(105 Misc. Rep. 559)

In re BROOKS' ESTATE.

(Surrogate's Court, New York County. December 20, 1918.)

1. TAXÁTION 867(1)—TRANSFER TAX-DOMICILE-DETERMINATION.

In determining domicile of a deceased wife for the purpose of imposing a transfer tax on her property, decedent's domicile is that of her husband. 2. TAXATION 893-TRANSFER TAXES-BURDEN OF PROOF AS TO DOMICILE. Where, in proceedings to impose a transfer tax on the property of a decedent, the state comptroller asserts a change from the domicile of origin, the burden of proving it rests upon him.

8. TAXATION 867(1)-TRANSFER TAXES DOMICILE.

On motion by the state comptroller for an adjudication that a deceased wife was a resident of the state for the purpose of imposing a transfer tax, Laws 1916, c. 551, providing that persons having lived in New York for the year preceding their deaths shall "be deemed" residents thereof for taxation purposes, and amending Tax Law, § 243, has no application to the domicile of a deceased wife; her domicile following that of her husband living at her death.

In the matter of the transfer tax upon the estate of Elizabeth Ana Brooks, deceased. On motion by the State Comptroller for an adjudication that decedent died a resident of the state of New York. Denied.

Lafayette B. Gleason, of New York City (John B. Gleason, of New York City, of counsel), for the motion.

William B. Sprague, of New York City (T. Ludlow Chrystie, of New York City, of counsel), opposed.

COHALAN, S. The question of the domicile of the decedent is presented for determination on the evidence taken before the transfer tax appraiser, which, pursuant to the stipulation of the parties, is submitted to the court. The decedent was the wife of Ernest A. Brooks, who is a British subject, born in Cuba of English parents. The testimony shows that it had been the custom of decedent and her husband to stay in Cuba (in which country Mr. Brooks had extensive business interests) until before the commencement of the rainy season in the month of May, returning to Cuba in the late fall or winter. Prior to the outbreak of the war the remainder of the time was spent in traveling; the itinerary including a trip to Europe and a comparatively brief sojourn in New York City. Since the year 1914 the time theretofore spent in the European tour was passed with the children of decedent in New York state.

[1, 2] The domicile of decedent's husband was decedent's domicile. Hunt v. Hunt, 72 N. Y. 217, 242, 28 Am. Rep. 129. The state comptroller asserts that there was a change from the domicile of origin, and the burden of proving the fact rests upon him. Dupuy v. Wurtz, 53 N. Y. 556. The evidence fails to support his contention. The acts of the husband of decedent are not inconsistent with his declaration that at the date of his wife's death he was a resident of Cuba.

[3] It is unnecessary to consider the effect of the amendment of section 243 of the Tax Law (Consol. Laws, c. 60) by chapter 551 of

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the Laws of 1916, construed by the Appellate Division in this department in its recent decision in Matter of Barbour, 185 App. Div. 445, 173 N. Y. Supp. 276 (decided December 13, 1918). The amendment has no application to the case under consideration, as the husband of the decedent is alive. Matter of Bain, 104 Misc. Rep. 508, 172 N. Y. Supp. 604. I find that the decedent was not a resident of the state of New York.

The proceeding will therefore be remitted to the transfer tax appraiser, for the purpose of appraising the estate of the decedent as a nonresident of this state.

WILTON MFG. CO., Inc., v. MACHINERY & METALS SALES CO., Inc.

(City Court of New York, Special Term. March 10, 1919.)

In an action on a contract of guaranty, signed by defendant as part of the consideration for an agreement by plaintiff to sell to another, a defense setting up plaintiff's breach of contract with principal held insufficient, not showing that the breach was in any way connected with the contract for performance of which the guaranty was given.

2. GUARANTY 25(3)-CONSIDERATION EVIDENCE.

Where under a prior arrangement, contemporaneous with the principal contract, a contract of guaranty was executed, the fact that it was not executed until after the principal contract was made does not establish that the contract of guaranty was without consideration and unenforceable.

3. PLEADING 8(4)-CONCLUSIONS-WANT OF CONSIDERATION.

Averments in the answer that a contract of guaranty was without consideration are mere conclusions of the pleader.

4. FRAUDS, STATUTE OF 143(1)—RIGHT TO DEFENSE-GUARANTOR.

The defense that a contract for the sale of goods was unenforceable on account of the statute of frauds is a personal defense, available only to the principal, and cannot be asserted by one who guaranteed the principal's performance.

Action by the Wilton Manufacturing Company, Incorporated, against the Machinery & Metals Sales Company, Incorporated. On demurrer to separate defenses in the answer. Demurrer sustained. White & Case, of New York City (David Paine, of New York City, of counsel), for the motion.

Jonas J. Hegt, of New York City, opposed.

FINELITE, J. Plaintiff demurs to the three defenses in the amended answer upon the ground that they are insufficient in law. The first cause of action pleaded sets up that the plaintiff is a domestic corporation and the defendant is a foreign corporation; that on or about October 15, 1918, the plaintiff agreed to sell to Lombard Export Corporation, a department of defendant, and Lombard Export Corporation agreed to purchase of plaintiff, goods, wares, and merchandise, the agreed purchase price and value of which was $1,013, which should be paid within 10 days after date of invoice; that the said goods were For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

duly invoiced December 3, 1918, and have been since said date held by plaintiff, subject to the payment of said purchase price, in accordance with the terms of said agreement and of sections 135 to 137, inclusive, of the Personal Property Law of the state of New York (Consol. Laws, c. 41); that defendant, in consideration of the aforesaid agreement on the part of the plaintiff, and as an inducement to the plaintiff to enter into said contract, duly executed and delivered to the plaintiff an agreement in writing whereby it agreed that, if any default should be made by said Lombard Export Corporation in the payment of said purchase price, it would pay to the plaintiff the amount of said purchase price, not to exceed $1,013; that said Lombard Export Corporation has not paid the said sum of $1,013, which became due on said purchase price December 13, 1918, nor any part thereof, although demanded.

Defendant by its answer sets up as a first separate and distinct defense that on October 7, 1918, Lombard Export Corporation agreed to purchase of the plaintiff said merchandise mentioned in the complaint, and by said agreement it was provided that delivery of said goods was to be made on October 11, 1918, and that payment for said goods was to be made, less 3 per cent., within 10 days after the delivery of said goods; that the plaintiff has wholly failed and neglected to deliver the said goods or any part thereof on the 11th day of October, 1918, and has ever since and still continues to refuse to make delivery thereof to said Lombard Export Corporation. For a second defense it sets up that the alleged guaranty referred to in the complaint was not executed and delivered until the 14th of November, 1918, which was long after the original contract had been entered into, and that the defendant received no consideration therefor, and that said alleged agreement of guaranty was and is wholly without sufficient consideration. For a third defense it pleads the statute of frauds.

[1] The plaintiff demurs to said defenses upon the ground that each is insufficient in law upon its face. From a reading of the pleading it is apparent that the defense attempts to set up a breach of a contract made by plaintiff not with the defendant, but with the Lombard Export Corporation, to show that the contract entered into between the plaintiff and the said Lombard Export Corporation was not fulfilled. The defense fails to allege facts sufficient in law to connect the contract there referred to with the one which the defendant guaranteed in this action. The fact that the Lombard Export Corporation, which is not the defendant, may have some claim against the plaintiff on a contract in no way identified with the contract which the defendant guaranteed is of course no defense to this action.

[2, 3] The second defense to the alleged guaranty, that it was not executed and delivered until after the original contract had been entered into and that the defendant received no consideration therefor, is without merit. Non constat if the former guaranty was executed under a prior arrangement contemporaneous with the contract for the giving of such guaranty, or if it were given before the goods were actually delivered, and it so appears by the complaint, then the fact that the writing postdated the contract for which the guaranty was

given would not detract from its validity. In 20 Cyc. at page 415, it is said:

"The fact that the contract of guaranty was executed a short time subse quently to the carrying out of the principal contract does not take the transaction out of the above rule if the guaranty was executed pursuant to an understanding had before the performance of the principal contract and was a material inducement to the parting with value by the creditor."

And in a note to this section it is said:

"Where a contract for the sale of goods is made and the seller declines to deliver them unless security for their payment is furnished, and a third person thereupon guarantees payment and the goods are furnished, the contract of guaranty must be regarded as having been made contemporaneously with the principal contract, and, of course, needs no additional consideration."

See Erie County Sav. Bank v. Coit, 104 N. Y. 532, 11 N. E. 54. The allegation that there was no consideration for the guaranty is a mere conclusion of law. Hammond v. Earle, 58 How. Prac. 426; Tate v. American Woolen Co., 114 App. Div. 106, 99 N. Y. Supp. 678.

[4] In the third defense, in which the defendant attempts to set up the statute of frauds, the pleader is met by the principle of law that such defense is a personal one to the parties to the contract, and is not available to the guarantor of the obligation. Matthews v. Matthews, 154 N. Y. 288, 48 N. E. 531. In the case of Stitt v. Ward, 142 App. Div. 626, 127 N. Y. Supp. 351, the court said:

"The statute of frauds is a personal defense and cannot be availed of by a third party."

See Folinsbee v. Sawyer, 157 N. Y. 196-199, 51 N. E. 994; Crane v. Powell, 139 N. Y. 379, 34 N. E. 911.

Demurrer to the separate defenses of the answer sustained, with $10 costs, with leave to defendant to plead over upon payment of said costs within 6 days after service of a copy of the order entered hereon and notice of entry thereof. Order signed.

A. SHERMAN LUMBER CO. v. KILDARE CLUB et al. (Supreme Court, Appellate Division, Third Department. March 14, 1919.) 1. INJUNCTION 148(2)-UNDERTAKING-PROCEEDING TO INCREASE.

That plaintiff, obtaining an injunction, is a wealthy corporation, and able to respond in damages, is not important, except as bearing on the court's discretion in increasing the undertaking, and tending to show that the same would not be burdensome, and might be necessary to fully protect the defendants, who are limited for damages to the amount of the undertaking.

2. INJUNCTION 148(2)—UNDERTAKING-LIABILITY-INCREASING UNDERTAKING.

Where defendants are made subject to expenditures in defense of their rights which exceed the amount of plaintiff's undertaking on injunction, the court should, in its discretion, enlarge the bond to cover the expenditures.

8. INJUNCTION 148(2)—INCREASE OF UNDERTAKING VALID DEFENSE.

Where the purpose of litigation is to enjoin defendants from interfering with plaintiff's private use of a roadway over defendant's land, and plaintiff is not interested in the status of the roadway, or its public use, and the record indicates that defendants have a good defense, they should be protected by a bond sufficient to cover their damages, as a condition of continued injunction.

4. INJUNCTION 148(2)-INCREASE OF UNDERTAKING-AMOUNT.

Since defendants are limited by the amount of the bond, though their damages should largely exceed it, in a suit to enjoin defendants from interference with a roadway, which defendants claim as private property, on the ground that it is a public highway, held, that the bonds should be increased from $2,500 to $10,000, in view of the circumstances.

John M. Kellogg, P. J., dissenting.

Appeal from Special Term, St. Lawrence County.

Action by the A. Sherman Lumber Company against the Kildare Club and others. From an order denying defendants' motion for an increase in the security given upon the injunction issued in the action, defendants appeal. Order reversed, and motion granted.

Argued before JOHN M. KELLOGG, P. J., and LYON, WOODWARD, COCHRANE, and HENRY T. KELLOGG, JJ.

Ainsworth, Carlisle & Sullivan, of Albany (John N. Carlisle, of Albany, of counsel), for appellant Kildare Club.

Snyder, Cristman & Earl, of Herkimer (Charles E. Snyder, of Herkimer, of counsel), for appellants Lehman and Ehrich.

Thomas Spratt and George E. Van Kennen, both of Ogdensburg, for respondent.

WOODWARD, J. The plaintiff, a domestic corporation engaged in lumbering and paper and pulp manufacturing, brings this action to restrain the defendants, owners and lessees of a gaming and fishing preserve in the Adirondacks, from interfering with the plaintiff's use of an alleged public highway running through the defendants' property. The defendants deny that the road is a public highway, and allege that it is a mere private road. The plaintiff has a large quantity of hemlock bark which it is trying to get to market, and the

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