127 N.Y.S. 764 | N.Y. App. Div. | 1911
' Francisco Llado y Bohera was engaged in the cork and cork-wood business in the city of New York under the style of Francisco Llado & Co., he for some years having no partner and being the sole person interested therein. In 1875 William J. Farrell entered his employment at tlie age of sixteen years and remained there-until the time of Llado’s death, when he had become his bookkeeper and manager. Llado married Leocadio Lachat and by her had three children: Francisco (born August, 1878), Louis (born August, 1880), and Adelaide (born April, 1883).
Francisco Liado owned three parcels of land, situated at his birthplace, San Feliu de Guixols, in the province of Gerona, in Spain, known respectively (1) as lot 44, the “Huerta” or garden, as it is described in the various instruments hereinafter referred to, comprising 27 areas and 342 centesimas, with the house thereon; (2) lot 22, comprising one area, adjoining the foregoing, and having a house thereon ; and (3) a parcel not described in any. of the doc.u-. merits herein and not involved in this litigation, but which has passed directly into the ownership of his three children aforesaid.
Liado obtained his supply of goods largely from Juan Rifa y Casas, a resident of Spain, to whom he was indebted for goods furnished and with whom he entered into an agreement on or about May 28,1881, known as a “ preliminary contract ” which was to continue until another and more formal one was made, which was to be when Liado (therein described as also of the town of. San Feliu in which Rifa resided) should go to Spain, which voyage he was recited as about to make on the twentieth of November, whereupon said contract should cease; if unforeseen circumstances should impede the intended voyage the contract should cease at the end of the ensuing December, unless it w-as renewed. This contract was quite full’in its recitals as to the methods to be followed in doing-business between Rifa and Liado, and by it Liado agreed that he
The loth paragraph of said agreement provided as follows: “In order to give a guaranty to D. Juan Rifa and Casas, Francisco Liado y Bobera will he liable to him for all with his goods and property, movable and immovable, which he has and shall have in the United States-as well as in Spain, and particularly be liable with all that house and lands that lie owns in the said town of San Feliu de Guixols, and which is bounded on the east:by Calasanz Street and on the south by the little fort and the beach, and on 'the west by the house óf Anglada ánd partly by the house of Vidal, and on the north by San Ramon Street.” This agreement was duly acknowledged in the city of New York ; it was registered in Spain on June 10,1881, in the register of the authenticating notary, Don Joaquin Amettler.
Thereafter, on December 2, 1881, Liado executed a power of attorney in the city of New York, in which he described himself as a merchant and an inhabitant of the city of New York, and acknowledged it before the Spanish vice consul, whereby he conferred “power ample, sufficient and complete on Don Joaquin Amettler, writer and notary, of the same town of San Feliu de Guixols, in order that in his name and in representation of his person as owner of the house Francisco Liado & Company, in that city of New York, he may ratify a preliminary commercial agreement between Don Juan Rifa and Casas of the said town and Francisco Liado & Company of New York, which commercial agreement is found to have been duly executed with all the necessary formalities according to the laws of contract in force for citizens of Spain in foreign countries — So that said attorney Don Joaquin Amettler may mortgage, if he thinks necessary, and it is the desire of Don •Juan Rifa and Casas, in guaranty of the disbursements that one (he, Don Juan) may make for the purchase of corks in Spain, which corks he shall remit to said Francisco Liado & Company, of New York, as provided in the agreement referred to, to the amount
The power then proceeded to describe by metes and bounds lot 44; A duro is the equivalent of five pesetas.
Acting under this power, Don Juan Amettler then proceeded, and on January 30,1882, appeared before Don Antonio Cassanas y Carendell, notary of the Territorial College of Barcelona and of the district in tire Province of Gerona, in company with Don Juan Eifa y Casas; and Amettler, as attorney for Liado, then entered into a written agreement with Eifa wherein the execution of the preliminary contract hereinbefore referred to was recited, and it was further agreed: “ Wherefore D. Joaquin Amettler in liis name confirm and ratify in all its parts the transcribed document, and although by the same it is inferred that it ended in December last, however, taking into consideration the large amount of merchandise that Señor Eifa shipped to Sr. Liado during the past year, the payment for the most of which is yet pending, and with the sole object of securing in evezy way possible the aznount of the same and such as he may ship in tlze future, the said Mi'. Aznettler in his said nazne, leaving protected the legal lien of the Government for one year’s taxes assessed and not paid, which preference is reserved, he mortgages for the su m of fifty thousand pesetas all of said house and grounds adjoining, designated by the number forty-four.” Then follows the description of lot 44 by metes and bounds.
Eifa. continued shipping goods to Liado, whose business, apparently, was not prospering; for, as the testimony shows, he had been borzowing money from his frietids, and hypothecated one of his policies of life insurance for a loan; and one Schwartz had a judgment-against him for $1,038.76, an appeal from which was pending undetenmned. •
In July, 1884, Liado had an aneurism' of the heart _ and sent for Gen. Geoz-ge W. Wingate, his friend and legal adviser, to
" At the time he gave instructions for the drawing of. the codicil he also stated that' he wished to give liis wife the three .policies" of life insurance for $5,000 each which had been issued, two by the Equitable Life Assurance Society, and one by the-Mutual Life Insurance Society^- one of the former having been assigned to oñé Herzfeld to . secure-á loan from him. Wingate told him that-he did not know the exact form which would be required by the companies in order to convey title, - but that if Liado would turn over to him the two policies which were in his possession in .trust for liis wife (Herzfeld having the third) he thought it would be a good gift and would hold in case he died before formal papers could be signed.' There
The learned trial court evidently did not consider this testimony as controlling when-it said in its opinion that the contention that the life insurance money should not be treated as assets of the husband’s estate was made for the first timé upon the trial; and when it found that the money derived from- the policies was an asset of Francisco Lladó’s estate, for the sole evidence to the contrary was . an unsworn statement of an accountant, Rollo, in 1899, when he entered in his balance sheets a note as to the policies: 9 Mr. Farrell stated that these policies were thought to be in the name of Mrs. Liado, but upon inquiry it was found that they were never transferred to his wife. They are accordingly brought in here as belonging to the estate of Mr. Francisco Liado.” Hpon this, Farrell, in filing his account as executor of his wife’s estate, in March, 1906, followed the account and charged himself with the policies. But there is no testimony to impeach the contemporaneous written evidence or Gen. Wingate’s testimony.
After the execution of the codicil to the will, and when be had been advised that he had but a short time to live, Liado talked .with Gen. Wingate regarding the continuation of his business by his wife.
The Rifa mortgage oh the Spanish property had been the subject of many conversations theretofore between Gen. Wingate and Liado. At the particular .conversation referred to, the question came up as to what arrangements it would be best to make in regard
.On August 28, 1884, Francisco Liado died in the city of Brooklyn, leaving him surviving his wife, Leocadie, and his three children, Francisco, then about five; Louis, then about three ; and Adelaide, then about one. His mother, also, survived him. The widow alone qualified as 'executrix. Gen. Wingate, for obvious reasons, declined to become involved in the business. difficulties of the decedent.
At the time of his decease, Liado was indebted to Eifa in the sum of $15,315.54 for goods sold, represented by acceptances of nine drafts drawn by'Eifa on Liado. The first two of these were taken up by Mrs. Liado on September 23,1884, after the making of the agreement of September 18,1884. Five of the others were paid at maturity, the remaining two being paid in the settlement with Eifa. on December 22,1887. Liado was also indebted to August Lachat, the father of Mrs. Liado, for money received and collected on his account, amounting to $6,505,14, represented by promissory notes, the first' of which bore date October 24, 1877, and" all shown on Llado’s books: he had also borrowed from his wife further sums of money sufficient to make the aggregate of the two accounts $13,445.15, for whicli Liado had made his notes and placed them in his safe in an envelope marked “ Property of .Leocadie Liado.” They were found so inclosed after his death.
Without going at length into the condition of the business, it is obvious that, although the learned' court found that Francisco Liado was solvent at the time of his death, that conclusion could be reached only by including the value of' the Spanish property and the ainount of the three insurance policies on Llado’s life, as well as by disregarding the claims of Mrs. Liado, of her father, and of James Liado; and that from no possible point of view could the business of and by itself be regarded as solvent or as able in its ordinary course to meet its obligations; and this is well shown by Llado’s own statements to Gen. Wingate, which are entirely corroborated by the balance sheets of the business itself.
Following out her husband’s expressed desire, Mrs. Liado secured the services of Farrell and continued the business, he having a claim against the estate for $375 for money deposited by him with Liado.
On September 18, 1884, Thomas Brugada, who had come to New York city as the representative of his uncle, Rifa, to see about the situation of the business here, entered into an agreement with Mrs. Liado and James Liado, by which it was agreed in the presence of Gen. Wingate and Farrell,'and on the representation of Gen. Win-gate that it was not possible to pay the mortgage on the Spanish t property, that if Rifa would continue to consign corks to the business then being condnoted by Mrs. Liado, as executrix of her husband’s estate, and would not then insist upon the payment of the amount due by Liado at his death, she would pay cash, or the equivalent of cash, as goods were thereafter delivered, and would put $10,000 of the insurance money, being the amount of the policies transferred to her, as capital into the business, and would
Thereafter Mrs. Liado did deposit with the business on September 23'and September 20, 1884, the proceeds of the two insurance policies which had been transferred to her, amounting respectively to $5,028.70 and $5,032.72; and these amounts were duly entered in the day book of the. business as loans.from her individually. On September 26, 1884, she made a loan, as executrix, to- the business of- $2,473.73, being the net .proceeds of the policy hypothecated with Herzfeld; that particular policy being evidently treated as an asset of the estate of her husband,, because she had never had possession of the same personally or through her attorney, and the same was not regarded as having been legally"transferred to her.
On October 28,1884, she made a loan to the business of $2,500, and on 'November 2.9, 1884, another of $500, both entries duly appearing in the firm books. Special accounts were opened with . her individually on the days of these respective payments, showing aggregate -loans by her individually to the firm of $13,061.42. An account was also opened in her name as executrix showing the deposit of the amount- of $2,473.73 from the policy pledged with Herzfeld. It further appears from the books that the proceeds of these loans made by her were drawn against speedily to discharge '.-firm obligations.
On December 31, 1884, at the suggestion of Gen. Wingate, who feared that' he might leave and go'with some other house, Farrell was'taken into partnership by Mrs.- Liado. She contributed the entire capital of the business, consisting of her husband’s estate, subject to his debts, her insurance moneys, the other money theretofore advanced by her, and the debts'due her father and-herself. The partnership was formed under the name of Francisco Liado &
In February, 1885, Mrs. Liado was appointed guardian of her three children. On April 28, 1885, an agreement of some kind was made in New York city between Brugada, representing Rifa, and the new firm of Francisco Liado & Co., by which an indebtedness to Rifa was acknowledged of $16,265, but the particulars of this agreement are not in evidence, nor does it appear how that sum was arrived at, nor what the other agreements made between the parties were, although it may well be that that sum represented the original obligation of $15,315.54, plus the interest thereon. This agreement ■was not produced and neither side has endeavored to prove its contents. That there was such an agreement is apparent because it was referred to in subsequent documents. On the same day Mrs. Liado sailed for Spain with her three children. On May 20, 1885, title to the Spanish property was duly registered under the Spanish law in the names of the'three children. The property thus registered consisted of parcels 44 and 22. The proceedings thereupon recited the will and codicil of Liado, and the title was subject to the life estate of Llado’s mother, Harcissa Lladoy Bobera. On September 29,1885, an action was commenced in Spain by Rifa against Leocadie Lacliat, widow of Francisco Liado as executrix» of her" deceased husband’s estate, and also as the guardian and curator, and, therefore, as the legal representative and administrator of her three children, to recover the sum of £3,150, /Ts. 3d., being the equivalent at the corresponding rate of exchange at that time of 81,325 pesetas and 48 centimes. The amount in English currency set forth as the debt owing by Mrs. Liado as executrix and guardian to Rifa was equivalent in American money to about $15,320. On the basis of the value of a peseta (19.3 cents) the claim in Spanish money would represent in American money about $15,695.
The summons having been issued, what is termed in Spanish law an “embargo” was, on December 26, 1885, laid on lots 44 and 22, hereinbefore described. In the original “ demand ” prayer was made that the court should proceed, in default of payment of the
Despite the uncertainty which is sought’ to be created as to the effect of this Spanish decree, it is apparent that it is a proceeding m- rem in the nature of an action to foreclose what is in effect a mortgage given to Rifa by Amettler as the duly authorized attorney in fact of Liado to secure the payment of the debt due him by Liado up to the extent of 50,000 pesetas, and in so far as the property was levied upon under, the embargo beyond that amount, it corresponds to some extent to our warrant of attachment.
On December 31, 1885, Farrell having readied Spain, .an agreement was entered into between Farrell, Rifa and Ivlrs. Liado, quite full, complete and formal in its details, and under which all' former agreements between them were annulled, except the mortgage hereinbefore referrred to. Under that, the debt of .the firm to Rifa was fixed at £2.273 sterling, and the maximum credit to be extended to the firm was fixed at the' sum of $15,000. Most elaborate provisions were made as to the future course of business dealing between them, and it is apparent that all these have reference to the new firm as it then existed, and not to the old firm transactions. The mortgage was continued as security for Rifa’s debt. The ratification of the mortgage was, of course, only as to parcel 44, the one originally included therein. The papers in the suit had already been served on Mrs. Liado in Spain. On January 31,1886, judgment was taken against Mrs. Liado as executrix of her husband’s estate and as custodian, representative and legal administrator of her children for the sum found due, namely, £3,150, 7s. 3d. sterling, equivalent to 81,325 pesetas and. 48 centimes, in addition to costs and interest, and the sale'of the property embargoed was directed. Nothing further appears to have been done in the Spanish suit until March • 7, 1887. Meantime, in February, 1886, Mrs. Liado and- Farrell returned to America, where they were married on April 26, 1886,-both then being about the age of twenty-seven years. . They resided in New York city, and the children of Liado went to live with them. In March,.1887, the expert, Pedro .Pasquale Baguer, reported to the' court the description and value of the two parcels upon which the
In July, 1887, the first of their children was born to' Mr. and Mrs. Farrell, the second being born in July, 1889. On August 9, " 1887, Harcissa Liado y Bobera died. There is no evidence in the case that her occupancy of whatever house she lived in had been interfered with. On March 19, 1891, Mrs. Liado' died, leaving her surviving her husband, "William J. Farrell, her three children by Liado and her two children by Farrell. She left her last will and testament, dated January 31, 1888, under which her executor took all her property in trust to hold the same during the lifetime of her husband and the minority of any child or children surviving her, and to allow her husband, William J." Farrell, during his lifetime • the income and use of the.principal of all the estate, real and personal, in such manner as he should see fit, upon the condition that he should support and educate such children as she might leave during their minority, except that in case any of such children should marry or'be in receipt of a sufficient income from other sources, his obligations towards them should' cease,' She also charged him with the care and support, of her father, August Lachat. She made provision for the. distribution .of her income upon the death of her husband or in .case he- should not survive her. She further provided- that after the death of her husband and upon the youngest of her children becoming of áge the trust should cease and the principal, be divided equally between' her children. In case her husband should, survive her, she authorized the moneys due-her by the firm of Francisco Liado & -Co. to remain in their hands. Her husband was made the sole executor of her will, and he duly qualified as such. He continued the business under its former firm name,, and in October, 1894, legally adopted the three children of Liado, they taking the name of Farrell, which-they still bear. He lived with the five children in' the city of New York, and took the' oldest son into his business as cleric and salesman, where he remained for some seven or eight years, until June, 1906. The children of Liado lived with him until they had all reached,, or nearly reached, majority. Francisco Liado lived with Farrell until he -was twenty-four years of age, when he married, and his sister, who was then twenty, went to live with him. Louis lived with
In 1903, some twelve years after his wife’s death, he married again. Since .that time there, has been much litigation between him and the three children of Liado.
The question directly involved in this action is the amount, 'if any, which the heirs of Francisco Liado are entitled to receive out of the proceeds of the sale of the two parcels of land in Spain, known as Nos. 44 and 22. The learned court at Special Term has held that the estate of Mrs. Liado Farrell is bound to pay back to "her three children by Liado the excess from that sale over and above the $14,000 paid to Eifa, viz., the sum of $6,168.45 paid to her by Brugada, and the sum of $1,358.56 paid by him to Farrell as executor of her estate, with simple interest on the former amount from December 31, 1889, and with interest on the latter amount computed from November 28,1894, with annual rests as of January first in each year, making a total sum up to the date of the entry of judgment, June 25, 1909, of $16,571.29, which was directed to be paid out of the moneys belonging to the estate of Leocadio Liado Farrell invested in the business still conducted by Farrell. According to the books of the firm of Francisco Liado & Go., at the time of its dissolution the capital account of Mrs. Liado Farrell therein amounted to $39,302.61, whereof $19,256:73 stood to her credit as executrix of her husband’s estate, and $20,045.88 to her individual credit. On the settlement of Farrell’s accounts as executor of his wife, the referee found that the total amount so invested was $40,265. His report was confirmed by a decree of the surrogate of New York county, dated March 17, 1908. The defendant Farrell,appealing from the judgment herein, claims that the'children of Francisco Liado have no right to recover any sum whatever, because the entire proceeds of the sale belonged to Mrs. Liado, on the ground (1) that the moneys of Mrs. Liado, having been used to pay the debts of her husband’s insolvent estate, her representative should be allowed to offset , the-same against the claim of the .children; (2) that she should be allowed credit for the amount due her as a creditor of her husband’s estate; (3) that she was entitled
Rifa’s debt could not possibly be paid out of the New York property of the estate. He was in Spain and had immediately at hand the real estate belonging to Liado, part of which was mortgaged to him to secure his debt and all of which he could attach, if necessary, to enforce collection of his claim. He and not Mrs. Liado was in control of the situation. All that she could hope for. was to so arrange matters that he would keep on supplying goods, which Farrell could dispose of, and thus insure a living for herself and her children. We can find ngthing in what she did save an honest effort to act for the best interest of all concerned. She was
The judgment appealed from should, therefore, be affirmed, with costs to the defendant William J. Farrell, as executor and trustee.
Ingraham, P. J., Laughlin, Clarke and Miller, JJ., concurred.
Judgment affirmed, with costs to defendant Farrell, as executor and trustee. Settle order on notice.