App. Div.] SECOND DEPARTMENT, FEBRUARY TERM, 1899. the State of New York is a voluntary, unin- | corporated association, which was formed prior to the year 1879, of and among the officers of the said Eleventh Regiment, and which has been continued to this date. It consists of more than seven members, and the plaintiff is the president and presiding member thereof. In or about the year 1879 a fund was raised by said board of officers and their friends for the purpose of being used for the relief of sick and destitute members of said regiment who had not neglected their duties for the six months prior to their sickness, or, in case of their death, of their families. The said fund was known as the "relief fund" of said regiment. One Frederick D. Umbekant, who was the colonel of the regiment and the president and presiding officer of said board of officers, in or about the year 1879, was elected by said board of officers the trustee of said fund, to hold the same and pay out the same pursuant to the directions of said board of officers, and from that time the said fund was administered under the direction of said board of officers for the said charitable purposes for which it was created, and payments were made by said trustee and by his successor on the votes and orders of said board of officers. Frederick D. Umbekant died and Albert P. Stewart, who succeeded him as colonel of the regiment, in or about the year 1885, was elected to succeed him as trustee of said trust, and payments therefrom were made by him on the votes and orders of said board of officers. In January, 1889, said Eleventh Regiment of the National Guard of the State of New York was disbanded by the Commander-in-chief. At that time there were between 400 and 500 privates and non-commissioned officers, and over 20 commissioned officers, connected with said regiment. Albert P. Stewart died on May 11, 1893, being then in possession of said fund, the whole or part of which was deposited in the United States Trust Company, in the city of New York, to the credit of Albert P. Stewart, trustee. On June 10, 1893, said board of officers of the said Eleventh Regi ment elected the defendant, Charles H. Collins, who was then a member of said board of officers, a trustee of said fund to succeed said Albert P. Stewart. Thereafter said Charles H. Collins applied to this court upon a verified petition, and upon notice to Emily Stewart, the administratrix of the estate of said Stewart, for an order that said fund be paid over to him as such trustee. In his said petition he stated the fact of his appointment as such trustee by said board of officers, together with other facts. Upon this petition an order was made by this court, at a Special Term thereof, held at Chambers, at the court house in the city of New York, on the 28th day of June, 1893, by which it was "ordered that said Emily Stewart forthwith surrender unto said Charles H. Collins, said petitioner and trustee, the United States Trust Company's certificate No. A68,718 for three thousand two hundred and thirty-four 20/100 dollars ($3,234.20); and it is further ordered that upon the surrender of said certificates unto said trust company by said Charles H. Collins, the United States Trust Company of New York city, after deducting from the amount of said certificate the sum of four hundred and sixty ($460.00) dollars, paid to Albert P. Stewart, as mentioned in petition herein, pay over forthwith to said Charles H. Collins the sum of two thousand seven hundred and seventyfour 25/100 ($2,774.25) dollars, and the interest due thereon, to be held by said Charles H. Collins as trustee of said Eleventh Regi ment Relief Fund." On the footing of said order and in pursuance of the same, said defendant, Charles H. Collins, obtained and received from said United States Trust Company the sum of two thousand eight hundred and nineteen ($2,819) dollars, as follows, to wit: On July 20, 1893, the sum of two thousand ($2,000) dollars, and on September 19, 1893, the further sum of eight hundred and nineteen (3819) dollars. Said payments were made to the said Charles H. Collins by the checks of said United States Trust Company on the Bank of the Manhattan Company, and were payable to his order as trustee, and they were indorsed by him as trustee and also as an individual, and were thereupon deposited by him in his own bank and to his own personal credit. The fact that he had collected and received these sums of money was not made known by the said Charles H. Collins to the said board of officers until more than one year after the last of said payments to wit, on December 22, 1894, on which date a meeting of said board of officers was held, at which he was present, and at which certain of the members of the association stated that they had heard that the money had been collected, and inquired of him in relation thereto. At this time the defendant made various false statements as constitut ing reasons why the fund in his hands must remain with him; and he further stated that the entire fund had been invested by him on a mortgage upon real estate in the county of Westchester, payable in sixty days and secured by the bond of responsible parties. At this meeting, after the defendant had made his statement with regard to the fund and its investment, the said board of officers elected Gustav Junker and Harold B. Christensen as trustees to act with said defendant with relation to said trust, and authorized them to procure a full accounting from the defendant with relation to the said trust. Shortly thereafter, and in the early part of January, 1895, Messrs. Junker and Christensen, the trustees appointed by said board of officers, called upon the defendant and requested to be shown the securities in which the fund had been invested by him. then stated that these securities were not then at his office, and appointed another day when they could call and when they would be shown the securities of which he had spoken. Pursuant to this appointment, and on January 22, 1895, Messrs. Junker and Christensen again called at the office of the defendant, when they were shown by him a paper which he said was a mortgage representing the investment of the entire fund received by him. This mortgage was taken into the possession of Messrs. Junker and Christensen by them contrary to the active protest and resistance of the defendant, and was produced in evidence before me. mortgage purports to have been made by Samuel C. Searson, of the town of New Rochelle, county of Westchester and State of New York, and Agnes W., his wife, to Charles H. Collins, as trustee of the Eleventh Regiment Relief Fund, to secure the sum of two thousand eight hundred ($2,800) dollars on November 1, 1894, with interest from September 11, 1894. It purports to mortgage a block of land in the town of Williamsbridge, county of Westchester and State of New York, bounded by Bridge street, Pier street, Hawthorne avenue and Fern place. It bears date September 11, 1894, and purports to have been acknowledged on that day before Robert J. Roby, Jr., a notary public, and to have been recorded in the office of the register of the county of West. chester, in the City of White Plains," in He This SECOND DEPARTMENT, FEBRUARY TERM, 1899. liber 1121 of Mortgages, page 505. It was fully proved and conceded before me that the said mortgage was a fabrication; that the mortgagors were fictitious persons; that it had been executed in their imagined names, either by the defendant in person, or by some other person, pursuant to his authority and direction; that no person had ever acknowledged the instrument; that the property secured was imaginary and fictitious; that it had never been recorded in any office, and that the signature purporting to be that of the register to the certificate of record had also been placed upon the paper by the defendant, or pursuant to his direction. The paper did, however, conform to the description of the mortgage which the defendant had represented to his associates in the board of officers as being the security in which he had invested the funds received by him as trustee of the relief fund of the regiment, in this, that it stated the amount of the fund correctly to within nineteen ($19) dollars; that it did purport to be upon Westchester county property, and that it did purport to be payable within sixty days from its date. A sum of money, amounting to about twelve hundred and fifty ($1,250) dollars, was invested by the defendant on a mortgage assigned to himself personally, upon property in the State of New Jersey, but this investment was not made pursuant to any authority given to him by the board of officers, was not made as trustee of this fund, or as trustee for any other purpose, and was without legal authority. Since the discovery by the board of officers of the Eleventh Regiment Relief Fund of the fact that the defendant had received this fund into his possession, he has repudiated the authority of the board of officers over it, and has resisted every effort on their part to have any control over said fund, and has violated his duty as trustee with relation thereto. I, therefore, decide that the plaintiff is entitled to a judgment that the said defendant, Charles H. Collins, be removed as trustee of the Eleventh Regiment Relief Fund, and that he account for all of the moneys belonging to said fund heretofore received by him before Edward L. Patterson, Esq., of the city of New York, counselor at law, appointed a referee to take such accounting; that on such accounting he be charged with the sum of two thousand eight hundred and nineteen ($2,819) dollars, with interest on two thousand ($2,000) dollars thereof, from July 20, 1893, and on eight hundred and nineteen ($819) dollars thereof, from September 19, 1893; that he be credited with the reasonable costs and charges of making the motion in this court, upon which the order was obtained directing the payment of said money by the United States Trust Company, and with any payments made by him by the authority of the board of officers of the Eleventh Regiment for the charitable purposes for which said trust was created, or which may be ratified or approved by them or by the attorney for the plaintiff in this action, but that no allowance should be made to him on such accounting for commissions as trustee or for counsel fees or disbursements incurred in resisting the claims of the plaintiff in this action. That said referee also take proof and report with respect to any other disbursements made by said Collins in the administration of his trust, and that he take proof and report upon Collins' claim for compensation out of the fund for services rendered by him before he was appointed trustee in the action of Walton v. Stewart, for the recovery of the fund. That said referee also take proof and report [Vol. 38. with respect to the amount which shoul! be In the Matter of the Application of Samuel George A. Miller, Respondent, v. Erie Railroad William N. Dykman, as Receiver, etc., Appellant, v. Seth L. Keeney and Others, Respondents.-Motion for reargument denied. The Staten Island Midland Railroad Company, Joanna Hickman, Respondent, v. Nassau Elec- Ernst F. Bliss, Respondent, v. The Metropoli| ton Elevated Railway Company and An App. Div.] FIRST DEPARTMENT, MARCH TERM, 1899. other, Appellants.-Judgment affirmed, with | costs. No opinion. All concurred. Donald Sutherland, Respondent, v. Union Railway Company of New York City, Appellant. -Judgment and order unanimously affirmed, with costs. No opinion. John P. Schmenger, Respondent, v. The New York Elevated Railroad Company and The Manhattan Railway Company, Appellants. - Judgment affirmed, with costs. No opinion. All concurred. William N. Henke and Amelia Henke, Respondents, v. The New York Elevated Railroad Company and The Manhattan Railway Company, Appellants.- Judgment affirmed, with costs. No opinion. All concurred. Sarah E. House, Respondent, v. Erie Railroad Company, Appellant.-- Judgment and order unanimously affirmed, with costs. No opinion. The People of the State of New York, Respond- Henri Strasbourger, Plaintiff, v. Herman Fal- John Schreyer, Respondent, v. Thorndike The People of the State of New York ex rel. 38g 627 a165a637 FIRST DEPARTMENT, MARCH TERM, 1899. Catherine F. Wetmore, as Executrix, etc., of Richard Carman Combes, Deceased, Appellant and Respondent, v. Indiana V. Stromeyer, Respondent and Appellant, Impleaded with Others.- Judgment affirmed, with costs. Appeal from a judgment entered on the report of a referee. VAN BRUNT, P. J.: This action was brought by the plaintiff's testator to have his accounts in respect to the enterprise hereinafter mentioned passed, and for such other equitable relief as might be proper. The case was tried before a referee, who rendered a judg ment, from which both parties appealed, but the only question presented to this court upon the argument was on the appeal of the defendant Indiana V. Stromeyer, she claiming that certain acts performed by the plaintiff's testator Combes, as trustee, were unauthorized, improper and in violation of his duty as such trustee. It appeared before the referee that the Stromeyer interest belonged to the defendant Indiana V. Stromeyer, who was represented by her husband, Frederick A. Stromeyer, in all these transactions, who had full authority to act for and on her behalf, it not being developed until near the close of these transactions to the other parties in interest that Frederick A. Stromeyer was not the one who really owned the interest which he represented. The facts as established before the referee seem to be briefly as follows: A railroad corporation, known as "The Pennsylvania and Western Railroad Company," incorporated under the laws of the State of Pennsylvania, existed prior and up to March, 1877. In March, 1877, a new corporation, bearing the same name, was organized and incorporated as a successor thereto. On and after September 1, 1879, the plaintiff's testator, Combes, and three others, among whom was this appellant, each owned a one-quarter interest in said Pennsylvania and Western Railroad Company. This appellant is, in some places in the case, confused with her husband, Frederick A. Stromeyer, who, however, acted at all times as her agent, and had full power and authority to bind her by any of his acts. On or about June 3, 1880, this appellant, as well as all the owners of the stock of said railroad company, other than Combes, delivered her stock therein to Combes as trustee. Thereafter Combes uniformly acted as trustee for all the cther owners with their consent. On May 2. 1882, this appellant and the other cestuis que trustent instructed Combes in writing to sell out their in- FIRST DEPARTMENT, MARCH TERM, 1899. Creek, Clearfield and Southwestern Railroad Company," which thereupon began to build a railroad upon part of the location of the Pennsylvania and Western Railroad Company. The Pennsylvania and Western Railroad Company began to build its road, but was enjoined therefrom in an action brought against it by the said Beach Creek, etc., Company, since which time no work whatever has been done on the construction of the Pennsylvania and Western Railroad Company. In 1883 an action of quo warranto was brought against the Pennsylvania and Western Railroad Company, at the instigation of Peale, which resulted in a judgment of ouster being given against said railroad company from a place called "Beach Creek Gap," a portion of its claimed roadway. An appeal was taken by the said Pennsylvania and Western Railroad Company from said judgment of ouster, which continued pending until the claims of Combes and his cestuis que trustent against Peele were settled long afterwards. On or about July 13, 1885, Combes and all the cestuis que trustent joined in an agreement with Simon Sterne, Esq., of the New York bar, whereby the latter undertook to prosecute their claims against Peale and others, by which agreement Combes and his associates agreed to pay out of the proceeds of whatever might be recovered, either at the end of the litigation or as the result of a settlement, first, the costs and expenses of any litigation which might be conducted, and out of the remainder to pay to Mr. Sterne twenty-five per cent thereof for his services in the conduct of the litigation, and seventy-five per cent to be the property of the associates, all charges for counsel fees for the conduct of proceedings in Pennsylvania to be at the expense of Mr. Sterne, who was to have the sole determination as to the proceedings there to be instituted and whom to employ. In pursuance of the authority conferred by this agreement, Mr. Sterne commenced two actions in the Supreme Court of the State of New York, neither of which were brought to trial. The complaint in the last action was verified by Frederick Stromeyer on the 28th of May, 1886, as one of the plaintiffs and parties in interest. No mention was made therein of the defendant Indiana V. Stromeyer, or of any interest claimed by her in the company or its property. In the complaint thus sworn to by Frederick Stromeyer is the following allegation: "That said Combes and Berthoud, being fully persuaded that the said action was for the advantage of the Pennsylvania & Western Railroad Company, and was honestly undertaken in its interest, sanctioned, aided and seconded all the acts and proceedings of said Peale, and surrendered the surveys and rights of way of the Pennsylvania & Western Railroad Company to the said Peale, and under the advice of one William A. Wallace, the attorney of said Peale, and who was the confidential adviser of and largely interested with the said Peale, and who was believed by said Combes and Berthoud to be acting for the common benefit of the parties to the said contract of May 8th, 1882, the said Combes and Berthoud, on their part, on or about August 7th, 1882, signed a supplementary agreement." Thereafter, Mr. Sterne, with the approval of all concerned, realized certain sums in settlement of the claims placed in his hands, and, after deducting his fees, paid over to Mr. Combes the balance, which was the principal asset accounted for by Combes herein. The Stromeyers having assigned a certain proportion of their claim in this action to one Richard Meyer, the referee found that the Stromeyer [Vol. 38. interest should be paid to Meyer, and that nothing remained due to either of the Stromeyers. The appellant Stromeyer claims that the agreement of August 7, 1882, was executed without their knowledge, and that their subsequent ratification of the agree ment is not binding upon them because such ratification was made under duress of poverty. We are unable to see upon what theory the appellant Stromeyer can avoid the effect of the subsequent ratification of the agreement of August 7, 1882. There is no pretense but that such ratification was made with full knowledge of all the facts, and that they joined in all the attempts to secure as much as possible out of the enterprise in which they were interested. They joined in the agreement with Sterne. Frederick Stromeyer swore to a complaint in which he avers the honesty of Combes in entering into the supplemental agreement, and when a compromise was made they distinctly approved and they participated in the benefits arising therefrom. The fact that, in consequence of their pecuniary condition the nimble sixpence was of much more importance to them than the slow shilling, in no way constituted duress; nor would it relieve them from their repeated ratification of an act which was sworn by them to be honestly done and in the interest of the cestuis que trustent. It would be introducing a new and dangerous element into the principles of equity to hold that the pecuniary condition of parties to an agreement could avoid its binding effect. While there may possibly be cases where the fraudulent use of such condition by a party in order to secure an unconscionable advantage may be availed of to obtain relief from agreements so entered into, the case at bar is entirely barren of any proof that the plaintiff's testator used any unfair means in order to bring about the ratification which they freely made. We are of opinion, therefore, that the referee was correct in the judgment rendered so far as presented on this appeal, and it should be affirmed, with costs to the plaintiff. Barrett, Rumsey, O'Brien and Ingraham, JJ., concurred. John W. Queen and Thomas F. Donnelly, as Receivers of the Weaver Cycle Material Company. Appellants, v. Joseph A. Weaver, Respondent.- Judgment reversed, new trialordered, costs to appellants to abide event.Appeal from a judgment entered after a trial at Special Term. VAN BRUNT, P. J.: The plaintiffs in this action, as receivers of the Weaver Cycle Material Company, brought this action to set aside a bill of sale made by said company to the defendant, and also an assignment of certain book accounts, the consideration of the bill of sale being money which had theretofore been loaned by the defendant to the company, and the consideration for the assignment being the contingent liability of the defendant as indorser of the notes of the company. The ground upon which the plaintiffs proceeded was that these transfers were made by the company either when it was insolvent or in contemplation of insolvency. Upon the argument of this appeal considerable stress was laid upon the question as to whether the laws of New York in respect to the transfer of property by corporations, or the laws of New Jersey, applied to the transfers above mentioned. It seems to us that it is immaterial, in view of the facts developed upon the trial of this action, whether we apply the laws of the State of New York or the laws of the State of New Jersey to these transfers. They were clearly made in contemplation of insol App. Div.] FIRST DEPARTMENT, MARCH TERM, 1899. vency, and consequently are void as against The People of the State of New York ex rel. torneys, in respect to the proceedings in a Harry B. Hollins and Others, Partners Doing Appeal from a judgment entered upon a The form of the letter which is claimed to be a delivery order, was not the point upon which the decision turned, as an examination of that case would show. And even if it were, as far as the legal aspects of the case are concerned, the facts remain precisely the same as they were with the exception that there was affirmative evidence that the letter from C. Green's Son & Co. to the defendants was not a delivery order in the usual form in use among merchants; there being no evidence whatever in the present case upon that subject, consequently, there is nothing to indicate to the court that it was such delivery order. The further point that there is no evidence now contained in the record that the defendants had no knowledge or notice that Hollins & Co. would take any action relying upon this letter in no way makes any material difference, because in order to create an estoppel the evidence must establish the facts upon We think the which such estoppel rests. judgment appealed from should be affirmed, with costs, upon the opinion on the previous appeal. Barrett. Rumsey and Patterson, JJ., concurred; Ingraham, J., dissented. Henry H. Lyman, as State Commissioner of Excise of the State of New York, Appellant, v. The True Friends Social and Literary Circle, Defendant, and Fidelity and Deposit Company of Maryland, Respondent.- Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.- Appeal in this action from an order denying plaintiff's motion for a retaxation of costs. PER CURIAM: The question presented on the appeal from the order in this action is the same as the question presented and determined in Lyman v. Young Men's Cosmopol itan Club (ante, p. 220), and for the reasons there stated the order must be reversed and a new taxation directed before the clerk, with leave to either party to use upon said new taxation such further affidavits or papers as may be necessary and proper. The order should be reversed, with ten dollars costs and disbursements, and the motion Presentgranted, with ten dollars costs. 38b 629 a165a534 |