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Our state Constitution deals with fundamen- in Albany county by state officials, and not tal principles and the main outline of state by county authorities, and that the applicant government. It leaves the details for subse- is not entitled to the office or to the emoluquent legislation. This court has heretofore ments thereof. He has not been appointed refused to permit the varying details of legis- according to the mandates of the Constitulation to modify these fundamental princi- tion. ples.

Allison v. Welde, 172 N. Y. 421, 65 N. E. 263, did not modify our decision in the Brenner Case. For reasons there stated, chapter 602 of the Laws of 1901, above referred to, while not creating a new office for Kings county, did create a new office for New York county, for the reason stated in the opinion of Judge Haight. The conditions in the two counties were entirely different. Judge Haight had dissented in the Brenner Case, and apparently again expressed his reasons for his dissent in his opinion in the Welde Case. His views, however, on this point were not shared by the majority of the court, which agreed with him as to the creation of a new office. The Welde Case, however, is important, as indicating that the points here raised were again called to the attention of this court, and that it did not vary from its position in the Brenner Case.

[6] The suggestion has been made by the respondent that, as the Constitution of 1894 continued some of the provisions contained in earlier Constitutions, it was in reality an amendment of those Constitutions, and not a new instrument, adopted by the people as and for a complete and new Constitution. The proceedings and resolutions of the convention show otherwise. Lincoln's Constitutional History, vol. III. Writing for this court in People ex rel. Metropolitan St. R. Co. v. State Board of Tax Comrs., 174 N. Y. 417, 67 N. E. 69, 63 L. R. A. 884, 105 Am. St. Rep. 674, Vann, J., refers to article 10, section 2, as contained in the third Constitution drafted in 1846, and says:

"The same provision was carried forward, ipsissimis verbis, into our present Constitution."

And in People ex rel. Town of Pelham v. Village of Pelham, 215 N. Y. 374, 109 N. E. 513, referring to this same section and article of the Constitution, this court said:

"It [the Legislature] cannot take away those local rights of self-government which the municipal corporation enjoyed when the present Constitution was adopted."

See, also, People ex rel. McClelland v. Roberts, 148 N. Y. 360, 369, 42 N. E. 1082, 31 L. R. A. 399; Chittenden v. Wurster, 152 N. Y. 345, 350, 46 N. E. 857, 37 L. R. A. 809.

My conclusion, therefore, is that the Legislature exceeded its authority by providing for the appointment of the commissioner of jurors

[7] This, however, does not leave the county of Albany without a commissioner of jurors, or without any designated authority to make the appointment. Chapter 441 of the Laws of 1899, as amended by chapter 320 of the Laws of 1900, was extended to the county of Albany. The latter act repealed chapter 557 of the Laws of 1894, as amended by chapter 679 of the Laws of 1896, only in a qualified way. There was no complete repeal. It said that these two earlier laws "shall not hereafter apply to the county of Albany, but such county shall be subject to the provisions of chapter 441 of the Laws of 1899, as amended by this act." The act of 1899 could apply to the county of Albany in every particular, except the power of appointment. This part of the law was unconstitutional. The law of 1894 did not apply to the county of Albany, in so far as the law of 1899 became effective. The Legislature never intended to leave the county of Albany without a commissioner of jurors, or a proper power of appointment. If the method provided in the act of 1899 was unconstitutional, the county of Albany could not be subject in this particular to the Laws of 1899, and the Laws of 1894 did apply, and were not superseded. What the Legislature meant, and what it virtually said, was that the Laws of 1894 did not apply to the county of Albany, because the county was deemed subject to the Laws of 1899. Clearly the Legislature would not create a power of appointment which it believed to be unconstitutional, and therefore did not intend to repeal the law of 1894, by substituting for it an unconstitutional or empty power. I cannot imagine that it would knowingly do an empty and useless thing. The commissioner, therefore, appointed by the authorities designated by chapter 557 of the Laws of 1894, as amended by chapter 679 of the Laws of 1896, would be and is a legally appointed commissioner of jurors for Albany county.

For the reasons here stated, the order of the Special Term should be reversed, and the application of the petitioner for a peremptory order of mandamus denied, without

costs.

CARDOZO, C. J., and POUND, KELLOGG, and O'BRIEN, JJ., concur. ANDREWS, J., dissents. LEHMAN, J., absent.

Ordered accordingly.

(246 N. Y. 130)

(158 N.E.)

FELDMAN v. BARSHAY.

Court of Appeals of New York. July 20, 1927. Taxation 514-Possible lien for taxes on corporation's real estate in hands of other wise innocent purchaser, never referred to Attorney General, held extinguished (Tax Law, 182, 192, 195-197, 203, and § 207, as amended by Laws 1917, c. 410).

Possible lien for taxes, under Tax Law (Consol, Laws, c. 60) §§ 182, 192, 195-197, on corporation's real estate in the hands of an otherwise innocent purchaser held extinguished, under section 207, as amended by Laws 1917, c. 410, where taxes became payable in 1905 and were never referred to the Attorney General pursuant to Tax Law, § 203, so that the purchaser could convey an unincumbered title to plaintiff, and hence plaintiff was not entitled to recover part payment of purchase price and judgment impressing vendee's lien on property

was erroneous.

(Id. § 196); "a tax imposed by section 182

* * shall be due and payable into the state treasury on or before the 15th day of January in each year" (Id. § 197); "such tax shall be a lien upon and bind all the real and personal property of the corporation, * from the time when it is payable until the same is paid in full." Whether, under these sections, in the absence of a report by the corporation, in default of an audit and statement by the tax commission, an unascertained franchise tax becomes, from the 15th day of January following the due date for the corporate report, a "lien upon" the real property of the corporation "until the same is paid in full" is an interesting question. It is a question, however, which we do not find it necessary to decide, and therefore refrain from deciding. If the franchise taxes, payable by the Dumont Terrace Company for the years 1904 and 1905, originally became a lien upon the real property owned by it in

Appeal from Supreme Court, Appellate Di- the year 1905 and now the subject of this convision, Second Department.

troversy, they ceased to be a lien thereupon by the force of the provisions of section 207 of the Tax Law, as amended by chapter 410 of the Laws of 1917. That section provides that:

Action by Louis Feldman against Joseph Barshay. From a judgment of the Appellate Division of the Supreme Court, Second Judicial Department (219 App. Div. 729, 219 N. Y. S. 811), which unanimously affirmed a judg. ment of the Special Term, impressing a vendee's lien in favor of plaintiff against prem-alty, ises owned by defendant, defendant appeals. Reversed, and complaint dismissed.

See, also, 219 App. Div. 799, 220 N. Y. S.

852.

Samuel Silverman and Jacob Saul Barshay, both of New York City, for appellant.

"As to real estate in the hands of persons who are owners thereof who would be purchasers in good faith but for such tax or pen

* * * all taxes and penalties which have prior to April 1, 1917, become due and payable pursuant to this article, and which have not been referred to the Attorney General pursuant to section 203 of this chapter, shall cease to be a lien on such real estate as against such purchasers or holders, after the expiration of 10 years from the time when such

Samuel Weiss, of New York City, for re-tax became due and payable." spondent.

Albert Ottinger, Atty. Gen. (C. T. Dawes, Deputy Atty. Gen., of counsel), for State Tax Commission.

KELLOGG, J. Every domestic corporation, for the privilege of exercising its corporate franchises, must pay an annual tax to the state based upon its capital employed within the state (Tax Law [Consol. Laws, c. 60] § 182); it must, between the 15th day of November and the 15th day of December in each year, make a written report to the tax commission, stating its condition at the close of business on the preceding 31st day of October, and particularly stating the capital employed by it during the year previous to such date (Id. § 192); the tax commission must, from such report or other data, "order and state an account for the tax due the state" (Id. § 195); notice in writing must be given by the commission to the corporation of the auditing and stating of the account

The taxes in question became payable, if at all, in the year 1905; they never were referred to the Attorney General pursuant to the provisions of section 203; the defendant, "but for such tax or penalty," was a purchaser in good faith of the property in question; therefore the taxes ceased to constitute a lien upon the property "10 years from the time when such tax became due and payable," or in the year 1915. It follows that the defendant, when he contracted to sell the property to the plaintiff, was the owner of an unincumbered marketable title, and was able to convey such a title to the plaintiff. The plaintiff therefore was not entitled to recover the sum paid to the defendant in part paymont of the purchase price, and the judgment rendered was erroneous.

The judgment of the Appellate Division and that of the Special Term should be reversed and the complaint dismissed, with costs in all courts.

646(1)—Acceptance of assignment of life insurance policy held not presumed, where assignee was to hold policy for assignor's benefit without personal profit.

CARDOZO, C. J., and POUND, CRANE, | 7. Insurance ANDREWS, LEHMAN, and O'BRIEN, JJ.,

concur.

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3. Exemptions 50(1)-Creditor gains no rights against insurance policy upon husband's life for wife's benefit by appointment of receiver or other transfer in invitum.

A creditor of a husband or wife gains no rights against a policy of insurance upon the life of the husband for the wife's benefit by the mere appointment of a receiver or other transfer in invitum.

4. Insurance 590, 594-Upon maturity, life policy is assignable without restriction and subject to seizure by creditors.

A life insurance policy, upon the life of a husband for the benefit of his wife, is, after his death, assignable without restriction and subject like other assets to seizure for the use of creditors.

5. Insurance 200-Where wife in North Dakota mailed assignment of life policy and after husband's death trust was created in New York, transfer held effected in New York.

Where wife in North Dakota mailed an assignment of a policy upon the life of her husband to her brother in New York before the husband's death, with intent to secure loans on security of policy, and after her husband's death came to New York and created a trust from the proceeds for the benefit of herself and son, held, that the transfer of the policy was effected in New York and title did not pass until the declaration of the trust.

6. Insurance 211-Delivery of assignment of Insurance poliay will not divest title unless coupled with acceptance.

The delivery of assignment of a policy of life insurance will not divest title until coupled with acceptance by the assignee.

Acceptance of assignment of life insurance policy held not to be presumed, where the assignee was to hold the policy for the benefit of the assignor without gaining any benefit himself. 8. Insurance 222-Acceptance of assignment of life insurance policy to secure expected loans held to leave beneficiary's ownership unimpaired except as to lien for advances.

Acceptance of assignment from wife of a life insurance policy upon the life of her husband to secure expected loans held to leave the wife's ownership unimpaired except as to the lien for advances to be made.

9. Insurance 222-Pledgee of life insurance policy to secure expected loans could not by acceptance get more than lien for possible ad

vances.

Pledgee of life insurance policy pledged to secure expected loans could not by his acceptance get more than was intended; namely, a lien for advances to be made.

10. Insurance 590-After death of insured, acceptance of assignment of life insurance policy held subject to rights of creditors.

After death of insured, acceptance by assignee of an assignment by the beneficiary of the rights under the life insurance policy was impossible except subject to rights of creditors.

11. Fraudulent conveyances-Creation of trust from proceeds of life policy by beneficiary for benefit of herself and son held void against creditors (Personal Property Law, § 34).

In view of Personal Property Law (Consol. Laws, c. 41), § 34, the creation of a trust from the proceeds of a life insurance policy by the beneficiary for the benefit of herself and her son held void against creditors.

12. Trusts 366(3)-In suit against trustee by creditor claiming lien on trust fund, trustee represents beneficiaries, and court can adjudicate issue without all beneficiaries being joined as defendants.

In suit against trustee by a creditor claiming that title to the trust fund is subject to his lien, the trustee represents the beneficiaries and defends in their behalf, and the court can adjudicate the issues without all the beneficiaries being joined as defendants.

13. Judgment 691-Where mother created trust from proceeds of life policy for herself and son, son's rights held cut off by decree in creditor's suit against trustee and mother adjudging trust void.

Where mother created trust from the proceeds of a life insurance policy for herself and son, the son's rights were cut off by a decree in a creditor's suit against the trustee and mother, notwithstanding son was not joined as defendant, since the son was sufficiently rep

(158 N.E.)

resented, especially where payments to him, should arise, subject to her orders." were subject to mother's orders.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by John L. Jackson against Ruby H. Tallmadge and another. From a judgment of the Appellate Division of the Supreme Court in the Third Judicial Department (216 App. Div. 100, 214 N. Y. S. 528), modifying, and, as modified, affirming the judgment of the Special Term (124 Misc. Rep. 389, 208 N. Y. S. 551) in favor of plaintiff, defendants appeal. Affirmed.

The

plaintiff, a New York judgment creditor, assails the trust as fraudulent.

[1-4] Under the law of New York, a policy of insurance upon the life of a husband for the benefit of his wife is withdrawn in large degree from pursuit by his creditors, and also from pursuit by hers. Eadie v. Slimmon, 26 N. Y. 9, 82 Am. Dec. 395; Smillie v. Quinn, 90 N. Y. 492; Miller v. Campbell, 140 N. Y. 457, 35 N. E. 651. She may assign it with his consent, but not otherwise. Domestic Relations Law (Consol. Laws, c. 14), § 52. The creditor gains nothing by the mere appointment of a receiver or other transfer in invitum. Smillie

See, also, 217 App. Div. 809, 217 N. Y. S. v. Quinn, supra. All this is true, however, 917; 218 App. Div. 802, 218 N. Y. S. 782.

Frank H. Hiscock, of Syracuse, and Hampton H. Halsey, of Rochester, for appellants. Charles H. Newman, of Ithaca, for respond

ents.

CARDOZO, C. J. The action is by a judgment creditor to set aside a transfer in fraud of creditors.

Carl E. Tallmadge, a resident of North Dakota, insured his life in the sum of $25,000 for the benefit of Ruby H. Tallmadge, his wife, the policy being issued by a South Dakota insurance company. Both husband and wife became insolvent and were threatened with prosecution, civil and criminal. At the same time the husband became critically ill. On February 3, 1923, the wife, then in North Dakota, mailed an assignment of the policy to her brother, the defendant Halsey, in Rochester, N. Y., intending to apply to him for loans on the strength of this security. companying the assignment was a letter from her lawyer to the effect that on meeting her brother she would explain to him the object of the instrument. The brother had no information in advance that the transfer was to be made. He knew, however, in a general way that the sky was darkened by financial troubles. Upon receiving the assignment on February 7, 1923, he understood at once that the policy was to be held for his sister subject to her use.

only while the husband lives and the policy is yet outstanding. At once upon maturity, it is assignable without restriction and subject like other assets to seizure for the use of creditors. Amberg v. Manhattan Life Ins. Co. of New York, 171 N. Y. 314, 63 N. E. 1111.

The question has been much debated in this case whether the assignment became effective in North Dakota or in New York. There is no evidence in the record that North Dakota has a statute similar to our own. The Special Term applied the law of New York, but even on that basis held the transfer to be fraudulent. The Appellate Division came to the same result, but applied the law of North Dakota, holding that the assignment was delivered when deposited in the mails and that there was a presumption of acceptance as in cases of a gift.

[5-7] We think the transfer of the policy was effected in New York and that title did not pass until the declaration of the trust. Ac- There is no need to determine whether the deposit in the mails without previous request or knowledge of the person named as assignee was equivalent to delivery. There may be significance in the fact that the document was still subject to recall upon notice to the post office. U. S. Postal Laws & Regulations, §§ 531, 533; Crown Point Iron Co. v. Etna Ins. Co., 127 N. Y. 608, 618, 619, 28 N. E. 653, 14 L. R. A. 147; Gately-Haire Co. v. Niagara Fire Ins. Co. of City of New York, 221 N. Y. 162, 116 N. E. 1015, Ann. Cas. 1918C, 115. If delivery be assumed, however, it did not divest title until coupled with acceptance. Instances there may be of a transfer so plainly beneficial that acceptance is presumed. Albany Hospital v. Albany Guardian Society and Home for Friendless, 214 N. Y. 435, 442, 108 N. E. 812, Ann. Cas. 1916D, 1195; Munoz v. Wilson, 111 N. Y. 295, 304, 18 N. E. 855. There was no such transfer here. The assignee was not expected to gain any benefit at all. He was to assume responsibilities without profit. He was to act as a buffer between his sister and her creditors, who might

Three days later Carl E. Tallmadge died. His widow brought the body to New York for burial, and was met on arrival by her brother. She explained to him that she was without means for her own and her son's support, and that the proceeds of the policy must be kept beyond the reach of creditors. A trust was then and there declared. There is some conflict in the findings as to its terms. One set of findings is to the effect that the trust was for the benefit of Ruby Tallmadge solely. Another set is to the effect that the trust was for her benefit and her son's "as their needs 158 N.E.-4

be counted on to pester him with lawsuits and, eroy, Remedies & Remedial Rights, § 357. trouble him in other ways. There is no presumption of a willingness to stand in such a breach. Pitkin's Adm'rs v. City of Montpelier, 85 Vt. 467, 473, 82 A. 671, Ann. Cas. 1914D, 500.

"Where the complainant claims in opposition to the assignment or deed of trust, and seeks to set the same aside on the ground that it is fraudulent and void, he is at liberty to proceed against the fraudulent assignee or trustee, who is the holder of the legal estate of the property, without joining the cestui que trust." Rogers v. Rogers, 3 Paige, 379, 380.

We think the interest of the son, if any, is not of such a nature that the court is under a duty to refuse in his absence to adjudicate the issues. The findings leave it uncertain, to say the least, whether he had any property interest subject to be protected. No payments were to be made to him except upon his mother's orders. Only a strained view of the transaction would see in it an intention to clothe him with any right or interest in the fund that would be good against her protest. 1 Perry on Trusts, § 117. If any shred of right existed, it has been cut off after adequate representation by force of this decree.

[8-11] We do not overlook a statement by the brother, confirmed by a finding of the court, that at once upon receipt of the document he resolved to accept any trust that might be necessary to give effect to his sister's purpose, whatever it might be. At that time her purpose was to use the assignment as a pledge to secure expected loans. Acceptance of such security did not divest the pledgor's interest as equitable owner, but left it unimpaired, subject only to the lien of advances to be made. The pledgee, however complaisant, could accept nothing more, for nothing more was then intended. Not till the meeting in New York was there an attempt to turn the pledge or mortgage into an assignment of the title subject to a trust. At that time the policy had already matured. Cases tending superficially to uphold a difAcceptance was then impossible except sub- ferent ruling are distinguished when their ject to the rights of creditors. Amberg v. facts are stated. First National Bank of Manhattan Life Ins. Co. of New York, supra. | Amsterdam v. Shuler, 153 N. Y. 163, 47 N. E. The conclusion thus reached makes it un- 262, 60 Am. St. Rep. 601, was a suit where necessary to consider whether a like goal could be attained by travel along other paths. Pers. Prop. Law (Consol. Laws, c. 41), § 34. [12, 13] A point is now made, though without plea of defect of parties or even objection at the trial, that the son should have been joined as a defendant, and that no decree may be pronounced without him. Civil Prac. Act, 193. There is no question at issue between trustee and beneficiaries or between the beneficiaries themselves. Matter of Straut, 126 N. Y. 201, 211, 212, 27 N. E. 259. The question is between the trustee and a creditor, a stranger to the trust, who insists that the title to the fund is subject to his lien. In a suit for such relief, the trustee represents the beneficiaries, and defends in their behalf. Matter of Straut, supra; Sweet v. Parker, 22 N. J. Eq. 453, 455, 456; Tucker v. Zimmerman, 61 Ga. 599; Vetterlein v. Barnes, 124 U. S. 169, 172, 8 S. Ct. 441, 31 L. Ed. 400; Pom

the omitted defendant was the creator of the trust. Apart from his interest in the surplus, "he had the right to contend that his estate should be distributed under the terms of the assignment, and that it was a valid, and not a fraudulent, instrument." 153 N. Y. at page 168, 47 N. E. 263. Cook v. Lake, 50 App. Div. 92, 63 N. Y. S. 818, was a suit where a fraudulent grantee had made a conveyance to another, not joined as a defendant, who held the legal title. Here the creator of the trust and the holder of the legal title are parties to the suit and have defended for themselves and for those they represent.

The judgment should be affirmed, with costs.

POUND, CRANE, ANDREWS, LEHMAN, and O'BRIEN, JJ., concur. KELLOGG, J., not sitting.

Judgment affirmed, etc.

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