Judge Martin: "It [the common council] may, therefore, by refusing to appropriate the amount called for by the board, limit the expenditures of any office or department to the amount appropriated, and thus lessen the expenses of the city government." Pryor v. City of Rochester, 166 N. Y. 548, 559, 60 N. E. 252. This plan of municipal government can be made to work successfully only by holding that every appointment by the head of a department of an employé whose salary involves an expenditure in excess of the amount appropriated for the use of the department is illegal and void, excepting, of course, in cases where the number or salaries of subordinates are prescribed by statute. It does not appear, however, in this case, that the fire department, as organized previous to the establishment of the new fire companies, involved an expenditure in excess of that prescribed by statute, and therefore the relator's appointment to a vacancy in the force as it had previously existed may well be sustained.

The increase

of the force, by the resolution of December 14th, to an extent involving on its face an annual outlay for salaries far in excess of that prescribed by statute, presents a very different question, to be dealt with when it comes before us.

PARKER, C. J., and GRAY, HAIGHT, and WERNER, JJ., concur with O'BRIEN, J. VANN, J., concurs with CULLEN, J.

Order affirmed.

(172 N. Y. 323)

SHAUGHNESSY v. FORNES et al. (Court of Appeals of New York. Nov. 11, 1902.)

MUNICIPAL CORPORATIONS-BOARD OF ALDERMEN-SERGEANT AT ARMS-APPOINTMENT-MANDAMUS.

1. The board of aldermen of the city of New York is a legislative body with power to elect its own officers and attendants, and neither Laws 1899, c. 370, § 21, giving preference to veteran soldiers, nor Charter, § 1543, requiring that any employé of any department whose position shall be abolished shall be reinstated in a similar position in another department, requires such board, which under Laws 1901, c. 466, is the successor of the city council, to appoint to the office of assistant sergeant at arms one who held such office under the appointment of the city council.

Appeal from supreme court, appellate division, First department.

Application by John J. Shaughnessy for a peremptory writ of mandamus against Charles V. Fornes and others, constituting the board of aldermen in the city of New York. From a judgment of the appellate division (77 N. Y. Supp. 223) denying the writ, petitioner appeals. Affirmed.

Thomas H. York, for appellant. George L. Rives, Corp. Counsel (Theodore Connoly and William B. Crowell, of counsel), for respondents.

O'BRIEN, J. The courts below have denied the relator's application for a peremptory writ of mandamus requiring the board of aldermen of the city of New York to elect him to the position of an assistant sergeant at arms to that body. There is no dispute with respect to the facts. The relator is a veteran soldier, and on the 6th of December, 1898, was appointed an assistant sergeant at arms to the council of the city of New York, pursuant to section 27 of the charter. At the time of his appointment the municipal assembly consisted of the council and board of aldermen. By an amendment of the charter (chapter 466, Laws 1901) the legislative power of the city became vested in the board of aldermen, the council being thus abolished, -and all the powers and duties theretofore exercised by the municipal assembly were devolved upon the board of aldermen. new board has power, among other things, to appoint a sergeant at arms and assistants. The relator, being a veteran soldier, and having been an assistant sergeant at arms of the council as it existed prior to the amendment of the charter, claims that upon the abolition of that body he was entitled to be transferred to a similar position in the board of aldermen. This claim is made under section section 21 of chapter 370 of the Laws of 1899. That statute, by its terms, has no application to certain positions therein described as confidential, and the principle upon which this case has been decided was that an assistant sergeant at arms occupies confidential relations to the appointing body, and hence was excepted from the requirements of the statute giving preference to veterans.

This

It may be that the position of assistant sergeant at arms to the board of aldermen is what the statute describes as confidential; but we do not think it necessary to pass upon that question in this case, since there is a broader ground upon which we prefer to place our decision. The board of aldermen is a legislative body. It has the power to elect its own officers and attendants, and neither the statute giving preference to veteran soldiers, nor section 1543 of the charter, has any application to such a position. These statutes were obviously intended to govern appointments in the various departments of the civil service of the city. They have no application to elective officers or appointees. No one yet has asserted that the general laws in regard to veteran soldiers, or the statute which regulates appointments in the civil service, have any application to legislative bodies. The senate and assembly of this state still have the power to elect their own officers and attendants, untrammeled by any of the restrictions contained in the civil service law, or any other statute in regard to appointments. The same principle is applicable to the board of aldermen of the city of New York. There is no law that we are aware of which requires that body to

NONSUIT-EXPRESS TRUST - ENFORCEMENT ASSIGNMENT OF JUDGMENT-PURPOSE. 1. On appeal from a judgment dismissing the complaint at the close of the opening address of plaintiff's counsel, every material fact in issue must be found in favor of plaintiff.

2. Where property was assigned to a corporation to secure it and indemnify others who became the assignor's sureties on the faith of the pledge, it could sue as trustee of an express trust to reclaim the property pledged from the assignor, who had appropriated it to his own use, if any of the obligations of the assignor for which it was pledged remain undischarged.

3. A judgment was assigned under an agreement pledging the proceeds thereof for the protection of a specified principal and sureties on a bond executed for the assignor, and it also provided for the application of the moneys "for the purposes above mentioned," and for the benefit of the sureties as their interest might appear at the time. Held to contemplate the protection of all the sureties on the boud, and not merely the one described as principal.

Parker, C. J., and Cullen and Werner, JJ., dissenting.

Appeal from supreme court, appellate division, First department.

Action by the Hoffman House against Elizur V. Foote, executor of Edward S. Stokes. From a judgment of the appellate division (63 N. Y. Supp. 784) affirming a judgment for defendant rendered on a dismissal of the complaint, plaintiff appeals. Reversed.

David McClure, for appellant. Charles E. Hughes, for respondent.

O'BRIEN, J. The plaintiff's complaint was dismissed at the trial, and this appeal is from the affirmance of that judgment. It seems to us that the judgment rests upon grounds so narrow and technical that the appeal should be sustained, and the parties remitted to a trial of the case in the regular and ordinary way. The issues in the case, if any, were triable by jury; but, after the plaintiff's counsel had opened the case to the jury, the learned trial judge granted a motion made by the defense for the dismissal of the complaint, and so the complaint was dismissed from what appears upon the face of the pleadings, or was stated by coun

sel in opening the case to the jury. The record contains the pleadings, the opening address of plaintiff's counsel, the motion to dismiss, with much argument thereon by counsel on both sides, and concludes with the statement that the complaint was dismissed at the close of the opening, to which decision the plaintiff's counsel excepted. In substance, this exception raises the question whether the court could properly nonsuit the plaintiff upon the pleadings and opening, without further investigation of the facts bearing upon the merits of the controversy. When a defendant demands and procures such a ruling at the trial, he must be prepared to defend it in this court upon the assumption that every material fact in issue is to be resolved or found in favor of the plaintiff.

The judgment in this case cannot be sustained without adopting some one of three possible theories incumbent upon the defendant to clearly establish. If it can be demonstrated either (1) that the complaint does not state a cause of action, or (2) that a cause of action well stated is conclusively defeated by something interposed by way of defense, and clearly admitted as a fact, or (3) that the learned counsel for the plaintiff, in his opening address, by some admission or statement of facts so completely ruined his case that the court was justified in granting a nonsuit, then this judgment ought to be sustained, but not otherwise. The practice of disposing of cases upon the mere opening of counsel is generally a very unsafe method of deciding controversies, where there is or ever was anything to decide. It cannot be resorted to in many cases with justice to the parties, unless the counsel stating the case to the jury deliberately and intentionally states or admits some fact that in any view of the case is fatal to the action. I am unable to find anything of that kind in the opening address contained in this record. It might very well be held that the learned counsel in the opening enlarged or amplified the complaint, but it cannot be said that his claim was not at least as broad as his complaint, or that his case verbally stated to the jury was not as strong as presented by pleading. If the plaintiff's counsel had a case upon the pleadings, it cannot be said that he stated himself out of court in his opening to the jury. The real question is whether he had any case upon the pleadings. The nonsuit rests upon the proposition that the plaintiff sued as trustee, and had not stated any facts to justify a recovery in that capacity. The basis of the complaint is a written instrument, which is set out in full, whereby the defendant assigned to the plaintiff and three other parties a judgment which he then held against Mackey of nearly $100,000. The purpose of the assignment was declared by the instrument to be for the purpose of securing the payment of a loan made to the defendant by one of the as

signees, and of indemnifying the assignees from all loss or liability by reason of certain bonds or obligations which they had executed for the defendant and at his request, in litigations to which the defendant was a party, to enable him to appeal in one case, and to get the benefit of a judgment and sale upon foreclosure in another case. The judgment was assigned as a pledge to secure the loan, and to indemnify the defendant's sureties upon these bonds; and the money, when collected, was to be retained and applied by the plaintiff upon any of these obligations in case of default in payment, or in case the sureties or any of them were made liable thereon, or in case any of the contingencies happened against which the sureties were to be indemnified by the terms of the instrument declaring the purposes of the pledge. Although the assignment ran to the plaintiff and the two other parties severally as security or indemnity against the several and separate obligations which they had severally assumed for the defendant, and for the loan by one of them, yet the judgment was to be collected and received by the plaintiff alone, and held or used by it for the purposes described; and the surplus, if any, was then to be paid over to the defendant. The judgment was collected by the plaintiff, and, having received the money, it was entered as a special account upon its books. Subsequently the defendant, having control of the plaintiff's corporate action, withdrew the fund from the special account, and applied the same to his individual and private uses. It is obvious that the money collected on this judgment was not received or held by the plaintiff in its own right or in its simple private corporate capacity, but for a special and particular purpose, namely, the protection of the sureties on the bonds and the payment of the loan. That was the sole purpose for which the fund was created, and, if a natural person should receive money under like circumstances and for a similar purpose, it would not, I think, be an error of law to hold that he was a trustee, and was liable to respond for the fund in a fiduciary or representative capacity. In the character of a trustee he could protect the fund from spoliation by any wrongdoer.

The plaintiff brought this action to reclaim and restore the fund, not only for its own benefit as one of the sureties, but for the benefit of others who were co-sureties with it, and interested in the protection of the fund.. A party, though a corporation, may prosecute an action for the benefit of others; and when it does it is a trustee of an express trust, within the provisions of the Code. Code Civ. Proc. 449. The plaintiff received and held the fund as trustee for its own protection as surety for the defendant, and also for the protection of the other sureties on the bonds, and to pay a certain loan, and as to the surplus it was a trustee for the defendant.

But it is said that this situation has been changed by events that transpired after the assignment of the judgment, and after the collection and receipt of the money thereon by the plaintiff. It is conceded that two of the obligations, to secure which the fund was created by the assignment from the defendant, have ceased to exist, since one of the bonds has been discharged by a direction of the court for a new trial of the action, and the loan has been paid in full. The third obligation, however, still remains in full force; and the question is whether the plaintiff may not assert its right to the possession of the fund in the same character or capacity in which it was originally received, so long as any of the obligations for the security and benefit of which it was created remain undischarged. The outstanding obligation is somewhat peculiar. It is executed by the plaintiff corporation as principal and two individual sureties. It may be conceded that the latter are not liable on it until after default of the former, though that is by no means clear, since all were sureties as to the plaintiff in the bond; but the fact still remains that the pledge of the judgment, according to the fair scope and meaning of the instrument creating the pledge, was intended to indemnify the parties to that bond from all loss, and it is still an existing, valid obligation, upon which the sureties may be made liable. It may very well be that the individual sureties executed the bond with the plaintiff upon the faith and credit of this fund, and they have the right to object to its waste and depletion by the trustee or any one else, and may call upon the trustee to protect it from diversion to the private use of the defendant. So that, whatever relation the plaintiff held to this fund when it received it, that relation has not been changed, but still exists.

One of the defenses set up in the answer was that the defendant has been released and discharged from all liability to account for the fund abstracted from the plaintiff's custody. That, of course, must mean that the defendant has a release and discharge from the plaintiff in the same character and capacity in which it sues; and it is said that this defense is admitted upon the record, since it is not put in issue by the reply. If the plaintiff's counsel, after stating a good cause of action in his complaint, has admitted upon the record that the defendant has been released and discharged, of course he was properly nonsuited; but that does not seem to me to be the situation. If the defendant, by his control of the corporate action of the plaintiff, was enabled to procure a resolution to be passed, or a release to be executed, surrendering the pledge, or discharging him from liability for the conversion of the money, that would not affect the parties for whose benefit the trust was created, unless they consented to it. The special defense states nothing with respect to the release except a simple corporate act, to which the

beneficiaries of the trust were not parties. It alleges that on a certain day mutual releases passed between the parties, but the pleading does not, in terms, state that either party released any claim held as trustee or for the benefit of others. The plaintiff, by way of reply to this defense, denied that any such release or discharge was ever made; adding to the broad terms of the denial the following qualifying words: "if the defendant by said allegation intends to charge that thereby claims, demands, and causes of action of the plaintiff, as trustee, against the defendant, were canceled or discharged." These were unnecessary or redundant words, but they did not vitiate the pleading at the trial. They would probably have been stricken out on a motion to correct it, but a demurrer to such a pleading cannot prevail; and the motion for a nonsuit, so far as it related to the pleadings, must be treated as a demurrer interposed at the trial. So there was a clear issue of fact on the face of the pleadings with respect to the release, and there is nothing in the opening of counsel that helps the defendant upon that issue.

The case, when viewed broadly in the light of the pleadings and the proceedings at the trial, comes to this: The plaintiff received certain property from the defendant under a written instrument which required it to hold the same for certain specified purposes; that is to say, for its own protection and indemnity, and the protection and indemnity of others who became defendant's sureties on the faith of the pledge. While one of the surety bonds was outstanding and undischarged, the defendant, as the plaintiff's agent or president, appropriated the fund to his own use. In a suit by the plaintiff to reclaim the fund, it has been nonsuited on the sole ground that it sued as trustee, and in that character had stated no cause of action. Whatever may appear to be the real merits of this case when regularly tried and submitted, we think this ruling was errone

ous. It is not necessary to use any particular formula of words in order to create a trust of personal property, and it is not even necessary that such a trust should be evidenced by any writing. Trust relations will be implied when it appears that such was the intention of the parties, and when the nature of the transaction is such as to justify or require it. Morse v. Morse, 85 N. Y. 53; Gilman v. McArdle, 99 N. Y. 451, 2 N. E. 464, 52 Am. Rep. 41; Day v. Roth, 18 N. Y. 448; In re Carpenter, 131 N. Y. 86, 29 N. E. 1005; Woodward v. James, 115 N. Y. 346, 22 N. E. 150; Gillet v. Bank, 160 N. Y. 549, 55 N. E. 292. It is quite clear that the contract which is the basis of the action was made, not for the benefit of the plaintiff alone, but for the benefit of others as well, including the defendant, who was entitled to the surplus. The plaintiff did not cease to be a trustee when one of the bonds was discharged, and the loan for which the pledge was made in

part had been paid. So long as the other bond remained unsatisfied, the plaintiff's duties and obligations and its legal relations to the fund and the parties remained unchanged, and what they were originally. While the plaintiff is described as the principal in that bond, the terms of the writing are broad enough to give the individual sureties an interest in the collateral, and the right to protect it. It is not true, we think, that at the time of the commencement of the action the plaintiff could hold the fund only in its own right and for its own protection. That contention ignores the manifest purpose of the pledge expressed or implied in the writing to secure and indemnify all the sureties on the bond, and not merely one of them who was described as principal.

If there could be any doubt about this proposition, founded upon the general words of the written assignment, it is removed by the very last clause, which in terms provides that the plaintiff is to apply the moneys collected on the judgment "for the purposes above mentioned," and for the benefit of the sureties (naming them) "as their interest may appear at the time." These words plainly mean that the pledge was not merely for the benefit of one of the sureties on the outstanding bond, designated therein as "principal," but for the benefit of all, as their interest might appear. The defendant had no right to the fund so long as any of the sureties on that bond remained liable. The sureties all executed the bond with knowledge of the pledge of the fund in question, and presumptively on the faith of it, and had the right to object to any release of it by the plaintiff. Wetmore v. Porter, 92 N. Y. 76. It may be that there is a defense to this action when all the numerous allegations contained in the voluminous pleadings on both sides have been tried and decided, but it is quite clear, we think, that the defendant was not entitled to a nonsuit by reason of anything stated in the pleadings or admitted in the opening of counsel.

The judgment should be reversed, and a new trial granted; costs to abide the event.

CULLEN, J. (dissenting). There are two questions presented on this appeal, and both arise on the pleadings: The first is whether the complaint set forth a good cause of action against the defendant; the second, whether that cause of action had been released previous to the institution of the suit. If either of these questions is decided against the plaintiff, it would have been unreasonable for the trial court to have proceeded with the trial, for in such event there could be nothing to try. The complaint was dismissed at trial term on the ground that the plaintiff sued as trustee, while the cause of action set forth in the complaint was in favor of the plaintiff individually. The appellate division, by a divided court, has on this theory affirmed the action of the trial term.

In this view I do not concur. It is true the title of the summons and that of the complaint state the name of the plaintiff as "Hoffman House, New York, as Trustee," but as trustee for whom or for what is not stated. The complaint sets forth the instrument under which the judgment recovered by the defendant against Mackey and others was assigned to the plaintiff; it states the collection of the judgment by the plaintiff, and the subsequent appropriation of the fund by the defendant, who was at the time an officer of the plaintiff, and in control of its management; and it prays judg ment that the defendant pay "to the plaintiff, Hoffman House, New York," the sum of $35,000, with interest, being the amount for which the plaintiff was liable on a bond which it had previously given. Thus the complaint stated all the facts, and, if from those facts there arose a good cause of action in favor of the plaintiff individually, it was entitled to recover in its own right, despite its description as trustee in the title of the summons and complaint. Litchfield v. Flint, 104 N. Y. 543, 11 N. E. 58. See cases there cited. This would seem to have been the notion of the pleader who drew the answer, for in that answer there are alleged both a personal release from the plaintiff, and a counterclaim against the plaintiff individually. That the complaint stated a good cause of action in favor of the plaintiff, either in one capacity or the other, cannot be questioned.

To the allegation of the release the plaintiff replied by denying that it thereby discharged the defendant from any cause of action which it as trustee had against him, and it also set up in bar of the defendant's counterclaim the same settlement; alleging that thereby the plaintiff released the defendant from all causes of action against him in favor of the plaintiff in its individual capacity, and that in consideration thereof the plaintiff was discharged from all liability to the defendant. It is therefore clear that by the pleadings it appeared that all personal claims or demands against the defendant had been discharged; and there remains the sole question whether the claim of the plaintiff to a portion of the proceeds of the assigned judgment was in its own right, or for the benefit of others. It seems to me unnecessary to consider whether by the instrument of assignment the plaintiff was created a trustee or not. The first and third of the liabilities as indemnity against which the Mackey judgment was assigned had been discharged by the defendant. He had succeeded in setting aside the judgment for which McDonald and Leary were sureties on appeal. He had paid Leary the debt of $25,000 specified in the assignment. The only purpose still outstanding was the second: "To secure the said Hoffman House against any liability heretofore incurred or which it may be under by reason of its

being a surety or liable in a proceeding in which the Farmers' Loan & Trust Company, as trustee, was plaintiff, and the Hoffman House of New Jersey was defendant, which obligation was for about thirty-five thousand dollars ($35,000), originally." It is the sum of money requisite to discharge this obligation, and only this sum, that the plaintiff seeks to recover. If this obligation inured to the benefit of the plaintiff alone, it is plain that the claim against the defendant for the conversion of the fund was the personal claim of the plaintiff, and it is admitted that all such claims held by either party to the action against the other were released and discharged by the settlement of September 25, 1897. If a recovery is had in this action, and the money applied to the satisfaction of the bond it will inure directly to the plaintiff's advantage, and practically it will obtain $35,000 from the defendant, although the parties agreed to release their several demands. The theory on which such result is sought to be accomplished is that the plaintiff is a trustee, not only for itself, but for the persons who became sureties on the bond it gave in regard to the liabilities specified in the assignment. That a party cannot well be trustee for himself is settled by the decision of this court in Greene v. Greene, 125 N. Y. 506, 26 N. E. 739, though, if the contrary were the law, I do not see how it would affect the question. So far as the plaintiff was a beneficiary under the assignment, even if the assignment had been made to another as trustee, it could release the defendant from any conversion of the trust fund; and, if the plaintiff was the sole beneficiary, its release would be a bar to any action by the trustee. The controversy, therefore, becomes further narrowed to the single question whether the assignment was for the benefit of the sureties of the plaintiff, and created a trust in their favor. It would seem that even a casual reading of the instrument disposes of such a contention. The purpose of the assignment is said to be "to secure the said Hoffman House against any liability." It is not stated to be for the purpose of indemnifying the sureties. There is no reference to the sureties, nor does it appear from the instrument that there were any such sureties. The final clause of the assignment does not in any way extend or amplify the objects before specified. The learned prevailing opinion is erroneous, where it is stated that the assignment provides that the plaintiff is to apply the moneys collected on the judgment "for the benefit of the sureties (naming them) as their interest may appear.'" The provision is that the moneys shall be applied "for the benefit of the said Ronald T. McDonald, the Hoffman House, and James D. Leary, as their interest may appear at the time." McDonald was not a surety on the bond given by the plaintiff. James D. Leary was one of