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and 136 New York State Reporter R. Robertson, for appellants. Wilton Bennet, for respondent.

HOOKER, J. The defendant Vielee was a justice of the peace of Mt. Hope, and his codefendant was overseer of highways in that town. The complaint alleges that the defendants illegally, wrongfully, without jurisdiction, and unlawfully did cause to be issued a legal process against the plaintiff here, which consisted of a summons issued by Vielee in an action where Hawkins was plaintiff; that the summons was served, and the defendants entered up judgment for the sum of $5 fine and penalty by reason of plaintiff's failure to pay a highway tax in the town of Mt. Hope; that the plaintiff was arrested on a body execution issued upon the judgment of the justice, and imprisoned thereunder, by reason of which he has suffered mental, physical, and moral injury; that the arrest and legal proceedings were an abuse of legal process and that the defendants had no jurisdiction whatever of the person of the plaintiff; that the plaintiff was not liable for road tax in the town of Mt. Hope; and that the defendants had no legal right to sue or "in any way issue any process against this plaintiff for the collection of highway tax in the town of Mt. Hope.”

The allegation that the defendants had no jurisdiction of the person of the plaintiff, doubtless meaning thereby that the justice had no jurisdiction, is, of course, a statement of a conclusion of law, and no facts are alleged in the complaint which can sustain it. The complaint is not sufficient as setting forth a cause of action for an abuse of legal process. The mere statement that the arrest and legal proceedings constituted such abuse is not enough. Such an action will not lie unless there has been willful misuse of the process of the court to the injury of the plaintiff. There is no allegation in the complaint to negative the presumption that both of the defendants were proceeding honestly and in the utmost good faith as public officers to discharge their respective duties. The Justice's Court had jurisdiction of the subject-matter, for aught that appears. The defendant may have been served with a summons while he was within the town where the justice resided; and while the allegation appears in the complaint that he was a resident of the town of Deer Park at one time, it does not appear that he was not a resident of said town at the time when he became liable for the payment of the road tax, which was sought to be enforced in the action before the justice. The allegations of the complaint make it appear that the use of the process complained of was clearly legitimate. The legal conclusions reached by the justice may or may not have been correct. Such conclusions are to be reviewed in the methods prescribed by the Code, and not by actions for the abuse of legal process. The complaint is even silent as to whether the judgment was ever appealed from, and, if so, how the appeal resulted.

Of course, the complaint cannot be sustained as setting forth a cause of action for malicious prosecution or false imprisonment. There are no allegations of malice, want of probable cause, termination of

the action favorably to the plaintiff, or the invalidity of the execution or the judgment upon which it was issued.

The interlocutory judgment should be reversed, and the demurrer sustained, with leave to the plaintiff to plead over upon the usual terms.

Interlocutory judgment reversed, with costs, and demurrer sustained, with costs, with leave to the plaintiff to serve an amended complaint upon payment of costs within 20 days. All concur.

(117 App. Div. 240)

In re HEARST. (Supreme Court, Appellate Division, First Department. January 11, 1907.) ELECTIONS-PRESERVATION AND DISPOSITION OF BALLOTS.

Election Law, Laws 1896, p. 963, c. 909, $ 111, provides that after the ballots have been counted and replaced in the boxes as required by law they shall be preserved for six months after the election, when they may be disposed of in the discretion of the board having charge of them. The duty of providing ballot boxes for the reception of ballots at an election in the city of New York devolves on the board of elections. The defeated candidate at the election for the office of mayor of New York City at the election held in 1905 made application to the Attorney General for leave to bring an action in the nature of quo warranto to try title to the office, which proceeding was pending when the period of six monthis prescribed by the statute was about to expire, and thereupon it was ordered, upon a stipulation of the Attorney General, the corporation counsel, and the applicant, that the board of elections preserve the ballots cast at such election in the boxes in which they then were until further order of the court on notice to the applicant. The application was denied in time so that the ballot boxes could have been used at the general election in 1906. The board of elections made no application to be relieved from the order, and other ballot boxes were provided by the board of elections for the election of 1906. Held, that after the election of 1906 there was no ground for vacating, on the motion of the successful candidate at the election of 1905, the order requiring the preservation of the ballots.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 18, Elections, & 231.]

Appeal from Special Term, New York County.

In the matter of the application of William Randolph Hearst to Julius M. Mayer, Attorney General of the state of New York, for leave to institute an action in the nature of quo warranto against George B. McClellan to try title to the office of mayor of the city of New York by virtue of an election held November 7, 1905. Appeal by George B. McClellan from an order denying his motion to vacate an order directing the board of elections of the city of New York to preserve until the further order of the court ballots cast at such election in the boxes in which the same then were. Affirmed.

Argued before PATTERSON, P. J., and INGRAHAM, LAUGHLIN, CLARKE, and SCOTT, JJ..

Arthur C. Butts, for appellant.
Clarence J. Shearn, for respondent.

LAUGHLIN, J. The duty of providing ballot boxes for the re- . ception of ballots at any election devolves in the city of Greater New

and 136 New York State Reporter York upon the board of elections; and to the end that the ballots may be preserved a reasonable time as evidence in a proper action or proceeding, and at the same time that the ballot boxes may be available for use at future elections, the Legislature provided, in section 111 of the election law (Laws 1896, p. 963, c. 909), that, after the ballots have been counted and replaced in the boxes as provided by law, “they shall be preserved inviolate for six months" after the election, and may be opened and their contents examined upon the order of the Supreme Court, or a justice thereof, or a county judge of the county, “and at the expiration of such time, the ballots may be disposed of in the discretion of the officer or board having charge of them.” It appears that the appellant and respondent were both candidates for the office of mayor of Greater New York at the general election held in the year 1905, and that the appellant received the certificate of election. It was claimed by the respondent that there was fraud or error in the canvass, and he sought to obtain a recount of the ballots, which it was decided was not authorized under the existing law. Matter of Hearst, 110 App. Div. 316, 96 N. Y. Supp. 341; Id., 183 N. Y. 274, 76 N. E. 28. An effort was then made by the respondent to have the Legislature pass a retroactive act authorizing a recount of the ballots. A bill designed to accomplish this purpose was duly introduced, referred to the appropriate committee of the respective houses of the Legislature, and favorably reported, but it failed to pass. About this time an application was made to the Attorney General for leave to bring an action in the nature of a quo warranto proceeding to try the title to the office of mayor by virtue of said election. This proceeding was pending when the period of six months prescribed by the statute as the time during which the ballot boxes containing the ballots must be preserved by the board of elections was about to expire: and the stipulation upon which the order was entered was doubtless made with a view to preserving the ballots for use as evidence, in the event that the application should be granted.

The application to the Attorney General in this proceeding for leave to bring the action was denied in time so that the ballot boxes could have been used at the general election in 1906. Had the board of elections then applied to vacate the order, to the end that the ballots might be destroyed and the boxes rendered available for use at the impending election, perhaps there would have been no good ground for denying the motion. The board, however, made no application to be relieved from the order. The application was made by the appellant, who had no duty to perform with respect to preserving or destroving the ballots, or with respect to furnishing ballot boxes for use at elections. The motion was denied on the 14th day of September, 1906, and the appeal was taken a few days later; but it was not brought to argument until the 21st day of December, 1906, and after the general election of 1906, for which it is conceded other ballot boxes were provided by the board of elections. The order indicates that the court, in denying the motion, was influenced by the offer of the applicant to provide ballot boxes for the ensuing election at his own expense, because his doing so was made a condition of denying the motion. Manifestly this consideration should not have entered into the judicial decision of the motion. If the Legislature made no further provision for the preservation of the ballots, and conferred no authority upon the board of elections to provide other ballot boxes, it would seem that the boxes legally provided should have been rendered available for use; and if the purchase of new ballot boxes was authorized, and the court in its discretion saw fit to preserve the ballots longer, that should have been done at the public expense. But, now that the general election of 1906 is over, it does not appear that any special election will be held, or that the ballot boxes will be needed until the general election of 1907, and it is not claimed that even for that election the ballot boxes used in 1905 will be required, for the reason that a duplicate set has been procured. Although the time within which the board is required by law to preserve the ballots has long since expired, it does not appear that there is any public necessity at present for vacating the order requiring that the ballots be preserved.

Two reasons are assigned in behalf of the appellant as grounds for reversal of the order. One is that the application to recount the ballots may be renewed to the coming Legislature, and the other is that the application for leave to bring an action in the nature of quo warranto may be renewed to the newly elected Attorney General. Without expressing any opinion on the question as to the power or authority of the Legislature to pass a retroactive statute authorizing a recount of the ballots, or of the propriety of so doing, or of the propriety of an application to the successor of the Attorney General who denied the application for leave to bring a quo warranto proceeding, or of the authority of such successor to entertain the same, or as to the competency of the ballots as evidence where no action or proceeding has been begun or instituted within the period during which they are required by statute to be preserved, we are of opinion that the court should neither direct nor authorize the destruction of the ballots at the present time. There being no public necessity for the use of the ballot boxes in the immediate future, the ballots, which might be competent evidence and essential to a recanvass of the votes, or to a trial of the title to the office, should either proceeding or action be lawfully and constitutionally authorized, should not be destroved at a time when the only ground assigned for so doing is to render futile any action that the Legislature or Attorney General may attempt to take. In any event, it is manifest that the application to be relieved from the order should have been made by the board of elections against whom it operates, and that board is at liberty at any time, and should, when public necessity for the use of the ballot boxes arises, apply to the court to have the order vacated.

It follows that the order should be affirmed, with $10 costs and disbursements. All concur.

102 N.Y.S.-4

and 136 New York State Reporter (117 App. Div. 130)

WARD V. CITY TRUST CO. OF NEW YORK et al. (Supreme Court, Appellate Division, First Department. January 11, 1907 ) 1. CORPORATIONS-DEALINGS WITH OFFICERS-DUTY TO MAKE INQUIRY.

Where a person dealing with an officer of a corporation should have made inquiry as to the authority the corporation bad conferred on the officer, he was bound by the result of a diligent inquiry; and, if the inquiry would have led to the discovery of facts justifying the dealing

had, he should have the benefit thereof, though no inquiry was made. 2. BILLS AND NOTES-TRANSFERS-HOLDERS FOR VALUE.

A person taking commercial paper in extinguisbment of a debt. surrendering the note of his debtor and the collateral, whether before or after the maturity of the debt, is a holder for value.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 7, Bills and Notes,

§ 932.] 3. SAME-GOOD FAITH OF TRANSFEREE.

A trust company made a loan to the owners of the stock of a corporation, taking their note theretor and the stock as collateral. Thereafter the affairs of the corporation were placed in the control of one of the stockholders, who negotiated a loan from a bank, receiving a draft, drawn to the order of the corporation, for the amount of the loan from the trust company. The stockholder indorsed the paper, in the name of the corporation, as president and general manager, to the trust company, and it accepted it in payment of its loan to the stockholders, surrendering the note and the stock. Held, that the trust company acquired title to the draft in good faith.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 7, Bills and Notes,

$$ 924-932.) 4. CORPORATIONS-CAPITAL TRUST FUND FOR CREDITORS.

The capital stock of a corporation is a trust fund for the benefit of its creditors. 5. BILLS AND NOTES-Boxa FIDE PURCHASERS-TITLE OF TRANSFEREE.

The transferee of the personal or real assets of a corporation acquires only the title of the corporation, and, if no consideration for the transfer mores to the corporation, the title of the transferee may be impeached by creditors; but a transferee of commercial paper of a corporation acquires, not the actual title of the corporation, but its apparent right to

make a transfer. 6. SAME-NOTICE OF WANT OF POWER IN TRANSFERRER.

Under Negotiable Instrument Law, Laws 1897, p. 732, C. 612, $ 95, declaring that, to constitute notice of an infirmity in the title of the person negotiating an instrument, the person to whom it is negotiated must have had actual knowledge of the infirmity, etc.. the notice of a want of power in an officer of a corporation to transfer commercial paper held by it must, to render the transfer ineffectual, be knowledge on the part of the transferee of such facts that will make his act in taking the paper amount to bad faith.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 7, Bills and Notes, 88 818-824.] SAME.

Evidence examined, and held, that a transferee of commercial paper of a corporation did not have knowledge of such facts as rendered his action in taking the paper equivalent to bad faith. Corporations-TRANSFER OF ASSETS_VALIDITY As To CREDITORS-KNOWLEDGE BY TRANSFEREE OF FRAUD.

The title of a transferee of corporate assets can only be impeached on the round of fraud against the creditors of the corporation by proof of knowledge on the part of the transferee of intended fraud, or of such

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