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and 121 New York State Reporter shown that his interest in said proceeds equaled that sum. To say that, if he had no interest in the mortgage claimed to be held by him, he could nevertheless recover the sum of $712.40 by merely showing that the net aggregate amount of the bids upon the mortgaged property was that amount, would be to put a construction upon the agreement not warranted either by reason or justice. It was the evident intent of the two parties holding the two mortgages to allow the sale to proceed without prospective purchasers being made aware of any conflicting claims upon the property, and thereby enable such purchasers to acquire perfect title to the property purchased, leaving the interests of the mortgagees to be determined after the proceeds realized from the sale was ascertained; the plaintiff's interest being first paid therefrom. This reasoning is that the plaintiff has proceeded upon the theory that the plaintiff's right to recover from Marks rested upon the said agreement made between plaintiff and Adler. If plaintiff relies upon an independent parol agreement made between himself and the defendant, the consideration being that the defendant should be allowed to sell the property, and thereby obtain his commissions, then it became a question of fact as to whether such agreement was made; and, the defendant having denied the making thereof, that question should have been submitted to the jury, and a direction of a verdict for the plaintiff was error.
Judgment reversed and new trial ordered, with costs to the appellant to abide the event. All concur.
BLUMBERG v. MARKS. (Supreme Court, Appellate Term. March 11, 1904.) 1. CHATTEL MORTGAGE–INTEREST OF MORTGAGEE-EVIDENCE.
On the issue as to the amount of plaintiff's interest in the proceeds of a sale of personalty, by virtue of his mortgage on the property sold, evidence held to fail to show that his interest amounted to the sum claimed
by him. 2. SAME-PROCEEDS OF SALE-EVIDENCE.
In an action on an agreement giving plaintiff the right to the proceeds of a sale under a mortgage foreclosure, on the issue as to the amount of the proceeds realized by the auctioneer on the sale, evidence held to show
that $391 was realized, and not a sum over $712.40, as claimed by plaintiff. 3. SAME-RECOVERY OF PROCEEDS-DEFENSES-FAILURE TO FILE MOBTGAGE–EF.
In an action against an auctioneer on an agreement giving plaintiff, by virtue of his mortgage, an interest in the proceeds of a sale of personalty under a foreclosure of a second mortgage, to the amount of the mortgage debt, and requiring the auctioneer to first pay plaintiff out of the proceeds of the sale, the fact that plaintiff's mortgage was not properly recorded
was not available to defendant. 4. REVERSIBLE ERBOR-EVIDENCE OF DEFENDANT'S INDEMNITY.
The admission of evidence that defendant is indemnified against a recovery in the action is reversible error, Appeal from City Court, Trial Term.
Action by Isaac Blumberg against Marcus Marks. From a judgment for plaintiff, defendant appeals. Reversed.
Argued before FREEDMAN, P. J., and GIEGERICH and McCALL, JJ.
Ira Leo Bamberger and Henry Siegrist, for appellant. Max D. Steuer, for respondent. FREEDMAN, P.J. This case has been before this court on a former appeal (Appellate Term, April, 1903) 87 N. Y. Supp. 512, and the facts need not be again recited.
To enable the plaintiff to recover in this action, three things must be proven: First, that the defendant had knowledge of the agreement made between the plaintiff and Adler respecting the sale of the goods covered by the mortgage, and that he promised and agreed to pay plaintiff, from the proceeds realized therefrom, a sum bounded by the plaintiff's interest in such mortgage, not exceeding the sum of $712.40; second, the amount of plaintiff's interest in his mortgage; and, third, the amount of the proceeds realized upon such' sale.
Upon the first point there was conflicting evidence, and, the jury having found in favor of the plaintiff thereon, it may be said that plaintiff established that fact.
Upon the second point the plaintiff testified that his interest in the mortgage owned by him was the sum of $712.40, and the jury found that amount in his favor. This statement of the plaintiff that there was still the sum of $712.40 unpaid upon his mortgage was made in answer to the direct question put to him by his counsel, and given over objection. No other testimony was given in support thereof. The mortgage itself was given to secure the payment of 18 promissory notes, aggregating the sum of $1,200, payable monthly. The plaintiff did not produce any of the unpaid notes, or give any details or figures by which he arrived at the amount claimed by him to be due. The defendant showed, in contradiction of plaintiff's testimony as to the amount due, as appears by the record, which contains a statement of the exhibits, by Exhibits 21 to 33, inclusive, payments aggregating $755, which, if true, would reduce plaintiff's interest in the mortgage considerably below his statement of $712.40. These payments seem to have been disregarded by the jury, although as to a material portion of them the plaintiff offered no explanation.
Upon the third point the plaintiff utterly failed to show a sum was realized equal to the recovery herein. The plaintiff's recovery is limited by his agreement with Adler to his interest in the "proceeds realized" from the sale. The only testimony given as to the amount realized by the defendant is given by himself, and he testifies positively that he obtained as a result of the auction sales the sum of $391 only, from which should be deducted his fees for selling, amounting to $35, leaving a balance of $356; and this testimony is wholly uncontradicted. It is true, there was evidence tending to show that the amount of bids aggregated the sum of $939, and it appears that upon some of these bids the articles were struck off; but it was shown without contradiction that upon such bids nothing was realized, and the goods so struck off were returned to Adler, the mortgagee named in the mortgage under which the property was being sold. In fact, the trial court remarked to the defendant when such evidence was being given: "You and 121 New York State Reporter are only liable for what you sold. You are not liable for what was returned to Mr. Adler.” So that, at most, a recovery should only have been allowed for $356.
The appellant sought to introduce testimony showing that the plaintiff's mortgage was usurious in its inception. This testimony was excluded as not admissible under the pleadings, and properly.
It is also urged that as the plaintiff's mortgage was not filed, nor was a renewal filed, in Kings county, where Levin, the mortgagor, resided at the time he executed the mortgage, the plaintiff had no interest in said mortgage, and therefore could not recover. We do not think that the neglect to so file either the mortgage or a renewal is available to this defendant. The failure to file such mortgage does not deprive the mortgagee of his interest in the mortgage. It merely makes it void as against creditors and subsequent purchasers in good faith. Lien Law, $ 90 (Laws 1897, p. 536, c. 418). The plaintiff had an interest in the mortgage owned by him, and that interest had been, by the terms of the agreement with Adler, "transferred to the proceeds realized from a sale" of the mortgaged chattels; and whether or not the plaintiff had kept his mortgage so that it was proof against attacking creditors or subsequent purchasers was immaterial, so far as the defendant was concerned, as he was not one of the class mentioned.
The testimony, admitted, over objection and exception, to the effect that the defendant was indemnified against any recovery in this action, was clearly reversible error. Manigold v. Black, 81 App. Div. 381, 80 N. Y. Supp. 861; Cosselmon v. Dunfee, 172 N. Y. 507, 65 N. E. 494.
For the reasons herein stated, the judgment must be reversed.
Judgment reversed and new trial ordered, with costs to the appellant to abide the event.
McCALL, J., concurs. GIEGERICH, J., concurs in result.
HARPER V. SMITH et al.
(Supreme Court, Appellate Division, First Department. April 8, 1904.) 1. CORPORATION-ACTION BY NONRESIDENT JURISDICTION-INJUNCTION.
Under Code Civ. Proc. $ 1780, specifying the cases in which a nonresident may maintain an action against a foreign corporation, courts have no jurisdiction of such an action brought to restrain the defendant from receiving or recognizing as valid any vote by a third person till the ownership of the stock has been vested in the plaintiff and third party jointis,
and then only as they may mutually agree to the vote. 2. SAME-TITLE TO STOCK-INJUNCTION PENDING LITIGATION.
Where stock in a foreign corporation, whose directors and stockholders hold all their meetings in the state, stands in the name of the defendant as trustee of the plaintiff, and the plaintiff claims title to the stock jointly with defendant, during the litigation of this claim the plaintiff is entitled to an injunction restraining defendant from voting or transferring the stock.
Appeal from Special Term, New York County.
Action by John E. Harper against Charles E. W. Smith and the C'nited Gold & Platinum Mines Company. From an order granting an injunction, defendant Smith appeals. Affirmed.
Argued before VAN BRUNT, P. J., and HATCH, McLAUGHLIN, PATTERSON, and INGRAHAM, JJ.
Walter W. Cooper, for appellant.
INGRAHAM, J. The relief asked for by the complaint is that plaintiff have judgment that certain shares of stock of the defendant corporation standing in the name of the defendant Smith as trustee for the plaintiff are owned by the plaintiff as co-owner with the defendant Smith; that the defendant Smith account therefor; that the said shares may not be voted or in any wise disposed of except as may be mutually agreed upon by the plaintiff and said defendant Smith, and that the defendant Smith be enjoined and restrained from exercising an exclusive voting right thereon until the record ownership of the said shares shall be vested in this plaintiff and the defendant Smith jointly, and from selling, assigning, pledging, transferring or otherwise disposing of said shares until the record ownership thereof shall be vested in the defendant Smith and the plaintiff personally, and then only as may be mutually agreed upon by said defendant Smith and the plaintiff; and that the defendant corporation be enjoined and restrained from receiving or recognizing as valid any vote cast by the defendant Smith, personally or by any agent, representative, or proxy of his, upon the said shares of stock of the defendant corporation, until the record ownership thereof has been vested in the defendant Smith and the plaintiff jointly, and then only as such vote shall be mutually agreed upon by Smith and the plaintiff.
The plaintiff and Smith are both nonresidents, and the corporation is a foreign corporation, organized under the laws of the state of Arizona. All the meetings of the corporation, however, have been held in the city and county of New York, and Smith has heretofore voted on the stock standing in his name as trustee of the plaintiff in the city of New York. It would seem that neither the plaintiff nor the defendant Smith could maintain an action against the defendant company, a foreign corporation, in the Supreme Court of this state, as, by section 1780 of the Code of Civil Procedure, an action against a foreign corporation can be maintained by a nonresident of the state only when the action is brought to recover damages for the breach of a contract made within the state or relating to property situated within the state at the time of the making thereof, or where it is brought to recover real property situated within the state or a chattel which is replevied within the state, or where the cause of action arose within the state. The plaintiff, however, has a right to resort to the courts of this state to enforce any cause of action, or to obtain any relief to which he is entitled as against the defendant Smith. The order appealed from provides that the defendant Smith, "both personally and by agent, representative, or proxy of his, be, and he hereby is, and 121 New York State Reporter enjoined and restrained, during the pendency of this action, from voting upon the 103,000 shares of the common and the 4,120 shares of the preferred stock of the defendant corporation in the complaint referred to, or upon any of them, to the exclusion of this plaintiff, at any meeting of the shareholders of the defendant corporation; that the said defendant Smith, both personally and by any agent, representative, or proxy of his, be, and he hereby is, restrained and enjoined, during the pendency of this action, from selling, assigning, transferring, pledging, or otherwise disposing of the said shares, or any of them, except only as may be mutually agreed upon by the said defendant Smith and this plaintiff; and that the defendant corporation be, and it hereby is, enjoined and restrained, during the pendency of this action, from accepting or recognizing as valid any vote offered by the said Smith upon the said shares of stock or any of them, except only as may be mutually agreed upon by the said defendant Smith and this plaintiff." No answer was interposed by either of the defendants, nor does the corporation appear or appeal from the order granting the injunction.
As this court has no jurisdiction over the defendant company, a foreign corporation, this injunction, so far as it restrains the corporation, was not justified. We think, however, that a case was made out which justified the court in restraining the defendant Smith, until final judgment, from selling, assigning, or transferring the said stock standing in his name and in which the plaintiff claims an interest, and from voting upon the stock, against the wishes of the plaintiff, in such a way as to imperil the plaintiff's interest if it should be finally determined that he is entitled to an interest in the stock. In the affidavit submitted in opposition to the motion, the defendant Smith claimed that by virtue of the various transactions between himself and the plaintiff he has become the absolute owner of the stock and entitled to undisturbed dominion over it. That question is to be determined upon the trial of the action, and the order appealed from maintains the existing situation until the real ownership of the stock can be determined upon the trial. The stock stands in the name of Smith as trustee for the plaintiff. Upon the face of the transaction, it would appear that the plaintiff, as the cestui que trust, would be entitled to have a voice in the disposition of this stock. The defendant is an Arizona corporation, but it is alleged, and not disputed, that all the meetings of the directors and stockholders are held in the city of New York. It is apparent that, if Smith could dispose of this stock pending the trial of the action, a judgment in favor of the plaintiff, if one should be obtained, would be valueless, as a person purchasing the stock from Smith would probably acquire such a title as against the plaintiff as would render it difficult, if not impossible, for the plaintiff to follow the stock and impress it with the trust in his favor. As the corporation does not meet in the state of Arizona, and as Smith is not there, or subject to the jurisdiction of the courts of that state, it would be a denial of justice, while entertaining the plaintiff's application to compel Smith to recognize his interest in the stock, to allow him meantime so to act in relation to the stock as to prevent the plaintiff from obtaining any benefit from the judgment if one should be