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the mortgage of $4,500, taken in part to secure the two sums of $3,000 and $1,000, in which the petitioners were interested. Upon that accounting the executors were charged with the whole amount of the inventory, and with the increase thereof, and they were credited by loss on the inventory, by expenses and legacies paid, and by $6,000 invested in these two mortgages; and it appears in the decree that the $6,000 included the trust funds in which these petitioners are interested. That decree, which has never been impeached or reversed, finally settled and allowed the accounts thus presented. So long as it remains in force, none of the parties thereto can object that the $11,000 was not properly paid for the real estate in New Jersey; that the two mortgages, amounting to $6,000, were not properly taken; or that the mortgage for $4,500 did not represent the two trust funds in which the petitioners claim an interest, (Code, Š 2742; In re Tilden, 98 N. Y. 434; In re Hawley, 100 N. Y. 206; S. C. 3 N. E. Rep. 68.
We are therefore of opinion, upon both grounds, that the decision of the surrogate was right, and that the judgment of the general term should be affirmed, with costs.
(All concur, except FINCH, J., not voting.)
BLAKE V. GRISWOLD.
(Court of Appeals of New York. December 14, 1886.) APPEAL-REARGUMENT—PLAINTIFF DEAD WHEN CASE ARGUED AND DECIDED.
An affidavit that, when an appeal was argued and decided, the plaintiff was dead, furnishes no ground for reargument. Motion for reargument. See ante, 434. Wm. C. Holbrook, for appellant. A. Pond, for respondent.
FINCH, J. This is a motion for a reargument. So far as our conclusions are criticised, nothing more need be said. The suggestions made are not at all new or outside of the consideration already given to the case. But an affidavit is presented showing that, when the appeal was argued and decided, the plaintiff was dead. The fact seems to have been suspected by, though not certainly known to, some of the counsel, but, at least, was not disclosed to the court. It will necessarily furnish a ground for some motion to be made in the case, but certainly furnishes none for a reargument. Until steps are taken for a proper substitution, the questions thence arising and now suggested are not before us, and the motion made is not in order. If we might treat those questions as presented informally, by the consent to a substitution contained in the plaintiff's brief, we could only do so by assuming that the person who claims in a letter to be administrator is such, and then disposing of the question of abatement raised upon the printed arguments without hearing counsel orally. We prefer that the questions involved should be raised in some regular and orderly manner, not likely to lead to further complications.
The motion should be denied.
(All concur.) (103 N. Y. 621) In re Judicial Settlement of Accounts of JONES and another, Ex’rs, etc.
(Court of Appeals of New York. Deceni ber 17, 1886.) EXECUTORS AND ADMINISTRATORS-WILL-GIFT OF NET PROFITS OF BUSINESS — DEDUCT
ING LOSSES_REPLACING WORN-OUT ARTICLES-REPAIRS.
Where, by his will, a testator directs his executors to carry on his business, ani, after deducting necessary expenses of conducting the business, to pay the net profits thereof to the beneficiaries named in the will, losses occurring on credits authorized to be made, expenses for replacing appliances used in the business which had worn out, and for horses which had died, and for repairs, were properly charged against the income of the business, and deducted from the amount paid the bene
ficiaries. Luther R. Marsh, for appellant. Martin J. Keogh, for respondent.
MILLER, J. The questions in this case arose on the final accounting of the testator's executors before the surrogate of Westchester county, and affect the construction to be placed upon portions of his will. The testator, before his death, was extensively engaged in the business of brewing ale and beer in the city of New York and vicinity, and by his will authorized and empowered his executors to continue his business for such time after his decease as they should think most advantageous to his estate, and he gave directions as to the management thereof, and the distribution of the profits arising from the same. He then made provision for the division of the whole of his estate into five equal shares, and disposed of them, substantially alike, by separate provisions in regard thereto, one of which is as follows: "I give, devise, and bequeath to Wilson G. Hunt, Martin Blydenburgh, Alexander Thayer, and · John J. Jones, executors of and trustees under this, my will, one equal fifth part of all my estate, real and personal, after payment of debts and funeral expenses as aforesaid, to have and hold the same, to them, the survivors and survivor of them, for and during the life of my sister Margaret Jones, in trust, nevertheless, to take possession of the real estate, keep the same in proper and suitable repair, keep the buildings thereon well insured, and to let or lease the same from time to time, and for such term of time, within the life-time of my said sister Margaret, as to them may seem best, and for the best rent that can be obtained therefor; to keep the personal estate safely and securely invested; and to collect the rents and profits of the real estate, the interest, dividends, and income of the personal estate, and, after paying the taxes and assessments, expenses of repairs and insurance, and all other legal and necessary charges and expenses, pay over the residue or net proceeds of said one-fifth part of my estate, so given to them in trust as last aforesaid, to my said sister Margaret, semi-annually, during her life.”
Under the provisions of the will, the executors, for a number of years, continued to carry on the business in accordance therewith. They sold the beer manufactured to purchasers on credit, as they had authority to do by the will, and a considerable amount of the credits created became uncollectible, and were lost to the estate. In the account filed by the executors these losses were charged against the income of the life-tenants, and deducted from the
Various appliances and articles which had been worn out in the conduct of the business, as well as horses which had died, were replaced by the executors, and the amount paid therefor charged against the life-tenants. Certain items for repairs were also charged against the life-tenants. All of the charges enumerated were allowed by the surrogate upon the accounting. These allowances present the question whether, under the will, they were proper charges against the income, and whether the executors have complied with the intention of the testator in reference thereto.
The testator, after vesting authority in his executors to hold in trust his real estate for the purpose named, and for collecting the rents and profits of the real estate, the interest, dividends, and income of the personal estate, and the payment of all legal charges and expenses, provides for the payment of the résidue or net proceeds as directed in the clause cited. By the terms “residue or net proceeds,” the testator evidently intended to dispose of such portion of the income as should remain after making proper and legitimate deductions for expenses and losses incurred in the management of the estate, and in the conduct of the business which was intrusted to their charge. Any money, therefore, which might be paid out in the course of the business, which was essential to carry it on, would be a necessary and proper charge
against the income and profits in determining what amount of the residue or net proceeds remains for distribution among the legatees. It would be very different to draw a dividing line by which it could be determined that a certain portion of the expenses incurred and disbursements made in the transaction of the business should be made a charge against the capital employed, and another portion against the profits or income. While a case might arise where a large expenditure, as, for instance, the erection of additional buildings, might be such an improvement of the real estate as to become an addition to the capital employed, yet any ordinary expenditures for repairs or improvements would not be embraced within any such rule. So, also, in reference to the wearing out, loss of, or depreciation of personal property, it cannot well be claimed that moneys expended to replace the same should not be deducted from the income received or profits realized. It was not necessary, we think, that the testator should have expressed in his will, in more specific terms, what items should be deducted, and he evidently meant, by the language employed, to include all losses and all expenses which were necessarily incurred in the management of the estate and the conduct of the business,
It can hardly be supposed that the testator intended that a division should be made of profits realized from the business, without deducting expenses and losses. Such a disposition of the income received would not constitute a division of the “residue,” as the amount would be greater than what actually remained. There would, in fact, be no such profits or balance on hand to be divided. The expenditure would have been made without any provision for its payment or reimbursement, and the value of the investment in the business very seriously impaired. The effect of charging any of the expenses which related to the business upon the principal of the estate would be a serious impairment of the capital employed in the business, which might, in the end, absorb the same, and thus destroy all income arising therefrom.
It is no answer to this view of the subject to say that, under the will, the business is only to be conducted so long as, in the opinion of the executors, it shall be to the advantage of the estate to carry it on, as, clearly, it could never have been intended that the conduct of the business should deplete the estate by dividing its capital to make good the expenses and losses referred to. Nor can it well be said that the losses were to be apportioned between principal and income, as it might be determined; and it is nowhere manifest that the testator's intention was that the devisees should not only receive the income, but a portion of the principal. It would require a close calculation to determine what apportionment should be made as to a portion of the losses incurred, and it is not fairly to be inferred that the testator intended that any such degree of exactitude should be required.
The provision under the will authorizing the executors to discontinue the business when it was no longer advantageous to continue it, bears strong indication of the intention of the testator that, when the body of the estate fails to yield a sufficient income, after making proper deductions, then the occasion arrived, as mentioned in the will, when it became the duty of the executors to discontinue the business.
The order of the general term affirming the decree of the surrogate should be affirmed, with costs.
(All concur.) (103 N. Y. 617)
ANDERSON, Ex'r, etc., v. GOLDSMIDT, Substituted, etc.
(Court of Appeals of New York. December 17, 1886.) LIFE INSURANCE-POLICY-ASSIGNMENT BY MARRIED WOMAN - CONSENT OF HUSBAND
CONTINGENT INTEREST OF CHILDREN-LAWS N. Y. 1879, Ch. 248.
Under chapter 248, Laws N. Y. 1879, providing that a married woman may assign a policy of insurance issued in her favor on the life of her husband with the husband's written consent, the husband joining with the wife in the execution of an
assignment is a sufficient consent thereto, and the validity of the assignment cannot be objected to, after the maturity of the policy, because, at the time such assignment was made, the assignor's children had a contingent interest in the policy which would become vested in the event of her death before the policy matured, as that
interest is defeated by her surviving until the maturity of the policy. James D. Bell, for appellant, Goldsmidt, substituted, etc. C. L. Lyon, for respondent, Anderson, Ex'r, etc.
EARL, J. On the thirty-first of May, 1870, the Germania Life Insurance Company issued to Barbara Goldsmidt an endowment policy upon the life of her husband, Joseph Goldsmidt, for $1,000, payable May 31, 1885, or within 60 days after due notice and proof of his death, should he die before that time. The policy, among other things, provided that, “in case of the death of the said Barbara Goldsmidt before the decease of the said Joseph Goldsmidt, the amount of said insurance shall be payable, after her death, to her children, for their use, or to their guardian, if under age; or, if she shall have no children, to her executors, administrators, and assigns.” On the fifteenth of February, 1881, Barbara Goldsmidt and Joseph, her husband, united in a written assignment, signed by them, of all their right, title, and interest in and to the policy to John Anderson. The policy matured on the thirty-first of May, 1885: and, John Anderson having died, the plaintiff, as his executor, began an as in to recover the amount of the policy from the insurance company, claiming under the assignment of the policy to his testator. An order was made substituting Barbara Goldsmidt as defendant, and the fund was deposited in court. She answered, setting up that the assignment was void, because she was a married woman, with children having an interest in the policy, and because the assignment was not executed in conformity with the statute. A judgment for the plaintiff having been affirmed by the general term, the defendant has appealed to this court, and attempts to sustain her appeal upon the two grounds mentioned in her answer.
It is provided, in chapter 248, Laws 1879, that “all policies of insurance heretofore or hereafter issued within the state of New York upon the lives of husbands for the benefit and use of their wives, in pursuance of the laws of the state, shall be, from and after the passage of this act, assignable by said wife, with the written consent of her husband, or, in case of her death, by her legal representatives, with the written consent of her husband, to any person whomsoever, or be surrendered to the company issuing such policy, with the written consent of the husband."
Objection is made that there was not in this case, within the meaning of this statute, the written consent of the husband to this assignment. But, by uniting with his wife in executing the assignment, he consented thereto in writing, and it would be taking a very narrow view of the statute, quite inadmissible, to hold that the purpose of the statute' was not fully answered by the execution of the assignment in that way.
The mere fact that she had children at the time she executed the assignment did not render her assignment void. The statute, whether there be children or not, gives the wife, with the consent of her husband, the absolute power to assign or surrender the policy. It is quite true that the children had a contingent interest in the policy, which would have become vested in case the wife had died before the policy matured. But here she survived that period, and hence the contingency did not arise which gave the children any interest whatever in the policy. At the time of this assignment there was no law and no public policy which prohibited the wife from assigning any interest which she had in the policy; and by the assignment which she executed plaintiff's testator became vested with the entire interest in the policy, and there is no defense to the plaintiff's claim to the amount due thereon. ;*". The judgment should be affirmed.
(103 N. Y. 690)
FITCH V. MCMAHON.
(Court of Appeals of New York. December 17, 1886.)
1. ARREST—CIVIL PROCESS-AFFIDAVITS IN SUPPORT-GROUNDS FOR.
In a replevin suit, on a motion for arrest of defendant on the ground of fraudulently concealing, removing, or disposing of the goods sought to be recovered, brought under Code Civil Proc. N. Y. 550, subd. 1, and on the ground of the sheriff's return on the writ of his being unable to find part of the goods, where plaintiff in his affidavit shows that his firm sold defendant goods of the value and kind alleged in the complaint, upon his representation that he was doing a good business, which the affiant alleges was untrue, "as appears by the affidavits annexed,” and such affidavits show that, three days after the last sale, defendant made a general assignment to one of his sons, with a preference to another son in England exceeding half the assets, and that his liabilities at the time were double his assets, it is a reasonable inference that defendant's representations to plaintiff, on purchasing the goods, were false, and such inference justifies the further inference, from the sheriff's return, of a fraudulent disposition or concealment of the goods,
and, on the whole, shows a good cause of arrest under the statute. 2. SAME-COMPLAINT IN REPLEVIN-EXTRINSIC FACT—SUPPLIED BY AFFIDAVITS.
In an action for replevin of goods alleged to have been bought by defendant from plaintiff under false representations as to his business, the allegation of the complaint, that defendant "wrongfully took” the goods for which the action is brought, does not necessarily imply a fraudulent taking, so as to set forth such an extrinsic fact as is required to give plaintiff the right to have defendant arrested under Code Civil Proc. N. Y. 8550, subd. 1; but, notwithstanding such a defect in the complaint, the motion for arrest will be granted, where the evidence afforded by the affidavits in support of the motion tends to show an extrinsic fact amounting to a fraud. This is an action in replevin, brought by Benjamin Fitch in the supreme court of Kings county, New York, to recover certain goods, chattels, and merchandise alleged, in the complaint, to have been "wrongfully taken” by the defendant, Patrick McMahon, from the plaintiff's firm and five other creditors, who, prior to the commencement of this action, had assigned their claims to the plaintiff, and for damages for the detention, injury, and depreciation of the value of said goods and chattels, and costs of suit. The complaint, as reamended, was objected to by defendant on the ground that the first cause of action, that of plaintiff's claim, derived from the firm of Benjamin Fitch & Co., was defective; the complaint alleging, as to this, (1) that said firm were the owners of the goods in Schedule A; (2) that defendant wrongfully took the goods in Schedule A "from the plaintiff's assignors;" (3) that, before the commencement of the action, “the said Benjamin Fitch & Co. duly assigned and transferred to the plaintiff herein their title to said goods,” etc.
The affidavit, requisition, and undertaking in replevin were duly made and issued. The sheriff, pursuant to the writ of replevin, seized a portion of the goods mentioned in the writ, and returned that the remaining portion of said property had been assigned, concealed, removed, or disposed of, so that he could not take or find the same. On this return, and affidavits of plaintiff and others that the case was within Code Civil Proc. N. Y.S 550, subd. 1, and that the ground of arrest was that the defendant had concealed, removed, or disposed of the goods which plaintiff sought to recover, Justice CULLEN, of the supreme court, Kings county, issued an order for defendant's arrest. Defendant then moved, before the special term, for an order vacating the order of arrest, on the papers upon which such order was granted, which motion was denied. The memorandum of Justice BARTLETT denying the motion to vacate was as follows: “Assuming that there are five distinct causes of action attempted to be set out in the complaint, the objections based on the affidavit of the plaintiff tend only to show that he has really no cause of action as far as the claim of his firm is concerned. The insufficiency of this cause of action, however, does not affect the validity of the order of arrest, though it may