author: Denio, Ch. J. Mullin, J.

text:
    Lyman Wolcott and Wife v. Friend Holcomb and Charles P. Holcomb.
    By an assignment of an interest in a demand, as collateral to a debt, the assignor continuing the prosecution of the suit and remaining liable for the debt until paid, the assignee is not thereby rendered liable for the costs.
    Where the attorney of an insolvent plaintiff takes from him an assignment of the judgment as security for the amount of costs he has included in such judgment, and the plaintiff continues the further prosecution of such suit on appeal, the assignee is not liable for the costs in such action.
    In an application to charge an assignee, not a parly to the suit, with costs, the moving party holds the affirmative, and is bound to make out a satisfactory case.
    Appeal from an order of the General Term of the Supreme Court, reversing an order of the Special Term, requiring Dan-forth H. Olney, one of the plaintiffs’ attorneys, to pay $278.88, the costs for which judgment had been given in favor of the defendants upon the final decision of the action in this court, with interest, on the ground that the plaintiffs had made an assignment of the demand to him and his partner, John Olney, pendente lite.

    The afSdavits on which the motion was made and opposed showed that the action was originally commenced in the County Court of Greene county, for an assault and battery alleged to have been committed by the defendants on the wife of the plaintiff, L. Wolcott. The plaintiffs recovered judgment in that court in February, 1848, which judgment was affirmed at the General Term in December following, for damages and costs, $168.87, and was also affirmed on appeal to the Supreme Court, with additional costs, in September, 1859. On appeal to this court, the foregoing judgments were reversed and judgment rendered in favor of the defendants, with costs, amounting to the sum first mentioned, in October, 1852.
    The motion to charge the attorneys with the costs was made in August, 1859, more than six years after the judgment of this court and ten years after the alleged assignment.

      The assignment' which was relied on to subject the attorneys to the payment of the costs, was alleged in the moving papers to have been made during the pendency of the appeal to the Supreme Court, but the opposing affidavits state that the transaction was after the judgment of the county court and before the appeal.
    The special facts contained in the affidavits are sufficiently stated in the opinion.

      J. H. Reynolds, for the appellants.

      D. K. Olney in person.
   Denio, Ch. J.

The provision of the Code of Procedure in respect to the liability for costs of persons not parties to the record, is broader than the former practice of the courts, or the corresponding provision of the Devised Statutes. (Code, § 321; R. S., 515,§47, 2d ed.) It embraces in its language the case of one defending an action in the name of the defendant on the record, and of a respondent on appeal; whereas the former law was limited to one prosecuting in the name of a plaintiff under such circumstances. (Miller v. Adsit, 18 Wend., 672; Bendernagle v. Cocks, 19 id., 151; Ryers v. Hodges, 1 Hill, 646.) The Code, however, requires that the cause of action should have become the property of the person sought to be charged, by means of an assignment or otherwise.

The question in this case, therefore, is, whether the cause of action had devolved upon the Messrs. Olney during the progress of the litigation. That was effected by assignment if at all. Lyman Wolcott, one of the plaintiffs, swears, that after the recovery in the county court, he and his wife, the co-plaintiff, assigned the verdict and judgment and all their interest in them, by writing, to the Messrs. Olney, or to D. K. Olney, one of .that firm, for a valuable consideration, - and that since then they have had the whole management of the cause.

• The judgment was for about $170, and about one-half of this was the plaintiffs’ costs which equitably belonged to the Olneys, who were the plaintiffs’ attorneys. These attorneys had no prior claim on the damages recovered, and Wolcott was not indebted to them on any other account. It is noticeable that Wolcott does not, in his affidavit, mention any actual consideration for their transfers, or refer to any dealing as furnishing a consideration or occasion for the transaction. The statement that it was for a valuable consideration is no doubt ¡prima facie sufficient, if uncontradicted; but in determining upon the relative weight of the respective allegations, we cannot fail to see that it was in the power of the party disposing of the judgment, if it was sold to the Olneys, to give some ■account of the equivalent which he received for the interest which he parted with, or some circumstance connected with the sale. If there was no real transfer of the portion of the judgment represented by the damages, the alleged assignees can only deny the allegation in general terms. Both the Messrs. Olney deny any purchase of the judgment, or the payment of any consideration for such a' purchase. Mr. D. K. Olney states, that according to his best recollection and belief, he applied to the plaintiff, after the recovery in the county court, for security for his costs, which did not exceed the amount of taxed costs included in the judgment, and that the plaintiff Wolcott thereupon gave him a claim wpon the judgment aS security for the costs and disbursements; that he cannot say whether this was in writing or verbal, but that according to his best recollection and belief, it is the only assignment which was ever made to him or to his firm. The suggestion that the equitable lien of the attorney, for the costs embraced in a judgment obtained for a client, was not well settled at that time, and hence that an actual assignment would be necessary to protect them, is not without weight. But even if that right or lien was unquestionable, it would not be an unnatural or improbable circumstance for the attorney of an insolvent client to desire him to manifest by an actual transfer, the attorney’s ownership of so much of the judgment as was for the costs.

It is to be observed that the allegations in the opposing affidavits are mainly upon recollection and belief, and that scarcely anything is stated positively. If the transaction were a recent one, it would be expected that those affidavits would contain a more positive denial; but after the lapse of ten years, no careful person of ordinary memory, whose business was somewhat extensive, could speak positively of a transaction of small pecuniary moment which had not been recalled to his mind in the interim. It is in this part of the case that the absence of attending circumstances, in the moving affidavit, is specially prejudicial to Mr. Olney. Any mention of the particular incidents of the transaction would, if he is right, have enabled him to speak with certainty. He does, however, swear, that according to his recollection and belief, no money or other consideration was paid to Wolcott on the occasion of his giving his attorneys a claim on the judgment for the amount of their costs; and he further states that he has examined the cash books and account books of the firm, and those kept by himself individually, and can find no entries respecting it.

The affidavit of D. K. Olney is corroborated by that of John Olney, his partner, but in the same guarded manner; and he adds a statement of the actual keeping of cash and account books, embracing entries of all moneys received and paid out by the firm. He further states that the firm dissolved their business connection after the time of the alleged assignment and before the conclusion of the litigation, and that according to his recollection, no account was made of anything connected with the transaction except the attorney’s costs in the suit. The attorneys unite in swearing that they did not take the litigation into their own hands, as charged in the moving papers, otherwise than conducting the suit in the ordinary way, as attorneys, but managed it on behalf of Wolcott, as they had done before the alleged assignment.

It is charged in the affidavit of the defendant, Friend Holcomb, that John Olney gave notice to him, soon after the recovery in the county court, that the judgment had been assigned to him and his partner, and forbade the defendant from paying it to the plaintiff; and one Ebenezer Belknap is stated to have been present and to have been appealed to as a witness of that giving of the notice. This is denied by John Olney upon recollection and belief; and Belknap swears that he has no recollection of such a conversation, though he cannot deny it more positively. One H. T. Holcomb, a relative of the defendant, makes affidavit that he had a demand against Wolcott, and, having heard that he had recovered a judgment against the defendants which had been assigned to the Olneys, he had a conversation with D. K. Olney, who admitted their having purchased the judgment, and said, in effect, that he would endeavor,so to manage the matter that the witness could be paid his demand out of the recovery. This is nearly as consistent with the idea that the interest of the Olneys was confined to their lien for costs, and that an assignment had been made to protect that lien, as with the other view. If the attorneys had become sole owners of the judgment in their own right, they could not, except as a mere gratuity, have paid any portion of it to the witness. But the conversation itself is denied by Mr. Olney, according to his recollection.

In an application of this nature, the moving party holds the affirmative, and is bound to make out a satisfactory case. Upon these papers I cannot say that I feel convinced that the judgment.was purchased by, and assigned to, the attorneys, or either of them. If their affidavits are ingenuous and truthful it could not have been so. A direct and positive denial by them would, of course, be fatal to the application. The only doubt I have has arisen upon the extremely cautious and guarded manner in which the allegations of the moving party are met. But this I think can be fairly accounted for by the lapse of time. The statute of limitations has not a direct bearing upon the case; but if a party will postpone a claim for so great a length of time his laches ought to be weighed against him in considering the evidence.

It appears that shortly after the reversal of the judgment in this court, a fresh 'action was commenced for the same cause, the proceedings in which were soon stayed by an order of the court, on the motion of the defendants, on account of the non-payment of the defendants’ costs in the first suit. This was more proximate by six years to the alleged assignment, and the defendants had, at that time, the same notice of it which they had when this motion was made. It would seem that a direct application for the payment of these costs would then have been made if it was supposed that the attorneys had become liable for their payment.

Assuming the transaction to have been such as D. K. OIney states it to be, namely, an assignment made for the purpose of securing the attorneys for their costs, and as collateral security for their payment, there was no foundation for the order of the Special Term. The attorneys having, as is now well understood, a lien for the costs, their position was not changed by having that right established by actual convention. But if this were otherwise, the assignment of an interest in a demand, as collateral to a debt, the assignor continuing the prosecution of the suit and remaining liable for the debt until it is paid, does not render the assignee liable for the costs. (Miller v. Randall, 20 Wend., 630.)

I am in favor of affirming the order of the General Term which is appealed from.

Mullin, J.

Lyman Wolcott, one of the plaintiffs in this action in the county court of Greene county against the Messrs. Holcomb, swears positively that the plaintiffs, for a valuable consideration, sold and assigned the verdict and judgment in said action, and all their interest therein, to the Messrs. OIney; that such transfer was in writing, and duly executed by said plaintiffs, and since that time they have had no interest in said judgment or verdict. That the Messrs. OIney, since the assignment, have been the owners of said verdict and all matters connected therewith, together with the appeal thereon, and they have had the whole management thereof and interest therein, and that said plaintiffs have had nothing to do with the same since the said transfer, or any interest in the same or the subject matter thereof.

In corroboration of this evidence, Friend Holcomb, one of the defendants in said judgment, testifies that, after the recovery of said judgment, John Olney, one of the firm of D. K. & J. Olney, called on him in presence of one Belknap, and notified him that said judgment had been assigned to his firm, and forbade the defendants to pay the same to the plaintiffs, but must pay it to them (the Messrs. Olney), as they were the owners of it.

Homer T. Holcomb testifies, that he held a note against Wolcott, and learning that he (Wolcott) and wife had recovered judgment against Holcomb, called on D. 3L Olney, who informed him that the Messrs. Olney had purchased the judgment, but he would try to work in said note some way, or get pay on it.

On this evidence standing uncontradicted, there could be ° no doubt but the Messrs. Olney would be liable for the costs. They are made purchasers of the judgment for a valuable consideration; they assert their title as such, and prosecute the proceedings subsequent thereto for their own benefit and not that of Wolcott and wife. I have laid out of view all that is stated in the moving papers, on information and belief, as not entitled to any weight in deciding the questions of fact presented by the papers. --

Let us now examine the affidavits used in opposition to the motion, and see whether the case made against the Messrs. Olney is answered by the opposing affidavits.

D. K. Olney swears that, according to deponent’s best impression and recollection, and as he verily believes to be true, that during the winter of 1848-9, he saw Wolcott and requested some arrangement to be made to secure the payment of the costs and disbursements of his firm in said action; that, according to his best recollection and belief, Wolcott, before the appeal to the Supreme Court, either verbally or in writing, gave a claim on said judgment as security for said costs and disbursements; that the attorneys’ costs and disbursements did not exceed the costs and disbursements in the record; and that the judgment, subject to such claim, belonged to Wolcott and wife. Olney does not recollect whether the agreement transferred the judgment conditionally or absolutely, or whether made to him alone or to his firm ; but whatever its terms were, the claim was understood and intended by the deponent and Wolcott to be conveyed only as security for said costs and disbursements, and the only object he had in taking it was to secure, such costs and disbursements; that, according to his recollection and belief, no money or other consideration was paid to Wolcott on said agreement being made; that he finds no entry of anything being paid on the books of his firm or his own books, nor can he find any other indebtedness of Wolcott to him or his firm; according to his best recollection and belief, the judgment was not taken at the risk of said Olney or his firm; nor did he or they become absolute owners thereof in their own right or for their benefit, but, on the contrary, Wolcott continued to have the same interest in such judgment after as before the transfer, and continued to exercise the same care and control over it after as before it was assigned.

John Olney testifies, that he never knew of any assignment of the judgment to his firm or to either member thereof; that Wolcott continued to have the care and management' of said suit during the continuance of said partnership, and that the only control his firm had over the proceedings was as attorneys and not otherwise. The settlement between D. K. & J. Olney, at the time of the dissolution, did not embrace anything connected with said judgment, except the costs.

D. K. & J. Olney deny, on recollection and belief, certain conversations alleged by the affiants in the moving papers to have been had with them; but, as I give no weight to the conversations in arriving at my conclusions on the facts, I have omitted all reference to them. And I do not overlook what is said by D. K. Olney in reference to a subsequent action. I do not give it the weight it would be entitled if ■the moving party had had an opportunity to answer those statements.

It is conclusively established that an assignment was made, by Wolcott and wife to the.Messrs. Olney, of the judgment against Holcomb. The evidence, on the part of the moving party, is positive that such assignment was absolute —a sale of the judgment, verdict and cause of action.

To overcome this, we have not the positive denial of either of the Messrs. Olney, but a denial founded on their best impressions, and recollection and belief. These statements would be true if the whole transaction had passed utterly from the memory or had never occurred. The parties are not censurable because they do not recollect an occurrence so long passed. But that does not give to their impressions the weight which belongs only to the oath of a person who recollects and can testify, positively, to a transaction of which he was personally cognizant. * The evidence of Wolcott is not balanced, much less overcome. The evidence of John Olney adds but little strength to the case made by his brother. He has no knowledge on the subject, and the facts to which he speaks are rather of a negative than affirmative character.

Wolcott is supported, in some essential particulars, by the affiants in the moving papers. Making any reasonable allowance for the contradiction of these persons by the Messrs. Olney, still the weight of evidence is against them.

When an assignment was shown, without any evidence that it was conditional or qualified, the inference would be that it was absolute. But if it was in fact taken as collateral, the assignee should be held liable. He is, in that case, beneficially interested in the prosecution of the action, and should be liable for its costs. The statute (3 B. S., 5th ed., 809, § 11) embraces him and establishes his liability.

In Whitney v. Cooper (1 Hill, 629), it was expressly decided that one who holds the demand, merely as collateral, is beneficially interested within the statute. This case is recognized in Giles v. Halbert (2 Kern., 33), that it was taken by purchase and not as collateral security.

It was incumbent on the Messrs. Olney to prove that it was taken as collateral. This they have failed to do, against the positive oath of the assignee that it was absolute, and that thereafter they, and not he, owned the judgment.

The respondents’ counsel criticises the affidavit of Hr. Wolcott in some particulars, which renders a brief notice of those points necessary.

It is said that he does not specify the time when the assignment was made.

The precise time was of no moment. The great questions were, whether there was an assignment, and whether, if there was, it was absolute or conditional merely. The impossibility of stating the exact time was felt by Hr. D. K. Olney when lie made his affidavit, for he counts no nearer the time than the winter months of 1818-9. Again, Wolcott had signed a paper which he had the right to suppose would be ready at all times to speak truly as well in regard to the date as the terms of the transfer.

It is said in the next place that Wolcott does not state the consideration. It was not necessary. If the paper had been produced it might have stated the consideration by the words for value received by Wolcott, which would have been as indefinite as those used by Wolcott. Could he have known that the true consideration would be material, and had then refused or neglected to disclose it, an inference might be drawn against him. But the important point was, whether the transfer was supported by a consideration, and not of what that consideration consisted.

Some stress is laid in the opposing affidavits on the fact that Wolcott, after the assignment, continued to manage and control the cause as before. This the Hessrs. Olney swear to, and this Wolcott denies. After the appeal it is somewhat difficult to understand, in the absence of any specification, what Wolcott could do in regard to the case, which could be called either managing or controlling it. The case of the appeal belonged to the attorneys, and it is not alleged that either Wolcott or his wife has paid either costs or disbursements to any one, so far as the papers go. It is not alleged that he (Wolcott) has ever been called on to pay the costs of' the Hessrs. Olney, although' some seven years have elapsed since the case was terminated.

The bringing of a second action after the reversal of the judgment in this court by the directions of Wolcott and wife, would be more strongly corroborative of the position taken by the Messrs. Olney, that they did not take the assignment absolutely, were it not that Wolcott has had no opportunity to answer such statement, further than he has done in the moving papers, by denying all interference with the case, and that the transfer was absolute or not conditional.

Another reason for resisting the payment of costs by the attorneys as assignees of the judgment is, that the appeal was a new action, in which they were defendants, and therefore not liable to pay costs.

It was very properly held that when an action is prosecuted in the name of another, the party in interest must pay the costs to the opposite party if the latter succeeds in the action. But he is not liable for the costs of the proceeding by writ of error to review the proceedings in which the party in interest was successful. (Miller v. Adsit, 18 Wend., 672.) The proceeding in error is considered a new action, prosecuted by the losing party in the court below for his own benefit.

It was said in the case cited that there is no case in which a person defending an action in the name of another has been held liable to the plaintiff for costs, with the exception of a landlord defending an action of ejectment in the name of his tenant.

An appeal, it is said, differs from a writ of error in this, the latter is a new suit, while the former is a continuation of the same suit. And one consequence of the difference is that, in the appeal, the party in interest is liable for the costs if the case is finally, decided against him.

The cases on this question are so conflicting, in the Supreme Court, that they do not aid us in deciding it; and the only case that I can find in this court bearing upon it is that of Robinson v. Plimpton (25 N. Y., 484). In that case an appeal had been taken by one of the stockholders of a bank, of which the plaintiff was receiver, to the General Term, from an order at Special Term, confirming the report of a referee, apportioning the debts of the bank amongst the stockholders. The appellant gave the undertaking required by the statute; and the order of the Special Term was reversed by the General Term, and this court reversed the judgment of the General Term and affirmed that of the Special Term. In an action on the undertaking claiming to recover the costs of both appeals, the defendants demurred, on the ground that the judgment of the Special Term having been reversed by the General Term, the condition of the undertaking was satisfied, and they were not affected by the affirmance of the judgment of the Special Term in this court. The Superior Court of Buffalo overruled the demurrer, and the defendants appealed to this court, and the judgment of the Superior Court was here affirmed, on the ground that the undertaking is not discharged until reversal of the judgment in the highest tribunal to which the parties are by law entitled to and do remove the cause.

This decision is not put on the ground that the appeal is a continuance of the same action, but upon the ground that the condition of the undertaking was to pay all costs and damages which may be awarded against the appellant, not by the General Term or other inferior court of appellate . jurisdiction merely, but by the court which should finally hear and decide the case. Allen, J., refers in his opinion to Trover v. Nichols (7 Wend., 434), Bennett v. Brown (20 N. Y., 99), Boll v. Gardner (21 Wend., 270), and Smith v. Grouse (24 Barb., 433). The first case was an appeal from a justice’s court to the common pleas, and the last case was an appeal, under the Code, from a justice to the county court. The other two cases were carried to the common pleas from justices’ courts, by certiorari. No stress is laid upon the difference in the manner in which the cases were removed. Nor was the fact that cases after removal were continuations of the same or were new actions, ever suggested as a ground for the ruling in this court; but the cases turned wholly on the terms of the undertaking.

If, however, the case after appeal is not to be considered a new suit when the rights of sureties are involved, I am unable to perceive why it should be so held in the case of a party for whose benefit it was originally prosecuted. The party in interest is entitled to the benefits of the litigation, and he should be charged with the burthens attendant upon it. If the costs should be collected of the party to the record, he is entitled to recover the sum paid from the one to whose benefit the action was prosecuted or defended. And there is no necessity for resorting to this circuitous mode of reaching the result, when the court has ample power on motion to grant the relief.

I am, therefore, of opinion that the Olneys were liable for the whole costs of the action.

Another ground on which the relief sought by the motion is resisted is that the claim is bound by the statute of limitations.

It is not claimed that the statute in terms reaches the case; but the claim is, that when the case is one in which, if an action was brought, the statute could be successfully pleaded. The court should refuse relief on motion, upon the principle that when the party has slept over six years on his rights, the demand should be treated, in all courts and in all forms of proceeding, as outlawed.

Where a plaintiff has a clear right of action, and also a, right to obtain relief by motion for the same matter, and he permits the action to be barred and then proceeds by motion, the court, in the exercise of a sound discretion, should refuse relief. But in a case where there was no relief by action, or it was at best doubtful whether an action is maintainable, the court, if the claim is a just and fair one, should grant the relief.

While the statute of limitations is to be enforced in every case to which it applies, it does not, in my judgment, furnish a defense which the court should go one step out of its way to encourage or sustain.

While it is desirable to prevent and discourage litigation and to prevent fraud and perjury, it never should be done at the expense of honesty or fair dealing. A law is essentially vicious — no matter what may be the motive that prompts its enactment — that enables a man to cheat his neighbor out of a debt honestly due, or shields him from the consequences of a breach of duty or of obligation.

A debt is none the less honestly due because more than six years have elapsed since it become due, and the moral sense of a people is, in my judgment, debased, in which, under sanction of law, a legal debt or duty may be avoided.

It remains to be proved that either of the statutes above referred to, have accomplished the objects had in view by those who framed them. I apprehend there would have been less litigation if the statute of limitations had never been passed, and that neither fraud nor perjury have been lessened by declaring void contracts not made in writing, or because they did not conform to some other rule of law. I think it has been proved that men are just as likely to resort to fraud and perjury to escape an obligation as to enforce it. The constant effort of courts to evade these statutes in order to prevent the grossest injustice, and the numerous instances of judicial legislation by which exceptions have been made to the arbitrary provisions of the statute, demonstrate the injustice and folly of such legislation. Perhaps the world is not prepared for the repeal of such legislation; but I believe the day is not distant when it will be repealed and when men will be astonished that they ever sanctioned or approved such laws.

The defendants in the action are legally and equitably entitled to their costs of the person bound to pay them, and on the evidence, it seems to me quite clear that the Messrs. Olney are the persons bound to pay. I have not found, nor have we been referred to any case in which an action has been maintained against the party in interest for the costs of the action. The usual, and indeed the appropriate remedy, is by motion, and there is no reason why the party should be denied relief. On motion it is turned over to the expensive remedy by action, and that, too, with a complete bar to his action, ready to be successfully interposed. Such a proceeding would be a mere mockery. I cannot assent to the application of the statute of limitations to the claim in question.

While I cannot assent to the affirmance of the order on any of the grounds suggested, yet I cannot comprehend why the judge at Special Term should have made the order against D. 3L Olney only. The evidence establishes the liability of both or neither. And it was due to the moving party as well as to D. K. Olney, that John should have been charged with his share of the liability.

But as neither party has raised any question in regard to this omission of the Special Term, we must overlook it and reverse the order of the General Term and affirm that of the Special Term, with costs.

The order of the General Term was affirmed on the opinion of Denio, Ch. J.


source: Caselaw Access Project

license: Public Domain

text:
    George Rinchey, Respondent, v. Burdett Stryker, Appellant.
    "Where the sheriff has an attachment granted by a judge of the Supreme Court in an action against the defendant, he may seize any property which the defendants have disposed of, with intent to defraud their creditors.
    Where the plaintiff in attachment has caused the same to be levied upon the property of the defendant, he is not to be deemed, in respect to such property, a mere creditor at large; but one having a specific lien upon the property attached.
    In an action against the sheriff for wrongfully taking such property, the sheriff, even .before judgment in attachment, has a right to show that the title of the purchaser from the debtors was fraudulent and void as against the attaching creditors.
    This was an action brought against the sheriff of Kings . county for seizing the goods claimed by the plaintiff, on an attachment issued against the property of William Cartwright and Moses R. Hazzard. The sheriff defended under such writ of attachment, and claimed the property levied upon as the property of Cartwright and Hazzard, which had been disposed of by them with intent to hinder, delay, &c., then* creditors.
   The court were of the opinion that the sheriff was entitled to defend, on the ground that the goods seized were the prop-" erty of Cartwright and Hazzard, who had disposed of the same with intent to defraud, &c., then* creditors, and that the plaintiff, in receiving the property, had notice of the fraudulent intent, &c.

The case is reported at length in 26 How. Pr., p. 75. The opinion was written by Balcom, J., in which all concurred, except Emott, J., who-did not vote.


author: Davies, J. Johnson, J.

text:
    Hart F. Pease, Appellant, v. Jacob Christ, Respondent.
    Defendant, upon a valid consideration, had agreed to assign to plaintiff a certain lease which he held of certain premises, on the first day of April, 1853, and to make a perfect title to said premises. On the 19th of the previous May, the defendant had executed two separate leases for portions of said premises for the term of six years. On the first day of April, pursuant to agreement, the parties met and executed their several agreements; the defendant executing the assignment of his lease for the premises, and also assigning to the plaintiff the two leases of May 19, 1852, which the plaintiff accepted and notified the lessees thereof of his rights; the defendant, at the same time, covenanted that the said assigned premises were free and clear of and from all former and other gifts, grants, bargains, sales, leases, judgments, executions, back rents, taxes, assessments and incumbrances whatsoever, subject to the covenants of the lease. Subsequently the plaintiff sued the defendant for a breach of his covenant on the ground of the outstanding leases of May 19, 1852, assigned by defendant to plaintiff, as above stated. Held by the court,

    That the existence of the leases of May 19, 1852, which were transferred to the plaintiff by the defendant at the time of making such covenant, did no constitute a breach of such covenant.
    That the conduct of the plaintiff, at the time of the making of such covenant by the defendant, in receiving such assignments of said outstanding leases, and notifying the lessees thereof of his ownership, was sufficient evidence that the leases of May 19, 1852, were not considered by the parties, at the titile, as being within the defendant’s covenant.
    A sufficient statement of the facts in this case will be found in the opinion of Judge Davies.

      F. Byrne, for the appellant.
    I. The report of the referee is conclusive upon the propriety of his finding upon the facts. The only questions left are, whether the facts so found justify his award of damage, and whether proper evidence was excluded and improper admitted. (Code, § 272; Orchard v. Cross, 12 Barb., 294.)
    II. The covenant against previous grants and incumbrances being by words m presentí, and therefore broken as soon as made,, by the previous assignments or leases to Huszak and Sevin, the whole damage occurred at once, and but one action could ever be brought on it. (Rawle on Cov., 285, 289, 293.)

      III. The sum parted with to get in the interest of Sevin, formed part of the damages. (¡Rawle on Gov., 131, and cases cited.)
    IY. The whole title of the plaintiff to the unexpired term in the premises leased, having failed by the previous conveyance of it by the defendants to Huszak and Sevin, he was entitled to recover the whole of the purchase-money mentioned in his assignment and interest, far exceeding any amount awarded in this case. (Chapel v. Ball, 17 Mass., 221.)
    Y. The referee was not limited in his estimate by the allegation in the complaint that the leases outstanding were to the 1st of Hay, 1853, only, being mere words of description, and immaterial in regard to which a variance • could be overlooked by him. (2 Greenl. on Ev., § 244; Rawle on Cov., 121, n. 2, and cases; Code, § 169; Harmony v. Bingham, 1 Duer, 210.)
    YI. If the assignment by the defendant to the plaintiff operated to assign the rents due to the former, the measure of damages of the latter would be either the difference of the rental of the property for six years, amounting to twelve hundred dollars, or as to the premises occupied by Sevin, interest on the portion of the purchase-money paid for them, from the time he surrendered them, together with the sum paid to procure the surrender, and as to the residue the difference of the value of its rental, and the sum paid by Huszak, during his term, amounting in all to nearly one thousand nine hundred dollars. (Richort v. Snyder, 9 Wend., 423.)
    YII. The rent collected by the defendant properly belonged to the plaintiff, and the former was responsible either for it, as money received to the use of the latter, or as part of the damages sustained by the existence of the previous leases.
    YIII. The defendant was liable in equity to an appor tioned part of the rent due to Stone, for two months out of the quarter, ending on the 1st Hay, 1853; if not it formed a back rent, within the meaning of the covenant against them; or was admissible in diminution of the rent due by Sevin, on the first of Hay, 1853, if taken in account, in estimating the value of the premises.
    IX. The facts found by the referee as fully protect the plaintiff’s rights to the damages awarded, as a jury’s special verdict would a general verdict, as to damages, even if his mode of arriving at the amount embraced any erroneous item.
    X. The proposed evidence of a verbal agreement or understanding, was wholly inadmissible, and the answer admitted that the assignment in question was a consummation of the agreement offered in evidence by the defendants. (Houghtaling v. Lewis, 10 Johns., 297; Bull v. Willard, 9 Barb. S. C., 641, 646, and bases.)
    XI. The two assignments of the leases to Huszak and Sevin, subsequent in date to the assignment of the original lease, even if proved to have been delivered to the plaintiff, which they were not by the mere record, did not vary the liability of the defendants. (Elsir v. Metcalf, 1 Denio, 324; Funk v. Voneida, 11 Serg. & R., 112; Levit v. Wetherington, Lube, 317; Grue v. Scarborough, 2 Speers, 654.)

      O'Gorman & Wilson, for the respondent.
   Davies, J.

The facts in this case, as gathered from the documentary evidence adduced upon the trial thereof, are as follows: On the 28th of Harch, 1853, the appellant being the owner of a certain farm in Hew Jersey, consisting of about 80 acres of land, agreed to execute and deliver to the respondent, on or before the first day of April, then next, a good and sufficient warranty deed for the same, free and clear of all incumbrances, except two mortgages, amounting to the sum of $1,700; and, on that day, he also agreed to pay the respondent the sum of $350. The respondent, in consideration of the premises, agreed, on delivery of said deed and said payment in cash, to assign to the appellant a certain lease of premises known as Wo. 390 Broadway, Wew York, made by James Stone to John J. Sevin, and by Sevin assigned to the respondent, reserving to himself, however, the rents up to the first day of Hay then next. It was further provided in the agreement, that the title was to he perfect in each ease. The crops then on the farm, it was understood, were to become the property of the respondent. On the first day of April, 1853, the parties met to execute the agreement, and the appellant made and executed the deed for the Hew Jersey farm, and paid the $350 in cash, 'and the respondent, on the same day, made and executed an assignment of the lease of Stone to Sevin, and assigned by the latter to him, habendum, from the first day of April, 1853, for the residue of the time therein mentioned; and the assignment also contained a covenant on the part of the assignor, that the said assigned premises were then free and clear of and from all former and other gifts, grants, bargains, sales, leases, judgments, executions, back rents, taxes, assessments and incumbrances whatsoever, subject to the covenants in said lease.' On the 19th of Hay, 1852, the respondent had made and executed two separate leases for portions of said premises; one to John J. Sevin for the term of six years from Hay 1, 1852, and one to Julius Gustav Huszak for the term of five year's therein mentioned. On the same first day of April, 1853, and in execution of the agreement, and at the time of the assignment of the lease of said premises held by the respondent, he made and executed to the appellant two several assignments of the said leases to Sevin and Huszak, habendum, from the first day of Hay then next, for and during the several terms in said leases respectively mentioned, and each of said assignments contained a covenant on the part of the assignor, that the said assigned premises then were free and clear of and from all former gifts, grants, bargains, sales, leases, judgments, executions, back rents, taxes, assessments and incumbrances whatsoever. This action was commenced to recover the rents received by the defendant from Sevin and Huszak, from the first of April, 1853, to Hay first, and the quarter’s ground rent due on the lease from Stone, falling due Hay 1, 1853, amounting to the sum of $176.25, and the whole amounted to the sum of $689.46, for which sum the referee gave judgment, and the same was reversed by the General Term and a new trial ordered. The plaintiff now appeals to this court from that order, and stipulates that, if such order tie affirmed, judgment absolute shall be rendered against him.

The order made by the General Term was undoubtedly correct, and should be affirmed. There has been no breach of covenant on the part of the defendant; neither has he done, or omitted to do anything which should subject him to the plaintiff’s claim for damages. A brief reference to what the parties agreed to do, and what they actually did, will clearly demonstrate this position. By the agreement of March 28, they arranged for an exchange of property, the same to be made on. the first day of April ensuing. The plaintiff, on his part, "agreed to convey his farm in Mew Jersey, and pay the defendant the sum of $350 in cash. The defendant, on his part, agreed to assign to him the lease from Stone to Sevin, then owned and held by him, the particulars of which lease were indicated by a reference to it. By the express terms of this agreement, the defendant reserved to himself, however, the rents up to the first day of May then next. This reservation has no meaning or significance unless it be read as it was obviously intended. The rents of the premises, the lease of which was to be assigned to the plaintiff, which should accrue up to the first day of May, 1853, and then payable, by the agreement of the parties, were to belong to, and be collected by the defendant ; and it is most difficult to perceive upon what theory, in the face of this plain and specific agreement between the parties, the referee charged the defendant with the rents so accruing and collected by him. If we refer to the terms of the assignment of the two leases, we shall see that the parties incorporated 'into them the substance of this agreement. In the habendum clause of each assignment, the assignee was to hold the assigned premises, not from the day of the date of the assignment, but from the first day of May then next. In other words, the assignee of the leases, who was to succeed to all the rights of the assignor therein, did not enter, and could not enter upon the enjoyment of such rights, until from and •after the first day of May then next. This was a reservation to the defendant of the accruing rents, up to May first, in accordance with the terms of the agreement of March 28th. But it is contended on the part of the plaintiff, that there has heen a breach of the covenant of the defendant in his assignment of the lease from Stone to Sevin to the plaintiff, wherein he covenants, at the date of the assignment, that the assigned premises were then free and clear of and from all former and other gifts, grants, bargains, sales, leases, judgments, executions, back rents, taxes, assessments and incumbrances whatsoever. To arrive at a correct interpretation of the language used here, we must refer to the agreement of March 28th, and the assignments of the two leases to Sevin and Huszak, executed simultaneously. We perceive that a similar covenant, in the identical language used here, is contained in each of these assignments, and that the parties acted with full knowledge of the existence of these three leases, and that these three covenants contained therein, are to be intended, and were intended as referring to other and different incumbrances, leases or charges. The plaintiff, by accepting the assignment of the two leases to Sevin and Huszak, showed conclusively that he did not regard them as incumbrances of the character covenanted against, in the assignment of the lease of Stone to Sevin; and by the acceptance of the latter assignment, he also demonstrated that he did not regard the covenants, contained in these two assignments, as violated or impaired by the existence of these two leases. Again, the plaintiff, I think, is precluded from setting up the claim, that the leases to Sevin and Huszak were breaches of the covenant, contained in the assignment by the defendant to him of the three leases, by reason of his acceptance of the assignments of those two'leases, and his call upon the lessees therein to attorn to him. He certainly, in his notice to them, made a claim for rents to which he clearly had no right by the terms of the agreement of March 28th, and by the express terms of the assignments themselves. He is none the less, however, bound by the election he made to accept the leases, and he cannot now be permitted, because he failed to obtain what he was not entitled to, under and by virtue of them, to recover damages of the defendant, by reason of their existence. In any aspect, therefore, in which the matter is viewed, it is very clear that the leases to Sevin and Huszak are no breach of the defendant’s covenant. It is clear, also, that the plaintiff has no claim whatever to the rents accruing on the leases, up to the 1st day of May, 1853. Neither is there any foundation for the claim of the difference between the rent reserved in the leases and the actual value of the rental. The plaintiff accepted the assignments of the leases, well knowing the terms thereof and the rent reserved. The time for him to interpose objections was when such assignments were offered to him. He not only accepted them, but claimed the rent reserved under them, and there is no ground for his claiming to recover of this defendant any difference between the rent reserved and the actual value of the rental.

There was no guaranty or covenant on the part of the defendant, of the rents reserved by the leases. He had therefore no responsibility in reference to the sum of $225. The referee to whom this action was referred, reported that the plaintiff had sustained damages by reason of the breach of the covenants contained in the assignment to him by the defendant, by reason of the existence of the leases to Sevin and Huszak, and the ground rent due to said Stone, in the sum of $150, being that portion of ground rent which accrued previous to April 1, 1853, and which, with interest from May 1, 1853, amounted to $176.25. And also in the sum of $66.66, being the difference or excess of rent accruing from April 1, 1853, to July 1, in that year, the date of the commencement of the action, on the premises rented by the defendant, between the actual value of the rental and the sum at which defendant had rented the same, which, with interest from July 1, 1853, amounted to the sum of $77.54. And also in the sum of $223, being the amount remitted and paid by the plaintiff to get possession of the premises occupied by Sevin, with interest on the same from July 1, 1853, amounting to $259.42. And also in the sum of $150, being the rent for the month of April, 1853, collected from the defendant from Sevin and Huszak, which, with interest from May 1, 1853, amounted to those rents; or any interest in, or connection with the same, after the first day of May. If the plaintiff thought it for his interest to terminate the lease with Sevin and pay him money therefor, it was no concern of this defendant, and for which no liability attached to him. The covenant of the defendant in the assignment of the Stone lease was not broken by the fact that a portion of the quarter’s ground rent, due on the first day of May, 1853, may have accrued on the 1st of April preceding. At the time this covenant was entered into, there was no rent due to Stone. It did not fall due until May 1, 1853; and the two months’ ground rent, which the referee charged to the defendant, was not due at the time of the assignment. It was not, therefore, hack rent, and was not covenanted against, and the plaintiff, as assignee of the lease, was bound to pay it. On the 1st of May, 1853, a quarter’s rent was due as an entirety, and the sum could not be apportioned without the express ágreement of the parties; and there is no pretense that any such agreement was made or contemplated. (Zule v. Zule, 24 Wend., 76, 78; Mosely v. Marshall, 21 N. Y., 280; see also, William, Clun’s Case 10 Coke, 127.)

The order granting a new trial should be affirmed, with costs, and judgment absolute be given against the plaintiff, in accordance with his stipulation.

Johnson, J.

Ho objection is raised by the counsel for the appellant, that the proper exceptions were not taken on the part of the defendant to raise the questions considered by the Supreme Court in reversing the judgment.

Upon the merits of the case, as disclosed by the evidence, there can be no doubt that the judgment was entirely erroneous, and was properly reversed by the Supreme Court, if it was open to review there, upon the facts and the law. I shall assume that it was so, as no question is made that it was not, and the court then reviewed the whole case upon its merits. The referee seems to have decided that the covenant in the assignment, on which the action was brought, was broken by the existence of the two sub-leases from the defendant to Sevin and Huszak, and their possession of the portions of the premises leased to them respectively, assuming that such possession was in violation of the plaintiff’s rights as assignee of the orignal lease, and under the covenants in the assignment of the same to him. But the evidence before the referee shows conclusively, and beyond the possibility of controversy, that these two sub-leases were also assigned by the defendant to the plaintiff on the same day with the original lease, by assignments containing precisely the same covenants as that on which the action is brought, and that the plaintiff had given notice to these sub-tenants of the assignment of their leases to him and that the rent should be paid to him.

As respects the loss of the April rent, complained of, and allowed by the referee, the agreement between the plaintiff and the defendant, in express terms, reserves it to the defendant. And so it appears in the assignment of each of these gub-leases.

The plaintiff recovers on the ground that he was kept out of possession by these sub-tenants, and also for moneys paid by him to induce one of them to remove and surrender his lease, where the fact is indisputable that both were his tenants, and that he was in possession through them from the first of April.

The defendant set up in his answer, by way of defense, that the agreement between himself and the plaintiff, of the 28th of March, was fully executed by him on the 1st of April following, by the assignment of the original lease and these two sub-leases, by separate instruments, which three instruments were all parts of one agreement. Of the evidence tending irresistibly to prove this, the referee takes no notice whatever. That these three assignments were but a single transaction can admit of no doubt. The object unquestionably was to fulfill the agreement, and the three assignments, and the covenants in each, should have been construed together, in reference to the written agreement between the parties, in performance of which, hy the defendant, the assignments were made and delivered. The acceptance, by the plaintiff, of the three assignments at the same time, and of the same date, with the same covenant in each, shows what was designed and understood by both parties. Construed together as a single act or transaction, in view of the agreement, it will be seen clearly that there is no such breach or breaches as are alleged in the complaint, and found by the referee.

The error, I think, arises from an entire misconception on the part of the referee, of the legal force and effect of the covenant counted upon, in view of the written contract, and of the assignments of the two sub-leases containing similar covenants. This, it seems to me, is an error of law which goes to the entire merits, and to which a general exception is sufficient; a more unwarrantable recovery upon the merits cannot well be conceded.

I am of opinion, therefore, that the judgment should be affirmed.

All the judges concurring,

Judgment affirmed.


author: Johnson, J.

text:
    Patrick Higgins, Respondent, v. Hiram Reynolds and Samuel Donaldson, Appellants.
    When the canal commissioners, in pursuance of the authority of the statute (1 R. S., 221, § 19), alter a public highway which interferes with the proper location, &c., of the canal, the fee simple of so much of the new location as falls within the boundaries of lands appropriated for the canal is in the State; as to all other portions of such lands, the title remains in the owner as before, subject to the public easement.
    The title of the owner, subject to the easement, remains perfect, not only to the land covered by the highway, but also to all the material within its boundaries, except such as may be needed to build or maintain the road.
    Where stone had been taken from the land for the purpose of constructing such road, before the land from which they were taken was covered by such location, the title to such material was in the owner of the land, and was not divested by a subsequent location of the road over the same land.
    This action was brought to recover for a quantity of stone taken by the defendants from the land of the plaintiff, under a written contract. By the contract, the plaintiff agreed to let the defendants come upon his land and take away all the stone which they wanted, for which the defendants agreed to pay two cents per cubic yard, in monthly payments, as the stone were estimated by the engineers.
    The plaintiff claimed for 25,000 yards of stone, taken under the contract. The defendants put in a general denial and separate answers of payment, and a counterclaim.
    The action was referred to a referee to hear and determine. The referee found, as facts, from the testimony before him, that the contract above specified was entered into between the parties on or about the 14th of ¡November, 1854; that the defendants had previously entered into a contract with the People of the State of ¡New York to construct and finish section ¡No. 62 of the Erie canal enlargement, according to certain specifications, annexed to their contract, and that, in the estimate of quantities in said specifications, was an item of 400 rods of road to be constructed; that the defendants commenced work on said section about the 1st December, 1854, at which time there was a highway running along the south side of the Erie canal, where it crosses the lands of the plaintiff, which had been used as such highway more than forty years, and was under the charge of the commissioners of highways of the town; that in June and July, 1856, the location of said highway, where it crossed the plaintiff’s land, was changed by the engineer in charge of the work on the canal, by removing the same further south, and raising the bed of the road by embankment; that, in the spring and summer of 1856, borrowing pits for the purpose of obtaining material for said embankment were opened on the plaintiff’s land, south of the south line of said highway, as located after the said change was made, from which stone were taken by the defendants and used on their work for slope wall; that all the stone taken from the plaintiff’s land were taken from the south side of said highway, as it had been used before the change in the location, and. also south of the south line of the appropriation for the enlarged canal, as shown by the upper or south blue line on the map introduced in evidence hy the defendants, and that the quantity so taken, up to the time of the commencement of the action, was 19,505 cubic yards; that the quantity of stone taken from the plaintiff’s land, before the commencement of this action, south of the south line of said highway, before the change in its location in the summer of 1856, and outside of the said upper or south blue line, and exclusive of the stone taken from the borrowing pits, was 18,585 cubic yards; that the largest portion of the stone taken, exclusive of those taken from the borrowing pits, were taken north of the south line of said highway, as it was after the change in the location thereof was made, and from land on which said highway was located after said stone had been taken; that all the stone taken from the plaintiff’s land, both north and south of the south line of the new road, were put into the defendants’ work promiscuously, and not kept separate, or estimated by the engineers separately. He also found that the defendants were indebted to the plaintiff, on some^other items of account, $27, and that the defendants had a valid counterclaim against the plaintiff, on account of cash paid and work and labor, of $50.46. Hpon these facts the referee held and determined, as a conclusion of law, that the defendants were liable to the plaintiff for the 18,585 cubic yards of stone taken from the land of the plaintiff upon which the highway was subsequently located, and south of the land appropriated for the enlarged canal, at the contract price; and, after deducting .the balance of the counterclaim, ordered judgment in favor of the plaintiff, against the defendants, for $348.24. The defendants excepted to the conclusion of law, in due form, and also made various exceptions to the findings of fact from the evidence.
    Judgment was entered upon the report, and the defendants appealed therefrom to the General Term of the Supreme Court in the fourth district, where the judgment was affirmed, and they now appeal to this court. The cause was submitted on printed points and arguments.

      James Gibson, for the appellants.

      T. B. Mitchell, for the respondent.
   Johnson, J.

Upon the facts established by the findings of the referee, this is a very plain case. The defendants had a contract with the State for the construction of section 62 of the enlarged Erie canal, and entered into a contract with the plaintiff by which they agreed to give him two cents per cubic yard for ail the stone taken from his land by them, as the same should be estimated by the engineers in charge of the State work. Before the summer of 1856, the defendants had taken and used in their work 18,585 cubic yards of stone from the plaintiff’s lands, south of and wholly outside the line of the lands appropriated for the canal enlargement, belonging to the plaintiff. Upon this state of facts alone no question could possibly be raised against the defendants’ liability to pay for these stone according to the price stipulated in the contract; but it further appears that there was an existing highway over the plaintiff’s lands, and partly within the bounds of the appropriation for the enlargement of the canal; and after this quantity of stone had been taken and used by the defendants, this highway was altered by the canal commissioner in charge of that portion of the work of enlargement, and its location changed so as to cover that portion of the plaintiff’s land from which this quantity of stone had been taken. The bed or surface of the road, as thus changed, was also raised by embankment. It is claimed by the counsel for the appellants, that the stone in question having been taken from that portion of the plaintiff’s lands over which the highway, as altered, was located, and such altered highway having been constructed and made passable by the defendants, under and by the- authority and direction of the canal commissioner and the engineer in charge of that portion of the work of enlargement, both the land for the road and the stone taken therefrom were, as matter of law, appropriated by the State, and the plaintiff divested of all title, and had no property in the stone for which he could recover. It is to be observed that the referee has excluded all stone taken from the borrowing pits on the plaintiff’s land, which seem to have been appropriated by the commissioner for the construction of the enlargement, and also all stone used in the slope wall. There are two very conclusive answers to the defendants’ position. In the first place, according to the finding, the highway was not altered and its location changed to the place from which these stone had been taken, until after the defendants had taken them under their contract with the plaintiff, and used them in their work. The stone, according to this, when taken, clearly belonged to the plaintiff, and a subsequent appropriation of the land from which they had been taken for any purpose, could not operate to divest the plaintiff of his title to such stone previously taken and sold, nor of his right which had then accrued under his contract with the defendants.

But in the second place, this land, over which the altered road was located, outside of the boundaries of the appropriation for the canal enlargement, was never appropriated in such a manner as to divest the plaintiff of his title. This portion of the plaintiff’s lands was never appropriated by the canal commissioners for the purpose of the canal enlargement. The portion appropriated for that purpose was indicated upon the map made in pursuance of the statute, a transcript of which was used in evidence. (1 R. S., p. 218, § 4.) To that portion of the plaintiff’s land included within the boundary lines, as designated upon that map, the State had acquired the fee simple and the plaintiff had become divested of his entire title. (1 R. S., p. 226, § 52.) At least the plaintiff -claims nothing within those boundaries. The State had become vested with the plaintiff’s title to all the land, including that covered by the highway, within those boundaries. But it had not and has never acquired the title in fee simple, to any of the plaintiff’s lands outside of those boundaries. The statute (1 R. S., p. 221, § 19) authorizes the canal commissioner in charge of the work of constructing or repairing or -improving any canal, to discontinue or alter any public highway whenever it interferes with the proper location or construction of such work. Sections 20 and 21 provide the manner and form in which such discontinuance and change of location shall be made. But in exercising this power of altering a highway, the canal commissioner obviously does not exercise the power of appropriating lands within the meaning of the statute, so as to divest the owner of his title and vest it in the State. ISTo power is given to a canal commissioner to appropriate lands for the mere purpose of a common highway. It is a power given to be exercised as subordinate or auxiliary, merely, to the main power to construct, repair or improve a canal. This auxiliary power is of the same nature and kind precisely with that exercised by highway commissioners in the discontinuance and alteration of highways; and the highway, when altered by the canal commissioner instead of the commissioner of highways, and changed to another location, would be nothing more nor less than a common highway as it was before. If any portion of the new location should fall within the boundaries of the appropriation for the canal, the title in fee simple to the land, as to such portion, would be in the State, but as to all other portions the title to the land would remain in the owner as before, subject to the public easement. The owner would no more lose his title to lands covered by a highway thus altered and located, than he would to land covered by a highway laid out or altered in the usual manner. The title of the owner subject only to the easement, remains perfect not only to the land covered by the highway, but to all the material within its boundaries, except such as may be needed to build or to maintain the road. (1 R. S., p. 525, § 126; Jackson v. Hathaway, 15 Johns., 447; Cortelyou v. Van Brunt, 2 id., 357; Williams v. Kenney, 14 Barb., 629; 3 Kent. Com., 432,433.) The location of the highway, as altered by the canal commissioner, was not necessarily part of the land appropriated for the enlarged canal, and, as the referee has found, was not in fact embraced within the lines of such appropriation at the place where the stone were taken. The borrowing pits seem to have been appropriated for the purpose of obtaining earth for the embankments, but stone, as well, would be included in such an appropriation. But those pits were at a place different from where the stone in question were taken. The case is not open to review upon the facts, as there was evidence before the referee tending to establish all the facts found by him. If any of the findings are erroneous or defective, they should have been corrected before the appeal. The recovery was clearly right and the judgment should be affirmed.

All the judges concurring,

Judgment affirmed.


author: Davies, J. Mullin, J.

text:
    Horatio N. Tuthill et al., Appellants, v. Ira Tracy et al., Respondents.
    Where there has been a sale of mortgaged premises, pursuant to a power under statute (3 R. S., p. 541, § 8), the equity of redemption of ,the mortgagor is thereby foreclosed; though the affidavit of the publication of notice of sale, and of the posting thereof, be not made and recorded, as required by statute, for twenty years thereafter.
    The right of the mortgagor to redeem is terminated, whenever there has been a sale of the mortgaged premises, regularly made, pursuant to the power contained in the mortgage, or under a decree of sale.

      W. Woodbury, for the appellants.

      A. J. Parker, for the respondents.
   Davies, J.

This action was commenced by the appellants as heirs-at-law of Anson Tuthill, deceased, to redeem a mortgage executed by him, in his lifetime, to one Burbank. The facts, as found by the referee who tried the.action, are: That said mortgage was dated on the 27th of January, 1834, and covered premises which descended to the appellants, on the death of the mortgagor, as his heirs-at-law; that said mortgage was purchased by one Aldrich, who proceeded to foreclose the same, under the statute; that the sale of the premises took place, pursuant to the statute, on "the 25th of September, 1839. Several persons bid at the sale, and the premises were struck off to the defendant Burbank, he being the highest bidder therefor; and it did not appear that any memorandum in writing was made of the sale. A question was made before the referee, whether the pm*chase was made by Burbank individually, or as the agent of Aldrich, the holder of the mortgage; and, upon the facts, found by the referee, it was clearly made by him as agent of Aldrich, and the latter could compel a conveyance of the premises by Burbank to himself. But the solving of this question, or the settlement of this question, between Burbank and Aldrich, is wholly immaterial and irrelevant to the right of these appellants to maintain this action to redeem. If they have that right, as both Burbank and Aldrich are made parties defendants, it is of no consequence, in the disposition of that question, which was in fact the purchaser at the sale.

The referee also found that the sale was not fraudulent or unfair, and that Burbank was the agent of Aldrich in bidding off the premises at the sale. He also found that no affidavit of the publication of the notice of sale was made until the time of the first trial of this action, January 1 J, 1854, at which time the affidavit was made and recorded in the clerk’s office of Allegany county, showing the publication of such notice the time required by law in a newspaper published in said county, and also the posting said notice on the outer court house door of said county. The auctioneer at the time of the sale made an affidavit of the sale to Burbank, and which affidavit stated the amount claimed to be due on said mortgage, on the 18th day of March, 1839, to be $461.11, and which affidavit was recorded in the clerk’s office of Allegany county on the 28th of September, 1839. The referee found, as conclusions of law, that, by the sale and the affidavit as made and recorded, the title to the premises was vested in Burbank, for the benefit of Aldrich; that no fraud was practiced by Burbank in making the bids, and that the fraudulent claim set up by Burbank, that he bid off said premises on his own account, and not for Aldrich, did not affect the validity or reality of the sale; that the plaintiffs’ equity of redemption was barred by the sale; that the making and recording the affidavits of sale and publication were not necessary to bar the equity of redemption, and that the same was barred by the sale when the premises were struck off to Burbank. The referee thereupon dismissed the complaint, and rendered judgment for the defendants, and the same was affirmed at the General Term, and the plaintiffs now appeal to this court.

As already observed, the plaintiffs’ rights are unaffected by the question whether Burbank purchased the premises for himself personally, or.as the agent of Aldrich.

The provisions of the Bevised Statutes in force at the time this sale was made, applicable to sales by advertisement to foreclose a mortgage and cnt off the equity of redemption, were as follows: “ Every sale pursuant to a power as aforesaid, and conducted as herein prescribed, made to a purchaser in good faith, shall be equivalent to a foreclosure and sale under the decree of a court of equity, so far only as to be an entire bar of all claim or equity of redemption of the mortgagor, his heirs and representatives, and of all persons claiming under him or them by virtue of any title subsequent to such mortgage.” (3 R. S., 5th ed., 861, § 8.) Sections 9 and 10, same page, contain directions as to the affidavits to be made of the sale, and the publication and posting of the notice of sale; and section 12 declares that such affidavits shall be recorded at length by the clerk of the county where such sale took place, in a book to be kept for the record of mortgages, and such original affidavits, the record thereof and certified copies of such record shall be presumptive evidence of the facts therein contained; and section fourteen (p. 862) provides that when the mortgaged premises, or any part thereof, shall have been purchased at such sale by the mortgagee, his legal representatives, or his or their assigns, or by any other person or persons whatsoever, as therein before provided, the affidavits of the publication and affixing notice of sale, and of the circumstances of such sale, shall be evidence of the sale and of the foreclosure of the equity of redemption, as therein specified, without any conveyance being executed, in the same manner and with the like effect as a conveyance executed by a mortgagee upon such sale to a third person hath theretofore been.

The only question made by the appellants as to the regularity or validity of the sale, consists in the fact that the affidavit of the publication of the notice of sale,, and of the posting thereof, had not been made and recorded, as required by statute, at the time of the commencement of this action, and that consequently their equity of redemption was not barred. It is found as a fact that the proper affidavit of such publication and posting was made and recorded in January, 1854, pending the first trial of this action. It is to be observed that no time is fixed by statute for the making and recording of any of the required affidavits. In the absence of any such requirement, it may well be that, so long as the purchaser did not wish to assert affirmatively his title, he might omit to have made and recorded these affidavits, which are declared by statute the substitute as equivalent of a conveyance by the mortgagee, and the cases are numerous which hold that the legal title is not transferred to the purchaser, so that he may maintain ejectment for the premises, until the affidavits required by statute as a substitute for the conveyance have been made and recorded. (Arnot v. McClure, 4 Denio, 41; Cohoes Company v. Goss, 13 Barb., 137; Laymam v. Whiting, 20 id., 559; Bryan v. Butts, 27 id., 503.)

•The sale, in this case, was made pursuant to the power contained in the mortgage, and was in all respects regular. The statute declares that every sale pursuant to the power, and conducted in the manner prescribed in the statute, made to a purchaser in good faith, shall be equivalent to a foreclosure and sale under a decree in equity, so far as to be an entire bar of all claim or equity of redemption of the mortgagee, his heirs and representatives. In the present instance the purchase at the sale was a purchase in good faith, and is protected by the language of the statute from any claim of an equity of redemption, so far and to the same extent as a purchase at a sale under a decree in equity.

In Burr v. Frost (10 Paige, 243), the chancellor held that the owner of the equity of redemption is not entitled to redeem the mortgaged premises after the same have been put up and sold under the decree, although the mortgagee becomes the purchaser at such sale. And the chancellor, in his opinion, distinctly declared that the mortgagor had no right to prevent the consummation of the sale by a mere tender of the amount of the decree and costs, previous to the execution of the master’s deed. The vice-chancellor in that case had stated it to be an established rule of the Court of Chancery in this State, that the right of redemption remains until the purchase by the mortgagee is consummated, the deed delivered and the report confirmed. This rule the chancellor denies, and says no such right had ever been claimed by the owner of the mortgaged premises in any suit or proceeding before him, during the fifteen years in which he had presided in that court. He adds, that the time allowed to the purchaser to pay the purchase-money, on payment of which, by the condition of the sale, the deed was to be delivered, was for the convenience of the purchaser, and to enable the master to get the best price for the property, and not for the purpose of giving the mortgagor the right of redemption in the meantime.

It follows, that the right to redeem was barred by the sale; and its subsequent consummation, by the making and recording of the required affidavits, was only necessary to vest the complete legal title in the purchaser. He had the equitable title by the purchase, and payment the consideration money, and that equitable title would not be defeated by the setting up of another equitable title—that of the equity of redemption.

The judgment of the Supreme Court was correct, and should be affirmed.

Mullin, J.

The proceedings to foreclose the mortgage given by plaintiffs’ father to Burbank were regular. The only plausible ground of exception is to the postponement of the sale from the 10th September, 1839, to the 25th of the same month, by a notice dated on the 7th, and which was published in the newspaper on the 11th, the day after the one first appointed for the sale. It was not proved that any person appeared for the assignee of the mortgage, at the time and place appointed for the sale, and then and there gave notice of postponement. If this was essential to a valid postponement, none was made, and the subsequent sale was wholly irregular.

Section 5 of the statute regulating foreclosures of mortgages by advertisement (3 R. S., 5th ed., 860), provides that a sale may be postponed from time to time, by inserting a notice of such postponement, as soon as practicable, in the newspaper in which the original advertisement was published, and continuing such publication until the time to which the sale was postponed. It is the publication of the notice of postponement that adjourns the sale, and such notice need not be published before the day of sale. It must he done as soon as practicable after the necessity for the postponement arises, and this necessity may arise before the sale, but will more frequently arise on the day of sale, so that a publication before the day would be impossible.

In chancery, the foreclosure, and a sale by the master, barred the mortgagor’s equity of redemption. (Brown v. Frost, 10 Paige, 243.) A deed was not necessary to accomplish that result.

The 8th section of the statute above referred to declares that every sale, pursuant to a power and conducted as therein prescribed, made to a purchaser in good faith, shall be equivalent to a foreclosure and sale under the decree of a court of equity, so far as the mortgagor’s equity of redemption is concerned.

A deed from the mortgagee or assignee, when some person other than himself is the pmchaser at such sale, or the affidavits of publication and sale and posting when such mortgagee or assignee is the purchaser, is not necessary to extinguish the mortgagor’s equity of redemption: they (the deed in the one case and the affidavits in the other) are evidence of the proceedings to foreclose, and are the means by which the legal title of the mortgagor is transferred. The equitable interest of the mortgagor is the one sought to be barred: that is not barred by a conveyance. It is the decree and sale, or the perfection of the statutory proceedings by a sale, that extinguishes such equity.

The delay in making and recording the affidavits did not extend the plaintiffs’ right of redemption; and the purchaser at the sale acquired, as against them, a valid title to the property.

I do not discover in the case any evidence that Burbank acted in had faith toward the plaintiffs in purchasing the premises. At all events, no such fact is found by the referee. If he (B.) defrauded Aldrich, that furnishes no ground on which the plaintiffs can rest a claim to relief.

It may be, and very likely is, a very hard case for these children, but the purchaser has acquired a right in the manner pointed out by the law in the premises, which cannot now be divested without doing infinitely greater injustice to others than it would confer benefit on them.

I am, therefore, of opinion that the judgment should be affirmed, with costs.

All concurred in affirmance.

Judgment affirmed.