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(103 N. Y. 425)
BRACKETT, Adm'r, v. GRISWOLD.
(Court of Appeals of New York. November 23, 1886.) ACTION OR SUIT-ACTION FOR PENALTY FOR FALSE REPORT-NEW YORK MANUFACTURERS' ACT, 1848-ABATEMENT.
Where the plaintiff dies during the pendency of an action, at his instance, against a trustee of a corporation for the penalty imposed by the New York manufacturers' act of 1848 for a false report, the action abates both at common law and under the statute, and cannot be revived in name of his administrator.
This action is similar to Blake v. Griswold, ante, 434. It arises out of the same circumstances, and is brought upon a complaint containing the same counts. Before verdict or judgment the plaintiff's intestate died, and the action was revived and continued in the plaintiff's name as administrator. W. C. Holbrook and M. D. Grover, for appellant, Griswold. A. Pond and R. L. Hand, for respondent.
FINCH, J. This appeal is taken from an order of revivor. The plaintiff's intestate was a creditor of a mining corporation, whose officers, in making their annual report, were alleged to have stated falsely the amount of capital paid in. For this cause of action, conjoined with one for conspiracy, a suit was brought, pending which, and before verdict or judgment, the plaintiff died. The question presented is whether his cause of action for the penalty of a false report died with him, or survived to his administrator. We have many times held that the provisions under which the asserted right of action accrued are highly penal in their nature, and have recently said more specifically that they are to be classed with actions ex delicto, and do not affect or concern any property, right, or interest as the subject of injury. Stokes v. Stickney, 96 N. Y. 323. At common law the action abated upon the death of either party,-the one by whom or to whom the wrong was done; and that rule must apply unless it is made inapplicable by the provisions of the Revised Statutes. 2 Rev. St. § 1, p. 447. But we have decided that those provisions affect only injuries to property rights; and, where such are not invaded, the common-law rule still prevails. Hegerich v. Keddie, 99 N. Y. 258; S. C. 1 N. E. Rep. 787. In that case, while concurring in the result, I thought the statute should receive a broader interpretation, and contemplated survivability as the rule, and abatement as the exception; and the construction finally reached was adopted after full deliberation and argument. It must now be deemed settled, and requires us to hold, that the cause of action for the penalty died with the intestate.
We have not been unmindful that, in our discussion of this question, we have assumed the assignability of a cause of action as a test, treating that and survivability as convertible terms; nor that we have also said that a cause of action for the penalty so far follows the creditor's debt, and belongs to it as an incident, that an assignment of the debt carries with it a right to the protection of the statute. Stokes v. Stickney, supra; Bolen v. Crosby, 49 N. Y. 183. But it was neither said nor meant that such right was itself assignable. Relatively to the debt it is rather a remedy than a right; and while it becomes, in connection with the debt, a cause of action, it belongs to the assignee of such debt by force of the statute which gives it to him by virtue of his having become a creditor, and not because of any derivative right resting upon and born of the assignor's ended and extinguished right. In other words, the new holder has his own right of action, or none. Having become a creditor, he thereby obtains the right which the statute gives him, and must depend upon that for his relief, and not upon an impossible transfer by the assignor of the debt. The questions which may spring out of this ruling may best be reserved till they arise.
So far as the cause of action was for a conspiracy to cheat or defraud the intestate, it was for an injury to a property right, and did not die with its owner. The order of revivor was so far proper, but should have been limited to the cause of action which survived. That has been tried, and judgment upon it given for the defendant. The plaintiff has recovered upon a cause of action which did not survive, and that recovery cannot be sustained.
The judgment should be reversed; and, as a new trial would be unavailing, judgment should be rendered for the defendants, with costs.
(103 N. Y. 527)
CONNER and others, Ex'rs, etc., v. REEVES and another, impleaded, etc. (Court of Appeals of New York. November 23, 1886.)
1. BONDS OF INDEMNITY-JUDGMENT ENTERED BY CONSENT-PRESUMPTIVE EVIDENCE. The covenantor, in an action on a covenant of general indemnity against judgments, is concluded, by the judgment recovered against the covenantee, fron questioning the existence or the extent of the covenantee's liability in the action in which such judgment was rendered, always saving the right to contest the proceeding on the ground of fraudulent collusion for the purpose of charging the covenantor; but where the judgment was entered by consent of parties, without notice to the covenantor, it is presumptive evidence only against him, and he may show that it was not founded on any legal liability of the covenantee to the plaintiff in that action.
2. SAME-NOTICE OF PENDENCY OF ACTION.
The covenantors, in a bond of indemnity given a sheriff against suits and judgments to which he shall be a party, are not relieved from liability for a judgment rendered against the sheriff by the fact that he did not notify them of the pendency of the action in which the judgment was obtained, when such covenantors did not make it a condition (in the bond) of their liability that they should have such notice.
3. SAME-ACTION ON-WHEN MAY BE BROUGHT.
A bond of indemnity against "all harm, let, trouble, damage, liability, costs, counsel fees, expenses, suits, actions, judgments," is an undertaking against liability by judgment as well as against damages, and the covenantee has a complete cause of action against the covenantors as soon as a judgment is rendered against him.
Action against the sureties on an indemnity bond. On the sixth May, 1876, Joseph Dubee had obtained a small judgment in the marine court against a person named Fischer. Dubee was about to issue execution against Fischer's effects, when one Gustave Kahrs interfered, and claimed, as owner, the chattels which the sheriff was about to levy upon under Dubee's execution. Thereupon Dubee gave to the sheriff the usual indemnity bond, whereon the defendants Reeves and Kloppenburg were sureties. Kahrs brought suit against Conner, the sheriff, in the court of common pleas, on the complaint that Conner had been guilty of conversion in making the levy under Dubee's execution. When the case came on for trial, Conner voluntarily submitted to judgment, and Dubee, the principal debtor, was present, and ratified his act. The defendants Reeves and Kloppenburg were not present, did not know anything about it, and did not subsequently ratify the sheriff's act.
Edward D. McCarthy, for appellants, Reeves and another, impleaded, etc. Vanderpoel, Green & Cuming, for respondents.
Notice to defendants of the pendency of the suit, and their consent to the judgment entered, were not necessary. Fay v. Ames, 44 Barb. 327, 333; Bartlett v. Campbell, 1 Wend. 50; Scofield v. Churchill, 72 N. Y. 565; Casoni v. Jerome, 58 N. Y. 315; Gerould v. Wilson, 81 N. Y. 573, 583, 584. When the principal is concluded, the sureties are concluded. Casoni v. Jerome, supra; citing Douglass v. Howland, 24 Wend. 35; Jackson v. Griswold, 4 Hill, 522; Annett v. Terry, 35 N. Y. 256; Baggott v. Boulger, 2 Duer, 160; Harrison
v. Clark, 87 N. Y. 572; Cohen v. Wyman, N. Y. Daily Reg. November 30, 1885.
The bond being conditioned to indemnify the plaintiff against "all liability, suits, actions, and judgments," the judgment against the plaintiff is conclusive against the defendants. Binsse v. Wood, 37 N. Y. 530; Westervelt v. Smith, 2 Duer, 457. Even if notice to the defendants should have been given, the judgment against Conner is still prima facie evidence against them. Duffield v. Scott, 3 Term R. 374; Lee v. Clark, 1 Hill, 56; Aberdeen v. Blackmar, 6 Hill, 324; Thomas v. Hubbell, 15 N. Y. 405. The liability thus prima facie established became conclusive, on the failure of defendants to show that there was a defense to the suit against Conner. Thomas v. Hubbell, (2nd Appeal,) 35 N. Y. 120; Chapin v. Thompson, 4 Hun, 779; Annett v. Terry, supra; Binsse v. Wood, supra; Konitzky v. Meyer, 49 N. Y. 571, 573, 576; O'Brien v. McCann, 58 N. Y. 376; Comstock v. Drohan, 8 Hun, 373. The bond being conditioned against liability, and not damage therefor, respondents were not required to show that the judgment had been paid. Johnson v. Gilbert, 9 Hun, 469; Bancroft v. Winspear, 44 Barb. 209; Chace v. Hinman, 8 Wend. 452; Rockfeller v. Donnelly, 8 Cow. 628; Gilbert v. Wiman, 1 N. Y. 561.
ANDREWS, J. The obligors undertook to well and truly save, keep, and bear harmless and indemnify the plaintiff's testator, William C. Conner, "of and from all harm, let, trouble, damage, liability, costs, counsel fees, expenses, suits, actions, judgments, that may at any time arise, come, accrue, or happen to be brought against him, for or by reason of the levying, attaching, and making sale" under and by virtue of an execution issued to him as sheriff, on a judgment in favor of the defendant Dubee against one Fischer, of personal property claimed by third persons. The undertaking was not against damage merely, but was an indemnity against liability by judgment as well. Rockfeller v. Donnelly, 8 Cow. 628; Chace v. Hinman, 8 Wend. 452. By the general rule of law, a covenant to indemnify against a future judgment, charge, or liability is broken by the recovery of a judgment, or the fixing of a charge or liability, in the matter to which the covenant relates. When the covenant is one of indemnity against the recovery of a judgment, the cause of action on the covenant is complete the moment the judgment is recovered, and an action for damages may be immediately maintained thereon, measured by the amount of the judgment, and this although the judgment has not been paid by the covenantee, and although the covenantor was not a party or had no notice of the former action. The covenantor in an action on a covenant of general indemnity against judgments is concluded, by the judgment recovered against the covenantee, from questioning the existence or extent of the covenantee's liability in the action in which it was rendered. The recovery of a judgment is an event against which he covenanted, and it would contravene the manifest intention and purpose of the indemnity to make the right of the covenantee, to maintain an action on the covenant, to depend upon the result of the retrial of an issue, which, as against the covenantee, had been conclusively determined in the former action; "always, however, saving the right, as the law must in every case where the suit is between third persons, to contest the proceeding on the ground of fraudulent collusion for the purpose of charging the surety." COWEN, J., in Douglass v. Howland, 24 Wend. 55. The general doctrine above stated is fully settled by authority. Chace v. Hinman, supra; Gilbert v. Wiman, 1 N. Y. 550; Methodist Churches v. Barker, 18 N. Y. 463; Rapelye v. Prince, 4 Hill, 120; Insurance Co. v. Wilson, 34 N. Y. 280; Douglass v. Howland, supra.
This case, however, presents a feature which, so far as I know, is not found in any of our reports. The judgment in the action of Kahrs against the sheriff was entered by consent. The action, after issue had been joined,
was put on the calendar, where it remained for several months. Dubee, one of the obligors on the indemnity bond, and the plaintiff in the execution against Fischer, was notified of the action, and was consulted by the sheriff in respect to the litigation. It was found that there was difficulty in procuring witnesses to establish the defense, and it was finally agreed between Kahrs, the sheriff, and Dubee that judgment should be taken in the action in favor of Kahrs for $500; and pursuant to this agreement, and by the consent of the parties thereto in open court, judgment was entered. The question is whether a judgment, obtained under these circumstances, established a breach of the contract of indemnity, and justified the court in directing a verdict for the plaintiffs.
The defendants neither proved, nor offered to prove, that there was any defense in fact to the action of Kahrs, or that the judgment exceeded the sum which Kahrs was entitled to recover against the sheriff, or that the agreement for the adjustment of the amount, or the consent to the entry of the judgment, was fraudulent or collusive. The appellants must fail on this appeal, unless they can maintain the proposition that the judgment against the sheriff furnished neither conclusive nor presumptive evidence of a a breach of the condition of the bond; or, in other words, that a judgment rendered by consent was not a judgment or adjudication, within the meaning of the bond. The question is not free from difficulty, but we are of opinion that the judgment, in the absence of any evidence of fraud or collusion, or any suggestion that there was a defense to the action against the sheriff, although entered upon consent of the parties to the action, presumptively, at least, established the liability of the defendants. The defendants executed the bond at the request, and for the accommodation, of Dubee. Its obvious purpose was to secure the sheriff against apprehended litigation as to the title to the property seized under the execution against Fischer. The bond was given to indemnify the sheriff against suits and judgments to which he should be a party, growing out of that proceeding. The appellants did not make it a condition of their liability that they should have notice. They were satisfied that the sheriff should conduct litigations founded upon his seizure of the property, without reserving any right of intervention. They committed the matter to his discretion, not, indeed, by express words, but by necessary implication. It is true that the sheriff was not, in a legal sense, the agent of the sureties to manage suits brought against him; but the sureties agreed that no judgments should be recovered against him therein. They did not limit the indemnity to judgments obtained upon an actual trial, or after a contest in court, and they did not undertake to divest the sheriff of the power incident to his position as a party to settle and adjust litigations instituted against him, in view of the exigencies of the situation. It might very well happen that a judgment founded upon a compromise or agreement, without actual trial, would best promote the interest of all concerned.
Can it be affirmed, as a matter of law, that the conditions of the bond only covered judgments obtained upon hostile and adverse litigation, and that no discretion was left in the sheriff to consent to a judgment, although he believed that by so doing money would be saved to the parties ultimately liable? This, we think, would be a too strict interpretation of the contract. But, at the same time, to hold that a judgment entered by consent of the parties, and without notice to or approval by the sureties, is, in the absence of proof of fraud or collusion, conclusive against them, would open the door to the perpetration of secret frauds, and subject sureties to a most hazardous responsibility, and to the discretion and judgment of a third person, which might seriously imperil them. A judgment by default has been held to be covered by an indemnity against judgments, (Lee v. Clark, 1 Hill, 56; Aberdeen v. Blackmar, 6 Hill, 324; Annett v. Terry, 35 N. Y. 256;) but, where default is made, the plaintiff must give proof to entitle him to judgment.
While we are of opinion that the sheriff was not excluded from the protection of the indemnity by reason of the fact that the judgment was taken by his consent, we think the reasonable rule is that a judgment so obtained is presumptive evidence only against the sureties, and that they are at liberty to show that it was not founded upon any legal liability to the plaintiff in the action. We are not aware that this point has been adjudicated in our court, but this conclusion is warranted, we think, by legal and equitable considerations. In this case there is an absence of any proof impeaching the fairness or justice of the claim of Kahrs, or tending to show that the judgment exceeded the legal liability of the sheriff. The judgment should therefore be affirmed.
(All concur, except RUGER, C. J., not voting.)
(103 N. Y. 678)
In re Estate of CADY, Deceased.
(Court of Appeals of New York. November 23, 1886.) TRUSTS-REMOVAL OF TESTAMENTARY TRUSTEE AND EXECUTOR-CAUSES.
An executor and trustee appointed under a will may be removed by the surrogate on the application of beneficiaries representing two-thirds in interest under the will, where the evidence convinces the surrogate of the unfitness of such trustee and executor by reason of drunkenness, improvidence, and hostility to the beneficiaries seeking relief.
The testator, Elias W. Cady, by his will, executed in 1854, devised to his son Charles Cady his homestead property of nearly 200 acres, subject to certain payments to be made to said Charles' sister Mary, and thereby appointed Charles and Charles' brother, Oliver, executors and trustees of his estate. By the same will he also devised about 400 acres of land, known as the "Cramer Farm" to said Charles and Oliver Cady, in trust to sell the same within five years, and out of the proceeds to pay said Mary Cady $3,000, and to divide the balance equally between said Mary and her two sisters, Harriet Ferguson and Rebecca A. Dwight. Subsequently the said testator made two codicils to his will, materially increasing the charges made on the homestead devised to Charles in favor of Mary, and in the months of June and September, 1881, he conveyed to the said Mary the said homestead devised by the will to Charles, leaving Charles without any interest under the will except as executor and trustee. The testator died in 1883. When the will was admitted to probate, Oliver Cady refused to act as executor, thus leaving Charles Cady sole executor and trustee. Immediately on the will being admitted to probate, the three sisters objected to their brother Charles acting as executor, or as their trustee, on the ground of his drunkenness, insolvency, and personal unfriendliness to them, and on the further ground that he was seeking to wreck the estate by inducing his creditors to levy on and sell all the personal property left by his father, claiming it belonged to him. After a protracted litigation, during which Harriet S. Ferguson withdrew her objections, a decree was rendered by the surrogate and affirmed by the general term, removing Charles Cady from his position as executor and trustee. From this decree Charles Cady appeals.
Geo. E. Goodrich and H. V. Howland, for appellant.
S. D. Halliday, of counsel, for Mary Cady and others.
Although connected together, there are two distinct proceedings in this case,-one to remove Charles Cady from his position as testamentary trustee, the other to deprive him of his executorship. The former relief is sought under Code N. Y. § 2817, and the latter under Code N. Y. §§ 2636, 2637, 2685,
First, as to the testamentary trusteeship. That Charles Cady was a testamentary trustee under this will and its codicils is clear from the definition given in New Code N. Y. § 2514, subd. 6. The removal of a testamentary trustee,