(101 N. Y. 580)

In re Application of OTIS, Ex'x, etc.1

Filed March 16, 1886.

1. INSANE PERSONS-COMMITTEE OF LUNATIC-RENT OF PREMISES WHILE USED BY COMMITTEE A PREFERRED CLAIM.

Where the committee of a lunatic occupies premises held under a lease by the lunatic, and such occupation is to the advantage of the estate, as where it was necessary in order to carry on or close up the business of the lunatic, the rent accruing during such occupation would justly be regarded as a reasonable expense incurred by the committee, to be paid before the claims of general creditors.

2. SAME BUT NOT LIABLE, AS ASSIGNEE, FOR RENT PREVIOUSLY DUE ON THE LEASE.

But the committee of a lunatic does not become chargeable, as assignee of a lease held by the lunatic, by reason of his occupation of the premises after his appointment.

Appeal of Otis and others from an order of the general term of the supreme court in the First department, reversing an order of the court at special term, directing the committee of Oscar Strasburger, a lunatic, to pay $8,125 and interest, being one quarter's rent of certain premises in Broadway, New York city. The order of the special term was made June 22, 1885.

ANDREWS, J. The jurisdiction confided to the court over the persons and estates of lunatics carries with it, as a necessary incident, after inquisition found and the appointment of a committee, the power to direct the application of the estate of the lunatic to the payment of demands existing against it, and this relief may be granted on petition of the claimant. Executors of Brasher v. Van Cortlandt, 2 Johns. Ch. 244; In re Heller, 3 Paige, 200; People v. National Trust Co., 82 N. Y. 283. This jurisdiction, in its origin, was equitable, and is exercised upon equitable principles, and in accordance with the maxim that "equality is equity." The equitable rule has been embodied in the statute, in respect to the distribution of money, arising from the sale of the land of the lunatic, for the payment of debts, which declares that the proceeds shall be distributed ratably among all the creditors. 2 Rev. St. 54, § 15; Code Civil Proc. § 2364. There is no express statutory provision regulating the mode of distribution of the personal assets, but it cannot be doubted that, when the assets are insufficient to pay all the debts in full, the same rule of equality should be applied. In view of this principle, the relief sought by the petitioner was properly denied.

The lunacy of Strasburger did not discharge or affect his covenants in the lease. The rent accruing after the appointment of the committee became a charge upon his estate, and was a demand which the petitioners could present, and have adjusted in the ordinary course of administration. A claim for rent under a lease, whether accruing before or after the appointment of a committee, has no intrinsic preference over other debts of the lunatic. The lessor has his remedy by re-entry in case of

1Overruling 34 Hun, 542.

default in payment of the rent, or he may forego his right to terminate the term, and come in as a general creditor of the estate for the rent unpaid. There may be equitable reasons upon which the court, in a particular case, ought to give a preference for rent accruing after the appointment of the committee. If the leased premises are occupied by thecommittee, and such occupation is to the advantage of the estate, as where it was necessary in order to carry on or close up the business of the lunatic, the rent accruing during such occupation would justly be regarded as a reasonable expense incurred by the committee, to be paid before the claims of general creditors.

But we perceive no equitable principle upon which a demand for rent takes preference of other debts, in the absence of a special equity growing out of the circumstances of a particular case. It is claimed that the occupation of the premises for a time by the first committee was an acceptance of the lease by him, and that he thereby became liable as as-signee of the term, and that the present committee succeeded to his situation and responsibility. If this claim was well founded, it would be material only as bearing upon the general equity of the committee, to be protected against liability by charging the fund in his hands with therent before paying the general creditors. But we are referred to no authority which sustains the proposition that the committee of a lunaticbecomes chargeable, as assignee of a lease held by the lunatic, by reason of his occupation of the premises after his appointment. It is well settled that a receiver or an assignee in bankruptcy, or an assignee for thebenefit of creditors, if he elects to accept a lease belonging to the debtor or assignor, becomes, by such election, assignee of the lease, and personally liable on the covenant to pay rent, of which liability he can only discharge himself by an assignment or surrender. Copeland v. Stephens, 1 Barn. & A. 594; Thomas v. Pemberton, 7 Taunt. 206; Clark v. Hume, 1 Ryan & M. 207; Carter v. Warne, 4 Car. & P. 191; Martin v. Black, 9 Paige, 641; Journeay v. Brackley, 1 Hilt. 447; Lewis v. Burr, 8 Bosw..

140.

This doctrine proceeds on the ground that, on the election being made, the receiver or assignee becomes vested with the title to the leasehold interest, and a privity of estate is thereby created between the lessor and the receiver or assignee, by virtue of which the latter becomes liable on the covenants running with the land. But the committee of a lunatic takes no title to the real or personal estate of a lunatic. He is a mere bailiff, to take charge of the property of the lunatic, and to administer it subject to the direction of the court. His possession is the possession of the court. In re Heller, supra; Noe v. Gibson, 7 Paige, 513; Petrie v. Shoemaker, 24 Wend 85; Lane v. Schermerhorn, 1 Hill, 97. It follows, asa necessary consequence from the nature of his office, and the fact that the title to the lunatic's property is not divested by the appointment of the committee, that the occupation by the latter, under a lease to the lunatic, is in the character of servant, agent, or bailiff, and creates noprivity of estate between him and the lessor.

The facts in this case did not call upon the court to intervene for the

protection of the committee, nor do they furnish any ground for equitable preference of the claim of the petitioner. The lunatic's estate is largely insolvent; the committee has not in fact occupied the premises during any portion of e quarter for which rent is claimed; the petitioner was notified by the present committee, on his appointment, that he would not occupy the premises; the continuance of the lease was a disadvantage to the estate; and the remedy of the petitioner to oust the subtenant, and to regain possession of the premises, was complete. The lessor has a claim against the lunatic's estate upon which he can come in with the other creditors. It would be inequitable, under the circumstances, to give him a preference.

The order of the general term should be affirmed. (All concur, except RAPALLO, J., absent.)

(101 N. Y. 688)

WOOLLEY and another v. BALDWIN.1

Filed March 23, 1886.

COUNTIES-OFFICERS-ACTION AGAINST COUNTY TREASURER-COMPLAINT AGAINST COUNTY TREASURER FOR NOT FORECLOSING MORTGAGE HELD IN TRUST. A complaint against a county treasurer for not collecting two years' interest due on a mortgage turned over to him as such officer, and for not foreclosing it until 16 months afterwards, but containing no averment that he had any knowledge of the value of the property, or of the insolvency of the mortgagor, or that he was chargeable with negligence in not ascertaining such facts, or in omitting to foreclose, and not alleging the facts themselves, is insufficient, as it merely avers a failure to collect, which of itself creates no liability on the part of the defendant.

Appeal from order of general term, Second department, affirming order sustaining defendant's demurrer.

Horace Secor, Jr., for appellants.

John J. Armstrong, for respondent.

PER CURIAM. The appellants claim that the complaint shows gross negligence on the part of the defendant, as trustee, in not enforcing prompt payment of the interest, or else foreclosing the mortgage at once. The complaint shows that when the defendant came into office as county treasurer, in 1879, he received, as such, a bond and mortgage of $5,000, in which the plaintiffs, as infants, were interested to the extent of $3,775.90; that the interest thereon was in arrears from November 1, 1876; and that, although the property had greatly depreciated in value, and was worth less than the amount of the mortgage, and although the mortgagor was insolvent, the defendant collected no interest on the mortgage, and did not commence a foreclosure on the same until May, 1880. The complaint also alleged that the mortgage was due May 1, 1877; and, further, that upon the foreclosure sale the property was sold for $1,105, of which the plaintiffs received $454.74, leaving a balance of $4,435.67 due them. It contained no averment that the defendant

1Affirming 32 Hun, 464, mem.

had any knowledge as to the value of the property, or of the insolvency of the mortgagor.

The question, then, is whether the delay in commencing the foreclosure for 16 months after he came into office, when two years' interest was due thereon when he took his office, renders the defendant liable, without alleging in the complaint that he was chargeable with negligence in not ascertaining the value of the property, the insolvency of the mortgagor, and in omitting to foreclose the mortgage. Not alleging the facts, or any of them, renders the complaint defective in not showing on its face that the defendant was chargeable with a neglect of duty. As it stands, it does not charge negligence, but merely avers a failure to collect, which, of itself, is insufficient to create a liability on the part of the defendant, and makes out no cause of action.

Judgment affirmed, with leave to the plaintiff to amend, on payment of costs.

(All concur, except RAPALLO, J., absent.)

SUPREME COURT OF ILLINOIS.

(115 III. 347)

KEIGWIN and others v. DRAINAGE COM'Rs and others.
Filed November 14, 1885.

1. CORPORATION-DE FACTO ORGANIZATION NOT ASSAILABLE IN CHANCERY SO OF DRAINAGE DISTRICT.

A court of chancery has no jurisdiction to entertain a bill for the purpose of determining whether a corporation de facto was legally organized. This rule applies to a drainage district which it is alleged did not comply with the statutory requirements for organization. 1 Starr & C. St. c. 42.

2. DRAINAGE ASSESSMENT IRREGULARITIES NOT JURISDICTIONAL NO GROUND FOR INJUNCTION.

Irregularities in a drainage assessment which do not affect the jurisdiction of the tribunal imposing it, are not sufficient to warrant the interference of a court of equity, (except, semble, in case of fraud.) An illegality of assessment, resulting from the absence of any law, general or special, authorizing it, will be ground for an injunction. This may occur where there is no law on the subject authorizing such a tax or assessment, or it may happen where the property assessed is exempt from taxation, or it may occur where the taxing tribunal has exceeded the limits of its power. In this last case the tax will be bad for the excess only. Irregularities alleged in this case are held not suf ficient to sustain a bill for an injunction.

W. W. Rathbun petitioned for rehearing and reversal upon the following grounds:

The drainage commissioners had not jurisdiction to levy an assessment. Without a sufficient petition for organization, persons can acquire no authority to act as drainage commissioners. Sharp v. Speir, 4 Hill, 88; Dean v. City of Madison, 9 Wis. 402. The petition must comply with all requisites of the statute (Sess. Laws Ill. 1879, p. 120, § 2; Id. 143, § 3) to confer authority to act. Young v. Stearns, 91 Ill. 222. The bill alleges various jurisdictional insufficiencies in the petition, which are admitted upon the record. Gross fraud and intentional wrong on the part of the commissioners were also charged by the bill and admitted upon the record.

Such districts are not corporations, nor quasi corporations, nor de facto corporations. The power is vested in the commissioners as corporations; and officials constituting a corporation are controllable by injunction. People v. Whitcomb, 55 Ill. 172.

The validity of the organization of the district may be inquired into by bill. People v. Whitcomb, 55 Ill. 172; Holden v. People, 90 Ill. 434; Cumberland Co. v. Webster, 53 Ill. 141; Commissioners of Highways v. Durham, 43 Ill. 86; Green v. Green, 34 Ill. 320.

Injunction is the proper remedy, and not quo warranto or certiorari. Story, Eq. Jur. §§ 64k, 700, 928; People v. Whitcomb, 55 Ill. 172.

An appeal from the action of the commissioners would have been ineffectual. Labadie v. Hewitt, 85 Ill. 341.

The petition was denied.

MULKEY, J. The appellants, Horace H. Keigwin and others, filed a bill in the circuit court of Lee county against the drainage commissioners of Hamilton township, in said county, to enjoin the collection of an assessment levied against the lands of appellants lying in Union