 Hun, 311; Matter ot N. Y., Lackawanna & W. R. R. Co., 26 Hun, 592. A proceeding by the board of educa- tion of a, city to acquire land for pub- lic school purposes is a "special pro- ceeding" as distinguished from an "ac- tion," and should, therefore, terminate in a final order, not in a judgment; and a judgment in favor of a respond- ent therein for his costs should be va- cated on motion. Matter of Board of Education of the City of Brooklyn, 11 N. Y. Supp. 780. Hailroad along street. — An applica- tion to the Special Term, under section 11 of the General Railroad Act (now Railroad Law, § 21), by a railroad com- pany for authority to construct its road upon the street in an incorpor- ated village, is a special proceeding, and costs as of an action are allowable therein in the discretion of the court. Matter of Lima, etc., R. R. Co., 68 Hun, 252, 22 N. Y. Supp. 967. Cited, with approval, Homellsville Railroad Co. V. N. Y., L. E. & W. R. R. Co., 83 Hun, 407, 31 N. Y. Supp. 745, where it is held that such a proceeding is not a condemnation proceeding to acquire title to land in the strict sense of the term, and that the rule of discretion in regard to the granting of costs is ap- plicable to sueh a proceeding. Sapid Transit Act. — Costs in pro- ceedings under the Rapid Transit Act may be awarded as provided in section 1454 of the Civil Practice Act. Matter of Low, 208 N. Y. 25. City of Yonkers. — In proceedings under the Yonkers supplemental city charter for the condemnation of lands for street purposes, the court has au- thority to award costs upon the con- firmation of the report of the commis- sioners. Matter of Saw Mill River Road, 152 App. Div. 788, 137 N. Y. Supp. 825. Elevated railroad.— It has been the settled practice of the courts not to allow costs in proceedings for con- demning the right of way for elevated railroad. Matter of the Union Ele- vated R. R. of Brooklyn, 55 Hun, 163, 28 St. Rep. 386, 7 N. Y. Supp. 853. 6. Matter of City of Brooklyn, 148 N. Y. 107; Matter -of Grade Crossing Commissioners, 20 App. Div. 271, 46 N. Y. Supp. 1070. 7. Matter of Rochester, 181 N. Y. 322. 8. Matter of Bradley, 145 App. Div. CONDEMNATION OF REAL PROPERTY. 487 Under section 154 of the Highway, costs are allowed pur- suant to the provisions of section 16.^ On the condemnation of lands under chapter 724 of the Laws of 1905, providing for an additional water supply for the city of New York, th6 allowance of costs is governed by section 13 of that act. The parties are not entitled to costs as in an action under section 1454 of the Civil Practice Act.^" Under the Palisades Interstate Park Act which provides that the court " shall also tax and allow such costs, fees and expenses to the commissioners of appraisal and other persons performing legal duty in the premises, as it shall think equit- able and right," the court has power to grant to the owners of land to whom an award is made, an allowance for actual expenses incurred for counsel and expert witnesses, including surveys and tests in and for the presentation of their cases.^^ E. Authority of commissioners. Commissioners have no authority to fix any allowance for counsel fees, but that power is vested in the court.^^ F. Award more favorable than offer. Where the compensation awarded to the owner of real property exceeds the amount offered by the petitioner, with interest from the time the offer was made, the landowner is entitled to recover the same amount of costs that a defendant may recover under section 1466 of the Civil Practice Act when he has prevailed in an action in the Supreme Court after a trial; $10 costs for proceedings before notice of trial and $15 after notice of trial, with $30 costs for a trial of an issue of 49, 129 N. Y. Supp. 450. See also Mat- N. Y. Supp. 450. ter of Bley v. Village of Hamburg, 84 9, County of Erie v. Fridenberg, 221 App. Div. 23, 82 N. Y. Supp. 35. N. Y. 389. Denial of retaxation. — ^The peti- 10. Matter of Simmons (Ashokan tioner'a right to costs awarded by the Reservoir, Section 6), 130 App. Div. iinal order in a proceeding to deter- 350, 114 N. Y. Supp. 571; aff'd, 195 mine the compensation to which he is N. Y. 573. entitled on account of a change in 11. Matter of Com'rs of Palisades grade of a street is not affected by an Park, 83 Misc. 186, 144 N. Y. Supp. order denying his motion for a retaxa- 782; aff'd, 164 App. Div. 957, 149 N. Y. tion after the costs allowed have been Supp. 1076. reduced by the clerk, if there be no 12. Matter of Daley, 91 Hun, 641, 37 claim of mistake or omission. Matter N. Y. Supp. 128, 72 St. Rep. 735. of Bradley, 145 App. Div. 49, 129 488 CONDEMNATION OF REAL PROPERTY. fact and $10 for a trial occupying more than two days.^^ While the proceeding to fix compensation is an assessment of dam- ages and not a trial, it is made the basis for a bill of costs as for a trial." Where, in a special proceeding by the trustee of a school district to acquire land for a schoolhouse site, the award of the commission exceeded the amount offered defendant land- owners for the land involved prior to the institution of the proceedings, defendants were held to be entitled to costs.^^ G. No offer made by plaintiff. Section 16 of the Condemnation Law provides for costs upon the hearing before commissioners if no offer is made by the plaintiff, or if, in the case of an offer, the recovery be larger than such offer; hence, when no offer is made by plain- tiff, defendant is entitled to costs before and after notice of trial and to a trial fee in a hearing before commissioners.^^ Where there is no allegation in the petition or proof that the plaintiffs have made an offer to purchase the property, though there is an adjudication of another court that the parties were unable to agree as to the price, defendants are entitled to costs." One holding an unexpired lease of lands ta;ken by eminent domain is an " owner within " the meaning of the Condem- nation Law; and, if he is a resident and under no legal dis- ability to convey his title, he is entitled to costs under section 16 if no offer to purchase has been served upon him.^^ H. Cases not covered by section 16. In a case not covered by section 16, as, for example, when the defendant is a non-resident of the State, the costs are not governed by that section but may be allowed under section 13. Matter of Brooklyn Union El. E. 15. Mead v. Conger, 97 N. Y. Supp. R. Co., 176 N. Y. 213. 526. Compare the following earlier cases: IG. New York, 0. & W. E.. R. Co. v. :\latter of Manhattan Ry. Co. v. Kent, McBride, 45 Misc. 516, 92 N. Y. Supp. 80 Hun, 559, 30 N. Y. Supp. 459; aff'd, 31; Matter of Williams, 112 Misc. 153, 145 N. Y. 595; City of Johnstown v. 182 N". Y. Supp. 267. Frederick, 35 App. Div. 44, 54 N. Y. 17. Matter of Manhattan Railway Supp. 412; Village of St. Johnsville v. Co. v. Kent, 80 Hun, 557, 30 N. Y. Cronk, 55 App. Div. 633, 67 N. Y. Supp. 957, 62 St. Rep. 569. Supp. 419. 18. People v. Thornton, 122 App. 14. Marshal v. Hatfield, 138 N. Y. Div. 287, 106 N. Y. Supp. 704. Supp. 733. CONDEMNATION OF REAL PROPERTY. 489 1454 of the Civil Practice Act, in the discretion of the court.^' Similarly, costs are awarded when the defendant is under legal disability to convey.^" In such a case, an extra allowance is not granted.^^ While the costs are discretionary, it is the policy of the law, in the absence of anything in the papers on appeal indi- cating that the discretion of the court should have been other- wise exercised, to affirm the order of the Special Term award- ing costs to the owner.^2 I. Award less than offer. Under section 16 of the Condemnation Law, which provides that if the plaintiff in a condemnation proceeding does not make an offer to purchase the property sought to be con- demned before serving the petition, the defendant is entitled to costs, the deposit with the court, after the commissioners have reported, of the amount of their awards, is not equiva- lent to the offer to purchase, although the report is set aside and the property is condemned under an amended petition subsequently served.^^ It has been held to be error to charge the owner with the services and expenses of commissioners in a case where a less amount was awarded than the company had offered, when it appeared that the. acceptance of the offer would have de- prived the owner of costs in a pending ejectment suit.^* J. Additional allowance. If the defendant is a resident of the State and under no disability to convey the property, and no offer has been made as provided in section 16 or if the offer is less than the award, the owner may receive an additional allowance under section 19. Oneonta Light & Power Co. v. 221 N. Y. 389; Matter of State of New Schwarzenbach, 164 App. Div. 548, 150 York, 152 App. Div. 633, 137 N. Y. N. Y. Supp. 76; afFd, 219 N. Y. 588. Supp. 485; aff'd, 207 N. Y. 582; Mat- See also Erie County v. Fridenberg, ter of People of the State of New 161 N. Y. Supp. 401. York, 70 Misc. 72, 128 N. Y. Supp. 29. 20. Manhattan E. R. Co. v. McKee, 22. Oneonta Light & Power Co. v. 1 App. Div. 488, 37 N. Y. Supp. 269; Schwarzenbach, 164 App. Div. 548, 150 Matter of State of New York, 152 N. Y. Supp. 76; aff'd, 219 N. Y. 588. App. Div. 633, 137 N. Y. Supp. 485; 23. City of Syracuse v. Stacey, No. aff'd, 207 N. Y. 582; Matter of People 2, 45 App. Div. 260, 60 N. Y. Supp. of State, 70 Misc. 72, 128 N. Y. Supp. 1106. 29. 24. Ulster & Delaware R. R. Co. v. 21. County of Erie v. Fridenberg, Gross, 31 Hun, 83. 490 CONDEMNATION OF REAL PEOPERTY. 16.^^ The extra alowance contemplated by section 16 is in- tended as an indemnity to the prevailing party for expenses necessarily or reasonably to be incurred in the proceeding.^^ In proceedings in the United States Federal court to ac- quire lands in this State, the provisions of the Condemnation Law as to extra allowance are applicable.^^ It has been thought that section 1476 of the Civil Practice Act, limiting allowances to $2,000 does not apply to condemnation proceed- ings ;^ but the statute applies to proceedings to condemn lands for the water supply of New York city and prevents an allow- ance of more than that sum.^^ No- allowance for counsel fees upon awards for business damages can be made under such statute.^" K. Disbursements of owner. The defendants are properly allowed the fees and mileage of necessary and material witnesses produced by them before the commissioners.^^ L. Several bills of costs. Where the owners of several parcels of land are made parties to a single condemnation proceeding and the question at issue is the amount of compensation to be made, the court has power to award a bill of costs to the owners of each sepa- rate parcel.^^ 25. Matter of L. S. & M. S. K. B,. 27. United States v. Engeman, 27 Co., 65 Hun, 538, 48 St. Rep. 360, 20 Abb. N. C. 141. N. Y. Supp. 573. 28. Matter of City of Brooklyn, 10 Just compensation:— In condemnation Misc. 650, 24 Civ. Pro. 182, 32 N. Y. proceedings to acquire land for a pub- Supp. 182, 65 St. Rep. 261; reversed, lie park in the town of Rye, held, that on other grounds, 88 Hun, 176, 34 in the county of Westchester the court N. Y. Supp. 991; aflf'd, 148 N. Y. 107. in making allowances would not con- 29. Matter of Simmons, 208 N. Y. sider under the clause providing for 69; Matter of Simmons (Section 2).. "just compensation" any unusual com- 71 Misc. 152, 128 N. Y. Supp. 724. pensation paid by the owner to coun- 30. Matter of Board of Water Sup- sel or expert witnesses, and would or- ply, 158 App. Div. 116, 142 N. Y. Supp. dinarily make the same allowance for 801; afif'd, 209 N. Y. 572. such expenses to each side of the con- 31. City of Johnstown v. Frederick, troversy. Matter of Studwell v. Hal- 35 App. Div. 44, 54 N. Y. Supp. 412; stead, 62 Misc. 330, 116 N. Y. Supp. Matter of New York, etc., R. Co., 26 68; afif'd, 134 App. Div. 921, 118 N. Y. Hun, 592. Supp. 1145. 32. County of Westchester v. Wake- 26. St. Lawrence & Adirondack R. R. field Park R. Co., 147 App. Div. 655 Co. V. DeCamp, 52 St. Rep. 10, 23 132 N. Y. Supp. 663. N. Y. Supp. 544. CONDEMNATION OF REAL PKOPERTY. 491 Where a plaintiff in condemnation proceedings joins sev- eral persons having no unity of interest as defendants and the compensation awarded them exceeds the amount of the plain- tiff's offer, each defendant is entitled to costs under section 16. This is true although several of the defendants appear by one attorney. But, where defendants appearing by the same attorney join issue by an answer contesting the right of the plaintiff to maintain the proceeding, so that there is a unity of interest in the defense, but one bill of costs should be allowed.^ Where a railway company seeks to condemn, in a proceed- ing taken under the Condemnation Law, real property held in severalty by the defendants, and some of them default in the proceeding, some appear and consent to condemnation, others appear and object to the jurisdiction and still others answer under section 9, but not by the same attorneys, the proceeding constitutes, in effect, as many distinct proceedings as there are owners of distinct parcels, and this justifies a separate judgment as to each and entitles each successful owner to costs as a matter of right.^* But where the county clerk, over the protest of the corporation counsel, taxed a full bill of costs for each of six respondents in condemnation proceedings whose, interests in the only issue raised or litigated in the pro- ceedings were identical, a motion for retaxation of costs will be granted and the clerk directed to retax them by allowing but one bill of costs.^ But separate bills of costs are not allowed against defend- ants who are proceeded against as partners and joint owners of the property, and who jointly answer.^^ M. Opening default of owner. Where the court as a matter of favor opens the default of an owner who fails to appear before commissioners and sends back their report for further hearing, the party relieved should pay the costs of the former hearing.^^ See also Matter of Prospect Park, 35. Matter of City of New York etf., R. R. Co., 67 N. Y. 371. (Newport Ave.), 96 Misc. 42, 160 N. Y. 33. Dexter & Northern E. R. Co. v. Supp. 9; afTd, 176 App. Div. 887, 161 Foster, 142 App. Div. 240, 126 N. Y. N. Y. Supp. 1121. Supp. 835; aflf'd, 203 N. Y. 637. 36. City of Syracuse v. Benedict, 86 34. Schenectady Railway Co. v. Hun, 343, 33 N. Y. Supp. 944, 67 St. Lyon, 44 Misc. 275, 89 N. Y. Supp. Rep. 614. 908 • aff'd 99 App. Div. 619, 90 N. Y. 37. Matter of Brownell Street, 44 St. Supp. 1113. Rep. 485, 17 N. Y. Supp. 747. 492 CONDEMNATION OF REAL, PROPERTY. ARTICLE XIII. ABANDONMENT AND DISCONTINUANCE OF PROCEEDING. A. Condemnation Law, § 18. Abandonment and discontinuance of proceeding. Upon the application of the plaintiff to be made at any time after the presen- tation of the petition and before the expiration of thirty days after the entry of the final order, upon eight days' notice of motion to all other parties to the proceeding who have appeared therein or upon an order to show cause, the court may, in its discretion, and for good cause shown, authorize and direct the abandonment and discontinuance of the proceeding, upon payment of the fees and expenses, if any, of the commissioners, and the costs and expenses directed to be paid in sucli final order, if such final order shall have been entered, and upon such other terms and conditions as the court may prescribe; and upon the entry of the order granting such application and upon compliance with the terms and conditions therein prescribed, payment of the amount awarded for com- pensation, if such compensation shall have been theretofore awarded, shall not be enforced, but in such case, if such abandonment and discontinuance of the proceeding be directed upon the application of the plaintiff, the order granting sucli application, if permitting a renewal of such proceeding, shall provide that proceedings to acquire title to such lands or any part thereof shall not be re- newed by the plaintiff without a tender or deposit in court of the amount of the award and interest thereon. B. Right of discontinuance. Ordinarily there is no difficulty in effecting a discontinuance of the proceeding before the report of the commissioners has been confirmed. Up to the time of the confirmation there is no obligation on the petitioner to take the premises in ques- tion, and the proceeding may be abandoned.^^ The property-owners acquire no vested rights in the con- demnation proceedings until the report of the commissioners of appraisal is finally eonfirmed.^^ The court in its discretion should not deny the motion of a railroad for leave to discontinue proceedings where it appears that the amount awarded to the landowner by the commis- sioners is deemed by the railroad authorities to be much more 38. Matter of the Mayor, 34 App. 786; appeal dismissed, 155 N. Y. 619; Div. 468, 54 N. Y. Supp. 295; Matter Matter of Syracuse, etc., R. R. Co., 4 of Bd. of Education of N. Y., 59 App. Hun, 311; Hudson River R. R. Co. v. Div. 258, 69 N. Y. Supp. 572; reversed, Cutwater, 3 Sandf. 689. 169 N. Y. 456; Schneider v. City of 39. Simpson v. Berkowitz, 59 Misc. Rochester, 90 Hun, 171, 35 N. Y. Supp. 160, 110 N. Y. Supp. 485. CONDEMNATION OF KEAL PEOPEETY. 493 than the land is worth and no one has acted in reliance upon the railroad's intention to condemn the property.^" But the right to discontinue the proceedings is not absolute and should not be allowed on the motion of the condemnor made after the report of the commissioners had been con- firmed except for the gravest reasons, if at all.^^ When land has actually been taken in condemnation pro- ceedings by the State, the owner cannot be compelled to take it back, with damages for its detention only.*^ Under a special statute authorizing the construction of sewers by a city whereby the title to the property is acquired by the city and the owner summarily divested of his estate in the land anterior to a consideration of the value by the com- missioners or the order of confirmation of their report of the same, that upon the filing of the oath of the commissioners the city becomes vested with an absolute estate of inheritance in fee simple and can not thereafter abandon the proceedings as the rights of the former owners have been fixed and the exer- cise of the power of eminent domain has been completed.*^ After confirmation the corporation cannot, without leave of the court, abandon the proceedings and refuse to pay the 40. New York, Ontario & Western ings served within the thirty days E. Co. V. Nelson, 152 App. Div. 245, specified by section 18 is timely al- 136 N. Y. Supp. 514. though the motion may be heard after 41. N. Y. C. & H. E, E. Co. v. Mar- said time has expired. New York, On- s'hall, 127 App. Div. 534, 112 N. Y. tario & Western E. Co. v. Nelson, 152 Supp. 33. App. Div. 245, 136 N. Y. Supp. 514. Right of owner to compensation. — It Agreement not to discontinue. — was held in People ex rel. Gas Light Where a petitioner in condemnation Co. v. Common Council, 78 N. Y. 56, proceedings has stipulated upon a good that where proceedings, by a municipal and valuable consideration not to ap- corporation, to condemn lands for put- ply for a discontinuance except on the lie purposes have so far progressed written consent of the defendants and that the amount of compensation to be owners, its motion for a discontinuance paid to the owner has been fixed as a while said stipulation is in full force finality, the proceedings cannot be dis- and eflfect must be denied, there having continued and abandoned by the mu- been no change in the situation in law nicipal authorities; the owner has a or in fact with reference to the owner- vested right to the compensation, and ship of the property. Matter of Man- payment may be enforced a,ccording to hattan E. Co. v. Meighan, 186 App. the statute under which the proceed- Div. 733, 175 N. Y. Supp. 20. ings were instituted. This right may 42. Kahlen v. State of New York, precede the vesting of the title in the 223 N. Y. 383. corporation. 43. Matter of City of Syracuse, 224 Timely motion. — A motion for leave N. Y. 201. to discontinue condemnation proceed- 494 CONDEMNATION OF REAL PROPERTY. award made to the owner upon confirmation of the report, mutual rights have vested in the parties, and the corporation cannot of its own option recede. It is not necessary in order to conclude the corporation that the title to the land should have vested in it under the proceedings ; it is sufficient if the right to acquire it in payment of the award is fixed.** Proceedings to acquire land for the Palisades Interstate Park are substantially the same as in other condemnation pro- ceedings and after awards for lands and property rights taken have been confirmed by the court and no appeal taken, such awards cannot be vacated and the proceedings discontinued.*^ The trustees of a village may, by resolution, discontinue proceedings for the extension of a street, but cannot subse- quently restore such proceedings by rescinding such reso- lution, as against interested persons who, in the meantime, have acquired new rights by legislative enactment. But such trustees have no power, by resolution, to discontinue the pro- ceeding while an appeal is pending therein, without consent of the opposite parties and leave of the court; and such reso- lution has no effect upon such appeal.*^ The proceedings may be discontinued as to a part of the property proposed to be taken, where the petitioner is unable to acquire the whole and the portion that he could acquire would be of no use for the purpose sought.*^ C. Imposition of terms. The costs on an application for " an abandonment and dis- continuance of the proceedings ' ' are regulated by section 18.*^ Where proceedings are sought to be discontinued after report and before confirmation, it is within the legitimate power of the court in granting the application to annex such terms to go with the favor as justice and fairness require, and the court is not restricted to costs and disbursements as a condition, 44k Matter of Rhinebeck & Conn. R. versed, 127 App. Div. 650, 111 N. Y. R. Co., 67 N. Y. 242. Supp. 895; aff'd, 193 N. Y. 658. 45. Matter of Com'rs of Palisades 48. Matter of Village of Le Roy, 35 Interstate Park, 216 N. Y. 104! App. Div. 177, 55 N. Y. Supp. 149. 46. Matter of Folts Street, 29 App. Costs as in action. — On permitting a Div. 69, 51 N. Y. Supp. 390, 85 St. discontinuance, the court has no power Rep. 390. to dismiss the proceeding "with costs 47. Matter of Mayor, etc., of N. Y., as in an action." Matter of the Mayor, 52 Misc. 319, 102 N. Y. Supp. 159; re- 34 App. Div. 468, 54 N. Y. Supp. 295.' ' CONDEMNATION OF REAL PROPERTY. 495 but may in its discretion impose the payment of an allow- ance.*^ Where a county discontinues its proceeding to condemn lands for a site for a new courthouse before commissioners have been appointed to ascertain the compensation to be made to owners of the property taken therefor, the court can impose upon the county only the taxable costs of the parties who appeared; the costs of motions, and the compensation of an infant defendant's guardian ad litemj" The phrase in section 18, relative to a discontinuance, ' ' and upon such other terms and conditions as the court may pre- scribe," does not authorize it to compensate parties who, while the proceeding was pending during a period of three months, incurred counsel fees and expenses, lost tenants and rents, and in some cases hired other property in expectation of being compelled by the county to vacate their own.°^ ARTICLE XrV. WHEN OBJECTIONS MAY BE RAISED. By proceeding with the hearing before the commissioners the owner of the premises waives many preceding irregulari- ties in the proceeding. The general appearance of a landowner operates to confer jurisdiction of his person upon the court and is a waiver by him of any question as to the sufficiency of the published notice by which the proceeding was instituted.^^ Such party, having appeared generally, cannot object to the petition on the ground that it is not properly veriified.^^ The appearance of an attorney for the landowner, when a petition for the appointment of commissioners is brought on for hearing, gives jurisdiction, and cures an omission from the petition, such as the omission to state the residence of owners.^* The report of commissioners will not be refused confirma- tion because they may have exceeded their authority in de- 49. N. Y., W. S. & B. R. R. Co. v. 52. County of Orange v. Ellsworth, Thome, 1 How. Pr. N. S. 190. 98 App. Div. 275, 90 N. Y. Supp. 576. 50. County of Onondaga v. White, 53. Matter of N. Y., Lackawanna & 38 Misc. 587, 77 N. Y. Supp. 1074. Western R. R. Co., 33 Hun, 148. 51. County of Onondaga v. White, 54. Matter of Rochester, Hornells- 38 Misc. 587, 77 N. Y. Supp. 1074. ville, etc., Ry. Co., 19 Abb. N. C. 421. 496 CONDEMNATION OF REAL PROPERTY. termining conflicting claims of title, where all the parties in interest during the entire hearing made no objection to the determination of the issues by the commissioners.^ The objection that the proper oath was not taken by the commissioners cannot be taken for the first time when the report is offered for confirmation.^^ If, by reason of the alleged prior dedication, the street open- ing proceedings were unnecessary, the objections ' should be taken on the motion to appoint the commissioners; it is too late when made at the time for the confirmation of the award of the commissioners.^^ Objections that no award was made for the land in the bed of the street opposite the claimant's lot will not be heard on motion to confirm the report of the commissioners where the claim was not made before the commissioners.^* One to whom an award has been made for injuries caused by a change in a grade crossing cannot wait until the report is rendered and then contest its confirmation on the ground that taxes deducted from the award were not proved to be a lien against the property, or because one of the commissioners was not a freeholder, or because the premises were not viewed by the commissioners as a whole.^^ An objection to an order appointing commissioners is waived by appearance of defendant and his proceeding with- out raising the objection.^ Questions as to the sufficiency of the petition must be raised when the petition is presented and before the order appoint- ing the commissioners is made.®-^ By proceeding with the matter, a party waives any objec- tion to the validity of the proceedings in a street opening which he might have, and which he should have made when the commissioners were appointed.^^ An objection to a report of commissioners of street opening, 55. Matter of City of Buffalo, 148 missioners (No. 89), 148 App. Div. 412, App. Div. 384, 132 N. Y. Supp. 926. 132 N. Y. Supp. 960. 56. Matter of Grade Crossing Com- 60. Postal Telegraph Cable Co. v. missioners (No. 89), 148 App. Div. 412, Bruen, 39 N. Y. Supp. 220. 132 N. Y. Supp. 960. 61. Matter of Bd. of Supervisors, 57 57. Matter of Hallett and Rowland Misc. 665, 110 N. Y. Supp. 46. Streets, 135 N. Y. Supp. 823. 62. Matter of Lexington Ave. Ey. 58. Matter of East 227th and 228th Co., 44 St. Rep. 387, 17 N. Y. Supp. Streets, 150 N. Y. Supp. 402. 870. 59. Matter of Grade Crossing Com- CONDEMNATION OF BEAL PROPERTY. 497 on the ground of the absence of one commissioner at the time of summing up by counsel after all the testimony was in, is waived where the objectant proceeds without any intimation of such an objection, and makes it for the first time after the award.^ An objection that one of the commissioners was appointed ex parte and that such appointment was a nullity cannot be raised after the report of the commissioners has been con- firmed by a competent tribunal.^* An objection to the qualifications of one of the commission- ers cannot be raised for the first time on the application for the confirmation of his report.®^ Where owners of land taken by a city litigate before a commissioner of estimate and assessment without objecting to him and he thereafter makes affidavit that he had disposed of any property owned by him within the area of assessment before the filing of the final report, an objection to his com- petency to act comes too late when taken on confirmation of the report.^^ But where the owner objects to the appointment of commissioners on the ground that the land was sought for private purposes, his failure to appeal from a decision that the purpose was public and his consent to the appointment of commissioners does not amount to a waiver of his rights and he may thereafter move to set the order aside.^'' Objections raised to the sufficiency of the notice of the pre- sentation of the petition in a proceeding for condemnation are not waived by the mere fact that a demurrer to the petition is subsequently interposed.®^ 63. Matter of 181st St., 17 N. Y. Misc. 59, 71 N. Y. Supp. 207; modified, Supp. 917. 84 App. Div. 455, 82 N. Y. Supp. 1027. 64. Morris v. Mayor, 55 Hun, 476, 67. Matter of Niagara Falls & W. 8 N. Y. Supp. 763. Ry. Co., 4 N. Y. Supp. 485. 65. Matter of City of New York 68. Matter of B'dway & 7th Ave. (Avenue A), 66 Misc. 488, 122 N. Y. R. R. Co., 69 Hun, 275, 23 N. Y. Supp. Supp. 321. 609. 66. Matter of Summit Avenue, 35 32 498 CONDEMNATION OF REAL PROPERTY. AETICLE XV. APPEAL AND NEW APPRAISAL. A. Condemnation Law, § 19. Appeal from final orders; stay. Appeal may be taken to the appellate division of the Supreme Court from the final order, within the time provided for appeals from orders by article thirty- nine of the Civil Practice Act; and all the provisions of such article relating to appeals to the appellate division of the Supreme Court from orders of the Special Term shall apply to such appeals. Such appeal will bring up for review all the proceedings subsequent to the judgment, but the judgment . and proceedings antecedent thereto may be reviewed on such appeal, if the appellant states in hia notice that the same will be brought up for review, and exceptions shall have been filed to the decision of the court or the referee, and a case or a case and exceptions shall have been made, settled and allowed, as required by the provi- sions of the Civil Practice Act, for the review of the trial of actions in the Su- preme Court without a jury. The proceedings of the plaintiff shall not be stayed upon such an appeal, except by order of the court, upon notice to him, and the appeal shall not afi'ect his possession of the property taken, and the appeal of a defendant shall not be heard except on his stipulation not to disturb such possession. B. Condemnation law, § 20. Appeal from judgment by plaintiff. If a trial has been had and judgment entered in favor of the defendant, the plaintiff may appeal therefrom to the appellate division of the Supreme Court within the time provided for appeals from judgments by article thirty-nine of the Civil Practice Act, and all the provisions of said article relating to appeals from judgments shall apply to such appeals; and on the hearing of the appeal the ap- pellate division may affirm, reverse, or modify the judgment, and in case of re- versal may grant a new trial, or direct that judgment be entered in favor of the plaintiff. If the judgment is affirmed, costs shall be allowed to the respondent, but if reversed or modified, no costs of the appeal shall be allowed to either party. C. Condemnation law, § 21. When appellate division ma,y direct a new appraisal. On the hearing of the appeal from the final order the court may direct a new appraisal before the same or new commissioners, in its discretion, and the report of such commissioners shall be final and conclusive upon all parties interested. If the amount of the compensation to be paid is increased by the last report, the difference shall be a lien upon the land appraised, and shall be paid to the parties entitled to the same, or shall be deposited as the court shall direct; and if the amount is diminished, the difference shall be refunded to the plaintiff by the party to whom the same may have been paid, and judgment therefor may be rendered by the court, on the filing of the last report, against the parties liable to pay the same. CONDEMNATION OF REAL PROPERTY, 499 D. Appeal to Appellate Division. 1. From what orders allowed. Tlie Condemnation Law seems to contemplate art appeal only from the fi.nal order in tlie proceeding, on which appeal interlocutory orders are also reviewed.^^ In pursuance of this statutory scheme, appeals from interlocutory orders have frequently been denied, such as an order of the Special Term refusing in toto to confirm the report;™ an order con- demning a fee and appointing commissioners ;''^ or an appeal from an order appointing a referee to hear and determine the issues raised by the petition and answer.''^ But, while an appeal from an order appointing commissioners is not generally permitted, it is held that an appeal may be allowed from an order overruling jurisdictional objections to the petition.''^ Although an appeal may not lie from a judgment 69. Erie R. Co. v. Steward, 59 App. Div. 187, 69 N. Y. Supp. 57; Village of St. Johnsville v. Smith, 61 App. Div. 380, 70 N. Y. Supp. 880. What is brought up. — An appeal from a final order in condemnation pro- ceedings, where the decree of condem- nation is not brought up either di- rectly or by including it in the notice of appeal, only brings up for review proceedings subsequent to the decree. Long Island Railroad Co. v. Garvey, 159 N. Y. 334. 70. Matter of Commissioner of Pub- lic Works, 185 N. Y. 391; Matter of City of New York (Valley Stream, etc.), 152 App. Div. 422^ 137 N. Y. Supp. 329. Contrary decisions. — In some of the cases, it has been said that an order setting aside the report of the com- missioners may be appealed to the Ap- pellate Division. Manhattan Ry. Co. V. O'SuUivan, 6 App. Div. 571, 40 N. Y. Supp. 326; aff'd, 150 N. Y. 569; Mat- ter of Town of Guilford, 85 App. Div. 207, 83 N. Y. Supp. 312; Matter of Manhattan Ry. Co. v. Stuyvesant, 126 App. Div. 848, 111 N. Y. Supp. 222. New York City Water Supply.— An appeal lies to the Appellate Division from an order of the Special Term which vacated an award made by the commissioners of appraisal to ascer- tain the compensation to be made for land taken for water supply of the city of New York by virtue of Laws of 1905, chapter 724. Matter of Sim- mons, 203 N. Y. 241. 71. Erie R. R. Co. v. Steward, 58 App. Div. 187, 69 N. Y. Supp. 57; Vil- lage of St. Johnsville v. Smith, 61 App. Div. 380, 70 N. Y. Supp. 880; Still- water, etc., R. R. Co. v. B. & M. R. R. Co., 67 App. Div. 367, 73 N. Y. Supp. 744; appeal dismissed, 170 N. Y. 573; Matter of Public Service Comm., 16'i App. Div. 908, 151 N. Y. Supp. 766; aff'd, 217 N. Y. 61. Contrary decisions. — In some of the oases, particularly the earlier ones, it has been held that an appeal may be taken from an order appointing com- missioners. Matter of B'dway & 7th Ave. R. R. Co., 69 Hun, 275, 53 St. Rep. 38, 23 N. Y. Supp. 609; Matter of City of Utica. 73 Hun, 256,. 58 St. Rep. 80, 26 N. Y. Supp. 564. 72. Staten Island Rapid Transit R. Co. V. Rosenberg, 157 App. Div. 472, 142 N. Y. Supp. 585. 73. Matter of City of Rochester. 102 500 CONDEMNATION OF KEAL PROPERTY. granting the right to condemn real property, except through appeal from the final order on the coming in of the report of the commissioners, it may be entertained where no motion to dismiss has been madeJ^ And it has been held that an order sending a report back to the commissioners is appealable.'^ An order denying a motion for the appointment of commissioners constitutes a final order in the proceedings, and is appealable by the petitioners^^ Where, after a trial before a referee of the issues raised by an answer to a petition in condemnation proceedings, a report has been made and judgment has been entered dismissing the petition, with costs, but " without prejudice to the plaintiff's right to begin other proceedings," an appeal therefrom by the defendant will be dismissed." 2. Waiver of right of appeal. The rule which deprives a party of the right to appeal from an order or judgment under which he has taken a benefit is not applicable to these proceedings, and the right to appeal is not affected by accepting payment for the land and giving a receipt therefor.''^ Where a report of damages is set aside and new proceedings are instituted, in which the company deposits a sum of money in court to secure any award that may be made, and upon confirmation of a second award pays the damages and takes possession, his right of appeal is not barred.''^ 3. Perfection of appeal. Where, by contract, a railroad company and a city are each liable for one-half the amount of compensation awarded for the taking of land for a grade crossing, notice of appeal from App. Div. 99, 92 N. Y. Supp. 478; 77. Village of Canandaigua v. Bene- County of Orange v. Storm King Stone diet, 13 App. Div. 600j 43 N. Y. Supp. Co., 180 App. Div. 208, 167 N. Y. Supp. 630. 806. 78. Matter of N. Y. & Harlem E. R. 74. Champlain & Sanford Railroad €o., 98 N. Y. 12; Matter of City of Co. V. Ostrander, 151 App. Div. 752, New York, 216 N. Y. 489; Matter of 136 N. Y. Supp. 1012. Metropolitan Elevated R. R. Co., 36 75. Bd. of Water Com'rs v. Shutts, St. Rep. 606, 13 N. Y. Supp. 367. 25 App. Div. 22, 49 N. Y. Supp. 319. 79. Matter of N. Y., W. 6. & B. E. 76. Matter of Metropolitan Elevated R. Co., 29 Hun, 646. R. R. Co., 136 N. Y. 500. CONDEMNATION OF REAL PROPERTY. 501 the order confirming such award must be served on such rail- road company, or the appeal will be dismissed.^" The provision of the Eochester charter regarding the con- demnation of land for a water supply that any person ag- grieved by the report or the award of the commissioners may appeal to the Appellate Division within 30 days after the con- firmation by the common council does not give to landowners outside the city their constitutional right of due process of law, for the party appealing must give a bond in the penal sum of $1,000, conditioned for the diligent prosecution of the appeal, and for the payment of costs which may be awarded against the appellant.^^ 4. Stay of proceedings. The appellant's right to a stay pending an appeal is not an absolute one, but whether it shall be granted or refused rests in the discretion of the court, and must be determined by the circumstances of each case.^^ Where an appeal is taken from a judgment and an order confirming an award, and the judgment is in favor of the one who holds the fee to certain property and against one who held the same under a lease from a former owner, the proceed- ings will not be stayed pending appeal if defendant tenders no bond, and it does not appear that plaintiff is not entirely able to make good all damages.^^ 5. Action of Appellate Division. The duty of the Appellate Division, in the premises, is simi- lar to that of the Special Term, for the reason that both courts are called upon to act in a discretionary manner, and where the award of commissioners is set aside by the Special Term as excessive, the Appellate Division has an inherent power to review the order .^ The award of the commissioners may be reviewed upon the facts as well as upon the law.^ 80. Matter of Grade Crossing Com- R. Co., 22 N. Y. Supp. 298, 51 St. Rep. missioners, 68 App. Div. 560, 74 N. Y. 827. Supp. 205. 83. Manhattan Ry. Co. v. Stroub, 70 81. .Matter of City of Rochester, 184 Hun, 363, 53 St. Rep. 811, 24 N. Y. App. Div. 369, 171 N. Y. Supp. 12; Supp. 68. aff'd, 224 N, Y. 386. 84. Manhattan R. Co. v. O'SuUivan, 82. Manhattan Ry. Co. v. Stroub, 70 6 App. Div. 571, 40 N. Y. Supp. 326; Hun, 363, 24 N. Y. Supp 68, 53 St. aff'd, 150 N. Y. 569. Rpp. 811; Matter of Metropolitan El. 85. Matter of Brooklyn Elevated li. 502 CONDEMNATION OF REAL PROPERTY. The fact that the commissioners made a personal inspection of the property, while not necessarily governing the action of the appellate court, has very great weight.^^ The Supreme Court will not set aside an award for every technical error, where no injustice appears to have been done.^^ The appellate court will not disturb an appraisal for technical errors, or unless the commissioners have clearly gone astray and disregarded legal principles.^* Where no excep- tion has been taken at the trial, and the report, having evi- dence to support it, is affirmed, the appellate court will not generally interfere.*^ Nor will it seek for technical errors in the admission or rejection of evidence, whore no erroneous methods are shown, nor erroneous principles adopted by com- missioners in making their award.^" Appellate courts interfere with the amounts of awards with great reluctance.^^ The Appellate Division has power to send back the report of commissioners of appraisal in condemnation proceedings, for the commissioners to state the grounds of their decision, and the rule adopted by them.^^ Where the report of commissioners of appraisal in con- K. Co., 80 Hun, 355, 61 St. Rep. 845, Supp. 159. 30 N. Y. Supp. 131. 90. Matter of Silver Creek & Dun- 86. Akin v. Water Com'rs of Am- kirk Sailway Co., 45 St. Kep. 66, 18 sterdam, 82 Hun, 265, 63 St. Rep. 560, N. Y. Supp. 331. 31 N. Y. Supp. 254. See also the Mat- 91. Matter of Thompson, 24 St. Rep. ter of Gilroy, 78 Hun, 260, 60 St. Rep. 433, 5 N. Y. Supp. 370, 1 Silvernail, 237, 28 N. Y. Supp. 910; Matter of 389. Metropolitan Elevated R. R. Co., 76 Nominal damages. — In proceedings by- Hun, 375, 59 St. Rep. 94, 27 N. Y. a city to condemn lands under the wa- Supp. 756. ters of a river, wherein it appeared 87. New York Central R. Co. v. Mar- that the owner in fee of the lands was vin, 11 N. Y. 279. not a riparian owner, and the evidence 88. Matter of N. Y., Lackawanna & as to value was conflicting and some- W. R. R. Co. V. Arnott, 27 Hun, 151; what speculative, the action of the Matter of N. Y., West Shore & B. R. commissioner in awarding nominal R. Co. V. Dudleston, 29 Hun, 609; Troy damages will not be disturbed on ap- & Boston R. R. Co. v. Lee, 13 Barb. peal. Matter of City of Buffalo, 189 169; N. Y., West Shore & B. R. R. Co. N. Y. 163. V. Gennet, 37 Hun, 317; N, Y., Lacka- 92. Matter of Water Com'rs of wanna, etc., R. R. Co. v. Union Steam- White Plains, 55 App. Div. 77, 66 N. Y. boat Co, 35 Hun, 220. Supp. 1005; Matter of Bd. of Public 89. Matter of Metropolitan Elevated Improvements, 99 App. Div. 576, 91 R. R. Co, 36 St. Rep. 224, 13 N. Y.' N. Y. Supp. 161. ) CONDEMNATION OF REAL PEOPEETY. 503 demnation proceedings fixes the value of land taken and the damage done to the remainder of the tract, it is error for the Appellate Division to modify the report by striking out altogether the damages awarded. If it is dissatisfied with the report, it should direct a new appraisal.^^ Where a proceeding was heard once by commissioners and their report was denied confirmation and a new hearing was had before other commissioners, whose report was confirmed, the court on appeal from the order confirming the report can- not review the former order denying confirmation from which an appeal was not taken until the second order has been made.^* The Appellate Division will not, of its own motion, vacate an order confirming the report of commissioners in a street opening proceeding making an award to. unknown owners upon the ground that notice had not been given to parties who might be interested in the award, where their right thereto does not clearly appear, and the attorney prosecuting the appeal is not authorized to appear for them.^^ E. Appeal to the Court of Appeals. An appeal lies to the Court of Appeals from an order of the Appellate Division, affirming an order of the Special Term when the proceedings involve the question of the right to condemn lands under the statute in question.^® But an order of the General Term, affirming an order of the Special Term, confirming the report of comrftissioners ap- pointed under the provisions of the Rapid Transit Act, is not appealable when there is presented only an error of law or fact, and no question as to the jurisdiction of the commis- sioners is raised.®^ An order of the Appellate Division reversing an order of the Special Term affirming an award of commissioners and dismissing the whole proceeding, leaving the client without any award whatever, is appealable to the Court of Appeals.^* 93. Matter of New York Municipal 152 App. Div. 752, 137 N. Y. Supp. 817. R. Corporation v. Weber, 226 N. Y. 70. 96. Rensselaer & S. R. R. Co. v. 94. Matter of City of New York Davis, 43 N. Y. 137. (Third Ave.), 145 App. Div. 244, 130 97. Matter of Brooklyn EI. R. R. Co. N. Y. Supp. 80. v. Flynn, 147 N. Y. 344. 95. Matter of City of New York, 98. Matter of N. Y. & Lackawanna, 504 , CONDEMNATION OF REAL PROPERTY. An order of the Appellate Division reversing an order of the Special Term appointing commissioners to ascertain and determine the amount of damage by reason of a change of grade, is a final order from which an appeal lies to the Court of Appeals.^^ Where the landowner accepts payment of the award, but appeals from the order of confirmation to the Appellate Divi- sion which dismisses his appeal, the Court of Appeals has jurisdiction to review the order of dismissal.^ An order of the Special Term modifying and correcting a prior order in the proceedings is a final order, and an appeal to the Court of Appeals lies from an order of the Appellate Division reversing it.^ But an order of the Appellate Division which modified an order of Special Term confirming the report by directing ' ' that the report be referred back to the same commissioners to ascertain the value " of the interest of one of the parties and " to award the amount to him," is not a final order; and the Court of Appeals is without jurisdiction to entertain an appeal therefrom.^ An order of the Appellate Division, reversing an order of the Special Term vacating the final order and judgment, is not a final order in the proceeding.* The Court of Appeals is without jurisdiction to review an order of the Appellate Division, affirming the order appoint- ing commissioners to ascertain the damages caused by the etc., R. R. Co., 98 N. Y. 447; Matter of 988 and 989, of the charter of the city- Clark V. Water Commissioners of Am- the Appellate Division has jurisdiction sterdam, 148 N. Y. 1; Village of Cham- to review the order of the Special plain V. McCrea, 165 N. Y. 264. Term, and that from its decision upon Nominal award. — Where commia- such review an appeal lies to the Court sioners make a merely nominal award, of Appeals. Matter of City of N. Y., which is confirmed at Special Term but 182 N. Y. 281. reversed by the Appellate Division, 99. Matter of Torge v. Village of upon the ground that it was a case for Salamanca, 176 N. Y. 324. substantial appraisal, the order is not 1. Matter of City of New York appealable to the Court of Appeals. (Court House), 216 N. Y. 489. Matter of Southern Boulevard R. R. 2. Matter of Bd. of Education, 169 Co., 128 N. Y. 93. N. Y. 456. New York Charter.— The Special 3. Matter of Daly, 173 N. Y. 640; Term reversed and confirmed in part Matter of City of New York, 224 a report of commissioners of estimate N. Y. 697. and assessment in the city of New 4. City of Johnstown v. Wade, 157 York; held, that under sections 986, N. Y. 50. CONDEMNATION OF REAL PROPERTY. 505 change of grade of a village street, because it is not a final order in a special proceeding.^ The Court of Appeals will not review matters of discre- tion;^ or conflicting evidence.^ And an appeal will not lie, as a matter of right, in case of the unanimous affirmance of the order.* No objections can be raised as to the irregular- ity in the proceedings, which were not taken below.^ It will be presumed that the Appellate Division reversed a judgment of the Special Term upon the law where its order does not state that the reversal was upon a question of fact, and in such case the Court of Appeals will consider whether the findings are supported by the evidence, and if the record so discloses they are conclusive upon it.^" F. New Appraisal. 1. In general. The distinguishing effect of the appeal authorized by sec- tion 19 of the Condemnation Law is that, upon such an ap- peal from a final order, the Appellate Division may direct a new appraisal, which, in that instance only, shall be final and conclusive."^ Where the court refuses to confirm the report of commis- sioners of estimate and assessment on the condemnation of lands for sewage purposes in the city of New York on the ground that the award is too large, new commissioners should be appointed. If the refusal to confirm the award is affirmed by the Appellate Division the order should be modi- 5. Matter of Grab, 157 N. Y. 69. on the ground of misconduct. Matter 6. New York Central R. R. Co. v. of Prospect Park R. R. Co., 85 N. Y. Marvin, 11 N. Y. 279; Matter of N. Y. 489. C. & H. R. R. R. Co., 64 N. Y. 60; Mat- 7. Matter of Prospect Park & C. I. ter of Kings County El. R. R. Co., 82 R R. Co., 85 N. Y. 494. N. Y. 100; Matter of N. Y. & Harlem 8. Matter of Brigham, 227 N. Y. 575. R. R. Co., 98 N. Y. 12. An order of 9. Buffalo & N. Y. City Co v. Brain- the Supreme Court denying the own- ard, 9 N. Y. 100. er's application to have the report sent 10. Village of Champlain v. McCrea, back with directions to state the 165 N. Y. 264. ground of the commissioner's decision 11. Manhattan R. Co. v. O'SuUivan, rests in discretion, and is not review- 6 App. Div. 574, 40 N. Y Supp. 326; able in the Court of Appeals; so, also, aff'd, 150 N. Y. 569. as to an order based on conflicting evi- See also Sands v. City of New York, dence, refusing to set aside an award 104 Misc. 427, 172 X. Y. Supp. 16. 506 CONDEMNATION OF REAL PROPERTY. fied by appointing new commissioners instead of sending the report back to the original commissioners.^^ The statute requires the person receiving the first award to repay the difference between the first and second award, where the second is smaller than the first, and he is not obliged to pay interest thereon except from the date of notice of confirmation of the last award.^^ Although a new appraisal may be ordered the effect of the confirmation of the original award is not destroyed; it still transfers title of the land to the condemning party and the property owner still retains title to the award that has been paid him subject, only in case the new award should be less, to a judgment against him for the difference." A second application for condemnation upon the setting aside of a finding of the commissioners in the first condem- nation proceedings is a continuance of the original proceed- ing, and the addition of the receiver of a condemning com- pany as a party, he having been appointed in the meantime, does not make it necessary to file a new petition nor give the owners of the land the right to file an answer.^^ 2. Conclusiveness of second appraisal. Under the provisions of section 21, the second appraisal is final and conclusive upon all the parties interested.^^ So far as the statute applies, it precludes a review of the second appraisal by common law certiorari," as well as by appeal.^' The denial of the right to review the second report does not violate the provisions of the State Constitution provid- ing that no person shall be deprived of his property without due process of law.^^ As it is final and conclusive of itself, it needs no order of confirmation.^" But, as a general propo- sition, the conclusiveness extends only to merits of the second 12. Matter of Collis, 144 App. Div. also Matter of Southern Boulevard R. 382, 129 N. Y. Supp. 214. R. Co., 141 N. Y. 532. 13. Matter of N. Y. Elevated K. R. 17. People ex rel Schuylerville, etc., Co., 44 Hun, 117. R. R Co. v. Betts, 55 N. Y. 600. 14. Matter of City of New York, 216 18. Matter of Prospect Park, 85 N. Y. 490. N. Y. 489. 15. Rochester, H. & L. R. Co. v. 19. Matter of Commissioners of Hartshorn, 4 Silvernail, 92, 7 N. Y. State Reservation at Niagara, 37 Hun, Supp. 279. 537. 16. Matter of Prospect Park & Coney 20. Matter of Prospect Park &. C. I. Island R. R. Co., 20 Hun, 184. See R. R Co., 85 N. Y 489. CONDEMNATION OF REAL PEOPERTY. 507 award. Generally the statute will not permit an investiga- tion in the amount of the award ;^ but it does not forbid a review for serious legal errors and irregularities. The Su- preme Court may set aside the second report and remove the commissioners on account of gross error and miscon- duct.^^ The refusal of commissioners to conform to the deci- sion of the Supreme Court on the first hearing is misconduct for which they may be removed.^ It is within the power of a court of equity to set aside any excessive award obtained by fraud or misconduct of the commissioners.^* The second report may be set aside where the commissioners have ac- cepted gratuities and accommodations from the owner or have listened to the owner's representations concerning the property in the absence of a representative of the company.^ To authorize a court to review on motion a second report, something more must be apparent than such errors of law or fact as are reviewable on appeal, and which would, if estab- lished, require a reversal and new hearing. There must be such an irregularity, fraud, or mistake in the proceedings of the commissioners as would authorize the court under its established practice to set aside a judgment or verdict in an action on a motion. The report cannot be set aside because of an error committed by the commissioners in hearing or excluding testimony to which one of the parties objected, nor because of any ordinary ruling in the progress of a trial to which an objecting party must reserve his right of remedy by an exception.^^ The statute as to the conclusiveness of second award does not apply when the proceedings on the first appraisal are dismissed on appeal, without a refusal or confirmation or any direction for new appraisal and new proceedings are instituted," or where the first report is set aside at Special Term.^* 21. Matter of Prospect Park & C. I. W. R. R. Co., 2 St. Rep. 456. R. R., 20 Hun, 184. 25. Matter of B., N. Y. & P. R. R. 22. Matter of Southern Boulevard Co., 32 Hun, 289. R. R. Co., 143 N. Y. 253; Matter of 26. Matter of N. Y. Elevated R. R. Prospect Park & C. I. R. R. Co., 20 Co., 41 Hun, 502. Hun, 184. 27. Matter of N. Y., W. S. & B. R. See also Matter of N. Y. & Harlem R. Co., 20 Hun, 646. R. R. Co., 98 N. y. 12. 28. Manhattan R. Co. v. O'Sullivan, 23. N. Y., Lackawanna & W. R. R. 6 App. Div. 571, 40 N. Y. Supp. 326; Co. V. Bennett, 2 How. Pr. N. S. 225. aff'd, 150 N. Y. 569. 24. Matter of N. Y., Lackawanna & 508 CONDEMNATION OF KEAL PKOPEETY. Where a former appraisal of damages to a business has been set aside at Special Term there is no appraisal and no report, and when the Special Term directs a new appraisal it is, when made, the original appraisal and is not conclu- sive.^^ Where a first report made by commissioners appointed in condemnation proceedings was set aside on appeal not upon the merits but solely upon the ground that oue of the commis- sioners was an improper person to act, and new commission- ers were appointed, an appeal lies from the order confirming the report of the new commissioners. Such report is not final and conclusive, as a second deter- mination is only conclusive where the previous decision was set aside upon the merits.^" An appeal will not lie to the Court of Appeals from an order confirming the second report of commissioners; a sec- ond report of such commissiners is final and conclusive, un- less there has been irregularity affecting their jurisdiction, or fraud, mistake, or accident such as would authorize a court of equity to set aside a judgment, referee's report, or award of arbitrators. Such report cannot be attacked col- laterally by motion.^^ 89. Matter of Board of Water Sup- 31. Matter of Southern Boulevard ply, 180 App. Div. 701, 167 N. Y. Supp. E. R. Co., 141 N. Y. 532; Matter of 629. Southern Boulevard R R. Co., 143 30. Matter of Lake Shore & M. S. R. N. Y. 253. R. Co., 140 App. Div. 339, 126 N. Y. Supp. 133. CONDEMNATION OF KEAL PROPERTY. 509 ARTICLE XVI. PRECEDENTS. A. Proceeding by village against water company. 1. Petition. SUPREME COURT— Tioga County. The Village op Waverly, Plaintiff, against The Waverly Water Company, Fred H. Sawyer, as Trustee for the Mortgage Bondholders of the Waverly Water Company and GEORGE H. GOFF, Defendants. To the Supreme Court of the State of New York: The petition of the village of Waverly, a municipal corporation and political division of the State of New York, respectfully shows : 1. That your petitioner is a municipal corporation duly organized under the laws of the State of New York, and is situated in the county of Tioga in said State. That the names and places of residence of the principal officers of said village (being members of the board of trus- tees thereof), were at the time of the execution and filing of this peti- tion, and at the time of the commencement of this proceeding, as fol- lows: (INSERT NAMES) That there is no board of water commissioners in said village of Waverly; and the board of trustees of said village exercises and has all of the powers and is subject to all the liabilities and must perform all the duties of a board of water commissioners as provided by the Village Law. 2. The specific description of the property, rights, privileges and franchises herein and hereby sought to be condemned, together with the location of the property by metes and bonds, with reasonable cer- tainty, is hereunto annexed and marked schedule "A," which said schedule is hereby made a part of this petition in all respects as though the same were herein fully set forth. 3. That the public use for which the said property is required is to furnish the said village of Waverly, N. Y., and its inhabitants with water for fire and domestic purposes. The necessity of the acquisition of such property for such use is : 1. To provide the said village and its inhabitants with pure and wholesome water. 2. The said village does not now own any water system whatsoever; and cannot supply said village and its inhabi- tants, or either of them, with pure and wholesome water for fire and 510 CONDEMNATION OF EBAL PROPERTY. domestic purposes. That the said system herein sought to be purchased is the only water system existing in said village. 3. That the sources of supply owned and controlled by the defendant, the Waverly Water Company, are conveniently located for supplying the inhabitants of the village of Waverly, and are entirely within the State of New York. That, as your petitioner is informed and believes, the defend- ant, the Waverly Water Company, has diverted and is now diverting a portion of said water supply, in that the same is furnished to a water company, organized and existing under the laws of the State of Pennsylvania, for the purpose of supplying the inhabitants of a borough of said last named State with water, and that a portion of the water supply owned by the said Waverly Water Company is and has been so diverted ; that by reason of such diversion the reservoirs of the said Waverly Water Company are at certain seasons of the year, rendered inadequate, the water therein impure and offensive, and the protection against fire less efficient. That in order to supply and make up for such diversion and insufficient source of supply, the defendant, the Waverly Water Company, has at various times pur- chased and furnished from another source outside of the State of New York water for its mains, but at such times the pressure was insuffi- cient for adequate fire protection, and the water so furnished less pure and wholesome for domestic purposes. That it is necessary for the village of Waverly to own and control the sources of supply now owned by the defendant, the Waverly Water Company, in order that the same be preserved and used for the benefit of the residents of the village of Waverly alone. 4. A majority of the electors of the said village desire to acquire, own, control and carry on a system of water works for supplying the said village and its inhabitants with water for fire and domestic purposes, and upon August 30, 1906, at a special election then held for the purpose, voted to purchase the present sys- tem of water-works, at not exceeding a certain fixed price. That it is necessary that the said village should purchase said system in order that it may provide for a future adequate supply; that it may take steps to, at all times hereafter, provide pure and wholesome water, and that it may provide said water both to its inhabitants and for fire purposes more economically than the same is now provided by the said Waverly Water Company. 5. That it is necessary that the said village should own, control and manage the said water system in order to prevent contamination of the water furnished through such system. That the said defendant, the Waverly Water Company, has been, and now is, knowingly and intentionally suffering and permit- ting the contamination of the said water supply. That in case the said village should own, control and manage such water system it could and would at all times prevent such contamination and could and would at all times deliver pure and wholesome water to the in- habitants of said village. 6. That the mains in some parts of the said water system have been permitted to become clogged with mud and sediment to such an extent as to prevent proper fire protection and the necessary pressure, and to render the water passing through such portion of the said mains unwholesome and unsanitary; that the said defendant, the Waverly Water Company, has at all times neglected, CONDEMNATION OF REAL PROPERTY, 511 and now does neglect, to properly flush the said mains so as to render them of sufBeient carrying capacity to give proper fire protection, and so as to render the water flowing through them sanitary and wholesome. That in case the said village owned, controlled and car- ried on the said system, it could and would properly and suitably flush the said mains for the purposes aforesaid. 7. That the said village has established and now owns a sewer system for the use of the inhabitants thereof, which sewer system is to be enlarged and ex- tended. That it is and will be necessary to periodically flush the said sewers and thereby clean the same of deposits that are continuously being made therein. That it is necessary for the said village to oper- ate its own water system for the purpose of flushing said sewers, which sewers could be flushed and cleaned at the same time the water mains were being flushed and cleaned, and the water used in so flush- ing and cleaning the water mains could be made to pass through the sewers and thus clean and flush such sewers. 8. The system of water- works now used by the Vaverly Water Company does not extend in and along some of the streets of said village, upon which a consider- able number of people reside, and said water company has neglected and is now neglecting to lay mains in and through said streets, and by reason thereof such inhabitants are unable to procure water from a public water supply for domestic purposes, and are without fire protection, and it is necessary that said streets, and the residents thereon, be supplied with water for domestic purposes and also water with sufficient pressure for fire protection. And in case the said water system should be owned and operated by the village of Waverly, such village could and would take steps to lay mains through said streets to the end that such inhabitants might be supplied with water for domestic purposes, as well as to protect them in case of fire. That this proceeding is instituted to acquire the existing system of the water-works of the defendant, the Waverly Water Company, pur- suant to the provisions of the Village Law. That on the 12th day of August, 1905, at least twenty-five electors «of such village, qualified to vote upon a proposition, did duly peti- tion the board of trustees of said village, and file in the office of the said board of trustees a petition that a special election be held in the said village for the purpose of voting upon the following proposition : ' ' Shall the village of Waverly, by and through its board of trustees, acquire the existing private system of water-works of the Waverly Water Company, of said village of Waverly, including its mains, lands, easements, rights and property, at a price not to exceed the sum of one hundred and twenty-five thousand dollars ($125,000), and issue therefor the bonds of the said village of Waverly, as provided in sections 128 and 129 of the Village Law." A certified copy of which said petition is hereunto annexed. That upon receiving and filing the said petition, the said board of trustees did, at a special meeting duly and regularly called and held on said 12th day of August, 1905, by proper resolutions duly passed, cause the said proposition to be submitted at a village election of said vil- lage and did designate the hours of opening and closing the polls, which include at least four consecutive hours between sunrise and 512 CONDEMNATION OF REAL PROPERTY. sunset, and designated the place of holding the election and directed the publication and posting of the notices of said election, as required by law; that the said election was directed to be held at the village hall in the village of "Waverly, upon the 30th day of August, 1905, from six o'clock a. m., until sunset of that day, being at least four consecutive hours between sunrise and sunset, which said time was at least ten days and not more than twenty days after the presentation of such petition; certified copies of said resolutions are hereunto an- nexed. That notice of the said election was published at least once in the official paper published in said village and a printed copy of such notice of election was conspicuously posted in at least six public places in the village of Waverly, specifying the time and place of holding such election and hours of opening and closing the polls thereof and setting forth in full the said proposition to be voted upon, all of which more fully appears by the certified copies of the affidavits of publication and posting which are hereunto annexed. That the said notice was published and the said notices were posted as aforesaid at least ten days before the said village election. That the said special election was duly held at the village hall in said vil- lage of Waverly on the 30th day of August, 1905, from six o'clock in the morning to sunset of that day ; that all votes upon said proposi- tion were by ballot and that such ballots were in the form prescribed by the Election Law. That the canvass of the votes cast at such elec- tion was begun immediately after the close of such election and with- out intermission, and such canvass continued without intermission or adjournment, and was completed without adjournment; that there- upon and without any adjournment said board of trustees, acting as canvassers and inspectors of election at such election, immediately signed a certificate and return as such canvassing board, setting forth the whole number of votes cast upon said proposition, the number of votes cast for, or in favor of said proposition, the number of votes cast against such proposition, and the number of spoiled ballots that M^ere not counted ; and also a statement that a majority of votes cast upon such proposition being in favor thereof, such proposition was duly declared carried ; that the said certificate of the said canvassing board was forthwith after its completion and on the 30th day of Au- gust, 1905, and before nine o'clock in the forenoon of the following day, filed with the village clerk of said village, in the manner and as required by law, all of which more fully appears by the affidavit of Wesley H. Brougham, verified February 24, 1908, and the certified copy of the said certificate of election, filed in the office of the said village clerk on the 30th day of August, 1905, which are hereunto an- nexed. That the said petition was presented to the said board of trustees as aforesaid, after the annual election of said village for the year 1905, and before the 1st day of January, 1906, and the said special election was not held in the months of February or March. That the total number of votes cast upon the said proposition was 771 ; that the number of votes cast for, or in favor of, the said proposi- tion was 450 ; that the number of votes cast against said proposition was 313 ; that the number of spoiled ballots, which were not counted was 8 ; that a majority of all the votes cast at the said special cloetion CONDEMNATION OF REAL PROPERTY. 513 "were for and in favor of the said proposition, and the said proposi- tion was duly carried thereat. 4. The names and places of residence of the owners of such property- are as follows : The "Waverly Water Company, which is a domestic corporation duly organized under the Laws of the State of New York, and having its principal office at the village of "Waverly, N. Y., said principal office being at No. 316 Broad street, in the said village of Waverly, N. Y., and whose president is J. Theodore Sawyer, whose residence is at No. 329 Chemung street, in said village, and Fred A. Sawyer, as trustee for the mortgage bondholders of the Waverly Water Company, who resides at No. 416 Chemung street in said vil- lage; that the said trust mortgage was given by the defendant, the Waverly Water Company, to the said Fred A. Sawyer, as trustee ■for the benefit of the holders of bonds issued under and secured by said mortgage to the amount of seventy thousand dollars ($70,000), which said mortgage was recorded in the Tioga county clerk's office on November 11, 1891, 10 o'clock a. m., in book 64 of mortgages, at page 576, and which said mortgage is now, as this plaintiff is in- formed and believes, a valid and subsisting lien upon the property . herein mentioned and described. That the defendant George H. Goff, who resides at No. 574 Clark street in said village of Waverly, has or claims to have, some contract or agreement with the defendant, the Waverly Water Company, for the ice from the reservoir of the said company, or for the use of the icehouse, tools and buildings of said Waverly Water Company, or both. 5. That the plaintiff, the village of Waverly, has been unable to agree with the owners of the property for its purchase ; that the said village of Waverly has attempted to acquire from the owners of the property herein described all of their said property, including the lands, mains, easements, rights and property, both real and personal, belonging to the said Waverly Water Company, and upon at least two occasions has requested the said Waverly Water Company to furnish a price for which the said company would sell the property, and the said company, through its duly authorized officers and agents, has at all times neglected and refused to give or state a price or sum which the said company would take and receive as the purchase price of such property and property rights of the said company. That the plaintiff employed competent and skillful civil engineers to examine the said plant and property to estimate its full and true value, and that the said civil engineers, so employed, did Jo the best of their ability estimate the full value of such property at the sum of eighty- six thousand three hundred and fifty-three dollars ($86,353). That the said plaintiff through its duly authorized officers and agents did ask and demand of the said defendant, the Waverly Water Company, the privilege of examining its books relative to the sizes and times of laying of its mains and of the amount of its gross income and its expenses, and other information concerning the present value of such property, and the «aid defendant, the Waverly Water Com- pany, did and has at all times refused to permit such examination to 33 514, CONDEMNATION OF REAL PBOPEBTY. be made for and on behalf of the plaintiff herein. That on the 29th day of December, 1905, a resolution was duly passed by the board of trustees of the plaintiff herein, directing and empowering the presi- dent and clerk of said board to make an offer in writing to purchase for and on behalf of the plaintiff herein all the plant, franchises, water rights, lands, dams, easements, pipes, mains, reservoirs, hydrants and other property essential and appurtenant to a water supply, which belongs to the said defendant, the Waverly Water Company, at and for the sum of one hundred and five thousand dollars ($105,000), the same to be free and clear from all liens or incum- brances thereon, a certified copy of which said resolution is hereunto annexed; that piirsuant to the said resolution the said president and clerk of the said board of trustees did duly execute such notice and on the 30th day of December, 1905, the same, together with a copy of the said last named resolution, were personally served upon the defendant, the Waverly Water Company, by delivering the same to J. Theodore Sawyer, the president thereof. That the said defendant, the Waverly Water Company, has at all times since such service neglected and refused, and does still neglect and refuse, to accept the said offer, and has at all times neglected and refused to name or state any price or sum for which the said last named defendant would sell, transfer and convey its said plant, franchises, water rights, lands, easements, dams, pipes, mains, reservoirs, hydrants and other prop- erty essential and appurtenant to a water supply, belonging to the said water company, to this plaintiff, although it has repeatedly and at different times been asked and requested so to do, by and on behalf of the plaintiff herein. That the said offer of one hundred and five thousand dollars ($105,000) was, in your petitioner's best judgment and belief, a liberal offer therefor, and at least the full, value of the said property. That the said offer, and the said request, and the negotiations and attempts upon the part of the plaintiff herein to purchase the said property, were made and had in good faith and for the purpose of agreeing with such owners as to the amount and value of said property. That the reason of the inability of the plaintiff here- in to agree with the owners of the property is on account of the re- fusal of the said owners to name or state any price or sum for which the said property would be sold and conveyed, and could be pur- chased by the plaintiff herein, although repeatedly requested so to do, and on account of the neglect and refusal of the said owners to accept the offer of the plaintiff herein to purchase the said plant at and for the price and sum hereinbefore mentioned, and because of the refusal of the said owners to enter into negotiations with the plain- tiff herein for the purchase thereof. 6. That the value of the property herein sought to be condemned is eighty-six thousand three hundred and fifty-three dollars ($86,353). 7. That it is the intention of the plaintiff, the village of Waverly, in good faith, to complete the work and improvements, for which the property herein described is to be condemned ; and that all prelimin- ary steps required by law have been taken to entitle the plaintiff, the village of Waverly, to institute this proceeding. That no previous application has been made to any court for a sale. CONDEMNATION OF REAL PROPERTY. 515 order or judgment for the condemnation of the property herein men- tioned, or for the appointment of commissioners of appraisal, except such as has or have been made in this proceeding. Wherefore the plaintiff demands that it may be adjudged that the public use requires the condemnation of the real property herein de- scribed, and that the plaintiff, the village of Waverly, is entitled to take and hold such property for the public use herein specified, upon making compensation therefor, and that commissioners of appraisal be appointed to ascertain the compensation to be made to the owners of the property so taken, and that the plaintiff, the village of Waverly, may have such other or further relief, or both, as may be just and equitable. Dated, February 24, 1908. The Village of Waverly, {by Orville H. Lawrence, resident of the Village of Waverly.) Frank A. Bell, Village Clerk of the Village of Waverly. STATE OF NEW YORK,] ^^ . County of Tioga, \ Orville H. Lavstrencb and Frank A. Bell, each being duly and severally sworn, for himself, deposes and says : That he has read the foregoing amended petition and knows the contents thereof, and that the same is true to the knowledge of each of said deponents, except as to the matters therein stated to be alleged upon his information and belief, and that as to those matters he believes it to be true. Said deponents further say, that the said Orville H. Lawrence is the president of the village of Waverly, the plaintiff above named, and the said Frank A. Bell is the village clerk of the said village of Waverly; that this proceeding was duly authorized by the board of trustees of the said village of Waverly, by a resolution duly passed at a regular meeting thereof, on the 13th day of January, 1906 ; that the reason this verification is made by these deponents is that the said Lawrence is the president of the village of Waverly, and the said Bell is the clerk of said village, and that the said village, the plaintiff in this proceeding, is a municipal corporation. (Jurat.) ("Schedule A," containing description of real estate and property mentioned in the foregoing petition.) petition OF ELECTORS FOR SPECIAL ELECTION. To the President and Honorable Board of Trustees of Waverhf, N. Y. : We, the undersigned qualified electors of the village of Waverly, N. Y., hereby respectfully petition your honorable board as follows : That a special election to be held in this village, for the purpose of voting upon the following proposition: ' ' Shall the village of Waverly by and through its board of trus- tees acquire the existing private system of water-works of the Waverly Water Company, of said village of Waverly, including its mains, lands, easements, rights and property, at a price not 516 CONDEMNATION OF REAL PROPERTY. to exceed the sum of one hundred and twenty-five thousand dol- lars ($125,000), and issue therefor the bonds of said village of Waverly, as provided by sections 128 and 129 of the Village Law." (Signed, A. J. Thompson, and tMrty-five other electors of the said village of Waverly.) ss. STATE OF NEW YORK,? County of Tioga, \ I, Frank A. Bell, hereby certify that I am the village clerk of the village of Waverly, Tioga county, N. Y., and that I have compared the annexed copy of the petition with the original thereof, filed in my ofSee on the 12th day of August, 1905, and that the same is a cor- rect and true copy of said petition and of the whole thereof. In witness whereof I have hereunto set my hand and affixed the seal of the village of Waverly, this 24th day of February, 1908. Frank A. Bell, Clerk of the Village of Waverly. PROCEEDINGS IN THE BOARD OP TRUSTEES. A petition was presented, signed by more than twenty-five qualified electors, asking: ' ' That a special election be held in this village for the purpose of voting upon the following propositions : ' ' "Shall the village of Waverly by and through its board of trustees acquire the existing private system of water-works of the Waverly Water Company, of said village of Waverly, including its mains, lands and easements, rights and property, at a price not to exceed the sum of one hundred and twenty-five thousand dollars ($125,000), and issue therefor the bonds of said village of Waverly, as provided by sections 128 and 129- of the Village Law?" It was moved by Trustee Genung, duly seconded and carried that said proposition be submitted at a special election, which is hereby appointed, to be held at the village hall, in the village of Waverly, N. Y., on Wednesday, August 30, 1905, from 6 o'clock a. m., till sunset. It was moved, duly seconded and carried, that the clerk cause the necessary publication and posting of the notices for said election, cause the ballots to be prepared and the room fitted for said election. (Add certificate of authentication by village clerk.) ELECTION NOTICE. Notice is hereby given that a special election of the village of Waverly, N. Y., will be held at the village hall, on Wednesday, Au- gust 30, 1905, and that the polls will be opened at 6 o'clock a. m., and close at sunset, for the purpose of voting upon the following proposition : CONDEMNATION OF REAL PROPEBTY. 517 "Shall the village of Waverly by and through its board of trustees acquire the existing private system of water works of the Waverly Water Company, of said village of Waverly, including its mains, lands, easements, rights and property at a price not to exceed the sum of one hundred and twenty-five thousand dol- lars ($125,000), and issue therefor the bonds of said village of Waverly, as provided by sections 128 and 129 of the Village Law." Prank A. Bell, Clerk of the Village of Waverly. Dated this 12th da;y of August, 1905. STATE OF NEW YORK,| ^^ . County of Tioga, \ Ray W. McEwen, being duly sworn, says that he is local editor of the Waverly Free Press, a weekly newspaper published at Waverly, Tioga county, N. Y., and that the advertisement of special election, a copy of which is hereunto annexed, was published for two consecu- tive weeks in the entire editions of said newspaper ; the first insertion having been made on August 18, 1905, and the last insertion on Au- gust 25, 1905. (Jurat.) Ray W. McEwen. ,( Certificate of authentication by village clerk.) AFFIDAVIT OF POSTING NOTICE OF ELECTION. (Insert copy of election notice, same as above.) STATE OF NEW YORK,^^^ . County of Tioga, \ Frank A. Bell, being duly sworn, deposes and says, that he is over twenty-one years of age, and resides in the village of Waverly, Tioga county, N. Y. That on the 17th day of August, 1905, he securely fastened up a copy of the annexed notice of election in public places in the village of Waverly, Tioga county, N. Y., as follows (naming and describing seven places situated in the said village of Waverly). (Jurat.) Frank A. Bell. (Certificate of authentication by village clerk.) affidavit of inspection of election. STATi. OF NEW YORK,^^^ . County of Tioga, \ Wesley H. Brougham, being duly sworn, deposes and says, that he resides in the village of Waverly, Tioga county, N. Y., and that he is and was on the 30th day of August, 1905, one of the trustees of said village of Waverly. That on the 30th day of August, 1905, he at- tended at the village hall in the village of Waverly, Tioga county, N. Y., and acted as a member of said board as one of the inspectors for said election. That said election was declared closed at sunset on that day, and 518 CONDEMNATION OF REAL PROPERTY. the canvass of the votes cast at such election was begun immediately after the close of such election and without any intermission, and such canvass continued without intermission or adjournment and was completed without adjournment. That thereupon the members of the board of trustees acted as can- vassers and inspectors of election, and immediately signed a certificate and return as such canvassing board setting forth the number of votes cast upon the proposition, ' ' Shall the village of Waverly by and through its board of trus- tees acquire the existing private system of water-works of Waverly Water Company, of said village of Waverly, including its mains, lands, easements, rights and property, at a price not to exceed the sum of one hundred twenty-five thousand dollars ($125,000), and issue therefor the bonds of said village of Waverly, as pro- vided by sections 128 and 129 of the Village Law?" That the said certificate was forthwith and immediately filed with Frank A. Bell, the clerk of the village of Waverly. (Jurat.) Wesley H. Brougham. CERTIFICATE OF ELECTION BY INSPECTORS OF ELECTION. This is to certify that a special election was duly held at the village hall, in the village of W,averly, on the 30th day of August, 1905, be- tween the hours of six o'clock a. m. till sunset, pursuant to resolution of the board of trustees of said village, adopted by said board at a meeting of said board held the 12th day of August, 1905. That at such election the following proposition was submitted to the qualified electors of said village and voted upon : "Shall the Village of Waverly, by and through its Board of Trustees, acquire the existing private system of water works of Waverly Water Company, of said Village of Waverly, including its mains, lands, easements, rights and property, at a price not to exceed the sum of one hundred twenty-five thousand dollars ($125,000) and issue therefor the bonds of said Village of Waverly, as provided by sections 128 and 129 of the Village Law?" That at said election upon said proposition the total number of ballots cast was 771. That the number of votes. cast for said proposition was 450. That the number of votes cast against said proposition was 313. That the number of spoiled ballots, was 8. A majority of votes cast upon said proposition being in favor there- of, the proposition was duly declared carried. Dated, Waverly, N. Y., August 30, 1905. L. F. Ford and Five Others. Inspectors of Election. (Affidavit, verifying the foregoing certificate, signed and sworn to by the six inspectors of election.) (Certificate of authentication by village clerk.) CONDEMNATION OF REAL PROPERTY. 519 RESOLUTION AUTHORIZING PRESIDENT AND OLERK OF VILLAGE TO MAKE PROPOSITION FOR PURCHASE OF WATER WORKS. The following resolution was offered by Trustee Lord, seconded by Trustee Genung, and unanimously adopted : Resolved, That the president and clerk of the board of trustees of the village of Waverly, N. Y., be and they hereby are authorized, empowered and directed, to make an offer in writing to purchase for and on behalf of the village of "Waverly, N. Y., all the plants, fran- chises, water rights; lands, dams, easements, pipes, mains, reservoirs, hydrants and other property essential and appurtenant to a water supply which belongs to the Waverly "Water Company at and for the sum of one hundred and five thousand dollars ($105,000), the same to be free and clear from any and all liens and incumbrances thereon, and that said offer be served on said company, and a duplicate there- of filed in the office of the clerk of the county of Tioga. (Certificate of authentification by village clerk.) 2. Order overruling^ preliminary objections to foregoing petition. i( Caption and title.) This matter coming on at a Trial and Special Term of this court held in and for the county of Tioga in the village of Owego on the 9th day of March, 1908, upon the petition of the petitioners verified February 24, 1908, and having been duly adjourned for argument at the same court to the 23d day of March and at said time and place the plaintiff having presented its said petition and appearing by Frank A. Bell, Esq., its attorney, and by Eandolph Horton of counsel, and the defendant, the "Waverly "Water Company, having appearerd by Frederick E. Hawkes, its attorney, and having interposed the fol- lowing objections to the sufficiency of said petition, viz. : "The defendant, the "Waverly "Water Company, hereby raises pre- liminary objections to the sufficiency of the petition in the above-en- titled matter, verified February 24, 1908, and maintains that the vil- lage of "Waverly, the plaintiff, had no power to institute this action, and that the court has no jurisdiction to entertain the same, upon the following grounds: "1. That said petition affirmatively shows that the village of Waverly, the plaintiff, did not comply with section 5 of the General Municipal Law of this State in that the resolution submitted to the taxpayers August 30, 1905, as set forth in said petition, to provide for the contracting of the debt for the purchase of the property of this defendant did not provide for the raising annually by tax a sum sufficient to pay the interest and the principal as the same shall be- come due. "2. That said petition affirmatively shows that said resolution sub- mitted to the taxpayers August 30, 1905, as set forth in said petition, did not authorize the board of trustees of the plaintiff to raise any money to purchase the property of this defendant, and that, there- fore, the plaintiff had no power to attempt to purchase the property of this defendant, described in said petition, either under section 222 •520 CONDEMNATION OF REAL PROPERTY. of the Village Law or under subdivision 5 of section 4 of the Con- demnation Law, and that, therefore, it had no power to institute this proceeding eithehr under section 222 of the Village Law or section 4 of the Condemnation Law. ' ' 3. Said petition does not allege that the property of the Waverly Water Company, specifically described therein, constitutes all the property and rights and easements of said water company or its exist- ing system for supplying the village of "Waverly and its inhabitants with water. "4. Said petition does not contain a concise statement of any facts showing a necessity for the acquisition of the property sought to be condemned. "5. Said petition does not show that the board of trustees of the plaintiff cannot agree with the owners of the system of water-works of this defendant for its purchase and does not show that the plaintiff has been unable to agree with the owners of the property for its pur- chase and does not show any reason for an inability to agree with the owners for its purchase, and affirmatively shows that the plaintiff has not taken any legal steps to attempt to agree with the owners of the property for its purchase. "6. Said petition does not describe the property, constituting the system of water-works of the Waverly Water Company for supplying the village of Waverly and its inhabitants with water, clearly and specifically as required by law." And the defendant, Fred A. Sawyer, as trustee, having appeared by Frederick Collin, Esq., his attorney, and having interposed the following preliminary objections to the sufficiency of said petition, viz.: The defendant, Fred A. Sawyer, as trustee for the mortgage bond- holders of the Waverly Water Company, hereby raises preliminary objections to the sufficiency of the petition in the above-entitled mat- ter, verified February 24, 1908, and maintains that the village of Waverly, the plaintiff, had no power to institute this action, and that the court has no jurisdiction to entertain the same upon the follow- ing grounds : (Stating six objections identical with those made by the Waverly Water Company.) And the defendant, George H. Goff, hav- ing appeared by his attorney, J. B. Floyd, Esq., and having inter- posed the following preliminary objections to the sufficiency of said petition, viz. : Defendant, George H. Goff, by his attorney, J. B. Floyd, appears in the above-entitled action or proceeding and offers the following preliminary objections to the sufficiency of the petition, viz. : First: That the statutes under which the petitioner claims to act do not confer any jurisdiction over said defendant's property or in- terest, which relates to the ice and icehouses built near and adjoin- ing the reservoirs of the defendant, the Waverly Water Company. Second: That said petition is defective for the reason that it fails to set forth such interest or describe the same or give said de- fendant Goff any knowledge or information as to what they propose to do with said icehouses, tools and machinery as set forth in folio 27 of said amended petition. CONDEMNATION OF REAL, PROPERTY. 521 Third: That said petition is further defective in that it fails to show or allege any necessity or right that the said petitioner should acquire the ownership of said icehouses or their contents or the lands upon which the same stand. Fourth : That said petition shows that defendant Goff is an owner within the meaning of section 2 of the Condemnation Law. It fails to show that petitioners ever attempted to acquire the interest of said defendant Goff in the property of said water-works by purchasing or otherwise, and that as to him the service of the same confers no juris- diction over his person or property, though Goff is a resident of Waverly, N. Y., and is under no legal disability to convey such in- terest or property, but on the contrary is fully capable of conveying the same. Fifth : That the petition herein affirmatively shows that the village of "Waverly, the plaintiff, did not comply with section 5 of the Gen- eral Municipal Law of this State in that the resolution submitted to the taxpayers to provide for the contracting of the debt for the pur- chase of the property of this defendant did not provide for raising annually by tax a sum sufficient to pay the interest and the principal as the same shall become due. Sixth: That said petition affirmatively shows that said resolution submitted to the taxpayers, August 30, 1905, as set forth in said peti- tion, did not authorize the board of trustees of the plaintiff to raise any money to purchase the property of this defendant, and that, there- fore, the plaintiff had no power to attempt to purchase the property of this defendant, described in said petition, either under section 222 of the Village Law or under subdivision 5 of section 4 of the Con- demnation Law, and that, therefore, it had no power to institute this proceeding either under section 222 of the Village Law, or section 4 of the Condemnation Law, and all of the parties having been heard and the proceeding having been held open to this time and place, and the said parties having appeared as hereinbefore set forth, Now, upon reading and filing said petition and the said prelimin- ary objections aforesaid, and upon motion of the plaintiff's attorney, defendant's attorneys opposed: Ordered: 1st: That each, every and all of the said preliminary ob- jections made upon behalf of the several defendants be, and the same hereby are, overruled and each of said defendants is hereby allowed an exception to the overruling of each of said preliminary objections. 2d : That each of said defendants is allowed twenty days after ser- vice of a copy of this order in which to file an answer to said petition and serve a copy of the same upon the plaintiff's attorney. 3d: That this proceeding is hereby adjourned to the Trial and Special Term of this court to be held at the court house in the city of Elmira, in and for Chemung county, on the 1st day of May, 1908, at the opening of court on that day. Enter. H. B. Coman, Justice Supreme Court. 522 CONDEMNATION OP REAL, PROPERTY. B. Proceeding by City of New York to acquire lands and waters for a water supply. 1. Petition for the appointment of commissioners of appraisal. NEW YORK SUPREME COURT— Ulstee County. In the Matter of the Application AND Petition of J. EDWARD SIM MONS, CHARLES N. CHADWICK AND CHARLES A. SHAW, Con stituting the Board of Water Supply op the City of New York, to Acquire Real Estate for and on Behalf of the City op New York, Etc., for the Purpose of Providing an Additional Supply OF Pure and Wholesome Water FOR THE Use of the City of New York. .Ashokan Keservoir, Section No. 7. To the Supreme Court of the State of New York, Third Judicial Dis- trict: The petition of the board of water supply of the city of New York respectfully shows to the court and alleges for and on behalf of said city: On the 3d day of June, 1905, an act of the Legislature was passed, known as chapter 724 of the Laws of 1905, entitled "An act to pro- vide for an additional supply of pure and wholesome water for the city of New York and for the acquisition of lands or interest therein and for the construction of the necessary reservoirs, dams, aqueducts, filters and other appurtenances for that purpose ; and for the appoint- ment of a commission with the powers and duties necessary and proper to attain these objects." On the 9th day of June, 1905, the Hon. George B. MeClellan, mayor of the city of New York, acting under and in pursuance of the power and authority vested in him by said act, appointed J. Edward Simmons, Charles N. Chadwick and Charles A. Shaw commissioners, for the purpose of carrying out the provisions of said act. They ac- cepted such appointment, duly organized and immediately entered upon the discharge of their duties, and have been and now are en- gaged in the discharge of their duties as such commissioners under the said act and the various acts amendatory thereof and relating thereto. The board of water supply, in carrying out the provisions of said act, did immmediately and with all reasonable speed, proceed to as- certain what sources did exist and were the most available, desirable and best for an additional supply of pure and wholesome water for the city of New York. The board of water supply, in the discharge of the duties placed upon them by such act, have made such surveys, maps, plans, specifications, profiles, estimates and investigations as CONDEMNATION OF EEAL PROPERTY. 523 they deemed proper in order to ascertain the facts as to said sources of supply, that a report might be made by said board of water sup- ply, as required by law, to the board of estimate and apportionment, with recommendations as to what action should, in its opinion, be taken with reference thereto, so that the board of water supply and the boarrd of estimate and apportionment might be enabled to de- termine from what source or sources and in what manner the city of New York might best secure an additional supply of pure and whole- some water. (The petition further recites in detail the acts and steps taken by the board of water supply, under the authority of and in compliance with the statute, for the purpose of acquiring such water supply and describes in detail the lands and waters to be acquired in this pro- ceeding.) The board of water supply further shows to the court and alleges that it has taken all the steps and discharged all the duties imposed upon said board of water supply to entitle the petitioner to the relief prayed for. Wheeefore, The board of water supply, for and on behalf of the city of New York and for the purpose of vesting the fee of the lands hereinbefore described in said city, prays this honorable court to make an order for the appointment of three disinterested and competent freeholders, at least one of whom shall reside in the county of New York, and at least one of whom shall reside in the county where the real estate sought to be acquired is situated, commissioners of ap- praisal to ascertain and appraise the compensation to be made to the owners of and all persons interested in the real estate laid down on said maps as proposed to be taken or affected for the purposes in- dicated in said act and to exercise and discharge all the powers and duties conferred upon commissioners of appraisal by said act or the acts amendatory thereof or relating thereto. And your petitioner further prays that the court shall in said order appointing such commissioners fix the time and place of the first meet- ing of said commissioners, and grant such other and further relief as may be just. Dated, June 25, 1907. (Verified by Commissioner Shaw.) Board of Water Supply. By Charles A. Shaw, Commissioner. 2. Order appointing commissioners. (Caption ^nd title.) On reading and filing the petition of the board of water supply of the city of New York, verified by Charles A. Shaw, on June 25, 1907, for and on behalf of said board of water supply of the city of New York, from which it appears that the acquisition of the real estate described in said petition and shown on the map therein referred to, which said map was filed in the Ulster county clerk's oflSce, on the 13th day of May, 1907, is necessary for the purpose of providing an additional supply of pure and wholesome water for the city of New York, and for the construction, operation and maintenance of the 524 CONDEMNATION OF REAL PROPERTY. reservoir, aqueduct, culverts, tunnels and various appurtenances as set forth in said petition, and it further appearing that due and proper notice of this application has been given by posting as re- quired by the act as more fully appears by the affidavit of Frederick Ward, verified May 29, 1907, showing the posting of thirty-seven copies of the notice of this application in hand-bill form in at least thirty-seven conspicuous places on or in the vicinity of the real estate to be taken or affected, and it further appearing that notice of this application has been given by publication as required by said act, and the court being satisfied that due and proper notice of the appli- cation herein has been given by posting and publishing as required by said act, and all provisions of said act have been complied with. Now after hearing "William B. Ellison, corporation counsel of the city of New York, in favor of granting said application and petition, and Mr. Arthur A. Brown, by Harrison T. Slosson, of counsel for cer- tain claimants; Messrs. A. C. & F. W. Hottenroth, of counsel for cer- tain claimants; Mr. Jerome H. Buck and Mr. G. Herbert Cone, of counsel for certain claimants, and Mr. A. T. Clearwater and Mr. Charles W. Walton, of counsel for certain claimants. Now on motion of John J. Linson, of counsel for petitioner, it is Ordered, that the said application be and the same hereby is granted, and it is Further Ordered, that James Jenkins of the city of Kingston, county of Ulster and State of New York ; Joseph D. Baucus, of the city and county of New York, and Peter C. Black, of the town of Ulster, Ulster county, N. Y., be, and they hereby are, appointed commission- ers of appraisal to ascertain and appraise the compensation to be made to the owners of and all persons interested in the real estate laid down on said map in this proceeding, filed in said clerk's office as aforesaid, as proposed to be taken or affected for the purposes indicated in said act, and to exercise nad discharge all the powers and duties conferred upon them under chapter 724 of the Laws of 1905, and the acts amendatory thereof and relating thereto, and it is Further Ordered, that the first meeting of said commissioners is to be held at the County Court House, in the city of Kingston, Ulster county, N. Y., on the 22d day of July, 1907, at two o'clock p. m. Enter in Ulster county : James A. Betts, Justice Supreme Court. 3. Notice of claim for one of the parcels sought to be condemned. (Title.) To Hon. James Jenkins, Hon. Peter C. Black, Hon. Joseph D. Baucus, Commissioners of Appraisal: James P. McGovern, claimant of Parcel No. 271A, does respectfully show and allege as follows: First : That prior to and on the 22d day of July, 1907, the said claimant was the owner of the fee and the appurtenances and in pos- session of all that parcel of land in section 7, designated as Parcel No. 271A, situate in the towns of Olive and Hurley, county of Ulster, State of New York, and that the said parcel is free from inenni- CONDEMNATIOK OF REAL, PROPERTY. 525 brances, except a mortgage made by Herman Aaron to Julia Cudney, dated the 14th day of July, 1906, on which there is unpaid the sum of $755. Second : That pursuant to chapter 724 of the Laws of 1905 and the acts amendatory thereof, the city of New York has taken the said parcel for the purposes mentioned in the said act. Third: That the acts of the city of New York, under and pur- suant to the said act, have greatly damaged claimant, and, therefore, asks for a hearing in support of the said claim, and that he be awarded just and equitable compensation therefor, together with his costs, compensation for his witnesses, disbursements and an allowance of 5 per cent, on the amount of the award, together with interest from the 22d day of July, 1907. Jerome H. Buck, Attorney for Claimant. 4. Beport of oommissionets. (Title.) We, James Jenkins, of the city of Kingston, county of Ulster and State of New York ; Joseph D. Baucus, of the city and county of New York, and Peter C. Black, of the town of Ulster, county of Ulster and State of New York, duly appointed commissioners of appraisal by an order of the Supreme Court in the above-entitled proceeding, dated June 29, 1907, to ascertain and appraise the compensation to be made to the owners and all persons in any manner interested in the real estate laid down on the map in this proceeding, filed in the office of the clerk of the county of Ulster, on the 13th day of May, 1907, as proposed to be taken, acquired or affected for the purposes indicated in chapter 724 of the Laws of 1905, and the acts amenda- tory thereof, and to exercise and discharge all the powers and duties conferred upon such commissioners by said acts, and, without un- necessary delay, to ascertain and determine the compensation which ought justly to be made by the city of New York to the owners or the persons interested in the real estate, or any right, title, interest, term, easement ■ or privilege pertaining thereto sought to be acquired, af- fected or extinguished by this proceeding, and to any owner or per- son interested in the real estate contiguous or adjacent thereto in any way affected by the taking of the said real estate, or the taking or extinguishing of any interest therein, whether such adjacent or con- tiguous real estate is shown on the plan or plans, map or maps or not, and upon such ascertainment and determination from time to time, to report the same to the court, as provided in said act, do re- spectfully report as follows : That on the 22d day of July, 1907, we, the commissioners aforesaid, took and subscribed the oath required by the constitution, and that we held the first meeting of this commission at the County Court House, in the city of Kingston, Ulster county. New York, on the 22d day of July, 1907, at two o 'clock in the afternoon, as directed by the order of this court. That on the 22d day of July, 1907, the oath of the commissioners was duly filed in the office of the clerk of the county of Ulster, and a 526 ■ CONDEMNATION OF REAL PROPERTY. certified copy thereof filed in the office of the clerk of the county of New York on the 23d day of July, 1907. That we viewed the real estate laid down on the aforesaid map, in- eluding the parcels embraced in this report, and have carefully ex- amined each parcel thereon shown, and thereafter heard the testimony and considered and examined the claims presented to us which are herein reported on, and considered proofs and allegations of the per- sons claiming to be entitled to or interested in so much of the real estate laid down on said map as is so reported on, and such proofs and allegations as have been offered on behalf of the city of New York. That the testimony taken herein has been reduced to writing and is filed herewith, and we have annexed hereto a true copy of the map showing the parcels now reported on. That after examining said claims, proofs, allegations and testimony and making said views and examinations,, and carefully considering the same, we did, all being present, and without any unnecessary de- lay, ascertain and determine the compensation which ought justly to be made by the said city of New York to the owners of or persons in- terested in so much as is included in this report of the real estate sought to be acquired or affected by said proceedings. A brief description of the several parcels here reported on, shown on the map as taken or affected by these proceedings; the respective amounts of the compensation ascertained and determined upon by us as aforesaid; a statement of the respective owners or persons en- titled to or interested in the same, and the amounts which seem to us proper to be allowed as expenses and disbursements, including rea- sonable compensation for witnesses and counsel fees to such attorneys as have appeared before us for parties to these proceedings, are as follows : Parcel No. 273. All that certain piece or parcel of real estate situated in the towns of Olive and Hurley, county of Ulster and State of New York, desig- nated on the map hereinbefore referred to as Parcel No. 273, which parcel is described as follows : (Insert description.) Seven thousand dollars ($7,000) is the sum ascertained and deter- mined by us as aforesaid to be paid to the owners of and persons in- terested in said real estate for the taking of the fee of said parcel, designated on said map as Parcel No. 273. James P. McGovern is the owner of said parcel. Francis Raymond is the owner of a mortgage covering this parcel for the sum of two thousand dollars ($2,000) with interest at the rate of 5 per cent. Jerome H. Buck appeared before us as attorney and counsel for said owner, and we recommend that the sum of eighty-nine dollars and sixty-two cents ($89.62) be allowed him for expenses and dis- bursements, including reasonable compensation for witnesses, and a further sum of three hundred and fifty dollars ($350) for counsel fees. CONDEMNATION OF EBAL PROPERTY. 527 (Description of the other parcels reported on, and the awards made therefor by the commission.) All of which is respectfully submitted. Dated, Kingston, N. Y., December 28, 1907. (Signature of Commissioners.) 6. Objections to report. (Title.) James P. McGovern, the owner and claimant of Parcel No. 271A in section No. 7 of the Ashokan reservoir, excepts to the report of James Jenkins, Joseph D. Baucus and Peter C. Black, commissioners of appraisal herein, and objects to the confirmation of the said report on the following grounds : 1. That the award of $3,800, made by the commissioners for this property, is grossly inadequate. 2. That the commissioners erred in striking out, and in refusing to consider the evidence of the witness, Cornelius C. Vermeule, an ex- pert called by the claimant as to the value of this property for reser- voir purposes. 3. That the commissioners excluded and did not consider in mak- ing their award proper and material evidence bearing on the market value of this property, showing that this property was part of a natural reservoir site, and its market value by reason of this fact was much enhanced. 4. That the commissioners erred in striking out and in refusing to consider evidence offered by the claimant to show the market value of this property as a part of a reservoir site. 5. That the commissioners erred in refusing to receive and consider evidence offered by the claimant to show the value of this property to the city of New York. 6. That by the erroneous theory of valuation adopted by the com- missioners, claimant has been deprived of his property without due process of law and without just compensation, in violation of the United States Constitution. 7. That by the erroneous theory of valuation adopted by the com- missioners, claimant has been deprived of his property without due process of law and without just compensation, in violation of the Con- stitution of the State of New York. 8. That the commissioners erred in failing to award to the claim- ant, the value of the land plus the value of the structures erected upon it. 9. That the words "just and equitable compensation" as used in the act under which this proceeding was instituted mean all loss, dam- age or expense direct or consequential suffered by the claimant, and the commissioners erred in refusing to so construe the said act. 10. That if the words "just and equitable compensation" do not include all loss, damage or expense, direct or consequential, suffered by the claimant, the act under which these proceedings are carried on is unconstitutional and violates article 1, section 1, and article 1, section 6, of the Constitution of the State of New York, in that it deprives this claimant of the equal protection of the laws, and -de- 528 CONDEMNATION OF BEAL PROPERTY. prives him of the rights and privileges secured to railroad corporations Tinder section 13 of the act under which this proceeding is being car- ried on, and deprives claimant of his property without due process of law, and without just compensation, and also violates article 1 of the Fourteenth Amendment of the Constitution of the United States, for the same reason. 11. That the commissioners erred in failing to make compensation to the claimant for the rights he had to combine with the owners of those contiguous parcels of land, which together constituted a reser- voir site, in offering for sale, using, or selling the whole of the said site to intending purchasers in the open market, and in thereby ob- taining a greatly enhanced value for his property, and also for the rights which he had of combining with the said owners, in building or causing to be constructed a reservoir or reservoirs on all or parts of the said property, including this parcel of land, which rights were taken away by chapter 724 of the Laws of 1905, and the acts amenda- tory thereof and supplemental thereto, and particularly by section 3 of the said act, and by other provisions of the said laws. 12. That the commissioners erred in refusing to receive and con- sider evidence which was offered to show the most advantageous use to which this property could be put, and the said commissioners, in making their award, did not take into consideration, the most ad- vantageous uses to which this property could be put. 13. That the commissioners erred in refusing to receive evidence to show the value of this property of the city of New York, as under chapter 724 of the Laws of 1905, and the acts amendatory thereof, every other person and corporation was prohibited from construct- ing a reservoir on the Ashokan reservoir site, of which this particular parcel of property was a necessary part, and the said commissioners erred in refusing to consider the aforesaid evidence in making their award. 14. That the commissioners made higher awards to other claimants than they made to this claimant, in proportion to the relative market value of the said properties, and discriminated against this claimant, in this particular. 15. That the commissioners erred in failing to allow to the claim- ant costs before and after notice of trial and a trial fee, as the city made no offer to purchase this property. 16. That if the commissioners of appraisal property construed the act in refusing to permit costs before and after notice of trial, and a trial fee, the act under which these proceedings were carried on is unconstitutional in that regard, in that it viloates article 1, section 1, and article 1, section 6, of the Constitution of the State of New York, and article 1 of the Fourteenth Amendment of the Constitution of the United States, in that it denies to this claimant the equal protection of the laws, and deprives claimant of his property without due process of law and without just compensation, and it is also in violation of article 3, section 16 of the Constitution of the State of New York in that this is a local act, and embraces more than one subject, and these subjects are not expressed in the title. CONDEMNATION OF REAL PROPERTY. 529 Wherefore, claimant asks that the award herein may be set aside, and the court refuse to confirm the report of the said commissioners, and that the same may be sent back to the same commissioners or to other commissioners. Jerome H. Buck, Attorney for Clwimant. 6. Order confirming awards. (Caption and title.) On reading and filing the report, dated December 28, 1907, of James Jenkins, Joseph D. Baucus and Peter C. Black, who were appointed commissioners in the above-entitled matter, by an order of the Su- preme Court, dated June 29, 1907, to estimate, ascertain and appraise the compensation to be made to the owners of, and all persons in- terested in, the real estate shown on the map of this proceeding, filed in the office of the clerk of the county of Ulster, on the 13th day of May, 1907, as Map No. 1, as proposed to be taken, acquired or affected for the purposes indicated in chapter 724 of the Laws of 1905, and the acts amendatory thereof, and to exercise and discharge all the powers and duties conferred on such commissioners by said acts, and without unnecessary delay to ascertain and determine the compensation which ought justly to be made by the city of New York to the owners of or persons interested in the real estate, or any right, title, interest, term, easement or privilege pertaining thereto, sought to be acquired, af- fected or extinguished by this proceeding, and to any owner or per- son interested in the real estate contiguous or adjacent thereto, in any way affected by the taking of such real estate, or the taking or extinguishment of any interest therein, whether such adjacent or contiguous real estate is shown on said map or not : On reading due proof of the publication of the notice of the filing of said report, together with notice of the presentation of such report for confirmation to this court, at a Special Term, to be held in and for the third judicial district at the court house, in the city of King- ston, Ulster county, N. Y., February 15, 1908; and on reading and filing full proof of service of such report and notice of filing oh the corporation counsel and the comptroller of the city of New York : And it appearing from said report that on the 22d day of July, 1907, the commissioners took and subscribed the oath required by the Constitution, and that the first meeting of said commission was held at the court house, in the city of Kingston, on the 22d day of July, 1907, at two o'clock in the afternoon, as directed by the order of this court. That on the 22d day of July, 1907, the oaths of the commissioners were filed in the ofSce of the county clerk of the county of Ulster, and a certified copy thereof filed with the clerk of the county of New York, on the 23d day of July, 1907. That they viewed the real estate laid down on the aforesaid map, including the parcels embraced in said report, and carefully examined each parcel shown thereon, and thereafter heard the testimony and carefully considered and examined the claims presented to them, and 34 530 CONDEMNATION OF REAL PEOPEETY. which are reported on in said report, and considered the proofs and allegations of the persons claiming to be entitled to, or interested in so much of the real estate laid down on said map as is so reported on, and such proofs and allegations as were offered on behalf of the city of New York. That the testimony taken was filed with {heir report and that they have annexed thereto a true copy of so much of said map as shows the parcels so reported on. That after hearing such claims, proofs and allegations and testi- mony, and making said views and examinations, and carefully con- sidering the same, they did, all being present, and without unnecessary delay ascertain and determine the compensation which ought justly to be made by the city of New York, to the owners of or persons in- terested in so, much as is included in said report, of the real estate sought to be acquired or affected by said proceedings, and after hear- ing John J. Linson, counsel for the petitioner, in favor of the con- firmation of said report ; and Mr. Harrison T. Slosson, of counsel for the claimants to Parcels No. 295 (and others designated), .who did not oppose confirmation; and Mr. A. T. Clearwater, of counsel for the claimants to Parcels No. 312 (and others), who did not oppose confirmation; and Messrs. A. C. & P. W. Hottenroth, of counsel for the claimants to Parcels No. 308 (and others) in opposition, as far as said report affects Parcels 308, 304 and 302, and Mr. Jerome H. Buck, of counsel for the claimants to Parcels Nos. 273 and 271A, in opposition to confirmation as far as said report affects said parcels; and no one else appearing in opposition to the confirmation of said report, and due deliberation having been had thereon, Now, on motion of Francis Key Pendleton, corporation counsel of the city of New York, the petitioner, it is Ordered, that said report of said commissioners, dated December 22, 1907, filed in the office of the clerk of the county of Ulster, on the 30th day of December, 1907, be and the same hereby is in all respects ratified, approved and confirmed, except as hereinafter specifically stated and set forth, and it is further Ordered, that the respective amounts of compensation ascertained and determined by said commissioners and fixed by their report as far as the same affects Parcels No. 308 (and other parcels designated), except as hereinafter specifically stated and set forth, be paid by the comptroller of the city of New York, with interest thereon as pro- vided by law, to the persons respectively entitled thereto, and it is further Ordered, that in any and all cases where the name or names of the owner or owners, person or persons interested in any real estate in- cluded in said report, shall not be set forth or mentioned, or where the said owner or owners, person or persons owning such parcels of real estate are unknown, or are not fully known, and where there are adverse or conflicting claims to the amounts awarded, as set forth in said report, the said comptroller of the city of New York shall pay the sum so mentioned in said report payable to said owner or owners, person or persons, with such interest as aforesaid, into the Farmers ' CONDEMNATION OF KEAL PROPERTY. 531 Loan & Trust Company, New York city, to the credit of such parcels and subject to the further order of this court. A brief description of several parcels here reported on as taken or affected by these proceedings, the respective amounts of compensa- tion payable to the persons entitled to be paid such amounts of com- pensation, so far as the same are known, being as follows: (Insert description and awards.) Enter: James A. Betts, John D. Fratsheb, Justice Supreme Court. Clerk. C. Proceeding by municipal corporation to acquire lands for park. 1. Petition. SUPEEMB COURT— Albany County. In the Mattek of the Acquisition of Lands foe the Purpose of a Pub- lic Paek in the Thirteenth Ward. To the Supreme Court of the State of New York ■ The petition of the city of Albany by Philip Bender, superintend- ent of parks, respectfully shows to this honorable court: First. That it is a city of the second class and that Philip Bender is superintendent of parks in said city. Second. That the following is a specific description of the prop- erty situated in the thirteenth ward of the city of Albany, which is sought under these proceedings to be condemned, to wit : All those lands not owned by the city of Albany lying and being within the area bounded as follows: North by the south line of Spruce street; east by the west line of Swan street ; south by the north line of Elk street, and west by the east line of Dove street. Third. That heretofore and on the 20th day of April, 1908, the common council of the city duly passed an ordinance which was after- ward and on the 5th day of October duly amended, authorizing and directing that the above-entitled property be acquired by the city for the purpose of a public park. Fourth. That the following are the names of the owners of the property sought under these proceedings to be condemned, to wit: (Insert names.) Fifth. That the city of Albany, through its superintendent of parks, by law duly authorized, has been unable to agree with the owners in regard to the value of said property, as the city claims that said property should be sold for its market value and the owners thereof demand a price far in excess of the same. Sixth. That the value of the property based upon its assessed valu- ation is as follows: Property of (Give names of owners and valua- tions). Seventh. That it is the intention of your petitioner in good faith to proceed with diligence in the acquisition of said land to convert 532 CONDEMNATION OF REAL PROPERTY. the same into a public park wherein the numerous residents of the section sought to be benefited shall have an open space conducive to good health and public morals, and that all the necessary preliminary- steps required by law have been taken to entitle your petitioner to institute this proceeding. Wherefore, your petitioner respectfully demands that it may be adjudged that the public health and public morals require the con- demnation of the real property hereinbefore described and that your petitioner is entitled to take and hold such property henceforth for the public use hereinbefore set forth upon making due compensation therefor to the owners. Your petitioner prays further that commissioners of appraisal be appointed to ascertain the compensation to be made to the owners for the property so taken and as in duty bound your petitioner will ever pray, etc. Dated, Albany, N. Y., July 9, 1909. (Add verification.) Philip Bender, Superintendent of Parks. 2. Notice. (Title.) Notice is hereby given that under and pursuant to the provisions of an ordinance duly passed at a regular meeting of the common council of the city of Albany on the 20th day of April, 1908, and afterward amended on October 5, 1908, which said ordinance was thereafter duly approved by the mayor and by the board of estimate and apportionment, an application will be made at an adjourned Special Term of the Supreme Court to be held at chambers in the City Hall in the city of Albany on the 28th day of July, 1909, at ten o'clock a. m., on that day or as soon thereafter as counsel can be heard for the appointment of commissioners to inquire into and determine what damages and compensation the owner or owners of lands to be taken, as hereinafter described, or persons interested therein, will be entitled to for the same. The following is a description of the lands sought to be acquired in this proceeding : All those lands not owned by the city of Albany lying and being within an area bounded as fol- lows : North by the south line of Spruce street ; east by the west line of Swan street ; south by the north line of Elk street, and west by the east line of Dove street. Dated, July 12, 1909. Arthur L. Andrews, (Add proof of publication.) Corporation Counsel. 3. Order appointing commissioners. (Caption and title.) Upon reading and filing the petition of the city of Albany by Philip Bender, superintendent of parks, praying for the condemna- tion of certain lands in the city of Albany for a public purpose, and for the appointment of commissioners of appraisal to ascertain the compensation to be made to the owners for the property so taken, and it further appearing that publication of a notice of this application CONDEMNATION OF REAL PROPERTY. 533 has been duly made according to law, in the two official newspapers published in the said city of Albany, to wit, the Albany Evening Journal and the Press-Knickerbocker-Express, and due proof of such publication having been made and filed. Now, on motion of Arthur L. Andrews, corporation counsel of the city of Albany, and attorney for the petitioner herein, and after hear- ing (recite appearances), it is Ordered, that Henry E. Stern, John Wallace and Jacob C. E. Scott, all of the city of Albany, be, and they hereby are, appointed commis- sioners to inquire into and to determine and award such damages and compensation to the owners of or persons interested in such lands to be taken as they severally will be entitled to for the same, and are clothed with such powers as, by law, are conferred upon them. Enter: George H. Fitts, Justice Supreme Court. 4. Oath of commissioners. (Title.) COUNTY OF ALBANY,^ City op Albany, \ ^^' ' We, the undersigned, designated and appointed, by the Hon. George H. Fitts, a justice of the Supreme Court, commissioners to inquire into and to determine and award such damages and compensation to the owners of or persons interested in such lands to be taken as they severally shall be entitled to for the same in the above-entitled pro- ceeding, do solemnly swear that we will faithfully perform the duties of such commissioners, and of said ofSce, to the best of our under- standing and ability, and each of us, for himself, so swear. (Jurat.) (Signature of Commissioners.) 5. Keport of commissioners. To the Supreme Court of the State of New York: The undersigned commissioners appointed by an order of this court made at an adjourned Special Term thereof, held at Supreme Court chambers in the city of Albany on the 28th day of July, 1909, to in- quire into and to determine and award such damages and compensa- tion to the owners of or persons interested in the lands to be taken as they severally were entitled to for the same, do hereby respectfully report. That we met at the Special Term room in the City Hall in the city of Albany, on the 25th day of August, 1909, at ten o'clock a. m., that being the time duly designated for our first meeting, having first severally taken and subscribed the oath required by law. The commission organized by the selection of Henry E. Stern as chairman and proceeded to view the premises described in the peti- tion herein and to hear the proofs and allegations of the several parties. That the property intended to be taken in this proceeding is as follows : All those lands not owned by the city of Albany lying and 534 CONDEMNATION OF EEAL PROPBBTY, being within an area bounded as follows: North by the south line of Spruce street ; east by the west line of Swan street ; south by the north line of Elk street, and west by the east line of Dove street. A map of said premises is filed herewith. That after viewing the premises, hearing the pr,Q^ofs and allegations of the parties, and Mr. Neile P. Towner of counsel for Orr & Keating Corporation, Mr. Henry S. McCall of counsel for Catherine S. Lans- ing, Mr. Peter A. Delaney of counsel for Bradbury Dyer, Mr. Frank R. Keeshan of counsel for Anna M. Keeshan, Dennis J. Keeshan and Prank R. Keeshan, Mr. H. J. Crawford of counsel for Virginia C. Hendrick, and Mr. Arthur L. Andrews, corporation counsel, in behalf of the city, and having reduced the testimony taken to writing, which is herewith submitted, and after due deliberation and consultation thereon, we have ascertained and determined and do hereby find that the compensation be awarded to the owner or owners or persons in- terested in the lands herein sought to be taken and to which they are severally entitled is as follows: To Dennis J. Keeshan, owner of lots Nos. 107, 113, 129, 131 Elk street; Nos. 140, 146, 166 Spruce street; No. 12 Dove street $27,000 To Anna M. Keeshan, owner of lots Nos. 103, 109, 111 Elk street ; 138 and 144 Spruce street 10,500 To Catherine S. Lansing, owner of lots Nos. 85 and 97 Elk street and 118 and 130 Spruce street 2,600 To Bradbury Dyer, owner of lots No. 89 Elk street, No. 122 Spruce street and building on lot No. 97 Elk street 4,400 To Orr & Keating Corporation, a copartnership composed of Thomas B. Keating and Robert Orr, as owners of lots Nos. 42, 44 and 46 Swan street 750 To Jane Cromme, owner of lot No. 110 Spruce street 125 To Virginia. C. Hendrick for her interest in all the property sought to be taken in this proceeding 200 To Prank R. Keeshan, owner of lots Nos. 106, 108 Spruce street 500 And we do further report that the remaining property mentioned and described in the petition in this proceeding has been acquired by the city of Albany. We do further report that no other person has appeared before us and offered any evidence as to any other interest in or claim upon the property described in the petition herein and sought to be taken in this proceeding. All the property above described has reference to the lot numbers on map of land to be acquired for proposed park made by Walter E. Melius, city engineer, and filed herewith. The above awards include the lands, buildings, structures, appurt- enances and rights. The minutes of testimony taken by us in this proceeding are duly certified and submitted herewith. CONDEMNATION OF REAL PEOPEKTY. 535 The notice to owners and others interested in the property described in the petition with proof of due publication thereof is hereto annexed. All of which is respectfully submitted. Dated, October, 1909. (Signature of Commissioners.) 6. Notice of hearing. (Title.) The undersigned, appointed in the above proceedings to inquire into and determine and award such damages and compensation to the owners or persons interested in such lands so to be taken, as they severally will be entitled to for the same, will hold their first meet- ing at the Special Term room in the City Hall in the city of Albany, on the 25th day of August, 1909, at ten o'clock in the forenoon of that day, for the purpose of inquiring into, determining and award- ing such damages and compensation to the owners and all other per- sons interested in the property to be taken for the purpose of a public thoroughfare as they severally will be entitled to for the same, which said property has been heretofore described in the published notice for the appointment of the undersigned commissioners. All persons interested in any manner in the land to be taken for the purpose aforesaid are invited to be present. Dated, Albany, N. Y., July 28, 1909. (Signature of Commissioners.) Akthub L. Andrews, Corporation Counsel. (Add proof of publication.) 7. Notice of presentation of report. (Title.) The report of the commissioners who were duly appointed herein, pursuant to an order of the Supreme Court made at an adjourned Special Term thereof, held at the City Hall in the city of Albany on the 28th day of July, 1909, and thereafter duly entered in the Al- bany county clerk's office, having been made, notice is hereby given that said report wiU be presented to the Supreme Court at an ad- journed Special Term thereof, to be held at chambers in the City' Hall in the city of Albany on the 4th day of November, 1909, at 9 :30 o'clock in the forenoon of that day or as soon thereafter as counsel can be heard, in order that the court may take such action thereon and make such order pursuant to the provisions of section 7 of title 17 of chapter 298 of the Laws of 1883 as may seem to be proper in the premises. Dated, October 23, 1909. Arthur L. Andrews, (Add proof of publication.) Corporation Counsel. 8. Order confirming report. (Caption and title.) It appearing to this court. that heretofore and on the 28th day of July, 1909, an order was duly made upon the petition of Philip Ben- der, superintendent of parks of the city of Albany, and on that day 536 CONDEMNATION OF EEAL PROPBKTY. entered in the clerk's office of Albany county appointing Henry E. Stern, John Wallace and Jacob C, E. Scott, commissioners to inquire into and determine and award such damages and compensation to the owners and persons in the lands in said petition designated to be taken for the purposes of a public park as would seem to them to be just and equitable ; that notice of application for said order was duly pub- lished in the official newspapers of the city of Albany according to the statute in such case made and provided; that said commissioners thereafter took and filed the constitutional oath of office and caused a notice to be published in two daily newspapers published in the city of Albany and designated as the official newspapers, of their first meeting according to the statute in such ease made and provided; that thereafter and from time to time the said commissioners duly heard the proofs and allegations of the parties in respect to the value of the lands sought to be taken. That said land is bounded and described as follows: All those lands not owned by the city of Albany, lying and being within an area bounded as follows : North by the south line of Spruce street ; east by the west line of Swan street ; south by the north line of Elk street, and west by the east line of Dove street. That said commissioners made their report in writing dated Oc- tober 21, 1909, wherein they find and report that the owners and per- sons interested in the said lands and the amounts to be awarded to them respectively are as follows: (Insert names and amounts.) A notice of motion for the confirmation of said report having been duly published according to law. Now, on reading and filing said report and the evidence taken by said commissioners and proof of the publication of the several notices, and on motion of Mr. Arthur L. Andrews, corporation counsel of the city of Albany, and Mr. Frank R. Keeshan for defendants Anna M. Keeshan and others, it is Ordered, that said report of Henry B. Stem, John Wallace and Jacob C. E. Scott, commissioners, dated October 21, 1909, be and the same hereby is in all things confirmed and it is Further ordered, that the amount of the award as made by said report, after deducting said sums, which may be due for taxes or water rates, be paid to the several persons therein respectfully desig- nated, where the titles to the premises for which the same is made are free and clear of all incumbrances whatsoever, and, if the title to any of the parcels of land so taken, and for which such award is made, is, at the time when the said award is payable, subject to any incumbrances, the amount of said award, or so much thereof as may be necessary, shall be paid to the party or parties holding the same according to their respective rights, or said award be deposited to their credit respectively, to be paid wholly or in part to such person or persons as shall by any future order of this court, or a judge there- of, upon notice to the corporatic«i counsel of the city of Albany, be de- clared to be entitled thereto ; and it is Further ordered, that no other person has any interest in said land, or any part thereof ; and it is CONDEMNATION OF REAL PROPERTY. 537 Herehy further ordered, that the comptroller of the eity of Albany issue to the several parties entitled to the award certificates in writ- ing, describing the property taken and the amount of such award and acknowledging indebtedness on the part of the city to the party there- in named, in the amount of such award, and also stating that there is now on deposit in one of the city depositories, or in the officei of the treasurer, subject to their order, the amount of such award. Enter: George H. Pitts, Justice Supreme Court. 9. Notice of application to tax expenses of proceedingf. (Title.) The report of the commissioners, who were duly appointed herein, having been confirmed by an order of the Supreme Court, made at an adjourned Special Term thereof, held at the City Hall in the city of Albany on the 4th day of November, 1909, and duly entered in the Albany county clerk's office, notice is hereby given that a statement of the costs, expenses and disbursements of the proceedings, including the compensation of said commissioners, will be presented to Hon. George H. Fitts, a justice of the Supreme Court, at his chambers in the City Hall in the city of Albany on the 20th day of November, 1909, at nine o'clock a. m., or as soon thereafter as counsel can be heard, and a motion will be made that said costs, expenses and dis- bursements be taxed, and for such other and further order as to the court may seem just and proper. Dated, Albany, N. Y., November 5, 1909. Arthur L. Andrews, (Add proof of publication.) Corporation Counsel. (Title.) Statement of costs, expenses and disbursements of the above-en- titled proceedings, including the compensation of the commissioners appointed therein: To the Press Company: Publishing notice of application for appointment of com- missioners $9.00 Publishing notice of first meeting 15.75 Publishing notice of motion to confirm report of commis- sioners 15.75 Publishing notice of taxation of costs 10.50 To the Journal Company: Publishing notice of application for appointment of com- missioners 9.00 Publishing notice of first meeting 15.75 Publishing notice of motion to confirm report of commis- sioners 15.75 Publishing notice of taxation of costs 10.50 Fees of Albany county clerk for making searches 150.00 Fees of Albany county treasurer for searches 25.00 538 eOKDEMNATIOlT OF REAL PROPERTY. ' Fees of witnesses as follows : James D. Wasson 1,500.00 Henry S. Fisher 50.00 Fee of Rogers, Euso & Kelly, stenographers 75 Fee of Charles S. Moore, stenographer 75.75 Compensation of commissioners as follows: Henry E. Stern 200.00 Jacob C. B. Scott 200.00 John Wallace 200.00 Total. .-. $2,503.50 (Verified by Corporation Counsel.) 10. Affidavit by commissioner. John "Wallace, being duly sworn, deposes and says that he resides in the city and county of Albany, State of New York; that he was duly appointed by an order of this court at an adjourned Special Term thereof, held at chambers in the City Hall in the city of Albany, on the 28th day of July, 1909, one of three commissioners to inquire into and to determine and award such damages and compensations to the owners or to persons interested in certain lands in the city of Albany, N. Y., to be condemned and taken for a public purpose, as they might severally be entitled to for the same. That deponent duly acted as such commissioners in such proceedings and has performed his duties as such commissioner in taking and hearing testimony and in actual attendance at prearranged meetings, where adjournments subsequently were taken, in considering the testimony taken after the close thereof; in consultation with the other commissioners in said proceeding and in arranging, considering and discussing the final report of said commissioners and in considering and awarding proper damages and compensations to the owners of or persons in- terested in the lands acquired through such proceedings, this depon- ent was actually engaged during a part or the whole of twenty-two I (22) days and as such commissioner this deponent is duly entitled to such compensation as is fixed by statute and may be allowed by this court for the sum total of twenty-two (22) days. John Wallace. (Jurat.) (Add similar affidavit for each of the other commissioners.) 11. Order taxing costs and expenses. (Same title and caption.) On reading and fiiling proof of the due publication of notice of taxation of costs, expenses and disbursements in these proceedings, including the compensation of the commissioners and a statement thereof, duly verified, and after hearing Mr. Arthur L. Andrews, cor- poration counsel, for the petitioner and Mr. Frank R. Keeshan of counsel for Anna M. Keeshan and others, it is CONDEMNATION OF EEAL PKOPEETY. 539 Ordered, that the cost, expenses and disbursements of the proceed- ings be, and hereby are taxed and adjusted at twenty-five hundred and three dollars and fifty cents ($2,503.50), and it is hereby Further ordered, that there be allowed to the defendant Anna M. Keeshan and others for their costs, disbursements and allowances in these proceedings, the sum of five hundred dollars ($500), the same to be paid to their attorneys. Enter : George H. Fitts, Justice Supreme Court. D. Proceedings by railroad to acquire land. 1. Notice of presentation of petition. SUPREME COURT— Erie County. The South Buffalo Railway Com- pany vs. HENRY D. KIRKOVER and EMMA J. KIRKOVER, His Wife, and HENRY KOONS. To the Above-named Defendants: You will please take notice that a petition, of which a copy is here- unto annexed, will be presented to a Special Term of the Supreme Court to be held at the City and County Hall in the city of Buffalo, on the 19th day of November, 1900, at the opening of the court on that day, or as soon thereafter as counsel can be heard, and applica- tion then and there made for the relief demanded in such petition. Rogers, Locke & Milburn, Attorneys for Petitioner. 2. Petition. (Title.) To the Supreme Court: The petition of the South Buffalo Railway Company respectfully shows upon its information and belief: That the name of your petitioner is The South Buffalo Railway Company ; that it is a domestic corporation organized under the Rail- road Law of the State of New York ; that the principal place of busi- ness of your petitioner is the city of Buffalo, in the county of Erie and State of New York ; that the names and places of residence of its principal oflSces and of its directors are as follows: (Insert names and addresses.) That the object or purpose of the incorporation of your petitioner was to construct, maintain and operate a railroad from a point in the city of Buffalo southerly through the town of "West Seneca, and thence through said town to a point near Blasdell in said town. That your petitioner requires for use in the construction of its road 540 CONDEMNATION OF EEAl, PROPERTY. certain premises situate within the town of "West Seneca in the county of Erie, and desires to acquire the title thereto by condemnation. That the following is a specific description of the property to be condemned: (Insert description.) That the public use for which the property is required is for the construction, maintenance and operation of the railroad of your peti- tioner; that the same is embraced within its route as the same was laid down upon a map thereof, which was filed in the office of the clerk of the county of Erie, on the 17th day of August, 1900; and that your petitioner intends to construct its railroad upon the said property. That the names and places of residence of the owners of the prop- erty are as follows : That the defendant Henry D. Kirkover, who resides at Fredoraa, in the county of Chautauqua and State of New York, is seized in fee of the said premises; and that the defendant Emma J. Kirkover is the wife of the said Henry D. Kirkover, and resides with him and possesses an inchoate right of dower in the said premises. That the defendant Henry Koons, who resides at the city of Buf- falo, in the county of Erie and State of New York, is, or claims to be, the equitable owner of an undivided one-half of the said premises. That all of the said defendants are of full age. That the plaintiff has been unable to agree with the owners of said property for its purchase and that the reason of such inability is be- cause of the inability to agree upon the fair value thereof. That the value of the property to be condemned is eight thousand dollars ($8,000). That it is the intention of the plaintiff in good faith to complete the work or improvement for which the property is to be condemned, to wit, the construction and completion of its railroad thereon and throughout its entire line, and that all the preliminary steps required by law have been taken to entitle it to institute this proceeding. Wherefore, your petitioner demands that it may be adjudged that the public use requires the condemnation of the real property here- inbefore described, and that the plaintiff is entitled to take and hold such property for the public use specified upon making compensation therefor, and that commissioners of appraisal be appointed to ascer- tain the compensation to be made to the owners for the property so taken, and that it may have such other relief in the premises as shall be proper. The South Buffalo Railroad Company, (Add verification.) By John 6. Milbukn, A Director. 3. Order appointing commissioners. (Title and caption.) On reading and filing the petition of the above-named plaintiff, the South Buffalo Railway Company, duly verified by John G. Milburn, a director in said company, on the 8th day of November, 1900, from which it appears that the plaintiff is a domestic corporation, organ- ized under the Railroad Law of the State of New York; that the CONDEMNATION OF REAL PKOPEKTY. 541 principal place of business of the petitioner is the city of Buffalo, in the county of Erie and State of New York ; that the names and places of residence of its principal officers and of its directors are as fol- lows: (Insert names and addresses of its officers and directors.) That the object or purpose of the incorporation of the petitioner was to construct, maintain and operate a railroad from a point in the city of Buffalo southerly through the town of West Seneca, and thence through said town, to a point near Blasdell, in said town ; that the petitioner requires for use in the construction of its road certain premises situated within the town of "West Seneca, in the county of Erie, and desires to acquire the title thereto by condemnation; that the following is a specific description of the property to be con- demned: (Insert description.) That the public use for which the property is required is for the construction, maintenance and operation of the railroad of the peti- tioner; that the same is embraced within its route as the same was laid down upon a map thereof, which was filed in the office of the clerk of the county of Erie, on the 17th day of August, 1900 ; and that the petitioner intends to construct its railroad upon the said property; that the names and places of residence of the owners of the property are as follows : That the defendant Henry D. Kirkover, who resides at Fredonia, in the county of Chautauqua and State of New York, is seized in fee of the said premises ; that the defendant Emma J. Kirkover is the wife of the said Henry D. Kirkover and resides with him and possesses an inchoate right of dower in the said premises ; and that the defendant Henry Koons, who resides at the city of Buffalo, in the county of Brie and State of New York, is, or claims to be, the equitable owner of an undivided one-half of the said premises; that all of the said defendants are of full age; that the plaintiff has 'been unable to agree with the owners of the said property for its purchase, and that the reason of such inability is because of the inability to agree upon the fair value thereof ; that the value of the property to be condemned is eight thousand dollars ($8,000) ; that it is the intention of the plaintiff, in good faith, to complete the work or improvement for which the property is to be condemned, to wit, the construction and completion of its railroad thereon and throughout its entire line, and that all the preliminary steps required by law have been taken to en- title it to institute this proceeding. And it appearing that the said petition prays that it may be ad- judged that the public use requires the condemnation of the real property hereinbefore described, and that the plaintiff is entitled to take and hold such property for the public use specified, upon mak- ing compensation therefor ; and that commissioners of appraisal be appointed to ascertain the compensation to be made to the owners of the property so taken ; and such petition and notice having been duly served upon the defendants, Henry D. Kirkover and Emma J. Kirk- over ; and the defendant, Henry Koons, having appearerd herein ; and such petition having heretofore been presented to a Special Term of the Supreme Court, held in and for the county of Erie, at the City and County Hall in the city of Buffalo, on the 19th day of Novem- 542 CONDEMNATION OF BEAL PROPERTY. ber, 1900, at the opening of court on that day ; and the matter having been thereupon duly adjourned until this day by consent; and the matter having this day come on to be heard ; Now, upon reading and filing the said petition and the notice an- nexed thereto, and served therewith; and after hearing Mr. John G. Milburn, of counsel for the plaintiff, Mr. Wilson S. Bissell, of counsel for all the defendants consenting' thereto ; and no answer having been interposed to said petition ; and it appearing that the plaintiff is en- titled to the relief demanded; upon motion of Eogers, Locke & Mil- burn, attorneys for the plaintiff, it is Ordered and adjudged, that the prayer of the petition be granted, and that the public use requires the condemnation of the real prop- erty hereinabove described, and that plaintiff is entitled to take and hold said property for the public use hereinbefore specified, upon mak- ing compensation therefor; that Tracey C. Becker, George C. Laverack and Thomas T. Ramsdell, three competent and disinterested freehold- ers, who reside in the city of Buffalo, county of Erie and State of New York, be and they hereby are appointed commissioners to ascer- tain the compensation to be made to the owners for the said described real property to be taken for the public use hereinabove specified; and thai ihe first meeting of said commissioners be held at the office of Rogers, Locke & Milburn, No. 28 Erie street, in the city of Buffalo, county of Brie, on the 27th day of December, 1900, at ten o'clock in the forenoon of that day. Judgment signed this 26th day of December, 1900. Granted, De- cember 26, 1900. F. J. T., Clerk. i. Report of commissioners. (Title.) We, the undersigned, Tracey 0. Becker, George E. Laverack and Thomas T. Ramsdell, commissioners appointed by order of this court, dated the 26th day of December, 1900, to ascertain the compensation to be made to the owners thereof for the real property described in said petition, as amended nunc pro tunc as of the 8th day of Novem- ber, 1900, by an order of this court granted on the 24th day of De- conber, .1 900, do respectfully report as follows : That pursuant to said order appointing said commissioners, they met at the office of Rogers, Locke & Milburn, Esqs., No. 28 Erie street, in the city of Buffalo, county of Erie, and State of New York, on the 27th day of December, 1900, that being the time and place named in said last-mentioned order for the first meeting of said com- missioners to hear the parties and take the proofs herein ; and having first taken their oaths of office as such commissioners, which said oath is hereto annexed, the plaintiffs appeared by Rogers, Locke & Milburn, Esqs., i1s attorneys, and the defendants by Bissell, Carey & Cooke, Esqs., their attorneys, and by consent of counsel for both parties, the proceedings were adjourned from time to time until September 4, 1901, when, being attended by counsel for both parties, they pro- ceeded to view and on that day and subsequent days did view and carefully examine all the lands and premises described in said order CONDEMNATION OF EBAl, PROPERTY. 543 and in the petition herein, and the lands and premises of which said lands and premises so described are a part and from which the same were to be taken in and by this action and proceeding ; and that there- after by consent of counsel for both parties said proceedings were from time to time adjourned, until the 4th day of November, 1901, at the office of Rogers, Becker, Messer & Groat, No. 403 Main street, in the said city of Buffalo, on which day and subsequent days, to which said proceedings were duly adjourned, they heard all the proofs and "took all the evidence offered by the parties hereto, and caused the testimony taken by them to be reduced to writing, which testimony is filed with this report and made a part thereof; that, after the evi- dence was closed and counsel for the parties had discussed the same, they did deliberate thereon, and did carefully examine the said lands and premises, and did together to the best of their ability ascertain, determine and decide upon the amount of compensation to be paid to the parties defendant herein, the owners of the lands and premises aforesaid, and they do hereby respectfully report that the following named persons are those to whom such compensation should be paid, and that the sums to be paid to them are as follows : To Henry D. Kirkover and Emma J. Kirkover, his wife, and Henry Koons, as and for compensation for the lands and premises aforesaid, which are actually taken in this action or proceeding, the sum of ten thousand five hundred dollars ($10,500), and as compensation for the damages to the remainder of the parcel of land owned by said de- fendants, out of which the lands and premises described in said peti- tion and order are taken, excluding therefrom, however, by consent of counsel for defendants, such portion of said lands as lie to the north and east of the right of way and lands and tracks of the Buffalo, Rochester & Pittsburgh Railway Company, as shown upon the maps and exhibits offered and received in evidence, caused by the taking of the parcel of land described in this proceeding and the use thereof for railroad purposes in the manner and to the extent shown by the evidence and proceedings aforesaid, the sum of forty-one thousand five hundred dollars ($41,500), making a total appraisal and award to said defendant landowners of the sum of fifty-two thousand dollars ($52,000), as the compensation which ought justly to be made by the plaintiff to the owners of the property appraised by your commis- sioners herein. At the request of counsel for the defendant, we do further separ- ately report, that in fixing and determining such compensation and award, your commissioners have taken into consideration the question whether the lands and premises of said defendants, not taken in this proceeding aforesaid, have been in any way damaged and depreciated in value by the construction and use and operation of the railroad of the plaintiff adjoining the lands of said defendants and beyond the boundary lines of the parcel taken herein, and they find and have de- termined that said lands and premises of said defendants not taken have not been, and will not be, in any way thereby damaged or de- preciated ; and at the request of counsel for plaintiff, they have also taken into consideration the question as to whether any allowance or deduction should be made from said compensation or account of any 544 CONDEMNATION OF EEAL, PROPERTY. real or supposed benefits, which the defendant landowners have de- rived, or may derive, from the public use for which the property afore- said is taken, or the construction of any proposed improvement con- nected with such public use, and they find and have determined that no such allowance or deduction should be made on account thereof, because there are no such, and will be no such real or supposed bene- fits derived by the landowners from such public use of the property taken or the construction of any proposed improvement connected with such public use. The following is a specific description of the piece and parcel of land condemned and taken in this proceeding: (Insert description.) All of which is respectfully submitted. Dated, Buffalo, N. Y., April 16, 1902. (Signed) (Signature of Commissioners.) 5. Exceptions to report. (Title.) Sirs: — You will please take notice that the plaintiff in the above- entitled action hereby excepts to that portion of the report of the com- missioners heretofore made herein, bearing date the 16th day of April, 1902, as awards the defendants as compensation for the damages to the remainder of the parcel of land owned by said defendants out of which the lands and premises described in said petition and order are taken the sum of forty-one thousand and five hundred dollars ($41,500), making an award to the defendants of the sum of fifty- two thousand dollars ($52,000), as a compensation to be made by the plaintiff to the owners of the property appraised by the commission. Said plaintiff also excepts to that portion of said report of said commissioners wherein and whereby they find and decide that the lands and premises of said defendants not taken in this proceeding have not been in any way damaged or depreciated in value by the construction and use and operation of the railroad of the plaintiff adjoining the lands of said defendants and beyond the boundary lines of the parcel taken herein; and wherein they find and decide that said lands and premises of said defendants not taken have not been and will not be in any way thereby damaged or depreciated. Said plaintiff also excepts to that portion of the report of the com- missioners herein, wherein and whereby they find and decide that no allowance or deduction should be made on account of any real or sup- posed benefits which the defendant landowners have derived or may derive from the public use for which the property aforesaid is taken, or the construction of any proposed improvement connected with such public use ; and wherein and whereby they find and decide that there will be no such real or supposed benefits derived by the landowners from such public use of the property taken or the construction of any proposed improvement connected with such public use. EOGERS, IjOCKE & MiLBURN, Attorneys for Plaintiff, Buffalo, N. Y. To BissELL, Caret & Cooke, Attorneys for Defendants; And to the Clerk of the County of Erie. CONDEMNATION OF REAL PROPERTY. 545 6. Notice of motion for confirmation of report. (Title.) Gentlemen : — ^You will please take notice that upon the report of the commissioners heretofore duly made in this proceeding, dated the 16th day of AprU, 1902, and filed in the office of the clerk of the county of Brie on the 20lJi day of May, 1902, and upon all the papers and proceedings herein, a motion will be made at a Special Term of this court appointed to be held in and for the county of Erie, at the City and County Hall in the city of Buffalo, on the 26th day of May, 1902, at the opening of the court on that day, or as soon thereafter as counsel can be heard, for a rule or order of this court directing that the aforesaid report of the commissioners in this proceeding be in all respects ratified and confirmed, with costs to the defendants and against the plaintiff, and for such other, further and different relief jn the premises as may be proper. Yours, etc., BissELL, Caret & Cooke, Attorneys for Defendants,, Buffalo, N. Y. To Rogers, Locke & Milburn, Attorneys for Plaintiff, Buffalo, N. Y. 7. Order confirming commissioner's report. (Title and caption.) The defendants above-named having heretofore moved upon all the papers and proceedings herein for the confirmation of the report of the commissioners in this proceeding duly made on the 16th day of April, 1902, and filed in the office of the clerk of the county of Brie on the 20th day of May, 1902, with costs to the defendants against the plaintiff; And the said motion having regularly come on to be heard at this term of court, Bissell, Carey & Cooke appearing as attorneys for the defendants, and Rogers, Locke & Milburn. appearing as attorneys for the plaintiff; And after hearing Mr. Wilson S. Bissell and Mr. James McC Mitchell, of counsel for the defendants, in support of the defendant 's application for the confirmation of the commissioners' report with costs, who present the aforesaid report together with the testimony taken on the hearing before the said commissioners; and after hear- ing Mr. John G. Milburn, of counsel for the plaintiff, in opposition thereto; and the defendants' costs having been duly adjusted at the sum of sixty-five dollars ($65), and the court having duly granted the defendants an additional allowance of one thousand five hundred dollars ($1,500), and the fees of the commissioners having been fixed as follows: George B. Laverack, two hundred and fifty dollars ($250), Thomas T. Ramsdell, two hundred and fifty dollars [($250), Tracey C. Becker, two hundred and sixty dollars ($260) ; Now, upon reading and filing the said report and testimony, and upon all the papers and proceedings herein, on motion of Bissell, Carey & Cooke, attorneys for the defendants, it is Ordered, that the report of the commissioners in this proceeding, 35 546 CONDEMNATION OF REAL PEOPEETY. dated the 16th day of April, 1902, and filed in the office of the clerk of Erie county on the 20th day of May, 1902, be and the same hereby is in all respects ratified and confirmed ; and it is Further ordered and directed that the plainitff. The South Buffalo Railway Company, pay to the defendants (naming them) the sum of fifty-two thousand dollars ($52,000) together with interest there- on at the rate of 6 per cent, per annum from the 16th day of April, 1902, the date of the determination of the commissioners of the ap- praisal or award herein, as compensation to the said defendants for their property condemned by the plaintiff in this proceeding, pursuant to the said determination of the commissioners, and that upon payment of such compensation the plaintiff shall be entitled to enter into the possession of the property condemned and take and hold it for the public use specified in the judgment heretofore entered in this pro- ceeding ; and it is Further ordered and directed that in addition to the compensation specified the plaintiff, The South Buffalo Railway Company, pay the following sums to the commissioners herein as expenses of the pro- ceeding: (Insert names and amounts paid) ; and it is Further ordered and directed that the defendants Henry D. Kirk- over, Emma J. Kirkover, his wife, and Henry Koons recover of and from the plaintiff. The South Buffalo Railway Company, the sum of fifteen hundred and sixty-five dollars ($1,565), their costs and dis- bursements in this proceeding, as the same have been adjusted, and that execution issue therefor. Granted, June 16, 1902. Pekry E. "Wtjkst, Special Deputy Clerk. E. Proceeding by a street railway to acquire easement. 1. Petition. NEW YORK SUPREME COURT— Schenectady County. Schenectady Railway Company, Plaintiff, vs. KATHARINE K. PECK, HARRIET MUMFORD PECK, HANNAH HUNTINGTON PECK, Dependants. 88 App. Div. 201. To the Supreme Court of the State of New York: The petition of the Schenectady Railway Company, the above- named plaintiff, respectfully shows to this court : First. That the said Schenectady Railway Company is a domestic railroad corporation duly organized and existing under and in pur- suance of the provisions of the Stock Corporation Law, and of chap- ter 565 of the Laws of 1890, of the State of New York, known as "The Railroad Law," as amended, and having its principal place of business in the city of Schenectady, N. Y., and now engaged in the CONDEMNATION OF REAL, PEOPERTY. 547 business of construction, maintaining and operating a street surface raih¥ay for the conveyance of persons and property in the city and county of Schenectady and in the county of Albany, in the State of New York, and in other business duly authorized by law. That the names and places of residence of its principal officers are as follows: (Insert names and addresses.) And the names and places of residence of its directors are as fol- lows: (Names and addresses.) That the object or purpose of its incorporation is the construction, maintenance and operation of a street surface railroad in the cities and counties aforesaid, including a single track, branch or extension of its existing road from its present track at the junction of State street and Washington avenue, in the city of Schenectady in the State of New York, northerly through and along the surface of the street in said city known as Washington avenue, to the Mohawk River bridge at the end of said avenue, and that it has duly extended its road by the filing of the proper certificates, and by taking and effecting all the other necessary proceedings and acquiring the necessary au- thority so as to extend its road over said Washington avenue, between the points aforesaid. Second. That on or about the 21st of May, 1901, the common council of the city of Schenectady, by a resolution duly adopted on that day and approved by the mayor of the city of Schenectady, on the 23d day of May, 1901, granted its consent and the consent of said city to the construction, maintenance and operation by the plaintiff of its electric street surface railway upon Washington avenue, afore- said, from State street to the Mohawk River bridge and opposite the premises hereinafter described. That in proceedings duly had for that purpose, upon due notice to all persons entitled thereto, on or about the 12th day of November, 1901, an order was duly made by the Appellate Division of the Su- preme Court of the State of New York of the Third Judicial Depart- ment confirming a report of commissioners duly appointed by said court to ascertain and report whether the said railway of the plain- tiff ought to be constructed upon said Washington avenue (such com- missioners in said report having determined that such railway ought to be constructed), and approving such use of said avenue. That said order of said Appellate Division was thereafter on the 1st day of April, 1902, duly affirmed by the Court of Appeals of the State of New York. Third. That by virtue of the power and authority so given as afore- said the plaintiff heretofore commenced the construction of its rail- road on Washington avenue aforesaid from State street to the Mohawk River bridge. Fourth. That soon after the plaintiff commenced the construction of its said road on Washington avenue, and the defendants Katharine K. Peck, Harriet Mumford Peck and Hannah Huntington Peck com- menced an action in this court against the plaintiff to restrain the construction and operation of its said road upon a certain part of said Washington avenue, which adjoins and abuts upon the house 548 CONDEMNATION OF REAL PROPERTY. and premises situate on the westerly side of said avenue, owned by said defendants, and described as follows: (Insert description.) Upon the ground that such description conveyed, and that plain- tiffs in said action owned, the fee to the roadbed to the center line of said Washington avenue opposite said premises, and that the con- struction and operation of said railroad upon that part of said road- bed lying between said center line and the premises above described would be an additional burden upon such fee. That such proceedings were had in such action that a judgment was finally rendered therein, adjudging and determining the fee of that part of the roadbed of said avenue above mentioned, and restraining this plaintiff from constructing and operating its railroad upon such part of said roadbed until it had obtained the right to do so by con- demnation or otherwise. Fifth. That because of said judgment the plaintiff, in the construc- tion of its railway upon said avenue opposite the premises above de- scribed, did not construct the same over that part of said street, the fee of which was adjudged in said action to belong to the plaintiffs therein. That it is necessary for the proper operation of said railway that the same should be constructed over that part of the street opposite said premises of said Katharine K. Peck, Harriet Mumford Peck and Hannah Huntington Peck, and that the plaintiff should acquire a right, interest or easement, sufficient for the construction, maintenance and operation of a single track electric street surface railway in said strip of land, which is a part of the roadway of said "Washington ave- nue, which is the public use for which said land is required. That the following is a specific description and the location by metes and bounds of said land, namely: (Insert description.) Sixth. That, as determined by the said judgment aforesaid as to this plaintiff, the defendants Katharine K. Peck, Harriet Mumford Peck and Hannah Huntington Peck, were, and they now are, the owners of and in possession of the said premises above described. That all of said persons reside in said city of Schenectady and all of them are of full age, and that none of them are incompetent per- sons. Seventh. That your petitioner, the Schenectady Eailway Company, has endeavored in good faith to purchase from said Katharine K. Peck, Harriet Mumford Peck and Hannah Huntington Peck, their interest in the right or easement in said parcel of land above described, required for the purposes aforesaid, and has offered to pay therefor its actual value and more, but has been unable to agree with them for said purchase for the reason that they absolutely refuse to sell to the plaintiff the said easement. Eighth. That as plaintiff is informed and believes, the value of the easement aforesaid, to be condemned, is the sum of six cents. Ninth. That it is the intention of the plaintiff, in good faith, to complete the work or improvement for which said property is to be condemned ; and that all the preliminary steps required by law have been taken by it to entitle it to institute these proceedings, and that CONDEMNATION" OF BBAL PKOPEKTY. 549 such right is required for the public use of a right of way for a street surface railroad corporation. Tenth. That your petitioner has duly done and performed each of the several acts and things, as to notice and otherwise, required by law and the statute, as a preliminary or condition to the right to have and maintain these proceedings. Whebefoeb, the plaintiff demands that it may be adjudged that the public use requires the condemnation of the aforesaid real property herein described, and that the plaintiff is entitled to take and hold such property for the public use specified upon making compensation therefor, and that commissioners of appraisal be appointed to ascer- tain the compeinsation to be made to the owners for the property so taken. Dated, May 23, 1903. Schenectady Railway Company, (Add verification.) By Hinsdill Parsons, President. 2. Notice of presentation of petition. (Title.) To the Defendants Aiove-named : You are hereby notified that the annexed petition will be presented at a Special Term of the Supreme Court to be held at the chambers of Spencer, J., in the city of Gloversville, on the third Saturday of June (the 20th), 1903, at the opening of the court on that day, or as soon thereafter as counsel can be heard, to the end that such action may be taken thereon as may be proper. Dated, June . . . . , 1903. Yours, etc., Hun & Parkee, Attorneys for Petitioner. 3. Answer to petition. (Title.) The defendants, for answer, to the petition, upon information and belief : 1. Deny any knowledge or information sufficient to form a belief as to the facts alleged in division ' ' III ' ' of the petition. Deny that the plaintiff commenced the construction of its road on Washington avenue until after the decision of the Court of Appeals hereinafter mentioned. 2. Allege that the complaint and the judgments of the Special Term and the Court of Appeals in the action mentioned in the petition are in the words and figures as annexed and deny every other allegation in the petition about that action, except that it was brought, prose- cuted and went to the Court of Appeals. 3. Deny that it is necessary for the proper operation of said rail- way that it should be constructed on the part of the street in question, but admit that it is necessary for the operation of an extension on Washington avenue, if such extension there be. 4. Deny that any of the defendants resides in the city of Schenec- tady and allege that they aU reside in the city of New York. 550 CONDEMNATION OF REAL PROPERTY. 5. Deny the facts alleged in division "VIII." Wherepobe, they ask that the petition be dismissed. Edward Winslow Paige, (Add verification.) Attorney for Defendants. 4. Decision at special term. [(Title.) The above-entitled matter coming on to be heard at a Special Term of the Supreme Court of the State of New York, held at the city of Gloversville, Fulton county, on the 20th day of June, in the year 1903, upon due notice that the petition v?oUld be presented at this term of the court, with admission of service thereof by Edward Wins- low Paige, Esq., attorney for the defendants Katharine K, Peck and others, on said petition of the Schenectady Railway Company, veri- fied the 23d day of May, 1903, and on the answer of the defendants Peck, it being conceded that the only question at issue was the ques- tion as to the power of the court to adjudge that condemnation be made of the premises described in said petition, and that in case such issue of law be determined in favor of the petitioner, the Schenectady Railway Company, that the damages to be paid for the condemnation of such property be, and it was stipulated that the same are, the sum of six cents, and that final judgment to that effect might be entered in all respects in the same manner as if suqh sum had been awarded by a commission appointed in this proceeding, and after hearing Mar- cus T. Hun, Esq., on behalf of the Schenectady Railway Company, the petitioner, and Edward Winslow Paige, Esq., on behalf of the de- fendants, and after due deliberation had, I do find as matters of fact : 1. That the said Schenectady Railway Company is a domestic rail- road corporation duly organized and existing under and in pursuance of the provisions of the Stock Corporation Laws, and of chapter 565 of the Laws of 1890 of the State of New York, known as ' ' The Rail- road Law," as amended, and having its principal place of business in the city of Schenectady, N. Y., and now engaged in the business of constructing, maintaining and operating a street surface railway for the conveyance of persons and property in the city and county of Schenectady and in the county of Albany, in the State of New York, and in other business duly authorized by law. That the names and places of residence of the principal ofiicers are as follows: (Insert names and addresses.) And the names and places of residence of its directors are as follows : (Insert names and addresses.) That the object or purpose of its incorporation is the construction, maintenance and operation of a street surface railroad in the cities and counties aforesaid, including a single track, branch or extension of its existing road from its present track at the junction of State street and Washington avenue in the city of Schenectady in the State of New York, northerly through and along the surface of the street in said city known as Washington avenue, to the Mohawk River bridge, at the end of said avenue, and that it has duly extended its road by the filing of the proper certificates, and by taking and effect- CONDEMNATION OF EEAl, PROPERTY. 551 ing all the other necessary proceedings and acquiring the necessary authority so as to extend its road over said "Washington avenue be- tween the points aforesaid. 2. That on or about the 21st day of May, 1901, the common council of the city of Schenectady, by a resolution duly adopted on that day and approved by the mayor of the city of Schenectady on the 22d day of May, 1901, granted its consent and the consent of said city to the construction, maintenance and operation by the plaintiff of its electric street surface railway upon "Washington avenue aforesaid, from State street to the Mohawk River bridge and opposite the premises herein- after described. That in proceedings duly had for that purpose, upon due notice to all persons entitled thereto, on or about the 12th day of November, 1901, an order was. duly made by the Appellate Division of the Su- preme Court of the State of New York of the Third Judicial Depart- ment, confirming a report of commissioners duly appointed by said court, to ascertain and report whether the said railway of the plain- tiff ought to be constructed upon said Washington avenue (such com- missioners in said report having determined that such railway ought to be constructed) and approving such use of said avenue. That said order of said Appellate Division was thereafter on the first day, of April, 1902, duly affirmed by the Court of Appeals of the State of New York. 3. That soon thereafter the Schenectady Railway Company threatened to commence the construction of its said road on "Washing- ton avenue, and thereupon the defendants Katharine K. Peck, Har- riet Mumford Peck and Hannah Huntington Peck commenced an action in this court against it to restrain the construction and opera- tion of its said road upon a certain part of said "Washington avenue, which adjoins and abuts upon the house and premises situate on the westerly side of said avenue owned by said defendants and described as follows: (Insert description.) That such proceedings were had in such action that a judgment was finally rendered therein, adjudging and determining that the said defendants were the owners of the fee of that part of the roadbed of said avenue above mentioned, and restraining the Schenectady Rail- way Company from constructing and operating its railroad upon such part of said roadbed, which judgment was subsequently modified on appeal to the Court of Appeals "by adding thereto a provision that if the defendant shall require a right to the use of the land in ques- tion for street railway purposes the judgment shall not be regarded as effective to restrain it from entering upon such premises for the purpose of building, maintaining and operating its railroad thereon, and as so modified the judgment must be affirmed, with one bill of costs to the plaintiffs." 4. That the Schenectady Railway Company, after the decision of the Court of Appeals in Peck v. Schenectady Railway Company, here- inbefore mentioned, commenced the construction of its roadbed on "Washington avenue aforesaid, from State street to the Mohawk River bridge. 552 CONDEMNATION OF EEAL PROPERTY. 5. That, because of such judgment, the Schenectady Railway Com- pany, in the construction of its railway upon said avenue opposite the premises above described, did not construct the same over that part of said street, the fee of which was adjudged in said action to belong to the plaintiffs in said action. That it is necessary for the proper operation of said railway that the same should be constructed over that part of the street opposite said premises of said Katharine K. Peek, Harriet Mumford Peck and Hannah Huntington Peck, and that the plaintiff should acquire a right, interest or easement sufficient for the construction, maintenance and operation of a single-track electric street surface railway in said strip of land, which is a part of the extension of said roadway on said Washington avenue which is the public use for which said land is required. That the following is a specific description and the location by metes and bounds of said land, namely: (Insert description.) 6. That, as determined by the said judgment aforesaid as to the Schenectady Railway Company, the defendants (naming them) were, and they now are, the owners of and in possession of the said prem- ises above described. That all of said persons reside in said city of New York and all of them are of full age and that none of them are incompetent persons. 7. That the Schenectady Railway Company has endeavored in good faith to purchase from said Katharine K. Peck, Harriet Mumford Peck and Hannah Huntington Peck, their interest in the. right or easement in said parcel of land above described, required for the pur- poses aforesaid, and has offered to pay therefor its actual value and more, but had been unable to agree with them for said purchase for the reason that they absolutely refuse to sell to the plaintiff the said easement. 8. That it is the intention of the Schenectady Railway Company, in good faith, to complete the work or improvement for which said prop- erty is to be condemned ; and that all the preliminary steps required by law have been taken by it to entitle it to institute these proceed- ings, and that such right is required for the public use of a right of way for a street surface railroad corporation. . 9. That the Schenectady Railway Company has duly done and per- formed each of the several acts and things as to notice and otherwise, required by law and the statute, as a preliminary or condition to the right to have and maintain these proceedings. I find, as conclusions of law : First. That the Schenectady Railway Company is entitled to the relief demanded in the petition, and that the condemnation of the real property described in the petition is necessary for the public use, and that the Schenectady Railway Company is authorized by law, and is entitled to take and hold said property for the public use specified in the petition upon making compensation therefor. Second. That the parties to this action having agreed and stipu- lated that in case it should be decided that the Schenectady Railway Company is entitled to take such property, the damages to be paid for the condemnation of such property be the sum of six cents ($.06) and CONDEMNATION OF REAL PEOPERTY. 553 that final judgment to that effect be entered in all respects in the same manner as if such sum had been awarded by a commission ap- pointed in this proceeding. It is further adjudged and decreed that said sum be, and it is hereby fixed and determined to be the compensation to which the defendants are entitled for the taking and holding of the real property mentioned in t!he petition herein, to wit: (Description of property to be taken) for the public use specified in said petition, to wit : the construction, maintenance and operation of a street surface railroad and a branch or extension of its existing road over and upon the said premises above described, and that upon the payment thereof the Schenectady railway Company shall be entitled to enter upon the said premises and to construct, maintain and operate its railroad over and upon the same. I direct that judgment be entered in occordance with the foregoing conclusions of law. Dated, July 14, 1903. Edgar A. Spencer, Justice Supreme Court. 5. Final order and jndgment. (Caption and title.) The above-entitled proceeding having been brought to a hearing upon due notice thereof at a Special Term of the Supreme Court, held at the city of Gloversville, Fulton county, N. Y., before Mr. Justice Spencer, on the 20th day of June, 1903, and Marcus T. Hun, Esq., having been heard on behalf of the Schenectady Railway Company in support of the prayer of the petition herein, and Edward Winslow Paige, Esq., on behalf of Katherine K. Peck, Harriet Mumford Peck and Hannah Huntington Peek in opposition thereto, and the said court having thereafter made and filed its decision in writing, bearing date the 14th day of July, 1903, granting the prayer of the petition, and directing judgment as follows: Now, on motion of Hun & Parker, attorneys for the Schenectady Railway Company, it is Ordered, adjudged and decreed, that the Schenectady Railway Company is entitled to the relief demanded in the petition, and that the condemnation of the real property described in the petition is necessary for the public use, and that the Schenectady Railway Com- pany is authorized by law, and is entitled to take and hold said property for the public use specified in the petition upon making compensation therefor. And it appearing that the parties to this action have agreed and stipulated that, in case it should be decided that the Schenectady Railway Company is entitled to take such property, the damages to be paid for the condemnation of such property be the sum of six cents ($.06), and that final judgment to that effect be entered in all respects in the same manner as if such sum had been awarded by a commission appointed in this proceeding. It is Further ordered, adjudged and decreed, that said sum of six cents ($.06) be, and it is hereby fixed and determined to be, the eompen- 554 CONDEMNATION OF REAL PROPERTY. sation to wh^eh the defendants are entitled for the taking and holding of the real property mentioned in the petition herein, to wit : (De- scription of property), for the public use specified in said petition, to wit: the construction, maintenance and operation of a street surface railroad and a branch or extension of its existing road over and upon the said premises above described, and that upon the payment therein the Schenectady Railway Company shall be entitled to enter into the possession of the said premises to construct, maintain and operate its railroad over and upon the same, and to take and hold the same for Buch public use. JAMES B. ALEXANDER, Clerk. CONTEMPT* ARTICLE I. Introductory. A. Definitions. B. Inherent power of courts to punish for contempt. C. Foreign courts and officers. D. Distinction between civil and criminal contempts. ARTICLE II. Criminal contempts and their punishment. A. Judiciary Law, § 750. Power of courts of record to punish for criminal contempts. B. Judiciary Law, § 751. Punishment for criminal contempts. C. Judiciary Law, § 752. Requisites of commitment for criminal contempt. D. Other miscellaneous statutes. E. Conduct in court. P. Contumacy of witness. G. Disobedience of mandate. H. Misconduct of juror. I. Interference with jury. J. Obstruction of service of process. K. Procedure. L. When punishment may be summary. M. Commitment. O. Punishment. P. Indictment. Q. Attack on commitment. ARTICLE IIL What constitutes civil contempt. A. Judiciary Law, § 753. Contempts punishable civilly. B. Miscellaneous statutory enactments. C. Constructive contempt. D. Enforcement of judgment by contempt proceeding, 1. Civil Practice Act, § 505. Enforcement of judgment without execu- tion. 2. Civil Rights Law, § 20. No imprisonment for non-payment of costs in certain cases. 3. Civil Rights Law, § 21. No imprisonment for non-payment of money pursuant to judgment or order requiring payment of money due upon contract. 4. General right to enforce judgment by contempt. 5. Payment of money into court. * For a further discussion of matters relating to contempts, see Chamberlayne's Modern Law of Evidence; B. 0. & G. Consolidated Laws. [555] 556 CONTEMPT. 6. Costs. 7. Certainty of judgment. 8. Discretion of court. 9. Service of copy of judgment. 10. Inability to comply witli judgment. 11. Attack on judgment. 12. Circumvention of judgment. E. Orders of court. 1. In general. 2. Injunction order. 3. Mandamus and certiorari. 4. Service of order. 5. Wlio are liable for violation of order, 6. Inability to comply with order. 7. Validity of order. P. Process of court. G. Receivers. H. Attorneys. I. Failure to complete judicial sale. J. Fictitious bail or surety. K. Matrimonial actions. L. Supplementary Proceedings. M. Surrogate's court. 1. Surrogate Court Act, § 20. Incidental powers of the surrogate. 2. Surrogate Court Act, § 84. Enforcement of decree by punishment for contempt. 3. Failure of representative to obey decree. 4. Indebtedness of representative to estate. 5. Costs. 6. Discretion of surrogate. 7. Demand. N. iConduct of witnesses. 1. In general. 2. Privilege of witness. 3. Improper questions. 0. Miscellaneous acts. P. Advise of counsel as defense. ARTICLE IV. Procedure and punishment for civil contempt. A. Nature of proceeding. B. Jurisdiction of courts or judges. 1. Judiciary Law, § 781. Punishment of misconduct at trial term. 2. General authority of courts or judges. C. Strict following of procedure. D. Summary punishment. E. Issue of warrant without notice. 1. Judiciary Law, § 756. Issue of warrant without notice. 2. Discussion of statute. CONTEMPT. 557 F. Order to show cause or warrant to attach offender. 1. Judiciary Law, § 757. Order to show cause, or warrant to attaxih offender. 2. Judiciary Law, § 760. When order to show cause may be made. 3. Judiciary Law, § 761. Order to show cause defined. 4. Judiciary Law, § 762. Warrant of attachment defined. 5. Two methods of procedure. 6. Moving papers. 7. Contempt of order or warrant. G. Judiciary Law, § 758. Notice to delinquent officer to show cause. H. Judiciary Law, § 759. Order to show cause or issue of warrant when con- tempt committed before referee. I. Service of order or warrant. 1. Judiciary Law, § 763. Copy of affidavit and warrant must be served on accused. 2. Manner of service. 3. Service of aflSdavit. J. Undertaking and proceedings to obtain discharge. 1. Judiciary Law, § 764. Amount of undertaking may be indorsed on warrant." 2. Judiciary Law, § 765. Execution of warrant when undertaking not given. 3. Judiciary Law, § 766. Undertaking to procure discharge. 4. Judiciary Law, § 767. When habeas corpus may issue. 5. Judiciary Law, § 768. Sheriff to file undertaking with return. 6. Judiciary Law, § 771. Punishment Upon return of habeas corpus. 7. Judiciary Law, § 777. Proceedings when accused does not appear. 8. Judiciary Law, § 778. Prosecution of undertaking by person ag- grieved. 9. Judiciary Law, § 779. Prosecution of undertaking by attorney-gen- eral or district attorney. 10. Judiciary Law, § 780. Sheriff liable for taking insufficient sureties. iE. Hearing upon return of warrant or order. 1. Judiciary Law, § 769. Interrogatories and proofs. 2. Judiciary Law, § 772. Proceedings upon return of order to show cause. 3. Issues. 4. Default. 5. Reference. 6,. Interrogatories. L. Final order. 1. Judiciary Law, § 770. Final order directing punishment. 2. When commitment unnecessary. 3. Contents of order. 4. Statement as to act injuring plaintiff. 5. Definiteness as to amount to be paid, M. Punishment. 1. Judiciary Law, § 773. Amount of fine. 2. Judiciary Law, § 774. Length of imprisonment. 3. Judiciary Law, § 775. When court may release offender. 4. Judiciary Law, § 776. Offender liable to indictment. 558 CONTEMPT. 5. Amount of fine. 6. Costs. 7. Violation of order. 8. Witnesses. 9. Court proceedings by persons in contempt. 10. Suspension of punishment. 11. Length of imprisonment. 12. Release of offender. O. Appeals. 1. What orders are appealable. 2. Discretionary matters. ARTICLE V. Precedents. A. Disobedience of injunction by labor union. 1. Order to show cause. 2. Order appointing referee. 3. Order adjudging defendants guilty of contempt. B. Failure to comply with judgment directing delivery of property to receiver. 1. Order to show cause. 2. Order adjudging defendants guilty of contempt. 0. Failure of executor to obey decree. 1. Order to show cause. 2. Affidavit 3. Demand for payment and proof of service. 4. Decree of surrogate adjudging defendant guilty of contempi^, D. Disobedience of an injunction. 1. Order to show cause. 2. Final order. B. Failure to pay alimony. 1. Order to show cause. 2. Affidavit read in support of motion. 3. Affidavit read in support of motion. 4. Order. F. Witness in surrogate's court refusing to disclose information. 1. Petition. 2. Affidavit. 3. Order punishing contempt. G. Failure of executor to comply with decree. 1. Order to show cause. 2. Affidavits. 3. Preliminary objections to order to show cause. 4-. Answer to order to show cause. 5. Order of surrogate committing executor. CONTEMPT. 559 ABTICIE I. INTRODUCTORY. A. Definitions. In its broad sense a contempt is a disregard of, or disobe- dience to, tbe commands of a public authority, legislative or judicial, or an interruption of its proceedings by disorderly behavior or insolent language, in its presence, or so near thereto as to disturb its proceedings or impair the respect due to its authority.^ Contempt is disorderly, contemptuous, or insolent language or behavior in the presence of a legislative or judicial body, tending to disturb its proceedings, or impair the respect due to its authority, or a disobedience to the rules or orders of such a body, which interferes with the due administration of law.^ The tendency of the courts has been in modern times to restrict the definitions of contempts and narrow their own powers in respect to them.^ B. Inherent power of courts to punish for contempt. The power to punish for contempts is inherent in every court from the very nature of its organization.* Its existence is essential to the preservation of order in judicial proceedings and to the enforcement of the judg- ments, orders, and writs of the courts, and consequently to the due administration of justice.^ The right of a court of record to punish contempts is a 1. Am. & Eng. Enc. of Law, vol. 7, ed.), vol. 3, p. 777, citing Anderson p. 27. V. Dunn, 6 Wheat. 204; Burdett v. Ab- Other definitions. — "Contempts are bott, 14 East, 1; Wharton's Crim. Law, either direct, which openly insult or re- § 3426. sist the powers of the court, or the per- 3. Bergh's Case, 16 Abb. N. S. 366; son of the judges who preside there, or People v. Jacobs, 66 N. Y. 8. else are consequential, which, without 4. Anderson v. Dunne, 6 Wheat. (TJ. such coarse insolence or direct opposi- S.) 204; Bessette v. Conkey Co., 194 tion, plainly tend to create a universal U. S. 334; DoUard v. Koronsky, 67 disregard of their authority." 4 Bl. Misc. 90, 121 N. Y. Supp. 987; Matter Com. 383. "A contempt of court is of Yates, 4 Johns. 338; Yates v. Lans- disobedience to the court, by acting in ing, 9 Johns. 394. opposition to the authority, justice, and 5. Bessette v. Conkey Co., 194 TJ. S. dignity thereof." 9 Cyc. 5. 334, quoting from Ex parte Robinson, a. Amer. & Eng. Enc. of Law (1st 19 Wall. (U. S.) 510. 560 CONTEMPT. common-law right, and a necessary incident to tlie powers of the court. This is specially true of contempts committed in the presence of the court; and corporations, as well as indi- viduals, are within the scope of its powers.* Statutes conferring on courts of justice the right to pun- ish for contempt are regarded as merely declaratory of the necessarily inherent powers possessed by them at common law.'' The power possessed by the court to punish for disobedi- ence of its mandates is one of the safeguards for the due ad- ministration of justice, and is a necessary attribute of the court. The statute does not give a new power in this re- spect; it merely defines and limits an ancient rule of the common law.* To fine for contempt, imprison for contu- macy, enforcing the observances of order, etc., are powers which cannot be dispensed with in the court, because they are necessary to the exercise of all others.' The officers of the court are peculiarly subject to its discretionary powers, and may be punished in this summary manner, for oppres- sion, extortion, negligence, or abuse in their official capac- ity .^° The power to punish for contempt is, however, an ex- ception to the provisions of the Constitution in favor of per- sonal liberty, and cannot be extended in the least degree beyond the limits imposed by statute.^^ C. Foreign courts and officers. Our courts will not punish, as for contempt, disobedience of the order made by the courts of sister states.^^ 6. People V. Phelps, 4 T. & C. 467; Hanson, 67 How. Pr. 305. See also, gpaulding v. People, 7 Hill, 301; Am. & Eng. Enc. of Law, vol. 7, pp. Wicker v. Dresser, 13 How. Pr. 331; 30-32. Yates T. Lansing, 9 Johns. 395 ; People 8. People ex rel. Negus v. Dwyer, 1 V. Albany, etc., R. E. Co., 13 Abb. 171. Civ. Pro. 484; afE'd, 27 Hun, 548, 90 The inferior colirts have power at N. T. 402. eoTnmon law to protect their proceed- 9. United States v. Hudson. 7 ings from disorder, to order the arrest Cranch (U. S.), 33. and removal of disorderly persons, etc., 10. 1 Bac. Abr., tit. Attachment; 2 and such order exonerates the person Hawk, tit. Attachment; 3 Atk. 563. executing it from liability for false im- 11. Kutherford v. Holmes, 5 Hun, prisoument. Matter of Watson, 3 317; aff'd, 66 N. Y. 368; People v. Lans. 408. Riley, 35 Hun, 588. 7. Clarke v. Bininger, 43 Super. Ot. 12. Mills v. Mills, 95 Misc. 231, 158 126; aff'd, 75 N. T. 344; People v. N. T. Supp. 753. Dwyer, 63 How. Pr. 115; Stevenson v. CONTEMPT. 561 A trustee in bankruptcy in another State cannot be pun- ished for contempt for disobedience of an order of a court of this State to produce the books and papers of the bank- rupt.^* D. Distinction between civil and criminal contempts. Generally, it may be said that a criminal contempt em- braces all acts committed against the majesty of the law, and the primary purpose of their punishment is the vindication of public authority." In a criminal contempt punishment is imposed for the out- rage on the majesty of the law and the authority of the court, in which case the fine goes to the people, while in a civil con- tempt for the violation of the right of a party, a fine is im- posed as indemnity for the violation of that right.^^ The 13. Jaffe V. Weld, 167 N. Y. Supp. 1039. 14. Am. & Eng. Kne. of Law (3d ed.), vol. 7, p. 28. 15. People ex rel. Munsell v. Court, 101 N. Y. 245 ; Koenig v. Eagle Waist Co., 176 App. Div. 724, 163 N. Y. Supp. 1031; Matter of Watson, 3 Lans. 408; People V. Cowles, 4 Keyes, 46; Hawley V. Bennett, 4 Paige, 163; People ex rel. V. Gilmore, 88 N. Y. 626 ; People v. Spaulding, 10 Paige, 284; People v. Hackley, 24 N. Y. 74; People v. Restell, 3 Hill, 289; People ex rel. Munsell v. Oyer and Terminer of N. Y., 101 N. Y. 245. Distinction.— "Proceedings to punish for contempt are of two kinds, each hav- ing a distinct object in view, the one to protect the rights of private parties, the other to protect the dignity of the court and to punish persons guilty of willful disobedience of the mandates. In the former case the purpose being to preserve private rights, it is imma- terial whether the contempt was de- signedly or negligently committed, the power and duty of the court to re- dress the wrongs of the injured party are the same. If, for instance, a per- son transfer property or do any 36 other act in disobedience of an injunc- tion or other order, it can make no dif- ference to the injured suitor whether it was done innocently or with evil in- tent. His loss is the same in either event, and proceedings to punish the offender with a view to adjusting the rights of the parties would look to in- denmity only. Of course, if the diso- bedience was willful, the court could, at the same time that it enforced in- demnity, inflict punishment for a crim- inal contempt; on the other hand, if the only purpose of the proceedings is to punish the prisoner and maintain the dignity of the court, the disobedience must be designed and willful, and hence the law terms this a criminal contempt. If, for example, one after examination wrongfully interpret and through this mistake disobey an order, the majesty of the law is not offended and the dignity of the court is not im- paired, and he is innocent of willful offense, the infliction of punishmment could have no justification. The willful disobedience referred to in the statute relating to criminal contempt means conduct intentionally and designedly at variance with the mandate of the court. The disobedience need not be malicious, 562 COKTEMPT. process in the case of a civil contempt is strictly and purely remedial; in tlie case of a criminal contempt it is punitive, and in most instances purely so. A criminal contempt is one which tends to bring the administration of justice into disre- pute, and where the guilty party is punished with a view to maintaining the dignity of the court. A civil contempt is, and C9,n be used only, for the protection of individual rights, and for preventing a disobedience of the process of the court to the injury of a party to the proceeding.^* As respects dis- obedience to the orders of the court, the sole difference seems to be that a wilful disobedience is a criminal contempt, while a mere disobedience, by which the right of a party to an action is defeated or hindered, is considered otherwise." The dividing line between the acts constituting ' criminal and those constituting civil contempts becomes indistinct in those cases where the two gradually merge into each other. In those cases they have been classified and punished by the courts in some jurisdictions as criminal contempts, and by those in others as civil contempts. This, however, is largely a matter of definition. In most cases where they rest thus on the boundary line they are both, and so far as the rights of the contemnor are concerned may be punished as either. Their punishment as a civil contempt, in most instances, serves the double purpose of a private compensation to the opposite party and a public vindication of the power and dignity of the court.^^ In civil contempts it is essential to sustain a conviction that there shall exist not only jurisdiction in the court or officer granting the order which has been disobeyed, but also a valid cause of action in the aggrieved party, and this re- sults from the fact that the civil contempt is not an offense against the dignity of the court, but against the party in whose behalf the mandate of the court has been issued, and a fine is imposed solely as indemnity to the injured party. It is otherwise in case of criminal contempt that is of a pub- lic character and indictable; it is directed against the dignity and authority of the court alone. So in proceedings to prose- cute such an act the court wiU look only to the question of but it must be in pursuance of an in- 17. People ex rel. Negus v. Dwyer, 90 tent to disregard the mandate of the N. T. 406. violated order." People v. Aiken, 19 18. Am. & Eng. Enc. of Law (2d Hun, 337. ed.), vol. 7, p. 29. 16. People V. Cowles, 4 Keyes, 38. CONTEMPT. 563 power, and if there was jurisdiction to grant tlie order, it will impose punishment upon those who wilfully disobey it, for the purpose of vindicating its own power and maintaining its own dignity. Criminal contempts consist in a violation of the rights of the public as represented in their judicial tribunals. An element of willfulness exist in them, and they are punished in the interest of public justice, and not of indi- vidual litigants. Civil contempts need not be willful, and they are punished by a fine to the individual litigant as an indemnity for his loss. Conviction of a civil contempt in- volves a judicial determination that the party's rights or remedies have been defeated or impaired by the contempt." ARTICLE II. CRIMINAL CONTEMPTS AND THEIR PUNISHMENT. A. Judiciary Law, § 750. Power of courts of record to punish for criminal contempts. A court of record has power to punish for criminal contempt, a person piilty of either of the following acts, and no others: 1. Disorderly, " contemptuous, or insolent behavior, committed during its sit- ting, in its immediate view and presence, and directly tending to interrupt its proceedings, or to impair the respect due to its authority. 2. Breach of the peace, noise or other disturbance, directly tending to inter- rupt its proceedings. 3. Willful disobedience to its lawful mandate. 4. Resistance wilfully offered to its lawful mandate. 5. Contumacious and unlawful refusal to be sworn as a witness; or after be- ing sworn, to answer any legal and proper interrogatory". 6. Publication of a false, or grossly inaccurate report of its proceedings. But a court cannot punish as a contempt, the publication of a true, full and fair report of a trial, argument, decision, or other proceeding therein. (See B., C. & G. Consolidated Laws, 2d Ed., p. 4373.) B. Judiciary Law, § 751. Punishment for criminal contempts. Punishment for a contempt, specified in section seven hundred and fifty, may be by fine, not exceeding two hundred and fifty dollars, or by imprisonment, not exceeding thirty days, in the jail of the county where the court is sitting, or both, in the discretion of the court. Where a person is committed to jail, for the non-payment of such a fine, he must be discharged at the expiration of thirty days; but where he is also committed for a definite time, the thirty days must be computed from the expiration of the definite time. 19. People ex rel. Gaynor v. McKane, also, Stubbs v. Ripley, 39 Hun, 626; ap- 78 Hun, 154, 28 N. Y. Supp. 981. See peal dismissed, 102 N. Y. 734. 564 CONTEMPT. Such a contempt, coMmitted in the immediate view and presence of the court, may be punished summarily; when not so committed, the party charged must be notified of the accusation, and have a reasonable time to make a defense. See B., C. & G. Consolidated Laws, 2d Ed., p. 4377. C. Judiciary Law, § 752. Requisites of commitment for criminal con- tempt. Where a person is committed for contempt, as prescribed in section seven hun- dred and fifty-one, the particular circumstance of his offense must be set forth in the mandate of commitment. See B., C. & G. Consolidated Laws, 2d Ed., p. 4379. D. Other miscellaneous statutes. In addition tlie provisions of the Judiciary Law, as con- tained in section 750, various statutes provide for contempts. If a grand juror who has been challenged takes part in the consideration of a charge in certain cases, he may be guilty of contempt of court.^ If an application for an order to stay the trial of an indict- ment has been made before one judge and denied, a similar application to another judge may be the basis of a contempt charge.^^ Disobedience of a subpoena or a refusal to be sworn or to testify in a criminal case may be punished as for a criminal contempt.^^ E. Conduct in court. Any disorderly, contemptuous, or insolent behavior com- mitted in the presence of any one of the constituent members of the court, while engaged in the business devolved upon it by law, is a contempt committed upon it in the immediate view of the court within the State. The act of the news- paper reporter in secreting himself in a room, into which a jury were about to retire, remaining there, and, overhearing their deliberations, taking short notes thereof, and subse- quently printing his recollection of the debate between the members of the jury, amounts to a criminal contempt com- mitted in the immediate view and presence of the court, and the fact that the person committing the contempt was, when discovered, brought before the judge, who had no personal 20. Code of Criminal Procedure, §§ 349, 350. §§ 242, 243. 23. Code of Criminal Proceduve, 21. Code of Criminal Procedure, §§ 619, 635, 952. CONTEMPT. 565 knowledge of the offense and consequently allowed him to depart, does not constitute a judicial determination upon the offense, and subsequent proceedings, by order to show cause, are not objectionable as placing the respondent twice in jeopardy.^^ An attorney defending a prisoner on a criminal trial, who ■ persists in attempting to induce the trial judge to reverse a ruling theretofore made by him, after the trial judge has posi- tively declined to do so, and who, finding such persistent ef- forts ineffective, abruptly withdraws from the case in the midst of the trial, is guilty of a criminal contempt.^* A defendant in an action who, on the trial thereof, in the immediate view and presence of the court, abstracts and secretes a paper containing a contract which is the subject of investigation on the trial, which the plaintiff's attorney has laid down in front of such defendant, is guilty of criminal contempt.^^ But it seems that a mere personal grievance of the judge, however well founded, is not sufficient ground for criminal contempt proceedings. The offense is against the dignity and authority of the court and not the judge personally .^^ F. Contumacy of witness. The refusal of a witness to answer a proper question before a grand jury is punishable as for a contempt under the statute.^'' : Where the witness attends before the court in pursuance of a mandate, and is duly sworn, the court has power to require him to answer proper questions or be adjudged guilty of contempt, whether the examination is conducted by the judge personally, or by counsel in his presence.^* Where a party has produced a book of account and proved the same, and has pointed out and explained the charges in 23. Matter of Choate, 24 Abb. N. C. Div. 351, 82 N. Y. Supp. 887, modif d, 430, 18 Civ. Pro. 180, 8 N. Y. Crim. 1, 185 N. Y. 540. 9 N. Y. Supp. 321, 56 Hun, 351, 30 26. Town of Wilmurt v. Wright, 183 St. Eep. 728, 18 Civ. Pro. 230, 8 N. Y. App. Div. 305, 171 N. Y. Supp. 230. Crim. 31; aff'd without opinion, 121 N. 27. The People v. Hackley 24 N. Y. Y. 678. 74; People ex rel. Phelps v. Fancher, 2 24. People ex rel. Chandler v. New- Hun, 226. burger, 98 App. Div. 92, 90 N. Y. Supp. 28. Clark v. Brooks, 26 How. Pr. 740. 254. 25. Matter of Teitelbaum, 84 App. 566 CONTEMPT. it, called for in evidence, he may be compelled to go further, and required to read out of the book the specific items and charges to which he had referred and pointed, to the end that the same may be incorporated in his deposition and pre- served as evidence. For his refusal to thus read from the book, he may be punished for contempt.^^ A justice of the peace has authority to punish a person as for a criminal contempt of such court, for willfully and con- temptuously refusing to be sworn as a witness, he having been duly subpoenaed as a witness.^'* When a witness refuses to testify as to a certain matter, the question may arise whether the witness is actually within his constitutional rights as to self-incrimination. The provisions of the Con- stitution and statutes protect a person called as a witness in any judicial or other proceeding against himself or upon a trial against others, from being compelled to disclose facts and circumstances that can be used against him as tending to connect him with any criminal evidence which may then or thereafter be used or charged against him, or the sources from which evidence of the commission or his connection with it may be obtained. The witness is always the judge in such a case of what the effect of the answer sought to be drawn from him might be, and if to his mind it might con- stitute a link in the chain of evidence sufi&cient to convict him, if other facts are shown, he may remain silent, unless it is perfectly clear that he is mistaken and that the answer cannot injure him or subject him to the penalty of a prose- cution.^^ Or. Disobedience of mandate. A subpoena issued by a district attorney is a mandate of the court within the provisions of section 750 of the Judici- ary Law, and disobedience thereof may be punished as for a criminal contempt under section 619 of the Code of Criminal Procedure.^^ The wilful disobedience of an injunction order 29. People ex rel. Valiente v. Dyck- 80 N. Y. Supp. 816; aff'd, 176 N. Y. man, 24 How. Pr. 222. 253 ; People ex rel. Lewisohn v. General 30. Bowen v. Hunter, 45 How. Pr. Sessions, 96 App. Div. 201, 89 N. Y. 193. Supp. 3«4; aff'd, 179 N. Y. 594. 31. People ex rel. Taylor v. Forbes, 32. People ex rel. Drake v. Andrews, 143 N. Y. 219. See also, People ex rel. 197 N. Y. 53. Compare, Sherwin v. Lewisohn v. O'Brien, 81 App. Div. 51, People, 100 N. Y. 351. CONTEMPT. 567 may form the basis of a charge for criminal contempt.^ Al- though the injunction is erroneously granted, so long as it is not void, it must be obeyed.^^ But a justice who has no authority to grant an injunction has no power to punish the person to whom it is directed as for a criminal contempt for failing to obey it.^ To warrant punishment for the violation of an order, the order should be clearly expressed, and it must be shown with reasonable certainty that it has been violated.^^ If the order disobeyed be capable of a construction con- sistent with the innocence of the party, or of any intentional disrespect to the court, an attachment should not be granted.^^ A person, although not a party to an action in which an injunction has been granted and not served with such injunc- tion, who, with knowledge of its provisions, willfully violates it, may be punished as for a contempt of court. The essence of the offense is the violation of the order with knowledge of its existence, and the manner in which knowledge of the injunction is obtained is not material.^ One who aids, procures, or advises the disobedience of a lawful mandate of the court is equally guilty with him who actually disobeys it. It is not necessary in order to consti- tute a contempt that resistance to such a mandate should be successful.^^ 33. People ex rel. Empire Leasing with the work, held guilty of a criminal Co. V. Mecca Realty Co., 174 App. Div. contempt, it not being requisite to 384, 161 N. Y. Supp. 241. show on the proceeding for contempt a Labor unions. — See the following legal right in the tenant. Matter of cases as to prosecutions for criminal Qanz, 38 Misc. 666, 78 N. Y. Supp. contempt against labor unions violating 260. injunction orders: Steams v. Marr, 41 34. People ex rel. Davis \. Sturte- Misc. 252, 84 N. Y. Supp. 36; afl'd, 88 vant, 9 N. Y. 263; Koenig v. Eagle App. Div. 432, 84 N. Y. Supp. 965; Waist Co., 176 App. Div. 724, 163 N. modif'd, 181 N. Y. 463; Typothetae v. Y. Supp. 1021. Typographical Union No. 6, 66 Misc. 36. Matter of HoUe, 160 App. Div. 484, 123 N. Y. Supp. 967; aff'd, 138 .,39, 145 N. Y. Supp. 388. App. Div. 293, 122 N. Y. Supp. 975. 36. Ketchum v. Edwards, 153 N. Y. The owner of premises and his con- 534. tractor, restrained by injunction, 37. Weeks v. Smith, 3 Abb. Pr. 211. obtained at the suit of a tenant, from 38. People ex rel. Stearns v. Marr, tearing down the building "covered 88 App. Div. 422, 84 N. Y. Supp. 965; under plaintiff's leasehold," who, hav- modif'd, 181 N. Y. 463. ing dispossessed the tenant in sum- 39. People ex rel. Drake v. Andrews, mary proceedings, thereupon piaeeeded 197,.N. Y. 53. 568 CONTEMPT. Disobedience of an order under Code of Criminal Proced- ure, section 915, directing a son to support his mother, is a civil and is not a criminal contempt.^" H. Misconduct of juror. Where one upon examination as to his qualifications to sit as a juror upon the trial of an indictment for keeping a disorderly house denied any acquaintance with either of the defendants, that he had ever been in the place charged as being a disorderly house, or that he had any knowledge thereof, and upon a motion to punish him for contempt, it appears that while the jury was deliberating upon a verdict he told other jurors that he was acquainted with one of the defendants, the place of business in question and that he had been in it several times before the trial, he will be adjudged guilty of criminal contempt, whether his statements are true or false.**^ But it has been held that a juror who went to the scene of an affray for the purpose of acquainting himself with the locality is not guilty of contempt.^ Attorney. — ^Although in a civil the agreed settlement to him as attor- aotion brought by a town against a ney for the town, which order was former supervisor for the conversion of granted by the other justice, there be- town moneys the defendant has been ing nothing whatever to show that said adjudged guilty of a civil contempt in attorney did not have authority from failing to pay over, and the court, with the proper town officers to act for the the consent of the town authorities, has town and receive the money for his ordered that he be released from im- client. Town of Wilmurt v. Wright, prisonmeut on the payment of certain 183 App. Div. 305, 171 N. T. Supp. moneys to the county treasurer and the 230. payment of costs to the attorney for 40. People ex rel. Kroncke v. the town, which order was opposed by O'Brien, 39 Misc. 110, 78 N. Y. Supp. the town's attorney, the latter is not 904. And see, People ex rel. Prior v. guilty of a criminal contempt of court Prior, 113 Misc. 208, 182 N. Y. Supp. by reason of the fact that, disregard- 577. ing the order and without notice to the 41. Matter of Nunns, 104 Misc. 350, justice who made it, he, with the con- 172 N. Y. Supp. 167; afE'd, 188 App. sent of the town, stipulated before an- Div. 424, 176 N. Y. Supp. 858. other justice that the defendant should 42. People ex rel. Munsell v. Courts be discharged from imprisonment upon of Oyer & Terminer, 101 N. Y. 245. the payment of the whole amount of CONTEMPT. 569 I. Interference with jury. At common law it was a contempt of court for a witness or bystander to communicate with the grand jury touching a complaint under examination before them, without their request. To constitute such communication a contempt under our statute relative to criminal contempts, the manner of mak- ing it must involve some contemptuous behavior committed during the sitting of the court, and at least tending to impair the respect due to it.** One attempting to bribe a juror is clearly guilty of criminal contempt.** J. Obstruction of service of process. It is contempt of court for a person who knows of the exist- ence of an order in the hands of an oflficei* for service upon him, to prevent, willfully and by open force, either made or directed, the service of such process.*^ K. Procedure. The statutes do not specifically provide the practice to be followed for the commitment of one for criminal contempt, except that section 751 provides for summary punishment when the offense is committed in the view and presence of the court, and section 752 requires the commitment to set forth the particular circumstances of the ojBfense. Section 751 requires, when the offense is not committed in the view and presence of the court, that the party charged shall be notified of the accusation and have a reasonable time to make a defense. But the practice in such a case does not seem to have been otherwise prescribed by statute. The practice regulations contained in Article XIX of the Judiciary Law were taken from Title III, Chapter 17, of the Code of Civil Procedure and related only to civil contempts.*^ A proceeding for criminal contempt is triable only before the justice in whose presence the contempt was committed, and cannot be transferred to another justice.*'' 43. Henry Bergh's Case, 16 Abb. Pr. v. Court of Sessions, 8-2 Hun, 243, 31 284. N. Y. Supp. 373; rev'd on other 44. Klugman's Case, 49 How. Pr. grounds, 147 N". Y. 290. See also, 484. Town of Wilmurt v. Wright, 183 App. 45. Conover v. Wood, 5 Abb. Pr. 84. Div. 305, 171 N. Y. Supp. 230. 46. People ex rel. Taylor v. Forbes, 47. People ex rel. Deal v. Williams, 143 N. Y. 220; People ex rel. Barnes 51 App. Div. 102, 64 N. Y. Supp. 457. 570 COHTEMPT. Where proceedings are instituted under the statute in rela- tion to criminal contempt, and the party charged has ap- peared in pursuance of an order to show cause, and filed an affidavit, denying the contempt, and setting forth facts tending to sustain such denial, the court may, if it desire fur- ther proof as to the alleged contempt, send the matter to a referee to take testimony, and defer further action until the coming in of his report/^ It is not essential to sustain a conviction for criminal con- tempt that the plaintiff show a cause of action for equitable relief, as the fine goes to the people and . not to the party aggrieved.^^ L. When punishment may be summary. Criminal contempt may be divided into two classes: 1, That which is committed in the immediate view and presence of the court; and 2, That which is committed out of court. When the contempt is committed in the view and presence of the court, it may be punished summarily; when not so committed, the party charged must be notified of the accusa- tion, and have a reasonable time to make a defense.™ A plain line of distinction is drawn between proceedings for a contempt occurring in the presence of a judge, and the facts constituting which are certified by him, and cases of professional misconduct out of the presence of the court, where the actual truth is a matter of evidence. In the former class of cases it is held that the facts embodied in the order of the judge must be taken as true. In the latter the right of review is asserted, not only where there had been want of jurisdiction, but where the court below had decided erroneously on the testimony. Its discretion is not unlimited, and while not to be overruled in cases of doubt, is yet subject to review.^^ An affidavit is not necessary as a foundation for contempt proceedings where the offense was committed in the immedi- ate view and presence of the court or refer ee.^^ An order made by the court is a sufficient commitment where the con- 48. People ex rel. Alexander v. Alex- 50. People ex rel. Barnes v. Court of ander, 3 Hun, 311. Sessions, 147 N. Y. 290. 49. Northland Rubber Co. v. Inter- 51. Matter of Eldridge, SZ N. Y. 161. national Auto League, 143 N. Y. Supp. 52. People ex rel. Baldwin v. Miller, 9. 9 Misc. 1, 29 N. Y. Supp. 305. CONTEMPT. 571 tempt has been committed in the presence of the court, and it should direct the sheriff to take him into custody and con- fine him.^^ The court may act upon its own motion, and make the accusation, causing the party accused to be notified, and giv- ing him a reasonable time to make his defense. The order contains the charge. And it seems that t]ie party charged may appear by his counsel and make his defense.^* Where a witness summoned before the grand jury declined to answer, and after the court had ruled the question proper he repeated his refusal, it was held to be a contempt in the immediate view and presence of the court, so that no affidavit or further evidence was needed for commitment.^^ The publication of a false and grossly inaccurate report of a proceeding in court is not a contempt committed in the view and presence of the court.^^ An order punishing a person for contempt of court in fail- ing to make a return as required by an order of mandamus, not being for an act done in the presence of the court, can- not be granted on an ex parte application.^'^ An ex parte order adjudging a defendant guilty of crimi- nal contempt in wilfully disobeying a writ of habeas corpus is unauthorized.^* M. Commitment. In criminal contempts committed in the immediate view of the court it may punish summarily. The only record pre- served is in the final order or mandate of the court entered in the minutes of the clerk. If the particular circumstances of the offense were not required to be set forth, there would be nothing that the accused could have reviewed or that he could interpose as a defense to a subsequent conviction for the same act. If the court saw fit to call his act, no maltter what it might be, a criminal contempt, that determination would of necessity be final, even though the act of the accused consisted in the putting on of his hat as he was going out 53. Matter of Percy, S Daly, 530. Sessions, 147 N. Y. 290. 54. People ex rel. Greeley v. Court 57. Matter of Reddish, 47 App. Div. of Oyer and Terminer, 37 How. Pr. 14. 187, 63 N. Y. Supp. 361. 55. Matter of Hackley, 24 N. Y. 74. 58. People ex rel. Bishop v. Bishop, See also, People ex rel. Taylor v. 184 App. Div. 327, 171 N. Y. Supp. Forbes, 143 N. Y. 319. 563. 56. People ex rel. Barnes v. Court of 572 CONTEMPT. of the courtroom door, and failed to come within any of the provisions of the statute constituting a contempt of the court. The rule applies with equal force to contempts which are not committed in the presence of the court.^^ A mandate of commitment which does not specify the par- ticular circumstances of the offense is defective, and such defect will be held fatal upon a review of the proceedings by certiorari, although the papers before the reviewing tribunal clearly establish the sufficiency of the proof to sustain the conviction.^ A statement in the commitment to the effect that the of- fender, in the immediate view and presence of the court, behaved in an insolent and disorderly manner, which tended to interrupt the proceedings of the court and to impair the respect due to its authority, is not sufficient.^^ A general statement that the defendants disobeyed an in- junction order is insufficient.^^ A commitment, after reciting that the relator had been con- victed by the Surrogate's Court of contempt for a contuma- cious and unlawful refusal to answer certain legal and proper interrogatories propounded to her as a witness, directed that " she stand there committed, there to remain, charged with the said contempt as aforesaid, until she shall make answer to such legal and proper interrogatories as shall be propounded to her as a witness in this cause," and it was held that the commitment was invalid; that the confinement should have been limited to the time when the witness was willing to answer the questions which had been actually pro- pounded to her, and for a refusal to answer which she had been convicted of contempt. Although it is not necessary that the questions which the witness has refused to answer should be set out in haec verba in the commitment, yet it is the better practice to so set them out.^^ 59. People ex rel. Barnes v. Court of Marean, 86 App. Div. 378, 83 N. Y. SessiOBS, 147 N. Y. 390. Supp. 843. 60. People ex rel. Palmieri v. 62. Eoncoroni v. Gross, 93 App. Div. Marean, 86 App. Div. 278, 83 N. Y. 366, 86 N. Y. Supp. 1113. Supp. 843 ; Eoncoroni v. Gross, 92 App. 63. People ex rel. Jones v. Davidson, Div. 366, 86 N. Y. Supp. 1113. 35 Hun, 471. 61. People ex rel. Palmieri v. CONTEMPT. 573 0. Punishment. In criminal contempt the punishment is imposed to vindi- cate the dignity of the court and in the interest of public jus- tice, and not for the benefit of the party. The fine belongs to the public and not to the moving party, and costs are not allowed.^* Where a witness duly summoned to testify before a grand jury refuses to answer proper questions, the court has power to commit him to the county jail for contempt until he shall have answered such questions, and such commitment is regu- lar and lawful both under the common law and the statutes of the State.«^ After the adjudication, the accused will generally be al- lowed to purge the contempt by performing the act required, or undoing or reversing the acts constituting the contempt, or, where the act has caused injury to a party to the suit, by making reparation to the injured party .^"^ A judgment debtor cannot be punished for a criminal con- tempt for failing to appear for examination as to his prop- erty at the time stated in the order in proceedings supple- mentary to execution when he did appear two days later, and in the presence of the attorney for the plaintiff offered to submit to an examination, and it does not appear that his default was willful or intended.*^ Even where one is im- prisoned for contempt, the court may at any time, in its dis- cretion, either on its motion or upon proper application, in- quire into the question of the ability of the offender to obey the order, and if satisfied of the inability of the offender to comply he may be discharged.^^ Or, if the punishment in- flicted consists of both imprisonment and fines, the court may stay the issuance of process for the imprisonment of the of- fenders upon payment of the fines. ^* 64. Boon V. MeGucken, 67 Hun, 251, 66. People ex rel. Baldwin v. Miller, 23 N. y. Supp. 424;- People ex rel. 9 Misc. 1, 29 IST. Y. Supp. 305; People New York Soe. P. C. C. v. Gilmore, 88 ex rel. Taylor v. Seaman, 8 Mise. 152. N. Y. 628; People ex rel. Munsell v. 29 N. Y. Supp. 329. Court of Oyer and Terminer, 101 N. Y. 67. Matter of Jones, 126 App. Div. 245; Mutual Milk & Cream Co. v. Tiet- 112, 110 N. Y. Supp. 565. Jen, 73 App. Div. 532, 77 N. Y. Supp. 68. Typothetae of New York v. 287; People ex rel. Stearns v. Marr, Typographical Union No. 6, 138 App. 181 N. Y. 463. Div. 293, 122 N. Y. Supp. 975. 65. People ex rel. Phelps v. Faneher, 69. Typothetae v. Typographical 2 Hun, 226. Union No. 6, 66 Misc. 484, 123 N. Y. 574 CONTEMPT. P. Indictment. One committing a criminal contempt of court is also guilty of a misdemeanor.™ A conviction on indictment will not purge the contempt, nor will a conviction for a contempt be a bar to an indictment.''^ Q,. Attack on commitment. A commitment for criminal contempt can be attacked only by habeas corpus when the proceedings were regular, sus- tained by the evidence, and valid, and certiorari will not lie to review insufficiency of recitals in respect to the adjudica- tion on which the commitment is based.^^ But certiorari seems to be a proper remedy when the adjudication of con- tempt is not sustained by the evidence.''^ But an appeal and not an order of certiorari is the proper method to review an adjudication of criminal contempt com- mitted in a civil action where the adjudication is not sum- mary in character.^^ An appeal does not lie from an ex parte order adjudging a defendant guilty of criminal contempt. The proper practice is to move to vacate such order and appeal from the order entered upon the decision of such motion.''^ Supp. 967; afE'd, 138 App. Div. 293, See, also, Ex parte Kearney, 7 Wheat. 122 N. Y. Supp. 975. 38. 70. Penal Law, § 600. _ 78. People ex rel. Brewer v. Platzek, A warrant issued by a district attor- 133 App. Div. 25, 117 N. Y. Supp. 852. ney as authorized by the statute for 73. People ex rel. Brewer v. Platzek, the arrest of a relator stated that he 133 App. Div. 25, 117 N. Y. Supp. 852; stood indicted "for contempt;" on People ex rel. Drake v. Andrews, 134 habeas corpus, issued on the petition of App. Div. 32, 118 N. Y. Supp. 37 ; the relator, held, that this was a suf- People ex rel. Wright v. Court of Ses- ficient specification of the offense; that sions, 45 Hun, 57, 9 St. Eep. 609; as the statement was of a contempt People ex rel. Taylor v. Torbes, 143 N. which has already served as a basis of Y. 223. See also. People ex rel. Muii- an indictment, it necessarily implied a sell v. Court of Oyer and Terminer, 101 wilful contempt, of a character eonsti- N. Y. 245; People ex rel. Choate v. tuting a misdemeanor; also held, that Barrett, 56 Hun, 351, 121 N. Y. 678; it was not essential to the validity of People ex rel. Negus v. Dwyer, 90 Hun, the indictment that the accused should 403. first have been adjudged guilty of con- 74. Hanbury v. Benedict, 160 App. tempt by the court whose process he dis- Div. 662, 146 N. Y. Supp. 44. obeyed. People ex rel. Sherwin v. 75. People ex rel. Bishop v. Bishop, Mead, 92 N. Y. 415. 184 App. Div. 227, 171 N. Y. Supp. 71. Anderson v. Dunn, 6 Wheat. 204. 562. CONTEMPT. 575 And where tlie conviction was summary for an offense com- mitted in the view of the court, it was held that a proper method of reviewing the ruling was by an order of certorari, and not by an appeal from an order declaring the party guilty of such a contempt or by an appeal from an order de- clining to vacate such order.''® ARTICLE III. WHAT CONSTITUTES CIVIL CONTEMPT. A. Judiciary Law, § 753. Contempts punishable civilly. A court of record has power to punish, by fine or imprisonment, or either, a neglect or violation of duty, or other misoonduct, by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in either of the following cases: !>. An attorney, counsellor, clerk, sheriff, coroner, or other person, in any man- ner duly selected or appointed to perform a judicial or ministerial service, for a misbehavior in his office or trust, or for a wilful neglect or violation of duty therein; or for disobedience to a lawful mandate of the court, or of a judge thereof, or of an officer authorized to perform the duties of such a judge. 2^ A party to the action or special proceeding, for putting in fictitious bail or a fictitious surety, or for any deceit or abuse of a mandate or proceeding of the court. ■ 3. A party to the action or special proceeding, an attorney, counsellor, or other person, for the non-payment of a sum of money, ordered or adjudged by the court to be paid, in a ease where by law execution cannot be awarded for the collection of such sum; or for any other disobedience to a lawful mandate of the court. 4. A person, for assuming to be an attorney or counsellor, or other officer of the court, and acting as such without authority; for rescuing any property or person in the custody of an officer, by virtue of a mandate of the court; for un- lawfully detaining, or fraudulently and willfully preventing, or disabling from attending or testifying, a witness, or a party to the action or special proceeding, while going to, remaining at, or returning from, the sitting where it is noticed for trial or hearing; and for any other unlawful interference with the proceed' ings therein. 5. A person subpoenaed as a witness, for refusing or neglecting to obey the subpoena, or to attend, or to be sworn, or to answer as a witness. 6. A person duly notified to attend as a juror, at a term of the court, for improperly conversing with a party to an action or special proceeding, to be tried at that term, or with any other person, in relation to the merits of that action or special proceeding; or for receiving a communication from any person, in relation to the merits of such an action or special proceeding, without im- mediately disclosing the same to the court. 7. An inferior magistrate, or a judge or other officer of an inferior court, for 7e. Matter of Teitelbaum, 84 App. Div. 351, 83 N. Y. Supp. 887; modif d, 185 N. T. 540. 576 CONTEMPT. proceeding, contrary to law, in a cause or matter, which has been renjoved from his jurisdiction to the court inflicting the punisliment; or for disobedience to a lawful order or other mandate of the latter court, 8. In any other case, where an attachment or any other proceeding to punish for a contempt, has been usually adopted and practiced in a court of record, to enforce a civil remedy of a party to an action or special proceeding in that court, or to protect the right of a party.77 B. Miscellaneous statutory enactments. The Civil Practice Act and various statutes provide that certain acts or omissions shall be deemed a contempt of court. The disobedience of an order made by the court requiring the sheriff to return the inventory in attachment proceedings is a contempt.''^ When an application for an order made to a judge of the court, or a county judge, is refused, and an application is made to another judge, in reference to the same matter, for the same order or where an application is made to the court for judgment and a subsequent application made before an- other judge for the same judgment, such application shall be punished by the court as for a contempt.^^ Where an order has been made requiring a discovery or inspection of papers, the court may punish a refusal to coiij- ply with the order as for a contempt.^" A referee has power to punish a witness for contempt of court for non-attendance, or for refusal to be sworn, or to testify.*^ If the judgment debtor or other person in possession of property which has been sold under an execution commits waste in violation of an order granted by the court under section 720 of the Civil Practice Act, he may be punished for 77. Common-law contempt. — While the volved to induce the courts to act is common-law power to punish for con- clear. To justify the court in imposing tempt in civil cases exists both in Eng- punishment for contempt of court in land and in this State, it is thought any given ease, it must be clear that that in both jurisdictions it exists to a the case is within the principle upon more limited extent than formerly. which the courts have from time to While the cases in which the power may time immemorial acted. DoUard v. be invoked are not defined with pre- Koronsky; 67 Misc. 90, 121 N. Y. Supp. eisious, yet the power is no longer 987. purely arbitrary and indefinite. From 78. Civil Practice Act, § 947. the very nature of the case, the in- 79. Civil Practice Act, § 118. stances in which the power may be ex- ' 80. Civil Practice Act, § 325. erted cannot be determined in advance, 81. Civil Practice Act, § 469. yet the principal which must be in- CONTEMPT. 577 a contempt.^' The failure of an attorney whose name is sub- scribed to a pleading to pay motion costs when scandalous matter is stricken from the pleading, is a contempt.^ Where a party, or the representative or successor of the party who is bound by the judgment withholds possession of the property from the person declared to be entitled thereto, the court may punish him for contempt.^^ If, during the pendency of an action affecting real prop- erty, the defendant commits waste upon the property, the court may grant an order restraining the commission of waste and the disobedience of the order may be punished as for a contempt.^ If, in an action of replevin, a sheriff fails to comply with section 1113 of the Civil Practice Act, with regard to the return, he may be punished for contempt.^^ In default of a return to an order of mandamus the person on whom the order was served may be punished for a con- tempt of court.^®'^ On default of return to an order of prohibition the judge or members of the court failing to make the return may be punished for contempt of the court issuing the order.^ The omission to make a return, as required by an order of certi- orari or by an order for a further return, may be punished as a contempt of court.^ C. Constructive contempt. To constitute a constructive contempt of court some act must be done not in the presence of the court or judge that tends to obstruct the administration of justice or bring the court or judge or the administration of justice into disre- spect, and the proof must show beyond reasonable doubt that the defendant willfully refused to do what the court directed.^^ 82. Civil Practice Act, §§ 721, 732. SBa. Civil Practice Act, § 1334. 83. Civil Practice Act, § 1450. 87. Civil Practice Act, § 1347. 84. Civil Practice Act, § 985. 88. Civil Practice Act, § 1398. 85. Civil Practice Act, § 981. 89. Saal v. S. BrooHyn Ey. Co., 123 86. Civil Practice Act, § 1113. App. Div. 364, 106 N. Y. Supp. 996. 37 ' 578 CONTEMPT, D. Enforcement of judgment by contempt proceeding. 1. Civil Practice Act, § 505. Enforcement of judgment without execu- tion. In either of the following cases a judgment may he enforced by serving a certi- fied copy thereof upon the party against whom it is rendered, or the officer or person who is required thereby or by law to obey it; and, if he refuses or will- fully neglects to obey it, by punishing him for a contempt of the court: 1. Where the judgment is final and cannot be enforced by execution, as pre- scribed in the last section. 2. Where the judgment is final and part of it cannot be enforced by execu- tion, as prescribed in the last section, in which case the part or parts which can- not be so enforced may be enforced as prescribed in this section. 3. Where the judgment is interlocutory and requires a, party to do or to re- frain from -doing an act, except in a case specified in the next subdivision. 4. Where the judgment requires the payment of money into court, or to an officer of the court; except where the money is due upon a contract, express or implied, or as damages for non-performance of a contract. In a case specified in this subdivision, if the judgment is final, it may be enforced, as prescribed in this section, either simultaneously with, or before, or after the issuing of an execution thereupon, as the court directs. 2. Civil Rights law, § 20. No imprisonment for non-payment of costs in certain cases. A person shall not be arrested or imprisoned, for the non-payment of costs, awarded otherwise than by a final judgment, or a final order, made in a special proceeding instituted by a state writ, except where an attorney, counsellor, or other officer of the court, is ordered to pay costs for misconduct as such, or a witness is ordered to pay costs on an attachment for non-attendance. 3. Civil Rights Law, § 21. No imprisonment for non-payment of money pursuant to judgment or order requiring payment of money due upon contract. Except in a case where it is otherwise specially prescribed by law, a person shall not be arrested or imprisoned for disobedience to a judgment or order, re- quiring the payment of money due upon a contract, express or implied, or as damages for non-performance of a contract. 4. General right to enforce judgment by contempt. The cases where disobedience to a judgment may be pun- ished as a contempt are, where it cannot be enforced by ex- ecution, or where it directs the payment of money into court, or to an officer of the court.^" Thus a judgment requiring the 90. O'Gara v. Kearney, 77 N. T. Judgment for costs against guardian 423; Baker v. Baker, 23 Hun, 56; ad litem. — See Pierce v. Lee, 36 Misc. People V. Eiley, 25 Hun, 587; People 865, 74 N. Y. Supp. 927. ex rel. Borst v. Grant, 41 Hun, 351. Assignee of mortgage. — A judgment, CONTEMPT. 579 specific performance of a contract,^^ the removal of a nui- sance/^ the delivery of a paper,^^ or the removal of obstruc- tions,^^ may be enforced through contempt proceedings. Where a judgment adjudged the payment of a sum to a creditor from the surplus income of a trust estate, the trus- tee is, after demand, personally liable, and precept may be issued to collect the amount on motion, on its being shown that he has paid the amount over on another judgment.^^ The enforcement of a judgment by contempt proceedings may be resorted to only under the circumstances specified in rendered in an action wherein the as- signee in trust of a mortgage seeks the direction of the court as to the dis- position of the proceeds, adjudging, among other things, that within five days from the service of a copy of the judgment and notice of entry thereof, the assignee shall pay a certain sum to the estate of a creditor, cannot be en- forced by proceedings for a civil con- tempt. Harris v. Elliott, 163 N. Y. 269. 91. HUliker v. Hathorne, 5 Bosw. 710; Morris v. Walsh, 9 Bosw. 636. Partially enforcible by execution. — A final judgment in an action for spe- cific performance which directs the de- fendant to accept the deed tendered and make the payments called for by the contract up to the date of decree, execute and deliver a bond and mort- gage for the balance of the purchase price, and pay all taxes and assess- ments which had become liens since the date that title should have passed, with costs and disbursements, is enforceable by execution to the extent of the pay- ments required to be made, and cannot be enforced by proceedings for con- tempt unless defendant is shown to have refused to comply with the re- mainder of the judgment, viz.: accept- ance of the deed and execution of the bond and mortgage. Kittel v. Stueve, 11 Misc. 279, aa N. Y. Supp. 273; afE'd, 146 N. Y. 380. Payment for deed. — Where the judg- ment in an action for specific per- formance while directing defendants to receive and accept the deed of con- veyance theretofore tendered and pay plaintiffs a certain sum, provides that if they refuse so to do the deed shall be filed with the clerk of the court and that upon such delivery, or filing, de- fendants shall pay the amount of the judgment and that plaintiffs shall have execution therefor, defendants may not be punished as for contempt for fail- ure to pay the money. Weissenburger v. Williams, 81 Misc. 397, 142 N. Y. Supp. 1027. 92. Heughes v. Galusha Stove Co., 122 App. Div. 118, 106 N. Y. Supp. 606. 93. Walz V. Humrich, 158 App. Div. 584, 143 N. Y. Supp. 806; Hatton v. McFaddin, 15 Civ. Pro. 42, 16 St. Rep. 944, 2 N. Y. Supp.. 194. 94. Schmohl v. Phillips, 138 App. Div. 279, 122 N. Y. Supp. 974. Mandatory injunction. — ^A decree granting a mandatory injunction re- quiring the defendants to remove por- tions of their building which overhang the plaintiff's lands, being one which cannot be enforced by execution, must be enforced as provided in section 505. Mills V. Leland, 156 App. Div. 597, 141 N. Y. Supp. 725. 95. Williams v. Thorn, 81 N. Y. 381. 580 CONTEMPT. section 505.^® A judgment directing the defendant to pay the plaintiff money received by the defendant for property sold in violation of an injunction cannot be enforced by contempt proceedings under section 505, such a judgment being en- forceable by execution.^^ An order of restitution upon the reversal of a judgment, requiring the restitution of moneys paid on the judgment, is in effect a judgment for the pay- ment of money and is enforceable by execution, not by con- tempt proceedings.^^ An interlocutory judgment which, among other things, directs the recovery of money, is not like one directing money to be paid into court or ordering restitution of money paid out of court, and it cannot be enforced by contempt proceed- ings.^^ When the sole liability which is sought to be en- forced by a judgment is that of a partner to his copartners, and such liability arises out of a contractual relation existing between them, a fiduciary relation is not established such as will authorize the punishment of defendant for contempt.^ A final decree on an accounting by a general assignee cannot be enforced by proceedings for contempt.^ 5. Payment of money into court. Subdivision 4 of section 505 provides that a person disobey- ing a judgment of the court which required the payment of money into court, or to an officer of the court, except where it is due upon a contract express or implied, or for damages for non-performance of the contract, may be punished for contempt, and where an order was made by which the relator was directed to pay over a sum of money to a receiver, a demand having been made, and the relator having failed to make the payment, a warrant of attachment was properly issued.^ A judgment rendered in an action compelling a trustee of a corporation to account for property of the cor- poration wrongfully appropriated by him, and directing him 96. Harrison v. De Hart, 103 Miac. Schulte v. Anderson, 48 Super. Ct. 133. 536, 170 N. Y. Supp. 530. 1. Walford v. Harris, 78 Hun, 346, 97. Tabor v. Jaecke, 12 N. Y. Supp. 29 N. Y. Supp. 126. 645, 35 St. Bep. 832. 2. Matter of Stockbridge, 7 Abb. N. 98. LeGros v. Chain Shirt Shops, 0. 395; Matter of Hess, 48 Hun, 586, Inc., 187 App. Div. 368, 175 N. Y. 1 N. Y. Supp. 811. Supp. 621. 3. People ex rel. Pond v. Tamaen, 15 99. Potter v. Eossiter, 109 App. Div. Misc. 3(34, 37 N. Y. Supp. 407. 35, 95 N. Y. Supp. 1036. See also, CONTEMPT. 581 to pay over the value thereof in money to the receiver, may be enforced by contempt proceedings even though execution could have been issued thereon.^ But, where a defendant is not directed to pay the money into court, or to an officer of the court, he cannot be pun- ished for contempt under this section.^ Where certain bonds held by a trust company as collateral security for two notes owned by it and made by defendant were levied upon under a warrant of attachment issued against him, and the trust company out of the proceeds of the sale of the bonds not only paid itself the amount of the notes but also took the same course with regard to two other notes payable to the defendant and owned by the company, a motion to compel it to pay over to the sheriff the amount of the last two notes or, in default thereof, to be punished for a contempt of court, will be denied, as an action is main- tainable to recover damages for the alleged loss or injury caiised by the payment of the last two notes.® 6. Costs. It is not a contempt to fail to pay costs in an action be- tween husband and wife, as costs are collectible by execu- tion.'' 7. Certainty of judgment. In order that a commitment for a contempt may issue for the disobedience of a judgment or order, the precise thing to be done by the party proceeded against must be stated in the judgment or order; there should be no opportunity for . ambiguity. The party should be adjudged to do a specific act.^ Unless the order directs the surrender of premises, as well as a conveyance, a party cannot be punished for refusing to deliver possession.^ 4. Gildersleeve v. Lester, 68 Hun, 7. Noland v. Noland, Z9 Hun, 639; 535, 23 N. Y. Supp. lOaS, 139 N. Y. Jaequin v. Jacquia, 36 Hun, 378. 608, 52 St. Rep. 559. 8. Ross v. Butler, 19 Civ. Pro. 152. 5. Coffin V. Coffin, 161 App. Div. 215, 9. Tinkey v. Langdon, 60 How. Pr. 146 N. Y. Supp. 565. 180; MeKelsey v. Lewis> S Abb. N. C. 6. Houck V. Van Horn, 102 Misc. 61. 263, 168 N. Y. Supp. 701. 582 CONTEMPT. 8. Discretion of court. The provisions of section 505 are not imperative; the judg- ment creditor has no claim de jure that the power should be exercised; its exercise is discretionary.^" It has jjeen intimated that the process will not ordinarily issue to collect money where there is a fund in hand out of which payment ought to be made.^^ 9. Service of copy of judgment In order to enforce a judgment under section 505 the de- fendant should be served personally with a copy of the judg- ment. A transcript served on the defendant's attorney, with personal demand upon defendant, is insufficient.^ Section 505 applies only to judgments and does not require service of a certified copy of an order as a condition prece- dent to a motion to punish as for contempt a disobedience thereof.-^* 10. Inability to comply with judgment. An application to punish a party for failure to comply with a judgment will not be denied merely because such party has not the financial ability to make compliance." The question of the defendant's ability to comply is to be determined upon his motion to be discharged from imprison- ment under section 775 of the Judiciary Law. In proceed- ings to punish for contempt for refuing to obey a judgment that required defendant, a president of a company, to do cer- tain acts, it is no excuse for his non-compliance that the co- operation of other officers is necessary.^ 11. Attack on judgment. If the court had jurisdiction to render the judgment in question, the party proceeded against in contempt proceed- 10. Cochrane 's Executor v. Inger- N. Y. Supp. 163. soil, 73 N. Y. 613; Nolan v. Nolan, 29 14. Schmohl v. Phillips, 138 App. Hun, 630. Div. 279, 122 N. Y. Supp. 974; Mat- 11. Matter of Watson v. Nelson, 69 ter of Boyer, 74 Mise. 329, 134 N. Y. N. Y. 536. Supp. 231; Basch v. Associated Fea- 12. Fero v. Van Evra, 9 How. Pr. tures Booking Co., Inc., 92 Misc. 450, 1*8. 156 N. Y. Supp. 162; Lansing v. 13. Basch V. Associated Features Lansing, 41 How. Pr. 248. Booking Co., Inc., 92 Misc. 450, 156 15. King v. Post, 12 St. Bep. 5?5. CONTEMPT. 583 ings cannot assert the invalidity or irregularity of the judg- ment.^^ If the judgment is erroneous, the remedy is to ap- peal or to move for a modification." Irregularities cannot be invoked as a defense in a contempt proceeding, especially where the decree disobeyed was entered by the consent of the defendant, who subsequently absconded from the jurisdiction of the court.^^ The fact that the defendant has appealed from the judg- ment, and that the appeal is pending, is no excuse for a viola- tion of the judgment." 12. Circumvention of judgment. The court may punish as a contempt any act which is de- signed to and does defeat and circumvent its mandate, when the letter of the decree has been executed.^" An act done to render a forthcoming judicial decree inef- fective is punishable as a contempt.^ A transfer of specific property which is the subject of a judgment creditor's suit in equity, with the design, purpose and effect of rendering the decree nugatory, is an interference with the proceedings of the court, and contemptuous.^^ It is a contempt of court for a defendant to dispose of his property after a stay of ex- ecution on a judgment against him has been granted. In such a case he will be fined the amount of the judgment, with interest, as well as the judgment for costs on the appeal and costs of the motion to punish him for contempt.^^ £. Orders of court. 1. In general. The failure to obey an order of the court ip ground for the maintenance of a proceeding for civil contempt;^* and, if the 16. Park v. Park, 80 N. T. 156; rev'd, 164 App. Div. 493, 150 N. T. Schmohl V. Phillips. 138 App. Div. 279, ' Supp. 296. 122 N. Y. Supp. 974; Slaekman v. 21. Bartholomay Brewing Co. v. Kaufman, 160 N. Y. Supp. 786. O'Brien, 320 N. Y. 587. 17. Park v. Park, 80 N. Y. 156. 22. Winichi v. Silverman, 163 N. T. 18. Moore v. Moore, 142 App. Div. Supp. 634. 459 126 N. Y. Supp. 936. 23. Gresswell v. O'Kourke, 163 N. Y. 19. Slaekman v. Kaufman, 160 N. Y. Supp. 580. Supp. 786. 24. Whitman v. Hainea, 21 St. Rep. 20. Archer v. Turbo-Electrie Constr. 41, 4 N. Y. Supp. 48. Co., 86 Misc. 310, 149 N. Y. Supp. aOO; Order of restitution.— A party to an 584 CONTEMPT. failure is willful, may afford ground for a conunitment for criminal contempt.^ The failure to repay into court money paid to defendant under a judgment, when so ordered upon a reversal of the judgment, is a contempt which may be enforced by a commit- ment.^^ It is the disobedience of the order of the court, and not the failure to recognize the instrument by which it is en- forced, that constitutes a contempt.^''^ On motion to punish a party for contempt in violating an order it belongs in the first instance to the court which made the order sitting at Special Term to construe its provisions, determine the meaning thereof and to decide whether it has been violated.^* 2. Injunction order. The violation of an injunction order is, not only a civil contempt,^ but it may constitute a criminal contempt if the disobedience thereto was willful.^" The court will not coun- tenance any evasion of the injunction order, and will punish action is punishable as for a eontempt by commitment or by striking out her answer, or by both, for faUure to com- ply with an order of restitution direct- ing her to restore, by payment to the county treasurer, money obtained by her from the depository of the court, under and by virtue of a judgment rendered in her favor and thereafter reversed on appeal. Devlin v. Hinman, 161 N. Y. 115. 25. See, supra. Art., II — G. Diso- bedience of mandate. 26. Devlin v. Hinman, 40 App. Div. 101, 57 N. Y. Supp. 663, 29 Civ. Proc. 127; aff'd, 161 N. Y. 115. 27. People ex rel. Piatt v. Eice, 80 Hun, 437, &Z St. Bep. 389, 30 N. Y. Supp. 457; afE'd, 144 N. Y. 349. 28. Matter of N. Y. & Westchester Town Site Co. No. 3, 145 App. Div. 630, 130 N. Y. Supp. 419. 29. Douglas v. Bush, 34 App. Div. 236, 54 N. Y. Supp. 438; appeal dis- missed, 161 N. Y. 631; Country Club Land Ass'n v. Lohbauer, 43 App. Div. 169, 59 N. Y. Supp. 389; Brown V. Braunstein, 86 App. Div. 499, 83 N. Y. Supp. 798; Koenig v. Eagle Waist Co., 176 App. Div. 724, 163 N. Y. Supp. 1031; Koot v. Conk- ling, 108 Misc. 334, 177 N. Y. Supp. 610; Gage v. Denbow, 49 Hun, 43, 1 N. Y. Supp. 826 ; Wiuichi v. Silverman, 163 N. Y. Supp. 634. Bringing a suit against a lunatic or habitual drunkard after notice of in- junction, or against a receiver. L'Amoreux v. Crosby, 3 Paige, 422; Eiggs V. Whitney, 15 Abb. Pr. 388; Noe V. Gibson, 7 Paige, 513. See also People ex rel. Borst v. Grant, 41 Hun, 351. A resale without leave of court by a vendor of goods which a receiver has refused to receive under a contract is not a contempt of the injunction order. Moore v. Potter, 155 N. Y. 481. 30. See, supra. Art. II — G. Diso- bedience of mandate. C02SrTEMPT. 585 an intentional violation of its fair intent,^^ But, to entitle the injured person to relief in contempt proceedings, the order must clearly embrace the act complained of.^^ Dam- ages may be recovered in an action for the violation, or pro- ceedings taken for contempt, at the election of the injured party.^* As to the intent of a party, the rule in proceedings for con- tempt is analogous to that in prosecutions for crime, and the intent required to be proved is not the intent to violate the order of the court, but of the act which the law or the order of the court forbids.^* Proceedings are frequently main- tained against the members of a labor union for violating an order enjoining their unlawful acts.^^ Where the final decree in an action to set aside the probate of a will enjoins all parties from " maintaining any action . , , based upon a claim " that the paper was not the will of the decedent, a party so enjoined who begins a new action 31. Mayor v. N. Y. & S. I. R. R. Co., 64 N, Y. 622; Ogden v. Gibbons, 4 Johns. Cai. 174; Devlin v. Devlin, 69 N. Y. 212. 32. German Sav. Bk. v. Habel, 58 How. Pr. 336; Kennedy v. Weed, 10 Abb. Pr. GZ. Proceeding against third person.— An order restraining creditors from bringing actions against a corporation for the recovery of a sum of money does not prohibit a creditor from fil- ing a mechanic's lien against the prop- erty of a third person in the construc- tion of which the corporation had used the materials furnished by the credi- tor; and, therefore, the filing of such lien does not constitute a contempt. Matter of Simonds Furnace Co., 30 Misc. 209, 61 N. Y. Supp. 974. Avoiding nuisance. — ^When an injunc- tion restraining the working of an ash- reeeiving plant "in such manner as to cause a nuisance to plaintiff's said real property" does not prohibit the operation absolutely, nor prohibit any excess acts, a defendant who has made improvements in the plant so as to ob- viate most of the defects complained of should not be adjudged guilty of contempt in continuing to operate the plant, although the improvements are not beyond criticism. Under such cir- cumstances continuing the business un- der the improved conditions is not a willful disobedience of the court's com- mand. Saal V. S. Brooklyn B. Co., 122 App. Div. 364, 106 N. Y. Supp. 996. Restraining suit.^An injunction re- straining a party from suing executors is not violated by suing heirs-at-law. Dale V. Rosevelt, 1 Paige, 35. After service of an ordinary injunction in a creditor's suit, defendant is not guilty of contempt in proceeding to judg- ment . in a suit already commmenced. Parker v. Wakeman, 10 Paige, 485. 33. Porous Plaster Co. v. Seabury, 43 Hun, 611. 34. Gage V. Denbow, 49 Hun, 42, 1 N. Y. Supp. 836. 35. Kayser v. Fitzgerald, 109 Misc. 27, 178 N. Y. Supp. 130; Matter of McCormick, 117 Supp. 70. 586 CONTEMPT. which is in effect based upon a claim that the instrument is not the decedent's will is guilty of contempt.^^ 3. Mandamus and certiorari. Willful disregard by a board of aldermen, of an order of mandamus, is punishable by fine and imprisonment of the members.^ An order of certiorari, though made returnable at a Special Term in the wrong judicial district, may be the basis for a proceeding against the commissioners of taxes and assess- ments for contempt in failing to make a return thereto, since the order is not void, and cannot be attacked collaterally.^* 4. Service of order. Disobedience of an injunction order will be punished as a contempt, and it is not necessary that service of the order should have been made if the person violating it has knowl- edge it has been granted.^^ In administering the law in respect to the violation of in- junctions, the Court of Chancery never lost sight of the prin- ciple that it was the disobedience to the order of the court which constituted the contempt, and, therefore, although it required of the party availing himself of its order a substan- tial compliance with the rules of practice upon the subject, it would not usually allow the effect of its orders to be wholly lost, when the party sought to be bound by the order had actual knowledge, or notice of its existence, although there might have occurred some slip in the formal method of bringing it home to him.^" Service on the mayor of a city or president of a corporation binds the officers of each.*^ The committing or continuance of forbidden acts by the 36. Anderson v. Smithley, No. S, People v. Brower, 4 Paige, 405; Neale 141 App. Div. 429, 126 N. Y. Supp. v. Osborne, 15 How. Pr. 81; Wheeler v. 31. Gilsey, 35 How. Pr. 139; Atlantic Tel. 37. People ex rel. Pierce v. Cassidy, Co. v. Baltimore, etc., E. E. Co., 46 28 Misc. 589, 59 N. T. Supp. 1112; Super Ct. 377; Ewing v. Johnson, 34 aff'd, 44 App. Div. 3a9, 60 N. T. Supp. How. Pr. 202; WafBe v. Vanderheyden, 703. 8 Paige, 45. 38. People ex rel. Long Island R. R. 40. People v. Sturtevant, 9 N. Y. Co. V. Feitner, 53 App. Div. 181, 65 263. N. Y. Supp. 935. 41. People v. Sturtevant, 9 N. T. 39. Mayor v. N. Y. & S. I. Co., 40 263; Eorke v. Eussell, 2 Lans. 242. Super. Ct. 300; aff'd, 64 N. Y. 623; ,■ CONTEMPT. 587 servants of a corporation after its general officers are advised of the issue of an injunction and order forbidding such acts, is a contempt of court on the part of the corporation, equally as if there had been strict service of the injunction.^ A per- son who, after the court has decided to restrain the doing of an act, does the act, may be punished for contempt, although the decision has not been formulated.*^ 5. Who are liable for violation of order. Servants and agents who, with a knowledge of an injunc- tion, aid in its violation, and attorneys who advise its violation are liable for contempt, though the order has not been served upon them.** Officers of a corporation who have personal knowledge that a corporation is enjoined, and nevertheless violate the injunction, are punishable.*^ A municipal corporation violating an injunction may be punished by a proper fine. The municipality itself and not merely its agents and of- ficers are liable for contempt on the violation of such injunc- tion.*« Any person who interferes with the process, control, or action of the court in a pending litigation unlawfuly and with- out authority is guilty of a civil contempt if his act defeats, impairs, impedes, or prejudices the rights or remedy of a party to such action or proceeding. The advising and pro- curing the disobedience of a judgment is a contempt, and where the offense was an affirmative act of resistance to the process of the court, and an active effort to defeat its orders and make its judgment nugatory, it was properly punished even though the act required had been performed.*'' But persons who are not served with a copy of the decree and not shown to be acting for or with the defendant, cannot generally be punished for contempt in doing the acts forbid- den thereby.*^ ' 42. Rochester, etc., K. E. Co. v. L. R. R. Co., 12 Abb. 171. E. & W. R. R. Co., 48 Hun, 190. 46. Marson v. City of Rochester, 112 43. People ex rel. Piatt v. Rice, 144 App. Div. 51, 97 N. T. Supp. 881. N. Y. 249. *'*'• ^i°g ■''• Barnes, 113 N. Y. 476. 44. Stolts V. Tuska, 83 App. Div. 81, 48. Matter of Zimmerman, 134 App. 81 N. Y. Supp. 638. Div. 591, 119 N. T. Supp. 275 ; Rigas v. 45. Abell V. N. Y. Etc., R. R. Co., 18 Livingston, 178 N. Y. ZO. Week. Dig. 554 ; People v. Albany, etc., 588 CONTEMPT. 6. Inability to comply with order. A person will not generally be punished as for a contempt for a failure to do an act which he cannot do.*^ The court has power to relieve a party from the order, in a proper case, where there is inability to comply therewith.^" It is sufficient excuse when an act has been directed by man- damus to show that an injunction has been granted restrain- ing the same act.^^ A corporation which has been adjudged guilty of contempt because of the failure of its president to appear for examination will not be punished where it is shown that before the order for examination was made the person named therein as president had in good faith disposed of his stock, ceased to be either president or director, and severed all connection with the corporation so that it had no control or jurisdiction over him.^^ A mere statement by the officers of a corporation that they are not now possessed of the books, which they were ordered to produce upon an examination before trial, will not exoner- ate them from obedience to the order, where it appears that the books were lately in their control.^^ But it is no aswer to the proceedings for contempt that the pecuniary circumstances of the defendant are such that he is unable to comply with the order.^* 7. Validity of order. In determining whether parties are guilty of misconduct in failing to obey a lawful mandate of the court, no inquiry into its merits will be allowed.^^ An order, though erroneous, is entitled to obedience.^^ If the order is void for want of juris- 49. DifEany v. Kisley, 23 App. Div. 54. Lansing v. Lansing, 41 How. Pr. 371, 48 N. Y. Supp. 283; Grant v. 248. Greene Consol. Copper Co., 125 App. 55. Koehler v. Farmers & Drovers' Div. 833, 110 N. Y. Supp. 353. Bank, 14 Civ. Pro. 71. 50. Devlin v. Hinman, 40 App. Div. 56. People ex rel. Davis v. Sturte- 101, 57 N. Y. Supp. 663, 29 Civ. Pro. vaut, 9 N. Y. 263; Erie R. R. Co. v. 127; afe'd, 161 N. Y. 115. jRamsey, 4i5 N. Y. 637; Koehler v. 51. People V. Village of West Troy, Tarmer's Nat. Bk., 117 N. Y. 661; 25 Hun, 179. People v. Pendelton, 64 N. Y. 662; 52. Grant v. Greene Consol. Copper Mayor v. N. Y. & S. R. R. Co., 64 N. Co., 125 App. Div. 833, 110 N. Y. Supp. Y. Supp. 622 ; People ex rel. Cauff- 253. man v. Van Buren, 136 N. Y. 252; 53. Fenlon v. Dempsey, 21 Abb. N. Slaekman v. Kaufman, IfiO N. Y. Supp. C- 291. 786; Press Pub. Co. v. Associated CONTEMPT. 589 diction, objection may be taken to the contempt proceeding f' but, if it is merely irregular or erroneous, the situation will be considered only in mitigation of the punishment.^* That an injunction is too broad, and partially beyond the jurisdic- tion of the court, is no excuse as to those matters to which the court has jurisdiction.^^ An appeal from the order, with- out a stay, does not justify its violation.®" Where a final injunction restraining defendants froni per- forming as actors for any other person than the plaintiff was stayed, but the stay was finally reversed on appeal, the de- fendants cannot be held in contempt for not obeying the de- cree during the period the stay was in effect.*^ That the original order was modified on appeal is no excuse for failure to obey it, if it was affirmed in its essential parts.*^ A person sued by a wrong name will not be punished for con- tempt for failing to obey an order if he has not appeared in the action.®^ F. Process of court. A sheriff is liable to contempt for not returning process,®^ or for an insufficient return,' with intent to favor a party .^ A sheriff who refuses to receive a warrant of attachment delivered to him on a Saturday afternoon, &nd promises, but Press, 41 App. Div. 493, 58 N. T. JN. T. 637; Higbie v. Edgerton, ® Supp. 708; Hathorn v. Natural Car- Paige, 253; People v. Spaulding, 3 bonic Gas Co., 137 App. Div. 557, 131 Paige, 336; Smith v. Eeno, 6 How. Pr. N. Y. Supp. 683; People ex rel. Post 124. V. Grant, 13 Civ. Pro. 30'5; People ex' 59. Atlantic & Pacific Tel. Co. v. B. rel. Gaynor v. McKane, 78 Hun, 154, & O. E. E. Co., 46 Super Ot. 377; 28 N. Y. Supp. 981. modif d, 87 N Y. 355. 57. People v. Van Buren, 136 N. Y. 60. Stone v. Carlan, 3 Sandf. 738; 252; Bachjnan v. Harrington, 184 N. People v. Bergen, 53 N. Y. 404; Le- Y. 458; Koenig v. Eagle Waist Co., land v. Smith, 11 Abb. N. S. 231; Inc., 176 App. Div. 734, 163 N. Y. Troy & B. E. E. Co. v. B. & H. E. E. Supp. 1031; People v. Edison, 53 Co., 57 How. Pr. 181. Super Ct. 53. 61. Ziegfeld v. Northworth, 148 App. 58. Sheffield v. Cooper, 21 App. Div. Div. 185, 133 N. Y. Supp. 208. 518, 48 N. Y. Supp. 639; Hilton v. 621 Hathorn v. Natural Carbonic Paterson, 18 Abb. Pr. 245; People v. Gas. Co., 137 App. Div. 557, 121 N. Bergen, 53 N. Y. 404; Moat v. Hal- Y. Supp. 683. bein, 2 Edw. Ch. 188 ; People v. Sturte- 63. Muldoon V. Pierz, 1 Abb. N. C. vant, 9 N. Y. 263; Sullivan v. Judah, 309. 4 Paige, 443; Perry v. Mitchell, '5 64. People v. Brown, 6 Cow. 41. Denio, 537; Erie Ey. Co. v. Eamsey, 45 65. Burk v. Campbell, 15 Johns. 456. 590 CONTEMPT. fails, to go or send a deputy to see one of tlie plaintiff's attor- neys later in the day, may be guilty of contempt.^® But a sheriff who has acted in good faith should not be pun- ished as for contempt for a mistake of law.^^ Any person who interferes with the process or control or action of the court in. a pending litigation unlawfully and without authority is guilty of a civil contempt if his act defeats, impairs, impedes, or prejudices the right or remedy of a party to such action or proceeding.'^^ An order should not be granted for the arrest and imprisonment of a party who has obtained an attach- ment against property for his failure to pay the sheriff's charges, as fixed by an order vacating the attachment.^^ Where the return to a writ of habeas corpus, procured by a husband for the purpose of obtaining from his wife the custody of their infant child, alleges that the child is living in New Jersey and is not a resident of New York, and no traverse is inter- posed to such allegation, the mother of the child cannot be adjudged guilty of contempt for a failure to produce the child as demanded in the writ.™ G. Receivers. One suing a receiver without the consent of the court is guilty of contempt.''^ Likewise, an interference with the prop- erty in the custody of the receiver will be regarded as a con- tempt of court.''^ The refusal of a receiver to obey an order 66. Dailey v. Fenton, 47 App. Div. Pr. 65.' See the Chapter on Corpora- 418, 63 N. Y. Supp. 337. ' tions, as to suits by and against cor- 67. Second National Bank of Os- porate reeeivers. See also, Supplemen- wego V. Dunn, 63 How. Pr. 434. tary Proceedings as to receivers 68. King T. Barnes, 113 N. T. 479; therein. Lowenthall v. Hodge, 130 App. Div. Receiver acting under void order.— 304, 105 N. T. Supp. 120; People v. See Kroner v. Eeilly, 49 App. Div. 41, Church, 3 Wend. 262. 63 N Y. Supp. 527. 69. Hall V. U. S. Reflector Co., 66 Receiver seizing property of third How. Pr. 31. See also, Myers v. person. — See Brein v. Light, 36 Misc. Becker, 95 N. Y. 486. 112, 72 N. Y. Supp. 1087. 70. People ex rel. Winston v. Win- 72. Riggs v. Whitney, 15 Abb. 388; ston, 31 App Div. 121, 52 N. Y. Supp. Noe v. Gibson, 7 Paige, 513. See also, 814. Albany City Bank v. Schermerhorn, 9 71. Greene v. Odell, 43 App. Div. Paige, 373; Baker v. Browning, 8 608, 60 N. Y. Supp. 346; De Groot v. Paige, 388; Hilliker v. Hawthorne, 5 Jay, 30 Barb. 483; Taylor v. Baldwin, Bosw. 710; Sea Ins. Co. v. Stabbins, 8 14 Abb. 166; Phelps v. Cole, 3 Code Paige, 565. Rep. 157; Smith v. Woodruff, 6 Abb. Evicting tenantsi— In an action to CONTEMPT. 591 of the court is a contempt within sublivision 1 of section 753 of the Judiciary LawJ^ If one is ordered to deliver specific property to a receiver, he may be punished as for a contempt in case of his refusal^* The failure of a grantee, adjudged in a creditor's suit to have taken under a transfer fraudulent and void as to credi- tors, to pay to the receiver of the grantor appointed in seques- tration proceedings the value of the property transferred as directed by the judgment in the creditor's suit, does not sub- ject such grantee to contempt proceedings, since the money is to be paid to the receiver, not as receiver, but as the holder of the legal title to the grantor 's property.''^ The transfer of automobiles by a defendant in a judgment creditors action after argument, in which the defendant was represented, and after the announcement of the appointment of a receiver of the property, but before the entry and service of the order, is punishable as a contempt J^ A receiver of rents and profits of mortgaged premises can- foreclose a mortgage, to which the mortgagor, his lessee, and the monthly subtenant of the latter were made parties, an order was made, upon no- tice to all the defendants, appointing a receiver of the rents and profits, from which the lessee appealed, and there- after demanded the rents of the sub- tenants, and upon their refusal to pay, instituted summary proceedings for their eviction, held, that he was guilty of a contempt, though he acted under the advice of counsel in attempting to litigate the rights of the receiver in the summary proceedings. Coffin v. • Bur- stein, 68 App. Div. aa, 74 N. Y. Supp. 274. Where the ejection and exclusion of a receiver from the possession of a liquor saloon, and of the assets of a firm, including a lease, claimed under a chattel mortgage, was excused, and the defendants ordered to restore such pos- session, the disobedience of such further order, held, to make them liable for contempt and fine for the amount of loss claimed to have been sustained by the receiver. Levy v. Stanion, 43 App. Div. 619, 59 N. Y. Supp. 306. An assignee for the benefit of cred- tors cannot, like a receiver, be pun- ished for contempt for not complying with an order to pay out moneys in his hands. Matter of Badtke, 16 Week. Dig. 38. • 73. Clark v. Bininger, 75 N. Y. 344. See, also, Witherbee v. Witherbee, 55 App. Div. 181, 66 N. Y. Supp. 1036. Contempt not established. — The order adjudging a receiver in contempt for non-payment of money was held to be erroneous, where it was uncertain as to whether he was entitled to be al- lowed for alleged expenditures, and as to whether he had received the full amount specified, and where the order failed to state that damages to the estate of that amount had been caused by the non-payment. Weston v. Watta, 15 St. Eep. 133. 74. Lawson v. Tyler, 38 App. Div. 10, 90 N. Y. Supp. 188. 75. General Electric Co. v. Sire, 88 App. Div. 498, 85 N. Y. Supp. 141. 76. Winiehi v. Silverman, 163 N. Y. Supp. 634. 592 CONTEMPT. not ordinarily resort to contempt proceedings to compel ten- ants of the owner to pay rent." Contempt proceedings are available, however, where a person claiming to be lessee of the entire premises collects rents from a subtenant in defiance of an order forbidding him to do so, for in such case he inter- feres with the possession of the court through its receiver.''^ A lessee of mortgaged premises who,, not being a party to an action of foreclosure, nor receiving notice when a receiver was appointed, was afterward made a party and received notice, and claiming to have paid his own rents in advance, proceeds to collect rents from subtenants, acting under advice of counsel, is guilty of contempt, and his counsel is also prop- erly punishable." H. Attorneys. An attorney who collects or receives money for his client and refuses to pay it after demand, is punishable as for a contempt.^" An attorney is also liable for contempt for ap- pearing for a defendant and confessing judgment without authority .^^ But an attorney advising his client to file a petition in bank- ruptcy pending supplementary proceedings is not guilty of contempt.^^ An attorney who actively participates in taking out of the State and beyond the jurisdiction of the court property sub- ject to an attachment' levied in an action against a non-resi- dent, is guilty of an attempt to defeat a mandate of the court 77. American Mortgage Co. v. Sire, 79. Fletcher v. McKeon, 74 App. 103 App. Div. 396, 92 N. T. Supp. Div. 831, 77 N. T. Supp. 465. 1082; Guerrier v. Coleman, 135 App. 80. People ex rel. White v. Fee- Div. 46, 119 N. Y. Supp. 895; Green- naughty, 51 Misc. 468, 101 N. T. Supp. wich Savings Bank v. Silverman, 153 700; Matter of Bleakly, 5 Paige, 311; App. Div. 883, 138 N. Y. Supp. 13. Matter of Dakin, 4 Hill, 42; Wilmer- See also, Moore v. Smith, 70 App. dings v. Fowler, 14 Abb. Pr. N. S. 249 ; Div. 614, 74 N. Y. Supp. 1089. People v. Smith, 3 Caines, 221; People Refusal of a tenant who had in v. Wilson, 5 Johns. 368; Bohanan v. good faith paid five months' rent in Peterson, 9 Wend. 503; Ex parte advance to the mortgagor, after the be- Ferguson, 6 Cow. 596 ; Matter of Stein- ginning of a foreclosure suit but before ert, 24 Hun, 346 ; Ex parte Staats, 4 the appointment of a receiver, to pay Cow. 76. again to the latter, held, not a eon- 81. Denton v. Noyes, 6 Johns. 296. tempt. Krakower v. Lavelle, 37 Misc. 82. Matter of Kepecs, 123 N. Y. 423, 75 N. Y. Supp. 779. Supp. 872. 78. Guerrier v. Coleman, 135 App. 83. Lowenthal v. Hodge, 120 App. Div. 46, 119 N. Y. Supp. 895. Div. 304, 105 N. Y. Supp. 120. CONTEMPT. 593 ■ and will be ordered to bring back the property and deliver it into the custody of the sheriff. An attorney so acting is guilty of contempt although the warrant of attachment is not personally served upon him, if, with knowledge of the facts, he participated in removing the property.^ An attorney who has been ordered personally to pay costs on the vacating of an order to examine a debtor on supple- mentary proceedings cannot be held in contempt for failure to pay when it appears that the debtor on paying the judg- ment deducted the costs imposed upon the attorney.** An at- torney having two clients, if one is enjoined, is not limited in his professional action as to the other claiming different rights and interests.^ I. Failure to complete judicial sale. Where an order requires a purchaser at a foreclosure sale to complete the purchase, and the purchaser refuses to obey, the court has power to punish such disobedience as a con- tempt.*^ The plaintiff in the action does not waive his right to institute contempt proceedings against the delinquent pur- chaser by obtaining authority to resell the premises instead of instituting contempt proceedings immediately upon the delin- quent purchaser's failure to complete his purchase.*^ But failure of a purchaser at a foreclosure sale to comply with an order for a resale requiring him to pay to the referee any deficiency between his bid and the sum realized on the re- sale, together with the costs and expenses, and any taxes, water rates, or assessments which had become liens in the in- terval, cannot by itself be a foundation for a proceeding for contempt, where the order does not adjudge any specific sum to be paid.** An order for the payment of the difference between the bid made by a defaulting purchaser at a sale in foreclosure and the price at the resale, cannot be enforced by proceeding for contempt of court.*^ 84. Obermeyer & Liebman v. Adisky, Supp. 131. 123 App. Div. 272, 107 N. Y. Supp. 87. Rowley v. Feldman, 84 App. Div. 949. • 400, 82 N. Y. Supp. 679. 85. Slater v. Meiritt, 75 N. Y. 268. 88. Rowley v. Feldman, 66 App. Div. 8G. Burton v. Lynn, 21 App. Div. 463, 73 N. Y. Supp. 385. 609 47 N. Y. Supp. 835; State Bank 89. Leslie v, Saratoga Brewing Co., V. Wilchinsky, 65 Misc. 162, 119 N. Y. 33 Misc. 118, 67 N. Y. Supp. 222; 38 594 CONTEMPT. Where a referee in foreclosure fails to comply with the order, requiring him to pay surplus to the treasurer, and to file his report, it was held that an order was proper adjudging Mm guilty of contempt, prejudicing the rights of the parties, fining him, and directing his commitment, until payment and compliance with the first order."" J. Fictitious bail or surety. Under subdivision 2 of section 753 of the Judiciary Law, it is clear that a party who puts in fictitious bail or surety is guilty of contempt."^ Moreover, a surety who makes a false affidavit of justification may be prosecuted for contempt,'^ al- though he is not examined at the time of his justification.^ And lapse of time is no defense."* Where a surety is sought to be adjudged guilty of contempt because of his alleged insolvency at the time he executed the bond and the affidavit of justification, it is incumbent upon the moving party, in view of the fact that the proceeding oper- ates to deprive the defendant of his right to a trial by jury, to show his insolvency at the time in question beyond a reason- able doubt, and also that he has been guilty of perjury .^^ A surety who has deliberately divested himself of all prop- aff'd, 59 App. Div. 624, 69 N. Y. Supp. nesa of furnishing straw bail, and that 1138. the bond was paid for by the defend- 90. Steele v. Gunn, 3 N. T. Supp. ants. Matter of Westminister Realty 692, 19 St. Bep. 654. Corp., 123 App. Div. 797, 108 N. T. 91. Matter of Goslin, 95 App. Div. Supp. 551. 407, 88 N. Y. Supp. 670; Hall v. 92. Buffalo Loan, Trust & Safe De- Lanza, 97 App. Div. 490, 89 N. Y. posit Co. v. Medina Gas & Elec. Light Supp. 980; Matter of Westminister Co., 68 App. Div. 414, 74 N. Y. Supp. Realty Corp., 123 App. Div. 797, 108 486; Nuccio v. Porto, 72 App. Div. N. Y. Supp. 557; Foley v. Stone, 15 88, 76 N. Y. Supp. 96; Matter of Civ. Proc. 224; Hall v. L'Platimer, 49 Woods, 134 App. Div. 361, 119 N. Y. How. Pr. 500. Supp. 69; Simon v. Aldine Publishing Proof sufScient. — On a motion to Co., 12 Civ. Pro. 290; Foley v. Stone, punish a corporation and its presi- 15 Civ. Pro. 224. dent for contempt in furnishing fictiti- 93. Matter of Sheppard, 33 Misc. ous sureties on a bond given to dis- 724, 68 N. Y. Supp. 974. charge a mechanic's lien, a finding that 94. Matter of Hay Foundry & Iron the defendants knew of the fictitious Works, 22 App. Div. 87, 47 N. Y. Supp. character of the sureties is warranted 802. when it appears that the bond was ob- 95. Johnson v. Austin, 76 App. Div. tained from one engaged in the busi- 312, 78 N. Y. Supp. 501. CONTEMPT. 595 erty in order to prevent the enforcement of his liability can- not be punished for contempt of court.^^ An attorney who procured an order upon an undertaking with knowledge that one of the sureties was fictitious or in- solvent, and the other not worth sufficient property to war- rant his justifying as a surety, is properly punished for con- tempt.^'' On a finding that the fictitious bail actually did defeat, im- pair, impede, and prejudice the rights and remedies of a party to the action, the offender may be adjudged guilty of con- tempt, fined the amount of the judgment, and committed to the county jail on a failure to pay.^^ K. Matrimonial actions. Contempt proceedings against a husband for his failure to pay alimony or counsel fees, are discussed in the chapter on Matrimonial Actions.^^ Where the defendant in' a divorce action, during the pro- gress of the trial, wrote an article relating in part to the trial and in part containing his own views of the facts, and setting forth in full two letters which had been offered in evidence, excluded and marked for identification, the first sentence of which article showed that it did not purport to be a statement of proceedings on the trial, and sent it to several newspapers accompanied by a letter which also showed that the article was not confined to an account of the court proceedings, he cannot, on the publication of the article, be punished for a criminal contempt because of the publication of the letters and on the theory that he represented the entire statement to be an account of the proceedings on the trial. Such an adjudication can only be sustained by showing that the defendant published a grossly inaccurate account of the proceedings on the trial.^ L. Supplementary proceedings. An application is frequently made to punish a debtor or other person for his failure to obey an order in supplemen- 96. Bollard V. Koronsky, 138 App. 98. Matter of Woods, 134 App. Div. Div. 213, 123 N. Y. Supp. 11; afE'd, 361, 119 N. Y. Supp. 69. 199' N. Y. 558. 99- i^ee Matrimonial Actions, vol. 2. 97. Nuecio v. Porto, 7Z App. Div. 1. People ex rel. Brewer v. Platzek, 88, 76 N. Y. Supp. 96 ; Foley v. Stone, 133 App. Div. 25, 117 N. Y. Supp. 15 Civ. Proc. 224. 852. 596 CONTEMPT. tary proceedings. These matters are discussed in the Chap- ter on Supplementary Proceedings.^ M. Surrogate's court. 1. Surrogate Court Act, § 20. Incidental powers of the surrogate. Sub|. 7. To punish any person, for a contempt of his court, civil or criminal, in any case where it is expressly prescribed by law that a court of record may punish a person for a similar contempt, and in like manner. 2. Surrogate Court Act, § 84. Enforcement of decree by punishment for contempt. In either of the following cases, a decree of a surrogate's court directing the payment of money, or requiring the performance of any other act, may be en- forced by serving a certified copy thereof upon the party against whom it is rendered, or the officer or person who is required thereby, or by law, to obey it; and if he refuses or wilfully neglects to obey it, by punishing him for a con- tempt of court. 1. Where it cannot be enforced by execution, as prescribed in the last section. 2. Where part of it cannot be so enforced by execution; in which case, the part or parts which cannot be so enforced may be enforced as prescribed in this section. 3. Where an execution, issued as prescribed in the last section to the sheriff of the surrogate's county has been returned by him wholly or partly unsatisfied. 4. Where the delinquent is an executor, administrator, guardian, or testa- mentary trustee, and the decree relates to the fund or estate, in which case the surrogate may enforce the decree as prescribed in this section, either without issuing an execution, or after the return of an execution, as he thinks proper. If the delinquent has given an official bond, his imprisonment, by virtue of proceedings to punish him for a contempt, as prescribed in this section, or a levy upon his property by virtue of an execution, issued as prescribed in the last section, does not bar, suspend, or otherwise affect an action against the sure- ties on his official bond.3 3. Failure of representative to obey decree. A surrogate's decree upon the accounting of an executor or administrator directing the distribution of the funds or the payment of certain matters, may be enforced by contempt proceedings, if the representative fails to comply therewith.* 2. See, Supplementary Proceedings, Act, § 300. vol. 3. 4. Dunford v. Weaver, 84 N. Y. 445 ; 3. An appeal from a decree or an Matter of Scheuer, 161 App. Div. 525, order directing the commitment of a 146 N. Y. Supp. 707; Matter of Sny- persou does not stay the execution of der, 34 Hun, 302; aff'd, 103 N. Y. the decree or order appealed from un- 178; Matter of Holmes, 79 App. Div. less the appellant gives an undertaking 367, 79 N. Y. Supp. 687; aff'd, 176 as therein prescribed. Surrogate Court N. Y. 604; Matter of Pye, 18 App. CONTEMPT. 597 Wliere an investment made by an executor is rejected and lie fails to pay over tlie amount in money as directed by the surrogate, he is in contempt.'' Personal property specifically bequeathed to an executor is subject to application upon the debts of the testator's estate where there is a deficiency of assets; and for a failure to account therefor upon an order of the court he is guilty of contempt of court.^ An order of the surrogate directing an executrix to pay a judgment is a decree, and can be made a foundation for con- tempt proceedings^ The implied authority of an attorney does not extend to permit him to bind his client, an executor, to liability for a criminal contempt, in procuring the improper satisfaction of a decree without the actual privity of his client.* 4. Indebtedness of representative to estate. It is the duty of an executor, indebted to his testator when he died, if solvent at any time before his final accounting, to pay, as an individual, the debt to himself as executor. Where a decree has charged him with the debt his failure to comply therewith is punishable with fine and imprisonment.^ But, in such a case, the decree will not be enforced by con- tempt proceedings, if it is shown that the representative is Div. 306 46 N. Y. Supp. 350; aff'd, printed blank with the word " nothing " 154 N. T. 773 ; Matter of Isaacs No. written in each of the schedules, on the 1 103 Misc. 184 169 N. Y. Supp. 1066 ; contention that he was no longer act- Saltus V. Saltus, 2 Lans. 9; Matter of ing as executor, held a contempt of Kurtzman, 3 St. Eep. ■655. court. Matter of People's Trust Co., Application by one of several bene- 37 Misc. 239, 75 N. Y. Supp. 254. ficiaries.— Where a decree entered on 5. Matter of Ryer, 120 App. Div. the judicial settlement of the account 154, 104 N. Y. Supp. 804. of a testamentary trustee directs pay- 6. Matter of Pye, 18 App. Div. 306, ments to separate persons not united in 46 N. Y. Supp, 350; aff'd, 154 N. Y. interest, a motion by one of them to 773. punish the decretal debtor as for con- 7. Matter of Bernhard, 16 St. Kep. tempt for disobedience of the directions 240, 1 N. Y. Supp. 225 ; Matter of Ma- for payments contained in the decree honey, 88 App. Div. 140, 84 N. Y. may be granted, but only to the extent Supp. 339-. of a fine in a sum representing the 8. Matter of Feehan, 36 Misc. 614, amount payable under the decree to the 73 N. Y. Supp. 1136. moving party. Matter of Ball, 94 Misc. 9. Matter of Strong, 111 App. Div. 113, 158 N. Y. Supp. 1095. 281, 97 N. Y. Supp. 459; aff'd, 186 N. Contemptuous account.— The response Y. 584; Matter of David, 44 Misc. 337, by an executor to an order requiring 89 N. Y. Supp. 927. him to file an account, by filing a 598 CONTEMPT. financially unable to make the payment.^" The burden is upon the executor to show his defense of insolvency." 5. Costs. A provision in a decree of the Surrogate's Court, rendered upon the judicial settlement of an administrator's accounts, directing the administrator to pay personally a specified amount of costs to the contestants, cannot be enforced by con- tempt proceedings. While the language of such section may be broad enough to authorize the institution of contempt proceedings in such a case, it must be construed in connection with section 20 of Civil Eights Law, which prohibits imprisonment for non-pay- ment of costs except in the cases therein specified.^^ Costs awarded to a special guardian against a temporary administrator cannot be enforced by contempt proceedings.^^ Some of the earlier cases sustained the right to proceed by contempt proceedings to compel the payment of costs and al- lowances to special guardians." 6. Discretion of surrogate. Whether a person shall be punished by a Surrogate for a contempt of court, rests largely in his discretion.^ This dis- cretion will not be reviewed in the Court of Appeals.^® A guardian will not be punished for contempt in failing to pay over a balance found due on the accounting, where the moneys were expended in support of a household of which the infant was a member, and the guardian is penniless and in bad health and has offered all her household goods in payment of such balance.-''^ The discretion should not be exercised in 10. Baucus V. stover, 89 N. T. 1-, 28 Misc. 308, 59 N. T. Supp. 981; Matter of Ockerahausen, 59 Hun, 200, Slawson v. Schlessinger, 7 Abb. N. 13 N. Y. Supp. 396; Matter of Bugg, Cas. 399; Gilles v. Kreuder, 1 Dem. 3 St. Rep. 224. 349; Matter of Kurtzman, 2 St. Eep. 11. Matter of Strong, 111 App. Div. 655. 281, 97 N. Y. Supp. 459; aflf'd, 186 N. 15. Matter of Battle, 5 Dem. 447; Y. 584. Matter of David, 44 Mise. 337, 89 N. 12.. Matter of Humpreville, 154 N. Y. Supp. 927; Matter of Snyder, 2 St. Y. 115; Matter of Banning, 108 App. Eep. 758. Div. 13, 95 N. Y. Supp. 467. 16. Matter of Judicial Settlement of 13. Matter of Grant, 130 App. Div. Snyder, 103 N. Y. 178. 706, 115 N. Y. Supp. 383. 17. Matter of Lothringer, 26 Misc. 14. Beckett v. Place, 12 Misc. 333, 690, 57 N. Y. Supp. 950. 33 N. Y. Supp. 634; Matter of Monell, CONTEMPT. 599 favor of a delinquent executor wlio lias been directed to make payment from the money in his hands and who has disobeyed such direction, unless under extraordinary circumstances.^^ Financial inability is not necessarily a sufficient ground to relieve a representative from the result of his contempt. - 19 7. Demand. In order to punish a person for contempt for non-payment of money ordered by the court to be paid, the personal de- mand required by section 84 of the Surrogate Court Act, must be shown by affidavit. It must be a demand by or on behalf of the party to whom the order required the payment to be made.^" Where an executor is adjudged to pay to the petitioners an amount determined to belong to them by virtue of their lien as attorneys, and. costs to be paid by the executor personally, a demand for the entire amount of the petitioners' lien upon the entire decree does not afford a basis for a proceeding to punish him for contempt.^ N. Conduct of witnesses. 1. In general. The contumacy of a witness may constitute a criminal con- tempt;^ or it may be punished as a civil contempt.^ Thus, the contumacious £.nu unlawful refusal of a person who has been sworn as a witness to answer any legal and proper interrogatory may be punished criminally or -civilly .^^ The statute does not authorize the commitment of a witness for contempt for evasive and contumacious conduct, when there is no adjudication of injury to the right or reniedy of any party .^ If the party who has subpoenaed the witness suc- 18. Matter of Battle, 10 St. Eep. America, 100 Misc. 403, 167 N. T. 667. Supp. 1079. 19. Matter of Geyer, 63 Misc. 443, 24. Jones v. Davidson, 35 Hun, 471; 116 N. Y. Supp. 800 ; Matter of Kurtz- Matter of Jones, 6 Civ. Proc. 250. man, 2 St. Eep. 655. Signing deposition.— But although a 20. Matter of Oilman, 15 St. Bep. witness will be compelled to answer, he „.^g will not be obliged to sign a deposition 21. Matter of Feehan, 36 Misc. 614, when it might subject him to legal lia- 73 N. Y. Supp. 112«. bility. Marx v. Spaulding, 6 St. Eep. 22. See, supra, Art. II— F. Con- 530. tumaey of witness. 25. Manzella v. Eyan, 73 App. Div. 23. Todd V. Silk Association of 137, 77 N. Y. Supp. 132. 600 CONTEMPT. ceeds upon the trial, he is not generally injured ;^^ but a wit- ness who does not obey a subpoena will not necessarily escape punishment because the party who subpoenaed him was suc- cessful.^^ In proceedings to examine a witness before trial, it must appear, to put him in contempt, that the order for his examination has been served on him.^^ An order for the pro- duction of books must be served upon a party personally in order that he may be punished for civil contempt in failing to comply therewith. This is so although the party appeared by attorney and contested the motion for the order.^^ A party should not be punished for a civil contempt in dis- obeying an order requiring him to permit the inspection of books and papers, where the terms of the order are so in- definite as to make it uncertain what books and papers are covered thereby.^" The right to compel a witness to produce the books of a cor- poration of which he is the president turns upon whether their production is necessary to an inquiry set on foot through a legislative committee, and when such committee has all the information upon the subject of the inquiry in which it is en- gaged that is necessary for its general purposes, to allow an examination into the business of a • corporation generally as would be revealed in its books, is improper and without juris- diction.^ Where, on the examination of a witness served with a sub- poena duces tecum, his attorney, who was also the attorney for the judgment debtor, produces the documents called for by the subpoena, his persistent refusal to permit them to be put in evidence, though directed by the referee so to do, is a contempt of court.^^ Where a corporation defendant duly served with an order for its examination before trial and for the production there- on of certain of its books and papers containing material evi- 26. Noster v. Metropolitan St. By. Tebo v. Baker, 16 Hun, 182. Co., 30 Misc. 723, 63 N. Y. Supp. 501. 29. Curtis v. Powers, 146 App. Div. 27. People ex rel. Springs v. Reid, 246, 130 N. Y. Supp. 914. 139 App. Div. 551, 124 N. Y. Supp. 30. Curtis v. Powers, 146 App. Div. 205; People ex rel. Duffus v. Brown, 246 130 N. Y. Supp. 914. 46 Hun, 320; Bleecker v. Carroll, 3 31. Matter of Barnes, 204 N. Y. lOS. Abb. 82 ; Woods v. DeFiganiere, 1 Bob. 32. Steinmau v. Conlon, 79 Mise. 607. 527, 141 N. Y. Supp. 79; modif'd, 155 28. Loop V. Gould, 17 Hun, 585; App. Div. 888, 140 N. Y. Supp. 1147. CONTEMPT. 601 dence for the plaintiff fails to produce a single one of said books and papers, it will be adjudged guilty of contempt.^^ Where failure to produce books and papers is sought to be excused by a plea that the witness did not have the possession or control of them, that fact, and the witness ' good faith, must be shown by affirmative proof.^* Perjury has always been held to be a great contempt of court, and the court has power to punish sureties for that of- fense, by imposing upon them a fine sufficient to indemnify the defendant for the loss and injury he has sustained through their misconduct, and by imprisoning them for six months and until the fine is paid.^^ 2. Privilege of witness. A witness is not guilty of a contempt in refusing to testify to a fact which would subject him to a penalty or forfeiture,^^ or would tend to disgrace or incriminate himself.^^ The privi- lege is, however, personal to the witness.^^ 3. Improper questions. A witness cannot be punished for contempt for refusing to answer a question immaterial and irrelevant to the issue.^^ The question propounded must be pertinent to the issues in order that the refusal of the witness to answer the questions may be a contempt.^" 33. Am. Blue Stone Co. v. Cohn Cut that he should produce certain books of Stone Co., 98 Misc. 439, 164 N. Y. the corporation to refresh his recoUec- Supp. 506. tion, upon the ground they would tend 34. Press Pub. Co. v. Associated to incriminate him, held guilty of eon- Press, a? Misc. 90, 58 N. Y. Supp. 186, tempt. Pray v. Blanchard Co., 95 App. 29 Civ. Pro. 303; modif'd, 41 App. Div. 423, 88 N. Y. Supp. 650. Div. 493, 58 N. Y. Supp. 708. A county treasurer is not bound to 35. Eagan v. Lynch, 3 Civ. Proc. answer an interrogatory put to him by 236. a committee appointed by a board of 36. Henry v. Salina Bank, 1 N. Y. supervisors concerning moneys in his 83. hands as such treasurer. Matter of 37. Matter of Lewis, 39 How. Pr. Dickinson, 56 How. Pr. 260. 155; Lohman v. People, 1 N. Y. 379; 38. Brandon v. People, 42 N. Y. 265; People V. Rector, 19 Wend. 569; Southland v. Bexford, 6 Cow. 254; People V. Herriek, 13 Johns. 82. Ward v. People, 6 Hill, 144. The treasurer of a corpoiration, who, 39. Matter of Odell, 6 Denio, 344. not appealing from an order for his 40. People ex rel. Roache v. Han- examination before trial, refused to bury, 45 N. Y. Supp. 483. comply with a provision of the order 602 CONTEMPT. It is not a contempt for a witness to refuse to make a prom- ise as to what he will do in the future and in case of the hap- pening of some contingency." The court is to decide as to whether a question put to a witness is proper, and that ques- tion cannot be inquired into, to impeach a commitment for contempt.^^ 0. Miscellaneous acts. A contempt of court may consist in writing an insulting letter to a grand jury;^^ breaking open parts of books sealed up and delivered to a party for inspection;*^ or bringing an action m the name of another person, without his privity or consent.^ If a party stipulates in open court to pay the ex- penses of a reference, and he is ordered to pay and refuses, giving no satisfactory reason, he may be punished for con- tempt.*^ The failure of an assignee for creditors to produce a ledger of the assignor, placed by direction of the latter in another than its usual place, and being a book the assignee had no occasion to use, is not sufficient to justify his punishment as for a contempt.*'' An officer of a corporation who has been directed to pro- duce a large number of books and records of the corporation on his examination as a witness before trial is not guilty of contempt in merely failing to have all the books and papers before the referee on the day fixed for his attendance; but where he refuses to produce certain of said books subse- quently on demand when their use in aid of his examination has become necessary, he may be punished for contempt, and advise of counsel furnishes no excuse, but only affects the penalty.** P. Advice of counsel as defense. The fact that a party followed the advice of his counsel in doing the act in question, while it does not absolve him from 41. Matter of Freligh, 43 Misc. 11, 46. Fischer v. Eaab, 56 How. Pr. 85 N. Y. Supp. 830. 218; aff'd, 58 How. Pr. 221; People v. 42. People v. Cassells, 5 Hill, 164; Eeilly, 56 How Pr. 223. People V. Sheriff, 7 Abb. 96; Forbes v. 47. Matter of Wegman's Sons, 40 Meeker, 3 Edw. 453. App. Div. 632, 57 N. T. Supp. 987. 43. Bergh's Case, 16 Abb. 266. 48. Press Pub. Co. v. Associated 44. Dias v. Merle, 2 Paige, 494. Press, 27 Misc. 90, 38 N. Y. Supp. 186, 45. Butterworth v. Stagg, 2 Johns. 29 Civ. Pro. E. 203; modif'd, 41 App. Cas. 291. Div. 493, 58 N. Y. Supp. 708. CONTEMPT. 603 guilt/^ may be considered as a mitigating circumstance by the court in lixing the punishment.^" But it will not ordinarily protect him from a fine sufficient , to compensate the adverse party .^^ Acting under the advice of counsel is no justification, and goes in mitigation only to the extent that the court is satisfied that the advice was sought, obtained, and acted on in good faith.^^ A witness who fails to obey a subpoena cannot escape punishment because the counsel advised him that the service was not valid.^^ The advice of his attorney that the injunction is illegal will not justify or excuse the party enjoined in violating it.^* A client will not be punished for an act done by his attorney without his privity, procurement, or consent.^^ Where the commissioner of bridges of New York city violates, under ad- vice of counsel, an injunction order prohibiting him froin in- terfering with or obstructing plaintiff in laying down his pneumatic tubes over the bridge, he is liable to punishment as for a contempt, but where the act was done in good faith and with no willful intent to violate the order, the commissioner and his adviser should not be punished by way of fine for their act.^^ ARTICLE IV. PROCEDURE AND PUNISHMENT FOR CIVIL CONTEMPT. A. Nature of proceeding. Civil contempts are punished according to the practice out- lined in Article XIX of the Judiciary Law." When the pro- 49. Fischer v. Langbein, 103 N. Y. N. C. 1. 84 ; Day v. Bach, 87 N. Y. 56 ; Matter 51. Lansing v. Easton, 7 Paige, 364 ; of Grantz, 78 App. Div. 399, 79 N. Y. Billings v. Carver, 54 Barb. 40; Power Supp. 899 ; Power v. Village of Athens, v. Village of Athens, 19 Hun, 165. 19 Hun 1&5. 52. Stolts v. Tuska, 8a App. Div. 81, 50. Krom v. Hogan, 4 How. Pr. 235; 81 N. Y. Supp. 638. Matter of Fitton, 16 ' How. Pr. 303 ; 53. People ex rel. Springs v. Keid, Erie E. B. Co. v. Kamsey, 45 N. Y. 139 App. Div. 551, 124 N. Y. Supp. 637; Hawley v. Bennett, 4 Paige, 163; 205.. Jlogers V. Patterson, 4 Paige, 450; 54. Capet v. Parker, 3 Sandf. 662. Billings V. Carver, 54 Barb. 40; Lans- 55. Satterlee v. DeComeau, 7 Rob. ing V. Easton, 7 Paige, 364; People v. 666. Compton, 1 Duer, 512; Taggard v. Tal- 56. N. Y. Mail & Trans. Co. v. Shea, eott, 3 Edw. Ch. 638 ; HiUiger v. 30 App. Div. 374, 52 N. Y. Supp. 5. Hathorn, 5 Bosw. 710; People ex rel. 57. Judiciary Law, § 754. Del Mar v. St. Louis By. Co., 19 Abb. 604 CONTEMPT. ceeding against a party to the original action or special pro- ceeding is commenced by an order to show cause, the con- tempt proceeding is not an independent proceeding, but is a proceeding in the original action or proeeeding.^^ An order to show cause why a party to a special proceeding should not be punished for contempt for disobedience of an order made in such proceeding does not institute a new pro- ceeding but is an order in such special proceeding, and it is properly served upon the attorneys therein of the party pro- ceeded against.^^ But, a contempt proceeding against a wit- ness or other person not a party to the original matter, is new proceeding.^" And, when the proceeding is commenced by a warrant of attachment, section 762 seems to contemplate that an original proceeding is commenced.^^ B. Jurisdiction of courts or judges. 1. Judiciary Law, § 781. Punishment of misconduct at trial term. Where a misconduct, which is punishable by fine or imprisonment, as pre- scribed in this article, occurs at a trial term, or with respect to a mandate re- turnable at such term, and was not punished at the term at which it occurred, the supreme court may inquire into and punish the misconduct, as if it ■ had occurred at a, special term of the supreme court, held in the same county, or with respect to a mandate returnable at such a special term. (See B., C. & G. Consolidated Laws, 2d Ed., p, 4414.) 2. General authority of courts or judges. It has been held that a judge out of court has no power to punish for contempt on disobedience of an order made in a statutory proceeding before him, unless authority so to punish is expressly conferred by law.^^ And it has been said that the court in term time cannot punish, as for a contempt, disobedience of an order made by a judge out of court, unless the order is made in an action pending in the court.^ But it has been held that the court has power to punish for a contempt of an order made by a county judge in supplementary pro- ceedings in the Supreme Court.^ 64 58. Matter of Steinman v. Conlon, 61. Whitman v. Haines, 21 St. Rep. 208 N. Y. 198 ; Axlerod v. Levine, 220 41, 4 N. Y. Supp. 48. N. Y. 764. 62. People v. Brennan, 45 Barb. 344. 59. State Bk. v. Wilehinsky, 64 Misc. 63. People v. Brennan, 45 Barb. 344. 476, 118 N. Y. Supp. 578. 64. Tremain v. Riehardson, 68 N. Y. 60. See Matter of Steinman v. Con- 617. Ion, 208 N. Y. 198. CONTEMPT. 605 An order to show cause to punish for a contempt, made by a county judge, returnable after the expiration of his term of office, may be heard and decided' by his successor in office.^^ The proper remedy to obtain relief by a party in contempt is by a motion in the court in which the order was granted; where a judge who made the order was no longer a member of the court, it has been held that the order is properly made before any judge sitting at Special Term.^^ A committee of a board of supervisors has power to sub- poena a witness, but neither the Supreme Court nor a judge thereof can punish as for a contempt, disobedience of the com- mand. Where a person fails to obey such subpoena any judge of the court may issue a warrant commanding the sheriff to apprehend the defaulting witness and bring him before the committee. But where the official term of all the supervisors composing the committee has expired before the issuing of the warrant, the committee has no power to act further and the judge has no power to issue the warrant.®^ The justice who issued a subpoena requiring a witness to appear before a com- missioner appointed by a foreign court to take testimony in this State has no power to hear or determine an application to punish a witness for refusing to answer questions upon his examination, but such power is confined to the officer before whom he was required to appear.^^ C. Strict following of procedure. A proceeding to punish one for contempt of court is stricti juris and must be taken as prescribed by the statute.®^ Every condition precedent to the exercise of the power must receive a literal compliance.™ All the rights of the defendant must be carefully protected, and he cannot be adjudged guilty un- less there has been a literal compliance with the law.'^ But, where the defendant fails to object to the examination of witnesses before the court, but on the contrary cross-ex- 65. Ganeman v. Berry, 34 Hun, 138. 69. Bradbury v. Bliss, 23 App. Div. 66. Davidson's Case, 13 Abb. Pr. 606, 48 N. Y. Supp. 912; Goldie v. 129 ; People v. Murphy, 1 Daly, 462. Goldie, 77 App. Div. 12, 79 N. Y. Supp. 67. Matter of Supt. of the Poor of 268. Westchester Co., 6 App. Div. 144, 39 70. Flor v. Flor, 73 App. Div. 262, K. Y. Supp. 878. See also. People ex 76 N. Y. Supp. 813. rel. Stitz v. Rice, 57 Hun, 62, 10 N. 71. Goldie v. Goldie, 77 App. Div. Y. Supp. 270. 12, 79 N. Y. Supp. 268. 68. Matter of Searls, 155 N. Y. 133. 606 CONTEMPT. amines them, he must be held to have consented to the prac- tice adopted, and cannot complain thereof on appeal.''^ And, where parties, in response to an order to show cause why they should not be punished for contempt, appear and answer, they waive any defects in the affidavit upon which the order was issuedJ' The objection that a proceeding to punish a person for con- tempt was not instituted by an attachment or an order to show cause, will be deerned to have been waived if not taken at the Special Term.'* Although the moving affidavits on an application to punish for contempt are insufficient, being founded upon information and belief and the conclusions of the affiants, the matter may be determined if the answering affidavits present sufficient facts to raise the questions involved.'^ D. Summary punishment. Under section 755 of the Judiciary Law, where the offense is committed in the immediate view and presence of the court, or of the judge or referee, upon a trial or hearing, it may be punished summarily. For that purpose, an order must be made by the court, judge, or referee, stating the facts which constitute the offense, and bring the case within the pro- visions of this section, and plainly and specifically prescrib- ing the punishment to be inflicted therefor. A show cause order or a warrant of attachment is not neces- sary where the contempt is committed in the immediate view and presence of the court as in the refusal of a witness to answer questions.'^ E. Issue of warrant without notice. 1. Judiciary Law, § 756. Issue of warrant without notice. Where the oflFense consists of a neglect or refusal to obey an order of the court, requiring the payment of costs, or of a specified sum of money, and the court is satisfied, by proof, by affidavit, that a personal demand thereof has been made, and that payment thereof has been refused or neglected; it may issue, 72. King V. Barnes, 113 N. T. 476. 155 N. Y. Supp. 375. 73. People v. Court of Sessions, 147 75. Gardner v. Buffalo Steam EoUer N. Y. 290. Co., 155 App. Div. 763, 140 N. Y. 74. Maigille v. Leonard, lOa App. Supp. 1049. Div. 367, 92 N. Y. Supp. 656; aff'd 76. People ex rel. Cowan v. Hamil, without opinion, 181 N. Y. 558. Com- 145 N. Y. Supp. 400. pare Protter v. Lovell, 91 Misc. 417, CONTEMPT. 607 without notice, a warrant to commit the offender to prison, until the costs or other sum of money, and the costs and expenses of the proceeding, are paid, or until he is discharged according to law. (See B.., C, & G. Consolidated Laws, 2d Ed., p. 4396.) 2. Discussion of statute. The court is not required to issue tlie warrant without further notice to the accused party, for under section 757 it can issue a show cause order or a warrant of attachment as therein provided. Section 756 is not a definition of cases in which proceedings as for a contempt may be taken, but is simply the proceeding prc\ided for enforcing, in appropriate cases, the contempts defined in section 753." To proceed under this section, it is essential that a demand be made for the payment of the money in question.™ And this demand is to be made by or on behalf of the person entitled to receive it.™ " The personal demand " required by this section, must be proved by affi- davit.^ The statute is not satisfied by a recital, in the order adjudging the offender guilty of contempt, that it appears to the satisfaction of the court that such a demand has been made, where there is no proof of that fact by affidavit or otherwise.^^ Until service of a copy of the order is made a party cannot be brought in contempt for not complying with its direction.^^ Before one can be adjudged to be in contempt it must appear, not only that the order in question was served upon him, but that such service was accompanied with a de- mand that he comply therewith and pay the money directed to be paid thereby.^ 77. Leslie v. Saratoga Brewing Co., 80. Matter of Oilman, 15 St. Rep. 33 Misc. 118, 67 N. Y. Supp.' 322; 718. aff'd, 59 App. Div. 624, 69 N. Y. Supp. 81. Flor v. Flor, 73 App. Div. 262, 1138. 76 N. Y. Supp. 813. 78. General Electric Co. v. Sire, 88 82. Eagan v. Lynch, 3 Civ. Pro. 236 ; App. Div. 498, 85 N. Y. Supp. 141; Pittsfield National Bank v. Taller, 23 Grey v. Cook, 34 How. Pr. 432 ; Mc- Civ. Proc. 48 ; McOauley v. Palmer, 40 Comb V. Weaver, 11 Hun, 271; Fischer Hun, 38; Loop v. Gould, 17 Hun, 585; V. Baab, 81 N. Y. 235. Gerard v. Gerard, 2 Barb. Ch. 73; 79. Matter of Gilman, 15 St. Eep, People v. Murphy, 1 Daly, 462; Sand- 718; Panton v. Zebley, 19 How. Pr. ford v. Sandford, 3 St. Kep. 133. 394; People v. King, 9 How. Pr. 97; 83. E. Elver Bank v. DeLacey, 37 Tinkey v. Langdon, 60 How. Pr. 180. Misc. 765, 76 N. Y. Supp. 9Z7. 608 CONTEMPT. F. Order to show cause or warrant to attach offender. 1. Judiciary Law, § 757. Order to show cause, or warrant to attach offender. The court or judge, authorized to punish for the offense, may, in its or his discretion, where the case is one of those specified in either of the last two sec- tions, and, in every other case, must, upon being satisfied, by affidavit, of the commission of the offense, either 1. M'al 17 How. 16. 82. Cumberland, etc., Co. v. Hoffman, 88. Artisans' Bank v. Park Bank, 41 30 Barb. 165. Barb. 599. 83. Wrightsville Hardware Co. v. 89. Jewell v. Wright, 30 N. Y. 259. Assets Realization Co., 159 App. Div. The City Court of the city of New 849, 144 N. Y. Supp. 991. York has jurisdiction of an action by Compare, Hann v. Barnegat, etc., Co., «i foreign corporation on a note pay- 7 Civ. Pro. E. 222. able within the State, though outside 84. Burckle v. Eckhart, 3 N. Y. 132. of that city. Globe Yarn Mills v. Bil- 85. Strann v. Brandt-Dent Co., 71 brough, 28 Abb. N. C. 426, 46 St. Rep. App. Div. 234, 75 N. Y. Supp. 698; af- 271, 19 N. Y. Supp. 176; aff'd, 2 Misc. firmed, without opinion, 175 N. Y. 463. 100, 21 N. Y. Supp. 2, 49 St. Rep. 702. 86. Armour v. Sound Shore Front 90. Hibernia National Bank v. La- Improvement Co., 71 Misc. 253, 128 combe, 84 N. Y. 367; aff'g, 21 Hun, "' Y. Supp. 331; aff'd, 144 App. Div. 166. 694 CORPORATIONS. demand arose on a written contract executed and made pay- able in Canada, and the work contracted for, except a small portion, was done there, it was held it was not a New York contraet.^^ But where a contract was made in Canada and was chiefly performed here, it was held that suit would lie here.^^ In determining whether a cause of action arose within the State, for the purpose of deciding whether the courts in this State have jurisdiction of an action brought by a non-resident against a foreign corporation, the allegations of the pleadings may alone be considered.^^ The court has no jurisdiction of an action brought against a foreign corporation by a non-resident plaintiff to recover for breach of a contract of employment made, to be performed, and actually performed, in another State.^ Where the plaintiff made a contract with a foreign corpor- ation for work to be done partly here and partly abroad, and an office was to be kept in New York, it was held that the cause of action arose in this State.^^ Where a loan is made by one non-resident to another, out of the State, but secured by a draft drawn on a person residing in the State, the cause of action does not arise here.^^ But if bonds and coupons, made in another State, are payable here, the court has jurisdiction, though both parties are foreign corporations.^'' An action for loss of baggage may be main- tained here if the contract was made here.^^ Under a bill of lading issued in a foreign country for goods to be transported therefrom to New York, an action for damages to the goods in course of transportation is upon a cause of action arising in New York.^^ A non-resident cannot maintain an action against a foreign carrier to recover for goods shipped under a through contract from a point in Massachusetts to a point in New Jersey, taken from Massachusetts by connecting carrier to New Jersey, in 91. Campbell v. CJhamplain, ptc, R. 96. Western Bank v. City Bank, 7 R. Co., 18 How. Pr. 412. How. 238. 92. Johnson v. Adams Tobacco Co., 97. Connecticut Mutual Ins. Co. v. 14 Hun, 89. Cleveland R. R. Co., 41 Barb. 9. 93. Rosenblatt v. Jersey Novelty 98. Jones v. Norwich, etc., Co., 50 Co., 45 Misc. 59, 90 N. Y. Supp. 816. Barb. 193; criticised and limited in 94. Jones v. Burr Brothers, Inc., 142 MeCormick v. Pennsylvania R. Co., 49 App. Div. 640, 127 N. Y. Supp. 478 N. Y. 303. 95. Hiller v. B. & M. R. R. Co., 70 99. Robertson v. National Steamship N. Y. 223. Co., 14 N. Y. Supp. 313. COEPOEATIONS. 695 which latter State the conversion complained of occurred, as the contract was made and the cause of action arose without the State.i The Supreme Court is without jurisdiction to entertain an action against a foreign railroad company to recover damages for personal injuries where the injury occurred in a foreign State, and the plaintiff is a resident thereof.^ A cause of action against a foreign corporation, growing out of transactions in a foreign State, consisting of the taking over of the assets of a copartnership, in favor of a creditor of the copartnership, to recover from the corporation the amount of his demand to the extent of the value of the assets so taken over, did not arise within this State.^ d. Foreign corporation doing business in state. The courts of this State, prior to 1913, had no jurisdiction of an action by a non-resident arising in another State against a foreign corporation merely because the latter was doing business within this State.* Subdivision 4 of the statute, which permits an action by a non-resident or foreign corpor- ation against a foreign corporation if the latter is doing busi- ness within the State, is constitutional.^ This subdivision first became a part of the statute law of this State in 1913, when an equivalent subdivision was added to section 1780 of the Code of Civil Procedure. The amendment was held retroactive so as to apply to a cause already in existence and to actions which had been be- gun before the amendment if the defendant had appeared and answered, joined in interrogatories and asked the court to take af5firmative action.^ But it was held not retroactive to the. extent of being applicable to a judgment entered before said amendment took effect. Thus, it is not effective to overturn a judgment dismissing the complaint of a non-resident for lack of jurisdiction of such action, which judgment was entered 1. Monda v. Wells, Fargo & Co., 20 4. Fairclough v. Southern Pacific Co., Misc. 685, 46 N. Y. Supp. 682; aS'd, 21 171 App. Div. 496, 157 N. Y. Supp. Misc. 308, 47 N. Y. Supp. 182. 862; aff'd, 219 N. Y. 657. 2. Payne v. New York, Susquehanna 5. Tauza v. Susquehanna Coal Co., & Western R. R. Co., 157 App. Div. 220 N. Y. 259. 302. 142 N. Y. Supp. 241. 6, Fairclough v. Southern Pac. Co., 3. Fenkart v. Bodenmann, 64 Misc. 155 N. Y. Supp. 621. 140, 118 N. Y. Supp. 1. 696 COEPOBATIONS. before the amendment took effect. Although the court had no jurisdiction of a representative action brought by a non-resi- dent stockholder against a foreign corporation in that such amendment was not then in force, the court did gain juris- diction where subsequently a resident plaintiff intervened in the action in her own separate right without objection J The provisions of subdivision 4 are confined in their oper- ation to the defendant in the action.^ In an action against a foreign corporation, the jurisdiction of the court does not depend exclusively upon the residence of the plaintiff, where he has pleaded in conformity to the last subdivision of section 47 that the defendant is doing business within this State, and no question of fact was presented at the trial with reference to said provision.^ Where in an action by a foreign corporation against a like corporation which has been doing business in this State and has been licensed so to do, the court, under subdivision 4, has jurisdiction of the action, though plaintiff has never pro- cured authority to do business in this State.^" Where a corporation maintains an office in this State under the direction of a sales agent, with a number of salesmen, and with clerical assistants, and through these agencies sys- tematically and regularly solicits and obtains orders which result in continuous shipments from Pennsylvania to New York, it is " doing business " in this State within the mean- ing of this subdivision.^^ The provision is not mandatory upon the court, which should exercise its discretion under the special circumstances of each case. Where there is no relation between the tort for which the action is brought and the business being done by the foreign corporation in this State, an order arbitrarily granted by the special term dismissing the complaint will be 7. Grant y. Greene Consolidated United States Asphalt Refining Co. v. Copper Co., 169 App. Div. 206, 154 Comptoir National D'Eseompte, 166 N. Y. Supp. 596; Morrison v. Balti- App. Div. 64, 151 N". Y. Supp. 604. more & Ohio R. R. Co., 177 App. Div. 9. Persick v. Philadelphia & Reading 613, 164 N. Y. Supp. 258; Fairclough Coal & Iron Co., 182 App. Div. 291, 169 v. Southern Pacific Co., 171 App. Div. N. Y. Supp. 298. 496, 157 N. Y. Supp. 862; aff'd, 219 10. Barney & Smith Car Co. v. Bliss N. Y. 657. Co., 100 Misc. 21, 164 N. Y. Supp. 800. 8. Barney & Smith Car Co. v. Blisa 11. Tauza v. Susquehanna Coal Co., Co., 100 Misc. 21, 164 N. Y. Supp. 800; 220 N. Y. 259. CORPORATIONS. 697 reversed, with, opportuiiity for the special term to exercise its discretion.^^ The amendment did not take away the power of our courts to decline jurisdiction on the ground of forum non conve- niens, or other reasons rendering a trial here inexpedient. Hence, a demurrer was not sustained to a defense set up by a foreign corporation sued by a non-resident which alleges non- residence, alienage and that the defendant is not an inhabit- ant of the State, and which gives notice that facts will be shown which should lead the court to decline jurisdiction.^" Service of process under section 229 of the Civil Practice Act upon a foreign corporation doing business within the State by delivery to the officer therein mentioned is generally due process.^* e. Federal corporation. To section 47 of the General Corporation Law is added a paragraph to the effect that within the meaning of the sec- tion, a foreign corporation shall not include a corporation located in this State and created by or under the laws of the United States. A national bank, located within this State, is a domestic corporation, and may sue here a national bank without the State, or any foreign corporation, for any cause of action.^^ 5. Refusal of courts to exercise jurisdiction. In some cases, even when the statute apparently permits an action against a foreign corporation, the courts, from motives of policy or convenience, refuse to exercise the jurisdiction.^^ Our courts will exercise no jurisdiction in equity to restrain a foreign corporation from doing certain threatened acts in another State in the nature of a local trespass." And the courts of this State have no jurisdiction over a receiver of a foreign corporation appointed by the court of another State.^* 12. Waisikoski v. Philadelphia & 15. Market Nat. Bank v.. Pacific Nat. Reading C. & I. Co., 173 App. Div. 538, Bank, 4 Law Bull. 82. 159 N. Y. Supp. 906. IG. Colorado State Bank v. Galla- 13. Bageon v. Philadelphia & Read- gher, 76 Hun, 310, 27 N. Y. Supp. 688. ing Coal & Iron Co., 178 App. Div. 662, 17. Atlantic & Pacific Tel. Co. v. B. 165 N. Y. Supp. 910. & 0. R. R. Co., 46 Super. Ct. 377. 14. Pomeroy v. Hocking Valley Ry. 18. Smith v. McNamara, 15 Hun, Co., 218 N. Y. 530. 477; Killmer v. Hobart, 58 How. 452. 698 COKPOBATIONS. But where the receiver is appointed in another State, but its funds and officers are here, and the funds are in unsafe hands, it has been held that a stockholder can maintain an action for a receiver.^^ A person wrongfully in possession in this State of the assets of a foreign corporation, is liable to an action by creditors in this State.^'* And a creditor of a for- eign corporation may pursue his demand in this State, against a corporation formed in this State, to which the prop- erty of such foreign corporation has been transferred, in con- sideration of the issue of shares in the New York company to the stockholders of the foreign company.^ The Supreme Court may try an issue and require an accounting and com- pel the restoration of any property appropriated by a de- fendant, even though such decree will operate upon property beyond the jurisdiction of the court.^^ Jurisdiction over a foreign corporation based on the fact that it has been permitted to acquire and operate part of a line of railroad in this State in the absence of more explicit legislation should only be exercised in favor of a resident plaintiff. Hence where the accident occurred in a sister State where the decedent resided and the plaintiff resides and where the defendant was incorporated, manifestly, the issue should be tried in the jurisdiction where the cause of action arose ; and although the courts of this State have juris- diction, they are not obliged to exercise it under such circum- stances.^^ Where a defendant which issued a policy of life insurance was a foreign corporation and was sued by a policyholder, a resident of this State, for an injunction to restrain the collec- tion of excessive assessments, it was held that the jurisdic- tion of the court was not raised by a demurrer to the com- plaint, but should be left to be determined when the plaintiff applied for judgment, for the question was not as to the jurisdiction of the court, but whether the court, having juris- diction, would exercise it, and that depended upon whether or not the court could enforce a judgment if it made one.^* 19. Redmond v. Hage, 3 Hun, 171. 83. Eugliah v. New York, etc., R. 20. Tinkham v. Borst, 31 Barb. 407. Co., 161 App. Div. 831, 146 ?f. Y. Supp. 21. Barclay v. Quicksilver Mining 963. Co., 9 Abb. (N. S.) 283. 24. Sauerbrunn v. Hartford Life 22. Hallenborg v. Greene, 66 App. Ins. Co., 159 App. Div. 121, 143 N. Y. Div. 590, 73 N. Y. Supp. 403. Supp. 1009. CORPOEATIONS. 699 6. Interference with internal affairs of foreign corporation. Our courts will not interfere with the general business of a foreign corporation,^^ nor regulate its internal affairs, unless fraud is shown jeopardizing property of stockholders in this State.^ The courts of this State have no jurisdiction of the assets of a foreign corporation, even if the trustees are resident here.^ And they will not entertain jurisdiction to enjoin the business of a foreign corporation, where such injunction would practically suspend the corporate franchise.^^ Chan- cery had no jurisdiction to dissolve a foreign corporation and wind up its affairs, although its property was mainly situated here.^^ But it could appoint a receiver for the pur- pose of preserving its property.^" But the courts of this State will exercise jurisdiction of an action brought by a resident against a foreign corporation, in which he is a stockholder, for the purpose of restraining illegal acts of directors who are personally within the jurisdiction of the court.^^ And they have authority in an action by a resident, in which the principal defendant is a foreign corporation, and which is brouglat to procure a sale of bonds delivered by it as col- lateral to its notes.^^ So, too, it is held that the Supreme Court has power to restrain the use of the proceeds of an illegal issue of stock by a foreign corporation, and to appoint a receiver.^^ The courts of this State will entertain actions in favor of resident plaintiffs against foreign corporations not only to recover at law but also in equity, including suits in favor of resident shareholders who have clear rights to be protected, and they will compel the enforcement by officers and directors of foreign corporations, if properly brought into court, of the contract obligations of the corporation, if the neglect or violation of such contract obligations amounts to a breach of 25. Way v. Keyport,. etc., Co., 16 29. Barclay v. Tallman, 4 Edw. 123. Abb. 320n; Howe v. Deuel, 43 Barb. 30. Murray v. Vanderbilt, 39 Barb. 504. 140. 26. Howell V. Chicago, etc., Co., 51 31. Fisk v. Chicago, etc., R. E. Co.. Barb. 378. 53 Barb. 513. 27. Redmond v. Enfleld Manufactur- 32. Coffin v. Chicago, etc., R. R. Co., ing Co., 13 Abb. (N. S.) 332. 4 Hun, 625. 28. Way v. Keyport, etc., Co., 16 33. Fiak v. Chicago, etc., R. R. Co., Abb. 320n. 51 Barb. 513. 700 CORPORATIONS. trust or duty which will be productive of injury to such resi- dent shareholders, in matters removed from the ordinary powers or discretion of such directors, and no adequate rem- edy at law is available. The courts of this State will refuse to act against foreign corporations, however, in a suit brought by a resident stockholder against them, where only the mere internal affairs of the corporation, resting in the untrammeled discretion of its directors as its governing or controlling agents, are involved; or where the remedy sought can only be given by the courts of the sovereignty by which the corporation was created, or where a decree would be abortive.^* 7. Acquisition of jurisdiction by service of process, etc. The Legislature has power to provide for and authorize the method of service of process on foreign corporations.^ In general, any service is sufficient which apprises the cor- poration of the action, and no constitutional right is violated by authorizing service on a director temporarily within the state.^^ The manner of personal service on such a corpora- tion is prescribed by section 229 of the Civil Practice Act. A judgment based on such service can be enforced against any property of the corporation within the State.^^ Suits by or against foreign corporations are maintained, not on the theory that the corporation litigant is here in person, but that it is represented by its agent, and it may sue or be sued in the courts of this State.^^ Our courts may obtain jurisdic- tion over a foreign corporation by service of process on its president within this State, though the service is effected by a trick.^ Authority over a foreign corporation may also be obtained by a general voluntary appearance, provided the action is within the jurisdiction of the court.^" But the court cannot acquire jurisdiction of the subject matter by consent, and, whenever attention is called to it, may refuse to exercise 34. Ives V. Smith, 3 N. Y. Supp. 645, N. Y. 137. 19 St. Rep. 656. 38. Plimpton v. Bigelow, 93 N. Y. 35. Hiller v. B. & M. R. Co., 70 592. N. Y. 223. 39. Atlantic, etc., Co. v. B. & O. E. 36. Hiller v. B. & M. R. R. Co., 70 R. Co., 46 Super. Ct. 377. N. Y. 223; Pope v. Terra Haute Car 40. DeBemer v. Drew, 57 Barb. 438; Co., 87 N. Y. 137. Root v. Great Western R. R. Co., 65 37. Pope V. Terra Haute Car Co., 87 Barb. 619; aflf'd, 55 N. Y. 636. COEPORATIONS. 701 its powers.*^ The voluntary appearance confers jurisdiction to the same extent as actual service of process.^^ But an ap- pearance to move to set aside an irregular process confers no jurisdiction.*^ When jurisdiction has once been acquired over the parties and the subject matter, every presumption is in favor of the legality of the judgment.** The designation by a foreign corporation of a person upon whom service of process may be made in this State pursuant to section 16 of the General Corporation Law operates to per- mit service upon such agent in an action to recover for the breach of contract of employment by the corporation where the contract was made and the breach occurred in the for- eign State, although it had no relation to any business which the corporation transacted in this State.*^ 8. Special proceedings. The courts of this State have no jurisdiction to issue an order of mandamus to compel a fraternal beneficial corpora- tion organized under the laws of another State and having no subordinate lodges in this State to reinstate a member. No jurisdiction is conferred by section 46 of the Geners^l Cor- poration Law, providing that an action against a foreign corporation may be maintained by a resident of the State, for mandamus is not an action but a special proceeding.*'' And the courts of this State will not through the aid of man- damus compel the inspection of books of a foreign corpora- tion.*^ D. When proof of corporate existence is unnecessary. 1. Greneral Rules of Practice, Rule 93, subd. 2. In such an action, the plaintiff need not prove, upon the trial, the existence of the corporation, unless the answer is verified and contains an afRrmative allega- tion that the plaintiff, or the defendant, as the case may be, is not a corporation. 41. Callahan v. New York, 66 N. Y. versing, 170 App. Div. 594, 156 N. Y. 656; Davidsburgh v. Knickerbocker Supp. 647. Life Ins. Co., 90 N". Y. 526. • *t 46. People ex rel. Ruman v. National 42. Attorney-General v. Guardian Slavonic Society, 144 App. Div. 574, Ins. Co., 77 N. Y. 272. 129 N. Y. Supp. 603. 43. Tiffany v. Lord, 65 N. Y. 310. 47. Matter of Rappelye, 43 App. 44. Blake v. Lyon, etc., Mfg. Co., 77 Div. 84, 59 N. Y. Supp. 338; Matter of N. Y. 626. Crosby, 43 App. Div. 61«, 59 N. Y. 45. Bagdon v. Philadelphia & Read- Supp. 340. ing Coal & Iron Co., 217 N. Y. 432; re- 702 COKPORATIOSrS. 2. Discussion of regulation. Under the regulation in question, the answer of a defendant disputing the corporate existence of a corporate plaintiff or defendant must contain an affirmative allegation that the party is not a corporation.^^ Whether the corporation is a plaintiff or a defendant is not material; the answer must con- tain the required allegation in order to raise the question.^^ It applies to foreign, as well as domestic, corporations.™ And it has been held applicable to joint stock associations.^^ A general denial of the allegations of the complaint does not 48. Steele v. E. M. Gilmore Mfg. Co., 77 App. Div. 199, 78 N. Y. Supp. 1078; Piatt & Washburn Reflmng Co. V. Hepworth, 13 Civ. Pro. R. 122. A£Sdavit for attachment. — Since an affirmative allegation that defendant is a foreign corporation would suffice to establish the fact upon the trial in the absence of an affirmative allegation that the defendant is not a corporation, such u, positive and unqualified allega- tion in an affidavit to procure an at- tachment is a sufficient foundation therefor. Simons v. Lehigh Mills Co., 53 Misc. 368, 104 N. Y. Supp. 739; An- thony & Co. V. Fox 53 App. Div. 200, 65 N. Y. Supp. 806; Srteele v. R. M. Gil- mour Mfg. Co., 77 App. Div. 199, 78 N. Y. Supp. 1078. Incorporation depending on public acts. — ^An allegation in a complaint that the plaintiff is a domestic cor- poration is not admitted by demurrer, if the incorporation depends upon pub- lic acts, of which the courts are bound to take notice, for in such case these acts may be read as if embodied in the complaint, and the allegation that the defendant is a corporation is a mere allegation of law. Walsh v. Trustees, etc., 96 N. Y. 427. No alle:gatlon in complaint. — Where there is no allegation in the complaint that defendant is a corporation, it has been held that no specific denial is necessary in the answer, and a, general denial puts that question in issue. An- sonia Brass, etc., Co. v. Conner, 13 Week. Dig. 7; Brooks v. Farmers', etc.. Creamery, 21 Week. Dig. 58. De facto corporation.— lA corporation may be so defective as'to be incapable of supporting its incorporation as against the people, but be sufficient by user to be held a corporation de facto as to subscribers to its capital. Buf- falo, etc., R. R. Co. V. Cary, 26 N. Y. 75; Cayuga Lake E. R. Co. v. Kyle, 64 N. Y. 185. Best evidence. — ^The objection that the plaintiff did not prove its incor- poration by the best evidence cannot be made where defendant did not an- swer. Kingston Carriage Co. v. Hut- ton, 34 N. Y. Supp. 1101, 69 St. Rep. 190. 49. Steele v. E. M. Gilmore, 77 App. Div. 199, 78 N. Y. Supp. 1078; Gold- smith V. The Wells Co., 86 Hun, 489, 67 St. Rep. 550, 33 N. Y. Supp. 727. 50. McElwee Manufacturing Co. v. Trowbridge, 6« Hun, 28, 22 N. Y. Supp. 674, 52 St. Rep. 64; aff'd, 142 N. Y. 679 ; Taendsticksf abriks Aktiebolaget Vulcan V. Myers, 58 Hun, 161, 11 N. Y. Supp. 663, 34 St. Rep. 122. Before the Code of Civil Procedure, a foreign corporation was required to prove its corporate existence when a general denial was interposed. Water- ville Mfg. Co. V. Bryan, 14 Barb. 182. 51. Gifford v. Fargo, 106 Misc. 5»9, 176 N. Y. Supp. 566. CORPOEATIONS. 703 require proof of the corporate existence of a party .^^ Nor does the denial of a specific allegation as to the corporate existence of a party require proof of the fact.^^ Nor does a denial of knowledge or information sufficient to form a belief as to the incorporation, raise an issue.^* Similarly, a denial upon information and belief that plaintiff is a corporation, does not require plaintiff to prove its corporate existence.^ A mere denial in any form is not sufficient to raise an issue on the question of the plaintiff's existence as a corporation. The answer must contain an affirmative allegation to the ef- fect that the plaintiff is not a corporation.^^ A plaintiff is not bound to prove the incorporation unless a verified answer is served containing a verified affirmative allegation that the defendant is not a corporation.^'' The failure of the answer to present an issue as to the incorporation cannot be aided by statements contained in the verification itself.^* 52. Deutz Lithographic Co. v. Inter- national Reg. Co., 32 Misc. &87, 66 N. Y. Supp. 540. 53. Nickerson v. Canton Marble Co., 35 App. Div. Ill, 54 N. Y. Supp. 705; Post Publishing Co. v. Bennett, 164 App. Div. 633, 14i9 N. Y. Supp. 867. 54. East River Electric Light Co. v. Clark, 18 N. Y. Supp. 463, 45 St. Rep. 635. To same effect. Crown Point Iron Co. v. Fitzgerald, 14 St. Rep. 427; Taendstlcksfabriks Aktiebolaget Vul- can V. Myers, 58 Hun, 161, 11 N. Y. Supp. 663, 34 St. Rep. 122; McElwee Manufacturing Co. v. Trowbridge, 68 Hun, 28, 52 St. Rep. 64, 22 N. Y. Supp. 674; Dry Dock, etc., R. R. Co. v. North & East River R. R. Co., 3 Misc. 61, 51 St. Rep. 771, 22 N. Y. Supp. 557; Mil- ler V. Jones, 67 Hun, 281, 22 N. Y. Supp. 90, 51 St. Rep. 361; Dewolf v. Watterson, 35 Hun, 111; Concordia, etc.. Association v. Read, 93 N. Y. 474; First National Bank, etc., v. Clark, 22 Week. Dig. 569; Martin. Cantine Co. v. Warshauer, 7 Misc. 412, 23 Civ. Pro. R. 379, 58 St. Rep. 560, 28 N. Y. Supp. 139. 55. First National Bank v. Slattery, 4 App. Div. 421, 38 N. Y. Supp. 859; Lamson Store Service Co. v. Cunning- ham, 11 Misc. 428, 65 St. Rep. 271, 32 N. Y. Supp. 129; citing Vulcan v. Myers, 58 Hun, 162, 11 N. Y. Supp. 663; Concordia Savings & Aid Ass'n v. Reed, 93 N. Y. 474; Bengston v. Thingvalla Steamship Co., 31 Hun, 96; Second Methodist Episcopal Church in Greenwich v. Humiphrey, 21 N. Y. Supp. 89, 4^ St. Rep. 467. 56. United States Vinegar Co. v. Schlegel, 62 St. Rep. 826, 143 N. Y. 537; Stroock Plush Co. v. Talcott, 129 App. Div. 14, 16, 113 N. Y. Supp. 214. Amendment of complaint. — In Black- burn V. American News Co., 89 App. Div. 82, 85 N. Y. Supp. 440, plaintiff was allowed to amend a complaint set- ting out defendant is not a corpora- tion, but a joint stock corporation, upon the ground that under the regula- tion, it would not be necessary for plaintiff to prove at the trial the cor- porate character of defendant, there being no affirmative allegation in the complaint that defendant was not a corporation. 57. Bengston v. Thingvalla S. S. Co., 3 Civ. Pro. R. 263. 58. Nickerson v. Canton Marble Co., 35 App. Div. Ill, 54 N. Y. Supp. 705. 704 COEPOKATIOH'S. The regulation does not apply where the action is brought against the treasurer of the corporation, and there is no allegation in the complaint that the defendant is the treas- urer or oflScer of any corporation.^® Nor does it preclude proof, under a general denial, that a contract alleged to have been made in the name of the de- fendant was made at a time when it had no corporate exist- ence.^" Whether it applies to condemnation proceedings is a disputed question. In the first department, it does not apply ;^^ in the second department, it applies.^^ In proceed- ings by a railroad company to acquire title to lands, the peti- tion averred the due incorporation of the petitioner, and a counter affidavit denied any knowledge or information suffi- cient to form a belief as to the truth of said averment, and it was held that, considering this simply as an affidavit, it was not a denial of the averment ; that treating it as an an- swer, there was no such denial as put the petitioner to proof of its incorporation under this section ; that conceding the land owners might, without a formal denial, disprove the fact, the burden was upon them of proving the petitioner was not a corporation.®^ E. Waiver of misnomer. In an action by or against a corporation, any mistake in the statement of the corporate name is waived, unless the mis- nomer is pleaded.®'' . A misnomer of a corporation is waived unless pleaded, and this is true when the corporation suffers a default as well as when it answers.®^ Thus, where a religious corporation was sued under a wrong name, it was held that the defect must be raised unequivocally by the answer or it was waived, and the 59. Tighe v. Laverty, 162 N. Y. 62. Long Island Railroad Co. v. Supp. lOOS. Jones, 151 App. Div. 407, 135 N. Y. 60. Galdieri & Co., Inc., v. Arthur Supp. 964. Waist Co., 98 Misc. 612, 163 N. Y. See also Erie & Jersey R. K. Co. v. Supp. 154. Brown, 57 Misc. 164, 107 N. Y. Supp. 61. Matter of Broadway and Sev- 983. enth Ave. Ry. Co., 73 Hun, 7, 57 St. 63. Matter of N. Y. Land St. R. R. Rep. 108, 25 N. Y. Supp. 1080. Co., 99 N. Y. 12. See also Food Abatement Commis- 64. Rule 93, subd. 3. sion V. Merritt, 94 Misc. 388, 158 N. Y. 65. Whittlesy v. Frantz, 74 N. Y. Supp. 289, a decision of Special Term 456; City of New York v. Union Ry. in the Fourth Department. Co., 31 Misc. 451, 64 N. Y. Supp. 483. COEPOEATIOITS. 705 question of misnomer was not raised by the mere allegation that the plaintiff was not incorporated.^^ Waiver of misnomer by a corporation defendant takes place, unless the misnomer is pleaded, where the name stated in the summons is sufficiently similar to its corporate name to fairly apprise it that it is the defendant intended.^^ F. Restrictions on defense by corporation in suit on note. 1. Civil Practice Act, § 252. Verification in action against corporation to recover on note or other evidence of debt. In an action against a foreign or domestic corporation to recover damages for the non-payment of a promissory note, or otlier evidence of debt, for the absolute payment of money, upon demand, or at a particular time, the answer must be verified. 2. Former statute. Under the Code of Civil Procedure, it was necessary in an action against a corporation to recover on a note or other evi- dence of debt, that the defendant serve with a copy of his pleading a copy of an order directing the trial of the issues.^' The verification of the answer seems all that is required under the present practice. A policy of insurance, either life or fire, is not within this section, although the policy is due; the section applies only to instruments which admit on their face a debt payable absolutely .^^ An action against a corporation upon a guarantee is not within the scope of the statute.''" 6G. Associate Presbyterian Congrega- 341 ; Edward Barr Co. v. Kuntz & Co., tion V. Hanna, 113 App. Div. 12, 98 18 Abb. N. C. 476; Moran v. Long N. Y. Supp. 1082. Island City, 101 N. Y. 439; Schlegel v. G7. Grossman v. Loiber Hair Co., 155 Bottling Co., 2 Civ. Pro. R. 393; Beau- N. Y. Supp. 1012. mond v. Diecks, etc., Co., 5 Civ. Pro. 68. Duke v. Mount Morris Construe- R. 275; Ford v. Binghamton Hydraulic tion Co., 127 App. Div. 3i9, 111 N. Y. Power Co., 54 Hun, 452, 7 N. Y. Supp. Supp. 313; Center v. Hoosick River 714, affirmed, 121 N. Y. 664. Pulp Co., 43 Misc. 247, 88 N. Y. Supp. 69. McKee v. Metropolitan L. Ins. 548; Pennypacker v. Levis & Co., 63 Co., 25 Hun, 583; N. Y. Life Ins. Co. v. Misc. 384, 116 K Y. Supp. 771; Blen- Universal L. Ins. Co., 88 N. Y. 424; derman v. Bellis Co., 64 Misc. 65, 117 Tyler v. Aetna Fire Ins. Co., 2 Wend. N. Y. Supp. 897: Hein v. Standard Die 280; Ogle v. Knickerboeker L. Ins. Co., & Tool Works, 113 Misc. 137, 184 4 Law Bull. 22. N. Y. Supp. 78; Schlesinger v. Louis 70. Canavello v. Michael & Co., 31 Meyer Realty Co., 114 N. Y. iSupp. Misc. 170, 63 N. Y. Supp. 967. 45 706 COEPOBxVTIONS. The provisions of the section are not extended to include a corporation, not the maker of the note, but which it is al- leged has assumed the indebtedness of the maker,'^ ARTICLE II. JUDICIAL SUPERVISION OF A CORPORATION AND OF THE OFFICERS AND MEMBERS THEREOF. A. Statutes. 1. General Corporation law, § 90. Action against officers of corpora- tion for misconduct. An action may be maintained against one or more trustees, directors, man- agers, or other officers of a corporation, to procure a judgment for the follow- ing purposes, or so much thereof as the case requires: 1. Compelling the defendants to account for their official conduct, including any neglect of or failure to perform their duties, in the management and dis- position of the funds and property, committed to their charge. 2. Compelling them to pay to the corporation, which they represent, or to its creditors, any money, and the value of any property, which they have acquired to themselves, or transferred to others, or lost, or wasted, by or through any neglect of or failure to perform or by other violation of their duties. 3. Suspending a defendant from exercising his office, where it appears that he has abused his trust. 4. Eemoving a defendant from his office, upon proof or conviction of mis- conduct, and directing a new election, to be held by the body or board duly authorized to hold the same, in order to supply the vacancy created by the re- moval; or, where there is no such body or board, or where all the members thereof are removed, directing the removal to be reported to the governor who may, with the advice and consent of the Senate, fill the vacancies. 5. Setting aside an alienation of property, made by one or more trustees, directors, managers or other officers of a corporation, contrary to a provision of law, or for a purpose foreign to the lawful business and objects of the cor- poration, where the alienee knew the purpose of the alienation. 6. Restraining and preventing such an alienation, where it is threatened, or where there is good reason to apprehend that it will be made. 7. The court must, upon the application of either party, make an order directing the trial by a jury of the issue of neglect or failure of defendants to perform their duties; and for that purpose the questions to be tried must be prepared and settled as prescribed in section nine hundred and seventy of the Code of Civil Procedure. As to any litigation pending prior to September one, nineteen hundred and seven, the provisions of this section as they existed prior to that date shaU apply. (See B., C. & G. Consolidated Laws, 2d Ed., p. 3126.) 71. Fifty-third Nat. Bank of Cincinnati v. Hudson Refrigerator Co., 133 N. Y. Supp. 168. CORPORATIONS. 707 2. General Corporation law, § 91. Who may bring such an action. An action may be brought, as prescribed in the last section, by the attorney- general in behalf of the people of the State, or, except where the action is brought for the purpose specified in subdivision third or fourth of that section, by a creditor of the corporation, or by a trustee, director, manager, or other officer of the corporation, having a general superintendence of its concerns. (See B., C. & G. Oonsol. L., 2nd Ed., p. 3131.) 3. General Corporation Law, § 92. Visatorial power over corporation not affected by this article. This article does not divest or impair any visitatorial power over a corpo- ration, which is vested by statute in a corporate body, or a public officer. (See B., C. & G. Consol. L., 2nd Ed., p. 3133.) B. Action by Attorney-General. 1. Corporations affected by statute. The general scope of the statutory provisions in so far as they purport to invest the attorney-general with authority to call corporate officers to account, has been the subject of much judicial discussion. These sections are a re-enactment of earlier statutory provisions (2 R. S., §§ 33, 35; Code Civil Procedure, §§ 1781, 1782), adopted to remedy a defect in the jurisdiction of the Court of Chancery, deemed to have been pointed out by Chancellor Kent in Attorney-General v. Utica Ins. Co., 2 Johns. Ch. 371, and, according to the reviser's note, ' ' to give the Court of Chancery in this State the same power that is exercised by the court in England in cases of char- itable corporations, and in other cases. "'^^ The statutes are, however, construed as applicable to private as well as public corporations.'^* 72. People v. Equitable Life Assur- divided upon the question in People v. ance Soc., 51 Misc. 339, 101 N. Y. Ballard, 134 N. Y. 272, note, but upon Supp. 354; wherein it was said: "In a reargument (134 N. Y. 2&9) it was People V. Lowe, 117 N. Y. 175, the finally held thiat these sections of the view was expressed that, regard being Code were intended to confer authority had to the origin of the statute in upon the attorney-general to institute question, the attorney-general was not an action against officers and directors thereby given authority to bring an of any business corporation for an ac- accounting suit against directors of a counting, in the interests of the cor- corporation unless the corporation was poration, and that the question of the eleemosynary in character or the pub- advisability of the litigation was a lie interests were substantially in- matter exclusively for .the attorney- volved. The point was not actually general to determine, free from any decided because of a division among control of the court." the judges, and the court was again 73. Private corporations. — In People 708 COEPORATIONS. 2. Nature of action. An action by the Attorney- General in the name of the Peo- ple, pursuant to sections 90 and 91 of the General Corpora- tion Law, for the removal or suspension of a director, must be brought in equity J* Section 90 does not confer upon the parties enumerated in section 91 any new cause of action, except with respect to the removal or suspension of directors, and with that exception, by the provisions of these two sections, the legislature merely authorizes the enforcement by the officials and individuals designated in section 91 of causes of action, which have ac- V. Ballard, 56 Hun, laS, 8 N. Y. Supp. 918, 29 St; Rep. 926, it was held that the attorney-general has no authority to bring an action in the name of the people for the settlement of strictly private disputes between .the trustees and a portion of the stockholders of a private corporation not charged with any public duties. Where it appears that an action has been brought in the name of the people by the attorney- general, not upon the relation or for the benefit of creditors of a corpora- tion, but solely in the interest of cer- tain stockholders who are dissatisfied with the action taken by its trustees, it is competent for the court to in- quire into the quesition as to whether there is an enforceable public interest involved in the action. It was held, in the same case, at Special Term, 3 N. Y. Supp. 845, that independently of the statute, a. court of equity has no jurisdiction at the suit of the people to compel officers of a private business corporation to refund property of the corporation illegially disposed of, and the faot that the action was brought on the relation of a trustee is insuffi- cient where neither the complaint nor the title of the action shows that it was so brought. But on appeal to the Court of Ap- peals, 134 N. Y. 269, it was held, that an action might be brought by the at- torney-general in the name of the people without relator against a do- mestic business corporation and its trustees to remove the latter from their position for misconduct and to compel them to account for and pay over to the corporation the value of property belonging to it transferred to them by others in violation of their duty, whenever he deems that the ac- tion can be maintained and the inter- ests of the public will be promoted thereby. The question as to whether the public interests require him to bring such an action, is committed by the statute to the absolute discretion of the attorney-general and may not be made the subject of inquiry by the court on trial of the action. Subse- quently a motion was made in the Court of Appeals, Second Division, for a reargument upon the authority of Skinner as Trustee v. Smith, 134 N. Y, 240, where the action was brought under these sections to set aside aliena- tions of property made or authorized by individual defendants to those who were at the same time a majority of the trustees of the corporation and also to compel them to account for all sums and property received under such alienation. The motion was denied for reasons given. People v. Ballard, 133 N. Y. 639. 74. People v. Equitable Life Assur- ance Soc, 124 App. Div. 714, 109 N. Y. Supp. 453. CORPORATIONS. 709 crued to the corporation and might be enforced by it or by its receiverJ^ The statutes do not, in terms or otherwise, affect or take away the duty of the Attorney-General to proceed under the provisions of the Executive Law or at common law, by prosecuting such suits as are necessary to protect the in- terests of the peopleJ^ 3. Accounting by ofScers. It was not the intention of the Legislature in enacting the statute in question to require directors of a corporation to account as in cases of trustees of express trusts, and more must be alleged than the mere fact that the defendant was a director." In an action against directors of a corporation for negli- gently wasting property the plaintiff must allege the facts constituting negligence or misconduct.'^^ An action may be maintained against officers and directors of a corporation by the attorney-general for losses sustained in consequence of their misfeasance or neglect of duty as well as for losses occasioned by their malfeasance or official cor- ruption, though the corporation itself or its receiver might have a remedy at law for the same misfeasance or neglect and though each instance of loss does not involve every de- fendant.'^^ When the president of a railroad company makes a contract with himself for the construction of the railway and obtains all the securities, stocks and bonds, under pre- tense of paying the nominal contractor, arid, as chief engi- neer, makes to himseK certificates for work done, and then, as president, paid himself many hundreds of thousands of dollars in advance of what the contractor is entitled to, the attorney-general must bring the action; and it is no defense to such an action that an action has been brought by a stock- holder under section 90.*" And an action brought by one 75. People v. Equitable Life Assur- N. Y. Supp. 453. ance Society, 124 App. Div. 714, 718, 78. People v. Equitable Life Assur- 109 N. Y. Supp. 453. ance Society, 124 App. Div. 714, 718, 76. People v. Powers, 83 Hun, 440, 109 N. Y. Supp. 453. 29 N. Y. Supp. 950, 31 N. Y. Supp. 79. People v. Equitafble Life Assur- 1131; reversed, on other grounds, 147 ance Soc, 51 Misc. 339, 101 N. Y. N. Y. 104. Supp. 354. 77. People v. Equitable Life Assur- 80. People v. Bruff, 60 How. Pr. 1. ance Society, 124 App. Div. 714, 109 710 COKPOEATIONS. director to compel others to account is not a bar to an action by tbe attorney-general.^ 4. Suspension or removal of officers. A director of a corporation does not stand in the same rela- tion to the corporate body which a private agent holds toward his principal without some statute or provision of the charter authorizing his removal or suspension. A director cannot be removed or suspended from office until the end of his term, at least without cause, and his remedy is quo warranto and not mandamus.^ Suspension or removal of a director of a corporation can only be had in an action brought by the attorney-general pursuant to sections 90, 91, and 307 of the General Corpora- tion Law.^^ Where a stockholder alleged that one of the defendants was the recipient of the fraudulent transfer or corporate as- sets, and prayed that the directors be suspended from their office, a receiver be appointed, and for other equitable relief, the fact that under sections 90 and 91 directors can only be suspended from office by proceedings by the attorney-general, does not prevent the action from being maintained, where it appears on the trial that plaintiff is entitled to equitable relief.^* The issuance of stock by officers of the corporation without authority from the directors and without consideration from the corporation is misconduct authorizing their removal. The vice-president and secretary may be removed as directors for such misconduct and their re-election as such directors does not serve to condone their fault or protect them from removal.^ 5. Joinder of actions. The causes of action in favor of a corporation enumerated in section 90 of the General Corporation Law are not excluded from the operation of section 258 of the Civil Practice Act, 81. Keeler v. Brooklyn Elevated E. App. Div. 731, 116 N. Y. Supp. 166. R. Co., 9 Abb. N. C. 166. 84. Whitman v. Holmes Publishing 82. People ex rel. Maniee v. Powell, Co., 33 Misc. 47, 68 N. Y. Supp. 167. 201 N. Y. 194. 85. People v. Lyon, 119 App. Div. 83. Welcke v. Trageser, No. 1, 131 361, 104 N. Y. Supp. 319. CORPORATIONS. 711 wMcli prescribes what causes of action may be joined.^ An action for the removal or suspension of a director may be joined with one against the same director or directors for an accounting.*' But a cause of action against the directors of a corporation cannot be united with a cause of action taken against their predecessors or successors in office, unless the acts com- plained of were done pursuant to a scheme or conspiracy or there are allegations connecting the acts of one set of direc- tors with those of their predecesors or successors.^* Where the complaint in an action against the directors of a corporation to require them to account for their official con- duct and repay property of the corporation converted or lost from neglect of duty, etc., embraces many separate causes of action, some equitable and some legal, in one or more of which some of the parties defendant are not interested, the causes have been improperly united.*^ Prior to an amendment made by chapter 157 of the Laws of 1907, directors of a corporation could not be sued uiider section 1781 of the Code of Civil Procedure (now General Corporation Law, § 90) for a neglect or failure to perform duties, and, hence, a suit brought under said section prior to the amendment could not include damages as such caused by the defendant's neglect of duty.^" C. Action by creditor, stockholder, or trustee. 1. Status of plaintiff. Except in those cases mentioned in subdivisions three and four of section 90 of the General Corporation Law, an action may be maintained under such section by the attorney-general, or by a creditor of the corporation, or by a trustee, director, manager, or other officer of the corporation, having a general superintendence of its concerns.^^ 86. People v. Equitable Life Assur- ance Society, 124 App. Div. 714, 728, ance Society, 124 Ap^i. Div. 714, 728, 109 N. Y. Supp. 453. 109 N. Y. Supp. 453. 89. People v. Equitable Life Assur- 87. People v. Equitable Life Assur- ance Society, 124 App. Div. 714, 109 ance Society, 124 App. Div. 714, 109 N. Y. Supp. 453. N. y. iSupp. 453; People v. Lowe, 47 90. People v. Equitable Life Assur- Hun, 577; reversed, on other grounds, ance Society, 124 App. Div. 714, 109 117 N. Y. 175. N. Y. Supp. 453. 88. People v. Equitable Life Assur- 91. General Corporation Law, § 91. 712 C0RP0RATI02«fS. The trustees of a corporation can maintain an action to compel another trustee to account to the corporation or to its creditors or stockholders for money or property of the cor- poration illegally diverted by the defendant trustee from the corporate purposes.^^ It may be maintained by a duly elected trustee and vice-president of the corporation, al- though he has in no manner signified his acceptance of his election to the offices in question, acceptance in such cases being usually presumed.^^ The term ' ' creditor, ' ' as used in the statute, means a judg- ment creditor, and not a creditor at large.^* 92. Gildersleeve v. Lester, 68 Hun, 532, 2a N. Y. Supp. 1086, 52 St. Rep. 550; Piza v. Butler, 90 Hun, 264, 35 N. Y. Supp. 721. The director of a foreign corporation may maintain in the courts of this State an action against the president, also a, director of the corporation, to compel the latter to account for his official conduct as such president and director in the management and dis- position of the funds and property of the corporation committed to his charge, and to compel him to pay to the corporation the money and the value of the property which he ap- propriated to his own use or which he lost or wasted by a violation of his duty. Acken v. Coughlin, 103 App. Div. 1, 92 N. Y. Supp. 700. Actios by director. — In Miller v. Bar- low, 78 App. Div. 331, 79 N. Y. Supp. 964, it was held that upon the facts of that case plaintiff, a director, stood in the position of a trustee with re- spect to the creditors of the corpora- tion, and did not need to make such creditors parties, nor any of the other persons who would have been entitled to maintain the action under § 17S2. That it was not essential that the cor- poration be made a. party plaintiff, but as the appointment of a receiver of its property was sought, it was for that reason a necessary and proper party defendant. It seems the plaintiff was not obliged to request the corporation to institute the action before bringing it himself, or set forth in his complaint facts showing the futility of such a demand. Chancery has been said to have power to compel trustees to execute their trusts independently of statute. Kniakern v. Lutheran Church, 1 Sandf. Ch. 439; Bowden v.' McLeod, 1 Edw. 588; Baptist Church v. Witherell, 3 Paige, 296. 93. Halpin v. Mutual Brewing Co., 20 App. Div. 583, 47 N. Y. Supp. 412. Abandonment of ofSce, — The fact that the officer did not attend the meetings of the trustees for a period of about three months immediately fol- lowing his election does not constitute, as matter of law, such a long-contin- ued neglect of duty as amounts to an abandonment of his office as trustee, nor does it justify his associates in de- claring his office as trustee vacant. Halpin v. Mutual Brewing Co., 20 App. Div. 583, 47 N. Y. Supp. 412. 94. Belknap v. North Am. Life Ins. Co., 11 Hun, 282; Oole v. Knicker- bocker Life Ins.' Co., 23 Hun, 255; Paulsen v. Vansteenburgh, 65 How. Pr. 342. See also Steele v. Isman, 164 App. Div. 146, 149 N. Y. Supp. 488. The dissolution of the corporation and the appointment of a receiver of its property, constitutes a sufficient ex- CORPORATIONS. 713 The treasurer of a corporation suing a former treasurer to recover moneys belonging to the corporation and for an ac- counting, is not a manager or other officer of the corporation, " having a general superintendence of its concerns," within the meaning of section 91.*^ An action by a director against his co-directors for mis- management, etc., abates by reason of the fact that he is not re-elected to office. The action does not survive merely be- cause the former director continues to be a stockholder nor by virtue of section 83 of the Civil Practice Act.^^ A stock- holder of the corporation, who does not otherwise occupy the status of those entitled to bring the action under section 91, cannot maintain the action under such section.^'^ His remedy for misappropriation of corporate funds, if any, is generally an action in equity as a representative stockholder's action. cuse for the failure of a creditor to obtain a. judgment against the corpora- tion and issue an execution against the officers. Lilienthal v. Betz, 108 App. Div. 222, 95 N. Y. Supp. 849; reversed, on other grounds, 185 N. Y. 153. Representative action. — A suit by a creditor to recover moneys misappro- priated by directors or of&cers should be brought by plaintiff in a representa- tive capacity; an individual action at lavir cannot be maintained. Davis v. Wilson, 150 App. Div. 704, 135 N. Y. Supp. 825; Schwartzreieh v. Beauman, 112 Misc. 464, 183 N. Y. Supp. 440; but otherwise, where the rights of no other creditors are involved. Buckley V. Stansfield, 155 App. Div. 735, 140 N..Y. Supp. 953; aff'd, 214 N. Y. 679. 95. Laughlin v. Wocker, 152 App. Div. 466, 137 N. Y. Supp. 257. 96,. Hamilton v. Gibson, 145 App. Div. 825, 130 N. Y. Supp. 684. I^epresentative action. — Where the plaintiff, a director of a corporation, brings action under section 90 to com- pel officers of the corporation to ac- count for corporate property commit- ted to their charge and to compel them to pay over to the corporation the value of any property which they have acquired to themselves or wasted, etc., it is not necessary for him to state in the title of the action that he sues in a representative capacity if the com- plaint itself alleges that he is a di- rector. Where the action is brought against the defendant officers and the complaint states no cause of action against the corporation itself, it states but a single cause of action, although the corporation is properly made a party defendant to whom the individ- ual defendants will be directed to ac- count and pay over. Higgins v. Apple- baum, 183 App. Div. 527, 170 N. Y. Supp. 228. 97. Eothbart v. Star Wet Wash Laundry Co., 185 App, Div. 807, 174 N. Y. Supp. 76. Mutual Insurance Association. — A member or policy holder of an insur- ance company has not, as such, legal capacity to maintain an action to en- force the performance of the pro- visions in the policy in respect to the reserved fund. That action must be brought, if at all, by the attorney- general. Swan v. Mutual Reserve Fund L. Assoc, 155 N. Y. 9. See also Greef v. Equitable Life, 160 N. Y. 19. 714 CORPORATIONS. An action cannot be maintained as a representative stock- holder's action where it does not purport to be such, or it is not stated in the complaint that the action is brought for the plaintiff and others who may come in and contribute to the action.^ But a stockholder may disregard the provisions of this statute, and bring an action against the directors based on their unlawful acts.^^ Such an action is equitable in its nature, and is to be brought by a stockholder in behalf of him- 98. Rothibart v. Star Wet Wash Laundry Co., Inc., 185 App. Div. 807, 174 N. Y. Supp. 76. 99. Brinckerhoflf v. Bostwick, 88 N. Y. 52; reversing, 23 Hun, 237; Car- penter V. Roberts, 56 How. Pr. 216. Subsequent purchase of stock. — A stockholder is not deprived of the right to bring an action for illegal acts of the corporation by reason of the fact that he did not purchase his stock till after the commission of the acts com- plained of. Frothing'ham v. Broadway, etc., R. R. Co., 9 Civ. Pro. R. 304. Stock transferred.-r-An examination of defendant before trial will not be permitted in an action against an offi- cer of a corporation by a person who claims to be a stockholder, for an ac- counting and appointment of a re- ceiver on the ground of mismanage- ment of the corporate affairs, and waste of assets by defendant, where it appears that plaintiff's stock has been regularly transferred to defendant on the books of the company, though plaintiff asserts that the transfer was without consideration and upon con- ditions that were never performed, and that plaintiff must first establish his title to the stock. Lawson v. Stanley, 15 N. Y. Supp. 707. Corporation dissolved. — Where a cor- poration upon dissolution by the ex- piration of its charter has no cred- itors the stockholders are the equit- able owners of all the corporate prop- erty and should institute a special pro- ceeding for the appointment of a trus- tee under section 35 of the General Corporation Law and then require the trustee so appointed to prosecute an action against the sole remaining di- rector for an accounting. Buc the stockholders have a suffici«nt interest to enable them to maintain an action for an accounting against the sole re- maining director, a trustee ex male- ficio, charged with converting to his own use and mixing with his OAvn funds the property of which the stock- holders are the sole equitable owners. De Martini v. MoOaldin, 184 App. Div. 222, 171 N. Y. Supp. 528. Propriety of acts. — ^An appeal to equity on behalf of a stockholder to be relieved from acts of the directors of the corporation, Where the acts com- plained of were within their powers and apparently uninfluenced by the corrupt motives or personal interests adverse to those of the stockholders, should at least be justified by some showing that the acts were improper within the belief of a, fair proportion of the body of the stockholders. Bev- eridge v. N. Y. R. R. Co., 112 N. Y. 1, 20 St. Rep. 9©2. The complaint in a stockholder's ac- tion against the directors for misfeas- ance and nonfeasance should allege but two things: First, the cause of ac- tion, stated exactly as though the cor- poration itself was suing; second, the facts which entitle the plaintiff to sue in place of the corporation. Kava- naugh V. Commonwealth Trust Co., 181 N. Y. 121. COEPOEATIONS. 715 self and all other stockholders.^ The final decree protects the interests of all of the parties.^ The action cannot, as a general rule, be brought until the stockholder requests the corpor- ation to bring the action, and it declines.^ Yet, where it is shown that the corporation is under the control of those who must be defendants in the suit, such a demand is not required.* The corporation is a necessary party to such a representative action.^ 2. Joinder of actions. A corporation may sue one or more directors in equity for an accounting with respect to property of the corporation which has actually come into his or their hands, or for fraudu- lent breach of trust in the management of the corporation or its property and for the recovery of the value of property lost and incidental damages. So, too, it has an action at law against one or more directors for damages sustained by the cor- poration in consequence of his or their wrongful or negligent 1. People V. Equitable Life Assur- ance Society, 124 A.pp. Div. 714, 109 N. Y. Supp. 453. Compare, Hastings v. Drew, 50 How. 254; Bartlett v. Drew, 57 N. Y. 587. 2. Brinckerhoflf v. Bostwick, 99 N. Y. 194; reversing, 34 Hun, 352; Oarpenter V. Roberts, 56 How. Pr. 216. 3. Godley v. Crandell & Godley Co., 181 App. Div. 75, 168 N. Y. Supp. 251; Moran v. Vreeland, 81 Misc. 6'64, 143 N. Y. Supp. 522; Stromeyer v. Cornea, 15 Daly, 29, 18 St. Rep. 154; Gray v. New York, etc., Steamboat Co., 3 Hun, 383; Taylor v. Earle, 8 Hun, 1; O'Brien v. O'Connell, 7 Hun, 22S; Greaves v. Gouge, 69 N. Y. 154; Spen- cer V. Clark, 22 Week. Dig. 490. 4. Flynn v. Brooklyn City R. Co., 158 N. Y. 498; Niles v. N. Y. C. & H. R. R. Co., 176 N. Y. 119; Jacobson v. Franklin Lumber Co., 184 N. Y. 152; Seagrist v. Reid, 171 App. Div. 755, 157 N. Y. Supp. 979; Sheridan v. Sheridan Electric Light Co., 38 Hun, 396; Currier v. N. Y., W. S. & B. R. R. Co., 35 Hun, 355; Kelsey v. Sargeant, 40 Hun, 150; Anderton v. Wolf, 41 Hun, 571; Sage v. Culver, 71 Hun, 42, 54 St. Rep. 297, 24 N. Y. iSupp. 514; aff'd, 147 N. Y. 241; IVtyers v. Scott, 20 St. Rep. 35, 2 N. Y. iSupp. 753; Averell v. Barber, 6 N. Y. Supp. 255. See also MacLean v. Mott Iron Works, 193 App. Div. 698, 184 N. Y. Supp. 332. 5. Brinckerhofif v. Bostwiok, 88 N. Y. 52; reversing, 23 Hun, 237; Wells v. Jewett, 11 How. 242; Gardner v. Pol- lard, 10 Bosw. 674; Smith v. Rathbun, 66 Barb. 402; Stromeyer v. Comes, 15 Daly, 39, 18 St. Rep. 154. The dissolution of the corporation does not necessarily aibate the action. Holmes v. Camp, 186 App. Div. 675, 175 N. Y. iSupp. 349. Where it ap- pears that a corporation and its cred- itors have an apparent cause of action against officers and directors, a peti- tion for voluntary dissolution should be denied and the corporate existence continued until they can have oppor- tunity to sue. Matter of Great North- ern Trading Co., 168 App. Div. 536, 153 N. Y. Supp. 213. 716 COBPOEATIONS. official acts of misfeasance or non-feasance. But a suit in equity may not be joined with an action at law against the same directors.^ A complaint by a stockholder against a corporation and its officers alleged a declaration of a dividend, its non-payment, and asked judgment therefor. It also alleged the existence of a large surplus; that the directors, against plaintiff's protest, had authorized the issuance of additional stock at par (though the stock was worth more), allowing the stockholders to sub- scribe proportionately ; that the directors subscribed for their share; that there was a " fraudulent agreement " to refuse to pay the dividend and thereby to " reappropriate " it to the company and to share in it under their new subscription made at par, and asked that the proposed increase be restrained. Held an improper joinder of actions at law and in equity.'' 3. Parties. The action is maintainable against directors out of office.* In an action by a judgment creditor of the corporation to subject to the payment of its claim property fraudulently con- veyed by the corporation to its stockholders, the corporation is a necessary party.^ Where the corporation is dissolved, its receiver is a necessary party .-^^ But it is held that an action under the statute by a trustee of a domestic corporation, where he seeks no receiver, can be maintained, without joining it as a party defendant, where the relief he seeks is to prevent his co-trustees from making a threatened unlawful alienation of the property of the cor- poration detrimental to it and its stockholders.^^ Where one who, by contract with a corporation, is to have the management of its affairs for one year, before the close of the year, brings an action to set aside an alleged unlawful alienation of its property made by its trustees and officers, a trustee, who was not in any way connected with the unlawful alienation, is not a necessary defendant.^^ G. People V. Equitable Life Assur- Byrne, 115 App. Div. 846, 100 N. Y. ance Society, 124 App. Div. 714, 109 Supp. 1041. N. Y. Supp. 453. 10. Lilienthal v. Betz, 108 App. Div. 7. Searles v. Gebbie, 115 App. Div. 222, 95 N. Y. Supp. 849; reversed, on 778, 101 N. Y. Supp, 190. other grounds, 185 N. Y. 153. 8. Jacobus V. Diamond Soda Water 11. Green v. Compton, 41 Misc. ?1, Co., 94 App, Div, 366, 88 N. Y. Supp. 83 N. Y. Supp. 588. 302. 12. Beecher v. Shieffelin, 4 Civ. Pro 9. Lathrop, iShea & Henwood Co. v, R, 230. CORPORATIONS. 717 4. Accounting or waste. The court as a general rule, can interfere with a corporation or its officers only on some of the grounds mentioned in the statutes.^^ The official misconduct which, within the meaning of that phrase, as used in section 90, will support an action brought thereunder to charge the directors of a corporation with that offense, must exceed misfeasance and amount to actual mal- feasance in office. The mere misconception of his rights and impropriety and unlawfulness of action by a director of a cor- poration affords no grounds for convicting him of malfeas- ance in office which necessarily involves a corrupt intent." The statute refers to abuse of trust and misconduct, not to ineligibility on the part of a trustee.^^ Directors who have transferred all the property of their corporation, without providing for the payment of an out- standing judgment, are personally liable to the judgment creditor in a suit brought pursuant to section 90.^^ 13. Belmont v. Erie Railway Co., 52 Barto. 667; Ferris v. S'trong, 3 Edw. 127; Verplank v. Mercantile Ins. Co., 1 Edw. 84. Issues for jury. — ^An order settling issues to be tried by a jury under sub- division 7 of section 90 in an action- against officers for neglect and miscon- duct, which is alleged to have consisted in wrongfully excluding the plaintiflE from participating in the management of the corporation, the jury should not be allowed to determine the damage to the corporation caused by such acts as it is wholly a matter of speculation. Momand v. Landers, 174 App. Div. 227, 160 N. Y. Supp. 1053, Lien of attorney.— When the attor- ney employed by a director of a cor- poration to recover property misap- propriated by officers thereof has lien on property transferred by an officer to the corporation in discharge of his liability. Schoenherr v. Van Meter, 215 N. Y. 548. 14. Stokes v. Stokes, 23 App. Div. 552, 48 N. Y. Supp. 722. 15. Matter of Northern Dispensary, 26 Misc. 147, 56 N. Y. Supp. 784. 16. Darcy v. Brooklyn & N. Y. Ferry Co., 127 App. Div. 167, 111 N. Y. Supp. 514; aff'd, 196 N. Y. 99, 26 L. R. A. (N. S.) 267. A complaint which alleges that de- fendant was a domestic corporation, that plaintiff was a judgment creditor thereof, that the defendant company delivered a quantity of bonds to some of its stockholders — also defendants — for purposes foreign to its lawful busi- ness, as was well known to the latter; that to secure these bonds, a mortgage was executed to him of all the real and personal property of the company, which mortgage was made in contem- plation of insolvency, that a few days after, the mortgagees, to prevent cred- itors of the company from obtaining their lawful demands, took possession of the goods of the company and sold or were about to sell them, applied proceeds to their own use and the use of the holders of said bonds; that thereafter the mortgage was foreclosed and a judgment recovered, directing the sale of the real estate; that certain di- 718 COBPOEATIOK'S. It is a violation of duty under subdivision 2, of section 90, on the part of the directors of a corporation to divest it of all its property without affording a reasonable opportunity to its creditors to present and enforce their claims before the trans- fer should become effective; and such action renders the di- rectors liable for the amount of a claim established against the corporation as having accrued before the transfer. The motives which induce the omission are immaterial. It matters not that they may have supposed that they were not required to do any more than they did for the protection of creditors. Their omission to make adequate provision for the protection of creditors is proof of dereliction, and good faith constitutes no defense." Directors of a corporation who shall sell and transfer the assets thereof without compliance with the provisions of the General Corporation Law and the Stock Corporation Law, cannot relieve themselves from personal liability in a suit by a judgment creditor of the corporation by merely alleging that at the time of the transfer of the assets a fund was placed in trust for the payment of all debts, and that plaintiff by fail- ing to present his claim lost his rights. To set aside a fund for the purpose of paying debts, but without paying them, is no defense against a creditor whose judgment has been made worthless by the sale of all the debtor's property, without notice, and the division of the proceeds among the stockhold- ers and directors.^^ But the directors of a defunct corporation, who distribute all of its assets among themselves without a formal disso- rectors and stockholders procured the their just claims, will not avail as a incorporation of a new corporation and defense to an action brought by an that all these proceedings were part of officer of the corporation under section a fraudulent plan to transfer the prop- 90. Halpin v. Mutual Brewing Co., 20 erty of the defendant to the new cor- App. Div. 583, 47 N. Y. Supp. 412. poration for a nominal price and to de- 17. Darcy v. Brooklyn & N. Y. Ferry feat the rights of the creditors, shows Co., 19« N. Y. 99, 26 L. R. A. (N. S.) facts constituting a cause of action 267; aff'g, 127 App. Div. 167, 111 N. Y. under sections 90 and 91. Phoenix Na- Supp. 514; Buckley v. Starsfield, 155 tional Bank v. Cleveland Company, 11 App. Div. 736, 140 N. Y. Supp. 953; N. Y. 'Supp. 873, 34 St. Rep. 498. aflf'd, 214 N. Y. 679. The acquiescence of all the stock- 18. Shalek v. Jetter, 171 App. Div. holders of a corporation in the acts of 364, 155 N. Y. Supp. 975; Cullen v. its directors, in so dealing with its as- Friedlard, 152 App. Div. 124, 136 N. Y. sets as to deprive future creditors of Supp. 659. the corporation of the payment of COEPOEATIONS. 719 lution proceeding and notice to creditors, are not liable to such creditors on the ground that they have wrongfully and unlaw- fully distributed the assets of the corporation, where it does not appear that the creditor would have been entitled to the payment of his claim if the corporation had been regularly dissolved, and there is no proof of fraud or bad faith>^ Where the gravamen of an action, brought by creditors of a dissolved insolvent corporation against a former director and treasurer of the corporation, is not any official act or omission on the part of the defendant as such director and treasurer, but rather his promise to pay all the debts of the corporation in case he should be allowed to acquire its prop- erty at a judicial sale for less than its real value and his fail- ure to keep that promise, such action cannot be maintained under sections 90 and 91/" Directors and stockholders of a business corporation en- gaged in importing, buying, selling or manufacturing laces, have no right to purchase stocks or cotton on margin, and are liable therefor to judgment creditors for losing or wasting the property of the corporation.^ Profits made by the president of a corporation who owned a majority of the stock from a lease of all its property to him may be reached.^^ If an insur- ance company insolvent in fact, but not known by its officers to be so, reinsures a portion of its policies, this is a transfer which makes the directors liable to the other policyholders, and the receivers may maintain an action.^ An executive committee of a joint-stock company cannot vote themselves money in addition to the regular compensation for past extra services, or in consideration- of their retirement, and a re- ceiver will be appointed to recover such money.^* Bank officers who abuse or transcend their powers are as much liable as any private agent is to his employer.^ But directors are not liable for breach of fidelity by subordinates unless they have knowledge of bad character ; they are Hable only for neglect of ordinary care.^ Trustees who audit a bill in favor of one of 19. Curran v. Oppenheimer, 164 App. 23. Casserly v. Manners, 9 Hun, 695. Div. 746, 150 N. Y. Supp. 369. 24. Blatchford v. Ross, 54 Barb. 42. 20. Lilienthal v. Betz, 185 N. Y. 153. 25. Austin v. Daniels, 4 Den. 2.99. 21. Hemsley & Co. v. Duncan Co., 9« 26. Scott v. Depyster, 1 Edw. 513. Misc. 3i38, 164 N. Y. Supp. 282. Directors held guilty of negligence in 22. Conro v. Port Henry Iron Co., 12 failing to discover the dishonesty of Barb. 27. See Van Cott v. Van Brunt, the treasurer of the company. Tri- 82 N. Y. 535. Bullion Smelting & Development Co. v. 720 COKPOEATIONS. their number whose presence is necessary in order to consti- tute a quorum are liable to stockholders.^ In an action by a corporation against officers for damages arising from vio- lation of duty, no laches short of the statute of limitations is a bar.^ Where three of the four trustees, the pastor and sex- ton of a corporation, formed under chapter 60, Laws of 1813, conspired to change the eccleciastical connection of such cor- poration, and divert its temporalities to another denomi- nation, it was held that one legal trustee might bring an ac- tion in the name of the corporation to restrain such diver- sion 29 While courts cannot compel directors or stockholders, pro- ceeding by the vote of a majority, to act wisely, they can com- pel them to act honestly, or undo their work if they act other- wise. Where a majority of the directors, or stockholders, or both, acting in bad faith, carry into effect a scheme which, even if lawful upon its face, is intended to circumvent the minority stockholders and defraud them out of their legal rights, the courts may interfere and remedy the wrong.^" Corliss, 186 App. Div. 613, 174 N. Y. Supp. 830. A judgment against a corporation arising out of transactions under a contract by which the corporation had the exclusive right to sell the plaintiff' s proprietary articles for which it was to pay a fixed price, by which after an • accounting it was adjudged that the moneys it had received were received by it in a fiduciary capacity, is not evidence against the directors in a sub- sequent action in which the plaintiff claimed that the moneys so received by the corporation were dissipated by the directors in the payment of cor- porate liabilities. Schenck Chemical Co. V. Industrial Advertising & Dis- tributing Co., 66 Misc. 597, 121 N. Y. Supp. 838. 27. Butts V. Wood, 37 N. Y. 317. 28. Ilion Bank v. Carver, 31 Barb. 230. 29. First Ref. Pres. Church v. Bow- den, 16 Week. Dig. 387. 30. Flynn v. Brooklyn City R Co., 158 N. Y. 493. Reference. — If the object of an ac- tion is to compel the officers of a cor- poration to account for official miscon- duct, and not to procure an examina- tion of a long account, a, reference can- not be ordered to take and state an aa- count between the defendants and the corporation of which they are officers, until there is some proof to sustain the allegation that there has been offi- cial' misconduct, and the determination of the facts has been reached and put in the form of an interlocutory judg- ment directing an accounting. Stokes V. Stokes, 87 Hun, 152, 67 St. Rep. 760, 33 N. Y. Supp. 1024. Examination of defendants before trial. — A stockholder, who brings a representative action against his cor- poration and its directors to compel the directors to account for moneys al- leged to have been diverted by them from the corporation, by making im- provident contracts with subsidiaary corporations whereby the plaintiff was deprived of his share of dividends which should have been declared, is en- CORPORATIONS. 721 Thus, an aetion may be maintained by a stockliolder to re- cover for fraudulent mismanagement.^^ A stockholder as a general rule has no right of action against a director for wrecking the corporation and depre- ciating the value of the stock. But where the value of his stock has been depreciated by the failure of his co-contractor to furnish moneys needed by the corporation which he has stipulated to advance, then the damage is directly traceable to his breach of contract and for that damage he may be held individually liable to the stockholder whose stock has been thus depreciated.^ The law is settled in this State that directors of monetary corporations are held to the same degree of care that men of ordinary prudence would exercise in regard to their own af- fairs. In case the corporation could have successfully prose- cuted an action against defendants, it is ^yell settled that a stockholder may bring such action in behalf of himself and all others in like situation, either after demand made that it bring the action and its refusal, or without demand, where the persons who committed the wrongful- acts continued to be directors of the corporation. In such a case the purpose of the action is the restoration, for the benefit of all concerned, of the corporate funds wasted or lost through the fault of the corporation.^^ titled to examine the defendants be- be insolvent, became a director to fore trial to elicit proof of facts mate- facilitate the sale of preferred stock; rial to his cause of action which are that defendant was negligent in the controverted by the defendants and of performance of his duties as director which they have Icnowledge. And this and permitted another to manage the is so, although the plaintiff might corporation, including the sale of stock make the same proof by other wit- to the plaintiflF, which was acoom- nesses. Eckman v. Lindbeck, 178 App. plished by false statements, circulars Div. 720j 165 N. Y. Supp. 145. and reports, of some of which defend- 31. Cazeaux v. Mali, 35 Barb. 578; ant had actual knowledge, and that if approved, Bruff v. Mali, 36 N. Y. 200. defendant had properly performed his 32. Higgins v. Applebaum, 186 App. duties as director, the plaintiff would Div. 682, 174 N. Y. Supp. 807. not have been led into the investment; Director held liable. — In an action by and loss of his money. Evidence ex- a stockholder against a director of a amined, and held, that the direction of business corporation to recover dam- a verdict in favor of the defendant was ages for negligence, it was alleged, and error. Childs v. White, 158 App. Div. the evidence tended to prove, that the 1, 142 N. Y. Supp. 732. defendant, knowing the corporation to 33. Hanna v. Lyon, 176 N. Y. 107. 46 722 COKPOKATIONS. 5. Prevention of threatened alienation. An action may be maintained by a stockholder to prevent the misappropriation of the funds of the corporation.^* He may maintain an action to prevent the payment of money by the corporation on an unlawful agreement.^^ The statute sanctions an action to restrain the ofl&cers of a corporation from paying to themselves salaries fixed by them in their own favor, and to compel them to refund the amount already paid, and a previous demand to bring the action is unnecessary when the corporation is wholly under the control of the directors, whose wrong is complained ot.^ As to ques- tions of mere administration or of policy, as to which there is an honest difference of opinion among shareholders, the will of the majority should govern, and so the court is not justified in interfering, even in doubtful cases where the action of a majority might be susceptible of different constructions. To warrant the interposition of the court, where the proposed action is within the corporate powers, a case must be made out which plainly shows that such action is so opposed to the true interests of the corporation itself as necessarily to lead to the inference that none of those acting could have been in- fluenced by an honest desire to secur'e such interests, but that they must have acted with intent to subserve some outside purpose regardless of the consequences to the company and in a manner inconsistent with its interests.^'' 6. Setting aside alienation of property. This statute provides a remedy for the unlawful alienation of property by a corporation, where the alienee knew its pur- 34. Carpenter v. N. Y. & N. H. R. R. while the answer denies these charges Co., 5 Afch. 277; Zeiglex v. Hoagland, and the averment that plaintiff is a 52 Hun, 385, 5 N. Y. Supp. 300. creditor or stockholder, an injunction Injunction pendente lite. — ^Where the pendente lite is proper. Hoyt v. complaint in an action against the di- Malone, 31 St. Rep. 739, 9 N. Y. Supp. rectors of a corporation alleges that 877. See also Piza v. Butler, 90 Hun, the plaintiff is a ■creditor and stock- 254, 35 N. Y. Supp. 721. holder of the company, that the presi- 35. Leslie v. Lorillard, 40 Hun, 392. dent has appropriated the property of 36. McNaughton v. Osgood, 41 Hun, the company and designs to remove all 110; BrinckerhofF v. Bostwick, 88 N. Y. its property from the county where it 59. did business, that he is insolvent, that 37. G-amtole v. Queens County Water the company has ceased to do business Co., 123 N. Y. 91. and its assets will not pay its debts. COBPOEATIONS. 723 pose, by an action against the officers chargeable with the wrong, to set aside the alienation.^^ Where in an action by a trustee in bankruptcy of a corpor- ation against the former officers thereof and the corporation to nullify an alleged alienation of certain realty and moneys of the corporation to one of the defendants, and to recover the realty and money lost to the creditors and wasted through the neglect and failure of the individual defendants to per- form their duties as officers and directors to preserve the assets for the payment of the corporate debts, there is no alle- gation that at the time of the alleged transfer there were any creditors in existence, or that the transaction was in further- ance of a scheme to defraud subsequent creditors, or that the corporation was insolvent or that the conveyance made it in- solvent, a motion for judgment on the pleadings should be denied.^ 7. Receiver. Where the complaint in an action alleges waste of corpor- ate assets, wrongdoing and mismanagement upon the part of three of the directors of a corporation and of others confeder- ating with them, and seeks an accounting from such directors and a restraint of the alienation of the corporate property, a receiver of the property of the corporation may be appointed before trial, and the receivership may be continued after the trial to carry the judgment into effect. An action of this char- acter does not contemplate the distribution of the corporate assets among creditors nor a dissolution of the corporation.*" Although there is no demand in a complaint under the statute for the removal of the directors or the election of others in their place, a receiver may be appointed.*^ D. Actions against officers by corporation, or receiver, or trustee. 1. General Corporation Law, § 91-a. Actions against officers by cor- poration, or receiver, or trustee. The Supreme Court shall also have and exercise jurisdiction in equity, at the suit of a corporation, or of a receiver, or trustee in bankruptcy thereof, to compel one or more trustees, directors, managers or other officers of the corporation to account for injury to or losses of the funds, assets or prop- 38. Kelsey v. The Pflander Process 91 Hun, 220, 36 N. Y. Supp. 151; ap- Co., 9 St. Rep. 563. peal dismissed, 148 N. Y. 744. 39. Lumis v. Crosby, IT'C App. Div. 41. Jacobus v. Diamond Soda Water 315, 162 N. Y. Supp. 444. Co., 94 App. Div. 366, 88 N. Y. Supp. 40. Halpin v. Mutual Brewing Co., 302. 724 CORPOBATIONS. erty of the corporation, caused by or through any neglect or failure of the defendants to perform, or for violation of their duties. The court must, upon the application of either party, make an order directing the trial by jury of the issue of negligence, and for that purpose the questions to be tried must be prepared and settled as prescribed in section nine hundred and seventy of the Code of Civil Procedure.42 (See B., C. & 6. Consol. L., 2nd Ed., p. 3133.) 2. Discussion of statute. Prior to the enactment of this section an action at law for danaages for the misfeasance or nonfeasance of a director or officer of a corporation could not be joined with an action for equitable relief, but the effect of said statute is to do away with the distinctions theretofore recognized between strict actions for an accounting of property actually received and for wrongful acts and to authorize a single comprehensive action in equity in which the directors or officers of a corpor- ation may be called to account for all their acts while in office.^^ The statute applies whether the acts in question con- sist of actual misappropriation of funds or constitute negli- gence or neglect of duty resulting in damage.** It applies to foreign corporations.*^ The statute in question is sufficiently broad to authorize an action in equity by a trustee in bankruptcy of a domestic cor- poration to set aside alleged preferential payments by its offi- cers and directors to creditors, one of whom was also a di- rector and officer, made at a time when the corporation was in- solvent, and in contravention of section 66 of the Stock Cor- poration Law.** The fact that the plaintiff may have an ade- quate remedy at law is no defense to the action. And a de- fendant may not plead a counterclaim which has no relation to the cause of action in the complaint.*'' The action may be maintained against one guilty director without joining his co-directors.** 42; This section was added to the 413; aff'd, 168 App. Div. «13, 152 N. Y. General Corporation Law by chapter Supp. 1113. 633 of the Laws of 1913. 46. Sherwood v. Holhrook, 98 Misc. 43. Sherwood v. Holbrook, 98 Misc. 668, 163 N. Y. Supp. 326; aff'd, 178 688, 163 N. Y. Supp. 326; aff'd, 178 App. Div. 462, 165 N. Y. Supp. 514. App. Div. 462, 165 N. Y. Supp. 514. 47. Woolson Spice Co. v. Columbus 44. German American CoflFee Co. v. Trust Co., 193 App. Div. 661, 184 N. Y. Deihl, 86 Misc. 547, 149 N. Y. Supp. Supp. 484. 413; aflf'd, 168 App. Div. 913, 152 48. German American Coffee Co. v. N. Y. Supp. 1113. Kehl, 86 Misc. 547, 149 N. Y. Supp. 45. German Ameridan OoflFee Co. v. 413; aff'd, 168 App. Div. 913, 152 N. Y. Diehl, 86 Misc. 547 149 N. Y. Supp. Supp. 1113. COEPOBATIONS. 725 £. Precedents. 1. Complaint against directors for waste of corporate funds. SUPREME COURT— Washington County. David J. Hanna, Suing for Himself as Stockholder, and All Other Stock- holders of the People's National Bank of Salem, New York, in like situation, who shall choose to make themselves parties to this action, Plaintiff. vs. The People 's National Bank of Salem, New York, Charles Lyon, William C. Larmon, et al.. Defendants. i. 179 N. Y. 107. The plaintiff, complaining in behalf of himself and all others the stockholders of the Peoples National Bank of Salem, New York, in like situa/tion as himself, who shall, in due time, come in and seek relief by and contribute to the expenses of this action, by Lansing & Holmes, their attorneys, allege upon information and belief, as follows : I. That the defendant, the Peoples National Bank of Salem, New York, is a corporation and banking association organized about the 1st of January, 1884, under and by virtue of the Act of Congress of the United States, approved June 3rd, 1864, and known as the Na- tional Banking Act, and the various acts amending and extending the same, and that from the period of said organization until about the month of November or December, 1893, the said Peoples National Bank of Salem, New York, transacted a general banking business at the village of Salem, Washington County, N. Y. ; that on or about '.he month of October, 1893, said banking association became insolvent. II. That the capital stock of said bank was $50,000, divided into shares of the par value of $100 each. That the plaintiff at the time of said insolvency and suspension of said bank, was the owner and holder of ten shares of its capital stock of the nominal value of $100 each. III. That at the time of said suspension of payment by the said bank, the said bank was insolvent and its liabilities so far exceeded its assets as to entirely absorb its capital stock, and that the property and assets of said banking association were entirely inadequate to pay the satisfied debt and liabilities over and above its liabilities to share- holders upon account of capital stock, and that the comptroller of the currency having so ascertained and determined, and having decided that it was necessary in order to pay the same, to enforce the individ- ual liabilities of the shareholders of said banking association, as pro- vided by the said acts of congress, directed that an assessment be made upon all the shareholders of said bank, including the plaintiff, 726 CORPORATIONS. to the full extent of the whole amount of their stock therein, at the par value thereof, in addition to the amount invested in said shares. That by reason of the liabilities of said bank, and the said assessment made necessary thereby as aforesaid, the shareholders of said bank, including the plaintiff, were required to pay the amount of said assess- ment or suffer loss by the sale of their said stock, for the purpose of paying the amount of said assessment, and that this plaintiff's said stock was sold by said bank in satisfaction of said assessment and became wholly lost to him while other stockholders actually paid the said bank the full amount of their said assessment and retained their stock. IV. That one Eobert M. Stevenson, from about the year 1884, until the said suspension of payments by said bank, was the cashier of said bank, and that the insolvency of said bank was caused by the defalcations, willful misconduct, gross neglect and inattention to the duties of his office of the said Robert M. Stevenson while acting as such cashier, from about the year 1890 until the suspension of said bank. That for a considerable period prior to the suspension of said bank, the said Robert M. Stevenson loaned the funds of the bank in large amounts to various persons who were irresponsible, without taking any adequate security for such loans and without proper inquiry into the solvency of either the makers or of the endorsers upon notes which were discounted by him at said bank. That said loans were made and paper discounted in large amounts to one Benjamin G. Long, who was one of the pretended customers of said bank. That the said Long was a non-resident of the State and was a travelling agent engaged in the sale of musical instruments, upon credit, for which he took notes in various sums of numerous irresponsible persons and upon endorsing the same, the said Stevenson, without inquiry or knowledge of the solvency of said makers of said notes, and even of their places of residence, or whether such persons had existence or not — for num- bers of them were fictitious — discounted said notes until the bank held in the aggregate such paper of the nominal value of about $35,000; being more than three-fifths of the capital stock of the bank; that said notes were substantially worthless, loaned practically upon the credit of said Benjamin G. Long, who was not known to have any property in this State or elsewhere, and who was, at the time, actually insolvent ; that various other additional loans of a like character were made to various persons, which were a total loss to the bank and involved loss altogether of an amount equal to its entire capital stock. V. That at the time the aforesaid loans were made and of said suspension of said bank in 1893^ the defendants herein, other than the defendant corporation, were directors of said bank and constituted a portion of the Board of Directors thereof, each of said directors having been theretofore duly elected a director and having accepted such office and trust, and having acted therein; and the said defendant directors have been annually re-elected directors of said bank down until the present time, and now constitute a majority of the directors of said bank, which consists of nine persons, whose names are as follows: (Insert names of directors.) CORPORATIONS. 727 VI. That the said misappropriation and loss of funds of the bank through the discounting of said paper and the loaning of said money in large ^mounts to irresponsible persons of funds of said bank by said cashier, were caused by and were attributable to, and were the con- sequence and result of gross negligence, inattention to duty and mis- conduct of said directors, including the defendants in this action, in the discharge of the duties of their said office. VII. That at the times said loans were made as aforesaid, the directors of said bank including the defendant directors, failed and neglected to exercise any proper or reasonable control or supervision over the said cashier; that substantially the direction and maneige- ment of said bank was left to said cashier; and no effective system of examination was provided calculated to detect misconduct upon the part of the officers of the bank, or to protect the interest of the bank in the management of its business. VIII. That the accounts of the said Robert M. Stevenson, as cashier, on the books of said bank, if inspected, would have led per- sons of ordinary prudence to learn, or, at least, to suspect or believe that he was using the funds of the bank in reckless and unsafe enter- prises and imperilling the capital of the bank, and plaintiff alleges that the defendant directors herein knew or had reason to suspect and believe that • the cashier of said bank was grossly negligent in his management of its affairs in making the loans aforesaid and in other- wise handling its funds, and they neglected and violated their duty as directors, to the shareholders of the bank, including plaintiff, by willfully retaining the said Robert M. Stevenson in his position as cashier, knowing him to be an untrustworthy officer, and by omitting to exercise any proper or customary supervision or restraint over said cashier as aforesaid. That the said Robert M. Stevenson is dead, having died not long after a criminal inquiry had been made into his management of the affairs of said bank. IX. That the reason said bank has not been reqested to bring this action, and has been made a party defendant herein is, because that all of its present directors, namely: (naming directors), with the exception of Joseph B. Stone, were directors of the bank at the time and times said cashier was engaged in the wrongful acts and misconduct which led to the insolvency and suspension of said bank, and were themselves guilty of gross negligence and misconduct in connection with their supervision and management of the conduct of the said cashier and of the funds of the bank which led to its loss. X. That by reason of the premises said defendants were guilty of negligence an4 misconduct in their office as directors of said bank, whereby the plaintiff suffered damage to a large amount. XI. That the shareholders of said bank are numerous, and some of them are unknown to the plaintiff and cannot be ascertained by him, and, therefore, plaintiff sues for the benefit of all shareholders who may choose to join in this suit. WHEREFORE, plaintiff prays that this court decree that the defendants who were directors as aforesaid, are individually respon- sible to the plaintiff for all losses resulting to the plaintiff as such 728 COBPORATIONS. shareholder from the directors' negligence and misconduct in office as aforesaid, and that an account be taken of the damages suffered by the plaintiff and by the other shareholders of said banking associa- tion who may in due time join in this suit, by reason of the said negligence and misconduct in office, and that the several plaintiffs have judgment against the defendants who were directors as aforesaid for the respective amounts in which, upon said accounting, they shall appear to have respectively suffered damage in the respects aforesaid ; and that such other relief in the premises, as may be just, be granted, with costs and disbursements of this action. LANSING AND HOLMES, Attorneys for Plaintiff. 2. Complaint against directors for fraud and concealment, SUPREME COURT— County of New York. MARTIN CASSIDY, Plaintiff, vs. JOSEPH F. BLAUT, FREDERICK UHLMANN and RONALD T. Mc- DONALD, Defendants. 170 N. Y. 505. The plaintiff, complaining of the defendants, respectfully shows to the court and alleges upon information and belief : First : That at all the times hereinafter mentioned to the time of its dissolution, the Madison Square Bank was a domestic stock mqnied corporation and bank organized and engaging in business under the laws of this State, and having its place of business in the City of New York. Second : That at said times hereinafter mentioned the defendants were directcjrs of said Madison Square Bank, and one Samuel Cohen was a regular depositor in said bank, and had been for a long time previous, and as such had been accustomed from time to time to deposit monies in said bank. Third: That prior to and on and after the 8th day of August, 1893, the defendant Joseph F. Blaut was the president of said Madi- son Square Bank, and the defendants Frederick Uhlmann and Ronald T. McDonald were directors constituting a committee having the charge, management and direction of said bank, and the defendants were officers and agents of said bank, and the said defendants were in actual control of said bank, and managed and directed the affairs thereof. Fourth: That on the 8th day of August, 1893, and at the time aforesaid, the said Madison Square Bank was by the direction and with the knowledge of the defendants and each of them open for the regular transaction of its business, and the said defendants and each of them then and there for the purpose of inducing and intending to induce depositors to deposit money in said bank, and in violation of CORPOEATIONS. 729 their duties to such depositors, and in violation of the statute in such case made and provided, kept the said bank open, and directed, per- mitted and allowed the said bank to be and remain open for the purpose of receiving deposits and for the regular transaction of busi- ness, and the said defendants and each of them then and there for the purpose and with the intention aforesaid represented to the de- positors in said bank thait the said bank was solvent and could lawfully and properly accept deposits from such depositors. Fifth: Xhat the representation aforesaid was false and the de- fendants and each of them knew it to be false ; that on Ihe 8th day of August, 1893, and at the time aforesaid, the said Madison Square Bank was in fact hopelessly insolvent, and the defendants and each of them knew thart the said bank was hopelessly insolvent, and knew that the said bank could not lawfully or properly accept deposts from the depositors in said bank. Sixth: That on the 8th day of August, 1893, and at the time aforesaid, the said Samuel Cohen believing that the said Madison Square Bank was solvent, and relying upon the representations of the defendants aforesaid, in good faith, deposited in the said bank certain monies, to-wit: The sum of one thousand and twenty ($1,020) collars, and the said Madison Square Bank then, with the consent of the defendants and each of them, and by the direction and procurement and upon the instigation of the defendants and each of them, and the defendants then and there wrongfully concealing from and omitting to make known to the said Samuel Cohen the fact of the insolvency of said bank, accepted the said deposit of one thousand and twenty ($1,020) dollars. Seventh : That at said time said Madison Square Bank was insol- vent to the knowledge of the defendants and each of them, and that the defendants and each of them then and there received said deposit knowing that said bank was insolvent, contrary to the form of said statute. Eighth: That shortly thereafter and on or about the 9th day of August, 1893, and because of its insolvency aforesaid, the said Madi- son Square Bank closed its doors and notified the public that it would not receive deposits or pay money to creditors or depositors, and because of such insolvency the Superintendent of the Banking Depart- ment of the State closed the said bank and took possession of its assets, and on or about the 10th day of August, 1893, because of such insolvency an action was duly begun in the Supreme Court by the Attorney-General in the name of the People of the Stajte against the said Madison Square Bank for a dissolution of the said bank on the ground of its insolvency ; that temporary receivers of the property of said bank were duly appointed by order of this court and thereafter duly qualified; and that thereafter and on or about the 22d day of November, 1893, judgment was duly rendered, dissolving the said b^nk and forfeiting its corporate rights to the privileges and fran- chises, and permanent receivers of the property of said bank were duly appointed and have since duly qualified. That the said bank never resumed business, and that by reason of the insolvency and 730 COEPOEATIONS. closing and dissolution of said bank the said Samuel Cohen has been unable to recover any part of the aforesaid deposit of one thousand and twenty ($1,020) dollars made in reliance upon the false and fraudulent representations of the defendants aforesaid, excepting only the sum of five hundred and ten ($510) dollars. Ninth: That by reason of the premises said Samuel Cohen was damaged in the sum of five hundred and ten ($510) dollars. Tenth: That, heretofore and prior to the commencement of this action, the aforesaid claim and the cause of action hereinbefore set forth were duly assigned to the plaintiff, who is now the owner and holder thereof. Eleventh : That by reason of the premises the plaintiff has been damaged in the sum of five hundred and ten ($510) dollars. WHEREFORE, the plaintiff demands judgment against the- defend- ants for the sum of five hundred and ten ($510) dollars, with interest from the 8th of August, 1893, together with the costs and dis- bursements of this action. HAROLD NATHAN, Plaintiff's Attorney. ARTICLE III. SUPERVISION OF ELECTION OF OFFICERS. A. General Corporation law, § 32. Powers of supreme court respecting elections. The Supreme Court shall, upon the application of any person or corporation aggrieved by or complaining of any election of any corporation or any proceed- ing, act or matter touching the same, upon notice thereof to the adverse party, or to those to be affected thereby, forthwith and in a summary way, hear the affidavits, proofs and allegations of the parties, or otherwise inquire into the matters or causes of complaint, and establish the election or order a new elec- tion, or make such order and give such relief as right and justice may require.*9 (See B., C. & G. Consol. L., 3nd Ed., p. 3104.) B. Nature of proceeding. The statute in question is a substantial re-enaotment of an earlier provision found in 1 Eev. St. 603, section 5.^° The re- lief intended thereby is to establish an election, or to set aside that election and order a new one.^^ The proceeding is sum- mary in its nature/^ and avoids the necessity of proceeding by an action of quo warranto or other more cumbersome form of 49. Peacemakers' Court of Seneca son, 61 Hun, 338, 16 N. Y. Supp. 118. Nation of Indians has no jurisdiction 51. People ex rel. Putzel v. Simon- of a proceeding under this section. son, 61 Hun, 338, 16 N. Y. Supp. 118. People ex rel. Jamerson v. John, 80 52. People ex rel. Putzel v. Simon- Misc. 418, 141 N. Y. Supp. 225. son, 61 Hun, 338, 16 N. Y. Supp. 118. 50. People ex rel. Putzel v. Simon- COEPOEATIONS. 731 relief.^* But it is thought that the proceeding is of doubtful availability as a means of excluding persons from unlawfully holding over in corporate office to which others have been elected. The proper remedy in such a case may be by action in the nature of quo warranto.^^ The proceeding authorized is not a mandamus proceeding.^ Nor is it an aetion.^^ The remedy is available although an action may be maintained under 1208, et seq. of the Civil Practice Act, relative to an ac- tion by the Attorney- General against the usurper of an office or franchise.^* C. Application of statute. The statute is not limited in its application to stock corpor- ations, but applies to all kinds of corporations.^^ The election of the officers of an insurance company is subject to its pro- visions.^" Authority may be exercised under the statute whether the election is made by the stockholders or by trustees or directors to fill vacancies.^^ 0. By whom maintained. The proceeding must be instituted by some person whose rights have been infringed and who is justly entitled to corn- plain.^^ The fact that another party is joined, without author- ity, as co-petitioner with a stockholder does not affect the right of the latter to have his petition heard.^^ A stockholder is not entitled to intervene in a proceeding to annul an election of directors where he merely alleges that he is a stockholder at the time of the motion, and does not show that he was a stockholder at the date of the election, or that 54. Matter of Ringler & Co., 204 on opinion below, 118 App. Div. 616, N. y. 30. 103 N. Y. Supp. 465. 55. Report of Atty.-Gen. (1913), Tol. 60. Matter of Empire State Su- 2, p. 266. preme Lodge, 53 -Misc. 344; affirmed, 56. People ex rel. Putzel v. Simon- on opinion below, 118 App. Div. 616, son, 61 Hun, 338, 16 N. Y. Supp. 118. 103 N. Y. Supp. 465. 57. Matter of Utica Fire Alarm 61. Matter of Ringler & Co., 204 Teleg. Co., 115 App. Div. 821, 101 N. Y. 30. N. Y. Supp. 109. G2. Matter of Syracuse, etc., R. Co., 58. Matter of Empire State Su- 91 N. Y. 1; Matter of Scheel, 134 App. preme Lodge, 53 Misc. 344; affirmed, Div. 442, 119 N. Y. Supp. 295; Matter on opinion below, 118 App. Div. 616, of Keogh, 192 App. Div. 624, 183 N. Y. 103 N. Y. Supp. 465. Supp. 40«. 59. Matter of Empire State Su- 63. Matter of Petition of Argus Co., preme Lodge, 53 Misc. 344; affirmed, 13« N. Y. 557. 732 CORPORATIONS. the former holder of his stock did not vote for the directors whose election is sought to he set aside.®* Where an application was made by one who was not a stockholder at the time of the election complained of. but who subsequently received a certificate of stock from one who took part therein ; it was held that the petitioner did not occupy a position authorizing the interposition of the court in his be- half and that even if it be true, that an illegal election must be complained of and set aside in order to enable the court to compel an election, when the officers of the corporation omit to call a meeting of stockholders to elect a new board of directors, the complaint may only be entertained when made by some aggrieved party who is not himself the author of the wrong complained of.®^ E. Notice of application. Notice of the application should be given to the corporation and to the officers whose election is challenged ;®® but, in an action by policy-holders of an insurance company to set aside an election of officers of such company, it is not necessary to give notice to all of the policy-holders of the company .^'^ The petition or notice of motion to vacate an irregular election need not specify the irregularity.®^ F. When entitled to relief. An election of directors is not illegal because only a minor- ity of the stock is voted, as a quorum is made by the stock- holders attending or represented.®^ Where officers are unanimously elected by the only persons 64. Matter of Scheel, 134 App. Div. directors under this section, which ap- 442, 119 N. Y. Supp. 295. points a referee to take the testimony 65. Matter of Syracuse, etc., E. R. of witnesses and report the same to Co., 91 N. Y. 1. the court with his opinion. Matter of 66. Matter of Keogh, 192 App. Div. Silaski, 175 App. Div. IM, 161 N. Y. 624, 183 N. y. Supp. 408; Matter of Supp. 513. Empire State Supreme Lodge, 53 Misc. 67. Matter of Empire State Su- 344; affirmed, on opinion below, 118 preme Lodge, 53 Misc. 344; affirmed, App. Div. 616, 103 N. Y. Supp. 465. on opinion below, 118 App. Div. 616, Appeal from order appointing ref- 103 N. Y. Supp. 465. eree. — No appeal to the Appellate Di- 68. Matter of Keller, 116 App. Div. vision lies from an interlocutory order 58, 101 N. Y. Supp. 133. of the court, in a proceeding to review 69. Asheroft v. Hammond, 132 App. the validity of a corporate election of Div. 3, 116 N. Y. Supp. 362. CORPORATIONS. 733 entitled to vote, the election will not be set aside because bal- lots were cast by persons not entitled to vote.™ If one candidate receives a majority of the legal votes cast, the receipt of illegal votes in his favor does not defeat his election.'^^ But, if the question is as to the legal right to hold any elec- tion at all, and not who received a majority of the legal votes cast, the applicants are not required to show that a new elec- tion would result differently.'^^ Where proper notice of the election is not given, it is no answer to say that the vote of the complaining stockholder would not have changed the result of the election, for he has a right to be present to advocate the election of his candi- dates.'^^ Under the Stock Corporation Law, a stockholder is forbid- den to vote at an election of directors, unless it appears that his stock has been entered in the stock-book of the corporation for ten days immediately preceding the election.''* Only stockholders of record or those holding proxies are entitled to vote at an election of directors of a stock corpor- ation.'^® 70. Matter of Catholic, etc., Assoc, 142 App. Div. 307, 127 N. Y. Supp. 143. 71. Matter of Petition of Argus Co., 138 N. Y. 557. 72. Matter of Empire State Su- preme Lodge, 53 Misc. 344; affirmed, on opinion below, 118 App. Div. '616, 103 N. Y. Supp. 465. 73. Matter of Keller, 116 App. Div. 58, 101 N. Y. Supp. 133. 74. Matter of Glen Salt Co., 17 App. Div. 234, 45 N. Y. Supp. 568; aff'd, 153 N. Y. 688. Void transfer.— A transfer of stock which, though absolute upon its face, is designed only to confer upon the transferee the power to vote upon the stock for a period of three years, amounts to a proxy given for a con- sideration, and is void under section 23 of the General Corporation Law, pro- viding that "no member of a corpora- tion shall sell his vote, or issue a proxy to vote, to any person for any sum of money, or anything of value." Such a transaction may be attacked a? illegal by the stockholders, each of whom is presumed to have an interest in having only legal votes east. Mat- ter of Glen Salt Co., 17 App. Div. 234, 45 N. Y. Supp. 568; aff'd, 153 N. Y. 688. 75. Matter of Utioa Fire Alarm Teleg. Co., 115 App. Div. 821, 101 N. Y. Supp. 109. Policyholders. — Holders of policisa in a mutual fire insurance company, or- ganized under chapter 239 of the Laws of 1836, as amended by chapter 47 of the Laws of 1848, who have paid a cer- tain definite sum of money in full for insurance therein, in lieu of and in place of a premium note therefor, are as fully and effectively insured as those Who have given a premium note for insurance, and are members of the company and entitled to vote at any election of the directors equally with note policyholders. Matter of Mutual Tire Ins. 6o., 164 N. Y. 10. 734 COEPOKATION"S. Although a person may have an equitable claim upon stock standing in the name of another, which in a proper action might entitle him to a transfer thereof, such will not be deter- mined in a proceeding to inquire into the validity of an election.'^ Where a stockholder is not permitted to vote upon the ground that his stock was forfeited for nonpayment, the court may inquire into the validity of the forfeiture, and, if invalid, order a new election." Where directors de facto but not de jure elected other persons as directors to fill vacancies, the title to the office of the persons so elected is no better than that of the directors who took part in their election.™ The failure to comply with section 31 of the Stock Corporation Law, relative to the filing of the oath of the inspectors of elec- tion, is merely directory and does not invalidate the elec- tion.™ When the by-laws of a domestic membership corporation do not require notice of the election of officers, an election held at the regular time and place set by the by-laws is not invalid by reason of a failure to give notice.^ Where an election of railroad directors has been procured by temporarily enjoining a reorganization committee, holding 60 per cent, of the stock, from voting, and this injunction is subsequently set aside upon the merits, the result of the elec- tion represents only the wishes of a minority of the stock- holders and the election must be set aside.^ 76. Matter of Utica Fire Alarm ing, a special meeting is called for that Telegraph Co., 115 App. Div. 821, 101 purpose, the notice required by section N. Y. Supp. 109. 25 of the Stock Corporation Law must 77. Matter of N. Y., etc., Town Site be given, together with such other Co., 145 App. Div. 623, 130 N. Y. Supp. notice as is prescribed by the by-laws. 414. When the by-laws require in addition 78. Matter of Ringler & Co., 204 to the statutory notice a written notice N. Y. 30. mailed thirty days 'before the meeting, 79. Union National Bank v. Scott, a notice of only twelve days is insuffi- 53 App. Div. 65, 66 N. Y. Supp. 145. cient, and entitles a stockholder who 80. Matter of Electrical Workers v. has not appeared or waived his rights Sullivan, 122 App. Div. 764, 107 N. Y. to an order vacating the election. Mat- Supp. 886. ter of Keller, 116 App. Div. 5«, 101 Notice of election.— When, after a N. Y. Supp. 133. failure to vote for directors of a cor- 81. Matter of Townsend, 24 Misc. poratiou ait the regular annual meet- 80, 53 N. Y. Supp. 289. COEPORATIONS. 735 G. Relief granted. The court is authorized to inquire into and determine the validity of corporate elections, and any proceeding, act or matter touching the same.^^ The court may properly deter- mine any question relating to the election, if necessarily in- volved in the controversy, even though it is merely inciden- tal.^^ But the proceeding is not an action and it is not an ap- propriate remedy for determining equitable claims or ques- tions not necessarily involved in deciding the primary ques- tion.^* The court is not bound by the entries in the books of the corporation ;^ it may go behind the entries on the transfer book and determine whether a transfer appearing thereon was a sale or pledge and who was entitled to vote thereon.^ In a proceeding to test the validity of an election of officers in a fraternal benefit association, the court has no power to determine the validity of the amendments to the consti- tution.^^ In ordering a new election the court may require that notice be given to the stockholders that a receiver form- erly in charge of the corporate affairs has been discharged.^ The court, in declaring an election of directors wholly void, will not continue the directors so elected in office until their successors are legally chosen.** 82. Matter of Utica Fire Alarm Teleg. Co., 115 App. Div. 821, 101 Teleg. Co., 115 App. Div. 821, 101 N. Y. Supp. 109. N. Y. Supp. 109. 84. Matter of Utica Fire Alarm Evidence. — The strict rules which Teleg. Co., 115 App. Div. 821, 101 govern the reception of evidence in N. Y. 'Supp. 109. civil actions are not applicable to this 85. Matter of Ringler & Co., 204 proceeding. Matter of Petition of N. Y. 30; Strong v. Smith, 15 Hun, Argus Co., 138 N. Y. 557. 222. Res adjudicata.— An order made upon 8G. Strong v. Smith, 15 Hun, 222. notice to the borrower, in a proceed- 87. Matter of Catholic, etc., Assoc, ing instituted by the lender under tliis 142 App. Div. 307, 12!7 N. Y. Supp. section, adjudging that the lender, hav- 143. ing the legal title to the stock, might 88. Matter of Electrical Workers v. lawfully be elected to the office of di- Sullivan, 122 App. Div. 764, 107 N. Y. rector of the corporation, is not res Supp. 886. adjudicata upon the question of the 89. Matter of Empire State Su- a«3tual ownership of the stock. Farmer preme Lodge, 53 Misc. 344; affirmed, V. Farmer & Son Type Founding Co., on opinion below, 118 App. Div. 616, 83 App. Div. 218, 82 N. Y. Supp. 228. 103 N. Y. Supp. 465. 83. Matter of Utica Fire Alarm 736 CORPORATIONS. SUPREME COURT- H. Form of petition. -New York County. In the Matter of the Petition to SET Aside the Election op Direct- ors OP GEORGE RINGLER & COMPANY. .Matter of Ringler, 145 App. Div. 361. The petition of Anna Hachemeiater and J. Edward Jetter, as ad- ministrators with the will annexed of Henry Hachemeister, deceased, and J. Edward Jetter as substituted trustee under the will of Henry Hachemeister, deceased, and of Anna Hachemeister individually, re- spectfully shows to this court: That your petitioners are stockholders in the corporation of George Ringler & Co., a corporation duly organized under the laws of the State of New York, and that your petitioners Anna Hachemeister and J. Edward Jetter, as administrators with the will annexed of Henry Hachemeister, deceased, are holders and owners of three thousand (3,000) shares of stock of George Ringler & Co., a corporation whose entire capital stock consists of six thousand (6,000) shares of stock of the par value of one hundred dollars ($100) a share, and that your petitioner Anna Hachemeister individually is the holder and owner of five (5) shares of stock of the said George Ringler & Co. That Henry Hachemeister, in his lifetime, was the owner of the aforesaid three thousand shares (3,000) of stock held by your peti- tioners as such administrators with the will annexed. That said Henry Hachemeister died on the 5th day of July, 1907, leaving a last will and testament, by which he devised and bequeathed his entire estate to the executors named therein, William G. Ringler and Hon. Leonard A. Giegerich, in trust. That annexed hereto is a copy of the last will and testament of Henry Hachemeister, deceased. That the said will of Henry Hachemeister was duly filed in the Sur- rogates' Court, New York county, and duly admitted to probate by said Surrogates' Court, and letters testamentary duly issued to Wil- liam G. Ringler, the said Leonard A. Giegerich not having qualified, but having duly renounced as such executor. That the said William G. Ringler died on the 23d day of January, 1910, and that on January 28, 1910, Anna Hachemeister, one of. your petitioners, was duly appointed administratrix with the will annexed of. the estate of Henry Hachemeister, deceased, and thereafter on the 3d day of February, 1910, J. Edward Jetter, one of your petitioners, was duly appointed coadministrator with the will annexed of Henry Hachemeister, deceased, and thereafter your petitioners both duly qualified by filing a bond approved of by the Surrogates' Court, New York county, and since have been acting as such. That thereafter J. Edward Jestter, one of your petitioners, was ap- pointed substituted trustee under the will of Henry Hachemeister, deceased, and duly qualified as such by filing a bond approved of by CORPORATIONS. 737 the Surrogates' Court, New York county, and thereafter the stock owned by Henry Hachemeister, deceased, was exchanged by the said corporation for a certificate for three thousand (3,000) shares of stock in the name of your petitioners, Anna Hachemeister and J. Edward Jetter, as administrator with the will annexed of Henry Hachemeister, deceased. That in the month of August, 1907, "William G. Ringler, by gift, transferred- certificate No. 338 of said corporation to Anna Hache- meister individually, your petitioner. That the principal place of business of said corporation is located at No. 203 Bast 92d street, borough of Manhattan, city of New York, and your petitioners further state that on the 30th day of October, 1909, there was assumed to be held at the office of said corporation, by virtue of the by-laws, an election of directors, and the following persons were assumed to be elected directors thereat, to wit: Wil- liam G. Eingler, George F. Trommer, Arthur Strauss, Anna Hache- meister and Isaac Kugelman, and claiming to be directors by virtue of said alleged election said persons organized a board, and assumed to act as such, and that hereto annexed and marked exhibit "A" is a copy of the record of said alleged election taken from the minute- book of said corporation. That said alleged election and the proceedings, acts and matters touching the same were illegal and invalid for the following reasons : That at such election there were elected George F. Trommer, Ar- thur Strauss and Isaac Kugelman, as such directors. That under the General Corporation Law of the State of New York, and under the certificate of incorporation of said George Ringler & Co., and the by-laws of said corporation, it is necessary that a director, in order to be qualified as such, own at least one share of said stock of said corporation. That the said Isaac Kugelman, Arthur Strauss and George F. Trommer, at the time of said election, were not the owners of any stock, except that they held merely the record ownership of the same on the books of the said corporation. That the said stock recorded on the said stock-books as being held by Isaac Kugelman, Arthur Strauss and George F. Trommer, did not belong to them, but belonged to and were the property of William G. Ringler. That subsequently the said William G. Ringler died on the 23d day of January, 1910. That said William G. Ringler left a last will and tesitament, which was duly filed in the Surrogates' Court, New York county, and there- after the said will was duly admitted to probate by the Surrogates' Court, New York county, and in the said will the said William G. Ringler appointed George F. Trommer and George Ehret, Jr., execu- tors of his last will and testament, and letters testamentary were duly issued to the said George F. Trommer and George Ehret, Jr., on the 16th day of February, 1,910. That subsequently, on the 28th day of February, 1910, there was assumed to be held a monthly meeting of the trustees of George 47 738 CORPORATIONS. Ringler & Co., and at such meeting it appears that said board of trus- tees assumed to elect George F. Trommer as president of George Ringler & Co., and George Ehret, as vice-president. That annexed hereto and marked exhibit "B " is a copy of the record from the minutes of the corporation of said meeting. That thereafter an adjourned meeting of the board of trustees was assumed to be held on the 4th day of March, 1910, and John T. Wil- son was assumed to be elected director in place of Anna Hachemeister, one of your petitioners. That annexed hereto and marked exhibit " C " is a copy of the rec- ord of said meeting. That said John T. Wilson is not qualified to act as such director, inasmuch as John T. Wilson is not an owner of five (5) shares of stock, except merely that he is the record holder thereof upon the stock-book of the corporation and that in fact the said stock belongs to the estate of William G. Riagler, deceased. That the said election of said Wilson as director was also illegal, by reason of the fact that he was not such owner of said stock, at the time of said election, except as record holder thereof, as aforestated. That the said election was also illegal inasmuch as the said Anna Hachemeister never was removed as snoh director. That she was duly elected such director at the meeting held on the 30th day of October, 1909, and never resigned as such, and has been a director since 1905, nor was she ever legally removed or ceased to act as director, and she is still an owner and holder of five (5) shares of stock of the said corporation. That the said five (5) shares of stock were delivered by Anna Hachemeister to William G. Ringler in his lifetime, for safe- keeping, and that without her knowledge, consent or acquiescence, the five (5) sliai'es of stock were, in or about the month of March, 1910, canceled by George Ehret, Jr., and George P. Trommer, with- out authority on her part, exchanging said stock certificate in her name, which stock certificate was No. 338 of the stock of George Ringler & Co., for stock certificate No. 344, and that thereafter the said stock certificate No. 344 was exchanged by said executors for stock certificate No. 345, in the name of George Ehret, Jr., and that the said Anna Hachemeister never ceased to be a stockholder of said corporation. That annexed hereto is a copy of the sections of the by-laws relat- ing to the ownership of stock for the election of trustees, and filling of vacancies in the board of trustees. The present stockholders of record are George" F. Trommer and George Ehret, Jr., as executors of William G. Ringler, deceased, 2,975 shares; George Ehret, Jr., 5 shares; John T. Wilson, 5 shares; Isaac Kugelman, 5 shares; Arthur Strauss, 5 shares; and your peti- tioners as administrators with the will annexed, and J. Edward Jet- ter, as trustee of Henry Hachemeister, deceased, 3,000 shares. Annexed hereto is a copy of the certificate of incorporation of said corporation. That your petitioners did not discover all the facts set forth herein until on or about the 1st day of August, 1910, and have made this application upon the earliest opportunity. CORPORATIONS. 739 That on or about the 1st day of August, 1910, in an action brought in the Supreme Court, Richmond county, by Anna Hachemeister, plaintiff, against George Ringler & Co., George P. Trommer and George Ehret, Jr., individually and as executors of the last wiU and testament of William G. Ringler, deceased, Isaac Kugelman, Arthur Strauss and John T. Wilson, defendants, to cancel the said transfers by George F. Trommer and George Ehret, Jr., and to restrain the negotiation of said stock, an answer was interposed by all of the de- fendants, in which it was alleged that the stock of George Ringler & Co., prior to the 17th day of February, 1910, while srtanding m the name of George F. Trommer five (5) shares, Isaac Kugelman five (5) shares, Arthur Strauss five (5) shares, did not belong to the afore- said Trommer, Kugelman and Strauss, and the same allegation is set forth in the amended answer served on the 23d day of August, 1910, upon the attorneys for Anna Hachemeister, the petitioner herein, in said action. It is also admitted by the pleadings in the said action, and by the affidavits submitted upon the motion for an injunction restraining the negotiation of the said stock transferred to George Ehret, Jr., as afore- mentioned, that John T. Wilson is not the beneficial owner of the stock held in his name. That in said action a motion has been granted, restraining the negotiation of the said stock issued as aforesaid to George Ehret, Jr., and said motion was granted on September 14, 1910, and an order has been signed by Mr. Justice Putnam, who heard said motion. That your petitioners are aggrieved by and complain of such elec- tions of trustees and officers of the corporation as held on the 30th day of October, 1909, and February 28, 1910, and March 4, 1910, and the proceedings, acts and matters touching the same, and allege that the value of their stock has been injuriously affected by the acts of said persons assuming to act as directors, by virtue of said illegal pro- ceedings. Wherefore, the petitioners pray that such elections held on Oc- tober 30, 1909, February 28, 1910, and March 4, 1910, may be declared by this court to be irregular and of no effect, and be set aside, and the offices of all such directors be declared to be vacated, and that all persons assuming to be directors and trustees cease to act as such, and that a new election for the directors and trustees of such corpora- tion be ordered by this court, and that inspectors for such elections be appointed by the court, and for such further relief as right and justice may require. An order to show cause is asked for, on the ground that a speedy determination of the proceeding should be had, so that the present ineligible directors are ousted from their offices at the earliest op- portunity. No previous application has been made for the annexed order to show cause. Dated, New York, September 27, 1910. (Signature and verification.) 740 CORPORATIONS. ARTICLE IV. CHANGE OF NAME. A. General Corporation Law, § 60. Petition by corporation to change name. A petition to assume anotlier corporate name may be made by a domestic corporation other than a corporation organized under the business corporations law, the transportation corporations law or the membership corporations law, or organized under any law repealed by either of those laws, whether incorpo- rated by a general or special law, to the supreme court at a special term thereof, held in the judicial district in which its principal business office shall be situated, or, if it be other than a stock corporation, at a special term held in the judicial district in which its certificate of incorporation is filed or recorded, or in which its principal property is situated, or in which its principal operations are or theretofore have been conducted. If it be a banking, insurance or railroad corporation, the petition must be authorized by a resolution of the directors of the corporation, and approved, if a banking corporation, by the superintendent of banks; if an insurance corporation, by the superintendent of insurance, and if a railroad corporation, by the public service commission. The petition to change the name of any other corporation must have annexed thereto a certificate of the secretary of state, that the name which such corporation proposes to assume is not the name of any other corporation appearing on his index of corporations as authorized to do busi- ness under the laws of the state of New York, or a name whidi he deems so nearly resembling it, as to be calculated to deceive. (See B., C & G. Consol. L., 2nd Ed., p. 3117.) B. General Corporation Law, § 61. Contents of petition. The petition must be in writing, signed by the petitioner and verified in like manner as a pleading in a court of record, and must specify the grounds of the xipplication, its present name and the name it proposes to assume, which must not be the name of any other corporation, or a name so nearly resembling it as to be calculated to deceive ; and it it be a railroad corporation, a corporation having banking powers or the power to make loans upon pledges or deposits, or to make insurances, that the petition has been duly authorized by a resolu- tion of the directors of the corporation and approved by the proper officer. (See B., C. & G. Consol. L., 2nd Ed., p. 3119.) C. General Corporation Law, § 62. Notice of presentation of petition. If the petition be made by a corporation located elsewhere than in the city and county of New York, notice of the presentation thereof shall be published once in each week for three successive weeks in a newspaper in every county in which such corporation shall have a business office, or if it has no business office, of the county in which its principal corporate property is situated, or in which its operations are or theretofore have been principally conducted, which newspaper, if it he a banking corporation, shall be designated by the superintendent of banks, if an insurance corporation, by the superintendent of CORPORATIONS. 741 insurance, or if a railroad corporation, by the public service commission. In tlie city and county of New York su■ ss. : City of Troy, j On this 16th day of November, 1910, before me personally came Otis G. Clarke, to me known, who being by me duly sworn did depose and say that he resided in the city of Troy, Rensselaer county, New York ; that he is the president of the North Baptist Church and Con- gregation of the city of Troy, the corporation described in and which executed the above instrument ; that the said corporation has no cor- porate seal, and that he signed his name thereto by order of the board of trustees of said corporation. Wm. C. Gordon, Com. of Deeds, Troy, N. ¥. I. Precedents for leave to mortgage. 1. Petition. To fhe Supreme Court of the State of New York: The petition of the North Baptist Church and Congregation of the city of Troy, N. Y., respectfully shows : First. That the petitioner is a religious corporation, and that its corporate name is the "North Baptist Church 'and Congregation of the City of Troy." That it is managed by trustees. That the whole 760 CORPORATIONS. number of its trustees is nine. That the names of the trustees and their places of residence respectively are as follows: (Insert names.) That the names of its principal offices and their places of residence are as follows: (Insert names.) Second. That the business of the petitioner, and the object of its incorporation, is to enable its members to meet for divine worship and other religious observances, and the establishment and maintenance of a church for the furtherance of such objects, and that it was in- corporated under and pursuant to an act of the Legislature of the State of New York, entitled "An Act to Provide for the Incorporation of Religious Societies, passed April 5, 1813." That its location and legal residence is in the city of Troy, New York. Third. That the petitioner is the owner of certain real property, a description of which by metes and bounds is as follows : (Descrip- tion. ) Fourth. That the interest of the corporation will be promoted by the mortgaging of the real property above specified, and that a concise statement of the reasons therefor is as follows: The corporation is indebted in the sum of five thousand dollars ($5,000), that the corpo- ration has no money or other resources outside of the real estate above described and the real estate on which its church building stands, and the chattels and personal property which constitute the furniture and furnishing of its said church building, with which to pay said indebt- edness, and it is necessary that the payment of said indebtedness should be provided for by the giving of a mortgage as a security for the loan of that amount, thereby extending the time of payment suf- ficiently to enable said corporation to acquire means to pay and cancel said indebtedness without sacrificing its property interests. Fifth. That said mortgage has been authorized by a vote of at least two-thirds of the trustees of the petitioner, at a meeting thereof duly called and held, and a copy of the resolution granting such authority is made a part hereof, and reads as follows: "Whereas, the members of the North Baptist Church and Congre- gation of the city of Troy, N. Y., have authorized and consented that the trustees of said corporation mortgage the following described property of said corporation, viz.: (description), for a sum not to exceed five thousand dollars ($5,000), that being the amount required to pay debts incurred in the administration of the temporal . affairs of said corporation; and, whereas, said corporation is indebted in the sum of five thousand dollars ($5,000), and whereas the Hudson River Baptist Association North has agreed to accept a mortgage on the aforesaid property as security for the loan of five thousand dollars ($5,000), and the bond of said corporation, said bond and mortgage to contain the provisions and conditions hereinafter set forth. "Resolved, at least two-thirds of said trustees being present and voting unanimously for this resolution, that the trustees of the North Baptist Church and Congregation of the city of Troy authorize, and they do hereby authorize the making of a mortgage upon and cover- ing the real estate hereinbefore described and the delivery thereof to CORPORATIONS. 761 the Hudson Rivr Baptist Association North, for the sum of five thousand dollars ($5,000), and the making and delivery of a bond to accompany said mortgage; that said bond be drawn to bind said corporation in the penal sum of ten thousand ($10,000), and both said bond and mortgage to be conditioned for the payment of the sum of five thousand dollars ($5,000), to the said Hudson River Baptist Association North, their successors or assigns, at the expiration of five (5) years from the date of the making and delivery thereon, with interest thereon at the rate of five per cent (5%) per annum payable semi-annually, which bond and mortgage shall also contain the usual interest, insurance, taxes, and assessment clauses, the said corporation to have the privilege of paying on account of said principal sum on any semi-annual interest day any sum not less than five hundred dollars ($500), and that Otis G. Clarke, the president of the board of trustees, be authorized to make and execute said bond and mortgage and deliver the same to the Hudson River Baptist Association North, on behalf of this corporation and its trustees." Sixth. That the market value of the remaining real property of the petitioner is twenty-five thousand dollars ($25,000). That out- side of the furniture in its church building, which stands upon such remaining real property, the petitioner has no personal property. That the cash value of said furniture is twenty-five hundred dollars ($2,500). That the total amount of the debts and liabilities of the petitioner is five thousand dollars ($5,000), and the same is unsecured. Seventh. That the application proposed to be made of the moneys realized from such mortgage is as follows : to provide for the payment of said indebtedness of five thousand dollars ($5,000). Eighth. That at a meeting of the qualified members of the petiti- tioner held at their meeting-house in the city of Troy, N. Y., on the 8th day of February, 1910, pursuant to a public notice given at one regular service of the church on each of the two Sundays next pre- ceding said meeting, the object, time, and place of such meeting being distinctly stated in said notice, the members of said corporation duly consented to the mortgaging of the property of said corporation, and duly authorized and directed the trustees of the petitioner to mort- gage its real estate by a resolution unanimously passed at said meet- ing. That a copy of the resolution, evidencing such consent thereto and direction is made a part hereof and reads as follows : "Resolved, that the board of trustees of the North Baptist Church be authorized and empowered to raise either by giving a mortgage or by note of trustees a sum not to exceed five thousand dollars ($5,000), the above amount being required to pay debts jncurred in the admin- istration of the temporal affairs of the church." Wherefore, the petitioner demands that an order may be made granting leave to the said corporation to mortgage the real estate hereinbefore described for the sum of five thousand dollars ($5,000), and authorizing and empowering said corporation to execute and de- liver a bond and mortgage executed in the name of said petitioner to ike Hudson River Baptist Association North, upon the real estate 762 COEPOEATIONS. hereinbefore described, for that purpose, which bond and mortgage shall contain all the conditions and provisions hereinbefore set forth in the resolution of the trustees, a copy of which appears in this pe- tition. Dated, Troy, N. Y. (Signatures and verifications.) 2. Order for leave to mortgage. (Caption and title.) Upon reading and filing the petition of the North Baptist Church and Congregation of the city of Troy, for leave to mortgage certain of its real estate, which petition was dated, duly verified and signed on this 14th day of November, 1910, by Otis G. Clarke, Don C. Woodcock, James A. Dorrance, William P. Gurley, Philander Pollock, Halbert D. Hull, William A. Sherman, Stephen D. Sweet, and Edward W. Douglas, comprising the whole number of the trustees of the peti- tioning corporation, from which petition it satisfactorily appears that the members of the corporation have duly consented to the mortgag- ing of its real estate, and that such mortgage has been authorized by a vote of at least two-thirds of the trustees of the corporation at a meeting thereof duly called and held, and that the interest of the corporation will be promoted by the mortgaging of the real property specified in the petition that said petition complies with the provisions required by law relating to the application to mortgage the real estate of a corporation. Now, after due deliberation upon the matters set forth in said pe- tition, and after hearing Edward W. Douglas, of counsel for the pe- titioning corporation, and upon his motion, it is Ordered, that the prayer of said petitioner be granted, and that the petitioner be and it hereby is given leave to mortgage the real estate described in said petition for the sum of five thousand dollars ($5,000) , and it is further Ordered, that the petitioner execute, duly acknowledge, and de- liver to the Hudson River Baptist Association North, the corporation named in said petition, a bond and mortgage, which mortgage shall cover the real estate owned by said corporation described in the pe- tition, the petitioner to be bound in said bond in the sum of ten thousand dollars ($10,000), and both said bond and mortgage to be conditioned for the payment of the sum of five thousand dollars to the said The Hudson Eiver Baptist Association North, their successors or assigns, at the expiration of five (5) years from the date of said botnd and mortgage, with interest thereon at the rate of five per cent (5%) per annum, payable semi-annually, with the usual interest, insurance, tax, and assessment clauses therein, the petitioner to have the privilege of paying on account of said principal sum on any semi-annual interest day, any sum not less than five hundred dollars ($500) ; and it is further Ordered, that the proceeds of said bond and mortgage shall be ap- plied for the purposes mentioned in the petition. Enter in Rensselaer county. CORPOBATIONS. 763 AETICLE VI. APPRAISAL OF PROPERTY ON APPLICATION OF NON-CONSENTING STOCKHOLDERS. A. Stock Corporation Law, § 17. Rights of non-consenting stockhold- ers on voluntary sale of franchise and property. If any stockholder not voting in favor of such proposed sale and conveyance shall at such meeting, or within twenty days thereafter, object to such sale, and demand payment for his stock, he may, within sixty days after such meeting, apply to the supreme court at any special term thereof held in the district in which the principal place of business of such corporation is situated, upon eight days' notice to the corporation, for the appointment of three per- sons to appraise the value of such stock, and the court shall appoint three such appraisers, and designate the time and place of their proceedings as shall be deemed proper, and also direct the manner in which payment for such stock shall be made to such stockholders. The court may fill any vacancy in the board of appraisers occurring by refusal or neglect to serve or otherwise. The appraisers shall meet at the time and place designated, and they or any two of them, after being duly sworn honestly and faithfully • to discharge their duties, shall estimate and certify the value of such stock at the time of such dissent, and deliver one copy to such corporation and another to such stock- holder, if demanded; the charges and expenses of the appraisers shall be paid by the corporation. When the corporation shall have paid the amount of such appraisal as directed by the court, such stockholders shall cease to have any interest in such stock and in the corporate property of such corporation and such stock may be held or disposed of by such corporation.4l B. Form of petiti'r., SUPREME COURT— Kings Countt. In the Matter of the Application OF JAMES J. ENNIS fob the Ap- pointment OF Appeaisees, etc.. The FEDERAL BREWING COM- PANY. To the Supreme Court of the State of New York: The petition of James J. Ennis respectfully shows and alleges : First. That the Federal Brewing Company is a domestic stock cor- poration, duly organized, and existing, under and by virtue of the 41. Special proceeding.— The proceed- below, 192 N. Y. 570. ing under this statute is a special pro- Time of application.— The statute ceeding. Matter of Ennis v. Federal requires the notice of such application Brewing Co., 123 App. Div. 691. 108 to be served within sixty days; the N. Y. Supp. 230; affirmed, on opinion hearing itself may be had after that 764 CORPOEATIOUS. laws of the State of New York, and that its principal place of busi- ness is located in the borough of Brooklyn, within the second judicial department. Second. That your petitioner is the holder and owner of forty-five (45) shares of stock in said corporation of the par value of four thousand five hundred dollars ($4,500). Third. That heretofore, and on or about the 27th day of April, 1907, at a meeting of the said corporation, a resolution was passed, authorizing the officers thereof to sell and transfer to the New York & Brooklyn Brewing Company all the property, rights, privileges, franchises and assets of the said Federal Brewing Company, and that thereafter the said property, pursuant to said resolution, was sold, transferred and conveyed to the said New York & Brooklyn Brewing Company. Fourth. That your petitioner was present at the said meeting and voted with the minority against the adoption of the said resolution, and objected to said sale and transfer. Fifth. That thereafter, and on or about the 16th day of May, 1907, and within twenty (20) days after the said meeting, your petitioner caused a notice in writing, subscribed by him, to be served upon the said Federal Brewing Company, as appears by the affidavit of James F. Fisher, hereto annexed, demanding the payment of forty-five (45) shares of the par value of one hundred dollars ($100) each; copy of which notice is hereto annexed and made a part hereof. Sixth. Your petitioner further states that sixty (60) days have not elapsed since the said meeting. Seventh. That the New York & Brooklyn Brewing Company is a stofik corporation, organized and engaged in a business of the same general character as the Federal Brewing Company. Eighth. Your petitioner therefore prays that an order be made, appointing three (3) persons to appraise the value of your petitioner's stock and designate the time and place of their proceedings, as shall be deemed proper, and also direct the manner in which payment of your petitioner's stock shall be made to him pursuant to the statutes of the State of New York, in such case made and provided. James J. Ennis, Dated, Brooklyn, N. Y., June 14, 1907. Petitioner. (Add verification.) (Annexed hereto were affidavits of persons, other than petitioner, stating facts in support of his petition.) C. Form of notice of objection to sale. Please take notice that I, the undersigned, the owner and holder of forty-five (45) shares, certificate No. . ., of the Federal Brewing Com- pany, of the par value of one hundred dollars ($100) each, not vot- ing in favor of the sale proposed at the meeting of stockholders, held April 27, 1907, do hereby object to the sale by you of all the prop- period has expired. Matter of Ennis 691, 108 N. Y. Supp. 230; affirmed, on V. Federal Brewing Co., 123 App. Div. opinion below, 192 N. Y. 570. UORPOEATIONS. 765 erty, rights, privileges and franchises or any interest therein or part thereof to the New York & Brooklyn Brewing Company, or to Frank Reynolds, or to any other corporation or person; and I do hereby serve notice upon you that I demand the payment of my stock. This notice is served upon you pursuant to the statute in such ease made and provided. Dated, Brooklyn, N. Y., May 16, 1907. Yours, &c., James J. Ennis, Stockholder. To the Officers and Directors of the Federal Brewing Company: (Annexed hereto affidavits of service of above notice on the Fed- eral Brewing Company by delivering the same to the president of said company, personally, and also by delivering a copy thereof to a per- son then at, and in charge of, the office of said Federal Brewing Com- pany.) D. Form of order granting application and appointing appraisers. (Caption and title.) On reading and filing the notice herein, dated June 14, 1907, that a motion would be made at a Special Term of the Supreme Court to be. held in and for the county of Kings, at the court house in the borough of Brooklyn, city of New York, on the 28th day of June, 1907, at the opening of said court or as soon thereafter as counsel can be heard, for an order appointing three persons to appraise the value of the petitioner's stock pursuant to the statute in such case made and provided, and for such other and further relief as to this court may seem just and proper, the petition of James J. Ennis, verified June 14, 1907, the affidavit of Richard A. Rendick, verified June 14, 1907, the affidvit of James F. Fisher, verified June 14, 1907, and the notice thereto annexed, and the affidavit of Samuel E. Kelly, verified June 14, 1907, and it appearing that said petition, and the papers upon which it was based, was served on the Federal Brewing Company on June 20, 1907, and after heai-ing Francis A. McCloskey, Esq.. of coun- sel for James J. Ennis, in support of said motion, and Thaddeus D. Kenneson, of counsel, in opposition to said motion, and the Federal Brewing Company opposing said application on the ground that it was not made within the time within which such an application must be made under the statutes of the State of New York, and due de- liberation having been had, now, on motion of Francis A. McCloskey, Esq., attorney for James J. Ennis, the petitioner herein, it is Ordered, that the said motion be and it hereby is in all respects granted; and it is further Ordered, that John W. Weber, Esq., Samuel S. Whitehouse, Esq., and Julian D. Fairchild, Esq., be and they are hereby appointed ap- praisers to appraise the value of the stock of the said petitioners and the 31st day of July, 1907, at two o'clock in the afternoon of that day, and such other times as the majority of the said appraisers shall fix, are hereby designated as the time of their proceedings ; and that the office of S. S. Whitehouse, Esq., of No. . . Montague street, and 766 CORPORATIONS, such other place or places as the majority of the said appraisers shall fix, are hereby designated as the place of their proceedings ; and it is further Ordered, that any vacancy in the- board of appraisers, hereby ap- pointed, occurring by the refusal or neglect to serve, or otherwise, shall be filled by this court upon five (5) days' notice; and it is further Ordered, that the said appraisers, or any two (2) of them, shall estimate and certify to this court, in writing over their signatures, the value of the petitioner's stock as of the 27th day of April, 1907, the time of the petitioner 's dissent ; and it is further Ordered, that the manner in which payment of the said stock shall be made by the said Federal Brewing Company to the said petitioneir is hereby directed to be in cash within fifteen (15) days after the confirmation or approval by this court of the report, estimate and certificate of the said board of appraisers ; and it is further Ordered, that the board of appraisers shall deliver one (1) copy of their report, estimate and certificate to the Federal Brewing Com- pany, and anotjier to the petitioner ; and it is further Ordered, that the charges and expenses of the said board of ap- praisers shall be taxed under the direction of this court, and shall be paid by the Federal Brewing Company, and it is further Ordered, that when the said Federal Brewing Company shall have paid the amount of such appraisal, together with the costs, charges and expenses herein provided, the petitioner shall cease to have any interest in the stock described in the said petition, and, in the cor- porate property of the said Federal Brewing Company, and that the said stock may be held and disposed of by the said Federal Brewing Company; and it is further Ordered, that the petitioner and the board of appraisers may ap- ply at the foot of this order for any other relief as may be just and proper ; and it is further Ordered, that all proceedings on the part of the petitioner under this order shall be and they hereby are stayed pending the determin- ation by the Appellate Division of the Supreme Court, second depart- ment, of an appeal from this order, by the Federal Brewing Company ; provided, however, that this stay may be vacated unless the Federal Brewing Company shall take an appeal, perfect the same and place the same for argument upon the first calendar for appeals from or- ders during the October, 1907, term of said Appellate Division. Enter : S. T. M., Justice Supreme Court. Granted, July 11, 1907, Chas. T. Hartzheim, Clerk. The foregoing order was affirmed by said Appellate Division on the 10th day of January, 1908, and by the Court of Appeals on the 2d day of June, 1908. Matter of Enwis v. Federal Brewing Co., 123' App. Div. 691, 192 N. Y. 570. COKPOEATIONS. 767 ARTICLE VII. ACTION FOR DISSOLUTION AND TO ENFORCE LIABILITY OF OFFICERS AND STOCKHOLDERS. A. Action for sequestration. 1. General Corporation Law, § 100. Action by judgment creditor for sequestration. Where final judgment for a sum of money has been rendered against a cor- poration created by or under the laws of the State, .and an execution issued thereupon to the sheriff of the county, where the corporation transacts its general business, or where its principal office is located, has been returned wholly or partly unsatisfied, the judgment creditor may maintain an action to procure a judgment sequestrating the property of the corporation, and pro- viding for a distribution thereof, as prescribed in section one hundred and twelve of this chapter. (See B., C. & G. Consol. L., and Ed., p. 3134.) • 2. Nature of action. An action for the sequestration of corporate property under section 100 of the General Corporation Law is an equitable action.^ It is simply a summary mode of compelling the application of the property of a corporation, which has allowed an exe- cution to be returned unsatisfied, to the payment of its debts. The purpose of appointing a receiver in such proceedings is to provide for a just and fair distribution of the property of the corporation and the proceeds thereof among its fair and 42. Proctor v. Sidney Sash, Blind & The Superior Court of the City of Furniture Oo., 8 App. Div. 42, 40 N. Y. New York had, within its territorial Supp. 454. limits, jurisdiction in equity co-equal Purpose of statute. — It was said in with that of the Supreme Court, to act Beals V. Buffalo Construction Co., 49 in sequestration proceedings. Jelly v. App. Div. 589, 63 N. Y. Supp. 635, that Paraiso Co., 15 Civ. Pro. R. 86. the purpose of the statute is more ex- Federal courts.— The action may be tended than might be inferred from maintained in a Federal court as well the section taken by itself. That be- as in a State court; and where a Fed- yond the sequestration of the property eral court in such a State has taken of the corporation, the relief reaches possession of the assets of the corpora - out for whatever liability can be ac- tion the court's jurisdiction is not quired; that it is not restricted to ousted by the subsequent institution whatever technically belongs to the of a suit by the State Attorney-General corporate entity, but liability "for the in which receivers are also appointed, payment of the debt" of the creditor Robinson v. Mutual Reserve Life Ins. is one of the tests for making a stock- Co., 162 Fed. 794. holder a party. 768 COKPOEATIONS. honest creditors.^ The statute does not supersede the attor- ney-general's power to institute proceedings to dissolve, nor the power of a general creditor without a judgment to insti- tute proceedings to restrain the improper exercise of certain powers, or to procure the payment of his debt; each proceed- ing may go on with the rights peculiar to each, subject to the power of the court to restrain unnecessary suits.^^ The right to invoke the remedy under this section belongs only to a judgment creditor. It plainly excludes the case where the company, though insolvent, is possessed of suffi- cient property, real or personal, within the county where it transacts its general business or where its principal office is located to satisfy the judgment creditor's execution. It is a proceeding looking solely to the sequestration of such assets of the company as are not leviable. It is only when creditors have 'had all the tangible property of the company within one or the other of the specified counties applied upon their exe- cution and there is still a balance unpaid thereon that the court is authorized to appoint a receiver, and it is only the assets which are left after the application in this way of the tangible property, that are to be distributed in the sequestra- tion proceedings equally among all the creditors.*^ The re- covery in the action is for the benefit of all the creditors, and 43. Townsend v. Oneonta, C. & E. S. be limited to a judgment setting aside R. Co., 88 App. Div. 208, 84 N. Y. the assignment, mortgage and trans- Supp. 427. fers only as to the plaintiff, and onlj- 44. Damhman v. The Empire Mill, 12 so far as they relate to or affect the Barb. 341. specific property upon which his ex- Other remedy of judgment creditor ecutions were liens when he commenced contrasted. — ^A judgment creditor of a his action, as his action is not one corporation may bring an action in brought, after an execution has been equity, before the return of executions, returned unsatisfied, to sequestrate tha issued upon judgment recovered .against property of the corporation, under see- the corporation, based upon the liens tion 100, a proceeding in which a re- thereby secured upon the property of ceiver may be appointed, but in which the corporation, to set aside an al- all the creditors of the insolvent cor- leged fraudulent general assignment, poration are entitled to come in and and a chattel mortgage, and transfers share equally in the distribution of its of personal property, made in fraud of assets. Home Bank v. Brewster & Co., creditors, both before and after the 15 App. Div. 339, 44 N. Y. Supp. 54. general assignment. He is not enti- 45. National Broadway Bank v. Wes- tled, however, to the appointment of a sel Metal Company, 59 Hun, 470, 37 receiver, and the relief granted must St, Eep. 102, 13 N. Y. Supp. 744. CORPORATIONS. 769 the plaintiff recovers no more than his proportionate share of the corporate assets.^ 3. Foreign corporation. A court of this State has no authority to appoint a re- ceiver of a foreign corporation, in an action brought here to sequestrate the property of such corporation.*^ The statute does not apply to a foreign corporation doing business in this State. The Supreme Court will not inter- fere with the property of such corporation at the instance of a judgment creditor, by the appointment of a permanent re- ceiver of the property of the corporation, in the absence of proof that the corporation has fraudulently disposed of its property in this State, or that the corporation has property within this State to which the receivership might attach, and that equitable intervention is necessary.*^ But the parties to a judgment Creditor's action and those interested may consent to waive the fact that a corporation is a foreign corporation and, having done so and the court having acted upon the waiver, it is not for a third party, who has likewise consented, to interfere with the adminis- tration of the property in the hands of a receiver.*^ Since the amendment of 1908 (ch. 278), there is now noth- ing to prevent taking supplementary proceedings against a foreign corporation against which sequestration proceedings cannot be brought.^" 4. Prerequisites to action. One who is a mere creditor at large is not entitled to main- tain the action ;^^bef ore maintaining the action he must pro- ceed to final judgment and have an execution returned un- satisfied.^^ If the judgment on which the sequestration pro- 46. Woodard v. Holland Medicine reversing, 18 Misc. 551, 41 N. Y. Supp. Oo., 21 Civ. Pro. R. 23, 39 St. Rep. 807. 411, 15 N. Y. Supp. 128; Morgan v. 49. Horton v. MoNally Co., 155 App. N. Y. & A. R. R. Co., 10 Paige, 290; Div. 322, 140 N. Y. Supp. 357. Tallmage v. Fishkill Iron Co., 4 Barb. 50. Matter of Meyer v. Consolidated 3^2 Ice Co., 132 App. Div. 265, 116 N. Y. 47. Burgoyne v. Eastern & Western Supp. 906; aff'd, 196 N. Y. 471. R r' Co 19 Civ. Pro. R. 384. 13 N, Y. 51. Dambman v. The Empire Mill, Supp. 537. 12 Barb. 341. 48 Dreyfuss & Co. v. Seale & Co., 52. Easton National Bank v. BuflFalq 37 App. Div. 351, 55 N. Y. Supp. 1111; Chemical Works, 48 Hun, 557, 1, N. .Y. 49 770 CORPORATIONS. ceedings are based is opened and the defendant is allowed to come in and defend, but the judgment is ordered to stand as security, there is no longer a final judgment and the se- questration proceedings must fall.^^ If the procurement of a judgment, however, is impossible, it may be excused. Thus, if the maintenance of actions against the corporation is enjoined by court order, a judgment is not a prerequisite." 5. Matters of practice. As the proceeding is equitable in its nature, a judgment creditor of a corporation may, if a fraudulent transfer of the corporate property is alleged, join as parties defendant the persons who hold such property in their possession. In analogy to the procedure under a creditor's bill in equity, the complaint, seeking to reach corporate assets, may unite claims for property in the possession or under the control of the judgment debtor with demands against other parties who have obtained possession of the property of the corporate judgment debtor by fraudulent transfers thereof.^^ In an action against a corporation by judgment creditor seeking a sequestration of its property, to have set aside as fraudulent, certain judgments in favor of the trustees, and likewise a certain trust deed, and, in addition, seeking a per- sonal judgment against the trustees for their failure to fulfill certain statutory duties, it was held that there was not an improper joinder of causes of actions.^® Both the corpora- tion and its stockholders may be joined as defendants.^^ The court may bring in all parties interested.^* The complaint need not set forth the claim on which the judgment against the corporation was recovered; nor need it state that the action is brought for all of the creditors of the corporation.^^ All motions for the sequestration of the property of corpora- Supp. 250; Mann v. Pentz, 2 Sandf. 61 App. Div. 26, 70 N. Y. Supp. 242. Ch. 257. 57. Woodard v. Holland Medicine 5a. Rodbourn v. Utica, etc., R. R. Co., 21 Civ. Pro. R. 23, 30 St. Rep. Co., 28 Hun, 369. 411, 15 N. Y. Supp. 128. 54. Hunting v. Blum, 69 Hun, 562, 58. Woodard v. Holland Medicine 53 St. Rep. 343, 23 N. Y. Supp. 965; Co., 21 Civ. Pro. R. 23, 39 St. Rep. 411, aff'd, 143 N. Y. 511. 15 N. Y. Supp. 128. 55. Proctor v. Sidney Sash, Blind 59. Woodard v. Holland Medicine and Furniture Company, 8 App. Div. Co., 21 Civ. Pro. E. 23, 39 St. Rep. 411, 42, 40 N. Y. Supp. 454. 15 N. Y. Supp. 128. 56. Bagley & Sewell Co. v. Lenning, CORPORATIONS. 771 tions must be made in the judicial district in which the prin- cipal place of business of the corporation is situated.^" 6. Effect of sequestration. The entry of a judgment of sequestration against a corpo- ration and the appointment of a permanent receiver, do not deprive the corporation of power thereafter to take and prose- cute appeals from judgments entered against it." Until the corporation is dissolved, a contract may be enforced against it as well after as before the appointment of a receiver. The sequestration interrupts the ordinary business of a corpora- tion, but does not necessarily affect the corporate franchises, and if the assets are more than sufficient to liquidate its lia- bilities, the surplus goes back to the corporation on paying its creditors. The corporation is entitled to have the action for sequestration discontinued and receiver discharged.^^ Until judgment dissolving the corporation and ending its ex- istence, a contract can be enforced against a corporation.®^ The judgment in the sequestration proceedings, with the re- sulting appointment of a receiver, does not dissolve the cor- poration or prevent the prosecution of actions against it.®* When judgment has been entered for the plaintiff, another creditor of the defendant should not be allowed to open the judgment and defend it, when it is not shown that there is any defense upon the merits. The validity of such claim should be determined under the judgment, which pursuant to section 112 provides for the exhibit and proof of all claims against defendant.®^ 60. Rules of Civil Practice, Rule 178. 548; Pringle v. Woolworth, 90 N. Y. 61. Auburn Button Co. v. Sylvester, 510. 68 Hun, 401, 52 St. Rep. 180, 22 N. Y. 64. People v. Troy Steel & Iron Co., Supp. SQL 63 St. Rep. 787, 82 Hun, 303, 31 N. Y. 62. Parry v. American Opera Co., 12 Supp.., 337, 24 Civ. Pro. R. 201. Civ. Pro. R. 195; Mann v. Pentz, 3 6S. Trowbridge v Troy & New Eng- N. Y. 419; Angell v. Silsbury, 19 How. land Ry. Co., 113 App. Div. 325, 99 Pr. 48. N. Y. Supp. 435. 63. Kincaid v. Dwinnelle, 59 N. Y. 772 CORPOKATIONS. 7. Form of complaint. SUPREME COURT— Ulster County. THE KINGSTON NATIONAL BANK ' agst. THE JAMES CEMENT COMPANY. The complaint of the above-named plaintiff respectfully shows to this court, that the said plaintiff is both a domestic and foreign cor- poration, created under the Laws of the State of New York, and the Laws of the United States of America ; that the defendant is a domes- tic corporation created under the Laws of the State of New York. The complaint further shows that on or about the 15th day of January, 1902, the above plaintiff recovered against the above de- fendant a final judgment in this court for the sum of $794.98, which said judgment was rendered against the said defendant, which is a corporation created under the Laws of the State of New York, for a sum of money, and the action in which the judgment was ren- dered was founded upon the promissory notes of the said defendant overdue, and which were held and owned by the said plaintiff; that said judgment was duly entered in the Ulster county clerk's office, and the judgment- roll therein duly filed in said clerk's office; that the execution, in due and regular form, has, since the entry of said judgment, been duly issued to the sheriff of the said county of Ulster, and has since been duly returned wholly unsatisfied; that the said defendant transacts its general business in said county of Ulster, and its principal office is located in the town of Esopus in said county of Ulster; that plaintiff, therefore, demands the judgment of this court sequestrating the property of the said defendant, and for a just and fair distribution thereof and of the proceeds thereof among its fair and honest creditors, in the order and in the proportion prescribed by law, in case of the voluntary dissolution of a corporation ; and that a temporary receiver may be appointed, pending this action, of the property and effects of the defendant, and that the final judgment to be entered herein may direct the appointment of a permanent receiver herein of said property and effects, or for such further or other judg- ment or relief or decree as may be just and agreeable to equity. R. BERNARD, Plaintiff's Attorney. CORPOKATIONS. 773 8. Form of judgment. (Caption.) THE KINGSTON NATIONAL BANK agst. THE JAMES CEMENT COMPANY, The summons and complaint herein, having been duly served on the defendant January 15, 1904, and being also duly served on the attorney-general of the State of New York on January 17, 1904, a copy of which said summons and complaint is hereto annexed, and more than twenty days having elapsed since such service, and no answer or demurrer or appearance having been interposed by said defendant or said attorney-general; and whereas, on January 25, 1904, after due notice to the said defendant and to sajd attorney- general, by an order of this court, granted at a Special Term thereof. Amasa Humphrey was duly appointed the temporary receiver of said defendant, and duly gave the bond required by said order, and has entered upon the discharge of his duties: Now, on motion of R. Bernard, the attorney of said plaintiff, it is hereby ordered, adjudged and decreed, the attorney-general of the State of New York having had due notice of the application for judgment, and a copy of this proposed judgment having been served upon him and he making no objection hereto, that the goods, property and effects of the said defendant be sequestrated, and for a just and fair distribution thereof and of the proceeds thereof among the fair and honest creditors of the defendant, in the order and in the proportion prescribed by law in case of the voluntary dissolution of a corporation; that said Amasa Humphrey, of said city of Kingston, be and he hereby is appointed the permanent receiver of the defendant and its stock, property, fran- , chises, bonds, contracts, things in action, and effects of every kind and nature, with the usual powers and duties, according to the laws of the State, and the practice of this court, upon his executing and acknowledging in the usual form, and filing with the clerk, for the county of Ulster, a bond to the people of the State of New York in the penal sum of $20,000, with at least two sureties, freeholders or householders of the State of New York, who shall severally justify, conditioned for the faithful discharge of the duties of receiver, and for the due accounting for all moneys or property of every kind rje- eeived by him as such receiver, which bond is to be approved as to its sufficiency and manner of execution by a justice of this court; that upon said filing, so approved, said receiver proceed forthwith to col- lect and receive the debts, demands and other property of said de- fendant, and to preserve the property and the proceeds of the debts and demands collected, to sell, dispose of, and convert into money all other property, real and personal, of said defendant, to collect, receive and preserve the proceeds thereof, and to maintain any action or 774 CORPORATIONS. special proceeding for either of those purposes; that the defendant, its directors, officers, agents and servants, and all persons whomsoever, having notice of this judgment, be and they are hereby enjoined from in any manner interfering with said receiver in the discharge of his duties as such, and from collecting any of the debts or demands, and from paj'ing out, disposing of, or in any way interfering with, trans- ferring or delivering to any person any of the money, property, or effects of the said defendant, except to deliver the same to the said receiver; that, on the demand of said receiver, the said defendant deed, convey, transfer, set over, assign or sell to said receiver, any and all its property, real and personal ; that the said receiver shall deposit all funds of the defendant coming in his hands not needed for im- mediate disbursement in the Ulster County National Bank of King- ston, N. Y. C. R. INGALLS, Justice Supreme Court. B. Action for dissolution. 1. General Corporation Law, § 101. Action to dissolve a corporation. In either of the following cases, an action to procure a judgment, dissolving a corporation, created by or under the laws of the State, and forfeiting its corporate rights, privileges and franchises, may be maintained, as prescribed ' in the next section: 1. Where the corporation has remained insolvent for at least one year. 2. Where it has neglected or refused, for at least one year, to pay and dis- charge its notes or other evidences of debt. 3. Where it has suspended its ordinary and lawful business for at least one year. 4. If it has banking powers, or power to make loans on pledges or deposits, or to make insurances, where it becomes insolvent or unable to pay its debts, or has violated any provision of the act, by or under which it was incorpo- rated, or of any other act binding upon it. (See B., C. & G. Consol. L., 2nd Ed., p. 3136.) 2. General Corporation Law, § 102. Who may bring action to dis- solve a corporation. An action specified in the last section, may be maintained by the Attorney- General, in the name and in behalf of the people. And whenever a creditor or stockholder of any corporation submits to the Attorney-General a written statement of facts, verified by oath, showing grounds for an action under the provisions of the last section, and the Attorney-General omits, for sixty days after this submission, to commence an action specified in the last section, then, and not otherwise, such creditor or stockholder may apply to the proper court for leave to commence such an action, and on obtaining leave may main- tain the same accordingly; and if there be no person in existence upon whom service of the summons can be made under the provisions of section four hundred and thirty-one of the Code of Civil Procedure, service of the summons in such action may be made in such manner as the court upon application by petition may direct. (See B., C. & G. ConSol. L., 2nd Ed., p. 3138.) COKPOEATIONS. 775 3. General Corporation Law, § 115. Effect of this article. This article does not repeal or affect any special provision of law, prescribing that a particular kind of corporation shall cease to exist, or shall be dissolved, in a case or in a manner, not prescribed in this article; or any special pro- vision of law, prescribing the mode of enforcing the liability of the stock- holders of a particular kind of corporation. (See B., C. & G. Conaol. L., p. 3148.) 4. Nature of action. An action to dissolve a corporation reaches the same result as an action to annul its franchise, which is covered in article VIII of this chapter, though it proceeds upon different grounds and with different procedure. The court has no general jurisdiction of an action brought for the dissolution of a corporation. The power in that respect is derived solely from the statute, and unless the complaint in an action brought for that purpose shows jurisdictional facts, the court has no power to act, its decree is void and the corporation, still exists; and judgment in such an action may be treated as valid so far as it relates to the sequestration of the property of the corporation, but so far as it purports to dissolve the corporation it is a nullity.®^ It is not a sufficient defense to an action, brought under section 102, to deny that the defend- ant is organized for manufacturing, mining, mechanical or chemical purposes. The section is said to refer to all cor- porations by or under the laws of the State.*'^ The action may be maintained in a Federal court as well as in a State court; and where a Federal court has taken pos- session of the assets of the corporation the court's jurisdic- tion is not ousted by the subsequent institution of a suit by the State attorney-general in which receivers are also ap- pointed.^^ It is questionable whether in this State an action to dissolve a foreign corporation can be maintained.®^ But, notwithstanding the forfeiture and dissolution of a foreign corporation by the tribunals where it existed, it is deemed to continue so far as to enable creditors to proceed within this State against its property here.'"' 66. O&born v. Montelac Park Co., 89 Ins. Co., 162 Fed. 794. Hun, 167, 35 N. Y. Supp. 610; aff'd, 69. Taylor v. Charter Oak Life Ins. 153 N. Y. 672. Co., 8 Abb. N. C. 331. 67. People v. Excelsior Gas-light Co., 70. Hibernia Nat. Bank v. Lacombe, 3 How. Pr. (N. S.) 390. 21 Hun, 106; aff'd, 84 N. Y. 367. 68. Robinson v. Mutual Beserve Life 776 CORPOEATIONS. 5. Insolvency or non-payment of obligations. Insolvency is said to mean a general inability to pay debts, to fulfill obligations according to its undertaking, a general inability to answer, in the course of business, the liabilities existing and capable of being enforced, not an absolute in- ability to pay at some future time, but as not in a condition to pay debts in the ordinary course, as persons carrying on trade usually do it, free from unusual or unforeseen contin- gencies.'^ Where insolvency and suspension of business are admitted, the law allows no excuse for forfeiture.''^ The mere fact that the demand notes of a corporation remain out- standing is not an act of insolvency in the absence of any demand of payment.'^ When a corporation becomes insol- vent, the directors may lawfully resign in order to obtain the appointment of a receiver, and it is proper for them to do so.'* In an action to dissolve a corporation on the ground that it has remained insolvent for at least one year, and that it has for that time suspended its ordinary and lawful busi- ness, it is immaterial whether the corporation is a manufac- turing corporation or not, inasmuch as the provisions of the statute refer to all corporations created by or under the laws of the State. Where the complaint alleged that the corporation had been unable to meet its obligations, and had failed to pay a judgment therein set forth, that it had not a dollar in the treasury, and was insolvent, and had been for at least a year past, it was held that an answer al- leging payment of the judgment and averring the corporation had no liabilities to creditors by way of judgments unsatis- fied, was insufficient, for a corporation may be insolvent against which no judgments have been recorded. A corpora- tion, like an individual, is insolvent when it cannot pay its debts. ''^ Where a corporation alleges that judgment was ob- tained against it by collusion and fraud of its president, if no application is made to open the same within a reasonable time, a receiver will be appointed.''® 71. Ferry v. Bank of Central New 74. Smith v. Danzig, 64 How. Pr. York, 15 How. Pr. 445. 320. 72. People v. North E. E. Co., 42 75. People v. Excelsior Gaslight Co., N. Y. 217. 8 Civ. Pro. R. 390. 73. Denike v. N. Y. R. Lime and 76. Loder v. N. Y., etc., R. R., 4 Cement Co., 80 N. Y. 599. Hun, 227. CORPORATIONS. 777 6. Suspension of business. Suspension of ordinary business means a substantial relin- quishment of such business; as in case of an insurance com- pany, a refusal to take new policies. A substantial suspen- sion of business is a violation of law.''^ A lease, by stock- holders of a manufacturing company, of all its property, for two years, although the business is carried on, but by the lessee, is a suspension of ordinary business.''^ An allegation of practical suspension to a great extent, for the whole or greater part of a year, is not sufficient.™ The non-user of corporate franchises for a period less than a year does not furnish ground for the dissolution of a corporation under the statute in question.^ A corporation from which the defendant claims to have ac- quired its rights, and which is alleged to have ceased to exist before the transfer of such rights, is a proper party. The complaint in such an action alleging that the defendant had never assumed the performance of what is claimed to be its lawful business; that it has not commenced the construction of its tunnel or railway, and that no proceedings to condemn the right of way have been taken, is sufficient.^ The ceasing or suspension of ordinary business for a period of a year, does not, ipso facto, dissolve the corporation. Judicial action is required.^^ Nor is it dissolved by the appointment of a re- ceiver and the sequestration of its property .^^ A forfeiture 77. Matter of Jackson M. Ins. Co., 66 N. y. 623; Allen v. N. J. Southern 4 Sandf. Ch. 559. R. R. Co., 49 How. Pr. 14; Clancy v. An election of trustees of the cor- Onondaga F. Salt Co., 62 Barb. 395; poration is not sufficient if it suspends Gary v. Schoharie Machine Co., 2 Hun, its operations. Briggs v. Penniman, 8 110; Mickles v. Rochester City Bank, Oow. 387. 11 Paige, 118; aff'd, 11 Paige, 129, N. 78. Conro v. Gray, 4 How. Pr. 166. 83. Huguenot Bank v. Studwell, 6 79. Bliven v. Steel and Iron Co., 9 Daly, 13; reversed, on other grounds, Abb. N. C. 205. 74 N. Y. 620. 80. People v. Atlantic Ave. R. Co., 57 See also, supra. Art. VII- A-6. Effect Hun, 378, 32 St. Rep. 717, 10 N. Y. of sequestration. Supp. 907; aff'd, 125 N. Y. 513. National Bank Act.— As the appoint- 81. People V. New York City Cen- ment of a receiver under the National tral Underground R. R. Co., 50 St. Rep. Bank Act does not dissolve the cor- 454 31 N. y. Supp. 373. poration, a creditor whose claim has 82. New England Iron Co. v. Gilbert been rejected may bring an action to Elevated R. R. Co., 91 N. Y. 153; establish it. Green v. Wallkill Nat. Ormsby v. Vermont Copper Co., 65 Bank, 7 Hun, 63. Barb. 360; reversed, on other grounds. Stockholder's liability.— A manufac- 778 CORPOEATIONS. of franchises of a corporation cannot be decreed in a col- lateral proceeding.^^ A party other than the State may not in a collateral proceeding contend that a corporation has by a failure to exercise its corporate powers forfeited its exist- ence; that can only be accomplished by the judgment of a court of competent jurisdiction in an action brought for that purpose by the attorney-general, in the name of the State.**' The fact that a gas company was liable to. a judgment of dissolution and the forfeiture of its corporate rights and privileges, under this section of the General Corporation Law, does not affect its special franchise to maintain a piping system in the village streets, that being a property right which survives the dissolution of the corporation and belongs to its creditors and stockholders upon a distribution of its assets.*^ 7. Moneyed corporations. A special article of the General Corporation Law is de- voted to the dissolution of money corporations. See sections 150-161. 8. By whom maintained. Under the present practice, an action under the statute in question for the dissolution of a corporation can be main- tained only by the attorney-general, except where he omits to do so as provided in section 102, when it may be maintained by a creditor or stockholder.^ But in some cases greater latitude was allowed in the bringing of actions for dissolu- tion, and the stockholders were permitted to maintain the turing company was held not to be grounds, 162 App. Div. 924, 146 N. Y. dissolved by the appointment of a re- Supp. 1116. ceiver under the Revised Statutes, and 86. Village of Fredonia v. Fredonia an action against a. stockholder on his Natural Gas Light Co., 84 Misc. 150, individual liability was not thereby 145 N. Y. Supp. 820; reversed, on other barred. Kincaid v. Dwinnelle, 59 N. Y. grounds, 162 App. Div. 924, 146 N. Y. 548. Supp. 1116. 84. Central Cross Town E. R. Co. v. 87. People v. Commercial Bank, 37 Thirty-third St. R. R. Co., 54 How. Pr. Misc. 16, 74 N. Y. Supp. 806; aff'd, 72 168; Matter N. Y. Elevated R. R. Co., App. Div. 633, 76 N. Y. Supp. 1025; 70 N. Y. 327. Blivin v. Peru Steel and- Iron Co., 9 85. Village of Fredonia v. Fredonia Abb. N. C. 206. Natural Gas Light Co., 84 Misc. 150, See also Wilmersdoerffer v. Lake 145 N. y, Supp. 820; reverseg,, on other Mahopac Co., 18 Hun,_ 387. CORPORATIONS. 779 action under some of the earlier statutes.^ Under the Re- vised Statutes, an insolvent insurance corporation could not be dissolved at a stockholder's suit, but only in an action brought by the Attorney- General.^^ It was held many years ago that a creditor at large of a corporation could not maintain an action to have it dis-. solved on the ground of insolvency, and to compel its trustees, directors and officers to make good the losses which it had sustained by reason of their mismanagement, as the word " creditor " means judgment creditor.'" To entitle a credi- tor to the aid of equity in reaching assets, there must be a,, judgment and execution issued thereon and returned unsatis- fied. The fact that the debtor is an insolvent corporation, and has conveyed its property in contravention of the statute, does not authorize a resort to equity till the remedy at law has been exhausted; nor can an equitable action be sustained on the ground that the appointment of a receiver is neces- sary to preserve the property during litigation.^^ An action under section 101 must be brought either in the name of the people of the State or in the name of the party in interest and not in the name of the people on the relation of the party in interest.'^ The Attorney-General may prosecute the action upon any of the grounds specified in section 101 without any regard to iproceedings instituted by directors of the company, when- ever, in his opinion, the public interests require that such an action should be brought.'^ Voluntary proceedings instituted by the directors of a com- pany do not constitute a bar to the prosecution of an action by the Attorney- General, in the name of the people.'* Where the Attorney-General has brought an action in the name of the people on the application of a creditor, the fact 88. Medbury v. Eochester Frear Dig. 130. Stone Co., 19 Hun, 498, explained in 91. Adee v. Bigler, 81 N. Y. 349. Killredge v. Kellogg Bridge Co., 8 Abb. 92. People ex rel. Hearst v. Ramapo j;r Q. X6g_ Water Co., 51 App. Div. 145, 64 N. Y. 89. Attorney-General v. Continental Supp. 532. Life Ins. Co., 53 How. Pr. 16. 93. People v. Murray Hill Bank, 10 90. Belknap v. North Am. Life Ins. App. Div. 328, 41 N. Y. Supp. 804. Co., 11 Hun, 282; Cole v. Knicker- 94. People of -the State of New York booker Life Ins. Co., 23 Hun, 255; ap- v. Seneca Lake Grape and Wine Co., peal dismissed, 91 N: Y: 641; Byrne v. 52 Hun, 174, 23 St. Rep. 346, 5 N. Y, N. Y. Brick and Cement Co., 16 Week. Supp. 136. ^ 780 CORPORATIONS. that the creditor is interested in another corporation of the same name, there being nothing to indicate that it was not brought by the Attorney-General in the discharge of a public duty and in good faith, is no defense.^^ The provisions of section 101, together with others in this article, constitute a clear and simple recognition that every stockholder has a quasi lien, or an interest in, all the assets of the corporation, for the value of his distributive share of such assets, after the payment of the corporate indebtedness. He is entitled to have a sale of its assets for cash or its equivalent, and would not be compelled to exchange his lien on the assets for lien upon, or interest in, other securities.^^ No stockholder in a corporation can institute an action to secure to himself the proportionate share of the property of the corporation without regard to the rights of creditors and in preference thereto. Sequestration of the property of cor- porations may not be had under such a proceeding, and such an action is opposed to the settled policy, of the State in dis- tributing the property of corporations.^^ 9. Effect of judgment. The dissolution of a corporation terminates all pending actions, and all subsequent proceedings are void.*^ A judg- ment for the dissolution of a corporation and the appointmjent of a receiver, brought under section 101, ordinarily has the effect of preventing the maintenance of an action against a corporation, and if actions are pending at the time of the rendition of such judgment they cannot be continued unless by order of the court.^^ Nor can process be served on an offi- cer of the company.^ After its dissolution, a company can make no contract on which any claim payable out of its as- sets can be based.^ Eeal estate conveyed absolutely to a corporation does not revert to the grantor on the dissolution 95. People v. Troy Chemical Co., 118 562; Sturges v. Vanderbilt, 73 N. Y. App. Div. 437, 104 N Y. Supp. 22. 384. 96. People v. Anglo-American Sav- 99. People v. Troy Steel and Iron ings & Loan Ass'n, 60 App. Div. 389, Co., 24 Civ. Pro. R. 201, 31 N. Y. Supp. 69 N. Y. Supp. 1054. 337, 63 St. Rep. 787. 97. Drake v. N. Y. Suburban Water 1. Hetzel v. Tannehill Silver M. Co., Co., 26 App. Div. 499, 50 N. Y. Supp. 4 Abb. N. C. 40. 826. 2. Tinkham v. Borst, 31 Barb. 407. 98. McCoUocli V. Norwood, 58 N. Y. COEPOKATIOSrS. 781 of the corporation.^ The dissolution of a corporation does not terminate a lease entered into by it, nor does a covenant therein cease to be obligatory.* The cause of action given by section 130 of the Decedent Estate Law for death by a wrongful act does not abate against a corporation upon its dissolution, but may be continued by order of the court against its receiver.^ On dissolution the interests of stock- holders become equitable rights to proportionate shares of debts, and in the adjustment each stockholder is to be charged with what he owes.^ 10. Form of complaint. SUPBEME COURT— Heekimer County. THE PEOPLE OP THE STATE OP NEW YOEK agst. E. REMINGTON & SONS. The plaintiff in this action, by Denis O'Brien, attorney-general, as and for their complaint herein, upon information and belief, allege : That in or abut the year 1861, the said defendant was organized and incorporated as a manufacturing corporation, under the act of the Legislature of the State of New York, passed February 17, 1848, entitled "An act to authorize the formation of corporations for manu- facturing, mining and mechanical purposes, ' ' and the acts amendatory thereto, under the corporate name E. Remington & Sons, and that ever since its incorporation it has been and is now located and doing business at Ilion, Herkimer county. New York, under said corporate name ; that since its incorporation as aforesaid, the said defendant has been extensively engaged in the manufacture and sale of firearms and other articles; that for some years last past the said defendant has been embarrassed financially in its said business ; that more than a year ago it became and was unable to pay and discharge its debts and liabilities in full as they become due, and became and was insol- vent ; that for at least one year last past the defendant has been, and has remained, and is now, unable to pay and discharge its debts and liabilities as they become due. or in full, and during said year has been, and has remained, and is now insolvent; that for at least one year last past the said defendant has been unable to pay and discharge its notes and other evidences of debt, and during said year has 3. Heath v. Barmore, 50 N. Y. 502. 63 St. Rep. 787, U Civ. Pro. R. 201, 4. People V. National Trust Oo., 82 31 N. Y. Supp. 337. N. Y. 283. 6. James v. Woodruflf, 2 Den. 574, 5. People V. Troy Steel and Iron Co., 782 CORPORATIOlifS. neglected to pay and discharge its notes and other evidences of debt, and is now unable to pay and discharge the same ; that the said defend- ant is the owner and has in his possession a large quantity of real and personal property ; that it is largely indebted to divers persons, firms and corporations, some of which indebtedness is past due ; that it can- not dispose of its said property to pay such indebtedness, and it is not and will not be able to pay the same. That several suits for debts due have been commenced against the said defendant, and the time for ob- taining judgments therein will expire in a few days; that if such judgments are allowed to be obtained and executions issued thereon, the property of the defendant will be levied on and sold at a great sacrifice, as plaintiffs verily believe, and such judgment 'creditors will obtain a preference over the other creditors of the defendant, and such other creditors will be greatly injured by the sacrifice of the defend- ant's property upon forced sales upon such executions; that the said defendant, in its present condition of financial embarrassment and insolvency, is not able to and cannot continue its corporate business, and that it is for the best ijtiterests of the creditors and stockholders that the corporation be dissblved and a receiver be appointed and its property distributed among its creditors according to law. Wherefore the plaintiff demands judgment: First. That the defendant corporation be dissolved and its rights, priyileges, ^nd franchises forfeited. Second. That a receiver of the pi-operty and effects of the cor- poration be appointed pursuant to the provisions of the statute, with all the power and authority conferred by law, and subject to all the duties and liabilities imposed upon receivers in such eases. Third, That the defendant, its trustees, directors, managers and other officers be restrained by injunction, during the pendency of this action, from collecting or receiving any debt or demand, and from paying out or in any way transferring or delivering to any person any tooney, property or effects of the said corporation, except by express permission of the court; and from exercising any of its corporate rights, franchises and privileges of the corporation, except by express permission of the court. Fourth. That the plaintiffs may have such other and further judg- ment or relief in the premises as may seem to the court proper to grant. Fifth. That the plaintiffs recover the costs of this action. D. O'BRIEN, Attorney-General, Plaintiff's Attorney. COEpOEATIONS. 783 11. Another form of complaint. SUPREME COURT— County of Queens. THE PEOPLE OF THE STATE OF NEW YORK agst. THE MUTUAL BREWING CO. The People of the State of New York, the plaintiff in this action, by Theodore E. Hancock, Attorney-General, for complaint herein, allege upon information and belief the following facts constituting their cause of action : First. At the several times herein referred to, the defendant The Mutual Brewing Company was and still is a domestic manufacturing corporation duly organized under the Laws of the State of New York, under and by the corporate name.a^pye m,entioned,, and has its princi- pal place of business at College toint, in the county of Queens, in said State. Second. That the defendant has become insolvent and is unable to pay its debts in full, and has violated the various provisions of the statutes and the acts amendatory thereof by or under which it was incorporated, and of the acts of the Legislature binding upon it. That the debts and liabilities of the said defendant exceed the total amount of assets and the value of a,ll its property by over $50,000.00 ; and that said defendant has been and remained insolvent for more than two years last past. Third. That the defendant The Mutual Brewing Company, has neglected and refused for more than one year last past, and still neglects and refuses, to pay and discharge divers and various of its notes and other evidences of debt. Wherefore, the plaintiff demand judgment dissolving the defend- ant corporation and forfeiting its corporate rights, privileges and franchises, and perpetually enjoining and restraining the defendant, its trustees, officers, agents and receivers from exercising any cor- porate powers, privileges and franchises, and from transferring, dis- posing of, and in any manner interfering with its property and assets, and the plaintiffs pray that during the pendency of this action an order may be granted restraining the defendant, its officers and agents, from transacting any corporate business or in any manner trans- ferring, disposing of or interfering with any of its property or assets, and that a temporary receiver of such property and assets be ap- pointed with all the powers and duties of temporary receivers in such cases, and that an injunction order restraining creditors and all per- sons from commencing any suit or proceeding against the defendant, or taking any proceeding in any action already commenced, may be granted, and that upon the dissolution of the defendant, a permanent receiver' of its property and assets be appointed, with all the rights, powers, duties and liabilities of permanent receivers in such cases,; 784 COEPORATIONS, and that the plaintiff may have such other and further relief as to the court may seem just and proper to grant, with the costs of this action. T. B. HANCOCK, Attorney-General, Plaintiff's Attorney. C. When action maintained against stockholders or officers. 1. General Corporation Law, § 109. Officers and stockholders may be made parties in action brought by a creditor. Where the action is brought by a creditor of a corporation, and the stock- holders, directors, trustees, or other officers, or any of them, are made liable by law, in any event or contingency, for the payment of his debt, the per- sons, so made liable, may be made parties defendant, by the original or by a supplemental complaint; and their liability may be declared and enforced by the judgment in the action. (See B., C. & G. Consol. L., 2nd Ed., p. 3144.) 2. General Corporation Law, § 110. Separate action may be brought against officers and stockholders. Where the stockholders, directors, trustees, or other officers of a corpora- tion, who are made liable, in any event or contingency, for the payment of a debt, are not made parties defendant, as prescribed in the last section, the plaintiff in the action may maintain a separate action against them, to procure a judgment, declaring, apportioning and enforcing their liability. (See B., C. & G. Consol. L., 2nd Ed., p. 3145.) 3. General Corporation Law, § 111. Proceedings in such actions. In an action brought as prescribed in either of the last two sections, the court must, when it is necessary, cause an accouct to be taken of tlie prop- erty and of the debts of the corporation, and thereupon the defendant's liability must be apportioned accordingly; but, if it affirmatively appears, that the corporation is insolvent, and has no property to satisfy its creditors, the court may, without taking such an account, ascertain and determine the amount of each defendant's liability, and enforce the same accordingly. (See B., C. & G. Consol. L., 2nd Ed., p. 3145.) 4. Application of statute. Section 109 of the General Corporation Law, and equiva- lent earlier enactments, have for many years formed a part of the remedies provided by statute for the enforcement of corporate duties at the suit of the people, and for the col- lection of corporate debts at the suit of creditors.'^ The sec- tions in question apply to an action under Article VI of the General Corporation Law for the dissolution of a corporation or the sequestration of its property, and do not apply to a creditor's action under the Stock Corporation Law for the 7. Cummings v. American Gear & Spring Co., 87 Hun, 598, 54 N. Y. Supp. 541. CORPORATIONS. 785 enforcement of the stockholder's liability.* They apply where the corporation is a party, not where the action is between individuals. The liability of the stockholders can be enforced under these sections only in an action where the creditor has sought to have the action brought by the Attor- ney-General, but the latter has failed to do so.® In an action brought by a judgment creditor of the corpora- tion to procure a dissolution and the sequestration of prop- erty fraudulently transferred by it, the persons or corpora- tions who held such property in their possession may be joined as defendants." A judgment creditor of a corporation who brings an action to set aside as fraudulent a trust deed executed by the cor- poration and judgments obtained against it, and to seques- trate the property of the corporation and have it appropriated to the payment of its debts, may, under section 109, enforce in the same action the liability of the shareholders of the cor- poration arising out of their failure to pay for the capital stock subscribed for by them, and also enforce the personal liability of the trustees for filing a false certificate to the effect that the capital stock was all paid in.^^ The receiver of an in- solvent corporation represents the creditors, and may recover against the stockholders to the amount of their unpaid stock.^^ Where the return of an execution unsatisfied is the ground of proceeding against a corporation, and the effects of the corporation are not sufficient to pay its debts, the creditor may resort to equity to recover the unpaid subscriptions to capital stock. In such case each shareholder is only liable in 8. Hallett v. Metropolitan Mess. tion, they had no right to retain, and Co., 69 App. Div. 258, 74 N. Y. the receiver brought up the matter at Supp. 639; modifying, 36 Misc. 659, 72 Special Term, where the stockholders N. Y. Supp. 370. appeared, that, although the judgment 9. People V. Commercial Bank, 37 entered went beyond the regular pur- Misc. 16, 74 N. Y. Supp. 806; aff'd, 72 poses of the action, yet as the stock- App. Div. 633, 76 N. Y. Supp. 1025. holders had voluntarily appeared, the Voluntary appearance of stockhold- court had power to enter final judg- ers. — In People v. Hydrostatic Paper ment on the question. Co., 88 K: Y. 623, it was held, in an 10. Matter of Sayre, 70 App. Div. action by the attorney-general to dis- 329, 75 N. Y. Supp. 286. solve a manufacturing corporation, 11. Bagley & Sewall Co. v. Lennig, where it appeared that the stockhold- 61 App. Div. 26, 70 N. Y. Supp. 242. ers had assets of the corporation 12. Van Oott v. Van Brunt, 2 Abb. which, to produce equality of distribu- N. C. 283; reversed, 82 N. Y. 535. 50 786 COBPOEATIONS. due proportion with the other stockholders, and the bill should be filed on behalf of all the creditors against all the share- holders who have not paid up subscriptions, so that an ac- count may be taken^'* Where the charter made stockholders jointly and severally liable for the debts of the corporation to the amount of their stock, and gave creditors a right to sue therefor after demand and refusal, it was held, that a credi- tor could file his bill against stockholders known to him, seek- ing a discovery of others, and for payment of his simple con- tract demand." D. Judgment and its provisions. 1. General Corporation Law, § 112. Distribution of property of cor- poration by judgment in actions under this article. A final judgment in an action, brought against a corporation, as prescribed in this article, either separately or in conjunction with its stockholders, directors," trustees, or other officers, must provide for a just and fair distribution of the property of the corporation, and of the proceeds thereof, among its fair and honest creditors, in the order and in the proportions prescribed by law, in case of the voluntary dissolution of a corporation. (See B., C. & G. Consol. L., 2nd Ed., p. 3145.) 2. General Corporation Law, § 113. Eeeovery of stock subscriptions. Where the stockholders of the corporation are parties to the action, if the property of the corporation is not sufficient to discharge its debts, the inter- locutory or final judgment, as the case requires, must adjudge that each stockholder pay into court the amount due and remaining unpaid, on the shares of stock held by them, or so much thereof as is necessary to satisfy the debts of the corporation. (See B., 0. & G. Consol. L., 2nd Ed., p. 3147.) 3. General Corporation Law, § 114. Liability of directors and stock- holders. If it appears that the property of the corporation, and the sums collected or collectable from the stockholders, upon their stock subscriptions, are or will be insufficient to pay the debts of the corporation, the court must ascer- tain the several sums, for which the directors, trustees, or other officers, or the stockholders of the corporation, being parties to the action, are liable; and must adjudge that the same be paid into court, to be applied, in such proportions and in such order as justice requires, to the payment of the debts of the corporation. (See B., C. & G. Consol. L., 2nd Ed., p. 3147.) . 13. Mann v. Pentz, 3 N. Y. 415. 14. Bogardus v. Rosendale Mfg. Co., 7 N. Y. 147. coBPORAiioiirs. 787 4. General Corporation Law, § 116. Entry of judgment and filing certified copies thereof. The final judgment in an action brought as prescribed in this article shall be entered in the office of the clerk of the county in which the principal business office, or the principal place of business of the corporation is located, and if it is adjudged tliat such corporation be dissolved, a certified copy of such judgment shall, if a banking corporation, be filed in the office of the superintendent of banlcs; if an insurance corporation, in the office of the superintendent of insurance; and if a business, transportation, railroad or mem- bership corporation, in the office of the secretary of state. (See B., C. & 6. Consol. L., 2nd Ed., p. 3148.) 5. Distribution of funds. Independently of any statute, a court of equity has power to direct sucii a disposition of the fund as it shall deem best for the interests of all concerned.^^ It is the duty of the receiver to apply the assets or their proceeds, remaining: in his hands after the payment of debts entitled to a preference under the laws of the United States, and judgments, so far as they are liens upon the real estate of the corporation, equally among all the other creditors as their demands existed at the time of his appointment.^^ All unpre- ferred creditors, whose claims have been duly proved and ad- mitted, are entitled to a ratable division among them of the fund to be distributed among the unpreferred creditors, not- withstanding that some of them have failed to file exceptions to the referee's report, and were not represented on the ap- peals entered thereon except as they were represented by the receiver." The creditor who brings the action obtains no 15. Smith V. Danzig, 3 Civ. Pro. R. ment more than sufficient to pay such j^gg sums, interest should be computed on Interest. It is said, in Matter of such amounts from the date of the in- Mumay, 6 Paige, 204, that in making solvency, so as to give each creditor a distribution of the eflfects of an in- ratable proportion of the fund toward solvent debtor or company among his debt. Followed, Matter of Duncan, creditors, under insolvent laws, inter- 10 Daly, 95; explained and applied, est on all debts on which interest is Matter of Shipman, 61 How. 515. recoverable, should be computed up to 16. People v. Universal Life Ins. Co., date of insolvency, and interest should 42 Hun, 616; distinguishing. Hunt v. be discounted on such of the debts not Knickenbocker Life Ins. Co., 101 N. Y. then due as are not drawing interest; 636. and the dividend should be declared 17. People v. American Loan & on the several amounts as thus ascer- Trust Co., 177 N. Y. 467; holding fur- tained. If assets afterward come into ther that creditors who appeared in the hands of the party making pay- the Court of Appeals by their attor- 788 CORPORATIONS. preference.^^ A surety of the corporation has no preference.^^ Employees may be allowed a preference for wages/" But officers have been denied a preference for their salaries.^^ But salaries may be set off against a debt.^^ Directors who, by permitting the debts to exceed the statutory limit, become liable to creditors, are entitled to the same deduction for ad- vances after dissolution as before.^^ On the insolvency of a corporation, one of its officers, who has made advances and received its bonds therefor, may prove them to the extent of such advances.^* An attorney cannot maintain an action against the receiver of an insurance company for services rendered after the appointment of the receiver on the retainer of the corporation, but the court may, on application of the attorney, in its discretion, allow a reasonable compensation.^^ Annuitants of insolvent life insurance companies are to be deemed creditors for the present value of their annuities, computed upon the basis of the Northampton tables, with six per cent, interest.^^ But the holder of a policy in a life insur- ance company which matured before the appointment of a receiver, had no right to claim payment before the general distribution, though perhaps in an exceptional case the court neys, and took an active part in wrest- 21. Bruyn v. Receiver^ etc., 1 Paige, ing the fund to be distributed among 684. the unpreferred creditors from those 22. Matter of Croton Ins. Co., 3 not entitled to it, and in settling the Barb. Ch. 642. basis of distribution, were entitled to 23. Talknadge v. Fisbkill Iron Co., 4 the costs of the appeal to the Court of Barb. 382. Appeals, payable out of the fund. 24. Duncomb v. N. Y. & H. E. R. 18. Morgan v. N. Y. & Albany R. R. Co., 22 Hun, 133. Co., 10 Paige, 290; Lowne v. Am. Fire 2S. Barnes v. Newcomb, 89 N. Y. Ins. Co., 6 Paige, 482. 108. "Fair and honest creditors," within Attorney fees. — An order directing the meaning of section 112, includes, a receiver to pay all debts "owing to not only those whose diligence has the laborers and employees for labor given direction to the conduct of the and services actually done in connec- proceedings, but all creditors who are tion with its railway," was construed within the descriptive terms of the to mean attorney and counsel fees in statute. People v. American Loan & litigation connected with the corpora- Trust Co., 177 N. Y. 231. tion in Gurney v. Atlantic & G. W. E. 19. Matter of Croton Ins. Co., 2 R. Co., 58 N. Y. 3S8; reversing, 2 T. & Barb. Ch. 360. C. 446. 20. People v. Remington, 25 St. Rep. 26. People v. Security Life Ins. Co., 301, 6 N. Y. Supp. 796; aflf'd, 121 78 N. Y. 114. See, however, Attorney- N. Y. 675. General v. North American Life Ins. Co., 82 N. Y. 172. COErOEATIONS. 789 can order it." A policyholder who dies after the appoint- ment of a receiver is entitled to claim as a creditor according to the value of his policy at the time of the dissolution.^^ On insolvency of a life insurance company the holders of running policies are not entitled to payment out of securities de- posited under the registration acts, in preference to death claimants under registered policies.^^ The receiver of an in- surance company cannot be compelled to pay a check drawn by the company in settlement of a loss before his appoint- ment, out of the funds on which such check was drawn, al- though such funds were withdrawn from the bank by the re- ceiver before the presentation of the check, the check not hav- ing been drawn on any particular fund so as to become an equitable assignment.^" Where a savings bank, having money on deposit with an- other bank, changes it to a call loan after both banks have become insolvent, the receiver of the savings bank is estopped from questioning such acts of the bank officers, and cannot claim a preference.^ Dividends may be allowed upon a debt proved against a corporation although securities are held for it.^^ A lien ob- tained in the ordinary course by judgment or execution be- fore the appointment of a receiver, is entitled to preference in payment.^^ Likewise, a dividend declared, the checks for 27. People v. Security Life Ins. Co., Pr. 339; aff'd, 16 N. Y. 377. 71 N. Y. 222. Irregular appointment of receiver. — 28. Attomey-Oeneral v. Guardian The appointment of a receiver of an Mutual Life Ins. Co., 82 N. Y. 336. insolvent insurance company, at a suit 29. Attorney-General v. North Am. of a stockholder, by consent anil for Life Ins. Co., 82 N. Y. 172. concealment, although erroneous, is not As to rights of policyholders in in- void, the property of the corporation solvent insurance companies, see, also, passes to the receiver, and though he People V. Security Ins. Co., 23 Hun, is superseded by another receiver ap- 601; Attorney-General v. Continental pointed in an action by the attorney- Life Ins. Co., 88 N. Y. 77. general, a creditor of the corporation 30. Merrill v. Anderson^ 71 N. Y. who recovers judgment prior to the ap- 325. pointment of the last receiver, ac- 31. Eosenback v. M. & B. Bank, 10 quires thereby no lien on its real Hun, 148; aff'd, 69 N. Y. 358. estate nor preference over other 32. People v. Remington, 54 Hun, creditors. Attorney -General v. Couti- 505, 8 N. Y. Supp. 31; aiFd, 121 N. Y. nental Life Ins. Co., 28 Hun, 360; cit- 328. ing, Osgood v. Maguire, 61 N. Y. 524, 33. Matter of Waterbury, 8 Paige, and Attorney-Gteneral v. Continental 380. Life Ins. Co., 53 How. 16. See also Rankin v. Elliott, 14 How. 790 CORPORATIONS.' which are made out before a fire which makes the company insolvent, have been given a preference.^* A lease for a term of years to a corporation is not termin- ated by its dissolution and the appointment of a receiver ; the lessor is entitled to the subsequently accruing rent out of the fund in the hands of the receiver.^^ 6. Form of judgment. At a Special Term of the Supreme Court of the State of New York, held at the court house in White Plains, N. Y., on the 16th day of May, 1896. Present — Hon. J. 0. Dykman, Justice. THE PEOPLE OF THE STATE OP NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. The summons and complaint in this action having been duly served on the defendant The Mutual Brewing Company, Now, upon reading and filing said summons and complaint, together with due proof of service thereof on the defendant and on motion of T. E. Hancock, Esq., Attorney-G-eneral, and J. Newton Fiero, Esq., of counsel for the plaintiff, and after hearing Stanley W. Dexter, representing Albert Schwill & Co., claiming to be creditors of the receiver in opposition, and after hearing C. J. Hall and W. W. Tompkins, representing C. F. Tietjen, trustee, and the West Side Bank and S. K. Nester. It is adjudged and decreed that the defendant The Mutual Brew- ing Company, be and same is hereby dissolved, and its corporate rights, privileges and franchises forfeited; and that a fair and just distribution of the property thereof, and of the proceeds thereof, among its fair and honest creditors, in the order and in the proportion prescribed by law be had. And it is further adjudged and decreed that the defendant The Mutual Brewing Company, its trustees, directors, managers and other officers, attorneys and agents, be and each of them hereby is forever restrained and enjoined from exercising any of the corporate fran- chises, powers, rights or privileges of the defendant, and from col- lecting or receiving any debts or demands belonging to or held by the defendant, a,nd from paying out or in any manner interfering with, transferring" or delivering to any person any of the deposits, moneys, securities, property or effects of the said defendant, or held by it 34. Lero v. Globe Ins. Co., 2 Edw. 35. People v. National Trust Co., 82 Ch. 657. N. Y. 283. CORPORATIONS. 791 That Edward Duffy be, and he is hereby continued as receiver of all the property and effects, real and personal, of the said corporation The Mutual Brewing Company, and of all the property held by it, and that he is hereby appointed permanent receiver thereof with the usual powers and duties enjoyed and exercised by receivers according to the practice of this court, and of the statute in such case made and provided, and he is hereby authorized to take possession of and seques- trate the property, things in action and effects, real and personal, of the defendant herein, and to take and hold all property held by or in the possession of said defendant corporation, subject to provisions hereinafter made. And it is further ordered and decreed, that the said receiver shall take title to such property and sell the same as now subject to the mortgage upon real estate belonging to The Mutual Brewing Com- pany made by it in favor of Cornelia L. Marshall, for the sum of fifty thousand dollars and interest, and also subject to a certain mortgage upon a certain other portion of the real estate belonging to said Mutual Brewing Company, which mortgage bears date the 9th day of December, 1891, and upon which by a decree of the Supreme Court made in an action in which Christian F. Tietjen, as trustee, was plaintiff, and The Mutual Brewing Company and others, defend- ants, there was adjudged due by said decree on the 13th day of Febru- ary, 1896, the sum of $28,753.83 ; and also subject to the lien of a cer- tain chattel mortgage made by the said Mutual Brewing Company on the 2d day of December, 1891, upon certain personal or chattel prop- erty of the said Mutual Brewing Company, and by which by the said decree so entered on the 13th day of February, 1896, has been declared to be a first lien upon the chattel property therein described ; and sub- ject also to the lien upon the personal property of The Mutual Brew- ing Company, which the West Side Bank and Samuel K. Nester have obtained by virtue of the issuing of executions upon the several judg- ments in favor of the West Side Bank and Samuel K. Nester against The Mutual Brewing Company, subject to the right of the said cred- itors to proceed under the decree and executions as heretofore by or- der of the court has been granted to them. The said Edward Duffy, as receiver, after giving three weeks' public notice of the time and place of said sale by publishing such notice twice each week for said three weeks in a newspaper published in the county of Queens, and in one newspaper published in the city and county of New York, be, and he hereby is authorized and directed to sell at public auction at the brewery of The Mutual Brewing Com- pany, in the village of College Point, Queens county. Long Island, New York, all the property and assets of The Mutual Brewing Com- pany, and of one Edward Duffy, as receiver, of The Mutual Brewing Company, appointed in the action of Paul Halpin v. The Mutual Brewing Company and others. That the sale of the assets of The Mutual Brewing Company, or receiver thereof, as herein provided, shall be subject to the liens here- inbefore specified. It is further adjudged and decreed that such further application 792 COKPORATIONS. may be made to this court under the provisions of this decree or order as the receiver may be advised is proper and necessary for his instruc- tion in the management and conduct of his trust. It is further adjudged and decreed that no application shall be made to any court, nor shall any action of the court be asked or suffered by the receiver relative to or in any way connected with the duties of said receiver, or the funds or assets of the defendant above mentioned, or their transfer, sale or delivery, unless notice of such application be first given to the attorney-general of the State of New York, and copies of all orders made or procured shall be promptly served on the attorney-general as required by law, and full power is hereby conferred upon the said receiver to institute and maintain actions and suits at law in any court or courts having competent jurisdiction for the collection of debts due to the defendant and the enforcement of any rights relating to the said corporation, its prop- erty and assets. It is further adjudged and decreed, that all money of said defend- ant, not needed for immediate disbursement, be immediately deposited by said receiver in People's Trust Company, Brooklyn, to the credit of said receiver, to be held by said last mentioned company subject to the further order of the court, and said money so deposited, as afore- said, with said company shall not be delivered over by it, except sub- ject to and in purusance of the order of this court. And it is further ordered, that all persons whomsoever and espe- cially creditors of said defendant, except C. F. Tietjen, the West Side Bank and S. K. Nester, be enjoined and restrained from commencing any action or proceeding against said defendant, or from taking any further proceedings in any action or proceeding already commenced, except where leave of the court has been hereinbefore granted. And it is further adjudged, that the plaintiff recover of the defend- ant The Mutual Brewing Company the sum of one hundred dollars costs and disbursements of this action, which said sum the said re- ceiver is hereby directed to pay to the attorney-general. And it is further ordered, adjudged and decreed, that the sale of the assets of such corporation shall be forthwith made and the receiver be and he hereby is authorized to continue the business until the sale thereof as hereinbefore provided, and that the receiver may charge such property as is not covered by the said liens to an amount not exceeding three thousand dollars for the purpose of preserving the property and carrying on the business, such charges to be subject to and subordinate to said liens. (Signed.) J. 0. DYKMAN, J. S. C. CORPORATIONS. 793 ARTICLE VIII. ACTION TO ANNUL A CORPORATION. A. General Corporation Law, § 130. Action by Attorney-General to annul corporation when legislature directs. The Attorney-General, -whenever he is so directed by the Legislature, must bring an action against a corporation created by or under the laws of the State, to procure a judgment, vacating or annulling the act of incorporation, or any act renewing the corporation, or continuing its corporate existence, upon the ground that the act was procured upon a fraudulent suggestion, or the concealment of a material fact, made by or with the knowledge and consent of any of the persons incorporated. (See B., C. & G. Consol. L., 2nd Ed., p. 3148.) B. General Corporation Law, § 131. Action by Attorney-General to annul corporation by leave of court. Upon leave being granted, as prescribed in the next section, the Attorney- General may bring an action against a corporation created by or under the laws of the State, to procure a judgment, vacating the charter or annulling the existence of the corporation, upon the ground that it has, either 1. Offended against any provision of an act, by or under which it was created, altered or renewed, or an act amending the same, and applicable to the corporation; or, 3. Violated any provision of law, whereby it has forfeited its charter, or become liable to be dissolved, by the abuse of its powers; or, 3. Forfeited its privileges or franchises, by a failure to exercise its powers; or, 4. Done or omitted any act, which amounts to a surrender of its corporate rights, privileges, and franchises; or, 5. Exercised a privilege or franchise, not conferred upon it by law. ' (See B., C. & G. Consol. L., 3nd Ed., p. 3149.) C. General Corporation Law, § 132. Notice of application for leave to commence action to annul corporation. Before granting leave, the court may, in its discretion, require such previous notice of the application as it thinlcs proper, to be given to the corporation, or any officer thereof, and may hear the corporation in opposition thereto. (See B., C. & 6. Consol. L., 3nd Ed., p. 3153.) D. General Corporation Law, § 133. Jury trial. An action brought as prescribed in this article, is triable, of course and of right, by a jury, as if it was an action specified in section nine hundred and sixty-eight of the Code of Civil Procedure and without procuring an order, as prescribed in section nine hundred and seventy of the Code of Civil Pro- cedure. (See B., C. & G. Consol. L., and Ed., p. 3153.) 794 COEPOEATJOKS. E. General Corporation Law, § 134. Injunction and receiver in final judgment. Where any of the matters, specified in section one hundred and thirty or section one hundred and thirty-one of this article, are established in an action, brought as prescribed in either of those sections, the court may render final judgment that the corporation, and each officer thereof, be perpetually enjoined from exercising any of its corporate rights, privileges, and franchises; and that it be dissolved. The judgment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the property of the corporation among its creditors and stockholders, as where a corporation is dissolved upon its voluntary application, as prescribed in article nine of this chapter. (See B., 0. & G. Oonsoa. L., 3nd Ed., p. 3153.) F. General Corporation Law, § 135. Temporary injunction. In an action, brought as prescribed in this article, an injunction order may be granted, at any stage of the action, restraining the corporation, and any or all of its directors, trustees and other officers, from exercising any of its corporate rights, privileges, or franchises; or from exercising certain of its corporate rights, privileges, or franchises, specified in the injunction order; or from exercising any franchise, liberty, or privilege, or transacting any business, not allowed by law. Such an injunction is deemed one of those speci- fied in section 603 of the Code of Civil Procedure, and all the provisions of title second of chapter seventh of the Code of Civil Procedure, applicable to an injunction specified in that section, apply to an injunction granted as prescribed in this section, except that it can be granted only by the court. (See B., C. & G. Consol. L., 2nd Ed., p. 3154.) G. General Corporation Law, § 136. Filing and publisMng judgment. Where final judgment is rendered against a corporation, in an action, brought as prescribed in this article, the Attorney-General must cause a copy of the judgment-roll to be forthwith filed in the office of the Secretary of State; who must cause a, notice of the substance and effect of the judgment to be published, once a week for four successive weeks, in a newspaper printed in the county, wherein the principal place of business of the corporation was located. (See B., C. & G. Consol. L., 2nd Ed., p. 3155.) H. History of action. The power to declare a forfeiture of corporate franchises was originally, in England, vested in the courts of law, and was exercised in a proceeding brought by the attorney-gen- eral in the name of the sovereign. The Court of Chancery never assumed jurisdiction in such eases until it was confer- red by an act of Parliament. It declined to exercise such jur- isdiction until the power was conferred by statute to seques- COEPORATIONSi 795 trate corporate property. The courts of this country have fol- lowed the English system.^'^ The common-law method of procedure and also procedure in chancery, for the dissolution of a corporation, has been recognized in this State. The old Code of Procedure left pro- ceedings in equity for that purpose undisturbed. The subse- quent Code of Civil Procedure, it seems, made provision for the exercise of the old chancery method of procedure where the whole case may be disposed of by the court without the in- tervention of a jury. The code provisions were, upon the adoption of the Consolidated Laws, placed in the General Cor- poration Law. In this statute provisions are made for the commencement of actions by leave of the court. They are sub- stantially like those contained in the old Code, and which, be- fore that Code, were contained in the Eevised Statutes. So it appears that the two systems of procedure against cor- porations have been continued. Under the one system, the ac- tions may be commenced without leave of the court and they must be tried as equitable actions. This seems to be provided for in article 6 of the General Corporation Law, sections 100- 116. Under the other system, actions can be commenced only by leave of the court, and the parties are entitled to jury trial as matter of rig^ht. This is provided for under the present article 7 of the General Corporation Law, sections 130-136. " Under the Eevised Statutes, when equitable and legal remedies were administered in different courts, there was reason for the existence of the two systems, but now, when all the remedies may be administered in the same court, it is diffi- cult to perceive any reason for the continued existence of the two systems, but they do exist and each must have its proper significance and operation."" I. Application of statute. The action is one which is brought in the name of the peo- ple without a relator, and one who instigates such an action or applies to the attorney-general to have one commenced, has no such interest in the questions involved. The simple ques- tion presented is as to whether a cause of forfeiture exists.^^ 36. Decker v., Gardner, 124 N. Y. 334. Additional franchises.— Where a eor- 37. Herring v. N. Y., L.B. & AV. Ti. poration already in existence is E Co 105 N". Y. 341. granted additional franchises, the court 38. People v. Buffalo Stone & Ce,- has jurisdiction under the statute to ment Co. 131 N. Y. 140. annul the additional franchises in a 796 CORPORATIONS. The Legislature has made the Attorney-General the medium to redress the wrongs of the public, and does not permit an individual to enforce the rights of the public or redress its wrongs.^^ The statute contemplates a punishment to be in- flicted upon the offender, not a benefit to be recovered by the prosecutor.^" Where the State seeks by action to destroy the life of a corporation it must show some grave misconduct on the part of the latter; some sin against the law of its being, not merely formal or incidental or affecting only private in- terests, but material and serious, and which has produced or tends to produce injury to the public. When, however, the transgression aft'ects the welfare of the people, they may by action summon the offender to answer for the abuse of its franchise, and ask to have its charter forfeited, and the cor- poration dissolved. While the statute confers upon trustees or directors of a manufacturing corporation general authority to manage its stock, property and concerns, and as between the company and those with whom it deals, the corporate ac- tion must be manifested through and by the directors, there may be actual corporate conduct which is not formal cor- porate action ; and where the conduct is directed or produced by the whole body, both the officers and stockholders of the corporation, it is of a corporate character, and if illegal, and injurious justifies the penalty of dissolution. As between the State and the corporation the substantial inquiry is what the collective action and agency of the officers and stockholders has accomplished.*^ The State must show, not only that a case of forfeiture has been incurred by the defendant, but that it continues to exist ; that its existence involves some public interest and that the proper case. People v. Broadway E. R. R. Co., 31 Misc. 674, 66 N. Y. Supp. Co. of Brooklyn, 9 N. Y. Supp. 6, 29 57, it was held that an individual could St. Rep. 343. not maintain an action to restrain a Jury trial is a matter of right. — street surface railroad corporation People V. Equitable Mutual Fire Ins. from charging fare in excess of the Co., 12 Misc. 556, 67 'St. Rep. 577, 33 rate permitted by law, and that ihe N. Y. 708; citing, People v. North proper remedy was for the attorney- River, etc., Co., 121 N. Y. 582. general to vacate or annul the charter 39. McNulty v. Brooklyn Heights R. of the corporation under the provisions Co., 31 Misc. 674, 66 N. Y. Supp'. 57. of section 131. See also People ex rel. Lehmaier v. 40. People v. Ulster & D. R. Co., 128 Interurban R. R. Co., 177 N. Y. 296. N. Y. 240. Excess fare charged by street rail- 41. People v. North River Sugar Re- way. — In McNulty v. Brooklyn Heights fining Co., 121 N. Y. 582. CORPOEATIONS. 797 court has authorized the bringing of the action. The action is always within the control of the State as the sole party in- terested, to prosecute or abandon it at its will or pleasure, and it may, through its Legislature, not only discontinue the action but waive or abolish causes of forfeiture with their rights of action and limit the operation of the statute by for- bidding the prosecution of such action in specified cases.*^ The constitutional or statutory provisions for the repeal- ing of statutes providing for the creation of corporations or the annulment of charters of corporations, do not confer power to take away or destroy property or annul contracts, and an expressed reservation of such a statute of power to take away or destroy property lawfully acquired under authority conferred by a charter and any legislation which authorizes such a result to take effect immediately, is uncon- stitutional and void.*^ A membership corporation organized as a board of trade or exchange which conducts a collection agency for pecuniary gain comes within the scope of section 131« J. Forfeiture or surrender of privileges or franchises. The mere omission of a corporation to exercise its powers does not of itself, unconnected with other acts, work a for- feiture of its charter.^^ The statute merely enables interested parties to have a corporation declared dissolved; until that is done a creditor may proceed as if non-user or insolvency had not occurred.*'^ If the statute provides that in case of a default the corporation shall be adjudged to have surrendered its rights and to be dissolved, the company remains in esse until judicially dissolved.*'' To dissolve the corporation there must be a judicial proceeding and judgment declaring the for- feiture and where the charter contained a provision that in case of default it should " forfeit all rights acquired by " it under the act of incorporation, the provision did not put an 42. People v. Ulster & Delaware E. road company a lessee of part of the E. Co., 128 N. y. 240; aflf'g, 58 Hun. road, is entitled on its application to 266 40 St. Rep. 280. l>e made a defendant. People v. Al- 43. People v. O'Brien, 111 N. Y. 1. bany & Vermont R. R. Co., 77 N. Y. 44! Rept. of Atty.-Genl. (1914), 349. 232. 45. Attorney-General v. Bank of 46. Mickles v Rochester City Bank, Niagara, — Hopk. 354. H Paige, 118; aff'd, 11 Paige, 129n. Lessee as party. — Where an action is 47. People v. Manhattan R., 9 Wend, brought to annul the charter of a rail- 351; Towar v. Hale, 46 Barb. 361. 798 CORPOEATIONS. end to the corporate life in case of default, but simply ex- posed it to proceedings on behalf of the State to establish and enforce the forfeiture, and until the State thus intervened, a private individual might not set up the forfeiture, or in any- way challenge the corporate existence.''^ But, if an act of in- corporation shows the legislative intent to make the continued existence of a corporation depend upon its compliance with the requirements of its charter, in case of non-compliance, its powers, rights and franchises are forfeited and terminated; it is not merely a case of forfeiture which may be enforced by the attorney-general. The legislature has power to provide that a corporation may lose its corporate existence without the intervention of the courts, on any orhission of duty, or violation of its charter or default as to limitations imposed.^^ The question whether a forfeiture clause in an act of incor- poration is or is not self-executing depends wholly upon the language employed by the legislature, which has undoubted- power to provide in an act of incorporation that corporate ex- istence shall cease by the mere failure of the corporation to perform certain acts imposed by its charter. It requires strong and unmistakable language to authorize the courts to hold that the legislature intended that a forfeiture of cor- porate existence should be affected without judicial proceed- ings on the intervention of the attorney-general. The words " all rights and privileges granted hereby shall be null and void " do not render a forfeiture clause in a charter self- executing, but the meaning of " null and void " in such a con- nection is that the corporate existence shall be " voidable," that is, that in case of default the corporation may be dissolved through appropriate legal proceeding by the attorney-gen- eral.^" A forfeiture may be waived by the Legislature.^^ The charters of business corporations imply and require that they shall perform the business for which they were instituted, and a substantial suspension of business, like an entire omission to begin business, is a violation of a charter ^^ If the corpora- 48. Day v. Ogdensburg, etc., R. Co., -Wend. 351; Matter of N. Y. Elevated 107 N. Y. 129; Matter of Brooklyn R. R. Co.. 70 N. Y. 327; affg, 7 Hun, Elevated R. Co., 125 N. Y. 434. 239; which is followed in Central 49. Brooklyn Steam Transit Co. v. Crosstown R. R. Co. v. Twenty-third City of Brooklyn, 78 N. Y. 524. Street R. R. Co., 54 How. Pr. 168. 50. Matter of New York and Long 52. People v. Northern R. R. Co., 42 Island Bridge Co. v. Smith, 148 N. Y. N. Y. 217; Matter of Jackson Marine 640. Ins. Co., 4 Sandf. Ch. 559. 51. People V. Manhattan Co., 9 CORPORATIONS. 799 tion has the power to supply the deficiency in its body, its rights are not extinguished hut only dormant; but if that power is gone and it cannot act till the deficiency is supplied, the corporation is dissolved.^ Mere insolvency, not shown to be continued, or a suspension of business, not shown to have been without reasonable cause, does not amount to a sur- render of corporate rights on the part of a banking corpora- tion.^^ Suffering an act to be done which destroys the end and object for which the corporation was created must be re- garded as equivalent to a surrender of its rights.^^ Non- compliance with the requirements of the act of incorporation, as to construction of a road, is a misuser which forfeits ; but non-compliance with conditions must be substantial.^ A cor- poration may be dissolved by forfeiture through neglect or abuse of its franchise, but such forfeiture, unless there be ex- press provision by statute, can only be enforced by the sover- eign in some proceeding instituted on its behalf.^'' The for- feiture of rights which have been lawfully used and enjoyed, cannot be inquired into collaterally.^^ Neglect to comply with the provisions of the charter, by a corporation, is an offense.*"^ It is a violation of law for a manufacturing corporation to enter into a partnership. A consolidation of such corpora- tions, except in the manner and as provided by statute and whether made directly, or indirectly, through the medium of a trust, is unlawful and injurious to the public interests. It seems that, as corporate grants are always assumed to have been made for the public benefit, any conduct which destroys 53. Phillips V. Wickham, 1 Paige, the verdict must show, not only a gg^ breach of the letter of the condition 54. People v. Bank of Hudson, 6 subsequent, but that the original ne- Cow. 217; Moran v. Lydeoker, 27 Hun, gleet was material and resulted in in- gg2 jury to the public, or that the want of 55. Briggs v. Penniman, 3 Cow. 387; repair was such as to render the road Slee V. Bloom, 19 Johns. 456. dangerous or inconvenient to travelers. 56. People v. Broadway R. Co. of People v. Williamsburg T. & B. Co., 47^ Brooklyn, 126 N. Y. 29; People v. N. Y. 586. Kingston & M. T. Co., 23 Wend. 194. 57. Denike v. N. Y. & Rosendale Turnpike company.— To warrant a Lime Co., 80 N. Y. 599. judgment against a turnpike company, 58. Patten v. N. Y. Elevated R. R. after the lapse of fifty years from its Co., 3 Abb. N. C. 306; appeal dUmissed, incorporation and the construction of 67 N. Y. 484. its road, for failing to comply with 59. People v. Rensselaer Ins. Co., 38 the statute in its original construction, Barb. 323. for failing to keep the road in repair, 800 COEPORATIONS. their functions, maims and cripples their separate activity, and takes away free and independent action, affects unfavor- ably the public interests.^" Private, as well as public or quasi- public corporations, are subject to an action under the statute in question.^^ The franchises mentioned in subdivision 3 of section 131 refer to corporate franchises and not to special franchises.^^ An action by the Attorney-General on behalf of the people to declare the franchise of a street railroad, or the portion thereof granted by the municipal authorities, forfeited for abandonment and nonuser, even where the consent of the court has been previously obtained, is not authorized by sec- tion 131. «3 The extinction of a corporate franchise for nonuser may only be determined in a litigation between the people of the State and the corporation, and where it has a special franchise to lay gas pipes in the streets of a village the municipality cannot maintain an action to forfeit or declare forfeited the general rights of the corporation to. transact business. For- feiture is a punishment for fault, not for misfortune, and where the only reason that said corporation has ceased to use the gas pipe is that it could not afford to supply the citizens of the village on account of competition, and therefore had temporarily suspended business, no ground of forfeiture is shown.'^* A franchise to lay and maintain gas pipes and other ma- chinery underground along or across any or all of the streets of a village, and which imposes no obligation on the company to furnish gas to any one, is not forfeited by a failure for three years to so use the streets. Where, after the gas com- pany had for three years ceased to use its pipes to furnish gas, it had paid the tax imposed upon its special franchise in the streets, the village was estopped from asserting that the company had forfeited its franchise for nonuser.^^ 60. People v. North River Sugar R«- Fulton E. R. Co., 140 App. Div. 611, fining Co., 121 N. Y, 582. 125 N. Y. Supp. 1045; aflf'd, 201 N. Y. Gl. People V. The Milk Exchange, 594. 133 N. Y. 565. 64. Village of Fredonia v. Fredonia 62. People v. Bleecker St. & Fulton Natural Gas Light Co., 87 Misc. 592, F. Pv. R. Co., 67 Misc. 577, 125 N. Y. 149 N. Y. Supp. 964; reversed, on other Supp. 1045; aflf'd, 140 App. Div. 611, grounds, 162 App. Div. 924, 146 N. Y. 125 N, Y. Supp. 1045; aff'd, 201 N Y. Supp. 1116. 594. 65. Village of Fredonia v. Frelo'iiii G3 People v. Bleecker Street and Natural Gaa Light Co., 84 Misc. 1.50, COBPOKATIONS^ 801 K, Exercise of privilege not conferred. The remedy afforded for the restraint and punishment of corporations for illegal conduct in the exercise of privileges or franchises not conferred upon them by law, is through an action by the A'ttorney-General to suspend their functions or annul their charters under this section.^* An agreement, by one of the trustees of a charitable corporation, that if a cer- tain person will procure for the corporation an appropration by the Legislature of a certain sum, and a subsequent ratifi- cation of that agreement by the trustees, by paying over the excess, the appropriation having been obtained, has been held to be an abuse of the powers of the corporation and a for- feiture of its charter.^^ "Where a business corporation agrees to care for plate glass for a fixed term for a certain consideration, and in the event that the glass is broken agrees to replace the same, and fur- ther agrees to keep the glass puttied in the frame, its cor- porate existence may be annulled in an action by the Attor- ney-Greneral, pursuant to section 131 upon the ground that said corporation is doing an insurance business contrary to the statute.^* L. Leave of court. Section 131 vests the attorney-general with the administra- tive duty of determining whether the public interests are to be subserved by instituting an action against a corporation to vacate its charter. The court will not inquire whether the bringing of such an action is a wise administrative act, but rather whether the attorney-general alleges against a corpora- tion a prima facie case or a case of such gravity as it seems proper the court should determine it upon the trial. The court would withhold leave in cases plainly frivolous or where it was obvious, on inspection of the application, that none of the statutory grounds existed.^^ The granting of the appli- 145 N. y. Supp. 820; reversed, on other pital Society, 7 Lans. 304. grounds, 1&2 App. Div. 924, 146 N. Y. 68. People v. Standard Plate Glass & Supp. 1116. Salvage Co., 174 App. Div. 501, 156 66. Thomas v. Musical Mutual Pro- N. Y. Supp. 1012. tective Unibn, 121 N. Y. 45 69. Matter of Application of the At- Practice of dentistry.-— See Lewis v. torney-G«neral, 50 Hun, 511, 3 N. Y. Harlem Dental Co., 189 App. Div. 359, Supp. 464; aff'g, 18 St. Rep. 122, and 178 N. Y. Supp. 533. citing People v. Boston, Hoosac Tun- 67. People v. Dispensary and Hos- nel, etc, R. R. Co., 27 Hun, 52S. 51 802 CORPORATIONS. cation rests in the sound discretion of the court. It is not given as a matter of right, but depends upon whether the pub- lic interest requires the action to be brought.™ Before leave will be given, the Attorney-General must make a written application which should point out the particular act or acts done or omitted, to justify the bringing of such action and allege wherein the corporation has violated the laws of the State, which allegation should be supported by sufficient evidence to render it probable that a cause of action exists. The authority to commence the action will not be granted as a matter of course on the application of the Attor- ney-General; the order in such case should specify the grounds on which the action is to be brought, since the court in grant- ing a general order abandons all control over the action and it thus becomes possible to bring an action upon any one or all of the grounds stated or shadowed forth, or upon grounds not disclosed in the affidavits annexed to the application of the Attorney- General.''^ "When no issue of fact is raised which would call for the determination of a jury, the court will ex- amine into the averments of the petition and the proof offered in support of them with like care as though called upon to pass judgment of dissolution. If the court cannot see that the corporation has been guilty of any material or serious transgression or misconduct which would tend to harm or menace the public welfare, the appli- cation will be denied.'^ An application by the Attorney-General must be on written petition, signed by him, and may be made ex parte, although the court may direct notice to the defendant.''^ Whether or not notice of the application shall be given to the corporation rests in the discretion of the court, and its failure to require notice does not render the order invalid, nor will such an order be reviewed on appeal except where the complaint on its face shows that the action is unfounded.''* Leave will not ordinarily be granted to prosecute such an action on the ground that the corporation has failed to file a certificate of 70. Matter of Attorney-General, 124 56 Misc. 49, 106 N. Y. Supp. 407. App. Div. 401, 108 N. Y. Supp. 823. 73. People ex rel. Mutual Union Tel. 71. Matter of Application of Attor- Co., 2 McCarty (Civ. Pro.), 295. ney-General, 81 Hun, 541, 63 St. Rep. 74. People v. B. H. T. & W. R. R. 281, 30 N. Y.Supp. 1093. Co., 27 Hun, 528. 72. Matter of Consolidated Gas Co., COKPOEATIONS. 803 the payment of one-half of its capital stock, or becaase it has failed to file an annual report.''^ M. Judgment. The form of judgment in an action to forfeit the privileges or franchises of the corporation for failure to exercise its powers is, as provided for by section 134, that the corporation be dissolved, a receiver appointed, an account taken and the property distributed in the same way as in voluntary disso- lutionsJ® The publication of the substance and the effect of judgments of dissolution is sufficient compliance with section 136. Such publication is required to be made each day, except Sundays, for four weeks, and the fees therefor are governed by section 1513 of the Civil Practice Act." N. Form of complaint. SUPREME COURT— State of New Yoek. THE PEOPLE OF THE STATE OF NEW YORK THE NORTH RIVER SUGAR REFIN- ING COMPANY. The People of the State of New York, by their attorney-general, upon leave of court duly granted in this their complaint, on informa- tion and belief allege: 1. For a first cause of action, that defendant is a corporation created and organized under and pursuant to the act of the Legis- lature of New York passed February 17th, 1848, and entitled "An act to authorize the formation of corporations for manufacturing, mining, mechanical, and chemical purposes," and the acts amenda- tory thereof; that defendant's certificate of incorporation filed on or about the 10th of February, 1865, declares its name to be "The North River Sugar Refining Company," its place of business in the city of New York, and its object the mnufacture and sale of sugar, syrups and molasses. That in violation of law and in abuse of its powers and in the exercise of privileges and franchises not conferred upon it, defendant, on or about the first of October, 1887, in the city of New 75. Lewis v. Harlem Dental Co., 180 Water Co., 51 App. Div. 145, 64 N. Y. App. Div. 359, 178 N. Y. Supp. 533. Supp, 532. 76. People ex rel. Hearst v. Eamapo 77. Rept. of Atty.-Genl. (1914), 169. 804 CORPORATIONS. York, together with the other subscribers thereto, entered into and became a party to and carried out the following agreement, namely : (Insert agreement.) That thereafter and under and pursuant to the provisions of said agreement, the capital stock of defendant was transferred to said board "The Sugar Refining Company," and in lieu thereof certifi- cates were issued by said board. That pursuant to said agreement such of the parties thereto as were not then incorporated became cor- porate bodies and their capital stock was transferred to said board and certificates issued in lieu thereof; that the greater part in num- ber and value of said certificates is owned by the members of said board; that by means of said agreement and the powers thereby con- ferred upon the said, board, said board monopolizes the manufacture and sale of refined sugar in the State of New York, and is enabled to control at will the production and price of said sugar in said State and in the United States. That in exercise of the powers conferred by said agreement, said board controls the action of defendant and the other corporations, parties to said agreement in the conduct of their business and controls and regulates the production and price , of refined sugar in the State of New York and in the United States. That in the exercise of said powers said board has limited the pro- duction and increased the price of said sugar in said State and in said United States, and that said agreement constitutes a combination to do an act injurious to trade and commerce, to which combination de- fendant is a party. 2. For another and separate cause of action, plaintiffs repeating the allegations of the preceding count, aver that for and during the year 1888, defendant wilfully neglected and omitted, and still wilfully neglects and omits, to make, file and punish any reports as prescribed and required by section twelve of the aet by and under which defend- ant was created a corporation. 3. For another and separate cause of action, plaintiffs repeating the allegations of the first above count, aver that in December, 1887, defendant went out of business and ceased its operations and thence- forth to the present time omitted and neglected to refine or mauu- fatcure or sell sugar, sjTups or molasses, and has failed and still fails to do any business or to exercise its powers. Wherefore, plaintiffs demand judgment that defendant. The North River Sugar Refining Company, be dissolved, its charter vacated and its corporate existence annulled. That it be enjoined from acting as a corporation, and a receiver of its property be appointed, and for such other and further relief as may be appropriate, with costs. CHARLES F. TABOR, Attorney-General, Plaintiff's Attorney. COEPOBATIONS. 805 ARTICLE IX. VOLUNTARY DISSOLUTION. A. Nature of proceeding. Sections 170-195 of the General Corporation Law contain provisions for the voluntary dissolution of corporations.''^ The statute was largely taken from the Code of Civil Procedure, sections 2419-2431, The proceeding is classed as a special proceeding.™ It is purely a statutory proceeding;^" and it must be at least substantially followed,*^ although it is insti- tuted in a court of general jurisdiction.^ The right to dis- solve a corporation is not found in the general equity powers of the court, but in the statutory enactments,*^ While the court acquires jurisdiction by the filing of a petition, it has no power or authority to take any step except as authorized by the statute.^* 78. Definition. — ^The dissolution of a corporation is the termination of the existence of the corporate franchises conferred by the State upon the body of the corporators. Am. & Eng. Cyc. of Law, vol. 4j p. 294. The dissolution of a corporation is that condition of law and fact which terminates the capacity of the body corporate to act as such, and necessitates a final liquida- tion and extinguishment of all the re- lations subsisting in respect to the cor- porate enterprise. Taylor on Corpora- tions, 309. How corporations may be dissolved. — The manner in which a corporation may be dissolved is said (1 Bl. Com. 485) to be either: First, by act of Parliament; second, by the natural death of all its members; third, by surrender of its franchises; fourth, by forfeiture of its charter. The manner of dissolution of a corporation is classi- fied in Am. & Eng. Enc. of Law: First., by expiration of the time limited in the charter; second, upon the happen- ing of a contingency prescribed by the charter, third, by the surrender of the franchises to the State; fourth, by act of the Legislature; fifth, by failure of an integral part of the corporation; sixth, by forfeiture of the franchise in a proper judicial proceeding. To the same effect see Thompson on Corpora- tions, § 6577; Spelling on Corpora- tions, § 1008. The subject is very fully discussed in People v. O'Brien, 111 N. Y. 1, in an action brought by the Attorney-General.. 79. Matter of Hulbert Bros.. 160 N. Y. 9. 80. Matter of Simonds Mfg. Co., 39 App. Div. 576, 57 N. Y. Supp. 776; Knickerbocker Trust Co. v. Tarrytown, etc., R. Co., 133 App. Div. 286, 117 N. Y. Supp. 871; Chamberlain v. Roch- ester, etc., Co., 7 Hun, 557. 81. Matter of Importers & Grocers Exch., 132 N. Y. 212; Matter of Mal- colm Brewing Co., 78 App. Div. 592, 79 N. Y. Supp. 1057. 82. Chamberlain v, Rochester, etc., Co., 7 Hun, 557; Matter of Westches- ter Iron Co., 15 How. Pr. 7. 83. Blivin v. Peru Iron & Steel Co., 9 Abb. N. C. 205; Magee v. Geneseo Academy, 17 St. Rep. 221. 1 N. Y. Supp. 709. 84. Matter of Binghamton 6. E. Co., 143 N. Y. 261 (264) ; Matter of Dolge- 806 CORPORATIONS. But, the court has implied authority to do whatever is necessary to render effective the contemplated purpose of the proceedings.^^ The non-compliance with the express require- ments of the statute is a jurisdictional defect.^ B. Application to corporations. 1. General Corporation Law, § 173. Corporation excepted from two preceding sections. Sections one hundred and seventy-one and one hundred and seventy-two of this chapter do not apply to a savings bank, a trust company, a safe deposit company, or a corporation formed to rent safes in burglar and fire-proof vaults, or for the construction or operation of a railroad, or for aiding in the con- stuction thereof, or for carrying on the business of banking or insurance, or intended to derive a profit from the loan or use of money. {See B., C. & G. Consol. L., 2nd Ed., p. 3165.)87 2. General Corporation Law, § 195. Exception of certain corporations. This article does not apply to an incorporated library society, to a religious corporation, or to a select school or academy, incorporated by the regents of the university or by the legislature, or to a municipal or other political cor- poration. (See B., C. & G. Consol. L., 2nd Ed., p. 3175.) 3. General Corporation Law, § 177. Corporations without stockholders. In the case of corporations affected by the provisions of this article and not having stockholders, it shall be sufficient for the purposes of this article to notify, name and refer to the " members " of such corporations, instead of " stockholders," as herein provided. (See B., C. & G. Consol. L., 2nd Ed., p. 3167.) ville El. & P. Co., 160 N". Y. 500 (502) ; trustees and members, when it appears Matter of Malcolm Brewing Co., 78 that it is doing no business, because of App. Div. 592, 79 N". Y. Supp. 1057; the diverse interests of its members. Matter of Simonds Mfg. Co., 39 App. although the corporation is solvent, Div. 576, 57 N. Y. Supp. 776. and the minority of the trustees and 85. Matter of Seneca Oil Co., 153 members oppose the dissolution. When App. Div. 594, 138 N. Y. Supp. 78; it appears that the interests of the afT'd, 208 N. Y. 545. stockholders of such a corporation are 86. Knickerbocker Trust Co. v. Tar- so discordant as to prevent efficient rytown, etc., R. Co., 133 App. Div. 285, management, and that the large ma- 117 N. Y. Supp. 871. jority of its trustees and members 87. Board of trade. — A corporation wish to wind up its affairs by dissolu- organized under chapter 228, Laws of tion, the fact is established that the 1877, providing for the organization of dissolution will be for the interests of exchanges or boards of trade, may be the stockholders. Matter of Applica- dissolved by the court upon petition tion of Trustees of the Importers & and consent of a large majority of its Grocers' Exchange, 132 N. Y. 212. CORPORATIONS. 807 4. Beference to statutes for particular corporations. The method of abolishing a library is provided for in the Education Law, section 1134. (See B. C. & G. Consolidated Laws, 2nd Ed., p. 2359.) An incorporated academy may be dissolved in the manner prescribed by the various subdivisions of section 64 of the Education Law. (See B. C. & G. Consolidated Laws, 2nd Ed., p. 2022.) This proceeding does not in any wise involve the intervention of or action by any court. The Banking Law, section 486, provides for the manner in which the stockholders of a bank may wind up its affairs by a two-thirds vote. Upon notice to the Superintendent of Banks of such action, the Supreme Court may make an order declar- ing the business of the bank closed, and finally make an order declaring it dissolved.^^ The procedure upon dissolution of religious corporations is provided for by section 18 of the Eeligious Corporation Law.' (See B. C. & G. Consolidated Laws, 2nd Ed., p. 7610.) When- ever a religious corporation " shall cease to act in its corpor- ate capacity and keep up religious services," the Supreme Court is authorized, as therein provided, to decree its disso- lution and order a sale of its property.^^ Dissolution of a stock corporation, both before beginning business and before expiration of time limited in its certificate 88. Proceedings by Attorney-Gen- ing for a voluntary dissolution abated eral.— 'Where, in an action brought by by the entry of the judgment of dis- the Attorney -General to obtain a judg- solution of the corporation in an action ment dissolving a banking corporation, brought by the Attorney-General, he alleged that it was insolvent, had Matter of Murray Hill Bank, 14 App. suspended its ordinary business, and Div. 318, 43 N. Y. Supp. 836. that the Superintendent of Banks had 89. Meeting of trustees.— No meet- taken possession of its property, and ing of the board of trustees of a reli- the answer did not deny the insolv- gious society is necessary to authorize ency, but alleged as a separate defense the application of a majority of the that, prior to the commencement of trustees for a dissolution of the so- the action, proceedings had been taken ciety under the Laws of 1872, chapter for a voluntary dissolution of the cor- 424. Nor is it essential that there poration, it was held that the pendency should be a meeting of the society to of such proceedings was not a bar to authorize such .an application, except the maintenance of the action by the to show the court that a dissolution is Attorney-General. People v. Murray favored by a majority of the society. Hill Bank, 10 App. Div. 328, 75 St. Matter of Third Meth. Epis. Oh., 67 Rep. 1203/41 N. Y. Supp. 804. It was Hun, 86, 51 St. Rep. 406, 21 N. Y. subsequently held in connection with Supp. 1105; aflfd, 142 N. Y. 638. the same proceedings that the proceed- 808 CORPOKATIONS. of incorporation or charter, is provided for by sections 220 and 221, of the Genera] Corporation Law. (See B. C. & G. Consolidated Laws, 2nd. Ed., p. 3178.) This may be done by voluntary action out of court by the incorporators or stock- holders. C. When proceeding may be maintained. 1. General Corporation Law, § 170. Petition for voluntary dissolution of corporations. If a majority of the directors, trustees, or other officers, having the manage- ment of the concerns of a corporation created by or under the laws of the State, discover that the stock, effects, and other property thereof are not sufficient to pay all just demands, for which it is liable, or to afford a reason- able security to those who may deal with it; or if, for any reason, they deem it beneficial to the interests of the stockholders that the corporation should be dissolved, they may present a petition to the supreme court praying for a final order dissolving the corporation, as prescribed in this article. (See B., C. & 'G. Oonsol. L., 2nd Ed., p. 3162.) 2. General Corporation Law, § 171. Directors or trustees may be required to petition. It shall be the duty of a majority of the directors or trustees of every cor- poration created by or imder the laws of this state to present a petition as prescribed in the last section whenever directed so to do by a majority in interest of its stockholders. (See B., C. & G. Consol. L., 2nd Ed., p. 3164.) 3. General Corporation Law, § 172. Petition when directors or trustees do not agree. If a corporation, created under a general statute of the state for the formation of corporations or under any special act or charter has an even number of trustees or directors who are equally divided respecting the management of its affairs, or if the stock of^ such corporation is equally divided into not more than two independent ownerships or interests, or if the entire stock of the cor- poration is, at that time, owned by the trustees or directors who are even in number or equally divided representing the management of its affairs, or if the stock is so divided, that one-half thereof is owned or controlled by persona favoring the course of part of the trustees or directors and one-half thereof is owned by persons favoring the course of the other trustees or directors, the trustees or directors or the stockholders or one or more of them may present a petition as prescribed in section one hundred and seventy of this chapter. (See B., 0. & G. Consol. L., 2nd Ed., p. 3164.) 4. Discussion of statute. A private business corporation is under no obligation to the State or to the public to carry on the business for which it CORPORATIONS. 809 was formed. It may at any time put an end to its trans- actions and voluntarily wind up its affairs.^'' The directors of a corporation have the legal power to com- mence proceedings for a voluntary dissolution, and it is their duty to do so, if for any reason they deem it beneficial to the interests of the stockholders that the corporation should be dissolved. It is not necessary that the corporation should be insolvent in order to justify the proceedings for dissolution and the final dissolution of the corporation.^^ Thus, if a cor- poration, although not insolvent, has been consistently losing its money for several years, the majority of the directors may properly petition for a dissolution.^^ Insolvency, however, is the most frequent cause for the dissolution of a corporation.^^ Section 174 of the statute should be construed to mean that the petition must show that the case is one of those specified in either section 170 or section 172 and not that the case comes within both sections. Consequently the owners of fifty per cent, of the stock have a right to present a petition to the court for dissolution under section 172, without regard to any action by a majority of the directors under section 170, and similarly a majority of the directors may file a petition for dissolution irrespective of any of the provisions of section 172.»* The words, " beneficial to the interests of the stockhold- 90. Skinner v. Smith, 56 Hun, 437, to sue and that the company's assets 10 N. Y. Supp. 81, 31 St. Rep. 448; amounted only to a few thousand dol- affd 134 N. Y. 3i40. lars and a heavily mortgaged apart- 91. Jameson v. Hartford Fire Ins. ment-house, are sufficient to warrant a Co. 14 App. Biv. 380, 44 N. Y. Supp. finding that the corporation was in- 25 solvent within the meaning of section 92. Jameson v. Hartford Fire Ins. 170. Matter of Lenox Corp., 57 App. Co., 14 App. Div. 380, 44 N. Y. Supp. Div. 515, 68 N. Y. Supp. 103; affd, 167 15. N. Y. 623. 93. Matter of Lenox Corp., 57 App. 94. Matter of McLoughlin, 176 App. Div. 515, 68 N. Y. iSupp. 103; affd, 167 Div. 653, 163 N. Y. Supp. 547. N Y. 623. When the charter provided thaA the Sufficient allegations. — ^Statements corporation might discontinue business contained in the moving papers, used when stockholders owing two-thirds of upon the application for such an order, the capital .stock should vote to do so, showing that notes of the corporation it waa held such a vote was effectual, had gone to protest, that suits to but that the corporate existence con- which the corporation had no defense tinued for the purpose of closing its were pending upon overdue claims ex- affairs. Green v. Seymour, 3 Sandf. ceeding in the aggregate $30,000, and Oh. 285. that other creditors were threatening 810 COEPOBATIONS. ers, ' ' in section 170, were not intended to make it mandatory upon the court to decree a dissolution in eases where it would be beneficial to a majority of the stockholders, when the best interests of the minority demand a continuance of the cor- poration's existence. The intention is to confide a discretion- ary power to the court to order a dissolution if, in its opinion, and viewing all the circumstances of the case, the best inter- ests of the stockholders will be subserved thereby. In the ex- ercise of such discretion, the court is bound to consider the in- terests of the minority as well as the majority .^^ Where a stock corporation is prosperous and no reason ap- pears why it should be voluntarily dissolved, the court will, at the suit of minority stockholders, who allege that the disso- lution of the corporation and the proposed substitution for the latter of a partnership constitute a scheme of the major- ity to " freeze out " the minority and buy in the corporate assets at a loss to the corporation, restrain all proceedings looking to a dissolution until the question whether a perma- nent injunction should be granted the minority has been de- cided by a trial upon the merits ; and this, although the minor- ity acting, as they now allege, in haste or under the influence of the dominating stockholders of the corporation, have al- ready, as directors, voted at a preliminary meeting of the di- rectors, in favor of dissolution and have then signed a writ- ten agreement to form a partnership in lieu of the corpora- tion.'^ A petition for voluntary dissolution of a corporation is sufficient, if it sets forth that there is a deadlock between the stockholders, the petitioner owning fifty per cent, of the stock, and that a dissolution will be beneficial to the interests of the stockholders in that the other stockholder, together with a dummy stockholder under his control, who together owned fifty per cent, of the stock, removed the petitioner from office as treasurer, excluded him from the management of the business, refused to allow him to examine the corporation books, and appropriated the money of the corporation and wasted it in extravagant expenditures to the loss of the peti- tioner's investment.''^ 95. Matter of Rateau Sales Co., 201 96. Elbogen v. Gerberaux-Flynn Co., N. Y. 420; Matter of Importers U 30 Misc. 264, 62 N. Y. Supp. 287; re- Grocers' Exchange, 2 N. Y. Supp. 257, versed, 50 App. Div. 623, 64 N. Y. 18 St. Rep. 175; reversed, 28 St. Rep. Supp. 1. 446, 8 N. Y. Supp. 319, 322, 15 Daly, 97. Matter of McLoughlin, 176 App. 419; aff'd, 132 N. Y. 212. Div. 653, 163 N. Y. Supp. 547. COEPOBATIONS. 811 If the stockholders elect directors with knowledge that they were not stockholders in fact, hut merely of record, such di- rectors may join in a petition for the voluntary dissolution of the corporation.^* And newly-elected directors have a right to stop proceed- ings which have been initiated by their predecessors in office.^^ A decree for dissolution in an action by a stockholder or credi- tor, who is also the president, and in a case not authorized by statute, cannot be sustained, although consented to by the president and by one or more of the trustees individually, for an application for a voluntary dissolution must proceed from the company or its board of trustees.^ But a judgment in an action brought by the Attorney-General is not invalidated by the consent of the company .^ S. Petition. 1. General Corporation Law, § 174. Contents of petition. The petition must show that the case is one of those specified in sections one hundred and seventy and one hundred and seventy-two of this chapter, and must state the reasons, which induce the petitioner or petitioners to desire the dissolution of the corporation. A schedule must be annexed to the petition, containing the following matters, as far as the petitioner or petitioners know, or have the means of knowing the same. 1. A full and true account of all the creditors of the corporation, and of all unsatisfied engagements, entered into by, and subsisting against the corpora- tion. 2. A statement of the name and place of residence of each creditor, and of each person with whom such an engagement was made, and to whom it is to be performed, if known; or, if either is not known, a statement of that fact. 3. A statement of the sum owing to each creditor, or other person specified in the last subdivision, and the nature of each debt, demand, or other engage- ment. 4. A statement of the true cause and consideration of the indebtedness to each creditor. 5. A full, just, and true inventory of all the property of the corporation, and of all the books, vouchers, and securities, relating thereto. 6. A statement of each incumbrance upon the property of the corporation, by judgment, mortgage, pledge, or otherwise. 7. A full, just, and true account of the capital stock of the corporation, specifying the name of each stockholder; his residence, if it is known, or if it is See also Matter of Bown Bros., Inc., Hun, 360, 22 N. Y. Supp. 318. Ill Misc. 294, 181 N. Y. Supp. 460. 1. Blevin v. Penn Steel & Iron Co., 98. Matter of Manoca Temple Assoc, 9 Abb. N. C. 205. 128 App. Div. 796, 113 N. Y. Supp. 2. People v. Globe Ins. Co., 60 How. 172. Pr- 52. 99. Matter of David Jones Co., 67 812 COKPOKATIONS. not known, stating that fact; the number of shares belonging to him; the amount paid in upon his shares; and the amount still due thereupon. (See B., C. & G. Consol. L., 2nd Ed., p. 3165.) 2. General Corporation Law, § 175. Affidavit to be annexed to petition. An affidavit, made by each of the petitioners, to the effect that the matters of fact, stated in the petition and the schedule, are just and true, so far as the affiant knows or has the means of knowing the same, must be annexed to the petition and schedule. (See B., C. & 6. Consol. L., 2nd Ed., p. 3167.) 3. General Corporation Law, § 189. Amending papers. The court may, at any stage of the proceedings before final order, on the application of the petitioners, or a majority of them, or on the application of the temporary receiver, grant an order amending the schedules annexed to the original petition, by the insertion of additional items, or by making the state- ments or inventory fuller and in greater detail than as originally filed, with the like effect as though said petition and schedules had been originally presented and filed as amended. (See B., C. & G. Consol. L., 2nd Ed., p. 3171.) 3 4. General contents of petition. The directors of an insolvent corporation are not required to resign their offices, and they institute the proceeding in their official capacity.* The petition for the dissolution of a corporation must fully conform to the statute in every particular.^ To empower the Supreme Court to entertain the proceed- ing, the petition must be verified by a majority of the direc- tors, in strict pursuance of the statute.^ Where it appears by the petition and proof that one-half of the shares of the cor- 3. Decrease of assets. — Where the di- Abb. Pr. 386. rectors of a manufacturing company, Creditors of bank. — ^The provision of in proceedings for voluntary dissolu- section 174 is complied with where the tion, applied for the appointment of schedule to such a petition by the di- temporary receivers, and the schedule rectors of a bank, whose property is in showed a surplus instead of a defl- the possession of the Superintendent .of ciency of assets, it was held that no Banks, states that it contains the re- case was made for the appointment of quired matter so far as known, and temporary receivers, and the schedules that there are "a number of other de- were not allowed to be amended so as positors whose names are unknown to to decrease -the amount of as:Bets. Mat- petitioners," and gives the aggregate < ter of Hitchcock Mfg. Co., 1 App. Div. claims of all depositors. Matter of 164, 73 St. Rep. 46, 37 N. Y. Supp. Directors of Murray Hill Bank, 9 App. 834. Div. 546, 41 N. Y. Supp. 914. 4. Zeltner v. Zeltner Brewing Co., G. Matter of Dolgeville El. L. & P. 174 N. Y. 247. Co., 160 N. Y. 500. 5. Ex parte Dubois, 15 How. 7, 6 CORPOBATIONS. 813 porate stock is owned by the petitioners, who were two of the directors of the company and the other half is owned by other individuals, and these parties differ concerning the manage- ment of the company, but it is not clearly stated why the com- pany should be dissolved, the petition is defective^ A verified petition is an affidavit within the meaning of the Civil Practice Act.^ An application to vacate a petition and order to show cause why a corporation should not be per- mitted to dissolve will be denied where the petitioner does not sustain the burden of proving his contention that the alle- gations of the petitioner are false.® 5. Eorm of petition and schedules. In the Matter of the Voluntary Dis- solution OF THE COMBUSTION UTILITIES COMPANY. To the Supreme Court of the State of New York, County of New York: The petition of Paul E. Jones, Frank W. Frueaufif, Warren W. Foster, Louis F. Musil, Charles T. Brown and Carl B. Gilbert respect- fully shows to this court : 1. That your petitioners are a majority of the directors having the management of the concerns of the Combustion Utilities Company, a corporation organized and existing under and by virtue of the laws of the State of New York, to vsdt, under the Business Corporations Law. 2. That your petitioners have discovered that the stock, effect** and other property of said corporation are not sufficient to pay all just demands for which it is liable or to afford a reasonable security to those who may deal with it. That the same are not sufficient to longer carry on the business of the corporation or carry out its charter pur- poses. That the stock of the corporation is equally divided into not more than two independent o^^'nerships or interests; and that one-half of the stock of the corporation is owned by persons favoring the course of part of the directors and one-half thereof is owned by persons favoring the course of the other directors. That your petitioners deem it beneficial to the interests of the stock- holders that the corporation should be dissolved, and are induced to desire its dissolution for the reasons stated in the preceding para- See also Matter of Cowtes Realty 8. Civil Practice Act, § 7, subd. 3. Co., 193 App. Div. 874, 184 N. Y. Supp. And see Matter of Geneva Basket Co., 77S. 71 Misc. 156, 127 N. Y. Supp. 943. 7. Matter of Pyrolusite Manganese 9. Matter of Hassan Paving Co., 152 Co., 29 Hun, 429. App. Div. 610, 137 N. Y. Supp. 453. 814 CORPOKATIONS. graphs, and for the further reasons stated forthwith, namely, that the corporation is now doing and has done no business nor has it been able to do business for over one year past, and has been for a much longer period insolvent and is now so hopelessly insolvent (as more particularly appears from schedule "A" hereto annexed and made a part of the petition) that it is neither practical nor possible to re- sume business ; that the corporation has no moneys with which to pay State or city taxes as the same may become due; that the stock of the corporation is equally divided into not more than two independent ownerships or interests ; that all efforts on the part of one of said in- terests to induce the other to co-operate in the furtherance of the charter purposes of the corporation have failed, and instead of co- operating the said other interest (though often requested) for more than a year last past has remained away from the stockholders ' meet- ings and thereby has successfully prevented special and annual meet- ings of stockholders, and still continues in like manner to prevent the holding of the same ; that, though regularly called from time to time, no annual meeting of stockholders has ever been held because of the non-attendance of a majority of the stockholders at any such meeting ; that by reason of the inaction of the said other interest, all endeavors to continue the business of the corporation have been thwarted, and the credit of the corporation has been so far affected as to render im- practical if not impossible the resumption of business; that the directors representing the owners of one-half of the stock have neglected and refused to attend meeting, though duly and regularly notified; that the corporation was organized for the development and installation of certain patents and processes, and the installation thereof has not been successful, and the corporation has been sub- jected to many claims for damages, and suits have been threatened thereon as hereinafter appears from schedule "A." 3. That the principal office of the said corporation is located at 60 Wall street, borough of Manhattan, New York city. 4. That your petitioners have hereunto annexed and made a part of this petition a schedule marked " A, " containing a statement of the matters required by chapter 23, article 9, section 174, of the Con- solidated Laws, as far as your petitioners know or have the means of knowing the same. Wherefore, your petitioners pray for the final order of this court dissolving the corporation and appointing a receiver of its property and effects, and for such other and further relief as may seem just and proper. Dated, (Add verification.) Petitioners. Schedule "A." 1. A full and true account of all the creditors of the corporation, Combustion Utilities Company, and of all unsatisfied engagements en- tered into by, and subsisting against the corporation, are as follows: (Recitals.) 2. A statement of the name and place of residence of each creditor. COKPORATIONS. 815 and of each person with whom such engagement was made, and to whom it is to be performed, is as follows: (Recitals.) 3. A statement of the sum owing to each creditor or other person specified in the last subdivision, and the nature of each debt, demand or other engagements is as follows: .(Recitals.) 4. A statement of the true cause and consideration of the indebted- ness to each creditor is as follows: (Recitals.) 5. A full, just and true inventory of all the property of the said Combustion Utilities Company, and of all the books, vouchers and se- curities relating thereto, is as follows: (Recitals.) 6. A statement of each incumbrance upon the property of the said corporation by judgment, mortgage, pledge or otherwise: (Recitals.) 7. A full, true and just account of the capital stock of the corpora- tion, specifying the name of each stockholder, his residence, the num- ber of shares belonging to him,, the amount paid in on his shares and amount still due thereupon: (Recitals.) 6. Another form of petition. (Title.) To the Supreme Court of the State of New York: The petition of John B. Hackett, Alrick H. Man and Edward A. Grenzbach, constituting all the directors of the J. B. Hackett Com- pany, respectfully shows: 1. That J. B. Hackett Company is a corporation organized under the Business Corporations Law of the State of New York, and that its principal place of business is located in the city and county of New York. 2. That your petitioners constitute all the directors of the said cor- poration. Their names and residences are as follows: John B. Hackett, Richmond Hill, New York city; Alrick H. Man, Richmond Hill, New York city; Edward A. Grenzbach, No. 214 West 122d street, Manhattan, New York city. 3. That the purposes for which said corporation was organized was the manufacture and sale of grates and grate bars and high-grade steam specialties. The amount of its authorized capital stock is fifteen thousand dollars ($15,000). The amount issued and outstand- ing is eight thousand five hundred dollars ($8,500), of which one thousand dollars ($1,000) is in the company treasury. 4. That your petitioners have discovered that the stock, effects and other property of said corporation are not sufScient to pay all just demands for which it is liable or to afford a reasonable security to those who may deal with it. That the business for the last two years has shown, a steady loss, the loss for the year ending December 31, 1909, being about two thousand two hundred dollars ($2,200). That the assets of the said corporation do not exceed in value six hundred and sixty-three dollars and thirty-nine cents ($663.39), and that the amount due creditors is over three thousand four hundred dollars ($3,400), making a deficiency of over two thousand five hundred dol- lars' ($2,500). That the creditors are pressing for payment. That the corporation 816 CORPORATIONS. is without funds to pay them, and that unless a receiver is appointed to take possession of and preserve the assets of the corporation and divide them equally among the creditors, they will be seized and sold in some legal proceeding instituted for the benefit of one or more creditors and probably sacrificed. That for these reasons your peti- tioners deem it beneficial to the interests of the stockholders that the said corporation should be dissolved. 5. That by resolution of the board of directors of said corporation passed January 10, 1910, these facts were recited and the officers and directors of the corporation were directed to institute proceedings for the voluntary dissolution of the corporation and for the appointment of a receiver of its assets, to insure their distribution among the differ- ent creditors and to prevent such assets being seized by legal proceed- ings in actions which may be brought by any of such creditors. 6. That your petitioners have annexed to this petition a schedule marked "Schedule A," which in its different subdivisions contains the statement required by the provisions of the General Corporation Law, as far as your petitioners know or have the means of knowing the same. Wherefore, your petitioners pray for a final order of this court dissolving the said corporation and appointing a receiver of its prop- erty and effects, and for an injunction restraining the institution and prosecution of any action at law against it, and for the appointment of a temporary receiver of its property until the hearing and deter- mination of such proceedings and the appointment of a permanent receiver. Dated, (Add verification.) Petitioners. (Here insert schedules.) E. Order to show cause. 1. General Corporation Law, § 176. Presentation of petition. The papers must be presented at a special term of the Supreme Court, held within the judicial district, embracing the county wherein the principal office of the corporation is located. (See B., C. & G. Consol. L., 2nd Ed., p. 3167. 2. General Corporation Law, § 178. Action by court upon petition for dissolution. In a case specified in sections one hundred and seventy-one and one hundred and seventy-two of this chapter the court may, in its discretion, entertain or dismiss the application. Where it entertains the application, or where the cause is one of those specified in section one hundred and seventy of this chapter, the court must make an order, requiring all persons interested in the corporation to show cause before it, or before a referee designated in the order, at a, time and place therein specified, not less than six weeks after the granting of the order, why the corporation should not be dissolved. (See B., C. & G. Consol. L., 8nd Ed., p. 3167.) CORPORATIONS. 817 3. General Corporation. Law, § 179. Publication of order to show cause why corporation should not be dissolved. A copy of the order must be published, as prescribed therein, at least once in each of the three weeks immediately preceding the time fixed therein for show- ing cause, in one or more newspapers, specified in the order, published in the city or county wherein the order is entered. (See B., C. & G. Consol. L., and Ed., p. 3168.) 4. General Corporation law, § 180. Service of order to show cause. A copy of the order must also be served upon each of the persons, specified in the schedule as a creditor or stockholder of the corporation, or as a person to whom an engagement of the corporation is to be performed, other than a person whose residence is stated to be unknown, or to be without the United States. The service must be made either personally, or at least ten days before the time appointed for the hearing; or by depositing a copy of the order, at least twenty days before the time so appointed, in the post-office, inclosed in a postpaid wrapper, addressed to the person to be served, at his residence, as stated in the schedule. (See B., C. & G. Consol. L., 2nd Ed., p. 3168.) 5. General Corporation Law, § 181. Entering and .filing order and ■v papers. The order must be entered, and the papers must be filed, within ten days after the order is made, with the clerk of the county where the principal office of the corporation is located. (See B., C. & G. Consol. L., 2nd Ed., p. 3168.) 6. General requirements of order. The petition is presented at a special term held in the judi- cial district where the principal office of the corporation is lo.cated. This office is at the place specified in its articles and its by-laws and reports, where its books of transfer, stock- books, and accounts of receipts and disbursements are kept, and the election of directors held." If the petition is enter- tained by the court, a show cause order is issued as provided in section 179. There must be at least a substantial com- pliance with the requirements of the statute ; but, if the peti- tion is regular in form, the court acquires jurisdiction, and a defect in the order does not render it a nullity. Thus, the order is not void because it fails to recite that in- solvency has been shown to the satisfaction of the court, as the court, having acquired jurisdiction, can correct such de- fect nunc pro timc.^ An order reciting the insolvency of the 10. Olmstead v. Rochester & Pitts- Div. 515, 68 N. Y. Supp. 103; affd 167 burgh R. Co., 8 St. Rep. 856. N. Y. 623. 11. Matter of Lenox Corp, 57 App. 52 818 COKPOEATIONS. corporation and requiring all persons interested to show cause why the prayer of the petitioner should not be granted, may be sufficient when the title of the order discloses that the pro- ceeding is for the dissolution of the corporation.^ Parties to a proceeding for dissolution, after becoming such, are entitled to notice of any application made therein.^^ There may be a substantial compliance with the statutory provision regarding the publication of the order to show cause, although the first publication was not twenty-one full days be- fore the return day.^^ 7. Form of order to show cause before referee with injunction. (Title.) (Special Term Caption.) On reading and filing the petition of John B. Haekett, Alrick H. Mann and Edward A. Grenzbach, director under the Business Corpo- ations Law of the State of New York and having its principal office at 5-7 Beekman street, in the borough -of Manhattan, city of New York, duly verified by the petitioners on the 11th day of January, 1910, and the schedule thereto annexed ; from which petition it appears that the case is one of those specified in section 170 of the General Corporation Law; and it further appearing to the satisfaction of the court from said petition that the said corporation is insolvent; and on reading and filing notice of this application dated January 12, 1910, with proof of due service thereof and of the said petition and schedule, and of a copy of this order upon the Attorney- General ; and after hearing George W. Wingate, Esq., of counsel for the petitioners, and the Attorney-General not opposing ; now, on motion of Wingate & CuUen, attorneys for the petitioners, it is Ordered, that all persons interested in said corporation show cause before this court, before Daniel F. Cohalan, Esq., who is hereby ap- pointed referee for that purpose, at his office No. 2 Rector street, in the borough of Manhattan, city of New York, on the 15th day of March, 1910, at 2 o'clock in the afternoon, why the said corporation should not be dissolved ; and it is further Ordered, that a copy of this order be published at least once a week for three weeks immediately preceding the time fixed herein for show- ing cause, in the New York Law Journal of New York, which paper is published in the city and county of New York ; and it is further 12. Matter of Christian Jensen Co., N. Y. Supp. 444. 128 N. Y. 550. 14. In re Council of Home for Compare, Matter of Pyrolusite Man- Friendless Jewish Children, 136 N. Y. ganese Co., 29 Hun, 429; People v. Supp. 1060. Seneca Lake Grape & Wine Co., 62 The order should be published in the Hun, 174, 23 St. Rep 346, 5 N. Y county where the principal office is Supp, 136, 17 Civ, Pro, 130. situated. Matter of Westchester Iron 13. Matter of Wendler Machine Co., Co., 15 How. Pr. 7. 2 App, Div, 16, 72 St. Eep. 499, 37 CORPOEATIONS. 819 Ordered, that until the hearing and determination of this applica- tion all creditors of said corporation be and they are hereby enjoined from instituting any action or legal proceeding against said corpora- tion, or interfering with its property and assets. Justice of tJie Supreme Court. 8. Form of order to show cause, appointing temporary receiver, etc. (Special Term Caption.) In the Matter of the Voluntary Dis- solution OF THE BUFFALO EX- POSITION COMPANY. Upon reading and filing the petition of George F. Brooks and Robert Walter, duly verified on the 30th day of June, 1909, whereby it appears that the said petitioners constitute a majority of the di- rectors of the Buffalo Exposition Company, that the said company is a corporation organized under and existing by virtue of the laws of the State of New York, and that said company is doing business at Buffalo, Erie county, N. Y. ; that said company is insolvent, and its property is not sufficient to pay all its just debts for which it is liable and to afford reasonable security to those who deal with it ; that said company owns a lease of real estate and certain personal property, consisting of exposition booth, improvements, etc., and is indebted to divers persons in large amounts, the greater part of which is past due, and said company is being pressed for payment and has no available funds with which to pay its debts and carry on its business, and is unable to procure funds therefor ; that actions are about to be commenced against the said company by its creditors, for the collec- tion of debts against the said company and a lien has been filed against the property of the said company, and that if the property of the company Is levied upon and sold under execution, said property will be exhausted and there will not be enough to satisfy claims of creditors in full and that it will be beneficial to the interests of the creditors and stockholders that the said company be dissolved and its property placed in the custody of the court,, and said petition further contain- ing a schedule showing the assets and liabilities of the said corpora- tion, and other matters required by statute to be shown, and also stating reasons why an injunction should be granted restraining the creditors from suing the said corporation, and it also appearing that it will be for the best interests of the stockholders that a temporary receiver, asked for therein, be appointed to conduct the business of the company in his discretion, subject to the order of the court ; and upon reading and filing the proof of service of notice of this applica- tion upon the Attorney-General of the State of New York, and said Attorney-General of the State of New York appearing in open court by his representative, Walter F. Heifheins, of the city of Buffalo, N. Y., it is 820 CORPORATIONS. Ordered, that all persons or creditors interested in said Buffalo Exposition Company, show cause before William G. Kilhoffer, who is hereby appointed referee for that purpose, at his office No. 308 Bris- bane Building, in the city of Buffalo, N. Y., on the 1st day of September, 1909, at ten o'clock in the forenoon of that date, why the said corporation should not be dissolved pursuant to the rule and practice of this court ; it is further Ordered, that a copy of this order be published in the Buffalo Ex- press, a newspaper published in the city of Buffalo, N. Y., and in the Buffalo News, a newspaper published in the city of Buffalo, N. Y., once a week in each of the three weeks immediately preceding the said 1st day of September, 1909 ; it is further Ordered, that all creditors interested in the said corporation be and they are hereby enjoined and restrained from commencing any suit against the said corporation, and from further prosecuting suits al- ready commenced ; and it is further Ordered, that Eugene "Warner of the city of Buffalo, N. Y., be and he is hereby appointed temporary receiver of the said corporation, pursuant to section 182 of the General Corporation Law, and that such temporary receiver immediately take possession of the property and effects, real and personal of every nature, kind and description, of said corporation, and hold and administer the same according to law, and that before the said receiver takes possession of such prop- erty or enters upon the discharge of his duties, he execute and file with the clerk of Erie county a bond to the people of the State of New York, in the penal sum of twenty-five thousand dollars ($25,000), conditioned for the faithful discharge of his duties as such receiver, said bonds to be approved by a justice of this court ; it is further Ordered, that the Columbia National Bank be and the same is hereby designated as the place of deposit, wherein the funds of the said corporation not needed for immediate distribution shall be de- posited ; it is further Ordered, that such temporary receiver in the performance of the duties of his trust act in all things subject to the order of this court ; it is further Ordered, that said temporary receiver have permission and he is hereby authorized and empowered to continue and carry on the busi- ness of the said company, in the conducting of entertainments, exposi- tions, etc., until the further order of the court, provided, however, that no indebtedness shall be incurred by said temporary receiver for that purpose, except the necessary help and supplies, without the further order and express authority of this court ; and it is further Ordered, that the receiver above named be empowered to borrow the sum of three thousand dollars ($3,000), in his discretion, such sum so borrowed to be a lien on the funds of the receiver, coming in his possession. Granted, Dated, ,1911. , Special Deputy Clerk. CORPORATIONS. 821 F. Notice to Attorney-Oeneral. 1. In general. Under section 312 of the General Corporation Law notice of application in a proceeding for the dissolution of a cor- poration must be given to the Attorney-General.^^ The statute is applicable to voluntary proceedings, such as are discussed in this Article.^^ The purpose of the statute is to require notice to be given to the Attorney-General of the time and place -when the petition will be presented to the court, so that he may be present and be heard upon an initiatory appli- cation, as well as all the other proceedings to be had in the matter, and unless such notice is served or waived the court has no jurisdiction to entertain the proceedings, and the order is void." And, upon an application to vacate an order for the volun- tary dissolution of a corporation, it is thought that it is the proper practice to give notice to the Attorney-General.-'^^ He is entitled to notice whether the corporation is solvent or in- solvent.^^ If granted without notice, the court may vacate it ; the fact that the court had no power to make the order does not prevent a subsequent application to vacate it.^" The de- fect, however, is jurisdictional; and it has been held that it cannot be cured by waivers subsequent to the order.^^ But the requirements of the statute may be satisfied by the acceptance of short notice.^^ Or the Attorney-General may waive the service before the motion is brought to a hearing.^^ 15. See, infra, Art. XII-E-5. Div. 653, 163 N. Y. Supp. 547. 16. People V. Seneca Lake Grape Sc 19. Matter of Broadway Ins. Co., 23 Wine Co., 52 Hun, 174, 5 N. Y. Supp. App. Div. 282, 48 N. Y. Supp. 299. 136, 23 St. Eep. 346, 17 Civ. Pro. 130. 20. Matter of Broadway Ins. Co., 23 17. Knickerbocker Trust Co. v. Tar- App. Div. 282, 48 N. Y. Supp. 299. rytown, etc., R. Co., 133 App. Div. 285, 21. Matter of Strong Co., 128 App. 117 N. Y. Supp. 871; People v. Seneca Div. 208, 112 N. Y. Supp. 557. Lake Grape & Wine 'Co., 52 Hun, 174, 23. Matter of Peekamose Fishing 5 N. Y. Supp. 136, 23 St. Rep. 346, 17 aub, 151 N. Y. 511. Civ. Pro. 130. 23. Matter of Strong Co., 128 App. 18. Matter of McLoughlin, 176 App. Dir. 208, 112 N. Y. Supp. 557. 822 CORPORATIONS. 2. Form of notice. SUPREME COURT— New York County. In the Matter of the Application op THE J. B. HACKETT CO. por Vol- untary Dissolution. Sib. — Please take notice that on the petition of the directors of the J. B. Hackett Company, verified January 11, 1910, and the schedule thereto annexed, copies of which are herewith served upon you, we shall apply at a Special Term, Part II thereof, of the Supreme Court to be held in and for the county of New York, at the County Court House in the borough of Manhattan, city of New York, on the 17th day of January, 1910, at 10 :30 a. m., for an order requiring all per- sons interested in said corporation to show cause why the said corpo- ration should not be dissolved and in an injunction granted against the institution or prosecution of any action against said corporation, a copy of which proposed order is served upon you herewith. Dated, January 12, 1910. Yours, etc., Wingate & Cullen, Attorneys for Petitioners. To Edward R. O'Malley, Esq., Attorney-General. G. Temporary receiver. Section 182 of the General Corporation Law provides for the appointment of a temporary receiver in a proceeding for the voluntary dissolution of a corporation. The sole authority for appointing a temporary receiver and granting an injunction, enjoining creditors from prosecuting their claims at the commencement of such a proceeding is that conferred by sections 182, 184; and if the statutory authority is not followed strictly the order will be void. If there is any evidence tending to show the requisite facts giving the court jurisdiction, the order is not a nullity, al- though it may have been improvidently granted, and may be set aside on motion.^* An order appointing a temporary receiver, made after the presentation of the petition and on proper notice to the At- torney-General, is valid, for it is not necessary that it should be preceded by a valid order to show cause why the corpora- tion should not be dissolved.^ A court of equity has no power t4. Matter of Lenox Corp., 57 App. S9; Knickerbocker Trust Co. v. Tar- Div. 515, 68 N. Y. Supp. 103; aff'd, 187 rytown W. P. & M. R. Co., 133 App. N. Y. 623. TAm. 285, 117 N. Y. Supp. 871. coKPORATioiJirs. 823 to appoint a receiver to take charge of and continue the busi- ness of the solvent corporation in a proceeding which does not ask for the dissolution, but is intended to hinder and delay creditors who bring suit.^^ In a proceeding for the voluntary dissolution of a brewing corporation the court should not, except for the most cogent reasons, authorize a temporary receiver to sell all of the prop- erty of the corporation prior to the entry of the final order dissolving the corporation.^^ H. Injunction. 1. General Corporation Law, § 184. Injunction. If a temporary receiver he appointed, the court may, in its discretion, on like motion and notice, with or without security, at any stage of the proceeding before the final order, grant an injunction, restraining the creditors of the corporation, from beginning any action against the said corporation for the recovery of a sum of money, or from taking any further proceedings in such an action theretofore commenced. Such injunction shall have the same effect and be subject to the same provisions of law as if each creditor upon whom it is served was named therein. (See B., C. & G. Consol. L., 3nd Ed., p. 3170.)28 2. When injunction issued. In a proceeding for the voluntary dissolution of a corpora- tion, the court may, at the time of appointing the temporary receiver, grant an injunction against the prosecution of suits against the corporation. It is not necessary that the motion for such injunction should be made after the appointment of the receiver.^* Where a corporation has gone into liquidation, the rights and debts of the parties are fixed and the assets of the cor- poration are best protected by enjoining all suits and ex- penses, except as are necessary in adjusting the respective debts in liquidation. The effect of a voluntary dissolution of a corporation is to place all its property and all its assets in the custody of the law to be collected and applied by a person appointed by the court.^" The restraining power of the court is purely statutory and is such only as is given by the statute.^ 36. Matter of Atlas Iron Construe- Injunction, tion Co., 72 St. Eep. 801, 38 N. Y. 29. Matter of Simons Co.,. 41 St. Supp. 173. Rep- »55. 16 N. Y Supp. 13. 27. Matter of Malcolm Brewing Co., 30. Walsh v. Seagcr Bros., 1 St. B«p. 78 App. Div. 592, 79 N. Y. Supp. 1057. 189. 28. As to injunctions generally af- 31. Matter of Binghamton Gen. Elec. fecting corporations, see, infra, XII-D. Co., 143 N. Y. 261; Matter of Tarry- 824 CORPORATIONS. Where a corporation is not insolvent at the time of the ap- plication, an injunction against creditors will not generally be granted.^^ Where there is no allegation of actual insolvency, the pend- ency of dissolution proceedings should not be allowed to inter- fere with the efforts of a board of directors recently elected to put the corporation on a firm basis, and an injunction to that end should not be granted.^^ An action to foreclose a lien upon property pledged or upon realty is not an action to recover " a sum of money," within the meaning of section 184, conferring authority on the court in dissolution proceedings to enjoin certain actions.^* An ac- tion for foreclosure is an action in equity, and the fact that, as an incident thereto, the court has jurisdiction, when such re- lief is asked, to award a judgment for the deficiency, does not alter the character of the action or bring it within section 184.^ But a foreclosure action, instituted by an opposing stock- holder, pending a reference in a dissolution proceeding, may be stayed in order to enable the permanent receiver to sell the equity of the corporation.^^ I. Hearing and decision. 1. General Corporation Law, § 185. Beferee. If a referee wa3 not designated In the order to show cause, the court may, in its discretion, appoint a referee when or after the order is returnable. (See B., C. & G. C!onsol. L., 2nd Ed., p. 3171.) 2. General Corporation law, § 186. Hearing. At the time and place specified in the order, or at the time and place to which the hearing is adjourned, the court, or the referee, must hear the allegations and proofs of the parties, and determine the facts. (See B., C. & G. Consol. L., 2nd Ed., p. 3171.) 3. General Corporation law, § 187. Decision. The decision of the court, or the report of the referee, must be in writing, and must be made and filed with all convenient speed. It must contain a state- town, etc., E. Co., 133 App. Div. 297, Tarrytown, W. P. & M. Ey. Co., 133 117 N. Y. Supp. 695. App. Div. 297, 117 N. Y. Supp. 695. 33. Matter of Hitchcock Mfg. Co., 1 35. Matter of Hamilton Park Co., 1 App. Div. 164, 37 N. Y. Supp. 834. App. Div. 375, 72 St. Rep. 681, 37 33. Matter of Colton, 26 Misc. 571, N. Y. Supp. 310. 67 N. Y. Supp. 556. 36. Matter of French, 181 App. Div. 34. Matter of French, 181 App. Div. 719, 168 N. Y. Supp. 988. 719, 168 N. Y. Supp. 988; Matter of CORPORATIONS. 825 ment of the effects, credits, and other property, and of the debts and other engagements, of the corporation, and of all other matters, pertaining to its .affairs. (See B., C. & G. Consol. L., 2nd Ed., p. 3171.) 4. General Corporation Law, § 188. Use of original papers on hearing. The court or the referee is entitled to use, upon the hearing, the original petition, and the schedules annexed thereto; and th« clerk must transmit them accordingly, upon the written order of the judge, or of the referee. In that case, they must he returned with the decision or report. (See B., C. & G. Consol. L., 2nd Ed., p. 3171.) 5. Construction of statutes. On the hearing, the question as to whether the proceedings are being taken in bad faith and for fraudulent purposes and with intent to defraud the stockholders can be determined, and the dissolution can be opposed upon those grounds.^ The failure of a referee, before whom a hearing is had, to make in his report a statement of the effects, credits, and other property, and of the debts and other engagements of the corporation, and of all other matters pertaining to its af- fairs, is fatal to the validity of the proceedings and renders an order dissolving the corporation, entered upon such de- fective report, void.^^ A bare statement that the schedules annexed to the petition are correct is not a compliance with the statute.^^ Where the report of the referee on a petition for disso- lution enumerates more books of the corporation than are con- tained in the schedule annexed to the petition, the discrep- ancy is not a ground for refusing final order, the trustees hav- ing made the schedule in good faith.*" When all parties in interest had notice of the dissolution proceeding and an opportunity to appear, a stipulation, fixing the referee's fees at an increased rate, consented to by all persons, is binding, although not agreed to by the attorney for the temporary receiver.*^ Where, upon an application for voluntary dissolution, it ap- pears that the corporation and its creditors have an apparent 37. Jewett v. Swan, 19 WWy. Dig. 40. Matter of Santa Eulalia Silver 144 Mining Co., 2 N. Y. Supp. 221; aff'd, 38. Matter of E. M. Boynton S. & F. 21 St. Rep. 89, 4 N. Y. Supp. 174. Co., 34 Hun, 369. 41- Matter of French, 181 App. Mv. 39. Matter of Pyrolusite ManganeFe 719, 168 N. Y. Supp. 988. Co., 29 HuH) 429. 826 COBPOEATIONS. cause of action against officers and directors for maladminis- tration of corporate affairs, the petition should be denied until such claims can be asserted in a representative action or otherwise, without prejudice to renew the application if, after a reasonable time, no such action is brought.^ Where it is alleged in the petition that certain stockholders claim the right to a preference on the distribution of the assets, the referee may hear and determine the controversy between the stockholders, and the court may provide by its final order for the distribution of the assets among those en- titled thereto.''^ 6. Form of referee's report. (Title.) To the Supreme Court of the State of New York: Pursuant to an order of this court made and entered herein on the 20th day of January, 1910, requiring all persons to show cause before me, as referee, why the above-named corporation should not be dissolved, I do hereby respectfully report to this court as follows: I first took and subscribed the oath prescribed by law, which said oath is hereby annexed. Upon the reference before me I have been attended by Laurence H. Doorly, Esq., of counsel for Wingate & CuUen, Esqs., attorneys for the petitioners, and no person or persons appearing in opposition, I thereupon proceeded with the hearing and determination of the mat- ters referred to me by said order, and have heard and examined the witness and considered the testimony and evidence produced by and on behalf of the petitioners, which testimony duly subscribed by the witness is hereto annexed, and upon said testimony and evidence I do hereby determine and report the facts as follows: First. That notice of this hearing was duly served upon the credi- tors of the J. B. Hackett Co., and advertisement of aforesaid order to show cause duly complied with. Second. The J. B. Hackett Co. is a domestic stock corporation, or- ganized and existing under the Business Corporations Law of the State of New York, its certificate of incorporation having been filed in the ofSce of the Secretary of State on the 31st day of August, 1907. Third. The general purposes for which said corporation was or- ganized are to engage in the sale of steel specialties, steam valves, grate bars and steam traps. 42. Matter of Great Northern Trad- Supp. 338. ing Co., l&S App. Div. 536, 153 N. Y. 43. Matter of Seneca Oil Co., 153 Supp. 213. App. Div. 594, 138 N. Y. Supp. 78; See also Matter of Quicksilver Min- afT'd, 208 N. Y. 546. ing Co., 186 App. Div. 347, 174 N. Y. CORPOBATIONS. 827 Fourth. The authorized capital stock of said corporation is fifteen thousand dollars ($15,000), of which eight thousand five hundred dollars ($8,500) was issued and one thousand ($1,000) of the same returned to the company as treasury stock. Fifth. The number of directors of said company is three and the names of the said directors are as follows: J. B. Hackett, Alrick.H. Man and Edward A. Grenzbach. Sixth. The petition herein was signed and verified by a majority of said directors, to wit all of the same. Seventh. That the petitioners are the owners of all the outstanding capital stock of the company. Eighth. I find that the allegations set forth in the said petition for dissolution are true, and that the stock effects and other property of said corporation are not sufficient to pay all just demands for which it is liable, and I lieem it beneficial to the interest of the stockholders that the corporation shall be dissolved and that such dossolution will not be injurious to the public interests. Ninth. The following is a statement of the effects, credits and other property, and of the debts and other engagements of said corporation : The company owns no real estate and transacted business at an office. Statement of Liabilities. Bills Payable — Note discounted Nov. 3, 1909, 3 mos. Title Guarantee & Trust Co., Brooklyn branch (since making of the petition taken up by and held by an in- dorser, H. F. Hackett) $300 00 H. F. Hackett, loan April 24, 1909 500 00 J. B. Hackett— Money loaned $675 00 Salary as president 618 50 1,293 50 New England Roller Grate Co. — Goods purchased 47 20 John T. Lindstrom — Goods purchased 189 87 ",Vatts Eegulator Co. — Goods purchased 267 79 The Kelly Fdry. & Mach. Co.— Goods purchased 112 72 Cooke- Wilson Electric Supply Co. — Goods purchased (subject to allowance) 329 14 Engineers' List Publishing Co. — Advertising 286 47 Smith Bros. Publishing Co.— Advertising 16 00 Dougherty Fdry. Co. — Goods purchased 52 38 "Westinghouse Electric & Mfg. Co. — Claim arising from return of goods purchased — claim being adjusted 7 22 828 COBPORATIONS. RuMand & Whiting Co.— Lease of ofSce to May 1, three (3) months at $30 90 00 Florence John, stenographer and clerk — Wages for remainder of January, three (3) weeks at $8 24 00 Total $3,516 29 Statement of Assets. Cash on hand, or in bank $153 22 Accounts due: Meyer Ice Machine & Engineering Co., No. 1 Montgomery street, Jersey City, N. J $52 50 Port Richmond Hygienic Ice & Cold Stge. Co., Port Richmond, S. I., N. Y '50 00 W. G. Wild, Hunting, L. 1 68 75 New Western Hotel, 47th street and Madison avenue, N. Y • 3 00 D. L. Holbrook, Point Pleasant, N. J., or No. 17 Battery place, N. Y 51 00 225 25- $275 14 Stock on hand $52 05 Sundry office fixtures 223 09 Total $653 61 I, therefore, respectfully recommend that the prayer of the pe- titioners be granted, and that a final order herein be granted dis- solving the said corporation. Dated, , 1910. Referee. 7. Form of notice of filing referee's report. (Title.) Please Take Notice, that the report of Daniel F. Cohalan, Esq., appointed referee by order of this court, dated the 20th day of Janu- ary, 1910, a copy of which is hereto annexed, was filed in the office of the clerk of this court, in the County Court House, borough of Manhattan, city of New York, on the 14th day of April, 1910. To the Attorney-General of the State of New York. ,( Service of a copy of the above notice of filing and of annexed re- port of referee is this day admitted.) Dated, " , 1910. CORPORATIONS. 829 8. Form of notice of motion to confirm report of referee and for order of dissolution. (Title.) Please Take Notice, that upon the petition herein verified the 11th day of January, 1910, the order to show cause granted thereon the 20th day of January, 1910, and the report of Daniel F. Cohalan, Esq., referee herein, dated the 13th day of April, 1910, and filed in the office of the clerk of this court on the lith day of April, 1910, copies of which are herewith served upon you, and upon aU the papers and proceedings hitherto had herein, the undersigned will make a motion before this court at a Special Term, Part I thereof, to be held at the County Court House, in the borough of Manhattan, city of New York, on the 25th day of April, 1910, at 10:30 o'clock in the forenoon of that day, or as soon thereafter as counsel can be heard, for a final order herein confirming the aforesaid report of the referee herein, dissolving the above-named corporation and appointing a receiver therefor and for such other and further relief as to the court shall seem proper and just in the premises. Dated, 1910. Respectfully, To the 9. Form of order confirming referee's report, appointing receiver and for injunction. (Same title.) On reading the petition filed herein on the 11th day of January, 1910, by John B. Hackett, Alrick H. Man and Edward A. Grenzbach, being all of the directors of the above-named company, praying for a dissolution of the order made thereon on the 20th day of January, 1910, requiring all persons interested in said corporation to show cause on the 15th day of March, 1910, before Daniel F. Cohalan, Esq., referee, why the said company should not be dissolved and a receiver of the property of said corporation appointed, and on reading and filing the affidavit of John J. Cosgrove, verified the 12th day of March, 1910, and the affidavit of Laurence H. Doorly, verified the 25th day of April, 1910, proving the due service and publication of said order to show cause according to its terms and as required by law, and it appearing from the certificate of the clerk of this court, dated April 23, 1910, that no one has made himself a party to this proceeding by filing a notice of appearance with the said clerk before the close of the hearing before the said referee, and on reading the report of Daniel F. Cohalan, Esq., the referee appointed herein as aforesaid, dated the 13th day of April, 1910, and filed herein on the 14th day of April, 1910, and proof of the due service of a copy thereof and of notice of filing on the Attorney-General of the State of New York, and on reading and filing the affidavit of Laurence H. Doorly, swor^ to on the 25th day of April, 1910, and the certificate of the clerk of 830 CORPOEATIONS. the county of New York, annexed thereto, dated April 23, 1910, by which it appears that no exceptions to said report have been filed or served and that more than eight (8) days have elapsed since the filing of said report and service of notice thereof on the Attorney-General and on reading and filing the notice of the motion for this final order, dated the 14th day of April, 1910, and proof of service thereof of this proposed order on the Attorney-General, and after hearing Laur- ence H. Doorly, Esq., counsel for Wingate & CuUen, attorneys for the petitioner, in support of the motion, and no one opposing. Now, on motion of Wingate & Cullen, Esqs., attorneys for the peti- tioner, it is Ordered, that the said report of Daniel F. Cohalan, Esq., referee herein, be and it hereby is in all respects confirmed. And it appearing to the satisfaction of the court that the allegations of the petition are true, that the said corporation, the J. B. Hackett Company, is insolvent and that it will be for the benefit of the stock- holders and not detrimental to any public interests that it be dis- solved, it is further Ordered, that the said corporation, the J. B. Hackett Company, be and it hereby is dissolved ; and it is further Ordered, that Howard E. Brown be and he hereby is appointed per- manent receiver of all the assets and property of said corporation with all the powers conferred by law on permanent receivers; and it is further Ordered, that said receiver, before entering upon his duties as per- manent receiver, make and file with the clerk of New York county a bond to the people of the State of New York with sufficient surety to be approved by the court, in the penal sum of one thousand dollars ($1,000), conditioned for the faithful performance of his duties as such permanent receiver and for the due accounting of all moneys received by him; and it is further Ordered, that said receiver deposit in the Fourth National Bank in the city of New York, all funds coming into his hands not needed for immediate disbursements; and it is further Ordered, that the petitioners recover the sum of ninety-seven dol- lars and sixty-five cents ($97.65), as and for their costs and disburse- ments herein, including the fees of the said referee and the stenog- riapher upon the reference, to be taxed by the clerk and inserted here- in and paid by the said receiver out of any funds coming into his possession. Enter : J. Final order and effect thereof. 1. General Corporation law, § 190. Final order. Where the hearing is before a referee, a motion for a final order must be made to the court, upon notice to each person who has made himself a party to the proceedings, by filing with the clerk, before the close of the hearing, a notice of his appearance, in person or 'by attorney, specifying a post-office COBPOBATIONS. 831 within the state, ■where such a notice may be served. The notice may be served as prescribed in the Code of Civil Procedure for the service of a paper upon an attorney in an action. Where the hearing was before the court, a motion for a final order may be made immediately, or at such a time and upon such a notice, as the court prescribes. (See B., C. & G. Cousol. L., 2nd Ed., p. 3171.) 2. Effect of final order of dissolution. It is only after the hearing and determination of the court that the final order of dissolution can be made.^* While the life of the corporation continues until the making of the final order,^ it then ceases to exist.'*^ Its directors become trustees for the creditors, and it is their duty to settle the affairs of the corporation, collect assets, pay debts, and divide the money and other property remaining among the persons entitled thereto.^^ But a corporation which has been voluntarily dissolved is 44. Matter of Malcolm Brewing Co., 78 App. Div. 592, 79 N. Y. Supp. 1057- Failure of petitioner to apply for final order. — Where, in a proceeding for the voluntary dissolution of a corpora- tion which has an equal number of trustees equally divided respecting its management, the petitioner neglects or refuses, after the referee has been ap- pointed, to apply for a final order, it is competent for the court, on special application of any person interested, to direct the petitioner to move, so that the interests of all may be protected. tf all the parties to such a proceeding appear before the court for the pur- pose of procuring a final order, the court is authorized to dispose of the matter, although no formal notice has been given to the petitioner. When the petitioner has filed the referee's re- port, but does not apply for the final order, and all the, parties appear before the court on an order obtained by one of them requiring the petitioners and the other parties to show cause why the final hearing should not be had, and the proceeding dismissed and a dissolution denied, the court acquires jurisdiction on notice to the attorney- general to make a final order dissolv- ing the corporation, on the default, ou an adjourned day, of the party who moved for a denial of dissolution, where the circumstances show that the motion was in e£fect and in contempla- tion of the parties an application for a final hearing of the proceeding upon the merits. Matter of Peekamose Fishing Club, 151 N. Y. 511; motion for reargument denied, 152 N. Y. 629. 45. Drew v. Keufer, 81 Hun, 144, 62 St. Rep. 697, 30 N. Y. Supp. 733. 46. Matter of Fi-ench, 181 App. Div. 719, 168 N. Y. Supp. 988. Effect as res adjudicata. — See Mac- Mahon v. Stephney Spare Wheel Agency, 140 App. Div. 554, 125 N. Y. Supp. 823. Statute of Limitations.— Where the property of the debtor is taken posses- sion of by the court to be adminis- tered for the benefit of all the credi- tors, the statute does not run against any debta not then barred. Ludington V. Thompson, 4 App. Div. 117, 3« N. Y. Supp. 768, 74 St. Rep. 110; afl'd, 153 N. Y. 499. 47. Stannard v. Reid & Co., 114 App. Div. 135, 99 N. Y. Supp. 567. 832 CORPORATIONS. not thereby relieved from the obligation of its contracts un- less it be shown that the dissolution was necessary because of its financial condition.'^ The liability of a business corporation for personal injuries survives its dissolution,*^ though the rule may be to the con- trary as to other corporations.^" A pending foreclosure- ac- tion, instituted by an opposing stockholder, can proceed no further until it is revived against the permanent receiver.^^ A final decree dissolving a corporation and appointing a permanent receiver, which orders a sale of the realty subject to specified liens, does not have the effect of divesting the liens of existing judgments not referred to therein, and, until any particular judgment is satisfied from the moneys in the hands of the receiver, it is the right of the owner of the judg- ment to proceed to execution and sell subject to the order of the court.^^ Upon the sale of the property of a corporation, after the ' stockholders have voted for its dissolution, but before such dissolution is effected, the sole right to the use of its corporate name is a property right and passes to a purchaser thereof who may prevent any competitor from using it.^^ 3. Distribution of assets. The assets of the corporation are distributed, first to the creditors of the corporation; and the surplus, if any, to the stockholders. But the court may not take from the trustee funds placed in his hands for the corporation for a specific purpose pur- suant to a contract obligation and itself distribute them through its receiver instead of through the trustee. The authority of the court is limited to compelling the trustee to distribute the fund as provided for by the contract, under its supervision.^* The creditors entitled to share in the distri- 48. Stannard v. Reid & Co., 114 App. 24 Civ. Pro. 398. Div. 135, 99 N. Y. Supp. 567. 61. Matter of French, 181 App. Div. 49. Cunningham v. Glauber, 133 719, 1&8 N. Y. Supp: 988. App. Div. 10, 117 N. Y. Supp. 866. 52. Matter of Coleman, 174 N. Y. 50. Matter of Yuengling Breviring 373. Co., 24 App. Div. 223, 49 N. Y. Supp. 53. Goddard v. American P. & C. 12. Co., 67 Misc. 279, 122 N. Y. Supp. 360. See also Matter of N. Y. Oxygen Co., 54. Matter of Home Provident 67 St. Rep. 549, 33 N. Y. Supp. 725, Safety Fund Assoc, 129 N. Y. 2»8. CORPORATIONS. 833 bution are those whose claims arose after the existence of cause for dissolution, as well as those having earlier claims.^ One who takes an assignment, after dissolution of a cor- poration, of a claim upon which its contingent liability became fixed before that event, has the same right as his as- signor and is a creditor of the corporation.^ Where the by-laws of a foreign benevolent society provided that each branch should retain a certain percentage of assessments to form a reserve fund to be the property and subject to the con- trol of the supreme body, the reserve fund of each local branch, upon the society becoming insolvent where there are no creditors in this State except members, should be repaid to the members thereof in proportion to their payments con- tributed to the fund.^^ A judgment recovered in another State, against a corpora- tion organized under the laws of this State after such corpora- tion has been dissolved in an action to which the receiver was not a party, is not enforceable in our courts against the re- ceiver, although it is valid under the laws of the State in which it was recovered.^^ A judgment not entered until long after the appointment of the receiver, and where no real estate came into his possession, is not entitled to a prefer- ence.^^ Unless a judgment creditor has acquired a statutory lien upon its assets prior to the appointment of the receiver, he is not entitled to a preference over other creditors, and his rights as creditor must be worked out through the receiver- ship.^" Taxes assessed upon the personal property of an in- solvent corporation, which became due subsequent to the levy of an attachment and execution thereon at the suit of credi- tors, are not a prior lien upon the assets in the hands of a re- ceiver for distribution under the direction of the court, which arose from the sale of the property subject to the levy.^^ A party loaning money to an embarrassed corporation, subse- 55. Matter of the Application of the 148 N. Y. 34; afif'g, 87 Hun, 384, 34 Com'rs of the State Reservation, 122 N. Y. Supp. 323, 68 St. Rep. 474. N Y 177. ^'" Atty.-Cren. v. Guardian Mut. L. 56. Moosbrugger v. Walsh, 89 Hun, Ins. Co., 5 N. Y. Supp. 84. 564 35 N. Y. Supp. 550, 70 St. Rep. 60. Mosher v. Supreme Sitting of J J 7' ' Iron Hall, 88 Hun, 395, 68 St. Rep. 755, 57. Lindquist v. Glines, 3 Misc. 214, 34 N. Y. Supp. 816. 23 N. Y. Supp. 272. 61. Wise v. Wise Co., 153 N. Y. 507. 58. Rodgers v. Adriatic Fire Ins. Co., 53 834 COEBORATIONS. quently adjudged to be insolvent, aad taking security therefor, is not in a position which entitles him in, equity to be adjudged to have a lien upon mortgaged property of the corporation or its proceeds in preference to bondholders of mortgages exist- ing when the loan was made; and it is immaterial for what purpose the loan was made or how the money received there- on was applied, if the bondholders thereon were not parties to the transaction.^^ Where there are sufficient assets in the hands of the receivers of a corporation, the claim of a credi- tor must be paid, although the time to prove debts against the estate has expired.^^ Where a creditor proves certain claims against an insolvent corporation, it cannot also prove coupon notes which it had agreed should be held as security for any indebtedness of the corporation against .the other parties to such notes. The creditor of an insolvent corporation has the right to prove and have dividends of his entire debt irrespec- tive of the collateral security held by him.^* Where a corporation had assumed payment of a mortgage on property it took, and, before anything had been collected, on the mortgage, went into the hands of a receiver, and there- after the mortgage was foreclosed and a judgment for a de- ficiency taken, it was held that the holder of the mortgage was entitled to his proportional dividend on the whole mort- gage debt, so long as it did not exceed the amount of the de- ficiency.^^ 4. Vacating order. The Supreme Court, in its inherent power to set aside and vacate its orders and judgments, may set aside an order for the voluntary dissolution of a corporation where substantial justice will be subserved. The court is not precluded from vacating such order on the theory that the corporation became forever legally dead on the entry of the order. It is not necessary that the order in voluntary dissolution proceedings be tainted with fraud or irregularity in order to 62. Farmers' Loan & Trust Co. v. 64. People v. Remington & Sons, 54 Bankers & Merchants' Telegraph Co., Hun, 480, 28 St. Rep. 427, 8 N. Y. 148 N. Y. 315. Supp. 31; aff'd, 121 N. Y. 328. 63. People v. Remington & Sons, 59 65. Matter of Simpson, 36 App. Div. Hun, 282, 36 St. Rep. 282, 12 N. Y. 562, 55 N. Y. Supp. 697; affirmed, Supp. 824; affirmed, on opinion below, without opinion, 158 N. Y. 720. 126 N. Y. 654. , qORPQBA.TIONS. . 835 authorize the court to set it aside ; it is sufficient that it was improvidently granted. An order to show cause why an order for the voluntary dissolution of a corporation should not be vacated need not be served on all the stockholders and creditors of the corpora- tion, where the Attorney-General and the receiver of the cor- poration and the only stockholder who appeared in the orig- inal dissolution proceedings are before the court and the di- rectors, other than the moving party, have ceased to have any interest as stockholders and the creditors are duly protected by a bond given by the moving party. Stockholders who did not appear in the dissolution proceed- ings are not necessarily parties to a motion to vacate an order of dissolution.^^ 5. Form of order for dissolution and appointing permanent receivers. ;(Title.) (Special Term caption.) The petitioners |(naming them) having upon their duly verified petition and schedules procured on the 7th day of January, 1911, an order from this court, dated that day, appointing Warren G. Strong and Alvin W. .Strong, receivers of said corporation, and further or- dering and directing that all parties interested in the Knoxboro Can- ning Company, to show cause at a Special Term of this court, on the 18th day of February, 1911, at ten o'clock in the forenoon of that day, why said corporation should not be dissolved, and said motion hav- ing come on to be heard at this term of court, held this day by the undersigned, and the said petitioners having appeared herein by Louis M. Martin, their attorney, and due notice of this application having been given to the AttorneyrGeneral of the State of New York, and due proof of the service of this order having been made and filed herewith on all the stockholders and creditors and persons interested therein, and due proof and proper publication of said order having been made and filed, and the court having heard the evidence and allegations and the proofs of the parties interested in said corpora- tion, and having made, its decision in writing, according to law, and . it appearing to the court, and the court having decided, that the said Knoxboro Canning Company is insolvent, and that it will be bene- ficial to the interests of the stockholders, creditors and all persons in- terested in said corporation that the same be dissolved, and not in- jurious to the public interest, for the follpwing reasons, -to wit : That said corporation commenced business on or about the year 1900, and that during said year it assumed liabilities and notes of seventeen thousand dollars ($17,000), which notes have never been paid, except the interest yearly, and that at no time has said corpora- tion shown a sufficient surplus, or had a sufficient surplus to pay any 66. Matter of Automatic Chain Co., 134 App. Div. 863, 119 N. Y. Supp. 379. 836 CORPOKATIONS. dividend on its stock, but on the other hand has shown a continual deficit, and that at the present time the outstanding notes against said corporation aggregate to the sum of twenty-five thousand four hun- dred and seven dollars and fifty cents ($25,407.50), and that its total liabilities is the sum of twenty-six thousand three hundred and nine dollars and three cents ($26,309.03), and that its assets aggregate the sum of twenty thousand one hundred and eighty-eight dollars and seventy-two cents ($20,188.72), leaving a deficit of at least six thou- sand one hundred and twenty-one dollars and twenty-one cents ($6,- 121.21), with the portion of the assets above referred to, not available by reason of a dispute in the amount due said company and in the quality of the goods sold. NoAV, therefore, upon the petition herein dated December 24, 1910, the order to show cause herein, dated January 7, 1911, the further petition for the enlargement of the powers of the temporary receivers, dated January 16, 1911, the order granting and enlarging said powers, dated January 21, 1911, with proof of the proper notice of all pro- ceedings upon the Attorney-General of the State of New York. On motion of Louis. M. Martin, attorney for the petitioners, it is hereby Ordered, that the Knoxboro Canning Company, of Knoxboro, Oneida county, N. Y., be and the same is hereby dissolved, and that Warren G. Strong and Alvin W. Strong, heretofore appointed temporary re- ceivers of the said corporation, be and they are hereby appointed per- manent receivers of said corporation and of the property thereof, and their acts as such temporary receivers be and the same hereby is con- firmed and ratified both as temporary receivers and with the enlarged powers as permanent receivers given by the order of this court, of January 23, 1911, and entered in the clerk's office of the county of Oneida on said day and that said permanent receivers have all the powers and liabilities of such receivers; it is further Ordered, that "Warren G. Strong and Alvin W. Strong, as such re- ceivers, have full power and authority to lease or sell and dispose of all the property and assets of said corporation, real and personal, what- soever and wheresoever, at public and private sale, and to such person or persons as they may deem best and at such times and places as they may deem proper, for the best interest of the stockholders and cred- itors of said corporation, subject to the approval of this court as to the sale of said real estate ; that before executing any title in and to the real estate, the said receivers report to this court the terms of the sale, the name or names of the purchaser or purchasers thereof for ap- proval ; that the National Bank of Vernon, N. Y., be and the same is hereby designated as the place of deposit of all funds ; it is further Ordered, that the said receivers shall give notice of their appoint- ment, which notice shall contain the matters required by law in notices of trustees, and insolvent debtors, and in addition thereto, shall re- quire all persons holding any open or subsisting contracts of such cor- poration, present the same in writing and in detail to such receivers, at a time and place in such notice specified ; it is further Ordered, that all parties interested in the Knoxboro Canning Com- COBPOEATIOFS. 837 pany, be and they are hereby enjoined from in any way using, eon- trolling, interfering with or incumbering the said company 's property, and from collecting any debts due said company, or paying out any money belonging to said company, until the further order of this court ; it is further Ordered, that the petitioners recover their costs and disbursements of this proceeding, and that the amount thereof be paid by the said receivers out of the moneys that may come into their hands, the same to be taxed by the clerk. Enter : K. Costs and allowances. The General Corporation Law relating to voluntary disso- lution of corporations contains no provision with respect to the costs and expenses of the proceeding ; but, as the proceed- ing is a special proceeding the provisions of the Civil Practice Act relating to costs in such proceedings govern.^^ The court necessarily has implied authority to require that the expenses of the dissolution proceeding be paid out of the corporate property.®^ A stockholder opposing a voluntary dissolution proceeding should not he punished by having costs and expenses taxed against him personally, because he merely appeared therein, and by interposing an answer obstructed and delayed the pro- ceedings to a certain extent.®' The court has no power to grant an extra allowance to the petitioners.™ L. Ap^peals. A proceeding for the voluntary dissolution of a corporation under the statute is a special proceeding; and a final order made therein is reviewable as of right by the Court of Ap- peal s.'"^ But the propriety of refusing to set aside an order dissolv- ing a corporation, entered on default, cannot be questioned in the Court of Appeals.'^ The question as to whether the granting of an injunction in a voluntary dissolution proceeding restraining a foreclosure proceeding commenced by the opposing stockholder pending a 67. Matter of French, 181 App. Div. M. R. Co., 133 App. Div. 297, 117 N. Y. 719, 168 N. Y. Supp. 988. Supp. 695. G8. Matter of French, 181 App. Div. 71. Matter of Hulbert Bros. & Co., 719, 168 N. y. Supp. 988. 160 N. Y. 9. 69. Matter of French, 181 App. Div. 72. Matter of Peekamose Fishing 719, 168 N. Y. Supp. 988. Cluh, 151 N. Y. 511. 70. Matter of Tarrytown, W. P. & 838 CORPOBATIONS. reference was proper, is not academic, where said stock- holder's rights to costs of the appeal is involvedJ^ Where an appeal by the petitioner from a final order in a proceeding for the voluntary dissolution of a corporation is dismissed for his failure to print his papers, he has thereby forfeited his right to review the determination as to the equities between the stockholders. Such a review may not be secured indirectly through a motion by the Attorney-General to modify the order, where he is interested only in the recov- ery of the tax on dividends declared and in protecting the creditors^* ARTICLE X. APPOINTMENT OF RECEIVER. A. Actions in which receiver may be appointed. 1. Generally. a. General Corporation Law, § 306. Appointment of receivers of prop- erty of corporations. A receiver of the property of a corporation can be appointed only by the court, and in one of the following cases: 1. An action, brought as prescribed in articles fifth, sixth or seventh of this chapter. 3. An action brought for the foreclosure of a mortgage upon the property, of which the receiver is appointed, where the mortgage debt, or the interest thereupon, has remained unpaid, at least thirty days after it was payable, and after payment thereof Was duly demanded of the proper officer of the corporation and where either the income of the property is specifically mort- gaged, or the property itself is probably insufficient to pay the mortgage debt. 3. An action brought by the Attorney-General, or by a stockholder, to pre- serve the assets of a corporation, having no officer empowered to hold the same. 4. A special proceeding for the voluntary dissolution of a corporation. 5. Upon the application of the regents of the university, in aid of the liquida- tion of a corporation whose dissolution they contemplate or have decreed; or upon the application of the trustees of such a corporation, with notice to the regents. Where the receiver is appointed in an action, otherwise than by or pursuant to a final judgment, notice of the application for his appointment must be given to the proper officer of the corporation. (See B., 0. & G. Consol. L., 2nd Ed., p. 3316.) 73. Matter of French, 181 App. DiVj Co., 182 App. Div. 249, 167 N. Y. 71«, 168 N. Y. Supp. 988. Supp. 1132. 74. Matter of Volk House Wrecking CORPORATIOITS. ' 839 b. Civil Practice Act, § 974. Receivers, generally. In addition to the cases, wliere the appointment of a receiver is specially provided for by law, a receiver of property; which is the subject of an action, in the supreme court or a county court, may be appointed by the court, in either of the following cases : , . , . i 1. Before final judgment, on the application of a party who establishes an apparent right to, or interest in, the property, where it is in the possession of an adverse party, and there is ' danger that it will be removed beyohd the jurisdiction of the court, oi: lost, niaterially injured, or destroyed. a. By or after the final judgment, to carry the judgment into effect, or to dispose of the property, accoxding to its directions. 3. After final judgment, to preserve the property, during the pendency of an appeal. The word, "property,'' as used in this section, includes the rents, profits, or other income, and the increase, of real or personal property. 0. Receiver of corporation distinguished from receiver of its property. It is to be noted that receivers in some cases are classed as receivers of the corporation, while others are receivers of some or all of its property.^ Eeceiyers under the section of the General Corporation Law are generally classed as of the corporation, except under subdivision 2.''^ Eeceivers ap- pointed under the above provision of the Civil Practice Act have authority only to the extent of the particular property in litigation. Eeceivers of the property are appointed, as a general rule, under the general equitable ..jurisdiction, irre- spective of the provisions of the General Corporation Law.''^ Independently of the statute, a court of equity has inherent jurisdiction to appoint a receiver to carry into execution the judgment of the court, and the statutes in question do not abridge this authority." Section .306 does not interfere with the power of the Supreme Court to appoint a receiver of the property, as distinguished from a receiver of the corporation 75. See, infra, X-A-l-e. Poreelosure under an agreement of the parties pro- of mortgage. viding for its incorporation, the court 78. Holland Trust Co. v. Consoli- is authorized in the execution of such dated Gas & Elec. Co., 85 Hun, 454, 33 judgment to make an order appointing N. Y. Supp. 830. a receiver of the property of the corpo- 77.. King V. Barnes, 51 Hun, ,550, 4 ration and appointing a referee under N. Y. Supp. 247; aff'd ;yithout opinion, whose direction a corporate election of 113 N. Y. 655. directors shall be held. King v. Barnes, Receiver appointed. — ^Where a judg- 51 Hun, 550, 23 St. Eep. 47, 4 N. Y. ment has been rendered sustaining the Supp. 247; aff'd, 113 N. Y. 476, 23 St. right of the plaintiff to a share of the Rep. 263. stock and franchises of a corporation 840 CORPORATIONS. itselfJ^ On the other hand, a court of equity is said to have no inherent power to appoint a receiver of a corporation, but that the authority for such an act must be found in the statute.™ The jurisdiction of chancery did not extend to the seques- tration of property of a corporation by means of a receiver, or to the winding up of its aif airs, or to control or restrain the usurpation of franchises by corporate bodies, or by persons claiming, without right, to exercise corporate powers. Ee- ceivers in such cases act under statutory authority which pre- scribes their authority and duties.^** And statutes granting such authority are strictly construed.^^ The general equity powers of the court will not be exercised where no waste or mismanagement are shown.*^ d. Purpose of receivership. The jurisdiction of the court to appoint receivers of prop- erty has for its primary object the care and custody of the property which is the subject of the receivership pending the determination of the questions involved in the litigation, and to enable the court by placing the property under the control of its officer to preserve it to answer the final decree which may be made in the action.*^ 78. Popper v. Supreme Counsel, 61 tral E. E. of N. J., 43 Hun, 546. App. Div. 405, 70 N. Y. Supp. 637. Supplementary proceedings. — Al- 79. Decker v. Gardiner, 124 N. T. though since the enactment of chapter 334; Brewster v. Brewster Co., 145 S78 of the Laws of 1908, supplementary App. Div. 812, 130 N. Y. Supp. 654; proceedings may be maintained against modif'd, 204 N. Y. 687. domestic corporations by judgment 80. Matter of Binghamton General creditors, such right does not authorize Electric Co., 143 N. Y. 261 ; Lehigh the appointment of a receiver. Boucker Coal Co. V. Central E. E. of N. J., 43 Contracting Co. v. Callahan Contracting Hun, 546; Attorney-General v. Utica Co., 218 N. Y. 321; afC'g, 172 App. Ins. Co., 2 Johns. Ch. 371; Attorney- Div. 609, 156 N. Y. Supp. 1116. General v. Bank of Niagara, Hopk. 82. Brewster v. Brewster, 145 App. 354; Belmont v. Erie Railroad, 52 Div. 812, 130 N. Y. Supp. 654; modi- Barb. 637; Waterbury v. Merchants' fied, 204 N. Y. 687. Union Exe. Co., 50 Barb. 157; Bangs 83. Townsend v. Oneonta, C. & R. S. V. Mcintosh, 23 Barb. 591. E. Co., 88 App. Div. 208, 84 N. Y. 81. In re Pyrolusite Manganese Co., Supp. 427; Vilas v. Page, 11 St. Rep. 29 Hun, 429; Lehigh Coal Co. v. Cen- 416. CORPOEATIONS. 841 e. Foreclosure of mortgage. Under subdivision 2 of section 306 of tlie General Corpora- tion Law, a receiver may, in certain cases, be appointed in an action against a corporation for tbe foreclosure of a mort- gage. The receiver appointed in such a case is not a receiver of the corporation, but only of the mortgaged property.^* The power to appoint a receiver of rents and profits was inherent in the Court of Chancery in such actions f^ and is not affected by the circumstance that the mortgagor is a cor- poration instead of an individual.*® Where property has ceased to be an adequate security for the amount unpaid on mortgage, and the person liable for the debt is insolvent, a proper case is presented for the appointment of a receiver of the rents and profits of the property.*'^ A receiver of the property in question may be appointed on the foreclosure of a first mortgage, although one has been appointed in an action to foreclose the junior mortgage on the same property.** f. Preservation of assets. To " hold " the assets as that word used in subdivision 3 of section 306 of the General Corporation Law, relating to the appointment of receivers of property of corporations, means to preserve the assets.** A receiver of the property appointed by a court in the exer- cise of its equitable jurisdiction as a so-called common-law re- ceiver pendente lite of the property of a foreign corporation to prevent the unlawful disposition and waste of its property, is not a receiver appointed under the provisions of subdi- vision 3 of section 306, where the action in which the receiver is appointed is not brought to preserve the assets of the cor- poration having no officers empowered to hold its property 84. Decker v. Gardiner, 124 N. T. v. Arnold, 5 Paige, 38, that this rule is 334; Holland Trust Co. v. Consoli- limited to a ease where the whole dated Gas & Eleo. Co., 85 Hnn, 454, 30 amount of the mortgage is due. N. Y. Supp. 830. ' 88. Holland Trust Co. v. Consoli- 85. HoUenbeck v. Donnell, 94 N. Y. dated Gas & Elee. Co., 85 Hun, 454, 33 342. N. Y. Supp. 830. And see, chapter, 86. United States Trust Co. v. N. Y., Foreclosure by Action. W. S. & B. B. E. Co., 101 N. Y. 478. 89. Ehret v. Ringler & Co., 70 Misc. 87. Burlingame v. Parce, 12 Hun, 627, 632, 129 N. Y. Supp. 546 ; rev'd, on 144; HoUenbeck v. Donnell, 94 N. Y. other grounds, 144 App. Div. 480, 129 342. It is held in Quincy v. Cheeseman, N. Y. Supp. 551; appeal dism'd, 204 4 Sandf . Ch. 465 ; Bank of Ogdensburg N. Y. 638. 842 CORPORATIONS. and where it is shown that an injun(?tioii §in4 an accpunting are sought against them. This subdivision does not interfere with the inherent power of tiie Supreme Court to appoint a receiver of the property of a corporation as distinguished from a receiver of the corporation itself.^" A receiver of a corporation should not be appointed on the ground that there are no officers of the corporation entitled to hold its assets merely because three of five directors have been ousted by order of the court, if the two remaining are prima facie qualified to act in that they are apparently duly elected and one of them, the vice-president, is given by the by- laws a'll the powers of the president who was ousted.^^ The attempted resignation of the officers of an insolvent corpora- tion for the express purpose of procuring the appointment of a receiver under such subdivision is not effective, because the statute was not designed to permit the officers to abandon their posts of duty and abdicate their official functions for the express purpose of shifting their burdens to the shoulders of the court. The proper practice for the officers is the insti- tution of proceedings for the voluntary dissolution of the cor- poration.'^ Where an action for the dissolution of a foreign corporation is brought in the State of its domicile, in which a temporary receiver is appointed and an injunction is granted restraining the officers of the corporation from conducting its business or from collecting, receiving or disposing of its assets, a stock- holder of the corporation, who is also its secretary and treas- urer, may, although a non-resident, maintain an action in this State to preserve and sequester the corporate assets, almost all of which are in this State, by virtue of subdivision 3.^^ 90. Matter of Howell v. German 80 N. Y. Supp. 338. See also, York- Theatre, 64 Misc. 110, 117 N. Y. Supp. villa Bank v. Zeltner Brewing Co., 80 1124. App. Div. 578, 80 N. Y. Supp. 839; 91. Ehret v. Eingler Co., 144 App. Zeltner v. Zeltner Brewing Co., 85 App. Div. 480, 129 N. Y. Supp. 551; rev'g, 70 Div. 887, 83 N. Y. Supp. 366. Misc. 627, 129 N. Y. Supp. 546; appeal 93. MacNabb v. Porter Air-Lighter dism'd, 204 N. Y. 638. Co., 44 App. Div. 102, 60 N. Y. Supp. 92. Zeltner v. Zeltner Brewing Co., 694. 174 N. Y. 247; afif'g, 79 App. Div. 136, CORPORATIONS. , 843 2. Sequestration or dissolution. a. General Corporation Law, § 104. Temporary receiver. In such an action, the court may also, at any stage thereof, appoint one or more receivers of the property, of the corporation. A receiver, so appointed, before final judgment is a temporary receiver, until final judgment is entered. A temporary receiver has power to collect and receive the debts, demands, and other property of the corporation; to preserve the property, and the proceeds of the debts and demands collected; to sell or otherwise dispose of the property as directed by the court; to collect, receive and preserve the proceeds thereof; and to maintain any action or special proceeding, for either of those purposes. He must qualify as prescribed by law for the qualification of a permanent receiver. Unless additional powers are specially conferred upon him, as pre- scribed in the next section, a temporary receiver has only the powers specified in this section, and those which are incidental to the exercise thereof.94 (See B., C. & G. Consol. L., 2nd Ed., p. 3139.) b. General Corporation Law, § 105. Additional powers and duties of temporary receiver. A temporary receiver, appointed as prescribed in the last section, is, in all respects, subject to the control of the court. In addition to the powers con- ferred upon him, by the provisions of the last section, the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority, and subject him to the duties and liabilities, of a permanent receiver, or so much thereof, as it thinks proper; except that he shall not make any distribution among the creditors or stockholders, before final judgment, unless he is specially directed so to do by the court. (See B., C. & G. Consol. L., 3nd Ed., p. 3142.) c. General Corporation Law, § 106. Permanent receiver. A receiver appointed by or pursuant to a final judgment in the action, or a temporary receiver who is continued by the final judgment, is a permanent receiver, and has all the powers and authority conferred, and is subject to all the duties and liabilities imposed upon a receiver in article eleven of this chapter. (See B., C. & G. Consol. L., 3nd Ed., p,_3143.) d. Application of statutory provisions. Although a receiver of the property of a corporation has been appointed, a judgment creditor may procure the appoint- ment of another receiver in sequestration proceedings, pro- vided the authority of the two does not confliet.^^ A receiver 94. This section refers to an action of their property, under article 6 of the General Corpo- 95. Thau v. The Bankers & Mer- ration Law relating to the dissolution chants' Telegraph Co., 16 St. Rep. 581, of corporations and the sequestration 2 N. Y. Supp. 11. 844 CORPORATIONS. in sequestration proceedings lias the general authority out- lined in section 104 of the General Corporation Law.'^ Section 104 does not justify the appointment of a receiver on the allegations of the complaint alone, before the ex- piration of the time for the defendant to answer. The ap- pointment before final judgment is not authorized, except where it satisfactorily appears that it is necessary for the protection of plaintiff's rights.^^ If a corporation voluntarily appears in an action by the Attorney- General for its dissolu- tion, the court has jurisdiction to appoint a receiver.^* Where the plaintiffs do not show that they are entitled to have a dis- solution of the corporation, a receiver will not be appointed.^^ Where a corporation transfers its property and assets to a new corporation, upon the sole consideration of shares of stock in the new company, a receiver may be appointed in an action brought by a creditor on his judgment.-"^ Where a judg- ment has been recovered against a corporation and an execu- tion has been levied, a trustee of its bonds being insane, a re- ceiver may be appointed at the suit of the bondholder.^ In case of default on the part of a railroad company to ap- ply interest, it is not material that its affairs are properly managed, and the bondholders are entitled to a receiver.^ A court of equity will enforce a provision in a mortgage for the appointment of a receiver in case of default.* When a judg- ment creditor applied for appointment of a receiver of a cor- poration which set up that the judgment was obtained by fraud and collusion, and time was given to enable the defend- ant to move to open the judgment, and it failed to do so, it was held that the court was authorized to infer that the de- fense was without merit.^ 96. Bien v. Bixby, 18 Misc. 415, 41 2. Ettlinger v. Persian Rug and N. Y. Supp. 433. • Carpet Co., 66 Hun, 94, 49 St. Rep. 97. Kieley v. Baron & Cook Heating 408, 30 N. Y. Supp. 773; aff'd, 142i & Power Co., 87 App. Div. 317, 84 N. N. Y. 189. Y. Supp. 306. 3. Van Benthuysen v. Central N. E. 98. Attorney-General v. The Guar- & W. R. R. Co., 45 St. Rep. 16, 17 N. dian Mutual Life Ins. Co., 77 N. Y. Y. Supp. 709. 373. 4. Keogh Mfg. Co. v. Whiston, 36 ' 99. Denike v. N, Y. & Rosendale Abb. N. C. 358, 14 N. Y. Supp. 344. Lime, etc., Co., 80 N. Y. 599. 5. Lodger v. N. Y., TJtica and O. R. 1. Barclay v. Quicksilver Mining Co., R. Co., 4 Hun, 322. r> Lans. 35. CORPORATIONS. 845 3. Annulment of corporation. General Corporation Law, § 134. In- junction and receiver in final judgment. Where any of the matters, specified in section 130, or section 131 of this article, are established in an action, brought as prescribed in either of those sections, the court may render final judgment that the corporation, and each officer thereof, be perpetually enjoined from exercising any of its corporate rights, privileges and franchises; and that it be dissolved. The judgment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the property of the corporation, among its creditors and stockholders, as where a corporation is dissolved upon its voluntary ap- plication, as prescribed in article nine of this chapter.6 4. Supervision of corporation or officers. Section 306 of the General Corporation Law relates to all the actions provided for by section 90, and justifies the ap- pointment of a receiver in such actions.'' The circumstances 6. Consolidators' note. — Section 134 of the General Corporation Law which is in the language of section 1801 of the Code of Civil Procedure does not seem to confer upon the receiver ap- pointed under the judgment in an ac- tion to annul a corporation the powers, duties and liabilities of receivers gen- erally under the Revised Statutes and subsequent enactments as now found in article 11 of this chapter. Section 134 simply states that the judgment must provide for the appointment of a re- ceiver, etc., as where a corporation is dissolved upon its voluntary applica- tion. The intention probably was to preserve the practice of the earlier statutes. Revised Statutes, part 3, chapter 9, title 2, article 1, section 27, provided that whenever a judgment should be rendered for the vacating and annulling any act of incorporation the Court of Chancery should have the same powers to appoint a receiver, etc., as were given in the proceedings for the voluntary dissolution of a corpo- ration. This section was carried into the old Code of Procedure, section 444, of which provided that the court should have the same powers to appoint a re- ceiver of the property of a corporation whose charter was annulled, and to take an account and to make distribu- tion thereof among its creditors as were given in the proceedings for the voluntary dissolution of a corporation under the Revised Statutes. Whether or not these powers, duties and lia- bilities are conferred upon the re- ceivers in actions to annul a corpora- tion the court in any event has the authority to confer them in a proper case. A suit in a Federal Court against an insolvent corporation and appointment of receiver therein does not necessarily prevent State from revoking charter and appointing receiver of property in its jurisdiction. People v. N. Y. City Railway Co., 57 Misc. 114, 107 N. Y. Supp. 247. 7. Williams v. United Wireless Teleg. Co., 131 N. Y. Supp. 41 ; Goss v. Warp Twisting In Machine Co., 133 App. Biv. 122, 117 N. Y. Supp. 228. Property in name of officer. — ^Al- though certain property purchased with funds of the corporation stands in the names of its directors, a receiver pendent lite will not be appointed where the defendants claim no title or interest in the prijperty, and state that 846 CORPORATIONS. may be such as to justify the appointment of a receiver, al- ■ though no demand is made for the removal of the directors or the appointment of others.* The power to appoint a receiver carries with it, by necessary imphcation, the right to enjoin the officers and directors from interfering with the property, or doing any acts which shall in any manner interfere with the receiver.^ Mere misconduct on the part of the officers and di- rectors will not justify the appointment of a receiver, unless such action is necessary to preserve the property or the rights of creditors or stockholders.^" Where the corporation is a go- ing, solvent concern, a receiver will not be appointed, unless a very clear ease is made out.-'^ they hold it in trust for the benefit of the corporation and stand in readiness to turn it over. Fenn v. Ostrander, Inc., 133 App. Div. 311, 116 N. Y. Supp. 1083. Corpotation dissolved. — Even though the directors of a corporation after dis- solution have, illegally distributed its assets without providing for a judg- ment on which the corporation was liable, a receiver pendente lite will not be appointed in a subsequent action by the judgment creditor against the corporation and its directors. Tapley Co. V. Keller, 133 App. Div. 54, 117 N. Y. Supp. 817. Representative action. — The court will not appoint a receiver of a corpo- ration in a representative action brought by a stockholder against di- Tectors alleged to have induced . the plaintiff to purchase stock by fraud, and for unlawfully issuing stock and declaring ■ dividends, where it ap- pears that no further waste is threatened in that the .stock-holders have appointed a committee, not in- cluding the defendants, to preserve the assets of the corporation and that the co-directors of the one charged with unlawful acts have removed him from ofB.ce, compelled him to make partial restoration and undertook criminal pro- ceedings aga;inst him. Sedg^wick v. Se- ward Development Co., 144 App. Div. 455, 139 N. Y. Supp. 309. 8. Jacobus V. Diamond Soda Water Mfg. Co., 94 App. Div. 366, 88 N. Y. Supp. 303. Resignation of directors. — ^A re- ceiver appointed in an action against a corporation and certain of its directors for waste and to prevent alienation of its property should not be continued after judgment; nor should creditors restrained from enforcing their rights, where it appears that the offending di- rectors have resigned and others have been elected in their place. Halpin v. Mutual Brewing Co., 91 Hun, 330, 36 N. Y. Supp. 151; appeal dism'd, 148 N. Y. 744. 9. Goss V. Warp Twisting In Ma- chine Co., 133 App. Div. 133, 117 N. Y. Supp. 338. 10. Fenn v. Ostrander, 133 App. Div. 311, 116 N. Y. Supp. 1083. 11. Fenn v. Ostrander, Inc., 133 App. Div. 311, 116 N. Y. Supp. 1083. A temporary receiver of a defendant corporation should not be appointed in an action by the representative of a deceased stockholder against the di- rectors and officers to compel them to account for and pay over property al- leged to have been wasted when neither the complaint nor the moving affidavit shows that the corporation is insolvent CORPOKATION^. 847 If it is paying dividfends', bioth. upon' its preferred and com- mon stock, a receiver will not be appointed on the application of a minority stbckbolder who claims that the president of the corporation is violating a contract made by it.^ A receiver should not be appointed in an action by a minor- ity stockholder asking that the directors be enjoined and re- strained from disposing of any of the assets of the corpora-' tion, except upon clear and convincing proof that the directors are acting fraudulently and, contrary to the best interests of the corporation.;^^ , Jl receiver may, properly be appointed where the directors and other officers are unfit to conduct the affairs of the corporation.^* 5. Voluntary dissolution; ' a. General Corporation Law, §' 182. Temporary receiver. If It shall be ipade ,to appear tp the satisfaction of the court that, the cor' poration is insolvent, the , co^irt may at any stage of the proceedings before the final order, on motion of , the petitioners on notice to the attorney -general, or on motion of the attorney-general on notice to the corporation, appoint a tem- porary receiver of ^he, , property,, of |.the,,corporat;|onj which receiver shall have all the powers and be subject to all the' duties that are defined as b,elonging to temporary receivers appointed in an action, in section one hundreii and four of this chapter; The cotirt may also', in its disci'fetibn, at any Stage in the pro- ceeding, after the appointment of a temporary receiver,' upon like motion and notice, confer upon such temporary receiver the powers and authority, and subject him to the duties and liabilities of a permanent receiver, or as much thereof as it thinks proper, except- that he shall not make any final distribu- tion among the creditors and stockholders, before final order in the proceedings, unless he is specially, directed so ito do by (the court. (See B., C. & G. Consol.- L., 2nd Ed., p. 3168.)15 ,,. - or in danger of becoming so, or that 14. Williams v. United Wireless Tele- there is danger that the corporate prop- graph Co.; 131 N. Y. Supp. 41. erty will be removed from the jurisdic- 15. Consolidators? note to § 182. — tion, or materially injured or destroyed.' This section provides for ' the powers A receiver will not be appointed merely and duties of a temporary receiver and because the representative of the makes applicable to a temporary re- former owner of one-half of the capital ceiver appointed in proceedings for the stock is dissatisfied with the manage- voluntary dissolution of a corporation ment of the corporation. Hastings v. the powers and duties of a temporary Tousey 121 App. Div. 815, 106 K. T. receiver appointed in an , action for Supp 639. sequestration and for the dissolution of 12. Metzger v. Knox, 77 Misc. 371, a corporation. This was accomplished 136 N. Y. Supp. 681; afl'd, 153 App. by the reference to section 1788 of the Div. 911 137 N. Y. Supp. 1129: Code of Civil Procedure, which refer- 13. Nobis V. Kobis> 193 App. Div. ence has been changed to section 105 218 183 N. Y. Supp. 726. of this chapter where section 1788 of 848 CORPORATIONS, b. General Corporation law, § 191. Permanent receiver. Upon an application for a final order, if it appear to the court in a case specified in section one hundred and seventy of this chapter that the corpora- tion is insolvent, or, in a case specified either in that section, or in sections one hundred and seventy-one and one hundred and seventy-two of this chapter, that for any reason a dissolution of the corporation will be beneficial to the interests of the stockholders and not injurious to the public interests, the court rtiust make a final order dissolving the corporation, and appointing one or more receivers of its property. But in the case of a solvent corporation, the court may, if there is no objection by creditors, dispense with a receiver and provide in the final order for the distribution of the assets. The order shall be entered in the office of the clerk of the county in which the principal business oflBce, or the principal place of business of the corporation is located, and a certified copy thereof, if a banking corporation, shall be filed in the ofSce of the superintendent of banks; if an insurance corporation, in the ofiice of the superintendent of insurance; and if a business, transportation, railroad or membership corporation, in the office of the secretary of state. Upon the entry of the order and the filing of a certified copy thereof as herein provided, the corporation is dissolved. A receiver appointed under this section shall have all the powers, duties and liabilities of receivers under article eleven of this chapter. (See B., C. & G. Consol. L., 2nd Ed., p. 3172.)16 c. General Corporation Law, § 192. Appointment of director, trustee, or other officer or stockholder as receiver. The court may, in its discretion, appoint a director, trustee, or other officer, or a stockholder of a corporation, a receiver of its property. (See B., C. & G. Consol. L., 2nd Ed., p. 3174. the Code has been incorporated in this tion there will be found no statement chapter. The powers and duties of a of the powers, duties, and liabilities of temporary receiver are not defined to receivers who may be appointed in such any large extent by statute, but are proceedings. There is not even a mainly matters of judicial discretion. reference to the proceedings conferring The powers, duties and liabilities of re- upon the receivers appointed in the ceivers consolidated in article 11 of this proceedings the powers, duties and lia- chapter apply only to permanent re- bilities of receivers. The omission, ceivers. For a note on the subject see however, is supplied by the Laws of 19 Abb. N. C. 359. 1880 (chap. 245, | 1, subd. 3, p. 369), A temporary receiver should not be which provides as follows: "Sections appointed on the voluntary dissolution 66 to 89 (Revised Statutes, part 3, of a corporation without a full hearing chap. 8, tit. 4, art. 3, both inclusive, of persons representing the majority which are hereby made applicable to a interests of stockholders and creditors. receiver appointed as prescribed in sec- Matter of Manoca Temple Assn., 128 tion 2429 of the Code of Civil Pro- App. Div. 796, 113 N. Y. Supp. 172. cedure." These sections of the Re- 16. Consolidators' note to section vised Statutes comprise in themselves 191. In the title in the Code of Civil or by reference the provisions in the Procedure relating to proceedings for Revised Statutes relating to the powers, the voluntary dissolution of a corpora- duties, and liabilities of receivers. The CORPORATIONS. 849 d. General Corporation Law, § 193. Certain sales, transfers and judg- ments void. A sale, assignment, mortgage, conveyance, or other transfer, of any property of a corporation, made after the filing of a petition as prescribed in this article, in payment of, or as security for, an existing or prior debt, or for any other consideration; or a judgment thereafter rendered against the corporation by confession, or upon the acceptance of an offer, is absolutely void, as against the receiver appointed in the special proceeding and as against the creditors of the corporation. (See B., C. & G. Oonsol. L., 2nd Ed., p. 3174.) e. General Corporation Law, § 194. Omission, defect or default of receiver. In a proceeding for the voluntary dissolution of a corporation, the court may, in the furtherance of justice, upon notice to the attorney-general, and the attorney-general not objecting, and upon such further notice to creditors or others interested as the court shall direct, which notice may be made by mail upon all persons and corporations not residing or existing within the state, relieve a receiver from any omission, defect or default, in any proceeding or act required by law to be taken, or done, or in the giving of any notice required by law to be given, and the court may upon like notice, confirm any act of a receiver, and any decision, report, order or judgment made in such proceeding. (See B., C. & G. Consol. L., 2nd. Ed., p. 3175.) B. Corporations subject to receivership. 1. Foreign corporations. Under the application given to section 306 by section 308 of the General Corporation Law, the receiver of a foreign cor- poration may be appointed, where the corporation does busi- ness within the State, or has, within the State, a business agency or a fiscal agency, or an agency for the transfer of its stock." provisions of the Eevised Statutes re- upon the ground that the directors are ferred to have been consolidated in not in a position to act as impartial article 2 of this chapter and have been trustees. Tailing v. Elbs, 120 N. Y. incorporated in this article relating to Supp. 693. proceedings for the voluntary dissolu- 17. Woerishoffer v. North River tion of a corporation of a reference at Cons. Co., 6 Civ. Pro. E. 113. For ap- the end of section 191 as follows: "A pointment of receiver of foreign cor- reeeiver appointed under this section poration, see Murrary v. Vanderbilt. shall have all the powers, duties and 39 Barb. 140; O'Brien v. Chicago, etc. liabilities of receivers under article R. R. Co., 53 Barb. 568; Debener v. eleven of this chapter." Drew, 57 Barb. 438; Redmond v. After the voluntary dissolution of Hoge, 3 Hun, 171; Hamilton v. Acces- a corporation the court may appoint sory Transit Co., 26 Barb. 46. a receiver in a suit in equity for the Equity jurisdiction. — ^It is held in purpose of administering the assets, Murrary v. Vanderbilt, 39 Barb. 140, 54 850 COKPORATIOBrS. The Supreme Court, at tlie instance of a stockholder of a foreign corporation, whose principal place of business is within the State, has jurisdiction to appoint a receiver of its assets, and preserve them for the benefit of its New York creditors.^^ A receiver of the assets located in this State may be appointed for the protection of the lawful claimants there- to.!^ While the courts of this State will, under some circum- stances, appoint a receiver of the property of a foreign cor- poration in this State when necessary for the protection of the stockholders or creditors, such action will not be taken be- cause of general allegations of misconduct on the part of di- rectors or officers of such corporation.^" The courts of this State have no general authority to appoint receivers for for- eign corporations or to enjoin them from exercising the privi- leges granted by the State of their creation.^^ G-enerally, the authority to appoint receivers extends only to the property within this State. 2. Moneyed corporations. Sections 150-161 of the General Corporation Law provide for the dissolution of insolvent moneyed corporations, and the appointment of receivers therefor. But the provisions of the General Corporation Law defin- ing the powers, duties and liabilities of receivers of corpora- tions in general govern and apply to receivers of inoneyed corporations, except in so far as they' are modified by the specific provisions of the article relating to the receivers of moneyed corporations.^^ that a court of equity has power to 433, 19 Sup. Ct. 165. See also, Ameri- appoint a receiver of a foreign corpo- can and British Mfg. Co. v. Hoadley, ration having property in its jurisdic- 97 Misc. 300, 163 N. Y. Supp. 836. tion independent of statutory provi- 19. Mitchell v. Banco de Londres, sions. 193 App. Div. 730, 183 N. Y. Supp. 18. Eeusens v. Manufacturing & 446. Selling Co., 99 App. Div. 314, 90 N. Y. 20. Philips v. Sonora Copper Co., 90 Supp. 1010 ; Horton v. McNally Co., App. Div. 140, 86 N. Y. Supp. 300. 155 App. Div. 333, 140 N. Y. Supp. 21. Acken v. Coughlin, 103 App. Div. 357; Moe v. McNally Co., 138 App. 1, 92 N. Y. Supp. 700. Div. 480, 133 N. Y. Supp. 71 ; Blake v. 22. People v. German Bank, 136 N. McClung, 173 U. S. 339, 357, 43 L. ed. Y. Siipp. 311. CORPORATIONS. 851 C. Practice for appointment of receiver. 1. Where application nxade. Under Eule 178 of the Enles of Civil Practice, an aplication for the appointment of the receiver of a corporation must be made in the judicial district in which the principal place of business of the corporation is situated, except that in certain actions by the Attorney-General the m6tion may be made in the judicial district where the action is triable.^^ The rule is in accord with section 314 of the General Corporation Law.^^ The principal busiiiess office of the cohlpany is at the place speci- fied in its articles and its by-laws and reports, where all its books of transfer, stock books and accounts of receipts and disbursements are kept and the election of directors held.^^ 2. Notice of application. When an application for the appointment of a receiver is made under section 306 of the General Corporation Law, the last paragraph of thfe section niiust be observed, and notice must, therefore, be .given to the proper officer of the corpora- tion, except when the -receiver is appointed by or pursuant to a final judgment. Section 975 of the Civil Practice Act has a requirement somewhat similar.^^ Moreover, under section 312 of the General Corporation, Law, notice is to be given to the Attorney-General of all motions in an action or proceeding for the dissolution of a corporation or the distribution of its assets.^^ Before the enactment of the statute it was held that, 23. Attrill V. Bockaway Improve- time limited for his appearance has ex- ment Co., 35 Hun, 376. pired. But where an order has been 24. Mo'rtgage foreclosure. — Before made directing the service of the sum- an amendment in 1896, the statute was mens upon a defendant by publication held not applicable to an application the court, in its discretion, may appoint for the appointment of a receiver in a a temporary receiver and preserve the mortgage foreclosure. TJnited States property, without notice, or upon no- Trust Co. V. New York, etc., E. Co., 35 tice given by publication or otherwise, Hun, 341; afE'd, 101 N. Y. 478. as may be proper. But where the ae- 25. Olmstead v. Rochester, etc., E. tion is for the foreclosure of a mort- Co., 8 St. Bep. 856. gage, which mortgage provides that a 26. Civil Practice Act, § 975. Ap- receiver may be appointed without no- plication for appointment of receiver.^ tice, notice shall not be required. Notice of an application for the ap- 27. And see, infra, X-E-5, as to no- pointment of a receiver in an action, tice to the attorney-general. before judgment therein, must be given Order nunc pro tunc. — ^Where in an to the adverse party, unless he has action lirought to sequestrate the prop- failed to appear in the action, and the erty of a corporation, a receiver was 852 CORPORATIONS. as a general rule, the appointment would not be made on an ex parte application.^^ Service of motion papers, etc., upon the Attorney- General, in a judgment creditor's suit for sequestration, is jurisdic- tional, and the omission to do so renders the appointment of a receiver therein void.^* An action brought to sequestrate the property of a corporation is within the statute requiring notice to be given the Attorney-General, and where the re- quirements of the statute are not complied with, either in pro- ceedings for the temporary appointment of a receiver, or in the final judgment, both appointments are void. The service of the papers, as required by that section, is essential to the jurisdiction of the court, and a failure to make such service cannot properly be corrected without an entirely new proceed- ing.^" But notice of an ancillary receiver of the property of a foreign corporation, situate in this State, is not required.^^ Where a matter is to be brought before the court, upon a regular notice of eight days, a notice of the motion, with a copy of the proposed order, must be served upon the Attor- ney-General. Where it is to be brought before the court by an order to show cause, a copy of the order to show cause, and appointed on default but no notice was R. Co., 32 Hun, 164. given to the attorney-general, and sub- 31. Woerishhofifer v. North B. C. Co., sequently, on notice to the attorney- 6 Civ. Pro. 113. general, an order was entered appoint- Foreign corporations. — Section 313 ing such a receiver nunc pro tunc, it may be said to apply only to domestic was held, without deciding whether a corporations. MacNabb v. Porter Air- jurisdietional defect could be cured by Lighter Co., 44 App. Div. 102, 60 N. an amendatory order, that the order Y. Supp. 694. Where, in an action had the efEect of making the appoint- brought to prevent funds of a foreign ment valid from its date. Morrison v. corporation from being taken away Menhaden Co., 37 Hun, 520. from the State to the detriment of the 28. Davie v. Ithaca, etc., K. K. Co., resident members, the court has juris- 5 Paige, 521 ; People v. A. & S. R. B. diction of the subject-matter, and the Co., 7 Abb. (N. S.) 365; Palmer v. facts show the necessity for the ap- Clark, 4 Abb. N. C. 35 ; Loder v. N. T., pointment of a temporary receiver, it Utica, etc., E. B. Co., 4 Hun, 23. has jurisdiction to appoint such a re- A general judgment creditor is not ceiver ex parte, and its right to do so entitled to notice of application for the is not dependent upon the court ac- appointment of a receiver of a corpo- quiring jurisdiction over the person of ration. Morrison v. Menhaden Co., 37 the defendant. Gliues v. Supreme Or- Hun, 523. der of Iron Hall, 32 Civ. Pro. B. 437, 29. Whitney v. N. Y. & Atlantic B. 30 N. Y. Supp. 375; aff'd, 50 St. Eep. B. Co., 33 Hun, 164. 281. 30. Whitney v. N. Y. & Atlantic B. CORPOKATIONS. 853 of the proposed order, should be served upon him. It is not necessary to serve upon him notice of the appHcation for the order requiring cause to be shown.^ A receivership to seques- trate the property of a railroad company comes within the spirit and intent of the statute.^^ 3. Papers on application. In an action of sequestration, a receiver will not be granted until jSnal judgment, unless it appears that a temporary re- ceiver is necessary to the protection of the plaintiff's rights.^^ In such an action, a temporary receiver will not be appointed on the complaint alone, unsupported by affidavit or other evi- dence showing the necessity of the receivership,^^ though such complaint has the usual verification.^^ A receiver will not be appointed upon affidavits on information and belief,^''^ espe- cially when the answering affidavits deny the charges of mis- conduct.^* 4. Discretion of court. The appointment of a receiver in a case provided for by law rests in the sound discretion of the court.^^ The considerations which should guide the discretion of the court are the public interests, those of the stockholders and the creditors, and a receiver will be appointed or the officers 33. Greason v. Goodwillie Wyman Bupp. 306. Co., 38 Hun, 138. 37. Livingston v. Bank of N. Y., 29 33. Whitney v. N. Y. & Atlantic R. Barb. 304; Bank of Columbia v. At- E. Co., 66 How. Pr. 436. torney-General, 1 Paige, 511. 34. Kieley v. Barron & Cooke H. & Facts within defendant's knowledge. P. Co., 87 App. Div. 317, 84 N. Y. — Allegations made by the creditor ap- Supp. 306. plying) though on information and be- 35. Federman v. Standard Chum lief, are to be taken as true, where the Manufacturing Co., 128 App. Div. 493, facts peculiarly within defendant's 112 N. Y. Supp. 834. knowledge are not denied. Holland Moving papers. — ^In People v. Albany Trust Co. v. Consolidated Gas and Elec- & S. E. E., 7 Abb. (N. S.) 290, an trie Light Co., 85 Hun, 454, e6 St. Eep. application for a receiver was denied 291, 32 N. Y. Supp. 830. on ground that moving papers did not 38. Fenn v. Ostrander, Inc., 132 App. show defendants were irresponsible or Div. 311, 116 N. Y. Supp. 1083. about to perform the act sought to be 39. Denike v. New York and Eosen- restrained. dale Co., 80 N. Y. 599; Verplank v. 36. Kieley v. Barron & Cooke H. & Caines, 1 Johns. Ch. 57. P. Co., 87 App. Div. 317, 84 N. T. 854 CORPORATIONS. of the corporation retained as these interests seem most like- ly to be best subserved.^" A receiver ought not to be appointed except in case of neces- sity, to protect the stockholders or creditors froiji loss, or to prevent abuse of the corporate franchises, inasmuch as he dis- places the directors or other trustees selected by the stock- holders, and under the direction of the court has the control of its property and effects and, when authorizeli so to do, the exclusive power to use its franchises.^-"^ One will not be appointed unless the persons who invoke such action clearly establish that the remedy is necessary to protect their interests from imminent and serious danger.'*^ But a receiver will not be denied if the condition of the sub- ject of the controversy requires the aid of such a remedy.'*^ 5. Order appointing receiver. The appointment of a receiver is a proceeding against the corporation ; and, if the appointment is binding as against it, it cannot generally be questioned by other persons. The juris- diction of the court to entertain the proceeding does not de- pend on the truth of the facts alleged in the petition ; and the determination of the court on the facts, whether right or not, does not affect the jurisdiction.*^ When a receiver has been appointed, the order cannot be vacated by consent.^ The order should comply with section 313 of the General Corpora- tion Law with reference to the designation of the depository for the deposit of the funds. 5. Form of order appointing temporary receiver in sequestration. (Caption.) THE KINGSTON NATIONAL BANK agst. THE JAMES CEMENT COMPANY. On reading and filing the complaint herein, duly verified January 15, 1887, and the notice of motion herein, with proof of the service 40. City of Eoehester v. Bronson, 41 33, 6 Abb. Pr. (N. S.) 457. How. Pt. 78. 44. Whittlesy v. Franz, 74 N. Y. 456. 41. City of Rochester v. Bronson, 41 See also, Griffin v. Long Island R. R. How. Pr. 78. Co., 103 N. Y. 449. 42. Thalmann v. Hoffman House, 27 45. People v. Globe Mut. Ins. Co., 60 Misc. 140, 58 N. Y. Supp. 237. How. Pr. 82. 43. Rogers v. Marshall, 38 How. Pr. CORPORATIONS. 855 of said CQinplaint pjid said notice of motion on the defendant herein, and on Denis O'Brien, attorney-general of the State of New York; Now, on motion of R. Bernard, the attorney for the above plaintiff, no one appearing in opposition thereto, it is ordered that Amasa Humphrey, of the city of Kingston, be and hereby is appointed re- ceiver of the defendant, the James Cement Company, its stock, bonds, property, franchises, contracts, things in action and effects of every kind and nature, with the usuaj powers and duties according to the laws of this State, and the practice of this court, upon his executing and acknowledging, in the usual form, and filing with the clerk of this court, for the county of Ulster, a bond to the people of the State of New York in the penal sum of $15,000, with at least two sufficient sureties, freeholders or householders of the State of New York, who shall severally justify, conditioned for the faithful discharge of their duties and for all moneys or property of every kind received by him as such receiver, which bond is to' be approved as to its sufficiency, form and manner of execution by a justice' of this court. Second. That, upon filing said bond so approved, said receiver proceed forthwith to collect and receive the debts, demands and other property of said corporation, and to preserve the property and the proceeds of the debts and demands collected, to sell or otherwise dis- pose of the property, or to do any other act or thing in regard to said property, or in his office as receiver, as hereinafter directed by this court, to collect, receive and preserve the proceeds, and to maintain any action or special proceeding for either of tho^e purposes. Third. That the principal value of the property of said defendant consists of its cement quarries and mills and kilns, and of the property used in connection therewith, and that said property is of greater value vrhen kept and used together than when separated, and that said property shall not be sold or disposed of by said receiver so as to impair the convenient and practical use of said mills, kilns or quarries without the order of this court ; that the real estate of said defendant shall not, nor shall any part thereof, be' sold by said receiver without a like order, and that said receiver shall, until otherwise ordered by this court, use and manage said property with a view to the continu- ance of said business of said defendant. Fourth. That the defendant, its directors, officers, agents and ser- vants, and all persons whomsoever, having notice of this order, be and they hereby are enjoined from in any manner interfering with said receiver in the discharge of his duties as such, and from collecting any of its debts or demands, and from paying out, disposing of, or in any way transferring or delivering to any person any of the money, property or effects of the said defendant, except to deliver the same to the said receiver. Fifth. That the said receiver shall deposit all funds of the defend- ant, coming in his hands not needed for immediate disbursement, in the Kangston National Bank of Kingston, New York. C. R. INGALLS, Justice Supreme Court. 856 CORPORATION'S. 7. Form of order appointing receiver with temporary injunction. (Caption.) Paul Halpin agst. The Mutual Brewing Company, Matthew Coleman, Thomas D. Cole- man, Patrick Coleman, Michael T. Coleman, The Coleman Brewing Com- pany, Frederick Bder, Edward Joyce, John N. Hayward, Christian P. Tiet- jen, Ti'ustee of John N. Hayward, T. D. Coleman & Brother, Dennis Cole- man, Louis F. Duesing and George S. Mitchell. ^ 148 N. Y. 744. On reading and filing the summons and complaint in this action, the affidavits of Maurice J. Power (recite names of other persons making affidavits) and the order to show cause why an injunction should not issue and a receiver be appointed, and the consent of the Albany City National Bank, the owners of 500 shares of the capital stock of the Mutual Brewing Company, and of the plaintiff, Paul Halpin and Edward Duffy, owners of 250 shares of the capital stock of the Mutual Brewing Company, and the affidavits of Frederick Bder, in opposition thereto, and after hearing Peter A. Hendrick, Esq., on the part of the plaintiff, in support of the motion (recite other appearances), and it appearing that the defendant the Mutual Brewing Company is insolvent, and that it is necessary for the pro- tection of its property and the rights of its creditors and stockholders that a receiver be appointed, and that its creditors should be enjoined from bringing any action against it, and it appearing that the sum- mons and complaint, affidavits and order to show cause, were served upon the defendants, The Mutual Brewing Company, Frederick Bder, Louis "W". Duesing, John N. Hayward and Christian F. Tietjen, trustee, etc., and upon the attorney-general of the State of New York, Now, on motion of Durnin &' Hendrick, attorneys for the plaintiff, it is. Ordered, that Edward Duffy, Esq., be and he is hereby appointed receiver of the property and assets of the defendant, The Mutual Brewing Company, its stocks, bonds and property, both real and personal, contracts, things in action and effects of every kind and nature, with the usual powers and duties of receivers, as provided by the Code of Civil Procedure and in the practice of this court, and the said receiver be and he is hereby authorized to conduct and carry on the business of The Mutual Brewing Company and to employ and discharge help and purchase materials to carry on the business, and incur liability therefor, and it is Further ordered, that said receiver, before entering upon the dis- COBPOBATIONS. 857 charge of Ms duties as herein provided, execute and file with the clerk of the county of Queens a bond to the people of New York, in the penal sum of $10,000, with two sufScient sureties to be approved by this court. And it is Further ordered, that the receiver deposit with the People's Trust Company of Brooklyn, N. Y., any sum of money in his hands in excess of $10,000 which is to be kept by him for immediate disburse- ments in the conduct of his trust. It is Further ordered, that the president, ofiicers, agents and servants of the defendant, The Mutual Brewing Company, be and each of them is hereby enjoined and restrained from interfering with the property and assets of the defendant, The Mutual Brewing Company, or the conduct of its business, and the said president, officers, agents and servants of the defendant, The Mutual Brewing Company, be and they are each hereby directed to transfer and turn over to said re- ceiver all books of account, property and assets of the defendant, The Mutual Brewing Company, of every kind and nature now in their hands or under their control. It is Further ordered, that the creditors of the said corporation and all persons whosoever, having notice of this order be and they are hereby enjoined from bringing any action against the said defendant, The Mutual Brewing Company, for the recovery of any sum of money or from taking any further proceeding in such an action heretofore commenced, or any further proceedings on any judgment recovered against said defendant. The Mutual Brewing Company, or any exe- cution issued thereon. It is Further ordered, that said receiver is authorized to conduct and carry on the business of said defendant, The Mutual Brewing Com- pany, as herein provided, until the further order of this court, and that the said receiver be and he is hereby authorized to apply to the court for any further instructions at any time as he may deem proper. It is Further ordered, that the injunction heretofore granted restraining the sheriff of the county of Queens from proceeding under the execu- tions issued to him against the defendant, The Mutual Brewing Com- pany, be and the same is hereby continued until the further order of the court; it is Further ordered, that Christian F. Tietjen, trustee of John N. Hayward and T. D. Coleman & Brothers, be and he is hereby re- strained from foreclosing the chattel mortgage made to him as such trustee, by the defendant, The Mutual Brewing Company. JOHN COTTIER, Clerk. 8. Another form of order appointing temporary receiver. (Insert proper recitals.) It is ordered, First. That Howard Gillespie, of Saugerties, county of Ulster, and State of New York, be, and he hereby is appointed receiver of all of the property of said Sheffield Manufacturing Company, with the usual powers and duties of receivers in such cases. 858 CORPORATIONS. Second. That before entering upon the duties of his trust the said receiver execute to The People of the State of New York, and file with the clerk of this court, his bond, with two sufficient- sureties, to be approved by a justice of this court in the penal sum of fifty thou- sand dollars, conditioned for the faithful performance of his duties as such receiver, and the duty of accounting for all moneys and property received by him. Third. That said receiver deposit all funds of the corporation, not needed for immediate disbursement, in the First National Bank of Saugerties, subject to the order of this court. Fourth. That the said receiver be, and he hereby is, authorized and directed from and after the execution, "approval and filing of his bond aforesaid, to continue operating the shops and works of said corporation to the extent that he may deem it wise, prudent and necessary for the purpose of preserving the assets of said corporation and the market-value of its property, or for such other purpose for which he may deem it necessary. Enter in Ulster county. D. CADY HERRICK, Justice Supreme Court. D. Qualifications of receiver. 1. Judiciary Law, § 251, Clerks in courts of record within the territory of the first and second judicial districts not to be appointed referees, receivers, or commissioners. No person holding the office of clerk, deputy clerk, speciar deputy clerk, assistant special deputy clerk, or assistant ih the clerk's ofBee, of a court of record within the first and second judicial districts or territory comprising the same shall hereafter be appointed by any court or judge, a referee, receiver or commissioner. (See B., C. & G. Consol. L., 3nd Ed., p. 4233. )*6 2. Who may be appointed. Private preferences must yield to public considerations, and all parties have a right to rely upon the unbiased judgment of the court in appointing a receiver.*^ An officer of the corpora- 4G. A clerk of the court cannot be ap- the person specified in the agreement pointed receiver unless all parties con- as the one who should close up the af- sent, but such an appointment is an ir- fairs unless objected to by both parties, regularity only and cannot be availed Hanover Fire Ins. Co. v. Germania of collaterally. Moore v. Taylor, 40 Fire Ins. Co., 33 Hun, 539. Hun, 56. Collusive action. — ^The appointment 47. Matter of Empire City Bank, 10 of a trustee of an insolvent eorpora- How. Pr. 498. tion as receiver will be set aside when A general agent of a corporation it appears to have been made in a was held properly appointed receiver cojlusive action. Wilson v. Barney, 5 to close up a business against the op- Hun, '357. position of one of the parties, he bping , COKPOBATIONS. 859 tion is not necessarily disqualified as a receiver thereof. If he is not responsible ior the conduct which occasions the ap- pointment, he may properly receive the appointment.^* One who was an officer of a corporation when the fraud in question was committed, should not be appointed, even though he denies participation in thefraud.*^ And the secretary of an insolvent savings bank, who had been used by directors shortly after appointment to verify a false statement of sol- vency, has been held not a fit person to be appointed its re- ceiver, on their nomination.^" A trust company may be ap- pointed receiver of two banking institutions.^^ E. Bond. 1. General Corporation Law, § 225. Security. A receiver, appointed in an action or special proceeding, must, before enter- ing upon his duties, execute and file with the proper clerk, a bond to the people, with at least two sufficient sureties, in a penalty fixed by the court, judge, or referee, making the appointment, conditioned for the faithful dis- charge of his duties as receiver; and the execution of any such bond by any fidelity or surety company authorized by the laws of this state to transact business, shall be equivalent to the execution of said bonds by two sureties. But this section does not apply to a case where special provision is made by law for the security to be given by a receiver or for increasing the same. (See B., C. & G. Consol. L., 2nd Ed., p. 318S.)53 2. General Corporation Law, § 234. Security of receiver. Before entering upon the duties of their appointment, such receivers shall give such security to the people of the state, and in such penalty, as the court shall direct, conditioned for the faithful discharge of the duties of their appointment, and for the due accounting for all moneys received by them. (See B., O. & G. Consol. h., 2nd Ed., p. 3187.) 3. General Corporation Law, § 226. Removal or new bond. The court, or, where the order was made out of court, the judge making the order, by or pursuant to which the receiver was appointed, or his successor in 48. In re Eagle Iron Works, 8 Paige, 53. Civil Practice Act, § 976, cori- 385. As to appointment of party en- tains provisions similar to the General joined, see Eddy v. Co-operative Dress Corporation Law relative to the se- Ass'n, 3 Civ. Pro. R. 434. curity to be given by a receiver. 49. Williams v. United Wireless Tele- Cost of bond not exceeding one per- graph Co., 124 N. T. Supp. 85. centum of amount annually may be 50. People v. Third Ave. Savings charged as necessary expense on leave Bank, 50 How. Pr. 22. of court or judge. Civil Practice Act, 52. Matter of Knickerboeker Bank, § 1511. 19 Barb. 602. Necessity of bond. — A receiver can- 860 CORPORATIONS. office, may, at any time, remove the receiver, or direct him to give a new bond, with new sureties, with the like condition specified in the last section. But this section does not apply to a case where special provision is made by law for the security to be given by a receiver, or for increasing the same, or for removing a receiver. (See B., C. & G. Consol. L., 2nd Ed., p. 3182.) 4. General Corporation Law, § 227. Notice to sureties upon accounting. A receiver who, having executed and filed a bond as provided for in section two hundred and twenty-five or section two hundred and twenty-six of this chapter, before presenting his accounts as receiver, must give notice to the surety or sureties on his official bond, of his intention to present his accounts, not less than eight days before the day set for the hearing on said accounting. The same notice must be given to such surety or sureties where the accounting is ordered on the petition of a person or persons other than the receiver, and in no case shall the receiver's accounts be' passed, settled or allowed unless the said notice provided for in this section shall have first been given to the surety or sureties on the official bond of such receiver. (See B., 0. & G. C!onsol. L., 2nd Ed., p. 3182.) 5. Liability of surety. The extent of the liability of a surety can be determined only by the terms of the bond, and generally he will not be bound by the adjudication against his principal, unless it is so pro- vided by the terms of the bond.^^ An action cannot be main- tained against the sureties on the bond of a deceased receiver until an accounting has been had to settle the liability of the receiver. An action is not maintainable upon a receiver's bond, until proceedings for an accounting are had against him, or in case of his death without having rendered an account, until such proceedings are had against his personal representatives; at least where no reason appears why such an accounting could not be given possession of the property and filed the requisite bond, and there- of a corporation without security. after, under the judgment in the action, Brewster v. Brewster Co., 145 App. is continued as permanent receiver, Div. 812, 130 N. T. Supp. 654; modi- while a further bond may be executed fied, 204 N. Y. 687. The appointment in the discretion of the court, he is uu- of a receiver is completed by the filing der no obligation to furnish it until re- and entry of the order appointing him, quired to do so, and his failure to do and when he executes and flies his bond so does not affect his power to act as his title to the property will relate permanent receiver. Jones v. Blum, back to the time of his appointment. 145 N. Y. 333. Matter of Hoagland-Bobinson Co., 36 54. Thompson v. MacQregor, 81 N. Misc. 28, 72 N. Y. Supp. 435. Where Y. 592. a temporary receiver has duly executed COKPOKATIOlfS. 861 not be had. This rule is not qualified by the fact that the bond contains no provision for a report or accounting by the re- ceiver.^ The liability of the sureties of a receiver differs from that of an administrator, being usually limited to an undertaking that he will faithfully discharge the duties of his trust, and a judgment against him in his official capacity is not conclusive upon his sureties unless there has been an accounting of the trust fund and the remedies against the receiver have been exhausted.^'' €. Form of bond. Know all men by these presents, That we, Amasa Humphrey, as principal, and James S. Winne, of the eity of Kingston, Ulster county, N. Y., by occupation a hotel-keeper, and James . Brower, of the city of Kingston, Ulster county, N. Y., by occupation a banker, and Jacob L. DeWitt, of said city, by occupation a merchant, as sureties, are held and firmly bound unto the people of the State of New York in the sum of $15,000, to be paid to the said people ; for which pay- ment well and truly to be made, we bind ourselves, our heirs, execu- tors and administrators, jointly and severally, firmly by these presents. Sealed with our seals. Dated the 25th day of January, 1907. "Whereas, At a Special Term of the Supreme Court, held at the City Hall, in the city of Albany, on the 25th day of January, 1907, in an action pending between the Kingston National Bank, plaintifi:, and the Jaipes Cement Company, defendant, on application of the plaintiff, Amasa Humphrey was duly appointed temporary receiver of all the property, debts, equitable interests, rights and things in action, effects and estate, real and personal of the said James Cement Company, pursuant to the provisons of the General Corporation Law. Now, therefore, the conditions of this obligation are such that if the said Amasa Humphrey shall faithfully discharge his duties as such receiver, and duly account for all moneys or property of every kind received by him as such receiver, then this obligation shall be void, otherwise to be in full force and effect. AMASA F. HUMPHKEY. [l. s.] JAMBS F. BROWER. [l. s.] JAMES S. WINNE. [l. s.] JACOB L. DE WITT. [l. s.] Sealed and delivered in the presence of V. B. VAN WAGONEN. (Add acknowledgement, justification and approval.) 55. French v. Dauehy et al., 134 N. Y. 610. Y. 543; French v. Dauehy, 57 Hun, 57. Coe v. Paterson, 122 App. Div. 100, 10 N. Y. Supp. 446; aff'd, 138 N. 76, 106 N. Y. Supp. 659. 862 COEPOBATIONS. ARTICLE XI. RIGHTS, POWERS AND DUTIES OF RECEIVERS. A. In general. Article 11 of the General Corporation Law (sections 230- 278) contains various provisions as to the powers and duties of corporate receivers. The article, unless otherwise pro- vided, applies only to permanent receivers appointed pur- suant to sections 106 and 191 of the General Corporation Law, those being the sections relative to the voluntary and involun- tary dissolution of corporations.^^ This article applies to 58. Consolidato'is' note. — Article XI. This article relates to the powers, duties and liabilities of receivers of corporations and unless otherwise pro- vided in specific sections it is made ap- plicable to receivers appointed under article 6 relating to actions for seques- tration, actions for dissolution and ac- tions to enforce the individual liability of ofdcers and members of corporations and article 9 relating to proceedings for the voluntary dissolution of a corporation. The article consists of the live matter in sections 66-89 of the Revised Statutes (part 3, chap. 8, tit. 4, art. 3), the sections of the Kevised Statutes relating to the powers, duties and obligations of trustees of insolvent debtors (part 2, chap. 5, tit. 1, art. 8) which are made applicable by reference in sections 66 to 89 above referred to, provisions from the Code of Civil Pro- cedure and finally provisions from in- dependent statutes not found in the Revised Statutes or the Code of Civil Procedure relating to the subject of re- ceivers. The provisions of the Revised Statutes were made applicable by the Laws of 1880, chapter 345, section 1, subdivision 3, page 368. Section 43 of the Revised Statutes being made ap- plicable to permanent receivers ap- pointed in actions for sequestration, actions for dissolution, etc., under sec- tion 1788 of the Code of Civil Pro- cedure' and sections 66 to 89, both in- clusive, being made applicable to re- ceivers appointed in proceedings for the voluntary dissolution of a corpora- tion under section 3439 of the Code of Civil Procedure. The provisions of the Code of Civil Procedure relating to re- ceivers and of independent statutes have been incorporated according to their context and judicial construction making them applicable. For con- venience, the provisions relating to the powers, duties and liabilities of re- ceivers of corporations have been placed in a separate article where by reference they have been made applic- able to such actions and proceedings as they are now applicable to by law. Application of statute. — ^Birdseye's Cumming & Gilbert 's Annotated Con- solidated Laws, page 3185 states the limitation of article 11 relative to permanent receivers as follows : ' ' The article by its terms does not apply to a receiver appointed pursuant to section 306, in action brought under section 90 against oflicers for misconduct; a re- ceiver appointed under sections 150, 151 to dissolve a moneyed corporation; a receiver appointed pursuant to sec- tion 306, in an action brought under section 131 to annul a corporation and vacate its charter; a receiver ap pointed pursuant to section 306, in an action to foreclose a corporate mort- CORPORATIONS. 863 domestic, not to foreign, corporations.^^ In addition to the powers conferred by article 11, it is to be noted that sections 107 and 191 contain special provisions as to the duties of per- manent receivers, and sections 104, 105 and 182 prescribe cer- tain powers and duties of temporary receivers. Section 134 of the General Corporation Law, relating to the appointment of receivers in actions to annul corporations, authorizes the judgment in such an action to provide for the appointment of a receiver, the taking of an account, and the distribution of the property, as where a corporation is dissolved upon its voluntary application, B. General Corporation law, § 239. General powers of receivers. The said receivers shall have power: 1. To sue in their own names or otherwise, and recover all the property, debts and things in action, belonging or due or to become due to such corpora- tion, whether accruing or maturing before or after the dissolution thereof and whether vested or contingent at the time of such dissolution, in the same manner and with the like effect as such corporation might or could have done if no receivers had been appointed; and no set-off shall be allowed in any such suit, for any debt, unless it was owing to such creditor by such corporation before the appointment of the receiver of such corporation, or unless it shall have been duly contracted by such receiver subsequent to his appointment; notwithstanding the notice to creditors the receivers may sue for and recover, any property or effects of the corporation and any debts due to it, at any time, before the day appointed for the delivery or payment thereof; 2. To take into their hands, all the property of such corporation, whether attached, or delivered to them, or, afterwards discovered; and all books, vouchers and securities relating to the same; gage; a receiver appointed pursuant to the existence of a corporation. That section 306, in an action to preserve section provides that "the judgment the assets; a receiver appointed pursu- must also provide for the appointment ant to section 306, upon application of of a receiver, the taking of an account, the regents, or a temporary receiver in and the distribution of the property of any case. It applies to a permanent the corporation among its creditors and receiver in an action to sequester the stockholders, as where a corporation is property brought under section 100, in dissolved upon its voluntary appliea- an action to dissolve a corporation tion." brought by the Attorney-General, a A receiver not subject to this article creditor or stockholders pursuant to sec- is a common-law receiver, and, except tions lO"!, 102, and in a proceeding for as subject to special statutes, has the voluntary dissolution under section powers and duties of receivers at com- 170ff. There seems to be some doubt mon law, as declared by courts of as to whether the consolidators have not equity. erred in failing to specifically apply 69. Strauss v. Casey Machine & Sup- the article to a receiver appointed pur- ply Co., 68 Misc. 474, 124 N. Y. Supp. sv(ant to section 134 in an action by the 32. people to vacate the charter or annul 864 CORPORATIONS. 3. In the case of a non-resident, absconding or concealed debtor, to demand and receive of every sheriff who shall have attached any of the property of such debtor, or who shall have in his hands, any moneys arising from the sale of such property, all such property and moneys, on paying him his reasonable costs and charges, for attaching and keeping the same, to be allowed by the court having jurisdiction; 4. From time to time, to sell at public auction, all the property, real and personal, vested in them, which shall come to their hands, after giving at least fourteen days' public notice of the time and place of sale, and also publishing the same for two weeks in a newspaper, printed in the county, where the sale shall be made, if there be one; 5. To allow such credit on the sale of real property by them, as they shall deem reasonable, subject to the provisions of this article for not more than three-fourths of the purchase money; which credit shall be secured by a bond of the purchaser, and a mortgage on the property sold; 6. On such sales, to execute the necessary conveyances and bills of sale; 7. To redeem all mortgages and conditional contracts, and all pledges of per- sonal property, and to satisfy any judgments, which may be an incumbrance on any property so sold by them; or to sell such property subject to such mort- gages, contracts, pledges or judgments; 8. To settle all matters and accounts between such corporation and its debtors, or creditors, and to examine any person touching such matters and accounts, on oath, to be administered by either of them; 9. Under the order of the court appointing them, to compound with any person indebted to such corporation and thereupon to discharge all demands against such person. (See B., C. & G. Consol. L., 3nd Ed., p. 3188.) 60 60. Consolidators' note to section Y., L. E. & W. K. K. Co., 105 N. Y. 382. 239. — ^This section comes from the 6ubd. 1. Some of the provisions re- chapter in the Revised Statutes relating lating to trustees of insolvent debtors to the powers, duties and liabilities of which were made applicable to re- trustees of insolvent debtors (Eevised ceivers in proceedings for the voluntary ytatutes, pt. 2, chap. 5, tit. 1, art. 8). dissolution of a corporation cannot be It was made applicable to receivers ap- applied to such receivers. An illus- pointed in proceedings for the volun- tratiou is found in the bracketed mat- tary dissolution of a corporation by the ter in this subdivision, following provisions in the Revised "The rights of the receiver become Statutes relating to the voluntary dis- fixed at the time of his appointment; solution of a corporation. the rights of creditors of the bank "Such receivers shall have all the represented by him then attached; and power and authority, conferred by law it would not be equitable to counten- upon trustees to whom an assignment ance any subsequent arrangement to of the estate of insolvent debtors may give any one of them an undue pref- be made; pursuant to the provisions of erence over the others. Parties must the fifth chapter of the second part of stand or fall by the condition of things the Revised Statutes. ' ' Revised Stat- in existence at the time of the appoint- utes, pt. 3, chap. 8, tit. 4, art. 3, § 68. ment of the receiver, unless special See Matter of Coleman, 174 N. Y. 383. equities exist." Matter of Van Allen, As to application of Revised Stat- 37 Barb. 325 (831). ntes, pt. 2, chap. 5, see Herring v. N. The Court of Appeals citing above CORPOBATIONS. 865 C. Power distinguished from that of assignee for creditors. The situation of a receiver of an insolvent corporation is quite different from that of assignee for the benefit of credi- tors. The former receives his authority from the statute and the order appointing him, but the latter 's authority may be restricted by the assignment.®^ D. Temporary receivers. 1. In general. Section 104 prescribes the powers of a temporary receiver in an action under Article 6 of the General Corporation Law, relating to the sequestration and involutary dissolution of a corporation. Section 105 permits the court to extend such powers.®^ The duties and powers of a receiver appointed in an equity action pendente lite are not defined by the statute, and are so defined in the appointing order. As an officer of the court the receiver is subject to its direction. One of the main purposes of receiver in any action is to preserve the property so that it will not be less valuable when final judgment is had.^^ He does not generally take title to the property or case says in a unanimous decision in Van Dyck v. McQuade, 85 N. T. 616 (617). "If, under the authority derived from the statute, the receiver in this case had the power to allow a set-off, that power did not extend to a case where no mutual debts subsisted at the date of the appointment of the re- ceiver. ' ' Subd. 5. The words "not exceeding 18 months" have been bracketed out because a receiver is required to re- port within a year unless his time is extended. For the same reason the words "subject to the provisions of this article" have been inserted. 61. People V. St. Nicholas Bank, 151 N. y. 592. 62. Preferential payment of claim. — A person who furnishes supplies to a railroad company, prior to the com- mencement of the action to foreclose a mortgage upon its property, in which a temporary receiver is appointed, is 55 not entitled to a preferential payment of such claim out of the assets in the hands of the receiver, where there is no provision in the order appointing such receiver, authorizing him to pay any of the debts of the corporation. Merchantile T. Co. v. Kings Co El. R. Co., 40 App. Div. 141, 5(7 N. Y. Supp. 892. 63. Cobb V. Sweet, 46 App. Div. 375, 61 N. Y. Supp. 545. Parties to subsequent action. — Tem- porary reeeivers of a corporation, ap- pointed in a proceeding for its volun- tary dissolution, may be proper parties to an action subsequently brought to enforce the liability of directors. Vi^hit- ney v. Wilcox, 58 App. Div. 57, 68 N". Y. Supp. 667. Determining conflicting claims. — ^A receiver appointed to care for and pre- serve property during the pendency of an action to settle conflicting claims thereto is a mere stakeholder and should not be permitted to intervene 866 CORPOKATIONS. possess, any authority to institute proceedings to ascertain what property he is entitled to claim from third persons.^^ He is in all respects subject to the control of the court.^^ He may be authorized to complete outstanding contracts, and he is not individually liable for material purchased by him in order to do so, where it appears that the material was pur- chased upon the understanding that it was a liability of the receivership, and that all payments therefor were made by checks signed by him as receiver.^^ He has no power to ap- point a deputy.^^ Although he does not possess all the powers of a permanent receiver, he is just as much the representative of the creditors and shareholders as though his appointment was invested with the quality of permanency; among the duties iniposed upon him is that of receiving and preserving the property of the corporation, and his relation to the parties whom he represents is so highly fiduciary as to require of him the exercise of the utmost good faith in all his dealings.®^ While he is only the custodian of the property, he has an equitable lien or interest in it for the benefit of the creditors, the property being regarded as a trust fund of which they are beneficiaries.^' Temporary receivers appointed in an action for dissolution, which abates upon entry of judgment in a similar action in another department, are bound to protect the assets which they have received until they are taken from their possession by order of the court, but they have no power to take assets of the corporation away from other persons.™ The section defining powers and duties of a temporary re- ceiver appointed in a sequestration action does not necessarily apply to receivers in other actions. The duties and powers of a receiver appointed in an equity action pendente lite are not defined by the statute or Code, and are so defined in the ap- pointing order. As an officer of the court the receiver is sub- in such a controversy. Nat. Park Bank 67. Murray v. Cantor, 18 Misc. 389, V. Goddard, 48 St. Rep. 744, 20 N. Y. 41 N. Y. Supp.'652. Supp. 526. 68. Atkins v. Judson, 33 App. Div. 64. Matter of Howell v. German 42, 53 N. Y. Supp. 504. Theatre, 64 Misc. 110, 117 N. Y. Supp. 69. Myers v. Myers, 18 Misc. 663, 43 1124. N. Y. Supp. 737; affd, 15 App. Div. 65. Buckley v. Harrison, 65 St. Rep. 448, 44 N. Y. Supp. 513. 93, 10 Misc. 683, 31 N. Y. Supp. 999. 70. Matter of Murray Hill Bank, 14 66. Nason Mfg. Co. v. Garden, 52 App. Div. 318, 43 N. Y. Supp. 836; App. Div. 363, 65 N. Y. Supp. 14?. aff'd, 153 N. Y. 199. CORPOEATIONS. 867 ject to its direction. One of the main purposes of a receiver in any action is to preserve the property so that it will not be less valuable when final judgment is had.'^ Section 104 requiring him to qualify as prescribed by law for the qualification of permanent receivers, applies only to those things which he must do in order to qualify him to act as such receiver, and not to his proceedings after his qualifi- cationJ^ A receiver in an action brought under section 90, does not generally distribute the corporate assets.''^ A court of equity appointing a receiver pendente lite can sell the property in the receiver's hands whenever such course becomes necessary to preserve the interests of all the par- ties.^* 2. Form of order extending powers of temporary receiver. (Tifle.) (Special Term caption.) On reading and filing the petition of Warren G. Strong and Alvin W. Strong, temporary receivers of the above-named corporation, the Knoxboro Canning Company, and also on filing due notice of service upon the Honorable, the Attorney-General of the State of New York, of said motion papers, with a copy of this order, as prepared. Now, on motion of Louis M. Martin, attorney for the said pe- titioners; it is Ordered, that the said Warren G. Strong and Alvin W. Strong, heretofore appointed temporary receivers of the said corporation, have in addition to the power already conferred upon them the power and authority, and be subject to the duties of permanent re- ceivers, and that they possess such power and authority in all 're- gards, except that they shall not make any final distribution among creditors and stockholders, except as hereafter ordered; it is further Ordered, that the said Warren G. Strong and Alvin W. Strong, as such receivers, have full power and authority to lease or sell and dispose of all the property and assets of the said corporation, real and personal, whatsoever and wheresoever, at public or private sale, and to such persons as they may deem proper, for the best interests of the stockholders and creditors of the said corporation, subject to the approval of this court as to the sale of the real estate ; that before executing any title in and to the real estate, the said receivers report to this court the terms of the sale, the price obtained for the same, 71. Cobb V. Sweet, 46 App. Div. 375, 73. Halpin v. Mutual Brewing Co., 61 N. Y. Supp. 545. 91 Hun, 220, 36 N. Y. Supp. 151; ap- 72. Nealis v. American Tube and peal dismissed, 148 N. Y. 744. Iron Co., 76 Hun, 220, 59 St. Rep. 120, 74. Porter v. Praser, 57 St. Rep. 516, 27 N. Y. Supp. 733; aflPd,,150 N. Y. 42. 6 Misc. 553, 27 N. Y. Supip. 517. 868 coEPORATioiirs. the name of the purchaser or purchasers thereof for approval; that "The National Bank of Vernon, N. Y." is hereby designated as the place of deposit of all funds. 3. Form of petition for accounting by temporary receiver. (Title.) To the Supreme Court of the State of New York: I, George W. Foster, of the city of Geneva, county of Ontario and State of New York, do hereby respectfully render the following ac- count of all my proceedings as temporary and permanent receiver of the above-named corporation. 1. That I was duly appointed temporary receiver of the above- named corporation by an order of this court made at a Special Term of the Supreme Court held in the city of Eochester, N. Y., on the 10th day of January, 1910,' and which was duly entered in the Ontario county clerk's office on the said 10th day of December, 1909. 2. That in accordance with the provisions of said order I duly filed my bond in said Ontario county clerk's office, the same being duly approved by this court. In accordance with the terms of said order I published once a week for four successive weeks immediately preced- ing the 7th day of March, 1910, a copy of said order in the Geneva Daily Times, a newspaper published in the county in which said order was entered, as appears by the affidavit of publication hereto annexed and marked "A." 3. That in and by an order made at a Special Term of this court held on the 7th day of March, 1910, at the courthouse in the city of Eochester, N. Y., the said Inland Lumber Company was dissolved and I was continued as permanent receiver of all the property of said corporation, and in and by the terms of said order I was autho- rized, empowered and directed to sell at public sale the property and assets of said company and to collect the debts due to said company. 4. That in and by an order made at a Special Term of this court held on the 15th day of January, 1910, at the courthouse in the city of Rochester, N. Y., I was authorized, empowered and directed to take such action against Frances E. Whitehill of Brookville, Pa., William J. Hood of Eochester, N. Y., and "William Pugh of Eochester, N. Y., or any one of them for securing the payment of the amount due from each to the said Inland Lumber Company as should seem best to ■counsel. That on the 15th day of January, 1910, the receiver made applica- tion to this court for a warrant of attachment against the property of Franees F. Whitehill as security for the satisfaction of such judg- ment as said receiver might obtain against the said Frances F. White- hill. That on the 15th day of January, 1910, this court issued a warrant of attachment against the said Frances F. Whitehill, under which the sheriff of Ontario county attached property belonging to the said Frances F. Whitehill to the value of two hundred and thirty-ome dollars and sixty-nine cents ($231.69), of which two hundred and CORPORATIONS. 869 twenty-one dollars ($221) was turned over to the receiver of the In- land Lumber Company by said sheriff, to apply on the judgment se- cured by the receiver against the said Frances F. "Whitehill on the 6th day of May, 1910, which judgment amounted to the sum of four thousand five hundred and eighty-nine dollars and ten cents ($4,589.10). That on or about the 20th day of May, 1910, the receiver entered into an agreement with William Pugh. That on or about the 20th day of May, 1910, the receiver compromised the claim held against William Pugh for five hundred dollars ($500), amount unpaid on his subscription to the capital stock of the Inland Lumber Company, and accepted in payment thereof his notes for two hundred and fifty dollars ($250) and the assignment of twenty-five (25) shares of the preferred stock of the Inland Lumber Company held by him. That on or about the 1st day of June, 1910, the receiver com- promised the claim against William J. Hood by accepting his notes for one hundred dollars ($100). That in and by an order made at a Special Term of this court held on the 24th day of October, 1910, the receiver sold at public auction on the 5th day of November, 1910, said judgment of four thousand five hundred and eighty-nine dollars and ten cents ($4,589.10) held by him as receiver against Frances F. Whitehill and at the same time offered and sold seven promissory notes made by William Pugh, dated May 20, 1910, each in the sum of twenty-five dollars ($25), three promissory notes made by WiUiam J. Hood, dated June 1, 1910, two in the sum of twenty dollars ($20) each and one in the sum of ten dollars ($10). That said notice of receiver's sale was duly advertised and posted in three public, conspicuous places in the city of Geneva, as is more fully shown by the affidavit of publication and postisg hereto annexed and marked exhibit "E." That at said sale the receiver realized from the sale of said judg- ment the sum of seventeen dollars ($17) ; from the seven promissory notes made by William Pugh the sum of one hundred and six dollars |($106), and from the three promissory notes held by William J. Hood the sum of thirty-seven dollars ($37), making a total of one hundred and sixty dollars ($160). I That after my appointment as such receiver of the above-named corporation I gave notice of such appointment as follows, viz. : (Re- citals.) By printing such notice once a week for three successive weeks in a newspaper within the county in which the corporation has its principal office of business, to wit: The Geneva Daily Times, a newspaper published in the city of Geneva, in said county of Ontario, as appears by the affidavit of publication hereto annexed and marked "B." 6. Schedule " 1 " hereto annexed contains a full, accurate and true account all moneys and property received or collected by me, all of which I am chargeable. 7. Schedule "2" hereto annexed contains a full, accurate and true 870 CORPORATIOITS. account of all disbursements made by me, showing the balance of money in my hands. 8. That a notice for the presentation of my account as receiver of the above-named corporation, a copy of which is as follows, viz. : Notice to the Creditors and all persons interested in the Inland Lumber Company, of Geneva, Ontario county and State of New York. Take Notice, that a full and accurate account of all the pro- ceedings of George W. Foster, as receiver of the above-named cor- poration, on oath, will be presented to the Supreme Court of the State of New York, at a Special Term thereof to be held at the city of Rochester, N. Y., on the 14th day of November, 1910, at ten 'clock in the forenoon of that day, or as soon thereafter as counsel can be heard, and a motion will then and there be made that the same be allowed and decreed to be final and conclusive upon all the creditors of the said corporation, and upon all per- sons who may have claims against it upon any open or subsist- ing engagement, and upon all the stockholders of such corpora- tion, and that said receiver be authorized to pay a final dividend, and upon proof of the payment thereof that he be discharged and his bond vacated, and for such other or further order as to the court may seem proper. Dated, Receiver of the Inland Lumber Co. was duly published as prescribed by law by printing suph notice at least once a week for three successive weeks in the Geneva Daily Times, being a newspaper published in the county in which the prin- cipal office of said corporation is located, with the affidavit of- publica- tion of said last-mentioned notice which is hereto annexed and marked "C." That the notice of the presentation of my account as receiver of the above-named corporation was duly served upon Hon. Edward R. O'Malley, Attorney-General, Albany, N. Y., also upon The Title, Guaranty & Surety Company of Scranton, Pa., and the affidavits of service of said notices are hereto annexed and marked "D." 9. That no money, property or effects, other than stated in said schedules, have come into my hands or possession and that no appear- ances by any attorneys have been received by me or served upon me. 10. That no accounts or demands against said corporation or any open or subsisting contracts with said corporation have been delivered or presented to me except as hereinafter stated. That the only cred- itors of said corporation are the stockholders thereof. 11. Schedule "3" hereto annexed contains the name and residence of each creditor other than stockholders and the amount found due him according to his proved claims. 12. Schedule "4" hereto annexed contains the name and residence of each stockholder and the amount and kind of stock held by him in said company. CORPOBATIOIirS. 871 13. I know of no creditors interested in the assets of said corpora- tion other than the said creditors mentioned in said schedule "3" and the stockholders of said company as set forth in schedule "4," all of which is respectfully submitted. Dated, (Add verification.) Receiver. Schedule "1." A statement of all receipts during the time of my receivership : (Insert statement of receipts with date and name of party.) Schedule "2." Disbursements. (Insert amounts paid with date and description of disbursement.) Schedule "3." The following is a statement of all creditors, their residence, and the amount due them: (Insert statement.) Schedule "4." The following is a full, just and true account of the capital stock of the Inland Lumber Company, specifying the name of each stock- holder,, his residence and the number of shares belonging to him. (Insert statement.) 4. Form of order discharging temporary receiver. (Title.) (Special term caption.) A motion having been made in the above-entitled action by the temporary receiver herein for an order granting him his fees and commissions for himself and his attorney herein in the above-entitled matter, discharging and canceling his bond heretofore given herein, discharging himself as such temporary receiver, and authorizing him to pay over to Frank L. Barnett, the receiver of the above-entitled corporation now adjudicated a bankrupt in the United States Dis- trict Court for the "Western District of New York, said Frank L. Bar- nett, having been appointed receiver of said bankrupt by the United States District Court and having duly qualified ; and it appearing to the satisfaction of this court that said temporary receiver herein should be allowed the sum of seventy-five dollars ($75) for and on account of his services and commissions and those of his attorney in addition to the sum of two dollars and thirty cents ($2.30), the amount- paid out by him for filing the papers herein with the county clerk. Now, on reading and filing the petition of Eugene L. Falk, verified the 29th day of November, 1910, and the exhibit thereto annexed and the affidavit of Edward C. Schlenker, the attorney for the temporary receiver herein, verified the 29th day of November, 1910, and after hearing Edward C. Schlenker, Esq., attorney for the temporary re- ceiver herein, and Frank L. Barnett, appearing in person, and Walter F. Hofheins, Esq., representing the Attorney-General of the State of New York, not objecting thereto, 872 CORPORATIONS. Now, on motion of Edward C. Schlenker, Esq., attorney for the tem- porary receiver, it is Ordered, that Eugene L. Falk retain the sum of seventy-five dollars ($75) for and as his fees and commissions and the allowance of his attorney as temporary receiver in the above-entitled matter, and the further use of two dollars and thirty cents ($2.30), the amount paid out and which will necessarily be expended in the filing of the re- quired papers and orders in the county clerk's office in the above- entitled matter; it is further Ordered, that after deducting the said sum of seventy-seven dollars and thirty cents ($77.30) he is hereby authorized and empowered to pay over to Frank L. Barnett as receiver of the Buffalo Gum Com- pany, an alleged bankrupt, which proceedings are now pending in the District Court of the United States for the Western District of New York, the balance remaining in his hands, viz.: Two hundred and sixty dollars and thirty-two cents ($260.32) ; it is further Ordered, that said Eugene L. Falk, upon paying over to the said Frank L. Barnett the sum of two hundred and sixty dollars and thirty- two cents ,($260.32), the balance remaining in his hands as such tem- porary receiver, be and he hereby is discharged as such receiver; it is further Ordered, that the bond given by him in the above-entitled matter which was executed by the United States Fidelity & Guaranty Com- pany for the sum of twenty thousand dollars ($20,000), which said sum was recorded in the office of the clerk of the county of Brie on the 29th day of October, 1910, be and the same hereby is canceled and discharged, and the said bonding company relieved from further liability upon said imdertaking. Granted, Dated, Justice Supreme Court. 5. Form of order discharging temporary receiver and canceling bond. (Title.) (Special term caption.) An application having been made for an order reducing the amount of the bond given by the temporary receivers in the above-entitled action, and due notice of this application having been given to all the parties interested in said matter, and it having been made to appear to the satisfaction of the court that a permanent receiver has hereto- fore been appointed, and that said receiver duly qualified, upon read- ing and filing the petition of Joseph A. Stone, verified the 12th day of July, 1910, and the notice of motion together with the admission of service thereof, and after hearing Eugene L. Falk, Esq., counsel for Joseph A. Stone and Eugene Warner, temporary receivers, and no one appearing in opposition thereto, it is Ordered, that Joseph A. Stone and Eugene Warner, temporary re- ceivers in the above-entitled matter, pay over to Eugene L. Dominick all moneys which they have in their hands as such temporary receivers in the above-entitled matter amounting to the sum of one thousand four hundred and fifty-six dollars and eighty cents ($1,456.80) ; and it is further CORPORATIONS. 873 Ordered, that upon the turning over of said moneys said temporary receivers are hereby discharged from all liability and accountability, and that the bonding company issuing the indemnity bond for said receivers be and the same is hereby discharged and relieved from all liability of whatsoever kind on account of said bond or otherwise. Granted, July 8, 1910. Peeey B. Wurst, Special Deputy Clerk. £. Ancillary receivers. The status of a foreign receiver, who is also appointed re- ceiver of the assets of corporations in this State by onr courts, is dependent on the order of the court appointing him here.''^ Such a receiver is without the authority to sue in this State to set aside a fraudulent transfer of property, made by the cor- poration as representing the creditors.'^ If his appointment vests him " with the usual powers and duties of receivers, according to the laws of this State and the practice of this court," and authorizes him to continue the business, he has, except so far as his powers are limited by the fact that his appointment is ancillary, all the powers of trustees of insolvent debtors." A non-resident stockholder of an insolvent foreign corpora- tion, of which a receiver has been appointed in the State of its domicile, and which has never obtained the certificate authorizing it to transact business in the State, may maintain an action to procure the appointment of an auxiliary receiver of its property in this State.''^ A foreign receiver cannot gen- erally maintain an action in this State against the corpora- tion as sole defendant for the sole purpose of procuring the appointment in this State of an ancillary receiver, on the fact that the corporation has property within this State that re- quires administration.™ The receiver of an insolvent bank of another State may be permitted to maintain an action against a resident.^" Where the receiver of a national bank of another State ap- pointed by the comptroller of currency brings an action in this 75. Hammond v. National Life Ass'n, 78. Walter v. F. B. McAliater Co., 21 31 Misc. 182, 65 N. Y. Supp. 407; afC'd, Misc. 747, 48 N. Y. Supp. 26. 58 App. Div. 453, 69 N. Y. Supp. 585; 79. Mabon v. Ongley Electric Co., dismissed, 168 N. Y. 262. 156 N. Y. 196; reversing, 24 App. Div. 76. Buckley v. Harrison, 65 St. Rep. 41, 48 N. Y. Supp. 967. 93, 10 Misc. 683, 31 N. Y. Supp. 999. 80. Howard v. Angle, 162 N. Y. 179; 77. Goodrich v. Sanderson, 35 App. aff'g, 39 App. Div. 151, 57 N. Y. Supp. Div. 546, 55 N. Y. Supp. 881. 187, 25 Misc. 551, 55 N. Y. Supp. 1108. 874 CORPORATIONS. State, security for costs can be required of Mm as a matter of right.^ A receiver of a bank who has been finally discharged can- not be allowed to intervene in proceedings to reach newly dis- covered assets.^^ F. Oath of receiver. General Corporation Law, § 238. Before proceeding to the discharge of any of their duties, all such receivers shall take and subscribe an oath, that they will well and truly execute the trust by their appointment reposed in them, according to the best of their skill and understanding; which oath shall be filed with the officer or court, that appointed them. (See B., C. & G. Consol. L., 2nd Ed., p. 3187.) G. Authority of one or more receivers, and of survivor. 1. General Corporation Law, § 235. Authority of single receiver. When one receiver only, shall be appointed, all the provisions herein con- tained, in reference to several receivers shall apply to him. (See B., 0. & G. Consol. L., 2nd Ed., p. 3187.) 2. General Corporation Law, § 236. Authority where there is more than one receiver. When there are more receivers than one appointed, the debts and property of the corporation may be collected and received by any one of them; and when I there are more than two receivers appointed, every power and authority con- ferred on the receivers may be exercised by any two of them. (See B., C. & G. Consol. L., '2nd Ed., p. 3187.) S3 3. General Corporation Law, § 237. Surviving receivers. The survivor or survivors of any receivers shall have all the powers and rights given to receivers. All property in the hands of any receiver at the time of his death, removal or incapacity, shall be delivered to the remaining receiver or receivers, if there be any; or to the successor of the one so dying, removed or incapacitated; who may demand and sue for the same. (See B., C. & G. Consol. L., 2nd Ed., p. 3187.)84 81. Beckham v. Hague, 44 App. Div. Bridge Co., 20 Misc. 576, 46 N. Y. 146, 60 N. Y. Supp. 767; reversing, 28 Supp. 418. Misc. 753, 60 N. Y. Supp. 213. 84. Accounting.— If, during the pcn- 82. Matter of Grand Central Bank, dency of proceedings instituted for an 27 Misc. 116, 57 N. Y. Supp. 418; aflf'd, accounting by the receivers of a cor- 42 App. Div. 157, 58 N. Y. Supp. 1022. poration, one of the receivers dies, the 83. Assignment of claim. — One of court may make an order reviving and the receivers of a corporation, who has continuing the accounting against his authority from the other, may make a representatives. Matter of Foster, 7 valid assignment of a claim belonging Hun, 129; Matter of Columbia Ins. Co., to the corporation. Toplitz v. Kings 30 Hun, 342. CORPORATIONS. 875 H. Title to property. 1. General Corporation Law, § 231. Receiver trustee of property. Permanent receivers shall be trustees of the property for the benefit of the creditors of the corporation and of its stockholders. (See B., C. & G. Consol. L., 2nd Ed., p. 3185.) 2. General Corporation Law, § 232. Beceiver's title to property. Such receivers shall, from the time of their having filed the security required by law, be vested with all the property, real or personal vested or contingent, of the corporation. (See B., C. & G. Consol. L., 2nd Ed., p. 3186.) 3. General Corporation Law, § 233. Transfer of assets of corporation to receiver. In all cases where receivers have been or shall be appointed for any cor- poration of this state other than an insurance company on application by the attorney-general, all property, real and personal, and all securities of every kind and nature belonging to such corporation, no matter where located or by whom held, shall be transferred to, vested in and held by such receiver; provided, however, that such transfer shall only be made when directed by an order of the supreme court, due notice of the application for such order having been made on the attorney-general and the custodian of the funds, securities or property. (See B., C. & G. Consol. L., 2nd Ed., p. 3186.) 4. General Corporation Law, § 243. Power of receiver to hold real property. A receiver, appointed by or pursuant to an order or a judgment, in an action in the supreme court or a county ■ court, or in a special proceeding for the voluntary dissolution of a corporation, may take and hold real property, upon such trusts and for such purposes as the court directs, subject to the direction of the court, from time to time, respecting the disposition thereof. (See B., C. & G. Consol. L., 2nd Ed., p. 3196.)8B 5. All property vested in receiver. Upon the appointment of a permanent receiver, all of the property of the corporation vests in such receiver, for the benefit of the creditors of the corporation and of its stock- holders.*^ 85. A similar provision is contained estate for the benefit of all its credi- in the Civil Practice Act, § 977. tors. Rinn v. Astor Fire Ins. Co., 59 86. Attorney-General v. Guardian N. Y. 143. Mutual L. Ins. Co., 77 N. Y. 272. A tax can only be properly assessed A receiver, though he may be ap- against the corporation in the name of pointed in a suit brought by a simple the receiver. Matter of Mallory, 2 creditor or stockholder, takes the whole N. Y. Supp. 437, 18 St. Eep. 499. 876 coRPOEATioisrs. A formal conveyance to the receiver is unnecessary.*^ Where he is regularly appointed he is vested with all the right and authority of his office, although his former appoint- ment as temporary receiver was illegal.** 6. nature of title. The receiver has no title personally, but his possession is that of the court, a>»d as receiver he represents a separate and independent legal existence, and an order made in an ac- tion brought against him personally and not as receiver and not in any way purporting to affect him in his official char- acter, has no force or bearing upon him as receiver.*' He oc- cupies the position of a trustee for the corporate funds, for the benefit of persons interested therein.^" 7. Date of acquisition of title. An order appointing a receiver sequestrates the property by operation of law and the title vests by relation as of the date of the order.^^ And a receiver's title may relate back to the time of the granting of the order of reference to appoint a receiver, so that all transfers made after that time may be void.^^ Trust. — Upon the appointment of a of Home Prov. Safety Fund Ass'n, 129 receiver of a. corporation, the right to N. Y. 288; see 13 Hun, 115; aff'd, 74 the possession of all the corporate N. Y. 617. property vests in him as well as the 87. Attorney-General v. Atlantic Mu- title to property which remained in the tual Life Ins. Co., 100 N. Y. 279. corporation, although it may have ere- 88. Matter of Stonebridge, 37 St. ated a trust concerning it. Matter of Rep. 617, 13 N. Y. Supp. 770. Home Provident Society Fund Ass'n, 89. Eddy v. Co-operative Dress 39 St. Rep. 437, 15 N. Y. Supp. 211. Ass'n, 3 ttv. Pro. R. 434. Insurance securities. — ^The receiver of 90. Kimberly v. Stewart, 22 How. fi life insurance company is unauthor- 281; McParland v. Bain, 26 Hun, 38. ized to take, for purposes of distribu- 91. Matter of Eagle Iron Works, 8 tion, the securities in the hands of the Paige, 385; Deming v. N. Y. Marble superintendent of the insurance depart- Co., 12 Abb. 66; Lottimer v. Lord, 4 ment belonging to said company de- E. D. Smith, 183; Van Alstyne v. posited with him for the protection of Cook, 25 N, Y. 485; Smith v. N. Y. policy-holders. Ruggles v. Chapman, Consolidated, etc., Co., 18 Abb. 420. 64 N. Y. 557. It is the duty of the 92. Matter of Schuyler Steam Tow siiperintendent to keep these securities, Boat Co., 136 N. Y. 169; reversed, 154 convert them into money and distri- U. S. 256; Matter of Berry, 26 Barb. bute the funds among the parties en- 55; Matter of Christian Jensen Co., titled. Smyth v. Monroe, 84 N. Y. 128 N. Y. 550, 40 St. Rep. 621, 27 Abb. 362; Matter of Voluntary Dissolution N. C. 303. COEPORATIONS. 877 The order cannot, however, as against third persons, date or relate back beyond the time of granting iV^ Even though it is immaterial for general purposes at what time the order of appointment of receiver is entered, because his title relates back to the time when the order was signed, it does not relate back so as to defeat intervening rights of a person actually acquired before the perfection of the order.^* It does not relate back for the purpose of destroying vested rights or for any other unjust purpose.^ It has been said that no superior lien can be acquired by the levy of an attachment between the making of the order and the time the receiver takes possession.^^ Upon the filing of a temporary receiver's bond, his right to possession of the property of the corporation relates back to the time when the order appointing him and enjoining credi- tors from prosecuting their claims was entered, and a judg- ment creditor, whose execution is delivered to the sheriff after the entry of such order, but before the filing of the receiver 's bond, acquires no lien thereon.^' But it has been held that the title of a receiver of a corporation to its assets does not relate back so as to divest the lien of an execution or attachment levied between his appointment and qualification.^* The general rule is that after property has once passed into the possession of a receiver, no lien can be acquired thereon or action taken with reference thereto without leave of the court.^^ 9S. Van Alstyne v. Cook, 26 N. Y. Co,. 12 App. Div. 492, 42 N. Y. Supp. 489. 802; Matter of Lewis v. Fowler Mfg. 94. Wilcox V. National Shoe & Co., 89 Hun, 208, 34 N. Y. Supp. 983, Leather Co., 67 App. Div. 466, 73 N. Y. 69 St. Rep. 44; Chamberlain v. Roch- Supp. 900. ester, etc., Co., 7 Hun, 557. See Mal- 95. Matter of Lewis & Fowler Mfg. ter of Eagle Iron Works, 8 Paige, 385; Co., 89 Hun, 209, 34 N. Y. Supp. 983. Matter of Berry, 26 Barb. 55. 96. Derby v. Bates, 13 Misc. 489, 35 99. Attorney-General v. Continental N. Y. Supp. 525. Life Ins. Co. 28 Hun, 360; afl'd, 93 See also Matter of Christian Jensen N. Y. 630. Co., 128 N. Y. 550, 40 St. Rep. 621, 27 After appointment of foreign re- Abb. N. C. 303. ceiver.— The beneficiary of a benefit so- 97. Matter of Lenox Corp., 57 App. ciety, whose claim had been proved, at- Div. 515, 68 N. Y. Supp. 103i! afl'd, 167 taeJhed its bank balance in New York. N. Y. 623. after a temporary receiver had been 98. Matter of Gies Lithographic Co., appointed by the court of Indiana, un- 7 App. Div. 550, 40 N. Y. Supp. 146; der the law of which it was organized. Matter of Muehlfeld & Haines Piano but before a receiver of the assets in 878 CORPORATIONS. 8. Title not superior to that of corporation. The receiver, as the representative of the corporation itself^ possesses no greater rights or higher equities than those which belong to the corporation.^ As to commercial paper, he does not stand in the position of a holder in due course.^ But, as the representative of the creditors, he may also pos- sess their powers ; and hence he may be permitted to attack a fraudulent conveyance of the corporate property.^ Where a receiver is not shown to represent any creditor having equity, he stands simply in the position of the company.* A lien on the property, created without fraud or illegal act before the appointment of the receiver, will receive recognition, and the receiver's title will be subordinate thereto.^ He takes title to the property as it exists at the time of his appointment, for the appointment of a receiver does not work the destruction of vested rights.^ Any legal preference which creditors may obtain without fraud or collusion on the part of the corporation, cannot be attacked as invalid by a receiver subsequently appointed.'^ If New York had been appointed; and it was held, that the attachment had priority over the rights of the receiv- ers, and that the funds were not im- pressed with a trust in favor of those entitled to share in the relief fund of the society. National Park Bk. v. Clark, 92 App. Div. 262^ 87 N. Y. Supp. 185. 1. Hyde v. Lynde, 4 N. Y. 387; But- terworth v. O'Brien, 28 Barb. 187; afi'd, 23 ,N. Y. 275. 2. Briggs V. Merril, 58 Barb. 389. 3. See, infra, Art. XI-M. Avoidance of acts of corporation. 4. Billings v. Robinson, 94 N. Y. 417; Cutting v. Damerel, 88 N. Y. 410; Savage v. Medbury, 19 N. Y. 32. 5. Matter of Binghamton Gen. Elec. Co., 143 N. Y. 261; Whitney v. N. Y. & Atlantic R. R. Co., 32 Hun, 165. Sale of property under lien. — Al- though one may have a valid lien on property in the possession of a receiver, and such lien will be respected by the court, the lienor cannot sell the prop- erty to satisfy his lien without the consent of the court. Walling v. sill- ier, 108 N. Y. 173. Lien for work. — Where certain work was done, the employers agreeing that the employed should have a general lien upon the property, and a receive/ was appointed for the employers, it was held that the lien should not be foreclosed, but the rights of the par- ties should be determined under the re- ceivership. Matter of Herbst, 63 Hun, 247, 44 St. Rep. 173, 17 N. Y. Supp. 760. Payment of lien. — In the absence of proof that the attaching creditor has obtained a, lien upon sufficient assets to pay his judgment, the receiver of the debtor will not be directed to pay the judgment out of the assets in his hands. Glines v. Supreme Sitting Order of the Iron Hall, 50 St. Rep. 743, 21 N. Y. Supp. 736. 6. Gorman v. Finn, 56 App. Div. 155, 67 N. Y. Supp. 546; affd, 171 N. Y. ' 629. 7. Varnum v. Hart, 119 N. Y. 101. CORPORATIONS. 879 a judgment has been entered against the corporation prior to the appointment, the receiver is bound by it so long as it re- mains in force. If the judgment is questionable, it is the duty of the receiver to apply to reopen it or take other steps to vacate it.^ As against the owner, a receiver acquires no title to property which is in the custody of the corporation, but which it does not own.* 9. Property in possession of another representative. A general assignee of a corporation, not a party to proceed- ings in which a receiver was appointed, cannot be ordered to surrender the assets to the receiver.^" The title of a general assignee of an insolvent corporation to its property, which he had reduced to possession before the commencement of the action to dissolve the corporation, is prima facie superior to that of the permanent receiver subse- quently appointed in such an action. If the receiver wishes to try the title of the general assignee, he must proceed by action and not by motion to punish the assignee as for a con- tempt in refusing to surrender the property on demand.^ While the court has power, in proceedings for the volun- tary dissolution of a corporation, to decree a distribution of its funds among those entitled thereto, it may not take from a trustee funds placed in his hands by the corporation for a specific purpose, pursuant to a contract obligation, and itself distribute them through its receiver instead of through the trustee ; the latter is, notwithstanding the dissolution, entitled to the possession of the trust fund, and the authority of the court is limited to compelling the trustee to distribute the fund, as provided for by the contract, and under the super- vision and orders of the court.^^ 10. Foreign receiver. The title of receivers of a foreign corporation appointed in another State is subject to the right of the courts of this State 8. Pringle v. Woolworth, 90 N. Y. 11. People of the State of New York 502. V- tlnited States Law Blank & Sta- 9. Corn Exchange Bank v. Blye, 101 tlonery Co., 24 Misc. 535, 53 N. Y. N. Y. 303. Supp. 852. 10. Matter of Muehlfeld, 16 App. 12. Matter of H. P. S. F. Assoc, 129 Div. 401, 45 N. Y. Supp. 16, 26 Civ: N. Y. 288. Pro. E. 265. 880 COKPOEATTONS. to control the corporate assets in this State for the benefit of domestic creditors.^"^ I. Actions by or against receivers. 1. Actions by receivers, in general. Under the subdivision 1 of section 239, stated above, a re- ceiver has the general right to bring actions to recover all the property, debts and things in action, belonging to or due the corporation in the same manner and with the like effect as such corporation might or could have done if no receiver had been appointed.^^ It is his duty to collect the assets of the corporation and reduce its choses to possession, and with all convenient haste to make distribution among the creditors and other parties entitled." 12a. Courtriglit v. Vreeland, 64 Misc. 46, 117 N. Y. Supp. 952. 13. i 260. Penalties recove' receiver. — ^AU penalties which i recovered by any receivers, pi to the provisions of this article, be deemed a part of the proper the corporation, and shall be dit uted as such among its creditors. General Corporation Law, § . Preferences in actions pr proceedii by or against receivers. — ^AU actions other legal proceedings and appea therefrom or therein brought by o against a receiver of any of the in- solvent corporations referred to in this chapter, shall have a preference upon the calendars of all courts next in or- der to actions or proceedings brought by the people of the State of New York. 14. Rockwell v. Merwin^ 45 N. Y. 166; Van Buren v. Chenango Ins. Co., 12 Barb. 671. Temporary receiver. — ^Where, pend- ing a stockholder's action against a foreign corporation and some of its of- ficers to set aside certaia alleged fraudulent transfers and to prevent certain other contemplated transfers, a receiver of the property of the corpora- tion is appointed to take possession of all its assets to prevent their unlawful disposition and waste, it has been held ' ■■■ -"owers and authority do not lintain an action .^ inain- i ^ -o ijranite Co., 23 C ,„„, 61 St. Rep. 852, 30 N. Y. Supp. 139. He has power to maintain an action to recover from a third party money collected by the defendant under a judgment entered against the insolvent corporation upon an offer made by it for the purpose of giving an unlawful preference, and the ins«lvent corpora- tion is not a necessary or proper party CORPORATIONS. 881 Even a foreign receiver can sue in this State, where there are no local interests adverse to the suit.-'^ A non-resident receiver of a foreign corporation, who holds an unpaid judg- ment recovered in another State against another foreign cor- poration, may maintain an action in the courts of this State to recover assets of the judgment debtor claimed to have been Unlawfully diverted and held by residents of this State.^^ Likewise, a receiver may be sued in the courts of this State, though the plaintiff should first procure leave of the court." An action for tort against a receiver of a corporation may be maintained, although committed before his appointment.^* So, too, the receiver can sue for damages for a tort committed before his appointment.-^* He is authorized to collect the rents and profits of real estate.^" He may maintain an action to determine priorities between conflicting claims to the fund remaining in his hands after final judgment.^^ He cannot, without consent of all parties interested, allow a claim which is not a charge on the trust fund, and he is bound to defend against an unjust claim.^^ "Rii^ it has been held that he is not bound to riic^n -y -. appointed by the .^ in the courts of this State, action. Nealia as . ». American Tube & Iron Co., 150 N. y. 42. Where, after a trial and decision ad- verse to plaintiff in an action in which a receiver pendente lite had been ap- pointed, but before judgment, an order was granted continuing the receiver- ship until after the decision of any ap- peal from the judgment, the receiver was held to have no authority after entry of judgment to bring an action to recover a claim, a part of the as- sets in his hands as receiver. Colwell V. Garfield Nat. Bank, 119 N. Y. 408. 15. Dyer v. Power, 39 St. Rep. 136, 14 N. Y. Supp. 873. 16. Trotter v. Lisman, 209 N. Y. 174. 56 17. See, infra, Art. XI-I-5. Leave of court to sue receiver. 18. Decker v. Gardner, 33 St. Rep. 541, 11 N. Y. Supp. 388. See also Decker v. Gardner, 124 N. Y. 334. 19. Gillett V. Fairchild, 4 Den. 80. 20. Wyckoff V. Scofleld, 98 N. Y. 475; Lief sky v. Mauger, 3 Sandf. Ch. 69. 21. Bamberger v, Fillenbrown, 12 Misc. 328, 33 N. Y. Supp. 614, 67 St. Rep. 321. 22. Attorney-General v. Life & Fire Ins. Co., 4 Paige, 224. 23. Sands v. Hill, 42 Barb. 651. 24. Pruyn v. McCreary, 105 App. Div. 302, 93 N. Y. Supp. 996. 882 CORPORATIONS. where permission to do so is granted by the court which ap- pointed them.^^ Where a receiver brings an action or proceeding, it is suffi- cient to allege that he has been appointed receiver, but where the answer denies the validity of his appointment he is bound to prove it before he can recover.^^ In order to prove the ap- pointment of a receiver it is sufficient to produce the petition, the order appointing him and his official bond.^^ The complaint will not be dismissed in an action brought by the receiver be- cause there was no proof that he had filed a bond, where it ap- pears that the order appointing him required a bond, and that he was subsequently ordered by the court to bring suit on the claim in question.^^ 2. Continuance of actions by or against corporation. The court has power to direct its receiver to appear in any litigation against the corporation pending in this or another State.^^ A receiver generally has power to continue a suit, which was brought by the insolvent corporation.^" The action does not abate by the appointment of the receiver.^^ If a judg- ment has been obtained against a corporation, a receiver may have it vacated if it was obtained fraudulently, collusively or without consideration.^^ The appointment of a successor to the receiver pending an action brought by him does not sus- pend its prosecution until the substitution of the new re- 25. Carrey v. Spencer, 36 N. Y. the plaintiff obtained against the cor- Supp. 886, 72 St. Rep. 108. poration itself. Section 1296 of the 26. Matter of O'Connor, 47 St. Rep. Code of Civil Procedure did not au- 415, 19 N. Y. Supp. 971. thorlze such an appeal by the receiv- 27. Palmer v. Clark, 4 Abb. N. C. 25. ers, as they are not entitled to be sub- 28. Hegewisch v. Silver, 140 N. Y. stituted as parties defendant. Jones v. 414. Woodin, 164 App. Div. 79, 149 N. Y. 29. Matter of People's Surety Co., 82 Supp. 377. See Civil Practice Act, Misc. 518, 144 N. Y. Supp. 131; re- § 577, as to when appeal may be taken, versed, on other grounds, 172 App. Div. 30. Albany Ins. Co. v. Van Vraken, 969, 156 N. Y. Supp. 1140. 42 How. Pr. 281. Appeals. — ^Under the Code of Civil 31. Phoenix Co. v. Badger, 67 N. Y. Procedure, it was held that receivers 294. of a corporation appointed to protect 32. Whittsley v. Delaney, 73 N. Y. its property pending the determination 571. of an action in which they had not 33. Hegewisch v. Silver, 140 N. Y. been made parties defendant, were not 414. entitled to appeal from a judgment for CORPORATIONS. 883 3. Actions against stockholder or officer. Primarily the receiver stands in the place of the corpora- tion, placed there by the court in order to preserve its assets and property and to do with them as he may be directed. What rights the corporation possessed and might enforce against its directors and trustees, the receiver possesses.^* He may sue the directors for negligence.^^ The receiver has the right of action against the directors of a corporation who misap- plied its funds or suffered them to be wasted by gross neglect or inattention.^® He can enforce the common-law liability of a trustee of a savings bank for a misapplication of the funds.^'' And section 244 of the General Corporation Law permits ah action by a receiver against a stockholder to recover the amount unpaid on his stock subscription.^^ And he may main- tain an action to restrain a judgment creditor from proceed; ing against a stockholder on account of his unpaid sub- scription.^* An action brought directly upon a stock subscription is one to recover a debt due the corporation and may be maintained by its receiver .■*" 34. Mason v. Henry, 152 N. Y. 529. Unlawful payment of dividends. — It has been said that the receiver of the property of a corporation cannot en- force the liability of directors of a cor- poration for paying out dividends which diminish its capital. Fritsch v. Homer, 3 Current Court Dec. 48. The receiver may maintain an action against its stockholders to recover divi- dends received by them while the cor- poration was insolvent (Curtis v. Lay- tin, 3 Keyes, 521) ; but he cannot im- peach the lawful acts of the corpora- tion. Hyde v. Lyhde, 4 N. Y. 387. Liability of directors under Member- ship Corporations Law. — The appoint- ment of a permanent receiver of a dis- solved membership corporation neither vests in him the personal right of its creditors to enforce the liability of di- rectors under section 11 of the Mem- bership Corporations Law nor does it enable him to assert or enforce the rights of the corporation under section 239(1) of the General Corporation Law. Fordham v. Poor, 109 Misc. 187, 179 N. Y. Supp. 367. 35. Kelly v, Dolan, 233 Fed. 635, 638. A receiver, suing to enforce the com- mon-law liability of a director of a corporation, may assert the unconsti- tutionality of a statute reducing the limitation upon such an action from six to three years, which does not pro-' vide a reasonable time after the time of its taking effect during which liabili- ties already incurred may be enforced. Gilbert v. Ackerman, 159 N. Y. 118; aflf'g, 33 App. Div. 371, 54 N. Y. Supp. 113. 36. Brinkerhoff v. Bostwick, 88 N. Y. 52. 37. Van Dyck v. McQuade, 57 How. Pr. 62. 38. Dayton v. Borst, 31 N. Y. 435; Sagory v. Dubois, 3 Sandf. Ch. 466; Whittlesey v. Frantz, 74 N. Y. 456; Pentz V. Hawley, 1 Barb. Ch. 122; Van Wagonnen v. Clark, 22 Hun, 497. 39. Eankine v. Elliot, 16 N. Y. 377. 40. Myers v. Sturgis, 123 App. Div. 884 COEPORATIONS. But it is not the absolute duty of a receiver, under section 52 of the Banking Law, to sue stockholders to enforce their statutory liability. Hence, it was held that, although a per- manent receiver failed to bring a statutory action against a solvent stockholder within the time limited by the statute, his account should not be surcharged with the amount which he might have recovered.*^ In no event should the accounts of a receiver be surcharged with the amount which he might have recovered from a stock- holder where the legal steps to be taken were necessarily left to his attorney-at-law whose appointment he did not control and whom the court refused to discharge on his motion, for the negligence to prosecute the stockholder was that of the attorney.^ 4. Leave of court for receiver to sue. Before commencing an action, a receiver must obtain leave of the court.*^ And leave to sue, when improvidently granted, may be revoked.^^ The court, having jurisdiction over a re- ceiver, may restrain him from further prosecution of an action.^^ And a complaint in an action by a receiver should allege that he has obtained leave to sue.^^ Where a receiver has been directed by the court to bring an action against cer- tain directors of a bank, and neither the receiver, creditor, nor the stockholders appeal from the order, the court will not reverse the order upon an appeal by the directors, even though they are also stockholders.*'' 470, 108 N. Y. Supp. 528; aff'd, 197 People v. Life Union, 84 Hun, 560, 32 N. Y. 526. N. Y. Supp. 1148. 41. People V. Bank of Staten Island, 44. Attorney-General v. North Am. 146 App. Div. »78, 131 N. Y. Supp. 53. Ins. Co., 6 Abb. N. C. 426. 42. People v. Bank of Staten Island, 45. Guaranty Trust Co. v. Edison 146 App. Div. 378, 131 N. Y. Supp. 53. United Phonograph Co., 128 App. Div. 43. Morgan v. Bucki, 30 Misc. 245 591, 112 N. Y. Supp. 929. 61 N. Y. Supp. 929. 46. Clukies v. Bank of N. Y., 74 App. Notice. — It is proper to deny a mo- Div. 39, 76 N. Y. Supp. 826; Morgan v. tion to direct the receiver of a corpora- Bucki, 30 Misc. 245, 61 N. Y. Supp. tion to sue directors, where notice of 929. the motion has not been given to all 47. People v. Com. Bank, 6 App. Div. the persons to be proceeded against. 194, 39 N. Y. Supp. 1000. CORPORATIONS. 885 5. Leave of court to sue receiver. An action cannot be brought against a receiver without first securing the consent of the court.^^ If a receiver is sued with- out leave of the court, the plaintiff is guilty of contempt of court and may be punished, accordingly/^ The court will on motion stay all proceedings in the action.^" But, until the court interferes, the action against the receiver may continue, and a judgment against him is valid, although the plaintiff did not procure leave to sue.^^ The omission to obtain leave to sue the receiver is not jurisdictional, although it may be a contempt. If the contempt is not willful, leave to sue may be granted nunc pro tunc on terms which will indemnify the re- 48. Matter of New York, etc., Tel. Co. V. Jewett, 115 N. Y. 166; Matter of French, 181 App. Div. 719, 168 N. Y. Supp. MS. Where motion made. — ^A motion for leave to sue a receiver is, in effect, a motion in the action in which the re- ceiver was appointed, and must be made in the judicial district in which such action was brought or in a county- adjoining the county in which it was brought. Matter of Commercial Bank, 35 App. Div. 224, 54 N. Y. Supp. 722. Order entered after commencement of action. — Where an action in replevin is brought against a receiver, service of summons and process will not be set aside on the found that the order per- mitting suit against him was not en- tered until two or three days after the commencement of the action. Mar- shall V. Friend, 33 Misc. 443, 68 N. Y. Supp. 502; affirmed, without opinion, 59 App. Div. 628, 69 N. Y. Supp. 1140. Federal receiver. — An action against a receiver appointed by the Federal courts may be brought in any court otherwise having jurisdiction of the ac- tion, without previous le&ve of the court appointing the receiver, where the action originates in any act or transaction of the receiver in carrying on the business connected with the property of which he is receiver. Orr Co. V. Cushman, 54 Misc. 121, 104 N. Y. Supp. 510. Right of resale. — The title to propi- erty which a receiver refuses to accept and pay for under a contract does not pass to the receiver so as to preclude the vendor from making a resale of the property without leave of the court in order to ascertain the amount of his loss by breach of the contract. Moore V. Potter, 155 N. Y. 481. 49. An action of trespass, brought without leave of the court and with knowledge that the defendant has been regularly appointed receiver of the property which is the subject of the action, has a direct tendency to defeat, impair, and prejudice the rights of the receiver in connection with his control and preservation of the property, and constitutes a contempt of court. Greene v. Odell, 43 App. Div. 608, 60 N. Y. Supp. 346. Notice of the application to punish a party for contempt of court for suing a receiver without leave, must be given to the Attorney-General. Langdon v. N. Y. Book Co., 39 St. Rep. 167, 14 N. Y. Supp. 308, 20 Civ. Pro. 280. 50. DeGroot v. Jay, 30 Barb. 483, 9 Abb. Pr. 364; James v. James Cement Co., 8 St. Rep. 490. 51. Pruyn v. McCreary, 105 App. Div. 302, 93 N. Y. Supp. 995; Hackley V. Draper, 4 T. & C. 614; aff'd, 60 N. Y. 88. 886 CORPORATIONS , ceiver.^- While a receiver is discharging his duties in the manner directed by the court, leave will not be granted to bring an action against him charging that he is a trespasser in so doing.^^ Thus, where a receiver holds property belong- ing to a third person by order of the court, in a proceeding to which the owners were parties, he cannot be sued without the permission of the court.^* Where a receiver takes possession of and accounts for cer- tain property, which did not belong to the concern for which he was appointed receiver, the owner of such property should apply to the court for relief or obtain leave of court before bringing action.^^ And the court will not generally grant permission to bring suit against a receiver where the claim has not been formally presented to the receiver.^^ The right of a person who has a lien on property, to hold possession of it is not atfected by the recovery of judgment for the amount of the indebtedness, and the lienor has a right to foreclose his lien and make the defendant's receiver a party, and should have leav^e to sue the receiver for that pur- pose.^^ Where a corporation is sued for an alleged trespass and attempts to justify unaer an agreement with a receiver who never authorized the act complained of, such a fact does hot make the action one against the receivers, so as to require leave of the court for its prosecution.^* A temporary receiver, who takes property belonging to a third person, in the belief that it belongs to his trust, is per- sonally liable for his conversion, and may, after a demand for the property and a refusal on his part to deliver it, be sued by the third person as of right, without the permission of the court. Where, however, the court, upon the accounting of the tem- porary receiver, to which the third person made himself a party, makes an order directing the temporary receiver to re- 52. Hirshfeld v. Kalischer, 81 Hun, 55. Case v. Duflfy, 86 N. Y. Supp. 606, 30 N. y. Supp. 1037, 63 St. Rep. 778. 220; James v. James Cement Co., 8 St. 56. Matter of Machwirth, 15 App. Rep. 490. Div. 65, 44 N. Y. Supp. 80. 53. Hardt v. Levy, 79 Hun, 351, 61 57. Pate v. Hoffman, 40 St. Rep. 915, St. Rep. 40, 29 N. Y. Supp. 375. 61 Hun, 386, 16 N. Y. Supp. 74. 54. Fallon v. Egberts Woolen Mills 58. Farnsworth v. Western Un. Tel. Co., 56 App. Div. 585, 67 N. Y. Supp. Co., 6 N. Y. Supp. 735, 25 St. Rep. 393. 347. CORPORATIONS. 887 lain the property converted as permanent receiver, he is en- titled to the protection of the court and cannot be sued with- out its permission.^^ An order granting leave to sue a receiver, made upon notice, is one affecting a substantial right and is appealable to the Appellate Division.*** 6. Security for costs. Under the Eules of Civil Practice, where a receiver applies to the court for leave to bring an action, he shall show in such application that he has sufficient property in his actual pos- session to secure the person against whom the action is to be brought for any costs which he may recover against such receiver ; otherwise the court may require the receiver to give a bond, with sufficient security, properly acknowledged, and approved by the court, conditioned for the payment of costs.*^ Before the adoption of this rule a receiver was required to give security for costs only where the action had been brought in bad faith or heedlessly or without reasonable prospects of success.*^ 7. Directions for payment of judgment against receiver. It is proper that a judgment against a receiver, sued as such, have a direction that he pay it "out of any funds which are or may hereafter come into his hands or under the direc- tion of the court applicable to that purpose."^ The costs of an action to which a receiver is a party should be paid in full, and an order may be made for that purpose where costs have been awarded against him. This is true al- though the action was originally brought against the corpora- tion, but was defended by the receiver.** 8. Settlement of controversies. Section 241 of the General Corporation Law provides with some detail for the settlement of controversies by referring to the same to one or more indifferent persons. The provision authorizing the receiver to agree with a 59. Fallon v. Egberts Woolen Mills Ridgeway v. Symons, 14 Misc. 78, 35 Co., 56 App. Div. 585, 67 N. Y. Supp. N. Y. Supp. 197, 25 Civ. Pro. R. 23, 347. 69 St. Rep. 552. 60. Matter of Commercial Bank, 35 63. Woodruflf v. Jewett, 37 Hun, 206. App. Div. 224, 54 N. Y. Supp. 722. 64. Locke v. Covert, 42 Hun, 484; 61. Rules of Civil Practice, Rule 176. Columbian Ins. Co. v. Stevens, 37 i^^. Y. 62. Hale v. Mason, 86 Hun, 499, 30 536; Camp v. Receivers of Niagara N. Y. Supp. 789, 67 St. Rep. 535; Bank, 2 Paige, 283. 888 CORPORATIONS. creditor upon a reference of a disputed claim is intended to afford a speedy and an economical method of determining the question at issue without the delay and expense attending an action at law. The object is to keep the contending parties out of court and to free them as far as possible from the forms of legal procedure. The statute provides for a reference of a claim by written agreement designating the referee or refer- ees to whose arbitrament the matter in dispute is to be sub- mitted. The sanction of the court to this agreement is not re- quired, and the selection of the referee is not only free from any judicial supervision or review, but even the discretion of a judge by whom the powers of the court are usually set in motion is dispensed with in the formal order which the statute directs the clerk to enter upon the filing of the agreement.^^ 9. Form of petition for instructions as to bringing suit. In the Matter of the INLAND LTJM- I BER COMPANY. [ First. The petition of G-eorge W. Foster respectfully shows to the court: That he is the receiver of the Inland Lumber Company, Geneva, Ontario county, in the State of New York, having been duly ap- pointed by an order of this court made in the above-entitled proceed- ings at a Special Term thereof held at the court house in the city of Rochester on the 10th day of January, 1910, and which said order was duly entered in the Ontario county clerk's office on the 11th day of January, 1910. Second. That your petitioner has duly given bond provided for in and by the terms of said order so appointing him as such receiver as aforesaid, which said bond was duly approved as to form, manner of execution, and sufficiency, and duly filed in the Ontario county clerk's office on the 11th day of January, 1910. That Frances F. Whitehill of BrookviUe, Pa., William J. Hood of Rochester, N. Y., and William Pugh of Rochester, N. Y., are each in- debted to the Inland Lumber Company, the said Frances F. White- hill in the sum of four thousand five hundred dollars ($4,500), the said William J. Hood in the sum of four hundred and ninety dollars ($490) and the said William Pugh in the sum of four hundred and ninety dollars ($490), the same being for unpaid subscriptions to the capital stock of the said Inland Lumber Company ; that said debtors refused to pay the same; that in the petitioners' judgment said claims are honest and collection should be enforced. Wherefore, your petitioners pray for the advice and direction of 65. People v. American Steam Boiler Ina. Co., 14 Misc. 162 (167), 35 N. Y. Supp. 355; aff'd, 3 App. Div. 504. CORPORATIONS. 889 this honorable court in the matters hereinbefore set forth and that he may be authorized to bring suit against the said Frances F. Whitehill, William J. Hood and William Pugh or any one of them for the amount due from each one and to proceed with the same in such man- ner and in such court as counsel may advise. That no further or former application has been made for this or any similar order or relief. Dated, Beceivev. , Attorney for Receiver. (Add verification.) 10. Form of order permitting suit. (Title.) (Special term caption.) Upon reading the petition of the receiver of the Inland Lumber Company, with proof of due service on Hon. Edward R. O'Malley; the Attorney-General of the copy of the petition and proposed order and notice of motion for this time and place, and on motion of W. S. O'Brien, attorney for the receiver, it is Ordered, that the said George W. Foster, receiver, be and he hereby is authorized and empowered and directed to take such action against Frances F. Whitehill of Brookville, Pa., William J. Hood of Roches- ter, N. Y., and William Pugh of Rochester, N. Y., or any one of them for securing the payment of the amount due from each to the said Inland Lumber Company as may seem best to counsel. J. Proceedings to discover assets. Section 240 of the General Corporation Law provides a pro- ceeding for examination of certain persons for the purpose of discovering the assets of the corporation under receivership. If he desired to obtain possession of books or any other property claimed by the company, which was in its possession, he instituted proper proceedings for their recovery so that there might be a determination of the question of ownership.^^ A receiver is under no obligation to attempt to take property from the possession of a third person, by force, without an express order of the court directing him to do so. The proper course is for the receiver to call upon the court to decide as to what property the receiver is entitled under the order of the court, and where it is in the possession of the third person who claims the right, to retain it, the receiver must proceed by suit against him.^'^ Under the earlier practice, a receiver could apply for a warrant to bring up for examination any person who is indebted to the corporation, or who has property be- longing to it in his custody ,^^ eS. Olmstead v. Rochester & Pitts- 67. Parker v. Browning, 8 Paige, 388. burg R. R. Co., 46 Hun, 552. 68. Noble v. Halliday, 1 N. Y. 330. 890 OORPOKATIONS, A temporary receiver of a corporation has power to main- tain any action or special proceeding for the purpose of col- lecting, receiving or preserving the property of the corpora- tion. A proceeding by such receiver to examine a person al- leged to have in his possession property to which the receiver is entitled, is a special proceeding for the purpose of collect- ing, receiving and preserving the property of the corporation an'd one which the receiver is entitled to maintain.^^ A tem- porary receiver in sequestration proceedings has power to examine a person alleged to have possession of property of which he should take possession.™ K, Investment of funds. A receiver has no authority without the direction or consent of the court to invest the moneys in his hands. In the absence of such direction, it is his duty simply to keep and protect the trust fund and hold it ready for distribution. Where, how- ever, a receiver, without authority of the court but acting in entire good faith, placed the funds in the hands of brokers to be loaned on call and charged himself with the amounts re- ceived for interest, it appearing that no part of the fund was lost and that the parties interested therein were not injured but were probably benefited, it was held that an order charg- ing the receiver with interest beyond the amount received, was error.'^^ And, it has been said that, if he exercises his best judgment in the investment of the funds, he will not be charged for losses.''^ And where the receiver makes unauthor- ized loans, but charges himself with the interest received, he will not be charged a greater sum.''^ The receiver should keep the trust funds separate or he will be charged with interest.'^* Where, upon the accounting by the receiver of an insolvent insurance company, it appears that he has deposited a por- tion of the trust funds in his own private bank account, the contestants may prove what amounts he has from time to time drawn out upon his individual checks for his own purposes, in 69. Rich V. Sargent Granite Co., 23 72. Hynes v. McDennott, 3 St. Rep. CSv. Pro. R. 359, 61 St. Rep. 852, 30 582. N. y. Supp. 139. 73. Attorney-iGeneral v. North Am. 70. Rich V. Sargent, 61 St. Rep. 852, Life Ins. Co., 89 N. Y. 94. 30 N. Y. Supp. 139, 23 Civ. Pro. R. 359. 74. Utica Ins. Co. v. Lynch, 11 Paige, 71. Attorney-General v. North Amer. 520; In re Commonwealth Ins. Co., S2 Life Ins. Co., 89 N. Y. 94; modifying, Hun, 78. 26 Hun, 294. CORPORATIONS. 891 order tliat he may be charged with interest upon any of the trust funds so used.''^ L. Appraisal of property of insolvent corporation. General Corpora- tion Law, § 310. Whenever by reason of the provisions of any law of this state it shall become necessary to appraise in whole or in part the property of any corporation in the hands of a receiver or otherwise, the persons whose duty it shall be to make such appraisal shall value the real estate at its full and true value, taking into consideration actual sales of neighboring real estate similarly situated during the year immediately preceding the date of such appraisal, if any; and they shall value all such property, stocks, bonds or securities as are customarily bought or sold in open markets in the city of New York or else- where, for the day on which such appraisal or report may be required, by ascertaining the range of the market and the average of prices as thus found, running through a reasonable period of time. M. Avoidance of acts of corporation. Under section 268 of the Eeal Property Law and section 19 of the Personal Property Law, a receiver is authorized to dis- affirm a transfer or agreement made by the corporation in fraud of its creditors.''^ The statutory provisions are derived from Chapter 314 of the Laws of 1858. A receiver may sometimes assert the rights of creditors which he might be unable to assert as representative of a cor- poration, upon the principle which permits a receiver of an insolvent corporation in the interest of creditors to disaffirm dealings of the debtor in fraud of their rights." The receiver represents both the corporation and the creditors and stock- holders, and in his character as trustee for the latter he may disaffirm and maintain an action to set aside illegal or fraudu- 75. Matter of Commonwealth Fire An ancillary receiver of a foreign Ins. Co., 32 N. Y. 78. corporation, unless the order of ap- 76. A temporary receiver of an in- pointment provides otherwise, has only solvent corporation, appointed in an ac- the powers of a temporary receiver, tion of sequestration, has power to and cannot maintain an action in dis- maintain an action to recover from a affirmance of fraudulent transfer by third party, money collected by the de- the corporation. Buckley v. Harrison, fendant under a judgment entered 10 Misc. 683, 31 N. Y. Supp. 999, 65 against the insolvent corporation upon St. Rep. 93. an offer made by it for the purpose of 77. Pittsburg Carbon Co. v. McMil- giving an unlawful preference, and the Ian, IIS N. Y. 46, m Abb. N. C. 96, 28 insolvent corporation is not a neces- St. Eep. 807; aff'g, 24 St. Rep. 848, 53 sary or proper party defendant to such Hun, 67, 23 Abb. N. C. 298, 6 N. Y. action. Nealis as Receiver v. Ameri- Supp. 433. can Tube and Iron Co., 150 N. Y. 42. 892 CORPORATIONS. lent transfers of the property of the corporation made by its officers or agents, or to recover its funds or securities invested if misapplied.''^ He may disaffirm the validity of acts of a cor- poration void in themselves, where such acts are forbidden and unauthorized by law.'^^ He may repudiate any illegally executed contract of the corporation and reclaim the prop- erty.^" But a receiver, merely as such, may not disaffirm acts of the corporation or of its directors, if it does not appear that it was insolvent or has creditors to be protected, or that those having an equitable interest iij the property affected have re- pudiated the transaction.^ The receiver has such an interest in the property as is suffi- cient to enable him to prosecute an action to set aside a mort- gage executed by the corporation without the assent of the stockholders,*^ or to avoid a chattel mortgage upon the cor- porate property.*^ He may bring an action to determine what bonds which have been issued by a company are secured by a mortgage issued by it, and what bonds should be excluded from sharing in the proceeds arising from the foreclosure of the mortgage.** And he may maintain an action to determine the validity of bonds and to what extent a mortgage is a valid and subsisting lien upon the property of the corporation.*^ If the insolvent corporation executed a bill of sale of its property in contravention of the Stock Corporation Law, he may maintain an action for conversion against the vendee, and is not obliged to bring a suit in equity to compel the ven- dee to account for property transferred.*^ But a receiver can- 78. Gillett V. Moody, 3 N. Y. 479; 80. Tallmadge v. Pell, 7 N. Y. 328. Matter of Attorney-General v. Guar- 81. Forker v. Brown, 10 Misc. 161, dian Mutual Life Ins. Co., 77 N. Y. 62 St. Rep. 480, 30 N. Y. Supp. 827. 272; Herring v. New York, etc., R. Co., 82. Vail v. Hamilton, 85 N. Y. 453; 105 N. Y. 340; Pittsburgh Carbon Co. Herring v. New York, etc., R. Co., 105 V. McMillan, 119 N. Y. 46, 24 Abb. N. N. Y. 340. C. 96, 28 St. Rep. 807; afif'g, 53 Hun, 83. Rudd v. Robison, 54 Hun, 339, 7 67, 23 Abb. N. C. 298, 6 N. Y. Supp. N. Y. Supp. 535; reversed, 126 N. Y. 433, 24 St. Rep. 848; Nathan v. Whit- 113. lock, 9 Paige, 152; Atkinson v. Roches- 84. Herring v. New York, etc., R. ter Printing Co., 114 N. Y. 168; Os- Co., 105 N. Y. 340. good V. Laytin, 3 Abb. Ot. of App. Dec. 85. Hubbell v. Syracuse Iron Works, 418. 42 Hun, 182, 4 St. Rep. 690. 79. Hoyt V. Thompson, 5 N. Y. 320; 86. McQueen v. New, 45 App. Div. Leavitt, Receiver, v. Yates 4 Bdw. Ch. 579, 61 N. Y. Supp. 464. 134. CORPORATIONS. 893 not impeach or disaffirm the authorized acts of the corpora- tion or its agents, and his appointment does not change the relation between the corporation and parties with whom it has been dealing.^ An action to set aside transfers made by a judgment debtor cannot be maintained by a receiver whose appointment was in- valid, although the complaint is amended so as to set forth subsequent valid appointment, as in such case no cause of ac- tion existing at the commencement of the action is shown.^^ An action to procure the cancellation of a judgment entered against a corporation by default upon the ground that the note sued upon was given without consideration, cannot be maintained by a receiver of the corporation appointed after the judgment was procured, where the complaint contains no allegation of fraud, collusion, accident, mistake, or any other ground for equitable interference.*^ N. Procuring advice of court. A receiver, being an officer of the court and subject to its direction, and being charged with responsible and often embarrassing duties, it is proper that he should, on suitable occasions, apply to the court for instructions.^" And if there is danger that the fund in his hands will be unfairly dis- tributed, he may apply to the court for its protection.^^ The court may make an order authorizing a receiver to take advice of counsel as to a defense.^^ 0. Protection of court. The court, in the administration of funds through a re- ceiver, will see that he is protected against needless annoy- ance and interference in the discharge of his duties, and that parties wilfully embarrassing him are arrested and pun- ished.^^ 87. Shaughnessy v. Rensselaer Ins. 90. Matter of Van Allen, 37 Barb. Co 21 Barb. 605; Williams v. Babcoek, 225; People v. St. Nicholas Bank, 76 25 Barb. 109; Bell v. Sibley, 33 Barb. Hun, 525, 58 St. Rep. 843, 28 N. Y. 610; Savage v. Medbury, 19 N. Y. 32; Supp. 114. • Davenport v. Beardaley, 23 Barb. 656. 91. People v. Security, etc., Co., 79 88. Banigan v. Village of Nyaek, 25 N. Y. 267. " App. Div. 150, 49 N. Y. Supp. 109. 92. Troy Savings Bank v. Morrison, 89. Ingalls v. Merchants' National 27 App. Div. 423, 50 N. Y. Supp. 225. Bank, 51 App. Div. 305, 64 N. Y. Supp. 93. Eddy v. Co-operative Dress Asso., 911. 3 Civ. Pro. R. 434. 894 CORPORATIONS. He is an officer of the court appointing Mm and his posses- sion is the possession of the court. The court will not permit his possession to be disturbed and will protect him from molestation in the discharge of his duties.^* No person has a right to interfere with the possession of the receiver ; and, if he does so, he is in contempt of court and punishable accord- ingly.^^ This is true even though the receiver declines to act as such. The property being in the custody of the court, per- sons having liens upon it have no right to interfere with its possession by the receiver without an adjudication by the court. If, however, the property is in the possession of the sheriff under a levy made under an execution and not in the possession of the receiver, and is sold by the sheriff without the permission of the court, such sale is not absolutely void, but at most can be held to be irregular.^^ A court which has, in its exercise of a rightful jurisdiction, appointed a receiver, can make an order prohibiting any after-interference, by way of levy or seizure, with the property in his possession.^^ A judgment creditor will not be permitted to take property on execution from a receiver.^^ By the proper presentation to a State Court, after due notice of the application, of a petition praying for the disso- lution of a corporation and upon the appointment of a re- ceiver, the court acquires jurisdiction of the subject matter, and although the receiver has not actually taken the property of the corporation into his manual possession, the jurisdiction of the court over it is exclusive. The appointment of the re- ceiver is completed by the filing and entering of the order ap- pointing him, although he may be directed to execute and file g, proper bond before he proceeds to discharge his duty; when that is done he can take actual manual possession of the prop- erty and his title relates back to the date of appointment. No other court, therefore, either Federal or State, can obtain jurisdiction over the property after the filing and entry of the 94. Attorney-General v. Guardian Constr. Co., 99 N. Y. 398; Matter of Mut. Life Ins. Co., 77 N. Y. 272. Schuyler Steam Tow Boat Co., dl Hun, 95. Matter of Woven Tape Skirt Co., 384, 43 St. Eep. 163, .18 N. Y. Snpp. 12 Hun, 111; Noe v. Gibson, 7 Paige, 87; affirmed, without opinion, 136 513. N. Y. 169; reversed, 154 U. S. 256. 96. Varnum v. Hart, 119 N. Y. 101. 98. Chapman v, Douglas, 5 Daly, 97. Woerishoeffer v. North River 244. CORPORATIONS. 895 order, even under process upon which possession was taken prior to the filing of the bond.^^ P. Continuance of corporate business. 1. In general. Ordinarily, it is the duty of the receiver of a corporation to wind up the corporate affairs and not to'continue its business. But, in a proper case, the court may appoint a receiver to carry on the business.^ A receiver of an insolvent corporation is not bound to com- plete its contracts, but, where he does so, with the consent of all parties interested, the cost of completion is chargeable against special creditors who have an assignment of or lien upon the proceeds of such contracts.^ Under an order authorizing him to continue the business and make up and dispose of such goods as he can manufacture at a profit for such period of time as to him seems beneficial to the creditors and stockholders, or until the further order ■ of the court, and to make contracts therefor, the receiver of a corporation has no authority to contract for the future mak- ing and delivery of goods within a specified time, and he can- not recover for a loss of profits in case of a breach of such con- tract by the failure of the other party thereto.* One of the purposes of a receiver of a railroad corporation is to manage and operate the property and maintain its in- tegrity as a road and as a going business.^ But he has no power incident to his general authority to 99. Matter of Schuyler Steam Tow Supp. 751. Boat Co., 136 N. Y. 169; reversed, 154 2. Matter of A. E. Chasmor & Co., U. S. 256. 22 Misc. 680, 50 N. Y. Supp. 1065. 1. Jackson v. DeForest, 14 How. Pr. 3. Matter of Punnett Cycle Mfg. Co., 81; Smith v. N. Y. Consol. Stage Co., 24 Misc. 310, 87 St. Kep. 204, 53 N. Y. 28 How. Pr. 377, 18 Abb. Pr. 419; Supp. 204; aff'd, 33 App. Div. 643, 64 Heatherton v. Hastings, 5 Hun, 459. N. Y. Supp. 1114. A temporary receiver, as such, has 5. Townsend v. Oneonta, C. & R. S. no authority to continue the business E. Co., 88 App Div. 208^ 84 N. Y. of a concern, and, imless he is author- Supp. 427. ized to do so by the court, the estate Permission to cross tracks. — A re- cannot be charged with liability in- ceiver cannot, without order of the curred by him in the business. Apple- court, grant a railroad company, other ton V. Welch, 20 Misc. 343, 45 N. Y. than that which he represents, permis- 896 CORPORATIONS. create a lien on the property of the company, for the purchase of rolling stock.'' A temporary receiver of a railroad corporation has no power to pay a debt of the corporation incurred for supplies furnished before the foreclosure suit in which he was ap- pointed was begun, where no authority to pay debts was given in the order appointing him, though he might be directed, on application therefor, to pay wages and current expenses essential to enable him to continue the operation of the road.'' A receiver who, without an order of the court, continues the business may be individually liable for his contracts.^ A receiver of a corporation authorized " to carry on and continue the business " is not individually liable for goods purchased for that purpose.^ A receiver of a corporation duly appointed by a United States District Court in one State, and empowered " to carry on and continue the business ... so far as may be necessary for the preservation from loss of the outstanding contracts ' ' of the corporation, may make purchases in another State, in order to complete the manufacture of certain articles, without being personally liable therefor, provided that he discloses the character in which he assumes to act and the source of his authority.^" sion to cross a railway of which he is A temporaiy receiver appointed in an receiver. Howlett v. N. Y., West Shore action to dissolve a corporation who is & Buffalo E. R. Co.j 14 Abb. N. C. 328; not authorized by the court to continue aff'd, 28 Hun, 55. the business or sell the property has no Construction of road. — So long as authority to employ a truckman, and the corporate rights and franchises Of the latter cannot maintain an action a corporation have not been adjudged ^or wages against him in his represen- to be forfeited in an action brought tative capacity. Meyer v. Lexow, 1 against it by the people, the fact that App. Div. 116, 37 N. Y. Supp. 67, 72 it is alleged to be insolvent and a re- St. Rep. 220. ceiver has been appointed in an action 8. Sayles v. Jordan, 2 N. Y. Supp. brought against it, does not authorize 827, 19 St. Rep. 349; affirmed, without the court to restrain the receiver from opinion, 121 N. Y. 685. proceeding to construct the road as aai- 9. Olpherts v. Smith, 54 App. Div. thorized by the charter. Moran v. Ly- 514, 66 N. Y. Supp. 976; affirmed, decker, 27 Hun, 582. without opinion, 173 N. Y. 593. 6. Vilas V. Page, 11 St. Rep. 416. 10. Sager Mfg. Co. v. Smith, 45 App. 7. Mercantile Trust Co. v. Kings Co. Div. 358, 60 N. Y. Supp. 849; aff'd, 167 El. Ry. Co., 40 App. Div. 141, 57 N. Y. N. Y. 600. Supp. 892. COBPOKATIONS. 897 But one authorized by order " to carry on and continue the business " of the corporation, who purchases goods neces- sary to enable him to do so, and accepts as receiver a draft for the purchase price drawn upon him as receiver by the vendor, is not individually liable for the amount of the draft, where it appears that the vendor dealt with the receiver upon the faith of the receivership alone.^^ The receiver of a street railway company is not liable for negligence in its operation at a time when the title of the rail- road was vested in him, but before he had assumed its oper- ation.'^ But a receiver of a railroad who operates and con- trols it, is liable for injuries of his employees to the same ex- tent as the company would have been. He cannot absolve himself from liability for not keeping the tracks in good con- dition by showing the lack of funds.-^^ He may not be person- ally liable, when no personal neglect is imputed to him either in the selection of agents or in the performance of any duty.^* But, though not individually liable, damages for injuries may be chargeable upon and payable out of the fund in court, the Same as other expenses of administration.^^ 2. Form pf petition for leave to continue business. In the Matter of the BUFFALO I GUM COMPANY. f To the Supreme Court: The petition of Eugene L. Falk respectfully shows to this court : 1. That he was appointed temporary receiver in the above-entitled proceeding by an order of this court dated on the 25th day of Oc- tober, 1910. 2. That he immediately entered upon his duties as such receiver and qualified as directed in said order and has ever since and still is acting as such temporary receiver. 3. Your petitioner further shows that the business of said corpora- tion consists of the manufacturing and sale of chewing gum. That there are at the present time a number of unfulfilled orders and con- tracts and that there is now on hand perishable property which should be made up into the finished product and sold. That said orders which 11. Olpherts v. Smith, 54 App. Div. 15. Graham v. Chapman, S3 St. Rep. 514, 66 N. Y. Supp. 976; affirmed, 349, 11 K Y Supp. 319. without opinion, 173 N. Y. 593. 14. Cardot v. Barney, 63 N. Y. 281. 12. Lauber v. Linch, 65 Misc. 209, 15. Kain v. Smith, 80 N. Y. 458. 119 N. Y. Supp. 614. 57 898 CORPOKATIONS. are now unfulfilled and which are daily coming in can be filled at a profit according to your petitioner's belief. That the good will of said business demands that the business of said corporation should be continued and its orders fulfilled so that the same may be sold for the largest possible amount and unless such business is continued and the orders fulfilled the good will of the business will deteriorate. 4. Your petitioner further shows that by reason of the foregoing facts he verily believes that it will be for the best interest of creditors to permit him to carry on said business and fulfill the orders now on hand. Wherefore, your petitioner asks for an order authorizing him to continue such business. Dated, (Add verification.) Petitioner. 3. Form of order authorizing continuance of business. (Title.) (Special term caption.) On reading and filing the petition of Eugene L. Falk, verified the 28th day of October, 1920, asking for an order permitting him to continue business of the above-named corporation and it appearing to the satisfaction of the court that it will be for the best interest of creditors that said temporary receiver be given an order permitting him to carry on said business, and upon reading and filing due ad- mission of service of the notice of this application and the Attorney- General of the State of New York appearing in open court by his representative, "Walter F. Hofheins, of the city of Buffalo, N. Y., and not objecting thereto, and after hearing Edward C. Schlenker, of counsel for the petitioner and due deliberation having been had thereon, Now, on motion of Edward C. Schlenker, Esq., attorney for pe- titioner, it is Ordered, that said temporary receiver have permission and he is hereby authorized and empowered to continue and carry on the busi- ness of said company of manuf acturipg and sell chewing gum and all other matters incidental to said business until the further order of this court, provided, however, that no indebtedness shall be incurred by said temporary receiver for that purpose except the necessary help and supplies without the further order and express authority of thite court. Q. Issuance of receiver's certificates. 1. In general. Courts have the temporary power to authorize the issuance of certificates of indebtedness by the temporary receiver of a private corporation but not to make them prior liens.^^ They 16. Matter of Westchester County Brewery, 73 Misc. 352, 131 N. Y. Supp. 16. CORPOKATIONS. 899 are issued, if at all, only for the expenses of preserving, main- taining and operating the property and business." The court has power to authorize the receiver of a railroad to issue and sell receivers' certificates to raise money for the further completion, equipment and extension of the road, for the court may protect the public in its legal right to have the railroad operated.^^ But a receiver of a railroad has no power without the order of the court to issue notes or certificates binding upon the trust estate, and the holder of them can make out an equitable claim thereon only by showing that the money received there- for was used for the benefit of the estate.^^ He has no power incident to his general authority to create a lien on the prop- erty of the company, for the purchase of rolling stock.^" Re- ceivers' certificates do not bind parties who are not concluded by the judgment and proceedings in the action in which they were issued.^^ If issued on an ex parte order, they do not create a lien in preference to the bondholders.^^ The receiver of a railroad, appointed in sequestration pro- ceedings, must, under section 104 of the General Corporation Law take steps to " preserve " the property, and to that end it has been held that he has power to issue receiver's certifi- cates to raise funds to complete the road.^^ 2. Form of order granting leave to receiver to issue certiiicates. (Title.) (Special term caption.) An application having been made by Eugene Warner, temporary receiver of ihe Buffalo Exposition Company in proceedings for the voluntary dissolution of said corporation, for an order authorizing said receiver to borrow the sum of three thousand dollars ($3,000) and issue his certificate therefor, and upon reading and filing the petition of Eugene "Warner, verified the 9th day of July, 1909, and Eugene Warner appearing and stating in open court that in his opinion it would be advisable to borrow said sum of three thousand dollars ($3,000) and continue the business, which in his opinion could be 17. Knickerbocker Trust Co. v. 21. Stevens v. Union Trust Co., 57 Oneonta, etc., R. Co., 201 N. Y. 379. Hun, 498, 11 N. Y. Supp. 368. 18. Rochester Trust & Safe Deposit 22. Raht v. AttriU, 106 N. Y. 423; Co. V. Oneonta, Crfoperstown & Rich- Knickerbocker Trust Co. v. Tarrytown. field Springs Railway Co., 122 App. W. P. & M. Ry. Co., 133 App. Div. 285, Div. 193, 107 N. Y. Supp. 237. 117 N. Y. Supp. 871. 19. Wesson v. Chapman, 77 Hun, 23. Rochester Trust, etc., Co. v. One- 144, 59 St. Rep. 44, 28 N. Y. Supp. 431. onta, etc., Ry. Co., 122 App. Div. 193, 20. Vilas V. Page, 11 St. Rep. 416. 107 N. Y. Supp. 237. 900 COKPOEATIONS. made to payj that he had cut down the running expenses of said business and that the attendance had been very good for the last and past week, and that he had advertised to continued the business; and it appearing to the satisfaction of the court that in order to continue said business it is necessary that the receiver be authorized to borrow said sum, and that unless said loan be authorized the assets of said corporation, which consists of the buildings on said property, will be of little or no value, whereas if said business is conducted said build- ing may be of greater value, and will inure to the benefit of the gen- eral creditors of the Buffalo Exposition Company, and it further ap- pearing that since the said business has been conducted at a gain, and that unless the receiver is authorized to borrow money said business must be discontinued, in which event the creditors of said Buffalo Exposition Company would receive nothing, and after hearing Eugene Xi. Faulk, counsel for the receiver, in support of said application, and Walter F. Hofheins, representing the Attorney-General of the State of New York, consenting thereto, Now, on motion of Eugene L. Falk, attorney for said receiver, it is hereby Ordered and decreed, that the said Eugene Warner be and he hereby is authorized to issue and deliver his certificate as receiver to the person, firm or corporation for the sum of three thousand dollars ($3,000) for moneys to be advanced by said person, firm or corpora- tion to the said receiver. Said certificate shall be a first lien upon all and singular the property of the said Buffalo Exposition Com- pany. The certificate under this order shall be countersigned by the clerk of the court, and shall be substantially in the following form : "This is to certify that Eugene Warner, receiver of the Buffalo Exposition Company, as such receiver and not individually is in- debted unto or the bearer hereof in the sum of three thousand dollars ($3,000) payable on or before the 1st day of September, 1909, with interest from the date hereof at the rate of 6 per cent per annum, out of the assets of the Buffalo Ex- position Company." The said certificate is by the terms of said order a first lien on all and singular the property of the Buffalo Exposition Company, owned by it at the date of said order appointing Eugene Warner receiver, or thereafter acquired .by said receiver, and upon the income thereof, and is prior in right to all other claims other than the actual ex- penses necessary in and incidental to the said receivership. Granted, Dated, Special Deputy Clerk. COTIPORATIONS. 901 R. Sale of assets. 1. General Corporation Law, § 245. Duty of receiver to convert assets into money. The receivers shall, as speedily as possible, convert the property, real and personal, of the corporation into money. (See B., C. &. G. Consol. L., 2nd Ed., p. 3196.) 2. General Corporation Law, § 246. Duty of receiver as to private A receiver duly appointed in this state by and pursuant to a judgment in an action, or by and pursuant to an order in a special proceeding may, upon application to the court by which such judgment was rendered, or such order was made, and upon notice to such parties as may be entitled to notice of application made in such action or special proceeding, be authorized by the said court to sell or convey the property, whether real or personal, of the cor- poration of which he is the receiver, at private sale, upon such terms and conditions as the court may direct. (See B., C. & G. Consol. L., 2nd Ed., p. 3196.) 3. Duty to convert assets into money. Not only is it within the power of a permanent receiver to sell the assets of the corporation, but it is his duty to do so.^* He is vested with all the property and effects of the corpora- tion and has full power to sell and dispose of the same and settle its affairs.^^ One having a lien on the corporate prop- erty or an interest therein, cannot be compelled to exchange his interest for a lien on other property.^* A receiver cannot invest the assets in stock of another corporation without the consent of all the stockholders.^^ A receiver may assign a chose in action due the corporation without using the corpor- ate seal ; he should act, contract and convey in his own name.^^ An order of the court is not necessary in order that the re- ceiver may have authority to sell a claim ; it is simply a pro- tection to him against a charge that he has exercised his dis- cretionary power unwisely.^^ Where a corporation is dis- solved because the trustees cannot agree the court may, after the payment of the liabilities and expenses of the receivership, 24. Frothingham v. Barney, 6 Hun, 156 App. Div. 920, 141 N. Y. Supp. 366. 1147. 25. Verplanck v. Merchants' Ins. Co., 27. Frothingham v. Barney, 6 Hun, 2 Paige, 438; White v. Haight, 16 N. Y. 366. 316. 28. Hoyt v. Thompson, 5 N. Y. 320. 26. Smith v. Westchester, etc., Co., 29. Higgins v. Herrmann, 23 App. 78 Misc. 75, 137 N. Y. Supp. 690; aff'd, Div. 420, 48 N. Y. Supp.. 244. 902 COEPORATiONS. order a sale and distribution of the remaining assets.^" A re- ceiver in possession of property claimed by many persons on the ground that the vendees had procured it by fraud may be directed to sell all the goods and hold the proceeds subject to the order of the court.^^ 4. Property subject to liens. There is no statutory authority permitting a receiver, in an action brought by the people to dissolve a corporation on the ground of insolvency, to sell the real estatfe subject to certain liens, referred to in the final decree, and disregard others that are valid and existing. He is required to redeem mortgages and pledges and satisfy judgments which may be incum- brances on the property or else sell the property subject thereto. The fact that a decree directs the permanent receiver to sell its real estate, subject to certain liens specified therein, does not have the effect of divesting the lien of an existing judg- ment not specified; and, until such judgment is satisfied from the moneys in the hands of the receiver, it is the right of the owner thereof to proceed to execution and sell the property subject to the order of the court.^^ An order directing the receiver to sell and convert property into cash, subject to the liens of execution, does not render judgments and executions valid which would otherwise be in- valid.^^ Where a receiver, duly appointed in an action, in pursuance of the directions of a judgment regularly obtained therein, sells property in his possession, as such receiver, he is not a trespasser, but, although there are liens on the property, is protected by the judgment, as are also all persons aiding and assisting him.^* 5. Confirming and vacating sale. In its discretion, for good cause shown, the court may vacate a sale made by a receiver.^ 30. Ex parte Woven Tape Skirt Co., 33. Rossman v. Seavor, 22 Misc. 661, 8 Hun, 508. 51 N. Y. Supp. 91; affd, 41 App. Div. 31. Nat. Park Bank v. Goddard, 62 603, 58 N. Y. Supp. 677. Hun, 31, 41 St. Rep. 439, 16 N. Y. 34. Walling v. Miller, 108 N. Y. 173. Supp. 343. 35. HacWey v. Draper, 60 N". Y. 88; 32. Matter of Coleman, 174 N. Y. Farmers' Loan and Trust Co. v. Bank- 373. ers & Merchants' Tel. Co., 119 N". Y. 15. COKPORATIOETS. 903 Proof of an agreement by the purchaser to pay the claim of a creditor of the corporation if he abstained from bidding, without any evidence that it was acted upon by the parties or of inadequacy of consideration, is not sufficient to invalidate the sale.^^ But gross inadequacy of price is sufficient ground for set- ting aside a receiver's sale.^^ Where a receiver, in an action against a cqrporation, fraudulently obtains an order for the sale of a debt due the corporation, an equitable action, at the suit of the creditor, will lie to vacate the order and set aside the sale.^^ Where a receiver is directed to sell property subject to the order of the court, any transfer before such confirmation is without authority. The transfer is not void, but voidable in case confirmation is denied, and in that case the transfer will not be operative.^^ A contract of sale, made by the receiver of an insurance company, is, while executory, subject to the supervision of the court, which may sanction or disapprove it. If the sale appears to be inequitable, the court will refuse to direct the receiver to complete it.^" An omission by the receivers in proceedings for the disso- lution of a corporation to serve notice upon the Attorney- General of an application for leave to sell property, is cured and the purchaser's title perfected by subsequent order con- firming the sale made upon notice to the Attorney General.*^ 6. Sale by temporary receiver. A court of equity appointing a receiver pendente lite can sell the property in the receiver 's hands whenever such course becomes necessary to preserve the interests of all the parties.^ 36. Johnson v. Rayner, 25 App. Div. (U. S.) 196. 598, 49 N. Y. Supp. 1959, 27 Civ. Pro. 40. Attorney-General v. Continental 102.' Life Ins. Co., 94 N. Y. 199. 37. Eawolle v. Kalbfleisch, 47 Misc. 41. Johnson v. Rayner, 25 App. Div. 364, 94 N. Y. Supp. 16. 598, 49 N. Y. Supp. 959, 27 Civ. Pro. R. 38. Hackley v. Draper, 60 N. Y. 88; 102. afl'g, 2 Hun, 523. 42. Porter v. Fraser, 57 St. Rep. 516, 39. Simmons v. Wood, 45 How. 262; 6 Misc. 557, 27 N. Y. Supp. 517. Koontz V. Korthern Bank, 16 Wall. 904 CORPORATIONS. 7. Purchase by receiver. Where the receiver of an insolvent corporation who held the equity of redemption in mortgaged premises, purchased them under the foreclosure of the mortgage held by the corpora- tion of which he was the receiver, he was held to retain them for the benefit of the cestuis que trust, who might elect and adopt the purchase or demand a resale. This rule is entirely independent of the question whether in fact any fraud has intervened, but is upon the ground that one standing as trus- tee in respect to property is not permitted to purchase and hold it for his own benefit.^^ 8. Form of notice of motion for order extending powers of temporary receiver and directing sale of property. (Title.) Sir: Please take notice that upon the papers and proceedings herein, an3 upon a petition, a copy of which is herewith served upon you, a motion will be made at a Special Term of the Supreme Court to be held at the city hall, in the city of Kingston, on the sixth day of April, one thousand eight hundred and ninety-five, at the opening of the court on that day, or as soon thereafter as counsel may be heard, for an order extending to the temporary receiver herein sundry powers and duties of a permanent receiver and granting him leave to sell sundry personal property held by him as such receiver, and for such other or further relief or order as to the court may seem just. Dated, Saugerties, N. Y., April 5th, 1895. Yours, etc., EDGAR M. HAINES, Attorney for Receiver. To Hon. Theodore E. Hancock, Attorney-General. 9. Form of petition for order extending powers of temporary receiver and directing sale of property. (Title.) The petition of Howard Gillespy, respectfully shows to the court : First. That he is the temporary receiver of the Sheffield Manufac- turing Company of Saugerties, Ulster county, in the State of New York, having been duly appointed by an order of this court made in the above-entitled proceeding, at a Special Term thereof, held at the city hall, in the city of Albany, on the first day of April, one thousand eight hundred and ninety-five, and which said order was duly entered 43. Jewett v. Miller, 10 N. Y. 402. COKPOEATIONS. 905 in the Ulster county clerk's office on the 2d day of April, one thousand eight hundred and ninety-five. Second. That your petitioner has duly given the bond provided for in and by the terms of the said order so appointing him as receiver as aforesaid, which said bond was duly approved as to form, manner of execution and sufficiency by Mr. Justice Parker, on the second day of April, one thousand eight hundred and ninety-five, and which said bond was duly filed in the Ulster county clerk's office on the said second day of April, one thousand eight hundred and ninety-five. Third. That your petitioner has duly qualified and entered upon the discharge of his duties as such receiver as aforesaid. ■ Fourth. That by virtue of his appointment your petitioner has become possessed of no real estate, but did become possessed of a large amount of personal property, consisting of blank books of various forms and sizes; flat paper used in the preparation and manufacture of such blank books, leather folded stock, envelopes, paste board boxes of various forms and sizes ; writing pads and tablets of various sizes, kinds and weights ; articles used in printing and for the preparation of covers for books ; pads and tablets ; packing boxes and materials used in their construction; fifty shares of the capital stock of the Barclay Fibre Company and sundry machinery and fix- tures which are covered by a mortgage which has been foreclosed and is in judgment; various accounts receivable, sundry open accounts upon the ledgers of J. B. Sheffield & Son ; leases covering the premises occupied by the company at Saugerties, New York, and their offices in New York; and an employe's liability policy in the Travelers' Insurance Company; sundry accounts called "suspense accounts," which are regarded of little or no value ; books of the corporation and insurance policies covering the stock and property of said corporation. Fifth. That in and by the order appointing your petitioner, he was authorized to continue operating the shops and works of said corporation to the extent that he might deem it wise, prudent and necessary for the purpose of preserving the assets of said corporation and the market-value of its property. Sixth. That your petitioner, pursuant to the powers so delegated to him, has continued to operate the said works. That there are at least two hundred and fifty people in the employ of the said com- pany, with a weekly pay roll of about fifteen hundred dollars. That the paper and book trade at the present time is exceptionally dull ; that there is no prospect, as petitioner believes, of immediate, improve- ment; that in petitioner's opinion the assets of the receiver would be materially depreciated by the continuation on the part of the receiver, of the manufacture of blank books and pads at the present time ; that it would be unwise to shut down the works of the said company by reason of the fact that it would depreciate the value of its property in its entirety, because of the inability of your petitioner to supply the trade with the orders which are received almost daily for the filling in of odd numbers and sizes of blank books. Seventh. That a judgment of foreclosure, as your petitioner is informed and believes, has been docketed in the office of the clerk of 906 CORPORATIONS. the county of Ulster, against all of the machinery owned by said corporation in an action in which Charles A. Spaulding, as trustee, for sundry bondholders, is plaintiff, and the said Sheffield Manufac- turing Company is defendant. Eighth. That your petitioner is informed and believes that the machinery is about to be advertised for sale at a very early date, and if so would leave him without the means of appliances of con- tinuing the business, or compel him to rent the said machinery, provided the said arrangements could be made. That in addition to the uncertainty as to the result of said foreclosure sale, the rental for the machinery would prove an additional expense altogether, that it is probable that the business could not be carried on, certainly for any length of time in so uncertain a condition, excepting to the detriment of the stockholders and all persons interested in the affairs of said corporation, as creditors, bondholders or stockholders. That as this petitioner is informed and believes, the committee ap- pointed on behalf of a large majority of the stockholders, bondholders and creditors of said corporation, representing all but a small per- centage thereof, is ready and prepared to purchase all the assets of said corporation at a fair price. That it is the opinion and judgment of this petitioner that a better price for the property and assets of said corporation can be acquired by a sale of all the assets as herein prayed for at the present time and under existing circumstances. Your petitioner, therefore, prays that he may be given the powers of a permanent receiver so as to sell the personal property above re- ferred to, and that he may sell all the personal property in his hands at the earliest practicable moment, having due regard to the rules and practice of the court in the premises. And your petitioner will forever pray. Dated Saugerties, N. Y., April 5th, 1895. HOWARD GILLESPY, Petitioner. 10. Forin of order extending powers of temporary receiver and author- izing receiver to sell. At a Special Term of the Supreme Court of the State of New York, held at the court house, in the city of Kingston, on the sixth day of April, 1895. (Title.) Upon reading and filing the petition for the appointment of the receiver and the order appointing him, also the petition of said tem- porary receiver, verified on the 5th day of April, 1895, which pro- posed order and a notice of motion for this time and place, with proof of the due service on Hon. Theodore E. Hancock, the attorney-gen- eral, and on motion of Edgar M. Haines, the attorney for said re- ceiver, G. D. B. Hasbrouck, appearing for the attorney-general, it is ordered, COKPORATIONS. 907 First. That said Howard Gillespy, the temporary receiver of the said Sheffield Manufacturing Company, be and he hereby is granted the power and authority for, and is subjected to the duties and lia- bilities of a permanent receiver. Second. That the said receiver be and he hereby is authorized, em- powered and directed to sell at public auction all the personal prop- erty coming into his hands as such receiver as aforesaid, including all accounts, bills receivable and accounts receivable. Third. That before making said sale, said receiver give at least fourteen days' public notice of the time and place of said sale by post- ing notices hereof in at least three public places in the village of Saug- erties, Ulster county, in the State of New York, where said personal property is located, and also by publishing notice thereof for two weeks in the Saugerties Post, a newspaper printed in the county where said property is located and where said sale is to be made. Fourth. It is further ordered that the said receiver may accept in lieu of cash upon said sale, the voucher, receipt or acquittance of any creditor or any committee of trustees, of all or any of the creditors of said corporation, for such sum or sums as would be represented by the said creditors upon a distribution of the proceeds of said sale, ratably and proportionately among all of the credit'^^s of said cor- poration, after deducting the costs, charges and expenses of said sale. The said receipt, voucher or acquittance to stand and be in lieu of a similar cash amount which would be distributed or be paid as a dividend to such creditor and the amount of such receipt, acquittance or voucher is to be charged to such creditor as a payment for the amount received by them. Enter : ALTON B. PARKER. J. S. C. 11. Form of petition for instructions as to sale of real estate. NEW YORK SUPREME COURT— Kings County. PEOPLE OF THE STATE OF NEW YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. To the Supreme Court of the State of New York: The petitioii of Edwin E. Dickinson respectfully shows to this hon- orable court: First. That heretofore and on or about the 28th day of March, 1896, in the above-entitled action, an order was duly granted and thereafter entered in the office of the clerk of the county of Mont- gomery, appointing your petitioner temporary receiver of the above- named defendant Granite State Provident Association, and provid- ing, among other things, that upon the iBling and approval of a bond 908 CORPORATIONS. in the penal sum of two hundred thousand dollars ($200,000), your petitioner should take possession of all the assets of said defendant in the State of New York. Second. That thereafter and on the 6th day of April, 1896, your petitioner duly executed and delivered a bond, with the American Surety Company as surety, and the same, upon due notice to the at- torney-general, was duly approved by a justice of this court, and thereafter and on the 10th day of April, 1896, filed in the office of the clerk of the county of Montgomery. Third. That thereafter and on the 2d day of July, 1896, an order was made and granted in the above-entitled action whereby the venue or place of trial of such action was changed from the county of Mont- gomery to the county of Kings, and that said order was thereafter and on the same day entered in the office of the clerk of Montgomery county. Fourth. And your petitioner further shows that the above-named defendant. Granite State Provident Association, is a foreign corpora- tion organized and existing under and pursuant to the laws of the State of New Hampshire, and formerly engaged in the business of a national building and loan association. Fifth. And your petitioner further shows that among the assets which came into your petitioner's hands, as receiver as aforesaid, was a piece of real estate in the village of Flushing, Queens county. New York, and more particularly described as follows: (Insert descrip- tion.) Sixth. And your petitioner further shows that such property was subject to a first mortgage for three thousand five hundred dollars ($3,500). Seventh. And your petitioner further shows that heretofore and on the 7th day of July, 1896, he obtained an order of this court au- thorizing and empowering him to sell and dispose of the real estate vested in him as receiver and formerly belonging to the Granite State Provident Association, which said order is hereto annexed and marked Exhibit A. Eighth. And your petitioner further shows, that under and by virtue of such authority, he did on or about the 27th day of August, 1896, agree to sell the premises in question to one Edward Eichard- son, for the sum of four thousand dollars ($4,000), to be paid as follows : At the time of executing the contract, in cash $100.00 By the purchaser assuming payment of a mortgage for $3,500 3,500.00 At the time of the delivery of the deed to the aforesaid premises 400.00 Total $4,000.00 and it was furthermore agreed that the said purchaser should pay any and all assessments for the year of 1896 which were then or might COBPOEATIONS. 909 thereafter become due. And he furthermore agreed to assume and pay any and all fees and charges or commissions of any agent or agents, broker or brokers who might have negotiated such sale. Ninth. And your petitioner further shows that he has received the part payment of one hundred dollars ($100) above mentioned, and is ready and willing to deliver the deed to the premises in question, but that the said Edward Richardson, the proposed purchaser, is un- willing to take title on the ground that the order hereinbefore referred to, a copy of which is hereto annexed and marked Exhibit A as afore- said, does not grant unto your petitioner sufficient power to sell and dispose of the property in question and give a good and marketable title. Wherefore, your petitioner prays for the advice and directions of this honorable court in the matters hereinabove set forth, and that he may have leave to carry out the sale above mentioned and for that purpose to execute any and all necessary deed or deeds as he may be advised by counsel learned in law are right and proper. That no other or former application has been made for this or any similar order or relief. And your petitioner as in duty bound will ever pray, etc. EDWIN E. DICKINSON, Lexow, Mackellar & Wells, Temporary Receiver. Attorneys for Receiver. 12. Form of order authorizing receiver to sell property. (Caption.) PEOPLE OP THE STATE OF NEW YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. On reading and filing the notice of motion herein, and the petition of Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, thereto annexed, verified the 31st daj'^ of De- cember, 1896, and proof of service of such notice of motion, petition and the proposed order to be entered thereon, on the attorney-general of the State of New York, and the attorney for the defendant, and after hearing T. Tileston Wells, Esq., of counsel for the receiver, on behalf of the motion, and on behalf of the attorney-general of the state of New York, Now, on motion of Lexow, Mackellar & Wells, attorneys for Edwin B. Dickinson, temporary receiver of the defendant Granite State Provident Association, it is Ordered, That Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is, authorized and empowered to sell to E. Richardson the premises situate at Flush- ing, Queens county, more particularly described in his petition, where- 910 CORPORATIONS. on this order is made, verified the 31st day of December, 1896, for the sum of four thousand dollars ($4,000), to be paid in the manner more partieulrly shown in the petition aforesaid, and for that purpose to execute any and all necessary deed or deeds of the premises in ques- tion as may be proper to convey title to said E. Richardson. Enter in Kings county. S. Contracts of receiver. 1. Contracts generally. A receiver is bound to comply vs^ith his contracts, where they are made with the permission or by the direction of the court.^* So far as a receiver assumes obligations of contracts, act- ing within the authority of the order which creates the re- ceivership, he will be held to the legal obligations of such con- tracts.^^ If he undertakes to carry out a contract made by the cor- poration before his appointment, he cannot receive the bene- fits of the performance without satisfying the obligations of the company under the contract.^" Eeceivers are only liable on contracts made in their official capacity to the extent of the property in their hands, which liability must be enforced in the receivership proceedings.'*'^ A receiver is personally liable upon any contract made by him, although ho may have a claim allowed upon his accounting, but it is not a lien upon assets in his hands.^* But, while a receiver who, without authority, contracts an indebtedness, may bo personally charged therefor, he may not be held liable if, having authority, he contracts with the dis- tinct understanding that the purchases are made on account of the receivership, and they are charged and billed to him as receiver.*' 2. Contracts of employment. It is the general rule that a person employed by a trustee, receiver, general assignee, executor or administrator, in mat- 44. Matter of U. S. Rolling Stock Div. 621, 59 N. Y. Supp. 1101. Co., 57 How. Pr. 17; Jay v. De Groot, 47. Stannard v. Reid & Co., 118 App. 2 Hun, 205. Div. 304, 103 N. Y. Supp. 521. 45. Woodruff v. Brie R. R. Co., 93 48. Rogers v. Wendell, 54 Hun, 540; N. Y. 609. Sayles v. Jourdan, 2 N. Y. Supp. 827. 46. Commercial Pub. Co. v. Beck- 49. Nason Mfg. Co. v. Garden, 52 with, 167 N. Y. 329; reversing, 42 App. App. Div. 363, 65 N. Y. Supp. 147. COBPOKATIONS. 911 ters pertaining to the execution of the trust, must look to the person employing him individually for his compensation, as the contract does not bind the estate he represents. The title to the trust property vests in these different officials and they must account for it to the persons ultimately entitled thereto ; thev are individually liable because they have no responsible principal behind them for whom they may contract and against whom the creditor may enforce his demand.^" In such case, if the plaintiff cannot recover against the receiver, he has no right of action and his claim cannot be enforced, since a receiver cannot, by his own motion, contract debts charge- able upon the fund in litigation. While a court may allow ex- penses incurred by a receiver for the preservation of the prop- erty, it is, nevertheless, the order of the court and not the act of the receiver which creates the charge and upon which its validity depends.^^ This rule seems to be based upon the ground that a claim may be perfectly proper so far as the plaintiff is concerned, and still improper as against the es- tate ; and that the receiver may have been guilty of some act which would render the allowance of the claim against the es- tate improper.^^ One who is employed by a receiver in matters pertaining to the execution of the trust must look to him in his individual capacity for his compensation; the receiver's contract does not bind the estate.®^ Even an order of the court may not justify a charge against the assets superior to the claims of a lienor, where the order is made without notice to him.^* But it seems that an agreement may be made by which the receiver may be enonerated from individual liability, and by which the party performing the services may look to the trust estate.^^ An action will not lie against a receiver to recover for ser- vices rendered to the corporation after the appointment of a receiver.^" And a receiver of a railroad company, appointed 50. Patton v. R. B. P. Co., 114 N. Y. 52. Opinion Martin, J., in Eogers v. 4; Davis V. Stover, 16 Abb. (N. S.) Wendell, 54 Hun, 544. 277; People v. Universal Life Ins. Co., 53. Ryan v. Rand, 20 Abb. N. C. 313, 30 Hun, 142; Ryan v. Rand, 20 Abb. 9 St. Rep. 523. jj .Q_ 314 54. Raht v. Attrill, 106 N. Y. 423. Stenographer— In Ryan v. Rand, 20 55. New v. NicoU, 73 N. Y. 127; Abb. N. C. 313, it was held that a re- Foland v. Dayton, 40 Hun, 563; Mar- ceiver was liable to a stenographer who tin v. Piatt, 51 Hun, 435. took notes of evidence before a referee 56. Barnes v. Newcomb, 89 N. Y. appointed to pass on his accounts. 108. 51. Vilas V. Page, -106 N. Y. 451. 912 COEPOBATIONS. on application of judgment creditors, is not authorized to pay claims for work and materials furnished before his appoint- ment.^'' 3. Rent. Where the receiver of an insolvent company continues to occupy and use premises, after his appointment, theretofore used by the company, he is liable for the rent during the period of such occupation, and it is error to refer the matter to a general referee appointed to pass on claims against the corporation.^^ The general rule is that when a receiver under orders of the court continues to use property theretofore used by the corporation, there is a just claim against him which will be directed to be paid out of the assets which come into his hands.^^ But a lease to a corporation is not terminated by its dissolution, and its covenant to pay rent does not there- upon cease to be obligatory, and a receiver is authorized to retain out of its assets sufficient to cancel and discharge such open and subsisting engagements.^" A permanent receiver of a banking corporation in proceed- ings for its dissolution, who entered into possession of the property leased to the corporation, is liable upon the coven- ants of the lease for the payment of rent which falls due dur- ing the period of his occupancy, by reason of the privity of estate created by such entry .^^ Occupation by the receiver of a part of premises under a lease to it, upon his representation to the landlord that he would apply to the court for permission to pay the rent accru- ing from subtenants, has been held not to make him person- ally liable for the rent.®^ Where, the receiver of a hotel building was directed to col- lect from the tenants in possession or other persons liable 57. Powers v. Jourdan, 4 St. Rep. a party in his representative capacity, 839. nor in such capacity if he paid over 58. People of State of N. Y. v. The such rent pursuant to an order made in Universal Life Ins. Co., 30 Hun, 142. the action in which he was appointed. 59. Myers v. Car Co., 102 U. S. 1; PfefFer v. Kling, 58 App. Div. 179, 68 Kneeland v. Amer. Loan & Trust Co., N. Y. Supp. 641; aff'd, 171 N. Y. 668. 136 U. S. 89. 60. People v. Nat. Trust Co. of City Ejectment. — No damages can be of New York, 82 N. Y. 283. awarded personally, in ejectment, 61. Prince v. Schlesinger, 116 App. against a receiver who was in posses- Div. 500, 101 N. Y. Supp. 1031. sion when the action was begun and 62. Met. Life Ins. Co. v. Sanborn, 34 who had collected rents, he being made Misc. 531, 69 N. Y. Supp. 1009. COKPORATIONS. 913 therefor all rents due, and it did not appear that plaintiff company, the then tenant, and which had heen conducting a hotel business in the building, was at the time it surrendered possession indebted for rent, the receiver was liable for money collected by him which was due plaintiff from former guests.^^ T. Preservation of property. A receiver is authorized to incur expense and charges for the preservation and use of the property which has come into his hands by virtue of receivership, and such claim may be en- forced against the receiver personally.^* Thus, if his allow- ance has been reduced and he is directed to return the excess, he will be allowed a credit to the extent of moneys advanced by him in good faith to protect the corporate property.*^ But, where expenditures are necessary for repairs to prop- erty in the hands of a receiver of rents and profits, appointed in a foreclosure action, he has no power without order of the court to lessen the fund by expenditures for repairs.*^ Where a receiver employs one to care for the property in the absence of an express agreement to exonerate the receiver, he is individually liable.^^ A receiver is not obliged to redeem stock which the firm had pledged by paying the debts secured by such pledge.^^ IT. Employment of counsel. 1. General Corporation Law, § 242. Power of receiver to employ counsel. If the receiver of a corporation employs counsel he shall within three months after he has qualified as receiver enter into a written contract fixing the compensation of such counsel at hot exceeding a certain amount or a certain percentage of the sums received and disbursed by him, which contract must be approved by the supreme court, on at least eight days' notice to the attorney- general. A payment by such receiver to his counsel on account of services shall only be made, pursuant to an order of the court, on notice to the attorney- general and subject to review on the final accounting. A contract with counsel shall not be made for a longer period than eighteen months, but may be renewed from time to time for periods of not more than one year, if approved by the supreme court on at least eight days' notice to the attorney-general. 63. St. Paul Hotel Co. v. Segrave, 48 66. WyckoflF v. Scofield, 103 N. Y. Hisc. 657, 96 N. Y. Supp. 308. 630. 64. Rogers v. Wendall, 54 Hun, 540. 67. Rogers v. Wendell, 54 Hun, 540, 65! People V. Brooklyn Bank, 157 28 St. Rep. 301, 7 N. Y. Supp. 781. App Div. 171, 142 N. Y. Supp. 75. 68. Chamberlain v. Greenleaf, 4 Abb. N. C. 178. 58 914 COKPOKATIONS. In case of the intervention of any policyholder or depositor, by permission of the court, such policyholder or depositor shall defray the legal expenses thereof, and no allowance shall be made for costs or fees to any attorney of such policyholder or depositor. It shall be unlawful for receivers of an insur- ance, banking or railroad corporation, or trust company to pay to any attorney or counsel any costs, fees or allowances until the amounts thereof shall have been stated to the special term as provided in section two hundred and forty- nine of this chapter, as expenses incurred, and shall have been approved by that court, by an order of the court duly entered; and any such order shall be the subject of review by the appellate division and the court of appeals on an appeal taken therefrom by any party aggrieved thereby.69 2. Who may be employed as counsel for receiver. As a general rule, the receiver should not employ for his counsel an attorney who has been identified with the legal business of any of the parties to the action.™ But the general rule is subject to the qualification that where such employ- ment is made in good faith, with the assent of the parties, it will escape the condemnation of the court.''^ And when the re- ceiver is not acting adversely to one of the parties, there is no impropriety in employing the counsel of the other.'^^ While the employment by a receiver of his partner as coun- sel in legal matters relating to the receivership is not to be commended, yet, when it clearly appears that the receiver has not and is not to share in the compensation for such services, 69. Rules of Civil Practice, Rule 180. Supp. 723; People v. Federal Bank, 114 Power of receiver to employ counsel. — App. Div. 374, 100 N. Y. Supp. 44. No receiver shall have power to em- Allowance to attorneys other than ploy more than one counsel, except un- for the receiver, is discussed in a sub- der special circumstances and in par- sequent section. See XI-W-12. Coats tieular cases requiring the employment and allowances. of additional counsel, and in such cases 70. Ex parte Ainsley, 1 Edw. Ch. only upon special application to the 576; Ray v. MacComb, 2 Edw. Ch. 165; court, showing such circumstances by Hynes v. McDermott, 3 St. Rep. 592, his petition or affidavit, and on notice 14 Daly, 104. to the party or person on whose behalf 71. Clapp v. Clapp, 49 Hun, 195, 1 or application he was appointed. No N. Y. Supp. 119; afif'd, 7 N. Y. Supp. allowance shall be made to any re- 495, 27 St. Rep. 180; aff'd, 125 N. Y. ceiver for expenses paid or incurred in 693; Warren v. Sprague, 11 Paige Ch. violation of this rule. 200, 4 Edw. Ch. 416; Bennett v. Moneyed corporation. — ^As to the em- Chapin, 3 Sandf. 673; Smith v. N. Y. ployment of counsel by a receiver in Consol. Stage Co., 28 How. 377, 18 Abb. an action to dissolve a moneyed cor- Pr. 419. poration, see General Corporation Law, 72. Hynes v. McDermott, 3 N. Y. § 154. See also Matter of Candee v. St. Rep. 582, 14 Daly, 104. Cunneen, 92 App. Div. 71, 86 N. Y. CORPORATIONS. 915 there is no law which prevents such employment and pay- ment.''^ A receiver should not apply to be authorized to em- ploy any particular attorney J* The employment of a Deputy Attorney-General who re- signed to accept the retainer as attorney for receiver of a banking corporation, is not approved by courtJ^ 3. Compensation of counsel. The attorney for the receiver should be paid for his services only according to the contract approved by the court and upon the order of the court directing the payment. The report of a referee on an accounting of the receiver should not grant an allowance to the attorney of the receiver for services on the accounting, but the attorney should apply for counsel fee on the entry of the final order.™ An action supplemental to the judgment in an action di- recting further proceedings by the receiver in the collection of the judgment is not a final order in a special proceeding, and cannot include an extra allowance of fees in lieu of costs 73. Matter of Simpson, 36 App. Div. 562, 55 N. Y. Supp. 697; aif'd, 158 N. Y. 720. Payments made to partner of re- ceiver. — Upon the accounting of a re- ceiver objection was made to the al- lowance of three claims, of $5,000 each, paid by the receiver to his counsel, who was also his partner, in pursuance of orders of the Special Term. The first order was obtained upon the petition of the receiver, the motion being made by the counsel. The other two were obtained upon the motion of the coun- sel and upon petitions made and veri- fied by them. It was held, that, as no appeal had been taken from the first order, it could not be questioned upon the accounting, but that the other two orders could be collaterally assailed, and that it rested upon the receiver to establish by other satisfactory evidence that the payments made thereunder were justified by the services actually rendered to him by the counsel. Mat- ter of Commonwealth Ins. Co., 32 Hun, 78. 74. First Nat. Bank of Rondout v. Navarro, 43 St. Rep. 813, 17 N. Y. Supp. 900. 75. People v. Brooklyn Bank, 125 App. Div. 354, 109 N. Y. 534. 76. Matter of Little, 47 App. Div. 22, 62 N. Y. Supp. 27; aflBrraed, on opinion below, 165 N. Y. 643. Objection by creditor. — Where a ref- eree, appointed upon the receiver's ac- counting to take proof upon and report to the court the value of the services rendered to the receiver by his attor- ney, finds, upon uncontradicted evi- dence given before him, that the attor- ney's charges were reasonable, a credi- tor of the corporation, who appeared before the referee on the first hearing, but omitted to attend the subsequent hearings, on one of which the attor- ney's fees were considered, or to object to the evidence offered, cannot raise, by exceptions filed to the referee's report, the question of the reasonableness of the attorney's charges for services for which the receiver was liable, although some of the charges did not appear iii 916 COBPOKATIONS. to the attorney for the receiver." Services rendered before the appointment of the receiver, are charged against the cor- poration, not against the receiver^* 4. Form of agreement with counsel. In the Matter of the ROCHESTER NON-RUST TINWARE COMPANY. Memorandum of agreement, made this 30th day of June, 1910, by and between Arthur Warren, as permanent receiver of the Rochester Non-Rust Tinware Company, a domestic corporation located at Rochester, N. Y., of the first part, and Christopher C. Werner and George H. Harris, composing the firm of Werner & Harris, practicing attorneys in the city of Rochester, N. Y., of the second part, wit- nesseth : Whereas, the party of the first part hereto was on the 25th day of June, 1910, appointed permanent receiver of the said corporation in a voluntary proceeding for dissolution thereof, and he having duly qualified is now acting as such permanent receiver. Now, therefore, it is agreed that said party of the first part does hereby employ the parties of the second part as his counsel as such receiver of said corporation, and he hereby agrees to pay the said parties of the second part as and for their compensation as attorneys for such receiver the value of such service not to exceed five per cent (5%) of all sums of money that shall come into his hands as such receiver. This agreement is made subject to the approval of the Supreme Court and shall expire in eighteen months from the date hereof unless sooner terminated. Said p^arties of the second part shall render all necessary legal ser- vices to the said receiver in said dissolution proceedings, and the pay- ment of such services shall be made upon the final accounting of the said receiver and upon the approval of the said Supreme Court. In Witness Whereof, the parties hereto have hereunto set their hands and seals the day and year first above written. Arthur Warren, [l. s.] As Receiver of Rochester Non-Rust Tinware Co. Christopher C. Werner, [l. s-l George H. Harris. [l. s.] the account -which was rendered by the 78. Matter of Little, 47 App. Div. 22, receiver and referred to the referee. 62 N. Y. Supp. 27; affirmed, on opinion Matter of Little, 47 App. Div. 22, 62 below, 165 N. Y. 643. N. Y. Supp. 27; affirmed, on opinion Criminal proceedings. — Services ren- below, 165 N. Y. 643. dered by the attorney in criminal pro- 77. Adams v. Elwood, 104 App. IMv. ceedings instituted against a third per- 138, 93 N. Y. Supp. 327. son, on a charge that he had com- CORPORATIONS. 917 5. Form of order approving agreement. (Title.) (Special term caption.) Upon reading and filing the proposed agreement herein between Arthur Warren as receiver of the Rochester Non-Rust Tinware Com- pany, a corporation, and Christopher C. Werner and George H. Harris, composing the firm of Werner & Harris, counsellors-at-law, of Rochester, N. Y., dated, June 30, 1910, the order appointing said Arthur Warren receiver granted on the 25th day of June, 1910, and the papers upon which said order was granted, all on file in the Monroe county clerk's office, and on motion of Werner & Harris, at- torneys for said receiver, it is Ordered, that said agreement between Arthur Warren, as such re- ceiver, and said Werner & Harris, his counsel, be and the same is hereby approved. All payments on account of such agreement shall only be made at the final accounting herein and upon the order of approval of this court. V. Determination of creditors' claims. 1. General Corporation law, § 250. Duty of receivers to give notice to creditors. The receivers immediately upon their appointment, shall give notice thereof which shall be published for three weeks in a newspaper printed in the county where the principal place of conducting the business of such corporation shall have been situated; and therein shall require, 1. All persons indebted to such corporation, by a day and at a plaice therein to be specified, to render an account of all debts and sums of money owing by them respectively, to such receivers and to pay the same. 2. All persons having in their possession any property or effects of such- cor- poration to deliver the same to the said receivers by the day so appointed. 3. All the creditors of such corporation to deliver their respective accounts and demands to the receivers or one of them, by a day to be therein specified, not less than forty days from the first publication of such notice. 4. All persons holding an open or subsisting contract of such corporation, to present the same in writing and in detail to such receivers, at the time and place in such notice apecified.78a 2. General Corporation Law, § 251. Delivery of property and payment of debts to receiver after notice. After the first publication of the notice of the appointment of receivers, every person having possession of any property belonging to such corporation, and every person indebted to such corporation, shall account and answer for the amount of such debt and for the value of such property to the said receivers. mitted perjury on the trial of certain 27; affirmed, on opinion below, 165 claims against the receiver, are not a N. Y. 643. charge against the receiver. Matter of 78a. Consolidators' note to section Little, 47 App. Div. 22, 62 N. Y. Supp. 250.— The following provisions of the 918 CORPORATIONS. 3. General Corporation Law, § 252. Penalty for concealing property from receiver. Every person indebted to such corporation, or having the possession or custody of any property or thing in action, belonging to it, who shall conceal the same, and not deliver a just and true account of such indebtedness, or not deliver such property or thing in action, to the receivers, or one of them, by the day for that purpose appointed, shall forfeit double the amount of such debt, or double the value of such property so concealed; which penalties may be recovered by the receivers. 4. General Corporation Law, § 253. Duty of receiver to call creditors' meeting. They shall call a general meeting of the creditors of such corporation, within four months from the time of their appointment by a notice to be published in the same manner, as hereinbefore directed respecting the publication of the notice of their appointment; in which notice, they shall specify the place and time of such meeting, which time shall not be more than three months, nor less than two months after the first publication of such notice. Every such notice shall be published at least once in each week, until the time of such meeting. 5. General Corporation Law, § 254. Proceedings at creditors' meeting. At such meeting, or other adjourned meeting thereafter, all accounts and demands for and against such corporation, and all its open and subsisting con- tracts, shall be ascertained and adjusted as far as may be, and the amount of moneys in the hands of the receivers declared.79 Revised Statutes relating to powers, porary receiver." Nealis v. American duties and liabilities of trustees of in- Tube & Iron Co., 76 Hun, 220, 27 solvent debtors are inapplicable and N. Y. Supp. 733. therefore have been omitted: 79. Breach of contract of employ- "In the case of an insolvent or im- ment with corporation. — In People v. prisoned debtor, such notice shall be Globe Mut. Life Ins. Co., 91 N. Y. 174, published for at least three weeks in a it was held that the agent of an in- newspaper printed in the county where solvent corporation had no valid claim application was made; and in the case upon the fund in the hands of a re- of non-resident, absconding or con- ceiver for damage for an alleged breach cealed debtors, it shall be published, for of a contract because of the discontinu- the same time, in the newspapers in ance of the employment, at least in the which the notice of an attachment hav- absence of evidence that it was some ing issued, is directed to be printed." fault of the company which brought Revised Statutes, pt. 2, chap. 5, tit. 1, about the insolvency. It seems that as art. 8, § 9. between the company and the person "Held, that the provisions of 2 Re- thus contracting, its dissolution by vir- vised Statutes, 469, sections 70 and 72, tue of proceedings on the part of the to the effect that receivers immediately people is to be deemed the independent after their appointment shall give a act of the State, and not the act of certain notice, do not apply to a tern- COEPOBATIONS. 919 6. General Corporation Law, § 259. Allowance of set-offs. Where mutual credit has been given by any corporation, and any other person, or mutual debts have subsisted between such corporation and any other person, the receivers may set off such credits or debts, and pay the proportion or receive the balance due. But no set-off shall be allowed of any claim or debt, which would not have been entitled to a dividend, as hereinbefore directed. No set-off shall be allowed by such receivers, of any claim or debt, which shall have been purchased by, or transferred to, the person claiming its allow- ance, which could not have been set off by him, in a suit brought by such receivers. 7. Set-off. Unless mutual debts exist at the time of the appointment of a receiver, he has no authority to allow a set-off.^ A receiver has no power to allow a set-off against a debt owing to the corporation of which he is receiver where the demand sought to be set off was assigned to the debtor for that purpose after his appointment, and what he cannot do directly, cannot be done by way of ratification or waiver.^ A temporary receiver of a bank has no power without an order of the court to sur- render collaterals pledged as security for a loan to offset the amount of the debt against a deposit.^^ 8. Determination by reference without action. The court appointing a receiver has power to order a refer- ence of a claim against him without action.^ The remedy of a party having a claim as to funds or property in the hands of a receiver is to apply to a court on notice for relief. It is the corporation, and the person con- 616; aff'g, 20 Hun, 262. tracting took the risk of any act or 82. People v. St. Nicholas Bank, 76 neglect on the part of the other offi- Hun, 522, 58 St. Rep. 843, 28 N. Y. cers of tbe corporation. See also Loril- Supp. 114. lard V. Clyde, 142 N. Y. 456. 83. Guardian Savings Inst. v. Bow- Ejcamination of books by creditor. — ling Green Savings Bank, 65 Barb. 275. The authority of the court to compel Expenses of reference. — A Special the receiver of a corporation to allow Term has authority to order the re- a creditor to make extracts from the ceiver of an insolvent building and loan books of the corporation rests on association to pay the disbursements grounds of justice and equity in ad- of a reference ordered to determine the ministering the trust, and the granting priorities of creditors and stockholders, or refusing an application of that char- and the exercise of such authority will acter is in the discretion of the court. not be interfered with by the Appellate Matter of Tiebout, 19 Wkly. Dig. 570. Division. People v. Metropolitan Mut. 80. New Amsterdam Savings Bank v. S. & L. Assoc, 103 App. Div. 153, 92 Tartter 4 Abb. N. C. 215. N. Y. Supp. 689; affirmed, on opinion 81. Van Dyek v. MoQuade, 85 N. Y. below, 182 N. Y. 531. 920 COBPORATIONS. not necessary for Mm to file a bill in equity to establish the claim.^* The court may authorize the receiver to sue on his application, or it may hear the claim upon affidavits, or oral evidence; or where a claim is disputed it may order a refer- ence.**^ "Where a petitioner, having leave to sue a receiver, asserts that his claim has been admitted to be due, no action against the receiver should be allowed to establish it, and the court will make no order to pay it unless it appears that the receiver has assets sufficient to pay all the other creditors.^ 9. Notice to Attorney-General. After the appointment of a permanent receiver of a cor- poration, in an action brought by the State for its dissolution, the Attorney-General is entitled to notice of a motion for a referee to hear and determine a disputed claim.^ 10. Form of notice of motion for order to prove claims. SUPREMj; COURT— Queens County. THE PEOPLE OF THE STATE OF NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. Please take notice, that upon all papers and proceedings in this action, and the judgment herein, and also upon the annexed petition of Edward Duffy, the permanent receiver of the Mutual Brewing Company, sworn to July 23d, 1896, we shall move this court at a Special Term thereof, to be held at the county court house in the city of Brooklyn, county of Kings and State of New York, on the 28th day of July, 1896, at 10 a. m., for an order in the form of an order of which a copy is hereto annexed requiring all the creditors of the corporation mentioned to, exhibit and prove their claims and thereby make themselves parties to this action, and requiring publication of 84. People v. Bank of Danaville, 39 87. Matter of Eustace v. New York Hun, 187. Building-Loan Ass'n, 98 App. Div. 97, 85. Matter of K Y. & W. U. Tel. 90 N. Y. Supp. 784. Co. V. Jewett, 115 N. Y. 166. See also People v. American Steam 86. Matter of Machwirth, 15 App. Boiler Ins. Co., 3 App. Div. 504, 38 Div. 65, 44 N. Y. Supp. 80. N". Y. Supp. 406. COKPOEATIONS. 921 notice of such order, as provided for in § 303 of the General Corpora- tion Law, or for such other or further relief as to the court may seem meet. Dated, New York, July 23d, 1896. Yours, etc., DURNIN & YATES, Attorneys for the Receiver. To Hon. Theodore E. Hancock, Attorney-General. 11. Porm of petition for order requiring creditors to prove claims. SUPREME COURT— Queens County. THE PEOPLE OF THE STATE OF NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. To the Supreme Court of the State of New York: The petition of Edward Duffy, as permanent receiver, under the judgment in this action entered on the 19th day of May, 1896, re- spectfully shows to this court : First. That your petitioner says that this action was commenced by the People of the State of New York, to secure a judgment for the dissolution of the defendant. The Mutual Brewing Company, and for a distribution of its assets among its creditors, and that on or about the 19th day of May, 1896, judgment was entered in this action which recited the service of the summons and complaint, and upon piotion of counsel for plaintiff, it was adjudged and decreed, among other things, that The Mutual Brewing Company be, and it was there- by dissolved and its corporate rights, privileges and franchises for- feited. And it further decreed that a fair and just distribution of its prop- erty and of the proceeds thereof be made to its fair and honest cred- itors in the order and in the proportion provided by law. Second. That by said judgment in this action, your petitioner, who had previously been appointed temporary receiver herein, was continued as such receiver of all the property and effects, real and personal, of said corporation, and was made permanent receiver there- of with the usual powers and duties enjoyed and exercised by receivers according to the practice of this court and of the statute in such cases made and provided. And it was also adjudged and decreed, that the receiver might make further application to the court as he might be advised for his instruction in the management and conduct of his trust. Third. Your petitioner further says that there has not been any order in this action requiring the creditors of the said corporation or of your petitioner, as such receiver,, to exhibit and prove their claims, or to make themselves parties to this action, as required by section 303 of the General Corporation Law. 922 COKPOKATIONS. Wherefore, your petitioner prays that an order be made herein requiring all the creditors of the said corporation to exhibit and prove their claims and thereby make themselves parties to this action in such a manner and in such a reasonable time, not less than six months from the time of the first publication of the order, as the court may direct, and pro\dding that the creditors who make default in so doing shall be precluded from all benefit of the judgment and from any distribution which may be made thereunder, excepting as provided by law, and that notice of such order be' directed to be given by pub- lication as required by section 303 of the General Corporation Law ; and your petitioner says that there has not been any previous appli- cation for this order now asked for. BDWAED DUFFY. 12. Form of order requiring creditors to prove claims. THE PEOPLE OF THE STATE OF^ NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. (Caption.) A motion having been made on behalf of Edward Duffy, the re- ceiver of the Mutual Brewing Company herein, for an order requiring all the creditors of said corporation to exhibit and prove their claims and thereby make themselves parties to this action, and requiring notice of such order, as provided for in section 303 of the General Corporation Law, and for such other and further relief as to the court may seem meet. Now, after hearing Durnin & Yates, upon behalf of said receiver, in support of the motion, and upon due proof of ser- vice of the within petition, notice of motion and proposed order here- in upon the attorney-general. Now, upon motion of Durnin & Yates, attorneys for said receiver, it is Ordered, that all the creditors of The Mutual Brewing Company exhibit and prove their claims against the said Mutual Brewing Com- pany or against the said receiver, and thereby make themselves par- ties to this action, and that they so exhibit and prove such claims with Edward Duffy, the receiver of the said corporation, at his place of transacting business, at the office of Durnin & Yates, his attorneys, No. 20 Nassau street, in the city of New York, within six months from the 14th day of August, 1896, and It is further ordered, that the creditors who make default in so doing shall be precluded from all benefit of the judgment herein, and from any distribution which may be made thereunder, except as pro- vided in section 303 of the General Corporation Law, and It is further ordered, that notice of this order be given by publica- tion in the following papers, to wit : In the Queens County Review, published at Freeport, Long Island, and in the Flushing Journal, COBPORATIONS. 923 published at Flushing, and for the following length of time, to -wit : Once a week for six weeks. It is further ordered, that all claims be proven by the presentation of vouchers accompanied by the affidavit of the party or one of the parties intorested, or the agent of said party or parties having knowl- edge of the facts that the whole amount of the debt shown in said vouchers is just due from the corporation aforesaid, or from said receiver to the corporation named in the voucher over and above all set-offs and counterclaims, with liberty to said receiver to contest any of the claim so proven as he may be adwised, and that the said re- ceiver may apply, if necessary, to the court for instructions in regard to any of the claims that may be contested. Enter. N. H. C. Justice. 13. Form of notice to creditors to prove claims. SUPREME COURT— Queens County. THE PEOPLE OF THE STATE OF NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. In pursuance of an order duly made in the above-entitled action by Hon. N. H. Clement, one of the justices of said court, on the 28th day of July, 1896, notice is hereby given to all creditors of the said corporation, to wit: The Mutual Brewing Company, and of said Edward Duffy as receiver of said corporation, that they are hereby required to prove their claims with Edward Duffy, receiver of said corporation, at his place of transacting business, at the office of Dur- nin & Yates, his attorneys. No. 20 Nassau street, in the city of New York, within six months from the 14th day of August, 1896; and that all creditors who make default in so doing shall be precluded from all benefit of the judgment herein, and from any distribution which may be made thereunder, except as provided in § 303 of the General Corporation Law, and that all claims be proven by pre- sentation of vouchers accompanied by an affidavit of the party or of one of the parties interested, or an agent of said party or parties having knowledge of the facts that the whole amount of debt shown in said vouchers is justly due from the corporation aforesaid or from said receiver to the creditor named in the voucher over and above all set-offs and counterclaims, with liberty to said receiver to con- test any of the claims so proven as he may be advised, and that said receiver will apply, if necessary, to the court for instructions in re- gard to any of the claims that may be contested. Dated, New York, July 31st, 1896. DURNIN & YATES, Attorneys for Receiver, 20 Nassau street, New York City. Edward Duffy, Receiver. 924 - CORPOKATIONS. 14. Form of receiver's notice. SUPREME COURT. THE PEOPLE OF THE STATE OP NEW YORK, Plaintiff, agst. THE MUTUAL BREWING COM- PANY, Defendant. Notice is hereby given by the undersigned, Theodore F. Hamilton, receiver, etc., of the above-named defendant, the Hudson Valley Knitting Company, that he has been duly appointed the permanent receiver of said defendant, and has duly qualified as such and entered upon the performance of his duties, and that, pursuant to law, said receiver requires: 1. All persons indebted to said defendant, the Hudson Valley Knitting Company, to render an account of all debts and sums of money owing by them, respectively, to said company, or to the re- ceiver of said company, at the office of Edgar T. Brackett, in the town hall, in the village of Saratoga Springs, N. Y. (the place where said receiver transacts his business as such), by the 15th day of January, 1897, and to pay the same, 2. All persons having in their possession any property or effects of such defendant, the Hudson Valley Knitting Company, to deliver the same to the undersigned, such receiver, by. the said 15th day of January, 1897. 3. All the creditors of such debtor, the defendant, the Hudson Valley Knitting Company, to deliver their respective accounts and demands to the undersigned said receiver, at his said place of doing business, the said office of Edgar T. Brackett, in the town hall. in the village of Saratoga Springs, N. Y., by the 15th day of January, 1897. 4. All persons holding any open or subsisting contract of such corporation, to present the same in writing, and in detail, to said receiver at the said office of Edgar T. Brackett, in the town hall in the village of Saratoga Springs, N. Y., on the said 15th day of Janu- ary, 1897.. Dated, November 23, 1896. THEODORE F. HAMILTON, Receiver of the Property of the Hudson Valley Knitting Company. Edgae T. Brackett, Attorney for Receiver. COEPORATIONS. 925 15. Form of notice of meeting of creditors. (Title.) To all whom it may concern: Take notice that the undersigned, permanent receiver of the above corporation, appointed by decree entered in the ofSce of the clerk of New York county, on the 5th day of May, 1910, in this proceeding, hereby calls a general meeting of the creditors of said corporation to be held on the 12th day of August, 1910, at 2 o'clock in the afternoon, at my office, room 418, No. 2 Rector street, borough of Manhattan, New York city. Dated, , 1910. Receiver . W. Distribution of assets. 1. General Corporation Law, § 256. Refunding consideration of sub- sisting contracts. If there shall be any open and subsisting engagements or contracts of such corporation, which are in the nature of insurances or contingent engagements of any kind, tlie receivers may, with the consent of the party holding such engagement, cancel and discharge the same, by refunding to such party the premium or consideration paid thereon by such corporation, or so much thereof as shall be in the same proportion to the time whiclli shall remain of any risk assumed by such engagement, aa the whole premium bore to the whole term of such risk; and upon such amount being paid by such receivers to the person holding or being the legal owner of such engagement, it shall be deemed can- celed and discharged as against such receivers. (See B., C. & G. Consol. L., 2nd Ed., p. 3200.) 2. General Corporation Law, § 257. Retention of funds for subsisting contracts and pending suits. The receivers shall retain out of the moneys in their hands, a, sufficient amount to pay the sums, which they are hereinbefore authorized to pay, for the purpose of canceling and discharging any open or subsisting engagements. If any suit be pending against the corporation or against the receivers, for any demand, the receivers may retain the proportion which would belong to such demand if established, and the necessary costs and proceedings, in their hands, to be applied according to the event of such suit, or to be distributed in a second or other dividend. (See B., C. & G. Oonsol. L., 3nd Ed., p. 3200.) 3. General Corporation Law, § 258. Payment of debts not due. Every person to whom a corporation glhall be indebted on a valuable con- sideration, for any sum of money not due at the time of such distribution, but payable afterwards, shall receive his proportion with other creditors, after deducting a rebate of legal interest upon the sum distributed, for the time unexpired of such credit. (See B., C. & G. Consol. L., 2nd Ed., p. 3201.) 926 CORPORATIONS. 4. General Corporation Law, § 261. Order of payment by receiver. The receivers shall distribute the residue of the moneys in their hands, among all those who shall have exhibited their claims as creditors, and whose debts shall have been ascertained, as follows: 1. All debts due by such corporation to the United States, and all debts entitled to a preference under the laws of the United States. 2. All debts that may be owing by the corporation as guardian, executor, administrator or trustee; and if there be not sufficient to pay all debts of the character above specified, then a distribution shall be made among them, in proportion to their amounts respectively. 3. Judgments actually obtained against such corporation, to the extent of the value of the real estate on which they shall respectively be liens. 4. All other creditors of such corporation, in proportion to their respective demands, without giving any preference to debts due on specialties. (See B., C. & G. Oonsol. L., 2nd Ed., p. 3201.) 5. General Corporation Law, § 261a. Payment of wages by receivers. Upon the appointment of a receiver of a corporation organized under the laws of this state and doing business therein, other than a moneyed corpora- tion, the wages of the employees of such corporation shall be preferred to every other debt or claim. The provisions of section two hundred and thirty of this chapter do not apply to the provisions of this section. (Added by Laws of 1921, ch. 22.)88 6. General Corporation Law, § 262. Failure to file claim before first dividend. Every creditor who shall have neglected to exhibit his demand before the first dividend, and who shall deliver his account to the receivers before the second dividend, shall receive the sum he would have been entitled to on the first dividend, before any distribution be made to the other creditors. (See B., C. . & G. Consol. L., 2nd Ed., p. 3203.) 7. General Corporation Law, § 263. Second dividend by receiver. If the whole of the property of such corporation be not distributed on the first dividend, the receivers, shall, within one year thereafter, make a second dividend of all the moneys in their hands, among the creditors entitled thereto; of which, and that the same will be a final dividend, three weeks' notice shall be inserted once in each week in a newspaper printed in the county where the principal place of business of such corporation was situated. . Such second dividend shall be made in all respects in the same manner as herein prescribed in relation to the first dividend, and no other shall be made thereafter among the creditors of such corporation, except to the creditors having suits against it, or against the receivers, pending at the time of such second dividend, and except of the moneys vmhich may be retained to pay such creditors, as herein provided. (See B., C. & G. Consol. L., 2nd Ed., p. 3203.) 88. See Labor Law, § 9, as to preference of wages. CORPORATIONS. 927 8. General Corporation Law, § 264. Surplus to stockholders. If after the second dividend is made, there shall remain any surplus in the hands of the receivers, they shall distribute the same among the stockholders of such corporation, in proportion to the respective amounts paid in by them, severally, on *heir shares of stock. (See B., C. & 6. Consol. L., 2nd Ed., p. 3303.) 9. General Corporation Law, § 265. Disposition of moneys retained by receiver for suits. When any suit pending at the time of the second dividend shall be termi- nated, they shall apply the moneys retained in their hands for that purpose, to the payment of the amount recovered, and their necessary charges and expenses; and if nothing shall have been recovered, they shall distribute such moneys, after deducting their expenses and costs, among the creditors and stockholders of the corporation, in the manner as herein directed in respect to a second dividend. (See B., C. & G. Consol. L., 2nd Ed., p. 3304.) 10. General Corporation Law, § 266. Duty of receiver as to unclaimed dividend. If any dividend that shall have been declared, shall remain unclaimed by the person entitled thereto for one year after the same was declared, the receivers ahall consider it as relinquished, and shall distribute it, on any subsequent dividend among the other creditors. (See B., C. & G. Consol. L., 2nd Ed., p. 3304.) 11. General Corporation Law, § 267. Effect of failure to file claim before second dividend. After such second dividend shall have been made, the receivers shall not be answerable to any creditor of such corporation, or to any person having claims against such corporation, by virtue of any open or subsisting engage- ment, unless the demands of such creditor shall have been exhibited, and the engagements upon wiiich such claims are founded, shall have been presented to the said receivers, in detail and in writing, before or at the time specified by them in their notice of a second dividend. (See B., C. & 6. Consol. L., 3nd Ed., p. 3304.) 12. Costs and allowances. The costs of an action to which a receiver is a party should be paid in full, and an order may be made for that purpose where costs have been awarded against him. This is true al- though the action may have been originally brought against the corporation, if a receiver has defended.^* Aind where a party obtains judgment in an action brought before appoint- ment of a receiver, the expense of the action being incurred 89. Locke v. Covert, 42 Hun, 484; 536; Camp v. Receivers of Niagara Columbian Ins. Co. v. Stevens, 37 N. Y. Bank, 2 Paige, 283. 928 CORPORATIONS. for the benefit of the fund, the receiver will be required to pay the costs out of the fund.'" But the court has no power to make any allowance to interveners out of funds in the hands of a receiver for counsel fees.^^ Nor will any allowance be made to counsel retained by the Attorney- General to appear in an action in which the receiver was appointed.^^ Services rendered by an attorney to a corporation in disso- lution proceedings before the appointment of a receiver, are charged against the corporation and not against the re- 13. Money paid to receiver by mistake. The receiver holds moneys which come into his hands sub- ject to the order of the court, to be paid in the manner which the court shall direct, so that even if money has been paid to him by mistake in his official character as receiver, the court, of which he is an officer, can alone direct it to be refunded.^^ 14, Trust funds. If funds in the possession of a corporation are impressed with a trust in favor of a third person, the corporate receiver may be directed to pay such funds in preference to the general creditors of the corporation. To authorize such relief, how- ever, it is necessary .to trace into the hands of the receiver the money or property which belonged to the beneficiary, or which had been set apart or appropriated for his benefit before the receivership.^^ Thus, if an insolvent bank receives a note for 90. Locke v. Covert, 42 Hun, 484. poration, for services rendered in the 91. Matter of Attorney-General v. defense of the proceedings, is properly North Amer. Life Ins. Co., 91 N. Y. 57; denied, where it appears that, by rea- Attorney-General v. Continental Life son of the actual insolvency of the cor- Ins. Co., 31 Hun, 623. poration known to its officers, and of 92. Attorney-Oeneral v. Continental their attempt to continue it in busi- Life Ins. Co., 88 N. Y. 571. ness by fraudulent means, the employ- 93. Barnes v. Newcomb, 89 N. Y. ment of counsel to resist the proceed- 108; Matter of Little, 47 App. Div. 22, ing was unjustifiable, although the 62 N. Y. Supp. 27; affirmed, on opinion counsel may have acted in good faith below, 165 N. Y. 643. and stopped the defense on discovering Defense by corporation to action. — that the corporation was insolvent. An application to authorize the receiver People v. Commercial Alliance Life Ins. of an insolvent corporation, appointed Co., 148 N. Y. 563. in a proceeding for its dissolution, to 94. Duffy v. Casey, 7 Rob. 79; Betty pay, as a preferred claim, out of the v. Campbell, 2 Rob. 664. funds in his hands, a reasonable allow- 95. People v. Merchants & Mechan- ance to counsel employed by the cor- ics' Bank, 78 N. Y. 269. COEPOBATIONS. 929 collection and fails to pay the avails to the owner before the appointment of a receiver for the bank, the claim of the owner of the note may be given a preference.* 15. Pre-existing liens. Every lien upon the property of a corporation resting upon valid agreement or process before the appointment of a re- ceiver or lienor, being lawfully in possession, must be pre- served with the right of enforcement unless courts and legis- latures are to override the vested rights of creditors.^^ The right of a creditor of an insolvent corporation in the hands of a receiver to have a preference over bondholders under a first mortgage is strictissimi juris; and such a credi- tor will not be entitled to such preference, or to call upon holders of receivers' certificates, who have been paid part of their claim, to contribute to make him equal with them, on the ground that, although not holding such certificates, his claim consists of a loan to the corporation of money used in paying debts of a character for which receivers ' certificates were sub- sequently authorized to be issued, by a judgment which de- clared that such certificate should be a first lien on the mort- gaged property.^* 16. Payment of taxes. The court may, on petition and application of the Attorney- General, and on notice to the insolvent corporation and the re- ceiver, in its discretion, make an order directing him to pay a tax imposed upon the corporation, since the claim of the State for the payment of the tax is a paramount one.^^ 17. Preference of wage earners. Under section 261-a of the General Corporation Law and section 9 of the Labor Law, " employees " are entitled to preferential payment of their wages.^ The question immedi- 96. Arnot v. Bingham, 55 Hun, 553,' & Northern R. E. Co., 110 N. Y. 250; 9 N. Y. Supp. 68; People v. The Bank reversing, 47 Hun, 587. of Dansville, 39 Hun, 187. 1- Operation of raUroad.— Where _ a 97. Matter of Binghamton General receiver was required to operate a rail- Electric Co., 143 N. Y. 261. road, keep up repairs, and pay for the, 98. Farmers' Loan & Trust Co. v. same out of the income with no pro- Bankers & Merchants' Tel. Co., 148 vision for the payment of outstanding j^ Y 315. ■ debts incurred for current expenses, it 99. Central Trust Co. v. N. Y. City was held he was not bound to give a 59 930 COEPOKATIOKTS. ately arises as to who is an " employee ' ' within the meaning of the statutes. The following have been held to be within the class : a salesman f a person employed by a mowing and reaping machine manufacturing corporation, setting up its machines and taking them down to repair them, to go from place to place and set them up for farmers and to unpack and repack them, although also employed by the corporation to sell its machines,^ and a person employed to assist the general manager of a corporation in keeping its books and to clean the office and showroom of the corporation, to assist in putting together and taking apart and ship- ping wire wicket-fence and weaving machines.* On the other hand, the following have been denied a preference on the ground that they were not within the meaning of the statute: a bookkeeper;^ a contractor with the cor- poration f a manager or superintendent of the corporation for preference to employees. Franklin Trust Co. V. Northern Adirondack R. R. Co., 11 App. Div. 249, 42 N. Y. Supp. 211, 76 St. Rep. 211. Prior to chapter 376, Laws 1885 (now Labor Law, § 9), a receiver could not be authorized by the court to pay or issue certificates of indebtedness for the payment of labor and services in operating the road prior to his appointment, and to make cer- tificates so issued a lien prior to the mortgage. Metropolitan Trust Co. v. Tonawanda, etc., R. R. Co., 103 N. Y. 245. And see Metropolitan, etc., Co. v. Tonawanda R. R. Co., 2 St. Rep. 69. Services after appointment. — The pro- ceeds of the property of a corporation in the hands of the receiver appointed in proceedings for its dissolution are properly applied to the payment of wages of employees due at the time the receiver was appointed, and wages of employees whose services were thereaf- ter required in preserving the property and preparing it for sale as well as ref- eree's fees, counsel fees, and expenses, including those of the receiver's attor- ney, and the money due on receiver's certificate authorized by the court. Matter of MuUer & Co., 47 N. Y. Supp. 277. 2. Palmer v. Van Santvoord, 17 App. Div. 194, 45 N. Y. Supp. 354; Mayer v. Stern, 22 App. Div. 628, 47 N. Y. Supp. 965; Matter of Luxton & Black Co., 35 App. Div. 243, 54 N. Y. Supp. 778; Matter of Fitzgerald, 21 Misc. 226, 45 N. Y. Supp. 630. 3. Palmer v. Van Santvoord, 17 App. Div. 194, 45 N. Y. Supp. 354. 4. Brown v. A. B. C. Fence Co., 52 Hun, 151, 23 St. Rep. 415, 5 N. Y. Supp. 95. 5. Cochran v. A. S. Baker Co., 30 Misc. 48, 61 N.. Y. Supp. 724. See also Chapman v. Chumar, 4 Silv. 199, 7 N. Y. Supp. 230, 26 St. Rep. 473. Act of 1885. — The word "employees" in chapter 376, Laws 1885, giving a preference to wages of "employees, op- eratives and laborers" in case a re- ceiver of a. corporation is appointed, is .limited by the specific words "opera- tives and laborers," and does not in- clude a clerk and bookkeeper of a manufacturing corporation, the super- intendent, foreman or draftsman, who receive salaries. Matter of Stryker, 158 N. Y. 526; aff'g, 73 Hun, 327, 55 St. Rep. 903, 26 N. Y. Supp. 209. 6. Matter of Charron v. Hale, 25 Misc. 34, 54 N. Y. Supp. 411; People v. CORPORATIONS. 931 wages;'' an attorney of the corporation;* and an assignee of an employee.^ It has been said that such a statute confers upon a class of persons having a contractual relation with cori)orations new and unusual privileges and securities which diminish the rights and securities of all persons having claims not within the favored class, and it is in derogation of the common law, and it should not be extended to cases not with- in the reason as well as within the words of the statute ; nor should it be given a retroactive effect.^" But it has also been announced that the statute should receive liberal construction, and that the word " employee " used in the statute has a wider significance than the words " laborers or operatives. "^^ 18. Delay by creditor in presenting claim. Where dividends are set aside for creditors who have proved their claims, but have failed to claim their dividends for more than one year, and no notice has been given the credi- tors of prior dividends, such dividends must be paid into court and notice given to such creditors by publication in a news- paper in the county once a week for three weeks and also by notice mailed to the creditor at his last known place of ad- dress. If a creditor, after due notice, fails to assert his rights as a creditor, he waives his claim, and forfeits his right to share in the distribution, and the funds set aside for dividends on un- proved claims will be distributed among the creditors who have presented and established their claims.^^ Where a depositor of an insolvent bank received from the receiver thereof her distributive share of the assets, and thereafter a creditor of the bank suing on behalf of himself and other creditors enforced the statutory liability of the stockholders and recovered a large sum, which was turned over to the receiver for distribution, and a referee was ap- pointed to ascertain the creditors of the bank, and was di- Rcmington, 6 N. Y. Supp. 796, 25 St. 9. People v. Remington & Sons, 45 Rep. 301, 3 Silvernail, 478. Hun, 329'. 7. Matter of American Lace Works, 10. People v. Remington & Sons, 45 30 App. Div. 321, 51 N. Y. Supp. 818; Hun, 329. People V. Remington & Sons, 45 Hun, 11. People v. Beverage Brewing Co., 329; Matter of Stryker, 73 Hun, 327, 91 Hun, 313, 36 N. Y. Supp. 525. 55 St. Rep. 903, 26 N. Y. Supp. 209. 12. People v. German Bank, 13« 8. People V. Remington & Sons 45 N. Y. Supp. 311, Hun, 329. 932 COEPORATIONS. rected to give notice by publication to all creditors to appear and prove their claims, and the plaintiff, whose address was known to the bank and the receiver, did not receive a copy of the notice, and knew nothing of the proceedings, and after a distribution of part of the fund the plaintiff moved for an order compelling the receiver to pay her her pro rata share of the fund, it was held, that she was entitled to relief on pay- ment of her share of the expenses, of the dissolution suit, as she showed a valid excuse for failing to file and prove her claim before the referee; that, as the receiver had been charged with the distribution of the fund, the motion would be regarded as made in the original action by the stockholders for dissolution.^^ 19. Contingent claims. Contingent claims cannot share in the distribution. Claims must be valued and determined and their status fixed as of the date of the commencement of the action for corporate dis- solution." 20. Receivers in more than one proceeding. Where a receiver was appointed in corporate dissolution proceedings and another was appointed in foreclosure pro- ceedings against the corporation, it was held that, in the ab- sence of special equities, the claims of each receiver should be paid out of the property in his hands although the same per- son is receiver in both proceedings.^^ X. Accounting of receiver. 1. General Corporation law, § 247. Duty of receiver to keep accounts. They shall keep a regular account of all moneys received by them as receivers ; to which, every creditor, or other person interested therein, shall be at liberty, at all reasonable times, to have recourse. (See B., C. & G. Consol. L., 2nd Ed., p. 3197.)16 13. Matter of Ziegler, 9& App. Div. N. Y. Supp. 311. 117, 90 N. Y. Supp. .6'8il. 15. Knickerbocker Trust Co. v. Tar- 14. People V. Metropolitan Surety rytown, etc., R. Co., 133 App. Div. 285, Co., 205 N. Y. 135; People v. Metro- 117 N. Y. Supp. S71. politan Surety Co., 158 App. Div. 651, 16. Further provisions as to account 144 N. Y. Supp. 23S. of receiver in dissolution. — See section See also People v. German Bank, 136 107 of the General Corporation Law. COEPORATIONS. 933 2. General Corporation Law, § 248. Duty of receiver to serve copy of report upon attorney-general and superintendent of banks. All receivers of insolvent corporations who are required by law to make and file reports of their proceedings shall at the time of making and filing such reports, serve a copy thereof upon the attorney-general of this state, and receivers of such corporations as report to, and are under the supervision of, the banking department shall on the first day of January and July of each year, during the continuance of their respective trusts, file with the superin- tendent of banks, a report, verified by oath, in such form as the superintendent may prescribe, showing the condition of their respective trusts. In case any receiver of an insolvent corporation shall neglect to make and file a report of his proceedings for thirty days after the time he is required by law to make and file such report, or shall neglect for the same length of time to serve a copy thereof on the attorney-general, as required by this section, the attorney- general, may make a motion in the supreme court for an order to compel the making and filing and serving a copy on him of such report, or for the removal of such receiver from his office. (See B., C. & G. Consol. L., 3nd Ed., p. 3197.) 3. General Corporation Law, § 249. Duty of certain receivers to make reports. It shall be the duty of every receiver of an insurance, banking, or railroad corporation, or trust company, to present every six months to the special term of the supreme court, held in the judicial district wherein the place of trial or venue of the action or special proceeding in which he was appointed may then be, on the first day of its first sitting, after the expiration of such six months, and to file a copy of the same, if a receiver of a bank or trust company, with the superintendent of banks; if a receiver of an insurance company, with the superintendent of insurance; and in each case with tlhe attorney -general, an account exhibiting in detail the 'receipts of his trust, and the expenses paid and incurred therein during the preceding six months. Of the intention to present such account, as aforesaid, the attorney-general, and also the surety or sureties on the official bonds of such receiver, shall be given eight days' notice in writing; and the attorney-general shall examine the books and accounts of such receivers at least once every twelve months. (See B., C. & G. Consol. L., 2nd Ed., p. 3197.) 4. General Corporation Law, § 276. Control of receiver by court. The receivers shall be subject to the control of the court and may be com- pelled to account at any time. (See B., C. & 6. Consol. L., 2nd Ed., p. 3208.) 5. General Corporation Law, § 268. Final accounting by receiver. A receiver shall apply within one year after qualifying as such for a final settlement of his accounts and an order for distribution, or shall apply to the court upon notice to the attorney-general for an extension of time, setting forth the reasons why he is unable to close his accounts, which order may be granted in the discretion of the court. The attorney-general or any creditor, or any party interested, may apply for an order that the receiver show cause why an accounting and distribution shall not be had at any time after the expiration of one year after the receiver qualifies; and it shall be the duty of 934 COBPORATIOH-S. the attorney-general after the expiration of eighteen months from the time the receiver enters upon his duties, in case he has not applied for a final settlement of his accounts, to apply for such an order on notice to such receiver. In ease of Buoh application by a party other than the receiver the court shall direct the receiver to take steps to account with all convenient speed. The receiver is not required or authorized to file any account, except as herein provided, except by special order of the court. (See B., C. & G. Consol. L., 2nd Ed., p. 3205.) 17 6. General Corporation Law, § 269. Notice of final accounting. Previous to rendering such account the receivers shall insert a notice of their intention to present the same, once in each week, for three weeks, in a news- paper of the county in which notices of dividends are herein required to be inserted, specifying the time and place at which sueh account will be rendered. Said receivers shall also give notice to the sureties on their ofiicial bonds, as provided in section two hundred and twenty-seven of this chapter. (See B., C. & G. Oonsol. L., 2nd Ed., p. 3206.) 7. General Corporation Law, § 270. Hearing on final accounting. Upon the coming in of such report, the court shall hear the allegations of all concerned therein, and shall allow or disallow such account, and decree the same to be final and conclusive upon all the creditors of such corporation, upon all persons who have claims against it, upon any open or subsisting engage- ment, and upon all the stockholders of such corporation. (See B., C & G. Consol. L., 2nd Ed., p. 3206.) 8. General Corporation Law, § 271. Reference of final accounting. The referee to whom such account shall be referred, shall hear and examine the proofs, vouchers and documents offered fpr or against such account, and shall report thereon fully to the court. (See B., C. & G. Oonsol. L., 2nd Ed., p. 3206.) 9. General Corporation Law, § 272. Further accounting. Such receivers shall also account from time to time in the same manner, and with the like effect, for all moneys which shall come to their hands after the rendering of such account, and for all moneys which shall have been retained by them for any of the purposes hereinbefore specified, and shall pay into court all unclaimed dividends. (See B., C. & G. Consol. L., 2nd Ed., p. 3206.) 10. Notice of accounting. Under section 269 of the General Corporation Law, the re- ceiver is required to publish a notice of his intention to pre- sent his accounts. And, under section 227, notice is required 17. Moneyed corporations. — ^As to See also People v. Manhattan Fire the accounting of receivers of moneyed Insurance Co., 77 App. Div. 517, 79 corporations, see General Corporation N. Y. Supp. 11. Law, §§ 1S8, 159. COKPORATIONS. 935 to be given to the sureties on his official bond. An action will not lie upon his bond, unless it appears that the surety was given notice of such accounting, as is required by statute.^* Upon the accounting of a receiver of a corporation, where the order for the accounting requires service of notice upon the creditors named in the application, such creditors have a right to appear and be present at the accounting.^^ Where it is sought to review proceedings had upon the settlement of a re- ceiver's account by a creditor, he should apply to be made a party to the action and to have the order vacated.^" Where, in proceedings for the voluntary dissolution of a corporation, the temporary receiver of the corporation is made the permanent receiver, an accounting by the temporary receiver to himself as permanent receiver is unnecessary, and an adjudication made upon such an accounting, on notice to the Attorney-General alone, is not binding upon creditors who have not appeared in the proceedings and who received no notice of the accounting; such creditors are, on the ac- counting of the permanent receiver, entitled to require him to account for everything received by him in his capacity as temporary receiver.^ 11. Reference. When the accounts of a receiver involve large sums they should be scrutinized according to long established practice by a referee before being passed by the court.^^ But the accounts of a receiver shall be filed and presented to the court before a reference is granted to pass upon such accounts.^^ ' Notice of the hearings before the referee must be given to the Attorney-General.^* 18. Stratton v. City Trust, Safe De- Appeal. — A receiver may appeal posit & S. Co., 86 App. Div. 551, 83 from a determination to settle his ac- N. Y. Supp. 780. counts. Matter of Guardian Savings 19. Greason v. Goodwillie Wyman Inst., 7 N. Y. 408. Co. 38 Hun, 138. A de facto receiver cannot avail 20. Schenck v. Ingraham, 4 Hun, 67, himself of an irregular or void ap- 5 Hun 397. pointment, under which he has acted, 21. Matter of Simonds Mfg. Co., 39 procured by his connivance, and thus App. Div. 57'6, 57 N. Y. Supp. 776. escape an accounting for the moneys 22. People v. Oriental Bank, 129 which came into his hands. O'Ma- App. Div. 865, 114. N. Y. Supp: 440; honey v. Belmont, 62 N. Y. 133. Matter of Home Book Co., 60 Misc. 23. People v. Columbia Car Spring 560, 112 N. Y. Supp. 1012; People v. Co., 12 Hun, 5«5. Knickerbocker Life Ins. Co., 18 Week. 24. People v. Knickerbocker L. Ins. Dig. 49i2, 31 Hun, 622, Co., 18 Week. Dig. 492, 31 Hun, 622. 936 COBPOBATIONS. 12. Receiver's neglect of duty. Upon proof of loss sustained by reason of the receiver's neglect of duty, he is chargeable with such loss.^^ If he de- posits funds in his own individual name and not as receiver, mingling them with his own funds and the bank fails, he will be charged with the loss resulting.^^ 13. Allowance for disbursements. Upon the accounting, the receiver will be allowed his rea- sonable expenses,^^ including counsel fees which have been properly paid.^^ But he may not charge counsel fees for him- self.^^ A receiver who is warranted in bringing an action to set aside a chattel mortgage and in appealing from the judg- ment, though unsuccessful, is entitled to be allowed the ex- penses and costs incurred by him.^^ 14. Cost of accounting. Where the conduct of a receiver renders a reference neces- sary to examine his accounts, the court has power to charge him with one-half the expense of the examination.^" But ordi- narily, when no misconduct is shown, he will not be compelled to pay any part of the costs of a reference to settle his ac- counts.^^ They are paid out of the fund.^^ Where a receiver acts in good faith in prosecuting an ac- tion, it is proper to allow him the costs and expenses incurred therein.'* 15. Effect of accounting. An accounting by a temporary receiver of a corporation is not conclusive, as against creditors, on his accounting as per- 25. Clapp V. Clapp, 49 Hun, 195, 1 Paige, 213; Collier v. Munn, 41 N. Y. N. Y. Supp. 919; afl'd, 125 N. Y. 693. 147. 26. Utica Ins. Co. v. Lynch, 11 29. Matter of Merry, 11 App. Div. Paige, 520; Matter of Stafford, 11 607, 42 N. Y. Supp. ©IT, 7® St. Rep. Barb. 353. 617. 26a. Corey v. Long, 43 How. 492; 30. Corey v. Long, 43 How. Pr. 492. Howes V. Davis, 4 Abb. 71. 31. Attorney-General v. Continental 27. Matter of Commonwealth Fire Life Ins. Co., 27 Hun, 524; aff'd, 9i3 Ins. Co., 32 Hun, 78; Clapp v. Clapp, N. Y. 45; Hynes v. McDermott, 3 St. 49 Hun, 195; Corey v. Long, 43 How. Rep. 582. Pr. 492; Utica Life Ins. Co. v. Lynch, 32. Matter of Merry, 11 App. Div. e Barb. Ch. 573. 597, 42 N. Y. Supp. 617. See also, supra, XI- V. Employment 33. Matter of Merry, 11 App. Div. of counsel. 597, 42 N. Y. Supp. ei7. 28. Matter of Bank of Niagara, 6 COBPORATIONS. 937 manent receiver.^ The receiver is generally protected on Ms final accounting in respect to his expenditures hy the orders made upon his intermediate account.^ 16. Form of report and account of receivers. NEW YORK SUPREME COURT— Kings County. PEOPLE OF THE STATE OF NEW^ YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. To the Special Term of the Supreme Court of the State of New York, held in and for the county of Kings: I, Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, do hereby render the following account of my proceedings as temporary receiver of said association from the time of my appointment to October 1st, 1896 : By an order of this court, bearing date the 28th day of March, 1896, and filed in the office of the clerk of Montgomery county, on the 4th day of April, 1896, I was appointed temporary receiver of all the property, things in action and eifects, real and personal, of said cor- poration, and of all the property held by it, with the usual powers and duties enjoyed and exercised by receivers according to the practice of this court and the statutes in such case made and provided. It was provided by said order that before entering upon the duties of my trust I should execute and deliver, with sufficient sureties, a bond to the people of the State of New York in the penal sum of two hundred thousand ($200,000), dollars, conditioned upon the faith- ful execution of my trust, and upon filing such bond, duly approved, I was authorized and directed to take possession of all the property, real and personal, of said corporation. On the 10th day of April, 1896, I filed in the office of the clerk of the county of Montgomery my bond in the manner and form pro- vided for in said order, the same having been duly approved upon notice to the attorney-general. As soon as practicable after my qualifications as temporary receiver, I availed myself of the provisions of law allowing this court to au- thorize me to more fully protect the property of said association, and that I applied for and obtained an order bearing date the 16th day of April, 1896, authorizing and directing the superintendent of banks to pay and deliver to me all moneys, funds, bonds and mortgages 34. Matter of Simonds Mfg. Co., 39 Aas'n, 88 App. Div. 597, 85 N. Y. Supp. App. Div. 576, 57 N. Y. Supp. 776. 137. 35. People v. U. S. Mutual Accident 938 CCEPOEATIOHS. deposited with him, and that in pursuance and by virtue of said order the superintendent of banks did thereafter deliver to me bonds, mort- gages and cash of the par or face value of one hundred thousand ($100,000) dollars, and that I did also obtain various other orders, as is more particularly shown in the schedule hereafter following, marked "Schedule No. 59." That by an order bearing date the 21st day of July, 1896, the venue or place of trial of the above-entitled action was changed from Montgomery to Kings county. That at the time I qualified as receiver as aforesaid the books and evidences of property in this State were in the possession of David A. Taggart, Esq., the assignee or receiver appointed by the Supreme Court of the State of New Hampshire, but that I was able to obtain access to such books and to make copies of the same as far as they related to the property of the association in this State, and that I was also able to obtain the bonds, mortgages and other papers relating to the property and investments of the association in this State; that I have proceeded to collect all the moneys due said asso- ciation as far as possible, and have deposited the moneys received by me and belonging to said association, in the bank of the Manhattan Company, New York city, in compliance with the terms of the order aforesaid. Annexed to this account, and marked "General Statement, No. 1," is a summary statement of the assets of the Granite State Provident Association, as shown by my inventory heretofore filed. This is followed by "General Statement, No. 2," showing the cash received and disbursed by me. This again is followed by "General Statement, No. 3," showing the assets referred to in my inventory as reduced by collections and other causes. This again is followed by "General Statement, No. 4," showing the liabilities of the association in this State at the time of my appointment as receiver. This again is followed by "General Statement, No. 5," showing the present condition of the liabilities of the association in this State. All the items referred to in the several general statements above mentioned are shown in detail by schedules, which said schedules are severally signed by me and made a part of this account. Dated, New York, October 1, 1896. All of which is respectfully submitted. EDWIN E. DICKINSON, (Annexed schedule and verification.) Temporary Receiver. COEPOKATIONS. 939 17. Form of order of reference as to interlocutory account. (Caption.) PEOPLE OF THE STATE OP NEW^ YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, having presented to a Special Term of this court an account of the administration of his trust as temporary re- ceiver of the said Granite State Provident Association, from the 28th day of March, 1896, the date of his appointment as such temporary receiver, to the 30th day of September, 1896, inclusive, and on read- ing and filing the said account, together with proof of notice of pre- sentation thereof, and also proof of service of such account and a copy of this order upon the attorney-general of the State of New York ; the American Surety Company, the surety on receiver 's bond ; Philip Carpenter, Esq., attorney for the defendant Granite State Provident Association, and J. Newton Piero, Esq., attorney for David A. Taggart, etc., and also proof of the filing of said account in the oflSce of the superintendent of banks of the State of New York, and in the office of the attorney-general of the State of New York, and after hearing C. W. Francis, Esq., deputy attorney-general of the State of New York, on behalf of the people of the State of New York, and T. Tileston "Wells, Esq., on behalf of Edwin E. Dickinson, tem- porary receiver of the Granite State Provident Association, Now, on motion of Lexow, Mackellar & Wells, attorneys for Edwin E. Dickinson, temporary receiver of the Granite State Provident As- sociation, it is Ordered, That "Walter N. GiU, Esq., counselor at law, be, and he hereby is, appointed referee to take and state the accounts of the temporary receiver herein, and to state and report to this court the amount properly payable to the attorneys and counsel for the said temporary receiver as expenses incurred for costs, fees and allowances for services duly rendered by them to the said temporary receiver and for disbursements made by them, and to ascertain and report the commissions properly payable to the temporary receiver for and on account of his services as stated in said accounts, and it is further Ordered, That not less than two days' notice of the hearing before the referee be given to the attorney-general, and the attorneys for the other parties, and that the referee shall take such testimony as shall be presented by either party, and report his determination, together with the testimony so taken by him, to this court in writing with all convenient speed, and it is further Ordered, That hearings before said referee may be held either in New York or Kings counties. Enter in Kings county. 940 COBPORATIONS. 18. Form of report of referee on interlocutory accounting. NEW YOEK SUPREME COURT— Kings County. PEOPLE OF THE STATE OF NEw" YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. To the Special Term of the Supreme Court of the State of New York: I, Walter N. GiU, the referee duly appointed by an order of this court, bearing date the 21st day of November, 1896, and entered in the office of the clerk of the county of Kings, on the 23d day of November, 1896, to take and state the accounts of Edwin E. Dick- inson, as temporary receiver of the Granite State Provident Associa- tion, and to state and report to this court the amount properly pay- able to the attorneys and counsel for the said temporary receiver, as expenses incurred for costs, fees and allowances for services duly rendered by them to the said temporary receiver, and for disburse- ments made by them, and to ascertain and report the commissions properly payable to the said temporary receiver for and on account of his services as stated in said accounts, do hereby respectfully re- port as follows: First. That on the 27th day of November, 1896, the day appointed for the first hearing herein, Messrs. Lexow, MaekeUar & Wells, at- torneys for the temporary receiver, produced and filed with me a notice of said hearing, with proof of service of the same upon the attorney-general; Henry C. Wilcox, Esq., attorney for the American Surety Company, the surety on the receiver's bond; Philip Carpen- ter, Esq., attorney for the defendant the Granite State Provident Association; and J. Newton Fiero, Esq., attorney for David A. Tag- gart, Esq., assignee, etc., and that said notice, with admissions and proofs of service, is iereto annexed. Second. That before proceeding to hear the testimony, I took and subscribed, in writing, the statutory oath as such referee, which is hereto annexed. Third. That the plaintiffs appeared on the hearing before me by Clarence W. Francis, Esq., deputy attorney-general of the State of New York; the temporary receiver, by Messrs. Lexow, MaekeUar & WeUs (Messrs. Clarence Lexow, T. Tileston Wells and Louis B. Van Gaasbeek, of counsel) ; the defendant Granite State Provident Asso- ciation, by Philip Carpenter, Esq. (Mr. Jonathan C. Ross, of counsel) ; and David A. Taggart, Esq., assignee, etc., by J. Newton Fiero, Esq. ; and that there were no other appearances. Fourth. That I have read and examined the accounts, vouchers, statements and orders, and have heard the proofs and arguments submitted by the respective parties and thereupon I do find and report as follows: COKPORATIONS. 941 I. That on the 21st day of November, 1896, the said temporary- receiver presented, and that thereafter and on the 23d day of No- vember, 1896, filed in the office of the clerk of Kings county his ac- counts setting forth in detail all his acts and proceedings as such re- ceiver and of the administration of his trust from the date of his ap- pointment to the 30th day of September, 1896, inclusive. II. That no objection or exceptions to the said account have been filed in the office of the clerk of the county of Kings as more fully appears from his certificate hereto annexed. III. That said account was also produced before me and put in evidence, together with the original vouchers supporting and verifying the same. IV. That on the 21st day of November, 1896, the said temporary receiver presented at a Special Term of the Supreme Court, and thereafter on the 23d day of November, 1896, filed in the office of the clerk of Kings county with and as a part of his said account, an itemized bill rendered to him by Messrs. Lexow, Mackellar & Wells, for services and disbursements made by them as attorneys and counsel for the said temporary receiver on matters pertaining to the receiver- ship, during the period covered by the said temporary receiver's ac- counting and to the 30th day of September, 1896, inclusive, amount- ing to the sum of six thousand three hundred and eighty-eight dollars and eighteen cents ($6,388.18). That said attorney's bill and account was produced before me and put in evidence and three disinterested witnesses were examined in explanation and support thereof in ad- dition to the testimony of Messrs. Wells, Mackellar and Lexow, and no testimony in opposition thereto was offered by any party to this proceeding. V. That I have examined in detail the accounts, vouchers and cheeks, and that the same as set forth is a true and correct account of his acts and proceedings as such temporary receiver from the date of his appointment to the 30th day of September, 1896, inclusive. VI. The following is a summary statement of the account of said temporary receiver, viz. : The receiver should be charged as follows : Property shown in the last column of • General Statement No. Ill $385,448.21 Cash received as shown by General State- ment No. II 101,929.38 The receiver should be credited as fol- lows: Cash disbursed as per General Statement No. II $4,374.24 Property settled or closed out as per sec- ond column of General Statement No. Ill 116,100.38 Property being foreclosed as per third column of General Statement No. III. . 40,799.72 $487,377.59 942 CORPORATIONS. Balance in bank as per General Statement No. II 97,050.38 Balance in cash drawn as per General Statement No. II 6.14 Balance in hands of agents as per General Statement No. II 498.62 Assets on hand as per first column of Gen- eral Statement No. Ill 228,548.11 $487,377.59 VII. That the temporary receiver has during the period covered by his accounting paid no dividends to creditors or stockholders. VIII. That to properly administer his trust, said temporary re- ceiver was obliged to employ competent counsel to advise and assist him ia the matters pertaining to the administration of his said trust ; that the temporary receiver retained Messrs. Lexow, Mackellar & Wells to act for him in that capacity, and that they rendered valuable services to the said temporary receiver, which are more particularly' shown in their bill, filed with and. being a part of the account of the temporary receiver, and in the testimony of the witnesses who were examined before me. IX. That ia my judgment the said services are reasonably and fairly worth the amount stated in said bill, viz. : the sum of five thousand two hundred and ninety dollars ($5,290). Between the date of the appointment of the said temporary receiver and the 30th day of September, 1896, inclusive, the said attorneys and counsel in- curred necessary expenses and made necessary disbursements, which are set forth in their bill and which have been proven before me, amounting to the sum of one thousand and ninety-eight dollars and eighteen cents ($1,098.18), both of said sums amounting in all to six thousand three hundred and eighty-eight dollars and eighteen cents :($6,388.18), are in my opinion properly payable to Messrs. Lexow, Mackellar & Wells. X. That the said temporary receiver has not been paid any fees or any commissions for any services, and that the commissions and fees now properly payable to him based on sums actually received and paid out by him during the period covered by this account as fixed by § 2 of chapter 378 of the Laws of 1888, as amended by chapter 275 of the Laws of 1886, are as follows: On moneys received, $100,000.00 at two and one-half per cent $2,500.00 $1,929.38 at one and one-fourth per cent 24.12 On moneys paid out, $4,874.24 at two and one-half per cent 109.36 Making in aU $2,633.48 which said sum is now properly payable to him. CORPOEATIOKS. 943 XI. That the testimony taken before me under the order of refer- ence herein consists of 235 typewritten pages, and is submitted with this my report. Dated, New York, December 23, 1896. WALTER N. GILL, Referee. 19. Form of order confirming report of referee on interlocutory ac- counting. (Caption.) PEOPLE OF THE STATE OF NEw"^ YORK agst. GRANITE STATE PROVIDENT AS- SOCIATION. Edwin E. Dickinson, temporary receiver of the defendant Granite State Provident Association, heretofore appointed in this action, hav- ing filed his account from the day of his appointment to September 30th, 1896, inclusive, and having then and there applied to this court for instructions in the administration of his trust, and an order having been entered in this action on the 23d day of November, 1896, appointing "Walter N. Gill, Esq., referee to take and state the accounts of the said temporary receiver, and to state and report to this court the amount properly payable to the attorneys and counsel for the said temporary receiver as expenses incurred for costs, fees and allowances for services rendered by them to the said temporary receiver, and for disbursements made by them, and to ascertain and report the commis- sions properly payable to the said temporary receiver for and on ae- , count of his services as stated in said accounts, and said reference having proceeded before the referee named in such order, and testi- mony having been taken, and said reference having been attended by Clarence W. Francis, Esq., deputy attorney-general of the State of New York, on behalf of the people of the State of New York; by Messrs. Lexow, Mackellar & WeUs, on behalf of Edwin E. Dickinson, Esq., temporary receiver as aforesaid ; by Philip Carpenter, Esq., at- torney for defendant Granite State Provident Association, and by J. Newton Fiero, Esq., attorney for David A. Taggart, Esq., assignee, etc., and said referee having made his report in writing, and said report having been duly filed in the office of the clerk of Kings county, and a copy of said report, together with notice of filing thereof, hav- ing been served upon the attorney-general of the State of New York ; the attorney for the American Surety Company, the surety on the temporary receiver's bond; Philip Carpenter, Esq., attorney for the defendant Granite State Provident Association, and J. Newton Fiero, Esq., attorney for David A. Taggart, Esq., assignee, etc., and notice of motion to confirm said referee's report and said temporary re- ceiver's accounts having been served on the attorney-general and the 944 CORPOKATIOHS. other attorneys above named, together with a copy of the proposed order to confirm said referee's report, and on proof of such service, and after hearing , Esq., on behalf of the people of the State of New York, and T. Tileston Wells, Esq., on be- half of the temporary receiver of the Granite State Provident Asso- ciation, Now, on motion of Lexow, Mackellar & "Wells, attorneys for Edwin E. Dickinson, temporary receiver of the Granite State Provident As- sociation, it is Ordered, That the report of Walter N. Gill, Esq., referee herein, appointed by order of this court, bearing date the 23d day of Decem- ber, 1896, and entered in the office of the clerk of Kings county on the 23d day of December, 1896, which said report is submitted here- with, be, and the same hereby is in all things confirmed; and it is further Ordered, That Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is, authorized and directed to retain out of the moneys in his hands two thousand six hundred and thirty-three and forty-eight one hundredths dollars ($2,633.48), for his fees and commissions from the date of his ap- pointment to the 30th day of September, 1896, inclusive, as found by said referee to be such fees and commissions; and it is further Ordered, That said Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is, authorized and directed to pay to Messrs. Lexow, Mackellar & Wells, for their services as attorneys and counsel during the period covered by the bill rendered to him and made a part of the account hereinabove referred to, the sum of five thousand two hundred and ninety dollars ($5,290), together with the sum of one thousand and ninety-eight 18/100 dol- lars ($1,098.18) for their disbursements, making in all six thousand three hundred and eighty-eight and eighteen one hundred dollars ($6,388.18), as found by said referee to be proper charges for their services and disbursements and proper expenses incurred by said tem- porary receiver in the administration of his trust ; and it is further Ordered, That said Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is authorized and directed to pay to Walter N. Gill, Esq., for his fees as referee herein, the sum of dollars; and it is further Ordered, That said Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is, authorized and directed to pay to Miss E. W. Munn the sum of two hundred and eleven 50/100 dollars ($211.50), for her services as stenographer in the reference before Walter N. Gill, Esq., hereinbefore mentioned; and it is further Ordered, That Edwin E. Dickinson, temporary receiver of the Granite State Provident Association, be, and he hereby is, authorized and directed to pay to Messrs. Lexow, Mackellar & Wells the further sum of doUars for an additional allowance on the accounting aforesaid. Enter in Kings county. COHPORATIONS. 945 20. Form of notice of motion on application for final settlement. (Title.) Sir: Please taken notice that a full and accurate account of all the pro- ceedings of Howard Gillespy, as receiver of the above named corpora- tion, on oath, vpill be presented to the Supreme Court of the State of New York, at a Special Term thereof, to be held at the city of Kings- ton, on the 21st day of December, 1895, at ten o'clock in the forenoon of that day, or as soon thereafter as counsel can be heard, and a motion will then and there be made that the same be allowed and be decreed to be final and conclusive upon all the creditors of said cor- poration, and upon all the persons who. may have claims against it, upon any open or subsisting engagement, and upon all of the stock- holders of such corporation, and that said receiver be authorized to pay a final dividend, and upon proof of the payment thereof that he be discharged and his bond vacated, and for such other or further order as to the eourt may seem proper. Dated Albany, N. Y., December 17th, 1895. EDGAR M. HAINES, Attorney for Receiver. To Hon. T. E. Hancock, Attorney-General. 21. Form of account of receiver, including copy notice to present claims and copy notice of presentation of account. (Title.) To the Supreme Court: I, Howard Gillespy, of Saugerties, county of Ulster and State of New York, do hereby respectfully render the following account of aU my proceedings as temporary and permanent receiver of the above- named corporation: I. That I was duly appointed temporary receiver of the above- named corporation by an order of this court made at a Special Term of the Supreme Court, held at the city hall, in the city of Albany, on the 1st day of April, 1895, and which was duly entered in the Ulster county clerk's office on the 2d day of April, 1895. II. That in accordance with the provisions of said order, I duly filed my bond in said Ulster county clerk's office, on the said 2d day of April, 1895, duly approved by Mr. Justice Parker. III. That in and by the order appointing me receiver as aforesaid, I was authorized to continue operating the shops and works of the corporation to the extent that I deemed it wise, prudent and neces- sary for the purpose of preserving the assets of the corporation and the market-value of its property, and for such other purposes as I might deem it necessary. rV. That in and by an order made at a Special Term of this court held on the 6th day of April, 1895, at the court house, in the city of Kingston, the power and authority of a permanent receiver was 60 946 COBPORATIONS. granted to me, and in and by the terms of said order I was authorized, empowered and directed to sell at public auction all personal property coming into my hands as such receiver, including all accounts, bills receivable and accounts receivable, and in and by the terms of said order I as also authorized to accept in lieu of cash upon said sale, the voucher, receipt or acquittance of a creditors' committee for such sum or sums as would be represented by said creditors' committee upon a distribution of the proceeds of such sale, ratably and propor- tionately made among all the creditors of said corporation; that the said receipt, voucher or acquittance was to stand in lieu of cash. V. That pursuant to the terms of said order, I advertised said property for sale, and on the 24th day of April, 1895, I sold the same to William F. Russell, Edward C. Rogers, Charles A. Schultz, John G. Myers, Oscar S. Greenleaf, Robert A. Snyder and Daniel Lamb, as a committee for sundry bond and certificate holders of the Shef- field Manufacturing Company, for the sum of $180,000, with the exception of a lot of worthless accounts heretofore belonging to J. B. Sheffield & Son, and amounting to fifty-seven thousand seven hun- dred and thirty-six dollars and fifty-seven cents ($57,736.57), which were sold to William F. Russell for one dollar, and which had no market value. VI. That I duly reported said sale to this court, and said report was by an order of this court duly made at a Special Term thereof, on the 25th day of June, 1895, and that the said sale was in all things confirmed, and said order was entered in the Ulster county clerk's offlce on the 27th day of June, 1895. VII. (Recite judgment and appointment as permanent receiver.) VIII. That in accordance with the provisions of said order, I duly filed my bond as permanent receiver of said corporation, on the 23d day of August, 1895, in the Ulster county clerk's office. IX. That immediately upon my appointment as such receiver of the above-named corporation I gave notice of such appointment as follows, viz : NOTICE. I, Howard Gillespy, of Saugerties, Ulster county, in the State of New York, do hereby give notice that I was appointed the perma- nent receiver of the corporation, The Sheffield Manufacturing Com- pany, by an order of and at a Special Term of the Supreme Court, held at the city hall, in the city of Albany, on the 30th day of July, 1895, which order was entered in the office of the clerk of the county of Ulster on the 31st day of July, 1895, and that I have duly qualified as such receiver. That by said order, the said corporation was dissolved and I, the said permanent receiver, do hereby give further notice, pursuant to the statute in such cases made and provided, requiring : I. All persons indebted to tjie said corporation, The Sheffield Manu- facturing Company, to render on or before the 16th day of October, 1895, an account of all debts and sums of money owing by them, respectively, to me, the permanent receiver of said corporation, arid COKPOEATIONS. 947 to pay the same at my office, in the village of Saugerties, county of Ulster and State of New York. II. All persons having in their possession any property or effects of said corporation, to deliver the same to me, the permanent receiver of said corporation, on or before the 16th day of October, 1895, at my office aforesaid. III. All the creditors of said corporation to deliver their respective accounts and demands against said corporation, to me, the perma- nent receiver of said corporation, on or before the 16th day of Oc- tober, 1895, at my office aforesaid. IV. All persons holding any open or subsisting contract of said corporation are required to present the same in writing and in detail to me, the permanent receiver of said corporation, on or before the 16th day of October, 1895, at my office aforesaid. Dated, Saugerties, N. Y., August 29th, 1895. HOWARD GILLESPY, Permanent Receiver of the Sheffield Manufacturing Company, Saugerties, Ulster County, New York. by printing such notice once a week for three weeks in two news- papers within the county in which the corporation has- its principal office of business, to wit: The Saugerties Post, published in the village of Saugerties, and in the Kingston Daily Leader, published in the city of Kingston, in said county, as appears by the affidavits of publication hereto annexed and marked "X" and "Y." X. Schedules "1" and "2," hereto annexed, contain a full, ac- curate and true account of all moneys and property received or col- lected by me or with which I am chargeable. XI. Schedules "3" and "4" hereto annexed, contain a full, ac- curate and true account of all discounts allowed by me, the wages of employees and salaries paid by me and expenses incurred by me in the conduct of the business under the authority of the court to continue operating the shops and works of said corporation. XII. Schedule "5" hereto, annexed, contains a statement of the balance of moneys in my hands and also shows the sum for which I hold the voucher of the stockholders or creditors' committee for part of the purchase price of the property aforesaid, pursuant to the order of the court. XIII. That a notice for the presentation of my account as receiver of the above-named corporation, a copy of which is as f oUows, viz. : Notice to the creditors and all persons interested in the Sheffield Manufacturing Company, of Saugerties, Ulster county, in the State of New York. Take notice, that a full and accurate account of all the proceed- ings of the receiver of the above-named corporation, on oath, will be presented to the Supreme Court of the State of New York, at a Special Term thereof, to be held in the city of Kingston, on the 21st day of December, 1895, at ten o'clock in the forenoon of that day, 948 COEPOBATIONS. or as soon thereafter as counsel can be heard, and a motion will then and there be made that the same be allowed and decreed to be final and conclusive upon all the creditors of said corporation, and upon all persons who may have claims against it, upon any open or sub- sisting engagement, and upon all the stockholders of such corpora- tion, and that said receiver be discharged and his bond vacated. Dated, Saugerties, N. Y., November 23rd, 1895. HOWARD GILLESPY, Receiver of the Sheffield Manufacturing Company. was duly published as prescribed by law, by printing such notice at least once a week for three successive weeks in the Saugerties Post and also in the Saugerties Telegraph and the Kingston Daily Leader, being newspapers published in the county in which the principal office of said corporation is located; and the said publication in the Saugerties Telegraph being made in lieu of the publication in the State paper ; that the affidavits of publication of said last-mentioned notice are hereto annexed and marked, respectively, "L," "M" and "N." XIV. That no money, property or effects, other than stated in said schedules, have come into my hands or possession; and that no appearances by any attorneys have been received by me or served on me. XV. That no accounts or demands against said corporation, or any open or subsisting contracts with said corporation, have been delivered or presented to me, except as hereinafter stated; that the only creditors of said corporation are the stockholders, and most of them are represented by the stockholders or creditors' committee aforesaid. XVI. Schedule "6," hereto annexed, contains the name and resi- dence of each certificate-holder represented and those not represented by the committee, the amount due him and the amount of certificates represented by the stockholders or creditors' committee, and list of certificate-holders who have filed their certificates with the under- signed. XVII. Said schedule also shows the amount of a judgment of deficiency against said corporation, upon the bonds issued by it upon the foreclosure of a mortgage upon this property and in favor of John W. Searing, as referee, in behalf of said bondholders. XVIII. I know of no creditors interested in the assets of said corporation other than said certificate-holders and said John W. Sear- ing, as referee, in behalf of the bondholders, upon the deficiency judg- ment aforesaid, and the said stockholders or creditors' committee, representing all of the certificate-holders of said corporation, except those whose names appear in the schedule as aforesaid, and who have not deposited their stock with said committee. All of which is respectfully submitted. Dated Saugerties, N. Y., December 21st, 1895. H. GILLESPY, (Schedules to be attached.) Receiver. CORPORATIONS. 949 22. Form of order appointing referee to examine and report npon receiver's accounts. (Caption.) (Title.) The receiver of the above-named corporation, Howard Gillespy, of Saugerties, Ulster county, in the State of New York, having at this date and term duly presented a full and accurate account of all his proceedings under oath, Now, on reading and filing said account and also proof of the due publication of the notice of said presentation as required by law, and of the service of such notice, and of the proposed order of the attorney- general; and on motion of Edgar M. Haines, the attorney for the receiver; it is ordered that said account be, and the same hereby is referred to Henry A. Peckham, Esq., of the city of Albany, New York, attorney and counsellor at law, to examine the same and report thereon with air convenient speed; that said referee be authorized to sit in Albany county. Enter. ALTON B. PARKER, J. S. C. 23. Form of order settling receiver's accounts. (Caption.) (Title.) Upon reading and filing the receiver's accounts of proceedings herein, and the exhibits and vouchers accompanying the same, and the order of this court referring said accounts to Henry A. Peckham, Esq., as referee, made at a Special Term of this court, held at the courthouse, in the city of Kingston, on the 21st day of December, 1895; and after reading and filing the i;eport of said referee, dated the 31st day of March, 1896, and the schedules, exhibits and vouchers accompanying the same, and upon proof of the due service of a copy of said report and papers accompanying the same, with a notice of motion for the granting of this order for this time and place upon Hon. T. E. Hancock, attorney-general of this State ; and after hearing Edgar M. Haines, Esq., the attorney, and Rosendale & Hessberg of counsel for said receiver; F. M. Parsons, deputy attorney-general, appearing and consenting thereto, it is ordered, I. That the report of Henry A. Peckham, Esq., dated the 31st day of March, 1896, the referee duly appointed herein, by an order made at a Special Term of the Supreme Court, held at the courthouse in the city of Kingston, on the 21st day of December, 1895, be and the same hereby is in all respects ratified, approved and confirmed. II. It is further ordered that the account of all the proceedings of Howard Gillespy, Esq., as temporary and permanent receiver of the Sheffield Manufacturing Company aforesaid, be and the same hereby are in all things allowed and decreed to be final and conclusive upon all the creditors of said corporation, and upon all persons who have or had claims against it, upon any open or subsisting engagement, and upon all the stockholders of said corporation. 950 COBPOKATIONS. III. Said receiver is hereby ordered, directed and empowered to pay a first and final dividend of 22 53-100 per centum to the creditors of said corporation, and that the said dividend be paid to the persons and in the amounts set forth in a schedule hereto attached and marked " T, " and forming a part of this order. IV. It is further ordered that if the cash in hands of said receiver be insufScient to pay the dividend in full to John W. Searing, Esq., as referee upon the judgment of deficiency recovered against the corporation aforesaid, and set forth in the schedule attached to the referee's report, that said receiver is hereby ordered, directed and empowered to apportion the amount represented by the voucher, taken by him from the reorganization or creditor's committee, and in said referee's report referred to between himself as receiver and said John W. Searing, Esq., as referee, in the manner and in the amounts set forth in said schedule "A" hereto annexed and forming a part of this order. V. It is further ordered that said dividend so declared as aforesaid, be paid to the said creditors of said corporation, only upon their giving said receiver a proper voucher therefore, and upon their sur- rendering to said receiver any -certificate of indebtedness issued by the said corporation aforesaid, and which may be held bv the creditors of said corporation, or either or any of them. VI. It is further ordered that if any creditor should refuse to give the voucher herein provided for, or refuse to surrender the certificate so held by him, or the whereabouts of said creditor cannot be learned, or upon the failure of any of the creditors to comply with the terms and provisions of this order, that said receiver be and he hereby is directed to deposit the dividend due such creditor with the county treasurer of the county of Ulster, subject to the further order of the court, and that he take the voucher of such county treasurer therefor. VII. It is further ordered that said receiver file a further report with the clerk of the county of Ulster, showing his compliance with the terms and provisions of this order, and that upon the filing of said report, and the vouchers herein directed to be obtained, the said Howard Gillespy, as the temporary receiver, and as the permanent receiver of the Sheffield Manufacturing Company, shall from thence- forth be and he hereby is finally, duly and forever discharged as re- ceiver; and that the bond given by said receiver on his apjpointment as temporary receiver, and the bond given upon his appointment as permanent receiver, and each of them, shall from thenceforth be vacated, canceled and discharged, and that all the sureties upon said bonds, and each of them, and their and each of their heirs, executors and administrators shall from thenceforth be and they hereby are fully and finally released, discharged and acquitted of any and all further liability arising from or by reason of said bonds, or any matter or thing in connection therewith or arising therefrom. The clerk of Ulster county will enter. ALDEN CHESTER, Justice Supreme Court. CORPORATIONS, 951 24. Form of receiver's final report. (Title.) To the Supreme Court: The undersigned, the permanent receiver of the Sheffield Manu- facturing Company, of Saugerties, Ulster county, in the State of New York, respectfully reports : That pursuant to the final order passing my accounts as such re- ceiver, which said order was made at a Special Term of the Supreme Court of the State of New York, held at the city hall, in the city of Albany, on the 7th day of April, 1896, and which was duly entered in the Ulster county clerk's office, on the 8th day of April, 1896, I proceeded to make a full and final distribution of all moneys and assets in my hands as such receiver as aforesaid. That I paid to Edgar M. Haines, Esq., the attorney for the peti- tioners, the costs, allowances and disbursements, and for services ren- dered, ^mounting to one thousand ($1,000) dollars. That I duly paid to Henry A. Peckham, Esq., the referee, upon the final accounting herein, his fees and stenographer's charges, the sum of two hundred and eighteen dollars and forty ($218.40) cents. That I duly paid a dividend of 22 and 53-100 per centum to all of the creditors of said corporation, except those herein mentioned, and that I have taken a proper voucher therefor ; and that all of said cred- itors, who have accepted said dividend have surrendered to me their certificates of indebtedness of said corporation issued therefor and which were held by them. That the sum so paid and the creditors to whom paid are as follows, viz. : (Insert statement.) That the only creditors and certificate holders who failed to take the dividend decreed to be paid to them are following, viz. : (Insert list.) And to cover said indebtedness I have deposited with George Deyo, as treasurer of the county of Ulster, one hundred and twelve dollars and sixty-five ($112.65) cents, to cover the said dividends, and to the credit of said certificate holders, and have taken this voucher therefor ; subject, however, to the further order and direction of the court in the premises. That all the moneys so distributed and deposited by the amount to the sum of $208,189.93. That herewith I return and duly file all of the vouchers taken by me as aforesaid. That I have now fully and entirely distributed all of the moneys and assets in my hands. And the undersigned makes this report pursuant to the terms and provisions of the order aforesaid, for the purpose of duly filing the same in the Ulster county clerk 's office. Dated, Saugerties, N. Y., May 15th, 1896. H. GILLESPY, Receiver. 952 coEPOEATioisrs. 25. Form of notice of accounting. (Title.) Please Take Notice, that a full and accurate account, under oath, of all the proceedings of Howard E. Brown, as permanent receiver of the above-named corporation, will be presented to the Supreme Court of the State of New York, at a Special Term, Part I. thereof, to be held at the County Court House, in the borough of Manhattan, city of New York, on the 8th day of September, 1910, at 10 :30 o'clock in the forenoon of that day, or as soon thereafter as counsel can be heard, and that a motion will then and there be made that the said account be allowed and passed and decreed to be final and conclusive upon all the creditors of said corporation and upon all persons who may have claims against it upon any open or subsisting engagements, and upon all stockholders of said corporation or other persons interested there- in, and that the court direct the settlement of said account by refer- ence or otherwise, and the payment of the moneys remaining in the hands of said receiver after deducting the amount of his commissions and the expenses of said accounting to those found to be entitled thereto, as a final dividend and that the same so paid and distributed, the said receiver be discharged, his bond vacated and the sureties therein released, or for such other relief as may be proper. Dated, 1910. Receiver. 26. Form of notice of motion to discharge receiver. (Title.) Sirs. — Please take notice that upon the receiver's account verified August 25, 1910, a true copy of which is herewith served upon you, upon the petition of Howard E, Brown, verified August 25, 1910, and upon the consent of Wingate & CuUen, attorneys for the petition- ing directors herein, and of the United States Fidelity & Guaranty Company, surety hereto annexed, and upon all the papers and pro- ceedings heretofore had herein, the undersigned will present said re- ceiver's account for settlement and make a motion before this court at a Special Term, Part I. thereof, to be held in and for the county of New York at the County Court House in the borough of Manhat- tan, city of New York, on the 8th day of September, 1910, at 10:30 o'clock in the forenoon of said day, or as soon thereafter as counsel can be heard, for an order settling and allowing said receiver's ac- count, granting said receiver an extra allowance, directing a distribu- tion as to the fund in this proceeding, discharging said receiver, can- celing his bond and discharging the surety thereon, and for such other and further relief in the premises as may be proper; and for the signature of the proposed order hereto annexed. Dated, Yours, etc. To COHPORATIONS. 953 Y. Compensation of receiver. 1. General Corporation Law, § 255. Deduction of disbursements and commissions by receiver. Out of the moneys in their hands the receivers may first deduct all the necessary disbursements jnade by them in the discharge of their duty and such commissions as may be allowed by law. (See B., 0. & G. Consol. L., Snd Ed., p. 3199.) 2. General Corporation Law, § 277. Commissions and expensw of receiver in voluntary dissolution. A receiver appointed pursuant to article nine is entitled, in addition to his necessary expenses, to commissions upon the suins received and disbursed by him as the court by which or the judge by whom he is appointed allows, as follows: On the first twenty thousand dollars not exceeding five per centum; on the next eighty thousand dollars, not exceeding two and one-half per centum; and on the remainder not exceeding one per centum; but in case the commissions of a receiver so computed shall not amount to one hundred dollars, said court or judge may in his or its discretion allow said receiver such a sum not exceeding one hundred dollars for his commissions as shall be commensurate with the services rendered by said receiver. (See B., C. & G. Consol. L., 2d Ed., p. 3209.) 3. Genersil Corporation Law, § 278. Commissions and expenses of re- ceiver except in voluntary dissolution. A receiver of a corporation, except a receiver appointed in proceedings for its voluntary dissolution, is entitled, in addition to his necessary expenses, to such commissions, not exceeding two and one-half per centum upon the sums received and disbursed by him, as the court by which or the judge by whom he is appointed allows, but except upon a final accounting such a receiver shall not receive on account of his services for any one year a greater amount than twelve thousand dollars, nor for any period less than a year more than at that rate. Upon final accounting, the court may make an additional allowance to such receiver, not exceeding two and one-half per centum upon the sums received and disbursed by him, if the court is satisfied that he has performed services that fairly entitle him to such additional allowance. Where more than one receiver shall be appointed, the compensation herein provided shall be divided between said receivers. (See B., C. & G. Consol. L., 2nd Ed., p. 3210.) 4. Civil Practice Act, § 1509. Commissions of receiver. A receiver, except as otherwise specially prescribed by statute, is entitled, in addition to his necessary expenses, to such commissions, not exceeding five per centum upon the sums received and disbursed by him, as the court by which, or the judge by whom, he is appointed allows. But if in any case the com- missions of a temporary or permanent receiver, so computed, shall not amount to one hundred dollars, said court or judge, in its or his discretion, may allow said receiver such a sum, not exceeding one hundred dollars, for his commis- sions as shall be commensurate with the services rendered by said receiver. 954 COEPORATIONS. 5. Amount of fees. Section 277 of the General Corporation Law prescribes the commissions of a receiver in proceedings for the voluntary dissolution of a corporation; and section 278 prescribes the commissions of other corporate receivers.^ Section 278 permits two different percentages which may be allowed a receiver. In the first place such receiver is en- titled to a commission not exceeding two and one-half per centum upon the sum received and distributed by him as al- lowed by the court, but he shall not receive for any one year a greater amount than twelve thousand dollars, nor for any period less than a year more than at that rate ; and it provides in the second place that where more than one receiver shall be appointed, the compensation provided shall be divided be- tween such receivers. Upon final accounting the court may make an additional allowance not exceeding two and one-half per centum if the court is satisfied that the receiver has per- formed services fairly entitling him to such additional allow- ance; and where more than one receiver has been appointed the compensation shall be divided between them. Snch com- missions are to be computed upon the value of the entire prop- erty that comes into the receivers 'hands and is distributed by him by order of the court, whether to the creditors of the insolvent estate or to the beneficiaries under a will or trust in- strument or by a settlement or compromise between parties.^'^ In the absence of legislation, the court has the right of de- termining the compensation of receivers.^^ But, when the com- pensation is prescribed by statute, the court has no power to allow a receiver any extra commission under the guise of extra compensation.^^ There is no authority for the granting of an extra allowance, where the action has not been deter- 36. Mortgage foreclosure. — The Act Civil Procedure (now § 1509 of the of 1883, in relation to receivers of Civil Practice Act). United States corporations (now incorporated in Trust Co. v. N. Y., W. S. & B. R. K. § 278), was held to apply only to re- Co., 101 N. Y. 478. ceivers of corporations appointed in 37. People v. Brooklyn Bank, 64 proceedings in bankruptcy, and a re- Misc. 538, 118 N. Y. Supp. 722. ceiver appointed in an action to fore- 38. Matter of Commonwealth Fire close a mortgage executed by a cor- Ins. Co., 33 Hun, 7.8. poration was held not entitled to the 39. Matter of Orient Mut. Ins. Co., fees specified in that section, but were 21 N. Y. Supp. 237, 50 St. Rep. 460. governed by § 3320 of the Code of CORPORATIONS. 955 mined and there has been no award of costs.^" He cannot be allowed commissions and also a sum for his services.*^ A receiver acquires no vested rights to compensation under a statute as it exists at the time of his appointment. He is only entitled to compensation at the rates allowed by the statutes as amended at the time when the services were ren- dered.^^ In case of change of receivers by death or otherwise, one-half of the percentage on moneys in the hands of the first receiver should be allowed to each.^^ The people, represented by the Attorney-General, and the receiver and his attorney being the only parties to a reference for the purpose of fixing the compensation of the receiver and his attorneys in a proceeding by the people against an insol- vent bank, it has been held that the Special Term cannot re- duce the amount stipulated by the parties for such compen- sation.''* But a court holding the funds of a corporation by its re- ceivers is not bound to allow the commissions agreed upon be- tween the receivers and the directors of the corporation.*^ Where temporary receivers of a trust company have served only five months, an allowance to them and their counsel of $75,800 each was held grossly excessive and was reduced to $20,000 each.« 6. On what property computed. A permanent receiver is entitled to commissions on the moneys actually received and disbursed by him by order of the eourt.*^ In computing the commissions of the receiver of a corporation upon accepting his resignation, only the amount of money which has actually come into his hands should be considered as a basis of computation.*^ The allowance to a re- ceiver is intended to cover the receiving and disbursing of the 40. Hanover Ins. Co. v. German ia 45. People v. Knickerbocker Trust Ins. Co., 46 Hun, 308, 11 St. Rep. 481. Co., 127 App. Div. 217, 111 N. Y. 41. Hynes v. McDermott, 3 St. Rep. Supp. 2. 582 14 Daly, 104. 46. People v. Knickerbocker Trust 42. People v. Bank of Staten Island, Co., 127 App. Div. 215^ 111 N. Y. 146 App. Div. 378, 131 N. Y. Supp. 53. Supp. 2. 43. Attorney-General v. Continental 47. Matter of Little, 47 App. Div. Life Ins. Co., 32 Hun, 223. 22, 62 N. Y. Supp. 27; affirmed, on 44. People v. Federal Bank of N. Y., opinion below, 165 N. Y. 643. 114 App. Div. 3174, 100 N. Y. Supp. 44; 48. People v. Mutual Benefit Asso- Matter of Schlesinger, 114 App. Div. elation, 39 Hun, 49. 374, 100 N. Y. Supp. 44. 956 COEPORATIONS. fund.*^ But in an extreme case, a temporary receiver may be entitled to a percentage on the value of the property coming into his hands for receiving and protecting the same, such amount to be determined and allowed by the court.^** No de- duction is made in the fees of a permanent receiver on account of moneys paid to persons claiming an interest in the fund, or in settlement of claims against him as receiver, or in satis- faction of liens upon the property of the corporation.^^ Al- though receivers selling property subject to incumbrance upon it are not entitled to commissions upon the amount of the in- cumbrance, yet this rule does not apply to a case where the receiver pays off the incumbrance and sells the property free and clear from it.^^ Where a firm held a mortgage upon a ves- sel, which mortgage was foreclosed by the receiver of the firm and the vessel bought in, it was held that the receiver was en- titled to his commissions on the money in his hands which he employed in the purchase.^^ Commissions will not be allowed a receiver upon money merely turned over to him by his precedessor in office ; such funds, when they come into the second receiver's hands, are to be regarded as in custodia legist 7. Misconduct of receiver. In determining the amount of the receiver's commissions the court will take into consideration the manner in which he has managed the trust fund.^^ Where the course of a receiver has been marked with neglect, inattention and misconduct, re- sulting in probable losses, which to a great extent could have been avoided if he had properly discharged his duties, the court may properly refuse to allow him any commissions by way of compensation.^^ Where a receiver does not take possession or control of the property but allows the business to proceed as before under the management of parties in interest who receive and dis- 49. Howes v. Davis, 4 Abb. W ; Mat- 31 Hun, 36. ter of the Bank of Niagara, 6 Paige, 53. Brett v. Brett, 4 St. Rep. 704. 213. 54. Attorney -General v. Continental 50. Matter of Smith Co., 31 App. Life Ins. Co., 32 Hun, 223. Div. 39, 52 N. Y. Supp. 877. 55. Matter of Commonwealth Fire 51. Matter of Little, 47 App. Div. Ins. Co., 32 Hun, 78. 22, 62 N. Y. Supp. 27; aflf'd, 165 N. Y. 56. Clapp v. Olapp, 49 Hun, 196, 1 643. N. Y. Supp. 918. 63. Matter of Security Life Ins. Co., CORPORATIONS. 957 burse the fund with his assent and approval, he is not entitled to a percentage on such moneys.^'' 8. Priority of receiver's commissions. A receiver of the property of an insolvent corporation is en- titled to be paid from its assets after payment of the costs of realization, even in priority to persons advancing money under an order of the court on the terms that repayment is to be made a first charge on the assets.^^ The expenses of proceedings instituted for the voluntary dissolution of a corporation, which has issued first mortgage bonds, and the fees of the temporary receiver, may be made a first charge to be paid by the permanent receiver.^^ The necessary expenses of administration, including the fees of the receiver, constitute a first lien on the funds in his hands, even on property attached prior to his appointment, where the at- taching creditors have been made parties to a proceeding in which an order is made to turn the attached property over to the receiver.^" But, where a receiver was never entitled to receive all the money in question, and the order directing payment to him was erroneous and reversed, it was held that the court had no power to permit the receiver to retain a sum to cover his com- missions and counsel fees.^^ And where a receiver has paid money under an order which was reversed, it is error to re- quire payment of the commission and expenses of the re- ceiver.^^ Where a receiver is an intruder and trespasser, he is not entitled to receive any compensation.®^ But, although an order appointing receivers is vacated be- cause it is an improvident exercise of the court's power, it does not follow that the receivers named in the order should receive no compensation.®* 57. Matter of Woven Tape Skirt Co., Co., 19 App. Div. 415, 46 N. Y. Supp. 85 N. Y. 506. 4€7. 58. Horton v. MoNally Co., 89 Misc. 61. Pittsfleld Nat. Bank v. Bayne, l'6i5, 151 N. Y. Supp. 674; modified, 140 N. Y. 331. 168 App. Div. 248, 153 N. Y. Supp. 62. Willis v. Sharp, 124 N. Y. 406, 429. 3i6 St. Rep. 417. 99. Matter of New Paltz & Wallkill 63. O'Malioney v. Belmont, 62 N. Y. Valley R. R. Co., 27 Misc. 451, 59 N. Y. 133. Supp. 247; aff'd, 42 App. Div. 622, 59 64. People v. Oriental Bank, 129 N. Y. Supp. 1111. App. Div. 865, 11'4 N. Y. Supp. 440. 60. Matter of Atlas Iron Constr. See also Verplanck v. Winchester Mer- cantile Ins. Co., 2 Paige, 438. 958 CORPOEATIONS. 9. When and how allowed. A receiver is entitled to liave Ms commissions calcuated and allowed upon tlie final settlement and disposition of Ms account.^ "Where on a motion to discharge temporary receivers of a corporation, for an accounting, and for permission to resume business, all of the parties are before the court, it has jurisdic- tion to determine the compensation of the receivers as a part of the accounting. A separate proceeding for that purpose is not necessary or proper.^ Where the attorney of the receiver was his partner and made the application upon Ms own peti- tion without notice, it was held that the order granting com- pensation might be attacked collaterally.^'' Where the justice, by whom certain orders passing the accounts of the receiver of a corporation and allowing him commissions were made, had jurisdiction to entertain the proceedings before him, but the amounts allowed were erroneous, it was held that the proper procedure was an application to the same justice to resettle the order, or by appeal.^* Z. Discharge or removal of receiver. 1. General Corporation Law, § 311. Application by attorney-general for removal of receiver and to facilitate closing affairs of receiver- ship. The attorney-general may, at any time he deems that the interests of the stockholders, creditors, policyholders, depositors or other beneficiaries interested in the proper and speedy distribution of the assets of any insolvent corporation will be subserved thereby, make a motion in the supreme court at a special term thereof, in any judicial district: 1. For an order removing the receiver of any insolvent corporation and appointing a receiver thereof in his stead, or 2. To compel him to account, or, 3. For such other and additional order or orders as to him may seem proper to facilitate the closing up of the affairs of such receivership, and Any appeal from any order made upon any motion under this section shall be to the appellate division of the department in which such motion is made. (See B., C. & G. Consol. L., 2nd Ed., p. 3220.) 66. Matter of Security Life Ins. Co., 67. Matter of Commonwealth Fire 31 Hun, 36. Ins. Co., 32 Hun, 78. 66. People v. Knickerbocker Trust 68. Matter of National Trust Co., 4 Co., 127 lApp. Div. 215, 111 N. Y. Civ. Pro. R. 203. Supp. 2. COEPORATIONS. 959 2. General Corporation Law, § 226. Kemoval or new bond. The court, or, where the order was made out of court, the judge making the order, by or pursuant to which the receiver was appointed, or his successor in office, may, at any time remove the receiver, or direct him to give a new bond, with new sureties, with the like condition specified in the last section. But this section does not apply to a case where special provision is made by law for the security to be given by a receiver, or for increasing the same or for removing a receiver. (See B., C. & G. Consol. L., 3nd Ed., p. 3182.) 3. General Corporation Law, § 273. Removal of receiver. Such receivers may be removed by the court. (See B., C. & 6. Consol. L., Snd Ed., p. 3a06.) 4. General Corporation Law, § 274. Vacancy. Any vacancy created by removal, death or otherwise, may be supplied by the court. (See B., C. & G. Consol. L.; Snd Ed., p. 3207.) 5. General Corporation Law, § 275. Renunciation by receiver. A receiver who shall be desirous of renouncing the trust vested in him, may apply to the court from whom his appointment was received, for an order to all persons interested, to show cause why such renunciation should not be accepted. Such application shall be accompanied by a full, true and just account of all the transactions of such receiver, and particularly of the property, moneys and effects received by him; of all payments made, whether to creditors or otherwise; and of the remaining effects and property of the corporation, in respect to which he was appointed receiver, within his knowledge, and the situation of the same. To such account shall be annexed the affidavit of the receiver that the said account is in all respects just and true, according to the best of his knowledge and belief; which affidavit shall be subscribed and sworn to, before the court, to whom the application is made, and shall be certified by the clerk of the court. Such court shall thereupon grant an order, directing notice to be given to all persons interested in the property of the corporation, in respect to which such receiver was appointed, to show cause on a day or at a term and at a place therein to be specified, why he should not be permitted to renounce his appoint- ment. Such notice shall be published, once in each week, for six weeks successively in such newspapers, as such court shall direct. On the day appointed for such hearing, and on such other days as shall from time to time be appointed, if it shall appear that notice was duly published, the court shall proceed to hear the proofs and allegations of the parties. If it shall appear that the proceedings of such receiver, in relation to his trust, have been fair and honest, and particularly in the collection of the property and debts vested in him; and if such court be satisfied that for any reason it is inexpedient for such receiver to continue in the execution of the duties of his appointment, and that such duties can be executed by another receiver, without injury to the property of the corporation, or to the creditors; and if no good 960 COEPOBATIONS. cause to the contrary appear, such court shall grant an order, allowing such receiver to renounce his appointment. Upon such order being granted, such receiver shall be discharged from the trust reposed in him, and his power and authority shall thereupon cease; but he shall, notwithstanding, remain subject to any liability he may have incurred, at any time previous to the granting of such order, in the management of his trust. The expense of all proceedings in effecting such renunciation shall be paid by the receiver making the application. (See B., C. & G. Consol. L., 2nd Ed., p. 3307.) 6. Removal of receiver. A receiver may be removed in the sound discretion of tlie court.^^ When a director of a company is appointed receiver, and it afterward appears that he has been connected with its management, he may be removed.™ A receivership vests in the court the assets of the insolvent estate. A receiver is but an officer and agent of the court, subject to its control and direction in all matters pertaining to the trust. The primary object to be accomplished is the conservation of the rights of the creditors and others whose interests are or may be impaired because of the financial calamity which has overtaken the corporation. These rights and interests are paramount to those of the receivers and their counsel. If the latter cannot subordinate their personal views to such paramount rights, the court will see to it that the re- ceivership is changed in order to accomplish such a result. Where receivers become hostile a court could and should in- tervene to remove them and appoint others.''^ Where the appointment and subsequent conduct of a tem- porary receiver of a railroad corporation were satisfactory to all parties in interest, except one claiming to be a majority bondholder, he will not be removed, where title of the object- ing party to the bonds was contested by the receiver, and the bonds were claimed to belong to the corporation itself.'^^ A 69. Seney v. N. Y. Consolidated N. Y. Supp. 357. Stage Co., 28 How. 481, 18 Abb. 435; 70. Keeler v. Brooklyn Elevated E. Ferry v. Bank of Central New York, R. Co., 9 Abb. N. C. 166. 15 How. 445; Wilson v. Barney, 5 71. People v. Brooklyn Bank, 125 Hun, 257. App. Div. 354, 109 N. Y. Supp. 534. Filling vacancy.— Power given to 72..Townsend v. Oneonta, C. & R. S. court to appoint to any vacancy Ry. Co., 41 Misc. 298, 84 N. Y. Supp. created by removal, death or other- 119; aff'd, 86 App. Div. 604, 83 N. Y. wise, is not made obligatory. Horton Supp. 1034. V. MoNally, 155 App. Div. 322, 334, 140 CORPOEATIONS. 961 receiver should have notice of an application for Ms re- moval,'^^ and, the papers on the application should apprise him of the charges against him J* And a receiver appointed in an action against a corporation should not be removed without notice of the application hav- ing been given to the plaintiff in the action at whose instance he was appointedJ^ But the power of the court to remove the receiver of a corporation does not depend on the notice to the stockholders who have appeared.™ The application for his removal should be made in the judicial district in which he was appointed." Where a motion is made to vacate an order appointing a receiver on the ground that another re- ceiver has been appointed, it is error, on denying such motion, to remove the second receiver and appoint another on grounds not stated in the moving papers.''^ 7. Termination of duties. The duties of a temporary receiver terminate with a judg- ment adverse to the party who procures his appointment, but he is not wholly discharged, remaining amenable to the court for the purpose of accounting.''^ Where, pending an action by a stockholder against the cor- poration and its directors for waste of its assets, in which a receiver was appointed, an election of directors was held and the directors charged with malfeasance were removed, it was held that the continuance of the receivership is unauthorized and unnecessary, and creditors who have obtained judgment against the corporation should be permitted to proceed with the collection thereof.*" 73. Bruins v. Stewart Manufactur- Beach Improvement Co.^ 25 Hun, 376. tag Co., 31 Hun, 195. 78. Brun v. Stewart Mfg. Co., 31 74. Townsend v. Oneonta, C. & R. S. Hun, ISS. R. Co., 86 App. Div. 604, 83 N. Y. 79. Whiteside v. Prendergast, 3 Supp. 1034; Attorney-General of N. Y. Barb. Ch. 471; McCosker v. Brady, 1 V. Jennings, 86 App. Div. 604, 83 N. Y. Barb. Ch. 329; Ireland v. Nichols, 40 Supp. 1034. How. 87; Colwell v. Garfield National 75. Attrill r. Rockaway Beach Im- Bank, 119 N. Y. 412. provement Co., 25 Hun, 376. 80. Duncan v. George C. Treadwell 76. Hoyt V. Continental Ins. Co., 21 Co., 82 Hun, 376, 63 St. Rep. 790, 31 Week. Dig. 145. N- Y. Supp. 340. See also Halpin v. 77. Rules of Civil Practice. Rule Mutual Brewing Co., 91 Hun, 220; 179. And see Attrill v. Rockaway aff'd, 148 N. Y. 744. 61 962 CORPORATIONS. 8. Effect of discharge of receiver. A final order of court in a receivership, discharging the re- ceivership and directing the disposition of the funds in his hands, is binding on all the creditors until it is directly at- tacked and set aside.^ A receiver who has been discharged is not generally a necessary party to an action relative to the property formerly owned by the corporation.^^ Nor will he be allowed to intervene in proceedings to reach newly discov- ered assets.^ A discharge pending proceedings to compel him to pay the claim of a creditor out of assets in his hands, is sufficient ground for denying the application.^* But a person having a judgment against a receiver, with the direction that the claim be paid out of a certain fund, can- not be deprived of his rights by a judgment in another action to which he was not a party, discharging the receiver.^ And it has been held that the discharge was no answer to a motion for leave to bring an action against him for the claim and delivery of the property, the claimants having had no notice of the application to discharge the receiver, he being aware of the claim.*^ 81. Ferguson v. Toledo, A. A. & N. ets held by a receiver in this State an M. R. E. Co., 85 App. Div. 352, 83 a fund for distribution after the dis- N. y. Supp. 283'. solution of the corporation here, when Foreign judgment. — While a statute the receiver has not been made a party of another State, continuing dissolved to the foreign suit so as to be bound insurance and other corporations for a by the judgment therein. Eodgers v. certain period for the purpose of prose- Adriatic Fire Ins. Co., 148 N. Y. 34. cuting suits by or against them, may 82. Lilienthal v. BetZj 185 N. T. 153. render valid and effective a judgment 83. Matter of Grand Central Bank, obtained in such State against a cor- 27 Misc. 116, 57 N. Y. Supp. 418; aff'd, poration of this State after its dis- 42 App. Mv. 157, 58 N. Y. Supp. 1022. solution here, so far as its property 84. New York & Western Union Tel. within such other State where it had Co. v. Jewett, 115 N. Y. 166. been doing business is concerned, this 85. Woodruff v. Jewett, 115 N. Y. State is not required by comity, and 267, 26 St. Rep. 142. will not give to such foreign judgment 86. Miller v. Loeb, 64 Barb. 454. the effect of reaching the corporate as- CORPORATIONS. 963 ARTICLE XII. MISCELLANEOUS MATTERS OF PRACTICE. A. Application of statute. 1. General Corporation Law, § 300. Application of preceding articles to certain corporations. Articles fifth, sixth or seventh of this chapter do not apply to a religious corporation; or to a municipal or ottier political corporation, created by the Constitution, or by or under the laws of this State; or to any corporation which the regents of the university have power to dissolve, except upon the application of the regents, or the trustees of such a corporation; and in aid of its liquidation under such dissolution. (See B., C. & G. Consol. L., 2nd Ed., p. 3218.) 2. Discussion of section. Articles fifth, sixth and seventh of the General Corporation Law constitute the statutory authority for the actions rela- tive to the judicial supervision of corporations, sequestration, dissolution and annulment of corporations.®^^ Authority under the statute extends to business corporations and renders them and their officers liable to prosecution in an action brought by the Attorney-General.®'' A religious corporation, organized under the general act, consists not only of the trustees, but of the members of the society. Such members are the corporators, and the corpora- tion is governed by the ordinary rules of the common law. A court of equity has no power to remove the trustees elected pursuant to statute, and with the absence of authority at com- mon law is the express provision of statute exempting re- ligious corporations.®® In the early decisions it was held that, independently of statute. Chancery had authority extending to religious corporations to compel the trustees thereof to ex- ecute their trusts, or to remove such trustees, if necessary.®^ If the trustees of a benevolent corporation agree to pay to a person procuring an appropriation from the Legislature all the moneys appropriated exceeding a specified sum, it is such 86a. An amendment by chapter 390, 29 St. Eep. 926; reversed, on other laws 1903, exempted from the appli- grounds, 134 N. Y. 269. cation of the articles referred to ^lU 88. Robertson v. Bullions, 11 N. Y. corporations which the regents have 243. power to dissolve. The amendment by 89. First Baptist Church v. With- chapter 501, Laws 1904, added the erell, 3 Paige, 296; Kniskern v. Luthe- word' "political." I'^n Churches, 1 Sandf. Ch. 439; Bow- 87. People v. Ballard, 56 Hun, 125, den v. McLeod, 1 Edw. Ch. 588. 964 COEPOEATIONS. an abuse of the powers of the benevolent corporation as to constitute a sufficient cause for its dissolution.'" B. Duty of Attorney-General to bring action. 1. General Corporation Law, § 304. When Attorney-General mnst bring certain actions. Where the Attorney-General has good reason to believe, that an action can be maintained in behalf of the people of the State, as prescribed in articles fifth, sixth or seventh of the chapter, except section one hundred and thirty of this chapter, he must bring an action accordingly, or apply to a competent court for leave to bring an action, as the case requires; if, in his opinion, the public interests require that an action should be brought. In a case vphere the action can be brought only by the Attorney-General in behalf of the people, if a creditor, stockholder, director, or trustee, of the corporation, applies to the Attorney-General for that purpose, and furnishes the security required by law, the Attorney-General must bring the action, or apply for leave to bring it, if he has good reason to believe, that it can be maintained. Where such an application is made section nineteen hundred and eighty-six of the Code of Civil Procedure applies thereto, and to the action brought in pursuance thereof. (See B., C. & G. Consol. L., 2nd Ed., p. 3314.) 2. Discussion of statute. In the preceding paragraphs of this chapter, other sec- tions of the General Corporation Law have been referred to, which provide for the bringing of actions by the Attorney- General. Thus section 91 provides for an action for the judi- cial supervision; section 102 for an action for the dissolution; and sections 130-132 for an action for the annulment of a cor- poration. The provisions of section 304 seem to be in addi- tion to such speciiic provisions. This section provides for two classes of actions, each of which requires two facts to exist before the action can be brought, but only one of which is common to both. Each class requires that the Attorney-General should have good reason to believe that the action can be maintained. In addition to that the first class requires that he should be of the opinion that the public interests demand that an action should be brought, and the second class that one of the persons named should apply to him to bring the actions and furnish the security required by law. It is not enough to warrant the commencement of either action for the Attorney- General to be satisfied that it can be maintained, for in one case he must 90. People v. Dispensary Society, 7 Lans. 304. CORPORATIONS. 965 also be satisfied tliat the public interests require Mm to act, and in the other, one of the designated persons must ask him to act and give security. In the first class no security is required, and in the second the public interests need not be consulted, but simply private interests. If a relator were re- quired in the first class, the Attorney-General might not be able to procure one, and hence could not obey the command of the statute. If a relator were not required in the second class, costs might be thrown upon the People in litigation in which the public had no concern.^^ The Attorney- General may bring an action in the name of the People without a relator, against a domestic business corporation for misconduct.^^ The statute in question authorizes the Attorney-General, when certain conditions exist " in the case of an insolvent corporation," to bring an action in the name and on behalf of the people to dis- solve the same and procure a judgment declaring its corporate rights, privileges and franchises forfeited.^^ An action for the annulment of a corporation may be brought in the name of the People on the relation of the party in interest.^* 91. People V. Ballard, 134 N. Y. 290. See also People v. Lowe, 117 N. Y. 175, 27 St. Rep. 139, wherein it was said that this section shows that, the Legislature had in mind public, not private, interests in authorizing ac- tions of this character and that the attorney-general is expected to consult and regard public, and not private, in- terests in instituting them. He is to determine in the first instance whether the public interests require an action to be brought, and he may act upon his determination subject to no con- trol, but this determination is not final, and he cannot in his discretion iptrude into a mere private quarrel The court, however, was not agreed as to the authority of the attorney-gen- eral to maintain the action in the case then before it. 92. People v. Ballard, 134 N. Y. 269, 48 St. Rep. 166. 93. People v. Manhattan Real Es- tate Co., 74 App. Div. 535, 77 N. Y. Supp. 837. Action by stockholder for dissolu- tion. — In Porter v. Industrial Informa- tion Company, 5 Misc. 262, 25 N. Y. Supp. 328, directors of an insolvent corporation refused to take proceed- ings for its dissolution so that the rights of the creditors and stockhold- ers might be equally distributed, and there was danger that all the assets would be wiped out on executions. It appeared that all the rights of the creditors to the assets, except those of judgment creditors, might be lost un- less a receiver was appointed to pre- serve the assets for the benefit of all. A stockholder brought an action for that purpose, which seems to have been opposed by the attorney-general upon the technical ground that an ac- tion should be brought before the dis- solution of the corporation or that the corporation should take proceedings for a dissolution. It was hfid under these circumstances that plaintiff, the stockholder, could maintain an action for dissolution. 94. People ex rel. Hearst v. Ramapo Water Co., 51 App. Div. 145, 64 N. Y. Supp. 532. 966 CORPOEATIONS. C. Intervention of creditors. 1. General Corporation Law, § 303. Creditors of corporation may be brought in to prove their claims in certain actions. In such an action, the court may, at any stage of the action, before or after final judgment, make an order requiring all the creditors of the corporation to exhibit and prove their claims, and thereby make themselves parties to the action, in such a manner, and in such a reasonable time, not less than six months from the first publication of notice of the order as the court directs; and that the creditors, who make default in so doing, shall be precluded from all benefit of the judgment, and from any distribution which may be made thereunder, except as hereinafter provided. Notice of the order must be given by publica- tion, in such newspapers, and for such a legnth of time, as the court directs. Notwithstanding such order any such creditor who shall exhibit and prove his claim in the manner directed thereby, with proof, by affidavit or otherwise, that he has had no notice or knowledge thereof in time to comply therewith, any time before an order is made directing a final distribution of the assets of such corporation, shall be entitled to have his claim received, and shall have the same rights and benefits thereon, so far as the assets of such corporation then remaining undistributed may render possible, as if his claim had been exhibited and proved within the time limited by such order. (See B., C. & G. Consol. L., 2nd Ed., p. 3213.) 2. Discussion of section. This section is thought to require creditors to prove their claims before a referee.^^ The receiver should allow every claim which he is satisfied is justly due, but none which could not have been recovered at law or in equity.^^ Claims not pre- sented and not in suit are, as a general proposition, wholly barred and precluded from sharing in the avails.''' When com- pulsory proceedings are pending for the dissolution of an in- solvent corporation and distribution of its assets, and a re- ceiver has been appointed, any creditor claiming a share must apply in such action or proceeding.'^ If creditors are misled by the statements of the receiver, and their claims are not presented in time and rejected for that reason, the receiver may properly obtain and publish an order extending the time.'' Where, after the time for present- ing claims against an insolvent insurance company, policy- 95. People v. Remington, 45 Hun, Co., 78 N. Y. 114. 349. 98. Rin v. Astor Fire Ins. Co., 59 96. Attorney-General v. L. & F. Ins. N. Y. 143; Attorney-General v. North Co., 4 Paige, 224. Am. Life Ins. Co., 6 Abb. N. C. 293. 97. Matter of Harmony Fire Ins. Co., 99. People v. Security, etc., Co., 79 45 N. Y. 310; People v. Security, etc., N. Y. 267. CORPORATIONS. 967 holders died, whose claims had been presented and allowed, it was held that the court had power to direct a revaluation of the policies.^ Proof of claim to be made under this section is not a special proceeding.^ An appeal from Special Term will not be heard unless ex- ceptions are taken to the decision.^ Where some of the credi- tors have been successful on appeal and thereby increased the fund for distribution among the unpreferred creditors, the fund must be divided among all the creditors, although some of them failed to file exceptions to the report and did not ap- pear upon the appeal except as they were represented by the receiver.^^ D. Injunction. 1. General Corporation Law, § 103. Temporary injunction in action authorized by this article. In an action, brought as prescribed in this article, the court may, upon proof of the facts authorizing the action to be maintained, grant an injunction order, restraining the corporation, and its trustees, directors, managers and other officers, from collecting or receiving any debt or demand, and from paying out, or in any way transferring or delivering, to any person, any money, property, or effects of the corporation, during the pendency of the action; except by express permission of the court. Where the action is brought to procure the dissolution of the corporation, the injunction may also restrain the corporation, and its trustees, directors, managers and other officers, from exercising any of its corporate rights, privileges, or franchises, during the pendency of the action; except by express permission of the court. The provisions of title second of chapter seventh of the Code of Civil Procedure, relating to the granting, vacating or modifying of an injunction order, apply to an injunction order, granted as prescribed in this section; except that it can be granted only by the court. (See B., 0. & G. Consol. h., 2nd Ed., p. 3139.)* 2. General Corporation Law, § 134. Injunction and receiver in final judgment. Where any of the matters, specified in section one hundred and thirty or section one hundred and thirty-one of this article, are established in an action, brought as prescribed in either of those sections, the court may render final judgment that the corporation, and each oflScer thereof, be perpetually enjoined 1. Attorney-General v. Continental, 3a. People v. American Loan & etc., Co., 88 N. Y. 77. Trust Co., 177 N. Y. 467. 2. People V. American Loan & Trust 4. The article referred to in this Co., 150 N. Y. 117. , section is article 6 of the General Cor- 3. Matter of Buffalo Ice Co., 37 App. poration Law, relating to sequestration Div. 144, 55 N. Y. Supp. 783. and dissolution. 968 CORPORATIONS. from exercising any of its corporate rights, privileges, and franchises; and that it be dissolved. The judgment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the property of the corporation, among its creditors and stockholders, as where a corporation is dissolved upon its voluntary application, as prescribed in article nine of this chapter. (See B., C. & G. Consol. L., 2nd Ed., p. 3153.) 3. General Corporation Law, § 135. Temporary injunction. In an action, brought as prescribed in this article, an injunction order may be granted, at any stage of the action, restraining the corporation, and any or all of its directors, trustees and other officers, from exercising any of its corporate rights, privileges, or franchises; or from exercising certain of its corporate rights, privileges, or franchises, specified in the injunction order; or from exercising any franchise, liberty, or privilege, or transacting any busi- ness, not allov^red by law. Such an injunction is deemed one of those specified in section six hundred and three of the Code of Civil Procedure, and all the provisions of title second of chapter seventh of the Code of Civil Procedure applicable to an injunction specified in that section, apply to an injunction granted as prescribed in this section, except that it can be granted only by the court. (See B., C. & G. Consol. L., nd Ed., p. 3154.) 5 4. General Corporation Law, § 302. Injunctions staying actions by creditors in certain actions. In such an action, the court may, in its discretion, on the application of either party, at any stage of the action, before or after final judgment, and with or without security, grant an injunction order, restraining the creditors of the corporation from bringing actions against the defendants, or any of them, for the recovery of a sum of money, or from taking any further proceedings in such actions, theretofore commenced. Such an injunction has the same effect, and, except as otherwise expressly prescribed in this section, is aubject to the same provisions of law, as if each creditor, upon whom it is served, was named therein, and was a party to the action in which it is granted. (See B., C. & G. Consol. L., 3nd Ed., p. 3213.) 5. General Corporation Law, § 305. Requisites of injunction against corporations in certain cases. An injunction order, suspending the general or ordinary business of a cor- poration, or suspending from oiBce, or restraining from the performance of his duties, a trustee, director, or other officer thereof, can be ganted only by the Sequestration. — It is to be noted chises. Auburn Button Co. v. Sylves- that this section provides for two ter, 68 Hun, 401, 52 St. Rep. 180, 22 classes of cases. The second sentence N. Y. Supp. 891. applies only to actions for dissolution, 5. The article referred to in this and in an action for sequestration, the section, is article 7 of the General Cor- court cannot grant an injunction re- poration Law, relating to actions to straining the officers from exercising annul corporations, the corporate rights, privileges or fran- COEPOEATIONS. 969 court, upon notice of the application therefor, to the proper oflScer of the cor- poration, or to the trustee, director, or other officer enjoined. If such an injunction order is made, otherwise than as prescribed in this section, it is void. (See B., C. & G. Consol. L., 2nd Ed., p. 3315.) 6. When injunction granted. An injunction may be granted to restrain tlie transfer of stock in an insolvent mining corporation.^ So, too, directors may be enjoined from issuing bonds as a device to increase capital by their conversion into stock.'' And a corporation may be enjoined from paying a dividend which, has not been earned.^ But, when an increase in stock is represented by property, no harm can result to the individuals or stockhold- ers, and there is no principle of law or public policy author- izing an injunction in such a case.^ The specific acts of the di- rectors of a corporation may be enjoined." But de facto di- rectors of a corporation will not be enjoined from acting on the ground of want of title to the office.^^ It is proper to re- strain the directors and officers from collecting debts and dividends due to the corporation, and from paying out or dis- posing of any of its property .-^^ An injunction will not be granted restraining the usual and ordinary business of a cor- poration, unless there is a plain violation of law or a de- parture from the powers of the corporation.^^ An action can- not be maintained either by a common or preferred stock- holder in a corporation to restrain the corporation from mak- ing a contract which it has the power to make, merely because the contract is detrimental to the interests of the plaintiff." An injunction will not lie to restrain the initiation into a society of one claimed to have been elected at a meeting illegally or fraudulently held, where no pecuniary injury is 6. Eogers v. Michigan, etc.,- R. Co., R. Co., 10 Paige,. 290. 28 Barb. 539; People v. Parker Vein 13. Mach v. Pacific Mail S. S. Co., 12 Co., 10 How. Pr. 186; aff'd, 10 How. Abb. (N. S.) 373. Pr. 544. Appeal. — The decision of the Special 7. Belmont v. Erie Railway Co., 52 Term restraining a life insurance corn- Barb. 637. pany from prosecuting its business is 8. Carpenter v. N. Y. & N. H. R. R. not final; it may be reviewed by the Co., 5 Abb. Pr. 277. General Term and Court of Appeals. 9. Williams v. Western Union Tel. People v. Atlantic Mutual Ins. Co., 74 Co., 93 N. Y. 162. N. Y. 177. 10. Howe V. Deuel, 43 Barb. 304. 14. Thompson v. Erie R. R. Co., 11 11. People V. Conklin, 5 Hun, 452. Abb. (N. S.) 188. 12. Morgan v. New York & Albany 970 COBPOBATIONS. shown to be likely to result. If the election was irregular, the remedy is by summary application to the court under the statute.^^ 7. Public service corporations. A temporary injunction which affects not only a railroad but the public offering its freight for carriage, will be vacated where there is no immediate necessity for it before trial.^'' But generally corporations may be restrained in the same man- ner and to the same extent as indiAdduals." An injunction may be granted to prevent a railroad from removing its rails and abandoning its franchise,^^ and an order may be issued re- straining the intersection,^^ or consolidation,^" of two railroad companies. 8. Creditors. Under section 302 of the General Corporation Law, the creditors of a corporation may be restrained from proceeding against it, during the pendency of the action.^^ The courts 15. Thompson v. Society of Tam- many, 17 Hun, 305. 16. Town of Fort Edward v. Hudson Valley R. Co., 127 App. Div. 438, 111 N. Y. Supp. 753. 17. Mayor of New York v. Staten Island Ferry Co., 64 N. Y. 622. 18. People V. Vermont &, Albany E. R. Co., 19 How. Pr. 523. 19. Howlett V. N. Y., W. S. & B. R. R. Co., 14 Abb. N. C. 328. 20. Blatchford v. Ross, 54 Barb. 42. 21. Mickles v. Rochester City Bank, 11 Paige, 118. National Bank. — The injunction clause in an order appointing a re- ceiver of a corporation was held not to preclude a national bank, located in Pennsylvania, from prosecuting ac- tions of judgment against the corpora- tions, or from levying upon, assessing and selling any of the property which it might reach outside of the State of New York. Union National Bank v. Leary, 95 App. Div. 381, 88 N. Y. Supp. 652; aff'd, 183 N. Y. 546. Insurance company. — In Attorney- General V. Guardian Mutual Life Ins. Co., 8 Week. Dig. 65, aff'd, 77 N. Y. 272, an injunction was granted at suit of a receiver of an insurance company, appointed on the application of the at- torney-general to stay a suit pre- viously brought by a policy-holder to recover assets of the corporation. Mortgage. — Section 302 does not au- thorize the court to grant an order re- straining a, person holding a mortgage covering real estate owned by the cor- poration, .which mortgage was given by a former owner of such real estate and was not assumed by the corpora- tion, from prosecuting an action to foreclose such mortgage until after the Court of Appeals has decided an ap- peal taken to it from a judgment ad- judging a mortgage executed by the corporation to be void, especially where the person sought to be restrained from prosecuting the foreclosure action has obtained an order of the court per- mitting him to maintain the same. COEPORATIONS. 971 will not permit a creditor to obtain by judgment a preference over other creditors.^^ The court has authority, as incident to the power of ap- pointment of a receiver, to prevent any interference with the assets of the corporation, by individual creditors or other- wise, in order to preserve the fund for distribution; and it may be exercised by an order made in the suit in which the receiver is appointed; and a creditor who attempts to inter- fere with the fund by another action cannot set up that the order is ineffectual as to him because not made in his own action.^* A special proceeding in an action by a creditor against a receiver may be enjoined, and this will be done if the action will hamper the receiver and increase expenses.^^ Upon the granting of an order of sequestration, and for the appointment of a receiver of an insolvent railroad corpora- tion, in an action brought on behalf of all its creditors, the right of action against its stockholders for the amount of their unpaid subscription to the capital vests in the receiver, and a judgment creditor of the corporation will be restrained from prosecuting an action against a stockholder for that purpose, commenced by him after the making of such order, but before the appointment of the receiver under it is perfected.^ An action by a stockholder of a corporation for a receiver there- of, and another by a judgment creditor for the sequestration of its property, is for the benefit of all concerned, and an at- taching creditor, although not strictly a party is a creditor, so that he is enjoined by a general injunction granted under this section.^'' When a receiver was sued by the judgment credi- tors of a corporation, alleging his appointment to be irregular and void, and asking, his removal, and the re- ceiver brought an action by order of the court to restrain Davidson v. The John Good Cord- 23. Galway v. United States, etc., age Co., 63 App. Div. 366, 71 N. Y. Co., 21 How. 313; on appeal, 36 Barb. Supp. 565. 256. Jurisdiction. — The Supreme Court, 24. Phoenix Foundry, etc., Co. v. having obtained jurisdiction for wind- North River Construction Co., 6 Civ. ing up the affairs of a corporation, and Pro. R. 106. having appointed a receiver, has juris- 25. Attorney -General v. North Am. diction to stay the suit of a creditor Life Ins. Co., 6 Abb. N. C. 293. brought to recover assets to which the 26. Rankine v. Rossie Galena Co., 9 receiver is entitled, in whatever court Paige, 598. the action is pending. Attorney-Gen- 27. Smith v. Danzig, 3 Civ. Pro. R. eral v. Guardian Life Ins. Co., 77 N. Y. 127. 272. 972 CORPOEATIONS. such suit, it was held that an injunction restraining the prose- cution of the judgment creditors* action should be continued until final judgment in the aetion.^^ The injunction under such statute may be granted without security .^^ 9. Injunction as bankruptcy proceedings. An injunction order restraining the officers and directors of a corporation from acting as such is not a violation of the Federal statutes as preventing the institution of bankruptcy proceedings, since the order merely restrains them pending further order of the court, and can be modified upon a proper application.^" 10. Ex parte order. Under section 305, an injunction which suspends generally the ordinary business of a corporation, may not be granted ex parte?^ If it is sought to restrain the building of its road by a railroad company or its leasing to contractors pending construction, notice is required.^^ An injunction order made without notice in violation of the statute is void.^ But an order to show cause why an injunction should not be granted, is a sufficient notice of the application for such in- junction.^-' A court of equity has not the power to restrain an officer of a corporation from performing the general, ordinary and proper duties of his office by an ex parte injunction, although it may restrain him from a particular wrong affecting private 28. Smith v. Danzig, 3 Civ. Pro. R. make the intersection. Such injunc- 127. tion does not suspend the general and 29. People v. Remington, 45 Hun, ordinary business of such . corporation 349. within the meaning of section 305. 30. Goss V. Warp Twisting-in Ma- Howlett v. N. Y., etc., R. R. Co., 14 chine Co., 133 App. Div. 122, 117 N. Y. Abb. N. C. 328. Supp. 228. 32. Town of Marbletown v. Rondout 31. Town of Fort Edward v. Hudson & Oswego R. R. Co., 43 How. Pr. 144; Valley R. Co., 127 App. Div. 438, 111 aflf'd, 43 How. Pr. 481. N. Y. Supp. 753. 33. Wilkie v. Rochester & S. L. R. Intersection of railroads. — In an ac- Co., 12 Hun, 424, holding that the tion by a stockholder to enjoin a rail- right to insist in the invalidity of the road corporation from intersecting the order is not waived by moving to va- road of the railroad corporation of cate the order. which plaintiff is a member, a tempo- 34. Goss v. Warp Twisting-in Ma- rary injunction may be granted with- chine Co., 133 App. Div. 122, 117 N. Y. out notice to the corporation about to Supp. 228. COEPORATIONS. 973 rights, and may suspend or remove a trustee in certain cases.^^ And an officer may be restrained from the perform- ance of any particular fraudulent act.^^ A clause contained in an order to show cause why a director should not be permitted to examine the corporate books, stay- ing defendants from removing said director pending the pro- ceeding, is not an injunction within the meaning of section 3055 A corporation whose general and ordinary business is illegal is within the meaning of section 305.^^ 11. Form of temporary injunction. SUPREME COURT— Queens County. THE PEOPLE OF THE STATE OF NEW YORK, Plaintiffs, agst. THE MUTUAL BREWING COM- PANY, Defendant. On reading and filing the summons and complaint in this action, the affidavit of Hon. G. D. B. Hasbrouck, Deputy Attorney-General, and on motion of Hon. T. E. Hancock, Attorney-General, attorney for the plaintiff, it is Ordered, that the defendant The Mutual Brewing Company, show cause before a Special Term of this court to be held at the court house in the city of Kingston, Ulster county, on the 21st day of December, 1895, at the opening of the court on that day, or as soon thereafter as counsel can be heard, why a temporary receiver, as prayed for in the complaint, should not be appointed of the property and assets of the said defendant The Mutual Brewing Company, with the usual powers and duties of receivers in such cases, as provided by statute, and, It is further ordered, that the president, officers, agents and ser- vants of the defendant The Mutual Brewing Company be and each of them is hereby enjoined and restrained from interfering with the property and assets of the defendant The Mutual Brewing Company, or the conduct of its business, and. the said president, officers, agents and servants of the defendant The Mutual Brewing Company be and they are each hereby directed to transfer and turn over to said receiver 35. People v. A. & S. R. R. Co., 7 37. People ex rel. Stauffer v. Bon- Abb. (N. S.) 265; People v. A. & S. R. wit Bros., 69 Misc. 70, 125 N. Y. Supp. R. Co., 1 Lans. 308. S58. 36. Howe V. Deuel, 43 Barb. 504; 38. City of New York v. Starin, 2 Fish' V. Chi., etc., R. R. Co., 53 Barb. N. Y. Supp. 346, 16 St. Rep. 882, 56 523 Super. Ct. 153. 974 COBPOKATIONS. all books of account, property and assets of the said defendant, the Mutual Brewing Company, of every kind and nature now in their hands or under their control. It is further ordered that the creditors of the said corporation and all persons whomsoever having notice of this order, be and they are hereby enjoined from bringing any action against the said defend- ant The Mutual Brewing Company, for the recovery of any sum of money or from taking any further proceeding in such an action here- tofore commenced or any further proceedings on any judgment re- covered against, said defendant The Mutual Brewing Company, or any execution issued thereon. It is further ordered, that said receiver is authorized to conduct and carry on the business of the said defendant The Mutual Brewing Company, as herein provided, until further order of this court, and that the said receiver be and he is hereby authorized to apply to the court for any further instructions at any time as he may deem proper. Let a copy of this order and the papers upon which the same is granted be served upon the defendant The Mutual Brewing Company, on or before the 19th day of December, 1895, and such service being made, the same shall be deemed sufficient. ALTON B. PARKER, Justice Supreme Court. £. Miscellaneous practice regulations. 1. General Corporation Law, § 301. Officers and agents may be com- pelled to testify in certain actions. In an action, brought as prescribed in article fifth, sixth or seventh, a stock- holder, officer, alienee, or agent of a corporation, is not excused from answering a question, relating to the management of the corporation, or the transfer or disposition of its property, on the ground that his answer may expose the cor- poration to a forfeiture of any of its corporate rights, or will tend to convict him of a criminal oiffense, or to subject him to a penalty or forfeiture. But his testimony shall not be used, as evidence against him, in a criminal action or special proceeding. (See B., C. & G. Consol. L., 2nd Ed., p. 3213.) 2. General Corporation Law, § 307. Judicial suspension or removal of officer of corporation. A trustee, director, or other officer of a corporation shall not be suspended or removed from office, by a court or judge, otherwise than by the final judgment of a competent court, in an action brought by the Attorney-General, as pre- scribed in section ninety of this chapter. (See B., C. & 6. Consol. L., Bnd Ed., p. a218.) 3. General Corporation Law, § 308. Application of the last threo sections. The last three sections apply to an action or special proceeding, against a corporation created by or under the laws of the State, or a trustee, director, or other officer thereof; or against a corporation created by or under the laws of COEPOKATIONS. 975 another State, government, or country, or a trustee, director, or other officer thereof, where the corporation does business within the State, or has, within the State a business agency or a fiscal agency, or an agency for the transfer of its stock. (See B., C. & G. Consol. L., 3nd Ed., p. 3218.) 4. General Corporation Law, § 309. Xisnomer not available in action against stockholder. Where an action, authorized by a law of the State, Is brought against one or. more persons, as stockholders of a corporation, an objection to any of the proceedings cannot be taken, by a person properly made a defendant in the action on the ground that the plaintiff has joined with him, as a defendant in the action, a person, whose name appears on the stock-books of the corporation, as a stockholder thereof, by the name so appearing; but who is misnamed, or dead, or is not liable for any cause. In such a case, the court may, at any time before final judgment, upon motion of either party, amend the pleadings and other papers, without prejudice to the previous proceedings, by substituting the true name of the person Intended, or by striking out the name of the person who is dead, or not liable, and, in a proper case. Inserting the name of his representative or successor. (See B., C & G. Oonsol. L., 2nd Ed., p. 3219.) 5. General Corporation Law, § 312. Service of papers upon Attorney- General. A copy of all motions and all motion papers, and a copy of any other applica- tion to the court, together with a copy of the order or judgment to be proposed thereon to the court, in every action or proceeding for the dissolution of a corporation or a distribution of its assets, shall, in all cases, be served on the attorney-general, in the same manner as provided by law for the service of papers on attorneys who have appeared in actions, whether the applications but for this section would be ex parte or upon notice, and no order or judgment granted shall' vary in any material respect from the relief specified in such copy, order or judgment, unless the attorney-general shall appear on the return day and shall have been heard in relation thereto; and any order or judgment granted in any action or proceeding aforesaid, without such service of such papers upon the attorney-general, shall be void, and no receiver of any such corporation shall pay to any person any money directed to be paid by any order or judgment made in any such action or proceeding, until the expiration of eight days after a certified copy of such order or judgment shall have been served as aforesaid upon the attorney-general. (See B., O. & G. Consol. L., 2nd Ed., p. 3220.) 39 39. Receiver. — Notice of application dissolved and whose assets are in the for appointment of receiver must gen- hands of a receiver, it la not necessary erally be given to the attorney-gen- that a copy of the motion papers eral under this statute. See, infra, should be served upon the attorney- Art. X-C-2. Notice of application. general under the provisions of this Validity of daims. — ^Where a special statute, since such a proceeding merely proceeding is taken to determine the determines the controversy between question as to the validity of claims the receiver and the claimant, and it affainst a corporation which has been not one for the distribution of the as- 976 CORPORATIONS. 6. General Corporation law, § 314. Application to the court in certain actions and proceedings. All applications to the court shall be made in the judicial district where the principal office of the corporation against which proceedings are taken is located, excepting such applications as are made in actions brought by the attorney- general on behalf of the people of the state, and all such applications shall be made in the judicial district in which the action is triable. (See B., C. & 6. Consol. L., 2nd Ed., p. asas.) 7. General Corporation Law, § 315. County wherein action may be brought by Attorney-General on behalf of the people. An action or proceeding brought by the attorney-general on behalf of the people of the state against any corporation for the purpose of procuring its dissolution, the appointment of a receiver, or the sequestration of its property, may be brought in any county of the state, to 'be designated by the attorney- general. (See B., O. & G. Consol. L., and Ed., p. 32.22.) 8. Examination before trial. Examination before trial under section 301 has invariably been enforced without question as to the constitutional power of the Legislature to enact and provide for it.^" 9. Suspension or removal of directors. The suspension or removal of the directors of a corporation can only be had in an action brought by the Attorney-General pursuant to sections 90, 91 and 307 of the General Corporation Law.^ Without some statute or provision of the charter authorizing his removal or suspension, a director cannot be removed or suspended from office until the end of his term, at least without cause.^^ Section 307 is said to have had its origin in chapter 151 of the Laws of 1870.*^ The suspension or removal of corporate officers is further discussed in an- other part of this chapter,*^ Section 308 of the General Corporation Law is declaratory of the kinds of corporations which come within the purview of sections 305-307.'^ sets of the corporation. People v. 42. People ex rel. Manice v. Powell, American Steam Boiler Ins. Co., 3 201 N. Y. 194, 202; aff'g, 140 App. Div. App. Div. 504, 38 N. Y. Supp. 406. 012, 125 IST. Y. Supp. 1139. 40. In re Stone Bridge, 13 N. Y. 43. See People v. Ballard, 134 N. Y. Supp. 770, 37 St. Rep. 617. 291. 41. Welcke v. Trageser (No. 1), 131 44. See Article II. App. Div. 731, 116 N. Y. Supp. 166. 45. Section 305, referred to in this sec- COEPOBAXIONS. 977 10. Application to corporations. Abundant authority appears for the intervention of the courts of this State, where it appears that an action is prose- cuted by the stockholders of an insolvent foreign corporation doing business and having assets in this State, but having no officers empowered to hold such assets.*^ By this section a foreign corporation not doing business in this State and not having any business or fiscal agency therein or agency for the transfer of its stock, is excluded from the operation of section 306, providing for the appointment of receivers of corpora- tions.^^ 11. Exceptions to report of referee. It has been held that there is no necessity for filing excep- tions to a report of a referee, who is appointed to take the evi- dence and report his opinion upon a claim made against an insolvent insurance company. The rule relating to filing ex- ceptions has no application to a reference of this character. It is only to a reference which empowers a referee to decide questions between parties that the rule is applicable, and it cannot foreclose the court from passing upon matters which such court only has the power to determine.^^ 12. Parties. It is the rule in actions of this kind that whenever it be- comes necessary to effect a complete settlement of the affairs of the party interested, the court may at any time before or after final judgment order such parties brought in, to the end that the whole matter in controversy may be determined.*^ tioD, relates to injunctions, and is cov- proceedings by its stockholders or ered in subdivision D of this article. creditors for its dissolution. Section 306 relates to receivers, and is 46. Hall v. Holland House Company, treated in the preceding articles. 66 St. Eep. 684, 12 Misc. 55, 33 N. Y. Supplementary proceedings. — In Mat- Supp. 50. ter of Victor, 20 Misc. 289, 45 N. Y. 47. Logan v. McCall Publishing Co., Supp. 890, reversing 20 Misc. 13, 44 140 N. Y. 447. N Y. Supp. 603, it was held that the 48. Attorney-General v. Continental, exemption of a foreign corporation etc., Co., 64 How. Pr. 93. which has a business and fiscal agency 49. Woodward r. Holland Medicine withir this State, from liability to ex- Co., 15 N. Y. Supp. 128, 39 St. Eep. amination in supplementary proceed- 411; citing Morgan v. New York, etc., ings, is not taken away by the ap- K. R. Co., 10 Paige, 290. pointment of an ancillary receiver in 62