Case ID: ad_113/html/0254-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Ingraham, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Victor Hartmann and Rosalie Schacht, Respondents, v. Francis J. Schnugg and Others, Individually and as Executors of and Trustees under the Last Will and Testament of John Schnugg, Deceased, and Others, Appellants.
    First Department,
    May 18, 1906.
    Principal and.' agent — estate of attorney in fact liable for moneys falsely represented to have been invested — practice — proposed findings and conclusions must be filed before case is submitted for decision. ...
    When an attorney in fact' authorized by his principal to- invest moneys in securities has reported certain fictitious'investments in mortgages and has continued until his death to pay what he represented to be income therefrom, his estate. is liable for.the moneys thus admitted to have been received.
    To entitle a party to require the court to pass upon proposed findings of fact and conclusions of law he must submit them before the case is finally submitted for decision, Unless the time is extended by consent. A case is “ finally" submitted for decision ” when the testimony is finished and the arguments . concluded. A party cannot wait until the court has announced its decision before submitting proposed findings and conclusions.
    Appeal by the defendants, Francis J. Schnugg and others, individually and as executors of and trustees under the last will and testament of John Schnugg, deceased, and others, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county, of New York on the 30th day of June, 1905, upon the decision of the court, rendered after a trial at the New York Special Term.
    
      Joseph Rosenzweig, for the appellants.
    
      J. Brewster Roe, for the respondents.
   Ingraham, J.:

For many years John Schnugg, the defendants’ testator, had acted as attorney in fact for the plaintiffs’ father and mother in investing money for them, collecting the interest on the investments and looking after their property, and had continued to occupy the same position for the plaintiffs after the death of their parents. He had invested certain moneys for plaintiffs’ mother on bond and mortgage, and after' her death continued to represent the plaintiffs and this action was to compel the representatives of his estate to account for these securities.

The record is quite voluminous, but as we think the findings of the trial court were sustained by the evidence, it will not be necessary to consider the testimony.

The court found that the plaintiffs were the only children and sole heirs at law ©f "one George Hartmann, who died on March 12, 1882, and Katharina Hartmann, his wife, who died on March 16, 1890; that Katharina Hartmann on July 13, 1882, executed and delivered to John Schnugg a written power of attorney by which she appointed the said John Schnugg to be her attorney in fact, empowering her said attorney, among other things, to invest and keep invested all her moneys at interest upon good bonds and mortgages or such other securities as her said attorney should deem most safe and profitable for said Katharina Hartmann; that John Schnugg accepted the appointment as such attorney in fact, and acted thereon continuously until the death of said Katharina Hartmann ; that at the time of the execution and delivery of said power of attorney, the said John Schnugg had in his possession belonging to the said Katharina Hartmann a large sum of money, which with bonds secured by mortgages in his possession amounted to $163,000- and upwards; that the said Katharina Hartmann died leaving a will which was duly admitted to probate in the Surrogate’s Court in the county of Hew York; that by said will the testatrix left all her property in the United States to the plaintiffs, share and share alike, and appointed John Schnugg her executor, to whom letters testamentary were issued; that on August 4, 1890, the plaintiffs executed and delivered to said John Schnugg a written power of attorney appointing the said John Schnugg as their, attorney in fact, and empowering their said attorney, among other things^ to invest and keep invested all their moneys at interest' Upon good bonds and mortgages, or 'stick other securities as-said ' attorney should deem most sáfe and profitable for them.; that upon the execution and delivery of said power of attorney the 'said John Schnugg accepted his appointment as said attorney, and thereupon and continuously until his death acted as said attorney in-fact; that said John Schnugg, as attorney in fact of said- Kátharina Hart mann, about August, 1887, accounted to said Katharina Hartmann, and by this account it appeared that he had on hand at' that time, as her attorney, a mortgage called tile Láwnside ” mortgage, of $18,000, and a mortgage on H o. 2690 Third avenue for $9,000; and that on September 7, 1888, the said John Schnugg represented in writing to Katharina Hartmann that he had in vested of her .money in his hands the sum of $22,000 .on a mortgage on real estate in the city of HeW" York oil Eighth avenue and One Hundred and Forty-sixth street; that on or about 'the 10th of October, 1891, said John Schnugg, as executor of the will of Katharina Hartmann, accounted as executor under her will, in which account it appeared that he held as. such executor these three mortgages above mentioned, and also a bond' and mortgage upon premises at Ho. 139 East Hinetyiifth street, Hew-Yolk city, for $4,600, and that he charged himself . with interest received upon these several mortgages. Thiá accounting was submitted to the plaintiffs, who were- then residing in Germany, and where they continued to reside down to the commencement of this action. With this formal account there was sent to them an agreement approving the accounts and acknowledging that théy had received from John ¡Schnugg these securities and that they had returned the securities to the- said Schnugg to be held by him as attorney in fact ..for them and to .’administer the same in accordance with the- power of attorney theretofore made to «him," which instruments' were duly executed by the plaintiffs and returned to the said John Schnugg who executed the same. These securities wére mot, as a matter of fact, -sent by John" Schnugg to the plain- - tiffs, and were-never in the possession of the plaintiffs. He merely reported to them that he had these securities, in his possession and retained them under the power of attorney referred to. H

In relation to the bond and mortgage alleged in this account toil be the bond and mortgage on. the Eastchester road property forH $18,000, it appeared that this property was owned by Francis J. Schnugg, a son of John Schnugg; that he made a mortgage on this property on May 4, 1894, for $20,000 to one Jacob Wick; that this mortgage was subsequently discharged of record on March 28, 1896; that subsequently Francis J. Schnugg executed and delivered to other parties mortgages on the same premises for amounts exceeding in the aggregate $58,000, and that thereafter the said Francis J. Schnugg conveyed these premises by deed dated January 2, 1902, and duly recorded, to the Eastern Union [Realty Company; that in relation to the mortgage for $9,000 on the property Ho. 2690 Third avenue, it appeared that this property was owned by Francis J. Schnugg; that on February 6, 1888, there was recordéd in the office of the'register a mortgage on said property to Katharina •Hartmann for $9,000, which was discharged of record on June 28, 1889, by a satisfaction piece executed by the said John Schnugg, as attorney in fact for said Katharina Hartmann, and there was no other mortgage on record or which appears to have been executed upon the said property in favor of either John Schnugg, as attorney in fact for the plaintiffs, or Katharina Hartmann, or the plaintiffs ; that in respect to the mortgage of. $22,000 on the property on the southwest corner of One Hundred and Forth-sixth street and Eighth avenue, Hew York city, that property was also owned by Francis J. Schnugg; but no mortgage appears to have been executed or recorded upon the said property in favor of either the plaintiffs or their mother, but on Hovember 23, 1892, Francis , J. Schnugg conveyed this property to one Stein subject to a mortgage of $28,000 to the Washington Life Insurance Company ; that in respect to the mortgage for $4,500 upon the premises known as Ho. 139 East Hinetyfifth street, no such mortgage was ever recorded, but it appeared that these premises were conveyed to Francis J. Schnugg by deed dated January 16, 1889 ; that said Schnugg, on December 9, 1889, mortgaged said premises to the Mutual Life Insurance Company for $10,000, and on January 10, 1890, the said Francis J. Schnugg conveyed the said premises to one Wilkening subject to the said mortgage for $10,000; that said Wilkening mortgaged said premises to said Francis J. Schnugg on January 10, 1890, for $4,500, which mortgage was discharged of record by said Schnugg on April 7, 1899; that subsequently said Wlikening reconveyed the premises to Francis J. Sclmugg by deed dated January 10,1897, and he sub- . sequently convéyed the said premises, to one Frank by deed dated October 7, 1901. Thus, these four mortgages in which John Schnugg had represented he had invested the plaintiffs’ money actually did not exist, although John Schnugg constantly remitted .to the plaintiffs the money which represented the' interest on these ■ mortgages down to the time of his death,, and the plaintiffs had not, until June 1, 1902, any knowledge that these representations were false and that no mortgages existed, and the court found that the plaintiffs were each entitled to an undivided half of these sums claimed to have been represented by these mortgages, and judgment .was awarded to each of the plaintiffs for oné-half of that amount, with interest. ‘

.. The trial court also found that from March 16, 1890, to August, 1902, the plaintiffs were the owners of certain premises' in the county of New York, known as No. 1516- Avenue A; that said John Schnugg, as attorney in fact for said plaintiffs, under the power of attorney executed by them, up to the time of his death on July 3, 1901, collected and had in his possession rents of said premises belonging to the plaintiffs, but no such rents collected after January 1, 1900, were ever paid'to or delivered to the plaintiffs. The court then found that there was due to the plaintiff George Victor Hartmann from the executors of Jolm_ Schnugg, deceased, the sum of $32,811.34, and that there was due to Rosalie Schaclit by the executors of John Schnugg, deceased, the sum of $35,099.70, for which judgment was awarded. The court also found that, after the death of said John Schnugg, Francis J. Schnugg . received certain rents belonging to the plaintiffs, of which there was a balance due of $18.96 to the plaintiff George Victor Hartmann, and the same amount in favor of Rosalie Schacht; and the court, awarded judgment against the defendants, as executors of John Schnugg, deceased, for the costs of this action.

The basis of the liability of the estate of John Schnugg is his failure to invest the plaintiffs’ property or the property of their mother, whose right had come td them, in the securities in which he reported to them that -lie had invested it. His accounts show that he had in his hands this $53,500 to invest. He reported to -them that he had invested it in certain securities specified and, based upon tliat report, his accounts were accepted and passed by the plaintiffs. He recognized the investments as outstanding until the time of his death, and paid to ,the plaintiffs sums of money as interest collected upon these mortgages. He certainly was liable to account to them for this sum of $53,500, and could only resist liability for the payment of that amount by delivering to them the mortgages in which the money had been invested. Under'the settlement of his accounts as executor of Katharina Hartmann he admitted as attorney in fact for the plaintiffs the receipt of three of these mortgages from himself as executor. He was chargeable with those mortgages, and in his failure to deliver them to the plaintiffs he was chargeable with the amount represented by them. Assuming that the plaintiffs had recognized Francis J. Schnugg as acting as attorney in fact for John Schnugg and that they would be bound by Francis J. Schnugg’s acts' subsequent to that time, that would not relieve John Schnugg from his liability for a failure to make the -investments in these mortgages that he reported that he had made, and which represented in his hands moneys belonging to the plaintiffs.

As these findings of fact were sustained by the evidence the legal conclusion follows that John Schnugg, or his estate, is liable to the plaintiffs for the amount represented by these alleged mortgages.

The only real question presented, I think, is that raised by the refusal of the trial court to pass upon certain proposed findings submitted by the defendants. Section 1023 of the Code of Civil Procedure limits the time within which a party may present to the court or referee a statement of -the facts which he deems established by the. evidence and of the rulings upon questions of law which he desires the court or referge to make. To "entitle a party to require the court to pass upon his proposed statement of facts or conclusions of law, he is required to present them to the court before the case is finally submitted for decision. It is not "alleged that this timé was extended by consent. The final submission of the case to the court for decision is the submission after the trial when the testimony is finished and the arguments concluded. A party cannot wait until after the case is finally submitted, and the court has announced its decision, and then submit proposed findings and require the court to p>ass Upon them. Counsel for the appellants is correct in saying that the announcement of the decision is not the decision of the case; that the case is not decided until the decision is signed and filed, but the time within which counsel are-allowed to submit proposed findings is before the cause is finally submitted to the court or the referee,” not before the case is finally decided by -the. court or referee. , ' '

I think, therefore^ that there was no error in the court’s refusing to pass upon .these proposed findings,, hut the utmost that the defendants could claim is that their proposed findings presented facts-which the court was bound to find, or that it would be error for the court to refuse any of these proposed findings. But a careful consideration of them has satisfied me that none of these proposed findings, except" so far as they have been found, were at all material or related to the plaintiffs’ right to recover.

Upon the whole case, I .think the iudgment was right and should be affirmed, with costs.

O’Brien, P. J., McLaughlin, Clarke and Houghton, JJ., concurred.

Judgment affirmed, with costs. Order filed.