USURY.

N. Y. COURT OF APPEALS.

Van Wyck et al., trustees, respts.,

Decided June 8, 1880.

only inference that can be drawn from the rest of the testimony is, that, while he had a bunch of flowers in one hand, he endeavored to get upon a passenger car going north v. Walters et al., impl'd, applts. at a rate of speed that made the attempt dangerous, and withal the steps of the car (as the plaintiff testified) had snow and ice upon them. The plaintiff slipped from the steps and fell upon the ground between the tracks. On rising he was knocked down, either by a freight car going by defendants and handed to the brokers

south or by its horses. It cannot be doubted that the place at which he testified that he was knocked down was one of danger.

Defendants applied to certain brokers for a loan on mortgage, agreeing to pay them 12 per cent. for procuring it. One B agreed tomake the loan, and left with one O, his attorney, checks signed in blank. O filled up the checks during B's absence, one of which was for the 12 per cent; this was endorsed

who transferred it to O, and the latter retained all but a small commission which he paid the brokers. No portion of this sum was received by B or the estate he represented. Held, That this did not constitute usury.

This action was brought for the foreclosure of a mortgage made by the appellants to plaintiffs. They interposed the defense of usury.

The plaintiff testified that the car from which he fell had stopped before he tried to get upon it. No other witness corroborated him in this. Although some of the witnesses who testified to the contrary It appeared that the appellants, were affected as to their credibility desiring to effect a loan, applied to by cross-examination, more than one certain brokers, who agreed to prowitness, not interested in the result, cure it for them upon being paid with minds more free than could the twelve per cent., which was to cover plaintiff's have been at the time of all charges, and referred them to B, the accident, and not shaken by one of the plaintiffs, who was an cross-examination, testified that the attorney. B agreed to make the loan, car had not stopped, but was mov- and one Ọ, an attorney, who had ing. Their evidence was corrobo- his office with B, was employed to All the parties rated by the testimony of other examine the title. credible witnesses in certain impor- interested met at this office April tant points. The witnesses referred 23, 1875, to close up the transaction. to as opposing plaintiff's testimony B filled up a check for $8,083.81, were called for the defendant, but which was applied to pay a prior that does not of itself require a sub-moatgage upon the property, and mission of the facts to the jury. Judgment affirmed.

Opinion by Sedgwick, J.; Freed

man, J., concurred.

also signed two other checks in blank, the amounts thereof not having then been determined, and delivered them to O, and was then called away on other business, and was not present during the remainder of the interview. After B left, O

filled in the two checks, one for $3,356.19, which the appellants received, and the other for $1,560, being twelve per cent. on the amount of the loan, which check was handed to one of the appellants, indorsed by him and delivered to the broker, who afterwards handed it to O, and received from the latter $260 for his commissions, the balance being retained by O.

No portion of this was ever received by B or the estate plaintiffs represented, and there was no evidence tha B or such estate ever derived any benefit or advantage from the alleged usury, or that B had any knowledge of it.

A. R. Dyett, for applts.

charter; but leased to another corporation the right to maintain and operate a railroad on a portion of its route, the tracks to be laid by the lessee, the lessor reserving the right to use the tracks so laid on a portion of such route upon paying a fixed compensation. Held, That this was not such a user of the franchise as was contemplated by the statute and did not preserve petitioner's corporate existence.

The petitioner was organized under the general railroad act on February 3, 1869. The Legislature passed acts in 1869 (chap. 718), 1870 (chap. 612), 1871 (chap. 622), and in 1872 (chap. 705), extending its route on and through various streets in the City of Brooklyn and conferring certain rights and privileges upon it.

It was authorized by § 2 of the Act of 1871, to use the tracks of any other company already laid on its route and if compensation could not be agreed upon it was to be ascertained in the manner provided by law in the case of lands taken for railroad purposes.

E. Ellery Anderson, for respts. Held, That the defense of usury could not be maintained. Usury must be established like any other defense, by proof of a satisfactory character, and a party cannot be made liable for the act of an agent intrusted with money to invest, who exacted a bonus for himself as a In July, 1877, the petitioner in condition of making the loan, with- stituted proceedings to acquire the out the knowledge or assent of his right to use the tracks of another principal. 66 N. Y., 344; 21 id, 219. company, on the ground that they Order of General Term, reversing were necessary for the purposes of judgment for defendants, affirmed, its incorporation. The petition and judgment absolute on stipulation for plaintiffs. Opinion by Miller, J. All concur.

therein contained no allegation that the company had begun the construction of its road in any form. It appeared on behalf of the other company that the petitioner had not begun its road within five years from the time of filing its certificate of incorporation, and had not spent ten per cent. of the amount of its capital stock as required by the statute, chap. 775, laws of 1867. And it was held that the petitioners

directing their payment at all, except as embraced in the general and unpreferred debts, the court cannot direct the assignee to pay the taxes in arrear.

In 1876 the assignor, L., executed a bond and mortgage to U. and T., as trustees, to secure a debt due them of $25,000. In 1879 L. made

corporate existence and powers had ceased, and that there was no corporation to acquire any right whatsoever. 72 N. Y. 245. The present proceedings were subsequently instituted to acquire the right to use the track of another company for the same purposes. It appeared that the petitioner leased to another a general assignment to D., in trust corporation the right to use, main- to pay certain preferred creditors in tain and operate a railroad upon a full, or rateably, and out of the surportion of its route, the tracks to plus to pay other creditors as far as be laid by the lessee, the lessee to it would go. The mortgage prohave all the rights and franchises vided that, upon failure to pay inof the lessor, the lessor reserving terest or taxes, the whole mortgage the right to use the tracks to be laid debt should, at the option of the upon a portion of such route upon mortgagee, become due. That emerpaying a fixed compensation there- gency arising, the action was comfor. The lessee built and operated a road upon the route described in

the lease.

menced to foreclose the mortgage, and a receiver was appointed pending the foreclosure. It appearing John H. Berger, for applt. that L. had failed to pay the taxes Wm. C. De Witt, for respt. in 1877, 8, 9, and the Croton Held, That this was not such a water tax, the mortgagees petiuser by the petitioner of the fran- tioned the court, reciting the forechise obtained by it as was contem- going facts, and that the premises. plated by the statute, and did not were an insufficient security for preserve its corporate existence; the debt, and asked for an order that the stock of the petitioner hav- that the assignee should pay and ing been increased to $300,000, an discharge the taxes in arrear. The expenditure by it of $30,000 within assignment contained no provision the time limited was necessary to preserve its existence.

giving any preference to taxes, or directing their payment at all, except as embraced in the general and unpreferred debts of the assignor. The prayer of the petition

Order of General Term, reversing order appointing commissioners, affirmed. Opinion by Rapallo, J. All concur. was denied, and the order entered thereon was affirmed at General

ASSIGNMENTS FOR CREDI- Term.

TORS.

N. Y. COURT OF APPEALS. In re assignment of Lewis.

Decided June 15, 1880.

Where an assignment for creditors contains no provision giving any preference to taxes, or

Strong & Cadwalader, for applts. John Clinton Gray, for respt. Held, no error; That the assignee derives all his power from the assignment, and the courts cannot direct him to pay a debt

of the assignor, or give it prefer- ment of alleged demands against ence, in violation of the terms of his estate. They claimed that the the assignment and the rights of money in question was received creditors under it. The assignee upon a sale of the real estate of is merely the representative of the S., for the payment of his debts. debtor, and must be governed by It appeared that after a sale, by the express terms of his trust. 6 order of the surrogate, the proceedN. Y., 519.

Order of General Term, affirming order denying motion, affirmed. Opinion by Finch, J. All con

cur.

SURROGATES. GUARDIAN.

ADMINISTRATORS.

N. Y. COURT OF APPEALS. Stilwell et al., adm'rs., applts., v. Swarthout et al., adm'rs., respts.

Decided June 1, 1880.

An order to show cause why authority to sell real estate should not be given to adminis trators was issued June 25, and made returnable March 2. Held, That being returnable in a shorter time than the statute prescribes, it showed a want of jurisdiction on its face,

which was fatal to its validity. A guardian's consent to act is essential in order to have his appearance for infants amount to

a waiver.

A failure to make report of sale to the surrogate, or to procure an order of confirmation prior to a conveyance to the purchasers, is a fatal defect.

ings were regarded as void and abandoned, and defendants procured certain mortgages to be foreclosed, and title was thus obtained in favor of the purchaser under the surrogate's order. The fund remaining after paying the mortgages was paid over to the administrators, and is the subject of this controversy.

The order to show cause why authority should not be given to sell was made January 25th, and returnable on the second day of March following. The statute requires that the surrogate shall make an order directing all persons interested to appear at a time and place to be specified, not less than six, nor more than ten weeks from the date of said order, to show cause, &c. 2 R. S., 101, § 5. John J. Van Allen, for applts. J. McGuire, for respts.

After a sale by administrators under a surroHeld, That the order was not in gate's order, the proceedings were abandoned, accordance with the statute; that and title obtained under foreclosure of the it went to the foundation of the mortgages on the premises, the fund accruing entire proceeding, and showed a being paid over to the administrators. In an

action to reach the fund, Held, That the want of jurisdiction on its face, administrators were not liable as such, as the was fatal to its validity.

fund was not under their control as repre

sentatives of the estate.

which

The defect was not merely an irregularity, but one of a jurisdictional character.

Plaintiffs in this action seek to reach a fund alleged to be in the In a proceeding to divest title hands of defendants as adminis- to real estate the statute must be trators of S., deceased, and to strictly pursued, and a substantial compel its application to the pay-departure from its requirement

Vol. 10.-No. 16*

renders the proceeding void. 42 it, proceedings might have been inBarb., 636. stituted before him to compel a reIt appeared that there were in- port of the administrators and the fant defendants in the proceedings distribution of the fund, and the before the surrogate, and that he payment of any lawful demand. made an order appointing a guar- Such being the case, the surrogate's dian to appear for them. There jurisdiction was exclusive, and the was no proof that such guardian fund being within his control, that consented to or did act, or even fact would be a bar to this action. that he had notice of his appoint- If, however, the fund was not a proment. The evidence showed that he acted as counsel for the claimant in the proceeding.

Held, That the guardian's consent to act was essential, in order to have his appearance for the infants amount to a waiver.

per subject for distribution by the surrogate as the avails of the sale of the real estate, the heirs at law could only be made liable in the manner prescribed by the statute, and upon its being made to appear that the deceased left no personal assets within this state to be administered upon, out of which the debt could be collected, or that the personal assets have been disposed of and appropriated towards the It appeared that no report of payment of the demand. 2 R. S., sale was made to the surrogate 452, 833; Laws 1859, chap. 110; by the administrators, and there 63 N. Y., 438. was no order confirming the report prior to the conveyance by them to the purchasers at the sale.

The rights of the infant defendants could not be waived by a failure to object to the order to show cause as erroneous. 4 Lans., 213; 22 Barb., 167.

Held, That this was a fatal defect, 13 Wend., 465; that this defect, and the others above referred to, are not cured by the provisions of chapter 171 of Laws of 1850, as amended by chapter 260 of Laws of 1869.

Also held, that defendants, the administrators, cannot be held liable as such, because the fund is not under their control as representatives of the estate.

Plaintiffs are not entitled to specific relief on the ground that the action is in rem for equitable relief, for the reason that their remedy at law had not been exhausted. Barb., 365; 5 id., 398, 413.

26

Judgment of General Term, affirming judgment dismissing complaint, affirmed.

In view of the failure to comply with the statute, the defendants were justified in abandoning the proceedings for the sale of the real estate, but, assuming that they were valid, as claimed, the fund Earl, J., in result. realized from the sale was under

the control and within the jurisdiction of the surrogate, and, to reach

Opinion by Miller, J. All concur;