BANKING. PREFERENCE. N. Y. COURT OF APPEALS. The People v. The City Bank of Rochester. In re petition of the Utica City Nat'l B'k. Decided Oct. 26, 1883. The Utica Bank and the Rochester Bank sent to each other for collection such commercial paper as was payable in their vicinity upon an agreement that each should charge the other with paper sent and credit the other with paper collected, and that at the end of each week a balance should be struck on the whole collection business of the week, and the bank found indebted should pay such balance to the other. No separation of the funds collected was made or intended. A receiver of the Rochester Bank having been appointed, Held, That petitioner failed to establish any lien or impress any trust on any specific money of the debtor bank which would enable it to obtain payment in preference to other creditors. Affirming S. C., 17 W. Dig., 185. This proceeding was instituted to compel the receiver of the Rochester City Bank to pay over to the Utica City National Bank, the petitioner, moneys collected by the former for the latter. The petitioner and the City Bank of Rochester acted as collecting agents for each other in the cities in which they were respectively located. The petition avers, on information and belief, that the petitioner, prior to the failure of the City Bank of Rochester, had sent to it commercial paper, which it had collected, and entered the amount so collected as a fund belonging to the petitioner, separate and apart from other funds, and that this fund remained so set apart when the re ceiver was appointed. The opposing papers show that the course of dealing and arrangement were that each of the two banks should keep a running account with the other, crediting it with the avails of collections made for it, and charging it with paper sent to it for collection; that a balance was struck once a week, and the bank found indebted to the other remitted to it by draft on New York the balance due, less commissions, and that the avails of these collections were never kept separate from the other funds of the bank, or distinguished therefrom in any way. A. M. Beardsley, for applt. Held, That upon the facts proved the petitioner failed to establish any lien, or impress any trust on any specific money of the debtor bank which would enable it to follow any of its property or funds which went into the hands of the receiver and obtain payment in preference to other creditors. Each sum as it came in became the property of the collecting bank, which simply became liable to account for it to the other on the next settling day. Order of General Term, affirming order denying application, affirmed. Opinion by Rapallo, J. All con cur. CONSTITUTIONAL LAW. N. Y. COURT OF APPEALS. The Trustees of the Firemen's Benevolent Fund, Roome, applt. Decided Oct. 2, 1883. respt., v. | prohibits the giving of "the money of the state * * * to or in aid of any association, corporation or private undertaking." Plaintiff's charter and the acts amendatory thereof are not violative of §§ 18 and 20 of Art. 3 or 10 of Art. 9 of the Constitution. Section 7 of said charter was not repealed by the acts providing for the taxation of corporations. com Held, Untenable; that the money is not given, but directed to be paid to discharge a moral obligation of the state; the money is appropriated to a public use, and plaintiff is merely a subordinate governmental agency employed by the state to fulfil its obligations. As to whether the money so directed to be paid is money of the state, quære. An obligation of the state may be recognized and discharged by it by taking money from its treasury and giving it to a corporation for the relief of those to whom the obligation is due. This was a case submitted under $1279 of the Code of Civil Procedure. The question at issue was whether defendant, who was the agent in the city of New York of certain foreign insurance panies, was liable to pay to plaintiff two per cent. on the gross receipts received by him as agent during the year 1881 for premiums for insurance by said companies on property in the city of New York, as required by plaintiff's charter and the acts amending the same. Laws 1866, Chap. 633, § 7, as amended by Chap. 962, Laws of 1867; Chap. 297, Laws of 1870; Chap. 64, Laws of 1877, and Chap. 89, Laws of 1879. It was claimed that these acts were violative of $18 of article 3 of the Constitution, Held, Untenable; as the perwhich prohibits the passage of a centage required to be paid by the "private or local bill *foreign companies is in the nature granting to any private corpora- of a license fee or condition. tion * * * any exclusive privilege, immunity or franchise what ever." * * Joseph H. Choate, for applt. James C. Carter, for respt. Held, Untenable; that no franchise, immunity or exclusive privilege was granted by said statutes. It was also claimed that plaintiff's charter and the acts amend ing it were violative of § 10 of article 9 of the Constitution, which Vol. 18.-No. 2a. It was also claimed that plaintiff's charter was violative of the provision of the Constitution which requires that an act which "imposes, continues or revives a tax shall distinctly state the tax and the object to which it is to be applied." It was also claimed that as Chapter 89, Laws of 1879, amending plaintiff's charter, is not certified to have been passed in either house of the Legislature when three fifths of its members were present, as required by § 21 of article 3 of the Constitution on the passage of an act "which makes, continues or revives any appropriation of public or trust money," the present appropriation was invalid. Held, Untenable; as the appro- | right. Code Civ. Proc., § 1342, and see § 190 thereof and note. priation was made by the amendatory act of 1877, Chap. 64, which has the proper certificate and simply makes plaintiff the recipient, and hence was not a three-fifths bill. The act providing for the taxation of certain corporations, Chap. 542, Laws of 1880, as amended by Chap. 361, Laws of 1881, did not repeal the provision in question of The matter is still pending before the County Judge, who may yet dismiss the proceeding upon a final hearing. Appeal dismissed, with $10 costs. Opinion by Pratt, J.; Barnard, P. J., and Dykman, J., concur. MORTGAGE. LEASE. plaintiff's charter; that if said pro- N. Y. SUPREME COURT. GENERAL vision imposes a tax it is one of a special and peculiar character and not a general one for state purposes. Judgment of General Term for plaintiff on case submitted affirmed. Opinion by Finch, J. All con cur. APPEAL. ORDER. N. Y. SUPREME COURT. GENERAL An order overruling objections filed against Appeal from an order of County Court, overruling objections filed by the judgment creditor against the petition of an imprisoned judgment debtor for his discharge under Art. 1, Tit. I., Ch. 17, Code Civ. Proc. TERM. FIRST DEPT. Charles M. Wunderlich et al., respts., v. William Wipfler et al., applls. Decided Oct. 26, 1883. When it is the custom of a landlord to grant new leases to tenants in possession under former leases which do not contain covenants of renewal, a new lease so granted will be considered in equity a renewal of the former one, and will be subject to the lien of a mortgage on such former lease. Appeal from judgment of Special Term, adjudging foreclosure, etc. The defendants W. in 1872 held a lease of certain premises in the city of New York from the late John Jacob Astor, on which they gave a mortgage to one R., who assigned the same to plaintiffs. This lease contained a covenant that the lessee should be entitled to remove the building which had been erected on the premises before the expiration of the term, S. B. Thomas and H. C. Place, but it contained no covenant of for applt. Robert Johnstone, for respt. Held, That the order appealed from did not affect a substantial renewal. It custom had been continued by the trustees to whom he had devised his property, and that, at the termination of the lease to the defendants W., in accordance with such custom, the said trustees had granted them a new lease. This action was brought by plaintiffs to foreclose their mortgage as against this new lease. Jacob A. Gross, for applts. August C. Hassey, for respts. Held, That since it appeared that the lease by the trustees of Astor was given in accordance with their custom, because the lessees were owners of the former lease and in possession of the premises thereunder and owners of the building standing thereon, with a right to remove the same, which rights were expressly subject to the mortgage, such new lease would be considered in equity a renewal of the old one, and would be subject to the lien of the mortgage. 2 Johns. Ch., 30; 1 Paige, 48; 2 Edw. Ch., 47; 5 Paige, 268; 2 Sandf. Ch., 131; 61 N. Y., 123. Judgment affirmed. Opinion by Davis, P. J.; Brady and Daniels, JJ., concur. EXECUTORS. N. Y. COURT OF APPEALS. Earle, respt., v. Earle, impl'd, applt. Decided Oct. 2, 1883. Where the trusts vested in the executors are not personal and do not involve the exercise of discretion, but are attached simply to the office, an executor whose letters have been revoked is not liable for future losses to the estate arising from the negligence of his co-executors. Where the executors entrust the management of the estate to a son of their testator they are responsible for his conduct and liable for any losses resulting from his improper or negligent management. The widow, who was one of the executors, was entitled to the income of one-third of the estate for life. The principal had never been in the hands of her co-executor. Held, That as the fund had been lost through the negligence of both, she should contribute the income toward her share of the loss. This action was brought by a legatee under the will of E., to compel W. and M., executors and trustees under said will, to account, and to charge them with certain funds it was alleged had been lost through their negligence. The will of E. appointed W. and M., and one D., his executors, and directed them to invest one-third of his estate and pay the income thereof to his widow so long as she should live, the residue of the estate to be divided equally among his seven children, the share of each to be invested by the executors and the income to be applied to the support, education and maintenance of the child to whom the principal belonged, a portion of the principal to be paid on the arrival of the child at majority, a portion when he or she arrived at the age of thirty, and the balance when he or she was forty. The third of the estate set apart for the widow was, on her death, directed to be divided in the same manner as the portion of the estate left by the testator to his children, and to be held upon the same trusts. E. died in May, 1859. A final acCounting was had by the executors in April, 1861, and a decree made finally settling the accounts and fixing the amounts in the hands of the executors. After this, D., one of the executors, moved to another state, and, having refused to give security, with his consent his letters testamentary were revoked, and he ceased to act as executor or trustee. The funds of the estate were left in the hands of the other executors. This action was subsequently brought. The court found, among other things, that when D. was removed from the office of executor none of the funds of the estate had been lost and all of the investments made by him had turned out well. Samuel Hand, for applt. Richard L. Sweezey and Carlisle Norwood, Jr., for respt. Held, That the trusts vested in the executors by the will not being personal or involving the exercise of discretion, but being attached simply to the office, when D. was removed from the office of executor he was relieved from liability for the future losses to the estate arising from the negligence of his co-executors, and was not a necessary party to this action. The executors, by qualifying and accepting the office, accepted the trusts conferred by the will. It appeared that the two remaining executors, the defendants here. in, had entrusted the management of the estate to a son of their tes tator. or negligent management by him of the estate. Although an executor or trustee is not liable for acts of a co-executor or co-trustee which he could not prevent or guard against, or which gave him no occasion for apprehending danger to the estate, yet as to his approval of, or acquiescence in, the acts of his associates, he is bound to exercise due caution and vigilance. The testator's widow, who was also one of the executors and trustees against whom this action was brought, and who was held jointly liable with the other defendant, was entitled to the income of onethird of the estate during life. The principal of this one-third had never been in the hands of the widow's co-executor. The court treated it as if in his hands, and directed him to pay to the U. S. Trust Co. so much thereof as the legatees who recovered judgment were entitled to have paid to them on the death of the widow, the interest thereon to be paid to her during her life. Held, That the fund having been lost through the negligence of both the executors the widow was not entitled to recover of her associate but should contribute the income toward her share of the loss. An interlocutory judgment was rendered herein which held the defendants, as executors and trustees, jointly liable for the losses Held, That they must be consid- occasioned by bad investments ered as having adopted him as made by a son of the testator, with their agent, and they are respon- their acquiescence. A referee was sible for his conduct and liable for appointed to take the accounts. any losses resulting from improper | Upon the hearing before him, W., |