Surrogate's Court, New York County, April, 1922.

[Vol. 118

The trustee in bankruptcy is vested only with the title to the property, which the bankrupt had at the date of adjudication. Bankruptcy Act, § 70a; Collier Bankruptcy [11th ed.], 1112. Property not then owned, but acquired after adjudication, does not vest in the trustee but becomes the bankrupt's clear of the claims of creditors. The next of kin acquired no interest, nor the right to contest the testamentary disposition of their mother until her death. This is so regardless of any provision in their favor in the will, which was subsequently revoked by the terms of the codicil. The federal courts have repeatedly held that the legacies or distributive shares accruing by the death of a decedent after adjudication do not vest in the trustee. Matter of Swift, 259 Fed. Rep. 612; Matter of Woods, 133 id. 82. This rule has likewise been applied to curtesy and dower, which vests in the trustee only where death occurs prior to the filing of the petition. Hesseltine v. Prince, 95 Fed. Rep. 802. Matter of Coryell, 4 App. Div. 429, cited by the objectants, is not applicable, since the person filing objections there was the receiver in supplementary proceedings on a judgment which became a lien upon the property of the bankrupt, acquired by her through the will of her father.

Subdivision 5 of section 70a of the Bankruptcy Act confers upon the trustee title to property which the bankrupt by any means could have transferred or which might have been levied upon or sold by judicial process. It confers no right upon the trustee here, since there was no vested interest in the next of kin until the death of their mother. Matter of Seal, 261 Fed. Rep. 112. There mere expectation of acquiring property does not constitute property or title to property, and, therefore, cannot be transferred or levied upon. The trustee is, therefore, not an interested party in this proceeding under Surrogate's Court Act, §§ 147, 314, subd. 11. Submit order accordingly.

Ordered accordingly.

In the Matter of the Estate of ALBERT S. RANLETT, Deceased.

Surrogate's Court, New York County, April, 1922.

Negotiable instruments consideration

on account of another

note given to pay balance due decedent's estate — liability of maker's estate

to pay the note — Neg. Inst. Law, § 51. Under section 51 of the Negotiable Instruments Law an antecedent or preexisting debt constitutes value and is a sufficient consideration to support a promissory note given in payment thereof.

Decedent, an employee of a firm of stockbrokers, having opened an account with them in the name of one W., gave orders to buy and sell on that account cotton for future delivery, and orally guaranteed the payment of any indebtedness

Misc. 528]

Surrogate's Court, New York County, April, 1922.

resulting from any of the transactions carried on for W. When the account was closed out there was a balance due the stockbrokers of $2,410, and immediately decedent wrote to the firm a letter as follows: "Referring to the indebtedness of $2,410 to you by A. W. Watkins, I beg to confirm my verbal guarantee of its payment." Later, in conversation, a member of the firm stated to decedent that as the account had been opened by him the indebtedness should be paid by him and thereupon decedent executed and delivered to the firm his promissory note for the amount of the debit balance, with interest, payable on demand for value received. The executrix of decedent disputed the claim on the note and in the agreed statement of facts it is conceded that at no time had the firm had any dealings, transactions or communications of any kind with W.; that he was unknown to the firm and that all dealings, transactions and communications relative to the account in his name were carried on by and with the decedent and according to his instructions. Held, that it was a fair inference that in reality the account was the personal one of decedent under the fictitious name of Watkins and the note given by decedent was in payment of his personal indebtedness, the identity of Watkins or his actual existence not having been established by either of the parties.

Upon delivery of the note the account was marked "settled upon the books of the firm and any claim against W. was discharged by them. Held, that in the circumstances there was a sufficient.consideration for the note and it was a valid claim against the estate.

TRIAL of claim against an estate.

Charles MacVeagh (George Denneny, of counsel), for Shearson, Hammill & Co.

Otis & Otis, for executrix.

FOLEY, S. Shearson, Hammill & Co. filed a claim against this estate upon a demand note for $2,431.69, made by the decedent to the order of the claimants and dated September 21, 1914. The validity of the claim is disputed by the executrix. The matter is submitted to the court upon an agreed statement of facts. On the 21st of November, 1910, the decedent, then an employee of the claimants, opened an account with them in the name of one A. W. Watkins, and thereafter gave orders to the claimants to buy and sell for that account, on the New York Cotton Exchange, cotton for future delivery. The transactions in the account continued up to July 29, 1914. The account was then closed out, and as a result of the trading there was a balance due of $2,410. At the time the account was opened, and during the time the trading was carried on, the decedent orally guaranteed the payment of any indebtedness resulting from any transactions carried on for Watkins. On the 1st day of August, 1914, immediately after the account was closed, the decedent wrote to Shearson, Hammill & Co. a letter which read: "Referring to the indebtedness of $2,410 to you by A. W. Watkins, I beg to confirm my verbal guarantee of its payment." On the 21st of September, 1914, Walter L. Johnson, a member of the firm of Shearson, Hammill & Co., had an interview

Appellate Term, First Department, April, 1922.

Vol. 118 with the decedent. Johnson then stated to Ranlett that as the account had been opened by him the indebtedness should be paid by him, and thereupon the decedent executed and delivered his promissory note for $2,431.69 (the debit balance including interest), payable on demand for value received. Payment was demanded of Ranlett upon the following day.

It is conceded in the agreed statement of facts that at no time had Shearson, Hammill & Co. had any dealings, transactions or communications of any kind with A. W. Watkins; that he was unknown to Shearson, Hammill & Co., and that all dealings, transactions and communications relative to the account in the name of A. W. Watkins were carried on by and with the decedent, and according to his instructions.

The fair inference is that the account was in reality the personal account of the decedent, under the fictitious name of Watkins, and the note given by the decedent was in payment of his personal indebtedness. In any event, the identity of Watkins, or his actual existence, has not been established by either of the parties. It is claimed, however, that there was no consideration for the giving of the note. Upon the delivery of the note the account was marked "settled" upon the books of the claimants, and any claim against Watkins was discharged by them. Under the circumstances it would seem, therefore, that there was a sufficient consideration. Union Bank v. Sullivan, 214 N. Y. 332; Robinson v. Oliver, 171 App. Div. 349, 353; affd., 224 N. Y. 665. Tyler v. Jaeger, 47 Misc. Rep. 84, cited by the executrix, has no application because of the peculiar facts here and in the course of dealing between the parties. Under section 51 of the Negotiable Instruments Law an antecedent or pre-existing debt constitutes value, and is a sufficient consideration to support the note given in payment thereof. Kelso

& Co. v. Ellis, 224 N. Y. 528. The claimants are holders of the note for value and have a valid claim against the estate. Submit decree accordingly.

Decreed accordingly.

BOLTON-WORSTED MILLS COMPANY, INC., Appellant, v. UNITED BRITISH INSURANCE COMPANY, LTD., Respondent.

Supreme Court, Appellate Term, First Department, March Term Filed April, 1922.

Insurance loss of goods in transit when receipt accepted from local truckman stating value to be $200 does not limit his liability or restrict recovery under insurance policy — subrogation.

A policy of insurance issued to plaintiff by defendant provided inter alia against loss of goods by theft or in transit while in the custody of any common carrier

Misc. 530]

Appellate Term, First Department, April, 1922.

66

or bailee from the time of leaving the warehouse, store or factory of the shipper until safely delivered to the consignee. While the policy was in force plaintiff's agent at Philadelphia delivered to a truckman certain goods of plaintiff for carriage to New York and delivery to plaintiff. Shortly before unloading at New York city the goods were either stolen or lost and were never delivered to or received by plaintiff. In an action on the policy it appeared that plaintiff had instructed its agent to put a valuation of $200 on all express" shipments in accordance with the policy of insurance. Held, that a receipt given by the truckman and accepted by plaintiff's agent upon a form filled in and prepared by the shipper's clerk and containing the words "Val. $200 " and the signature of the truckman who at the time simply said that he would cart the goods at a certain figure which was based on its size and not on its value did not limit his liability.

The kind and quality of the goods had a distinctive trade number and plaintiff's manager, a qualified expert in value, testified as to the reasonable market value of the goods at the time of loss. Bills showing the valuation of the goods on the basis of actual invoice cost plus certain other charges as provided by the policy and alleged in the complaint were furnished to defendant at the time plaintiff filed its claim. Held, that proof had been given as to the value of the goods and an order setting aside a verdict in favor of plaintiff and granting a new trial unless plaintiff stipulated to reduce the recovery to $200 will be reversed and the verdict reinstated.

APPEAL by plaintiff from an order of the City Court of the city of New York, setting aside a verdict of a jury in favor of plaintiff and granting a new trial unless plaintiff stipulated to reduce the amount of recovery to $200 and interest.

Levy & Becker (Joseph Levy, of counsel), for appellant.

G. Noyes Slayton, for respondent.

COHALAN, J. The action is brought to recover upon an insurance policy which provided, amongst other things, against loss of goods caused by theft or loss while in transit in the custody of any common carrier or bailee from the time of leaving the warehouse, store or factory of the shipper until safely delivered to consignee.

While the policy was still in force plaintiff's agent at Philadelphia delivered to one Hughes, a truckman, eight pieces of oxford gabardine property of the plaintiff for carriage to New York and delivery to plaintiff. Shortly before unloading at New York city they were either stolen or lost and were never delivered to or received by the plaintiff.

Hughes, the truckman, on receipt of the merchandise gave a receipt therefor in writing upon a form filled in and prepared for his signature by the shipper's clerk. This form had printed on it the name of the city from which the goods were shipped and nothing else. The part filled in at the time of shipment was the date, name of shipper and consignee, with the address of latter, number of packages of goods and the words "val. $200 " and signature of truckman.

The main point in issue is whether or not the plaintiff by the act

:

532 BOLTON-WORSTED M. Co., INC., v. UNITED B. INS. Co., LTD.

Appellate Term, First Department, April, 1922.

[Vol. 118

of its agent at Philadelphia in accepting the receipt from the truckman with "val. $200 " on it loses its right of indemnity under the plaintiff's policy. Did this act prejudice defendant's right of subrogation and violate an express warranty of the policy of insurance to such an extent that plaintiff is not entitled to recover more than $200?

At the time of filling in the receipt and its signing and delivery nothing was said between the parties as to any valuation of the goods or any conditions or terms of shipment, except the truckman said he would cart the goods at a certain figure. This figure was based on the size of the package and not on its value clearly one of bulk and not value. "Val. $200 " was not mentioned nor was there any agreement as to liability except such as might arise from the use of those words on the paper in question. It appears the agent had been instructed by the plaintiff to put a value of $200 on all " express" shipments in accordance with a provision of the insurance policy. He apparently made no distinction between "truckman" and "express." Clearly if "val. $200 " be not construed as limiting the truckman's liability then the plaintiff is entitled to recover.

The defendant called no witnesses but rested on the plaintiff's case and its motion to dismiss was denied, and both sides moved for direction of a verdict.

The court held that there was no limitation of liability of the truckman and that the defendant's right of subrogation was not impaired, but that there was a question as to the value of the goods. The motion for direction of a verdict was denied. Later upon motion to set aside the verdict in favor of plaintiff the court reserved decision and subsequently granted the motion.

A question was presented on the argument whether or not there was error on the part of the court in admitting evidence as to conversations had at the time of the giving of the paper in question. Receipts as such, and the paper given here is in form of receipt, are open to explanation. Had there been some express clause or limitation of liability, such as in the many cases referred to in respondent's brief, the question would be different. Here there was no express clause unless we hold that "val. $200 " constitutes such and I do not think it does. This expression standing alone as it did on this paper calls for explanation or at least is subject to it, and the explanation given is opposed to the views taken of it by the respondent.

After careful consideration I believe the receipt given by Hughes to the plaintiff's agent did not limit the liability of Hughes, and so the plaintiff was entitled to recover.