SCOTT, J. Appellant is sued as indorser upon a promissory note which by its terms was payable at the Hudson Trust Company. The complaint alleges that, when the said note by its terms became due and payable, it was duly presented for payment, according to the tenor thereof, and payment was duly demanded, which was refused, and thereupon said note was duly protested for such nonpayment. It is further alleged: "That thereafter notice of the presentment, demand, nonpayment, and protest of said note as aforesaid was not given to the defendants within the time required to charge the indorser thereof, to wit, the defendant, George Hoffman, but that, notwithstanding the omission to give such notice, the said defendant Hoffman, with knowledge of such omission, did thereafter make payments on account of said note, and promised the then holder thereof to pay the balance remaining due after crediting such payments, and that by reason thereof the said defendant, Hoffman, waived the notice of dishonor and the omission to give same." All these allegations are denied, and the plaintiff put to his proof. It is clear that the complaint alleges due presentment, and that the only waiver alleged is of due notice of dishonor. This does not include waiver of due presentment. It was therefore incumbent upon plaintiff to prove due presentment, which means that he should have proven that on the date on which the note fell due it was presented for payment at the Hudson Trust Company, where by its tenor it was payable. Section 133, Negotiable Instruments Law. This proof the plaintiff did not make, and thereby failed to prove the case alleged in the complaint. It must therefore be assumed, for the purposes of this appeal, that due presentment and demand was not made, and that the indorser was thereby released, as well as by the subsequent failure to give him due notice of dishonor. The evidence at most might have justified a finding that the appellant had waived the omission to give him due notice of dishonor, and this is all that the complaint alleges that he waived. It is not alleged that he waived due prescntment and demand, nor does it appear that he knew that there had been any omission in this regard. He could not be held to have waived that of which he was ignorant. The judgment and determination appealed from must be reversed, and a new trial granted, with costs to the appellant in all courts to abide the event. All concur. In re TRACY. (Supreme Court, Appellate Division, First Department. May 3, 1912.) ATTORNEY AND CLIENT (8 58*)-MISCONDUCT OF ATTORNEY-FAILURE TO AC COUNT. Where an attorrey fails to properly account for money collected by him for a client, and he is 71 years of age and was seriously sick while the money was unpaid, and payment was made after commencement of the proceedings, a severe censure only will be inflicted. [Ed. Note. For other cases, see Attorney and Client, Cent. Dig. §§ 7678; Dec. Dig. § 58.*] *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes In the matter of charges against Rollin Tracy, an attorney, of professional misconduct. Judgment of censure. See, also, 133 N. Y. Supp. 1147. Argued before INGRAHAM, P. J., and MCLAUGHLIN, CLARKE, SCOTT, and DOWLING, JJ. Paul M. Herzog, of New York City, for petitioner. PER CURIAM. The respondent in this case was charged with having received, on account of two clients, several small sums of money, which he failed to pay to them and were not paid until after the commencement of these proceedings. The respondent did not take the stand on his own behalf, and the charges against him were proved by undisputed testimony. The respondent is 71 years of age, having been admitted to practice in 1863, and during a large portion of the time that this money was unpaid was seriously sick. The official referee, while finding that the respondent was guilty of the charge, has recommended that, in view of the extenuating circumstances detailed in his report, the respondent be treated with clemency. While we cannot too strongly condemn the conduct of the respondent, and severely censure him for his failure to properly account to his clients for the money that he had collected, we adopt the suggestion of the referee, and with this censure take no further proceedings. ANDERSON et al. v. NEW YORK & H. R. CO. et al. (Supreme Court, Appellate Division, First Department. May 3, 1912.) ATTORNEY AND CLIENT (§ 126*)—SETTLEMENT BY ATTORNEY. Where attorneys of record received money from their client under an agreement to apply it primarily to the costs and disbursements, the Supreme Court, under its power to compel attorneys to deal fairly with clients, should have compelled such attorneys to refund to the clients any surplus of the amount advanced as agreed. [Ed. Note.-For other cases, see Attorney and Client, Cent. Dig. §§ 264273; Dec. Dig. § 126.*] Appeal from Special Term, New York County. Action by William S. Anderson and another against the New York & Harlem Railroad Company, James C. Bushby, and others. From an order denying a motion to require defendant Bushby to pay back certain moneys to plaintiffs, they appeal. Reversed, and motion granted. See, also, 130 App. Div. 904, 115 N. Y. Supp. 1110; 136 App. Div. 939, 121 N. Y. Supp. 1124. Argued before INGRAHAM, P. J., and MCLAUGHLIN, CLARKE, SCOTT, and DOWLING, JJ. H. A. Andrewes, of New York City, for appellants. *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes CLARKE, J. The plaintiffs were formerly the owners of the premises 702 and 706 Park avenue, in the borough of Manhattan. This action was brought upon an agreement for the reservation of the damages caused by the viaduct of the defendant railroad companies in front of said premises. Plaintiffs retained as their attorneys in said action the firm of Bushby & Berkeley, composed of James C. Bushby and L. M. Berkeley. The action was commenced in April, 1906, by the said firm as attorneys of record. Their compensation under the contract of retainer was contingent upon ultimate success. On April 22, 1907, plaintiffs paid said Berkeley as the representative of said firm of Bushby & Berkeley the sum of $500 on account; it being agreed that the said sum should be applied primarily for the costs and disbursements of the litigation, and that the surplus, if any, should be applied on account of attorneys' services in said case, and that the balance of the attorneys' compensation should be contingent on ultimate success. Berkeley on April 23, 1907, remitted $75 of the said sum of $500 to said Bushby. Thereafter the case was tried, and resulted in a judgment for the plaintiffs. Defendants appealed, and the Appellate Division reversed the judgment and ordered a new trial, on which trial the complaint was dismissed with $1,295.83 costs against the plaintiffs. This judgment was affirmed by the Appellate Division. with $98.72 more costs, which judgment was affirmed by the Court of Appeals with $146.59 costs. These costs, together with the disbursements for expert witnesses, for stenographer's minutes, printing, and other expenditures, largely exceeded the $500 advanced under the agreement as aforesaid. After the retainer the firm of Bushby & Berkeley was dissolved, but they remained as attorneys of record in this case. Berkeley has accounted to the plaintiffs for the $425 retained by him out of the said $500, but Bushby has wholly refused, although requested, to pay back said sum of $75 received by him, or to apply it on account of said costs and disbursements. The order appealed from was made upon a motion by the plaintiffs to compel the respondent Bushby to repay said moneys so received by him. The Special Term having denied the motion, this appeal is taken. The moneys having been received by the attorneys of record for the specific purpose set forth, and there being no denial of the material facts alleged, we see no reason why the power of the Supreme Court over its attorneys at law to compel them to deal fairly with their clients should not have been exercised. If there had been a dispute as to material facts, the court could have sent the matter to a reference or have taken proof itself. As there was none, the motion should have been granted. The order appealed from should be reversed, with $10 costs and disbursements, and the motion granted, with $10 costs. All concur. WILLIAMS v. BILLINGTON et al. (Supreme Court, Appellate Division, First Department. May 3, 1912.) CORPORATIONS (§ 473*)-SALE OF BONDS-RESCISSION-REMEDY AT LAW. Where plaintiff, desiring to convert into cash stock owned by him, was fraudulently induced by B. to agree to transfer it, B. to organize the M. Company as a domestic corporation to take over the stock in exchange for its bonds, which were to be a first lien on all its assets, and to be issued to plaintiff, and B. filed a certificate of incorporation of said company, and its bonds were issued in exchange for plaintiff's stock, but were illegal and worthless because no capital stock had been paid in, so that there was a complete failure of consideration, plaintiff, having accepted them believing the corporation had been duly organized and the bonds lawfully issued, was entitled on discovering the fraud to the remedy of rescission and restoration and an accounting in equity; and this though he may have an adequate remedy at law. [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 1842-1853, 1855; Dec. Dig. § 473.*] Dowling, J., dissenting. Appeal from Trial Term, New York County. Action by Justus N. Williams against Reno R. Billington and others. From a judgment dismissing the complaint, and dissolving a temporary injunction and vacating an order appointing a receiver, and requiring the receiver to turn over the property, and providing for his discharge and the cancellation of his bond, plaintiff appeals. Reversed, and new trial ordered. Argued before INGRAHAM, P. J., and LAUGHLIN, SCOTT, MILLER, and DOWLING, JJ. N. J. O'Connell, of New York City, for appellant. W. M. K. Olcott, of New York City (Harry K. Jacobs, of New York City, on the brief), for respondents. LAUGHLIN, J. The cause was regularly brought to trial at Special Term, and, after counsel for plaintiff opened, on motion of counsel for defendants, the complaint was dismissed on the theory, as shown by the remarks of the learned trial justice, that plaintiff had an adequate remedy at law. It is quite clear that the pleader has attempted to set forth a cause of action for equitable relief only, and no claim appears to have been made upon the trial that, on the facts pleaded, the plaintiff would be entitled in any event to recover at law, for no request to transfer the cause to the jury calendar was made. The appeal, therefore, presents only the single question as to whether proof of the facts pleaded would entitle plaintiff to any equitable relief. The plaintiff alleges that he owned 250 shares of the total issue of 330 shares of the capital stock of the New York Central Storage Company, a domestic corporation, which he desired to convert into cash; that defendant Billington was an attorney and counselor at law and the attorney for said corporation, and owned 30 shares of its capital stock; that Billington fraudulently induced him to enter into a formal For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes agreement in writing to transfer his 250 shares of said stock to the defendant Stade, who was acting for Billington; that this agreement was made on the understanding that Billington was to organize the Mt. Morris Storage Company as a domestic corporation, with a view to having it take over said stock in exchange for its bonds, which were to be a first lien on all of its assets and were to be issued to plaintiff, and which Billington represented to plaintiff could be readily converted into cash; that Billington thereafter filed in the office of the clerk of the county of New York a certificate of incorporation of said Mt. Morris Storage Company, and thereupon bonds of said company were issued and delivered to plaintiff in exchange for his stock; that the Mt. Morris Storage Company knew of the existence of the agreement between the plaintiff and Stade and all of its provisions, and all the facts and circumstances concerning the transactions in question; that the incorporators of said Mt. Morris Company were and are fictitious, and that no subscriptions to its stock have been paid as required by law, and that it has no assets other than the said stock transferred to it by the plaintiff, and that its directors merely represent the defendant Billington without any other interest in the company; that the bonds which plaintiff received are both illegal and worthless, and were issued in violation of law, for the reason that $500 had not been paid into the treasury of the company, and they were not issued for money, property, or work done, but solely for the plaintiff's said stock; that through said transfer of stock to said fictitious corporation defendant Billington has taken possession and control of the New York Central Storage Company's office, plant, and business, and has appropriated the same to his individual use, in accordance with a plan fraudulently conceived by him in advance by which he induced the plaintiff to execute and perform said agreement, in form with Stade, by fraudulent representations with respect to the organization of the new company and the bonds to be issued by it, upon which fraudulent representations the plaintiff relied, and that both the Mt. Morris Storage Company and the defendant Stade knew of the deception thus practiced on the plaintiff. The complaint further shows that the plaintiff is ready and willing to return the bonds, and that defendant Smith is made a party merely on account of his ownership of the other 50 shares of the outstanding stock of the New York Central Storage Company. The relief demanded is in effect that the agreement under which the plaintiff transferred his stock be canceled and the transfer be declared void, and the stock returned to plaintiff, and that defendants account for said stock and all the property of the New York Central Storage Company, which came into their, or either of their, hands in the premises, and that the equities of all the parties to the action be adjusted. I am of opinion that these facts sufficiently show that plaintiff was induced to make the agreement and to part with his stock by fraud, and that there was a complete failure of consideration. It is fairly to be inferred from the facts alleged that the plaintiff made the agreement, believing that the corporation would not be organized and commence business in violation of law before its capital had been paid in (section 3, Bus. Corp. Law; being chapter 4, Con. Laws 1909), and 135 N.Y.S.-3 |