deposit for said note knew and understood that said Columbia Casualty Company was making an investment of its funds in said certificate; that plaintiff at said time well knew and under stood the purpose for which said Columbia Casualty Company was organized or pretended to be organized, and knew and understood that, under the statutes of the state of Indiana relating to such corporations, no such investment of its funds was authorized to be made, and knew that such investment was wholly unauthorized and illegal. Defendant further says that said Columbia Casualty Company at said time had no power or authority of any kind or character to transfer, indorse, or assign said note in the manner done as aforesaid; that it had no right, power, or authority to invest any of its funds or property in a certificate of deposit or certificates of deposit of said plaintiff; that said Columbia Casualty Company had no right, authority, or power at said time, or at any time, to indorse, transfer, or assign said note for the consideration, upon the terms and conditions herein before set out, and which were the terms and conditions upon which said transfer was made; that said Columbia Casualty Company received no other consideration whatever for the transfer of said note except said certificate of deposit, as herein before set out; that said indorsement, assignment, and transfer of said note so made was wholly void, and plaintiff thereby acquired no right, title, or interest of any kind or character in and to said note, and now has no right, title, or interest of any kind therein." Charles R. Pollard, of Delphi, and Rabb, Mahoney & Fansler, of Logansport, for appellant. Benjamin F. Long, Charles E. Yarlott, and Paul M. Souder, all of Logansport, and George W. Julien and L. D. Boyd, both of Delphi, for appellee. DAUSMAN, C. J. [1, 2] Appellee has informed this court that "the theory of the tenth paragraph of answer is that the trading of the note in question by appellant to Columbia Casualty Company for a certificate of deposit of appellant was an unlawful investment of the capital stock of that corporation." In support of his theory appellee contends that the transaction was unlawful because in contravention of section 4769, Burns 1914, which prescribes how casualty companies shall invest the money received from the sale of their capital stock. But there is nothing in the statute which prohibits these companies from depositing any of their funds in banks, and taking therefor certificates of deposit payable either on demand or on a day specified, until such time as investments in accordance with the statute may be made. There is nothing in this paragraph of answer which conclusively fixes the character of the transaction as an investment in contradistinction to a deposit. The averments of this paragraph may be true, and yet, in contemplation of law, the transaction may have been nothing other than the making and receiving of a deposit. The essential nature of the transaction is not altered by merely characterizing it as an attempt "to invest its funds in said certificate of deposit." With as much reason it may be said that every deposit evidenced by a certificate issued by a bank is an investment in the certificate. Furthermore, if the company should actually invest money received from the sale of capital stock in securities other than those named in the statute, such conduct would be wrongful, but the transaction would not be void. At the utmost it would only be voidable. In that event appellee might find in a court of equity a way to protect his rights as a stockholder; but he cannot do so in this action. Wright v. Hughes, 119 Ind. 324, 21 N. E. 907, 12 Am. St. Rep. 412. Assuming that the casualty company is a corporation, the statute does not undertake to prohibit it from transferring its commercial paper, and the consequences of an assignment of commercial paper by a corporation are no different than they would be in the case of a natural person. 10 Cyc. 1121. [3-6] 2. Appellee contends also that the assignment of the note is void because the casualty company is a "pretended" corporation, and in support thereof directs our attention to section 4045, Burns 1914. second contention is not in harmony with the acknowledged theory of the pleading. Nevertheless it is our duty to consider it; This for, if the pleading be good on any theory, it would have been error to have sustained the demurrer. contention is that there is no averment in But the difficulty with this the pleading on which it can rest. Appellee relies primarily on the word "pretended" as a foundation for this contention. But what is the effect of the adjective "pretended"? The significance of the word is so vague and ambiguous that it does not inform either the court or the adversary party of any specific thing on which appellee relies for a defense. Does he mean that the casualty company is not a de jure corporation? Still it may be a de facto corporation; but whether it be a de jure corporation or a de facto corporation or no corporation at all depends on the facts, and the failure to disclose the facts is fatal. The word "pretended" can have no weight whatever as against the averment that the company purports to have been organized under the statute. Section 343a, Burns 1914. Finally, we come to the bald averment that the casualty company had no power to assign the note. Clearly this averment states a proposition of law. In other words, the powers of a corporation are determined by the law. Even under the lax provisions of section 343a, Burns 1914, it is not permissible to plead a conclusion of law. From time immemorial it has been the function of the pleadings to disclose the facts constituting the cause of action or the ground of defense. It is a trite observation that when making up issues the court must look to the pleadings for the facts, and must look to the books for the law. Chitty on Pleadings, chs. 3 and 6; 31 Cyc. 49. Our Code of Civil Procedure provides that the complaint shall contain a statement of the facts constituting the cause of action; that the defendant may demur to the complaint on the ground that it does not state facts sufficient to constitute a cause of action; that the plaintiff may demur to the answer on the ground that it does not state facts sufficient to constitute a cause of defense; and that the defendant may demur to any paragraph of the reply on the ground that it does not state facts sufficient to avoid the paragraph of answer. It clearly appears that the theory of the Code is that the pleadings shall deal only with facts. It must be presumed that by enacting said section 343a the Legislature did not intend to abrogate the other provisions of the Code, but did intend that said section should be construed so as to harmonize as nearly as may be with the established fundamental rules of pleading. We hold, therefore, that the provision of said section which authorizes the pleading of a conclusion, subject only to a motion to make more specific, means a conclusion of fact, and that it does not warrant the plead ing of a pure proposition or conclusion of law. The demurrer to the tenth paragraph of answer should have been sustained. Appeal from Supreme Court, Appellate DIvision, Third Department. Action by Edward P. Mullen against John Washburn. From a judgment for plaintiff, defendant appealed to the Appellate Division, which reversed, and dismissed the complaint (169 App. Div. 704, 155 N. Y. Supp. 757), and plaintiff appeals. Judgment reversed, etc. Erskine C. Rogers, of Hudson Falls, for appellant. T. D. Trumbull, Jr., of Glens Falls, for respondent. CHASE, J. The defendant entered into a * written contract with the plaintiff by which The contract included covenants as follows: [7] We cannot consider the other assign-enants and agrees to warrant and defend the "The said party of the first part hereby covments of error for the reason that they are title to the wood, timber, and trees hereby sold, not involved in the judgment rendered. The judgment is reversed, and the trial court is directed to sustain the demurrer to the tenth paragraph of answer. (224 N. Y. 413) MULLEN v. WASHBURN. (Court of Appeals of New York. 1918.) transferred, and conveyed against any person or persons whomsoever, and to defend any accutting of such wood, timber, or trees by party tion for trespass or damages by reason of the of the second part, and to save said party of the second part harmless from any action for trespass brought against him by any person or persons for cutting and removing such timber, wood, and trees. But it is expressly understood that party of the first part shall not be liable to party of the second part for any damage by reason. of any order or injunction restraining the cutting or removing of such wood, timber, and trees pending any action that may Nov. 12, be brought for trespass, damages, or in any manner relating to the title of said premises. ther condition that the said party of the first This sale and conveyance is made upon the furpart shall not be liable for any trespass or property adjoining the above-described premdamage done or committed on any lands or ises." 1. EVIDENCE 460(6) PAROL EVIDENCE CONTRADICTING WRITING ACTION BUYER AGAINST SELLER OF TIMBER. BY In action by buyer against seller of standing timber to recover costs of defending trespass action, evidence as to agreement that seller would point out boundary intended by general description of contract, and evidence that line was run and pointed out by surveyor, held not improperly admitted as in contradiction of written contract. 2. EVIDENCE 458-PAROL EVIDENCE AFFECTING WRITING-APPLICATION TO SUB JECT. Parol evidence is admissible to apply a writing to its subject. 3. EVIDENCE 448-PAROL EVIDENCE AFFECTING WRITING EXPLANATORY EVIDENCE. Parol evidence is received where doubt arises on face of instrument as to its meaning, not to enable court to hear what parties said, but to understand what they wrote as they understood it at the time, and such evidence, being explanatory, must be consistent with contract. had for several years been litigation be- were. and signed, there was a conversation in reOn the day that the writing was prepared gard to the location of the east line. Coun For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes sel for the plaintiff testified that the defend- I require the defendant, who had had litigaant said The contract was then executed and delivered. The plaintiff commenced cutting the wood, timber, and trees on the wood lot and the owners of the adjoining lands on the east commenced an action against the plaintiff and defendant herein, seeking to enjoin any further cutting of wood, timber, and trees. The defendant assumed the defense of that action, and his attorney appeared therein for both of the defendants. The jury could have found, and presumably did find, that the plaintiff proceeded further with cutting the wood, timber, and trees, and that he then called upon the defendant to have the east line located and surveyed, and that the defendant obtained a surveyor, and, after surveying the east line, pointed it out to the plaintiff as so surveyed and located. The plaintiff cut the wood, timher, and trees to the line so pointed out and surveyed, but not beyond it. An action was commenced against him by the owners of the adjoining lands for trespass, and it resulted in a judgment for the value of a few trees that he had cut and removed along, but within, the line as so located. This action is brought to recover from the defendant the amount paid and expended in the trespass action. The defense of the trespass action was conducted by the attorney for the defendant, and the jury could have found, and presumably did find, that the papers therein were taken to him by the plaintiff by the defendant's direction. The jury in this action found in favor of the plaintiff. [1] On the appeal by the defendant from the judgment entered upon such verdict, the Appellate Division reversed the judgment, holding that the evidence as to the agreement between the parties that the defendant would point out the line intended by the general description as stated, and also that the east line was run and pointed out to the plaintiff by a surveyor pursuant to such agreement with the defendant, were improperly received in evidence, as in contradiction of a writ ten instrument. On the trial it was shown that there was no fence, barrier, or visible evidence of the east line of the wood lot. All of the lands at or near the east line were covered with trees. The line was not marked on the trees or otherwise, and manifestly could not be located by the description contained in the contract, without the aid of a surveyor and of oral evidence. The purpose and intention of the parties, among other things, appears to have been to tion in regard to the title of his lot, to assume the expense of any further litigation that might result from cutting the wood, timber, and trees and removing the same from the lot as claimed by him, but that, if the plaintiff should carelessly or intentionally trespass upon lands adjoining the wood lot and on lands not claimed by the defendant, such trespass. The jury could have found, he (the plaintiff) alone should be liable for and it is to be presumed that it did find, that ally trespass upon the adjoining lands, but the plaintiff did not carelessly or intentionthat he cut the wood, timber, and trees upon the lands as described in the contract, and defined and amplified by the defendant through his surveyor. We think the Appellate Division was wrong in reversing the judgment, and that the Trial Term was right in admitting the evidence. ed to be the lands "now or formerly owned The east line of the lands conveyed is statby Nicholas Palmer and Elizabeth J. Palm er." The contract, therefore, makes the east boundary of the lands described dependent upon locating the line of the lands now or formerly of the Palmers. At we have said, it appears that there are no monuments or other outward evidences of its location. That fact was well known to the parties at the time the instrument was signed, and they then knew that oral evidence would be required to make certain the uncertainty that was apparent from a mere As the description of the property is vague, uncertain, and inspection of the contract. general, oral evidence is required to make it diction of the contract, but admissible to specific, and such evidence is not in contraaid the jury in determining the application of the language of the contract to the particular land to which it referred. It is a rule that, where words of general description are used in a deed, oral evidence may be resorted to to locate the premises inCortland & N. R. R. Co., 17 App. Div. 187, tended to be conveyed. Orvis v. Elmira, 190, 45 N. Y. Supp. 367, affirmed 172 N. Y. 656, 65 N. E. 1120; Coleman v. Manhattan Beach Improvement Co., 94 N. Y. 229; People ex rel. Myers v. Storms, 97 N. Y. 364; Pettit v. Shepard, 32 N. Y. 97. The Pettit Case was an action of ejectment It apbrought to recover 35 acres of land. peared that the plaintiffs were the heirs at law of one who had in 1815 purchased a lot known as No. 76, described as containing 175 acres, more or less. The lot in fact contained over 200 acres. Plaintiff's ancestor in 1825 sold 90 acres of the lot to one Anguish— "to be taken from the east side, bounded on the east, north, and south by the lines of the lot, and on the west by a line parallel to said east line and so far distant as to include 90 acres." Subsequently the ancestor sold to one Grim ard "the west part of lot 76, lying on the easterly side of Niagara river, containing 85 acres, be the same more or less. Grimard went into pos- session of all the land up to the Anguish line, and subsequently conveyed by the same de The plaintiffs claimed that the deed to Grimard conveyed but 85 acres, and sought to recover that part of what remained of lot 76 after the conveyance of the 90 acres, and after deducting therefrom 85 acres off the west end thereof. On the trial Grimard gave testimony to the effect that, when he purchased of plaintiff's ancestor, he went with him on the premises and pointed out the boundaries, and explained to him that this west part of the lot extended up to the Anguish line. The testimony was received "The testimony of Grimard, however, became material and important as to the intention of the grantor and the identity of the premises. The evidence was not given to vary or contra- dict the deed, but to identify the subject-matter, and to show what the grantor intended by 'the west half of lot No. 76.' In this view, the evidence was rightly admitted. It tended to show the location and boundaries of the piece of land which the grantor intended to convey, and did convey, by the description, or rather the designation, 'the west half of lot No. 76.'" In Hooten v. Comerford, 152 Mass. 591, 26 N. E. 407, 23 Am. St. Rep. 861, the matter in monu- cation of such line by the parties to the deed "If a grant by sufficient description of the premises conveyed, it is for the court to see in accordance with the express intention of the parties. In such a case nothing but a question of law is presented for the court to determine, doubtful, through uncertain, inconsistent, or but whenever the location of the premises is conflicting terms of description in the deed, the proper location of the premises becomes a ques- tion of fact, to be determined by the jury on [3] Parol evidence is received, where doubt arises upon the face of the instrument as to what the parties said, but to enable it to understand what they wrote as they under- planatory, and must be consistent with the The judgment of the Appellate Division should be reversed, and that of the Trial HISCOCK, C. J., and HOGAN, CARDOZO, "Under such circumstances, if bounds or mon- In that case the court allowed testimony [2] It is a well-established rule of law that parol evidence is admissible to apply a writ- ing to its subject. Ruling Case Law, vol. 4, § 65, p. 125. See, also, Myers v. Sea Beach Railway Co., 43 App. Div. 573, 60 N. Y. Supp. 284; Petrie v. Trustees of Hamilton College, 158 N. Y. 458, 53 N. E. 216; Cronk v. Wil- son, 40 Hun, 269; People ex rel. Murphy v. In Partridge v. Russell, 2 N. Y. Supp. 529, the boundaries as stated in a deed of the real property in dispute consisted in part of a REYNOLDS et al. v. REYNOLDS et al. (Court of Appeals of New York. Nov. 12, WILLS 94-FORM AND CONTENTS-EX- statutory formalities, and are not to be enlarged The existence of a valid trust, capable of en- - The total failure to designate the bene- ficiaries of trust in a will makes it to that extent an unwritten will, ineffectual for any A will will not be sustained, where to do so would be to perpetuate a fraud upon the next of kin, evade the statute of wills, and defeat the 5. WILLS 105 FAILURE TO DESIGNATE BENEFICIARY-EXTRINSIC EVIDENCE. Where a will devised personal property to executor in trust for disposition as previously directed, without naming beneficiaries, the ex- ecutor takes the legal title only, and the heirs beneficial interest therein by extrinsic evidence, 6. WILLS 105 DESIGNATION OF BENE- | 312, 324, 16 N. E. 305, 310 (2 Am. St. Rep. FICIARY-EXTRINSIC EVIDENCE. 420). The doctrine of incorporation may not be invoked to read into a will the recollection of the executor as to who are the beneficiaries of an attempted trust and what are their portions. 7. WILLS 94-SECRET TRUST. The surrogate had no power to declare and enforce a secret trust created by will. [3] The total failure to designate the beneficiaries of the trust in the will makes it to that extent an unwritten will, ineffectual for Laws, c. 13) § 16. The death of the execuany purpose. Decedent Estate Law (Consol. 8. WILLS 428. 698--VALIDITY CONCLU-tor prior to the establishment of the trust SIVENESS-DETERMINATION BY SURROGATE. The surrogate had power to determine, without taking evidence, the validity of an attempted disposition of property by secret trust, and his decree was conclusive on that point, since the action to establish the trust will not lie. would leave the court wholly without power to distribute the fund in accordance with testator's wishes. Holland v. Alcock, supra ; Fairchild v. Edson, 154 N. Y. 199, 48 N. E. 541, 61 Am. St. Rep. 609; Gross v. Moore, Appeal from Supreme Court, Appellate Di- 68 Hun, 412, 22 N. Y. Supp. 1019, affirmed vision, Second Department. 141 N. Y. 559, 36 N. E. 343. Action by Bridget Reynolds and another against John Reynolds, individually and as executor of the estate of John McGuire, deceased, and others. From a judgment of the Appellate Division (167 App. Div. 90, 152 N. Y. Supp. 661), affirming a judgment of the Special Term holding valid a testamentary trust, certain defendants appeal. Reversed, and complaint dismissed. L. J. Morrison, of New York City, for appellants. Henry F. Cochrane, of Brooklyn, for respondents. POUND, J. John McGuire died, leaving a last will and testament, which was duly admitted to probate, which contained the following language: "Item Sixth. I do hereby give and bequeath to my said executor all of the personal property [of] which I may die possessed and which I may own at the time of my death in trust, however, and for the purposes of paying out and disposing of same as I have advised and directed him to do." This action is brought to impress such trust for the benefit of two of testator's next of kin, his sisters Bridget Reynolds and Mary Morris. The testator left other next of kin, who are defendants herein. The courts below have sustained the contention of the plaintiffs upon the evidence of John Reynolds, the executor named in the will, that, prior to the execution thereof, testator told him that the disposition he desired to make of his personal property was to give the same in equal shares to them, and that the will was executed on the promise of Reynolds to pay out the same in accordance with such directions. [4] The facts in Matter of O'Hara, 95 N. Y. 403, 47 Am. Rep. 53, and Amherst College v. Ritch, 151 N. Y. 282, 45 N. E. 876, 37 L R. A. 305, and like familiar cases, are different. The wills there considered created no express trust, but equity declared a secret trust to exist on the ground of fraud. To sustain this will would be to perpetuate a fraud upon the next of kin, evade the statstate. The language of Finch, J., in Matter ute of wills, and defeat the policy of the of O'Hara, supra, 95 N. Y. at page 422, 47 Am. Rep. 53, may readily be paraphrased to apply hereto. Any bequest of this character is dangerous and indefensible. It exposes testators to the suggestion of unnecessary difficulties as inducements to the artifice of a secret and unwritten will. It exposes the trustee to temptation, and, even when he acts honestly, to severe and unrelenting criticism. It subserves no good or useful purpose. If we sustain it, we admit that any statute may be thus evaded. [5] Fraud which justifies equitable interference is defined in the O'Hara Case, 95 N. Y. 414, 47 Am. Rep. 53, as: has been done in performance or upon the faith "The attempt to take advantage of that which of the agreement while repudiating its obligation under cover of the statute." The alternative is the unjust enrichment of the fraudulent legatee, but fraud does not triumph when this trust is held inoperative. The law prevails over an attempt to defeat its salutary purposes. to be upon such trusts as the testator has other"Where the bequest is declared upon its face wise signified to the devisee, it is equally clear that the devisee takes no beneficial interest; and, as between him and the beneficiaries intended, there is as much ground for establishing the trust as if the bequest to him were absolute on its face. But as between the devisee and the The [1, 2] The question is whether the testamentary provision thus made is valid. Wills must be executed in compliance with stat- heirs or next of kin the case stands differently. They are not excluded by the will itself. utory formalities, and are not to be enlarg-will upon its face showing that the devisee takes ed or diminished by reference to extrinsic testimony which may not be authentic. Matter of Fowles, 222 N. Y. 222, 229, 118 N. E. 611. "The existence of a valid trust capable of enforcement is * * * essential to enable one claiming to hold as trustee, to withhold the property from the legal representatives of the alleged donor." Holland v. Alcock, 108 N. Y. the legal title only and not the beneficial interest, and the trust not being sufficiently defined by the will to take effect, the equitable interest goes, by way of resulting trust, to the heirs or next of kin, as property of the deceased, not disposed of by his will. They cannot be deprived of that equitable interest, which accrues to them directly from the deceased, by any conduct of the devisee; nor by any intention of the deceased, unless signified in those * ** For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |