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    Henry N. Beers, Respondent, v. Henry G. Hotchkiss et al., Respondents, and Hilaire E. Campbell et al., Appellants.

      (Argued February 18, 1931;
    decided March 24, 1931.)

      Joseph Steven Frank for appellants.
    It was error to hold that the survey, division, drawing and allotment of that part of the former town commonage known as Quogue Purchase, last division, in 1782, as entered in the town records, did not take title to the locus in quo out of the town trustees. (Powers v. Shepard, 48 N. Y. 540; Trustees of Southampton v. Betts, 163 N. Y. 454; Peterson v. Martino, 210 N. Y. 412; Constantine v. Van Winkle, 6 Hill, 177; 10 N. Y. 422; Lawrence v. Town of Hempstead, 155 N. Y. 297; People v. Livingston, 8 Barb. 253; People ex rel. Howell v. Jessup, 160 N. Y. 249; Trustees of East Hampton v. Kirk, 68 N. Y. 459; Town of Southampton v. Mecox Bay Oyster Co., 116 N. Y. 1; Sandiford v. Town of Hempstead, 97 App. Div. 163; 186 N. Y. 554; Town of Southampton v. Flanders Club, 113 Misc. Rep. 451.) It was error to hold that the quitclaim deed from the trustees of the proprietors of the common and undivided lands conveyed the premises in suit or any other theretofore divided and allotted property. The legal effect of the allotment becomes immaterial when it appears that the deed refers only to undivided land, meaning land which had never been the subject of a division and allotment in fact. Plaintiff is proceeding in equity and it was error to grant him judgment when it appeared that he founded his title on an unconscionable construction of this quitclaim. (Matter of City of New York [Avenue D], 200 N. Y. 536; French v. Carhart, 1 N. Y. 96; Wilson v. Ford, 209 N. Y. 186; Lamb v. Norcross Brothers Co., 208 N. Y. 427; Thayer v. Finton, 108 N. Y. 394; Town of Southampton v, Betts, 163 N. Y. 454; Town of Southampton v. Mecox Bay Oyster Co., 116 N. Y. 1; Denton v. Jackson, 2 Johns. Ch. 320; Trustees of East Hampton v. Kirk, 68 N. Y. 459; Lawrence v. Town of Hempstead, 155 N. Y. 297; Sandiford v. Town of Hempstead, 97 App. Div. 163; 186 N. Y. 554; Town of Southampton v. Flanders Club, 113 Misc. Rep. 451.) It was error to hold that the English Statute of Frauds of 1677 applied or that divisions and allotments prior to the first State Statute of Frauds of 1787 were invalid. (Trustees of East Hampton v. Kirk, 68 N. Y. 459; Sandiford v. Town of Hempstead, 97 App. Div. 163; 186 N. Y. 554; Lawrence v. Town of Hempstead, 155 N. Y. 297; Starr v. Child, 20 Wend. 149; Town of Brookhaven v. Smith, 188 N. Y. 74; Sanger v. Merritt, 120 N. Y. 109; Shinnecock Hills Co. v. Aldrich, 132 App. Div. 118; Constantine v. Van Winkle, 10 N. Y.422.)

      Lucius H. Beers and John R. Vunk for respondents.
    The land has been unfenced, uncultivated and unoccupied. (Thompson v. Burhans, 79 N. Y. 93; Mission v. Cronin, 143 N. Y. 524; Wiechers v. McCormick, 122 App. Div. 860.) Where land has not been occupied, improved or inclosed, title must be derived from the original patentee or donee. (Miller v. Long Island R. R. Co., 71 N. Y. 380; Bliss v. Johnson, 94 N. Y. 235; Archibald v. New York Central R. R. Co., 157 N. Y. 574.) Respondents hold title under an unbroken chain of title from the original patentee. (Mitchell v. United States, 9 Pet. 711; Johnson v. McIntosh, 8 Wheat. 543; Howard v. Moot, 64 N. Y. 262; Town of Southampton v. Mecox Bay Oyster Co., 116 N. Y. 1; Sanford v. Lindley, 179 App. Div. 940; Risty v. Chicago & Rock Island & P. Ry. Co., 270 U. S. 378; Denton v. Jackson, 2 Johns. Ch. 320; Town of Southampton v. Betts, 163 N. Y. 454; Sanders v. Townsend, 89 N. Y. 623; Miller v. L. I. R. R. Co., 71 N. Y. 80.) There was no allotment in 1782. (Sanger v. Merritt, 120 N. Y. 109.) If there had been an allotment in 1782, it would not have transferred title in the absence of a deed from the town corporation. (Appleton v. City of New York, 163 App. Div. 680; 219 N. Y. 150; Finch Pruyn Co. v. State of New York, 122 Misc. Rep. 404; Denton v. Jackson, 2 Johns. Ch. 320; Bogardus v. Trinity Church, 4 Paige, 178; 15 Wend. 11; Shinnecock Hills Co. v. Aldrich, 132 App. Div. 118; Lawrence v. Town of Hempstead, 155 N. Y. 297.) A local custom as to transfer of title to lands cannot overcome the force of the Statute of Frauds. (Colgate v. Pennsylvania Co., 102 N. Y. 120.) The statute of 1818 which related to the und vided lands of the town applied to the lands which were then owned by the town. (People v. Wainwright, 237 N. Y. 407; Perkins v. Smith, 116 N. Y. 441.)
   Cardozo, Ch. J.

In this action of partition, the plaintiff and the defendants Hotchkiss have won a judgment of the court that the defendants Campbell, the appellants, have no interest in the property and are unlawfully possessed of it.

Upon this. appeal, the appellants abandon any claim that they have justified their possession by the strength of their own title, and take their stand upon the position that the respondents, who seek to oust them, do not show a better right.

The action, though in form partition, is in substance one of ejectment in so far as its purpose is the extinguishment of hostile claims (Kellum v. Corr, 209 N. Y. 486, 490; Satterlee v. Kobbe, 173 N. Y. 91, 95; Brown v. Peek, 204 N. Y. 238). The respondents, if they are to uphold the judgment, must do so on the strength of their own title, and not merely on the weakness of the title of their adversaries (Trustees, etc., of Southampton v. Betts, 163 N. Y. 454, 457; McRoberts v. Bergman, 132 N. Y. 73).

The locus in quo is in the town of Southampton, Suffolk county, and is a portion of lots numbers 31, 32, 33, 34 and 35 in the last division of the Quogue Purchase, a division of common lands made or ordered by the town authorities in 1782.

As early as 1647, inhabitants of Southampton had been contributors to a fund of £6,000, which was expended in the purchase of lands for the use of the new community. The contributors were known as the “ proprietors,” and were deemed to have at least an equitable interest in the lands so purchased. The inhabitants resolved in town meeting (Southampton Town Records, vol. 1, p. 50) that the town be divided into fortie house lots, some biger, some less, as men have put in a share, six thousand pounds to be divided in to fortie parts.” By force of this division of £6,000 by forty, each lot had a value of £150, and the lots thus divided were subdivided into three £50 parts, with the result that an allotment became known as a “ fifty ” or a fifty right.” When new purchases were made afterwards with new allotments following, the “ fifties ” were still the units.

Southampton in its beginnings was without a royal patent, though its inhabitants like true precursors of the thought of Hobbes and Locke, had organized themselves already into a political community. The defect in the documents was supplied by the Andros patent of 1676 and the Dongan patent a decade later. By these, the title to the town lands was vested in a public corporation, the Trustees of the Freeholders and Commonalty of the Town of Southampton. From time to time thereafter the trustees allotted shares or portions of the common lands to the use of the “ proprietors.” The procedure followed at such times is stated in the findings. The trustees voted the appointment of indifferent persons as layers-out with instructions to lay out for subdivision certain land located by general reference to its situation in the town. The layers-out surveyed the land and laid it out into lots, known by numbers, recording in the town records the survey and division. Thereafter on notice to all proprietors, a drawing for the lots was held among the proprietors or persons entitled to an interest in the lands as successors to the original proprietors; and thereafter a record of the drawing, with the name of the person or persons drawing each numbered lot, was entered in the town records, certified by the clerk of the town corporation (cf. Osgood, American Colonies of the 17th Century, vol. 1, p. 461). The Lower Division of the Quogue Purchase was laid out in 1738, the Upper Division in the same year, the Canoe Place Division in 1739, the Accabog Division in 1763, the Divisions of Toppings Purchase in 1748 and 1782, other divisions in other years, and finally the Last Division of the Quogue Purchase in 1782.

This last division includes lots 31 to 35 inclusive, which take in the premises in suit. On May 28, 1782, the Trustees of the Freeholders and Commonalty of the Town of Southampton at a regular meeting thereof voted that certain named persons should lot the land in Quogue and Toppings Purchase, which appointment is recorded in the records of the town corporation. Of these appointees, John Sandford and David Halsey caused a survey and division into lots to be made of a large tract, including the premises in suit. They rendered a report to the town corporation, which report was entered in its records and certified by the clerk of the corporation, July 3, 1782. Thereafter, the lots so described and reported were drawn for by the several proprietors, after due notice, on July 4, 1782, and the report of the drawing is entered in the corporate records under that date. The allotments so recorded give the numbers of the lots (31 to 35), the names of the allottees, and the fractional interest awarded to each. There is criticism of the regularity of the procedure in that a resolution confirming the survey and the drawing is not entered on the records. Comparing the record of this allotment with that-applicable to others, we think substantial regularity must be held to have been observed. The practice was for the trustees in confirming a survey to direct the proprietors to meet and proceed to the usual drawing. When we find upon the town records a report that such a meeting was held after due notice and find upon the same records a report of the result of the drawings, the regularity of the intermediate proceedings between the survey and the meeting may safely be presumed. Courts do not look at records with over-technical eyes after the healing acquiescence of a century and a half (Lawrence v. Town of Hempstead, 155 N. Y. 297, 301). The' question, however, is not an open one, for the referee has found in effect that the procedure amounted to an allotment under the practice then prevailing. He states in his decision that “ in 1782 lots numbers 31 to 35 inclusive, in the division of land in said town known as the Last Division of the Quogue Purchase were laid out and allotted to certain individuals.” The respondents, not excepting to the finding, adopt it as correct (Cox v. Stokes, 156 N. Y. 491).

An allotment, then, there was, but its existence alone does not determine its effect. If its effect was the same as a conveyance, title to the locus in quo went out of the trustees in 1782. The respondents insist that such effect is excluded by the Statute of Frauds of England and the Colonies. Sanger v. Merritt (120 N. Y. 109; 131 N. Y. 614) is authority for the proposition that the force of a conveyance is denied to an allotment by the Statute of Frauds of 1787, adopted in this State after the war of independence (Laws of 1787, ch. 44; 1 B. L. 75). It leaves the question open whether there was any statute of frauds in 1782 or earlier in that century. )

Charles II in making a grant of the colony to his brother, the Duke of York, in 1664, directed him to govern the inhabitants according to such laws, orders, ordinances, directions and instruments as should be by him established, and in defect thereof, according to the good discretion of his deputies, but soc allwayes as the said Statutes, Ordinances and Proceedings of his deputies, bee not Contrary to but as neare as conveniently may bee agreeable to the Lawes, Statutes and Governement of this our Realme of England ” (Colonial Laws of New York, vol. 1, p. 2; The Lauderdale Peerage, L. R. 10 A. C. 692, 751).

By the Duke’s Laws, promulgated by the Duke of York at Hempstead, Long Island, March 1, 1665, no alienation of lands was to be good unless done by deed (to be acknowledged and recorded unless possession given), but with the proviso that this Law shall not extend * * * to any Land granted or to be granted by the Inhabitants of a Town ” (Colonial Laws of New York, vol. 1, p. 30). This proviso is broad enough to exclude a conveyance by allotment. Later statutes, more general in their terms, were adopted in 1683 and 1684 by the General Assembly of the.Colony, which had its first meeting in the city of New York in October, 1683. The first statute was to the effect that every conveyance should be recorded where the consideration exceeded £50 (Colonial Laws of N. Y., vol. 1, p. 142). It was directed not so much to the form of alienation as to the requirement of a record. The second statute (Colonial Laws of New York, vol. 1, p. 148) was to the effect that no bargain, sale, mortgage or grant should be good unless by deed in writing, " and possession given in part in the name of the whole ” by the grantor or his attorney, and unless the deed be acknowledged within one year after sealing thereof and duly recorded. In those years Thomas Dongan was the Governor-General of the Province. Acting under the instructions set forth in his commission he had summoned a General Assembly, whose acts, if assented to by him, were to be good and binding until rejected by the Duke of York, from which time they were to be null and void (Colonial Laws of New York, vol. 1, pp. 108, 109). When James, Duke of York, became King under the title of James II (February 6, 1685), he issued a new commission, 1686, to the Governor-General of the Province. By these instructions (Colonial Laws of New York, vol. 1, p. 178), the King repealed and disallowed a certain statute known as the charter of liberties and privileges which had been adopted by the General Assembly in 1683, and then proceeded to a declaration of his royal will and pleasure in respect of other laws. Our further will and pleasure is that all other Laws, Statutes & Ordinances already made within Our said province of New York shall continue & bee in full force & vigor soc far forth as they doe not in any wise contradict, impeach or derogate from this Commission or the Orders and Instructions herewith given you, till you shall, with the advice of our Council, pass other Laws in our Name for the good government of our said Province, which you are to doe with all convenient speed ” (Colonial Laws of New York, vol. 1, p. 180; and introduction by R. C. Gumming, p. XVII; also Documents Relating to Colonial History of New York, vol. 3, p. 370).

The respondents argue that the effect of the instructions was to confirm the colonial statutes of 1683 and 1684, if confirmation until then was lacking. Against this we are referred by the appellants to the decision of this court in Van Winkle v. Constantine (10 N. Y. 422), approving an earlier decision of the Supreme Court in Constantine v. Van Winkle (6 Hill, 177, 208), and also to a resolution of the General Assembly in 1691. Dicta in Van Winkle v. Constantine give support to the position that the statutes were at an end. The decision itself was narrower. The decision was directed to a provision of the charter of liberties of 1683 regulating the form of acknowledgment upon a conveyance by a married woman (Colonial Laws of New York, vol. 1, p. 114). The charter of liberties, as we have seen, is the one act of the Assembly that had been disallowed by the King in his commission to the Governor, and excepted from his instructions as to the continuance of earlier laws. A ruling that this act did not retain the force of law is inconclusive as to others.

More perplexing is the effect of a resolution adopted by the Assembly after the “ happy revolution ” of 1688, ' and the accession of William and Mary (see 10 N. Y. at p. 428). This resolution, adopted in 1691, is to the effect that all the laws consented to by the General Assembly, under James, Duke of York, and the liberties and privileges therein contained, granted to the People, and declared to be their Rights, not being observed, and not ratified and approved by his Royal Highness, nor the late King, are null, void and of none effect.” There is no evidence, it seems (Gumming, Introduction to Colonial Laws of New York, vol. 1, p. XIX), that this resolution ever had the approval of the Governor-General or the Council, without which approval it did not have the force of law. Even so, it is significant as a token of contemporary opinion. “ There is, no doubt, much force in the suggestion that a solemn declaration of the lower house of Assembly to the effect that a great political event entailed certain consequences on the laws of this province, is not to be lightly disregarded by the courts two centuries later ” (Robert Ludlow Fowler, introduction to a Facsimile of Bradford’s Laws of the Province of New York, 1694, p. LXXXII). Significant, too, is the omission of the colonial acts from subsequent collections of the statutory laws. Livingston and Smith were directed in 1750 to digest and collect in one volume all the laws in force in this colony from the said revolution (Colonial Laws of New York, vol. 3, p. 832). They began with the colonial legislation of 1691. Van Schaack, appoihted by the General Assembly in 1772 (Colonial Laws of New York, vol. 5, p. 355), did the same. On the strength of these proofs, we have the dicta already mentioned in Van Winkle v. Constantine, and Constantine v. Van Winkle (supra) to the effect that with the revolution of 1688 the earlier colonial statutes were extinguished altogether. On the other hand, contemporary usage, buttressed in these later days by the researches of historians, is strongly the other way. The resolution of 1691, if it be taken at its face value, does not include the Duke’s Laws. It is limited by its terms to the laws consented to by the General Assembly, which did not come into existence until Í683. The minutes of the Supreme Court of Judicature show that provisions of the Duke’s Laws, as well as provisions of the acts of the General Assembly, were deemed to have the force of law long after the adoption of the resolution which is said to have put an end to them (see e. g., 45 New York Historical Society Collections, 43, 123; Minutes of the Supreme Court, April 4, 1693, applying the act of October 22, 1684, 1 Colonial Laws, 147; Minutes of the Supreme Court, October 7, 1699, applying the act of October 23, 1684, 1 Colonial Laws, 150; cf. 1 Colonial Laws, 4). The persistence of some of the provisions of the acts of 1683 and 1684 — the provisions governing the record of conveyances — has confirmation in an act of 1710 (Colonial Laws of New York, vol. 1, ch. 216), which provides that copies of such records shall be legal evidence in the courts. The assumption plainly is that records are still made with the authority of law (cf. Act of Feb. 16, 1771; 5 Colonial Laws of New York, 202; Act of March 8,1773; 5 id. 534; Act of Oct. 30, 1708, 1 Colonial Laws of New York, 633). These evidences of usage are in harmony with the judgment of historians. The resolution of 1691 is the subject of a learned discussion in the introduction by Robert Ludlow Fowler, later one of the Surrogates of New York County, to a facsimile edition of Bradford’s Laws and Acts of the Province of New York (pp. LXXVIII to LXXXIII), and also in the preface by Robert C. Cumming to the edition of the Colonial Laws of New York published by the Statutory Revision Commission in 1894 (pp. XIX, XX). The conclusion is there expressed that the earlier statutes of the colony were preserved by the instructions of James to his Governor continuing them in force except as otherwise disallowed, and that the resolution of the Assembly, not approved by the Governor or Council, was without the force of law. So, in 1764, an opinion of the Attorney-General, of which more will be said later, upholds the practice of allotment, but is framed on the assumption that the practice, rooted in ancient usage, is an exception to the general rule (New York Historical Society Collections, vol. 55, p. 391; Golden’s Papers). With all these evidences of the survival of the early statutes, the dicta in Van Winkle v. Constantine (supra) cannot safely be accepted today as a statement of established law. The theme is still one for antiquarian research.

The respondents insist, however, that irrespective of the effect of the colonial statutes of 1683 and 1684, the Statute of Frauds of England, which was adopted by Parliament in 1676 to take effect June 24, 1677 (29 Car. II, ch. 3) was law also in New York. This is an unsettled question (Reed, Statute of Frauds, § 2, and cases there cited; Sanger v. Merritt, supra). We are referred by the respondents to section XXXV of the Constitution of 1777 to the effect that such parts of the common law of England, and of the statute law of England and Great Britain, and of the acts of the legislature of the colony of New York, as together did form the law of the said colony on the 19th day of April, in the year of our Lord 1775, shall be and continue the law of this State.” This declaration does not enlighten as to the problem now before us. Only those parts of the statute law of England that formed the law of the Colony at the date of the Battle of Lexington are to be held as law thereafter, and we are left to discover what those statutes were. There was no adoption en bloc of every act of Parliament, irrespective of its subject-matter or of the usage of the colony. A distinction is often drawn between the statutes of the mother country in existence at the settlement of a colony and those adopted after-wards. The first are deemed to have entered into the fabric of the common law, and like the common law itself became law in the colony unless unsuited to the new conditions (Beinsch, Colonial Common Law, Select Essays in Anglo-American Legal History, vol. 1, p. 390; The Lauderdale Peerage, L. B. 10 A. C. 692, 744). The second were not operative beyond the limits of the realm of England unless expressly declared to be operative abroad (The Lauderdale Peerage, supra; Sackett v. Sackett, 8 Pick. 306, 316, 317; Guardians of the Poor v. Greene, 5 Binney [Pa.], 554, 558; R. B. Morris, Studies in the History of American Law, pp. 12, 13, 15). This was a common formula, yet subject, we may be sure, to be overridden or enlarged by usage. One of the chief difficulties confronting a student of our legal history is that the whole subject of the reception of English law, both common and statutory, was not thought out in any consistent way, but was left unsettled and in the air. The plaint was a common one that no one can tell what is law and what is not in the plantations (Sioussat, The Theory of the Extension of English Statutes to the Plantations, Select Essays in Anglo-American Legal History, vol. 1, pp. 429, 430).

Practice and doctrine wavered for many years (Reinsch, supra). New York is said to have developed a coherent theory earlier than other colonies (Reinsch, supra, p. 390), yet the coherence was such by comparison merely. In a report by Governor Tryon to the Crown, made in 1774, he says that the Common Law of England is considered as the Fundamental law of the Province, and it is the received Doctrine that all the Statutes (not Local in their Nature, and which can be fitly applied to the circumstances of the Colony) enacted before the Province had a Legislature, are binding upon the Colony, but that Statutes passed since do not affect the Colony, unless by being specially named, such appears to be the Intentions of the British Legislature ” (Documentary History of New York, vol. 1, pp. 752, 754; cf. Sioussat, supra, p. 486). There was no Colonial Assembly till 1683, but even before that time the Court of Assizes was invested with legislative power (Cumming’s Introduction to Colonial Laws of New York, vol. 1, p. XIII; Documents Relating to the Colonial History of New York, vol. 3, p. 188). Whether the Court of Assizes is to be classified as a legislature within the sense of Tryon’s formula may be open to debate. Probably the line of division between reception and rejection was not quite so precise as the letter of the formula might be thought to imply. The more natural division would be between the time when the Colony had laws of its own — whether proceeding from an assembly or from any other competent authority — and the time when it had none (cf. Chalmers, Colonial Opinions, p. 207, where the line of division is stated to be the settlement of the Colony). If that is the test, the act of Charles II, being silent as to the colonies, was not law for their inhabitants. The good people of the Province already had a law of their own, a provision of the Duke’s Laws of 1665, which covered the same field, with exceptions appropriate to local conditions. The query suggests itself also what reason there was for the colonial acts of 1683 and 1684 if the act of Parliament was in force ex proprio vigore. On the other hand, the evidences are many that the rule of the statute became incorporated into the law of the Colony by the force of analogy and usage. The practice, however, was not uniform. Governor Moore, writing to the Lords of Trade in February, 1768, complains of the uncertain determinations, and different opinions of the Judges relative to Acts of Parliament, * * * so that in effect the issue of a cause depended not so much on the right of the Client, as on the breath of the Judge, and what was looked upon as a very good plea in one circuit was disallowed in another ” (8 Documents Relative to Colonial History of New York, 14). From time to time attempts were made to dissipate the doubts and scruples ” (Colonial tLaws of New York, vol. 4, p. 953), which were not unknown even then. Thus an act of December 24, 1767 (Colonial Laws of New York, vol. 4, p. 953) provided for the extension to New York Province of certain acts of Parliament continuing the statute of 1 Jac. II, ch. 17, §§ 5, 6, 7, of which section 5 extended and made perpetual the last section (25) of 29 Car. II, ch. 7 (cf. 8 Documents Relative to the Colonial History of New York, 14), but the act was vetoed by the Crown in 1770. There is a significant recital: Whereas divers acts of Parliament passed since the Establishment of a Legislature in this Colony, have nevertheless been practised upon us extending to this Colony; tho’ they are not declared in the said Acts to extend to the Plantations.” Even more significant is the recital in an act of 1774 (Mar. 19, 1774, Colonial Laws of New York, vol. 5, p. 689): Whereas the Statute for the Prevention of Frauds and Perjuries hath been received by Usage as Law in this Colony, and amended by a subsequent Statute passed after the establishment of a Legislature within this Colony.” Here, it would seem, is a legislative recognition both of the act of 29 Car. II and of the colonial legislation confirming or amending it.

If usage was potent to bring an act of Parliament into effect, usage must also have been potent to define the scope of its reception. This much at least is clear, the colonists were not conscious of any antagonism between the provisions of the statutes and the usage whereby town lands were parceled out to the proprietors by allotment noted on the records. The usage persisted for a century and more (Book of Records of the Town of Southampton [printed in four volumes, 1874], see e. g., vol. 2, p. 76 [1679]; p. 85 [1681]; p. 91 [1680]; p. 110 [1686]; p. 117 [1686]; p. 123 [1687]; p. 125 [1691]; p. 139 [1697]; p. 143 [1700]; pp. 149 to 166 [1712]; vol. 3, p. 7 [1737]; p. 13 [1739]; p. 24 [1740]; p. 74 [1745]; p. 82 [1745]; p. 88 [1738]; p. 92 [1738]; p. 97 [1738]; p. 106 [1738]; p. 120 [1738]; p. 129 [1739]; p. 191 [1761]; p. 195 [1763]; p. 208 [1763]; p. 230 [1763]; p. 240 [1763]; p. 294 [1782]; p. 301 [1782]). The allotments thus made covered tracts of vast extent and were accepted without protest as a sufficient source of title (cf. Town of Southampton v. Mecox Bay Oyster Co., 116 N. Y. 1; Lawrence v. Town of Hempstead, 155 N. Y. 297). On one occasion, if not oftener, there was a statute confirming the divisions of the past, and declaring that like divisions might be made in the future in the Same manner & method as has usually been practized ” (Colonial Laws of New York, vol. 2, p. 329, at pp. 336, 337, act of Nov. 11, 1726). True it is that this statute was repealed by the King in February, 1728 (Colonial Laws of New York, vol. 2, p. 329). The repeal, however, is of little significance as affecting the validity of divisions by a township. Included in the same statute were provisions for the informal partition of lands of private owners, grkntees of extensive tracts, which provisions, it seems, had aroused protest and criticism as tending to permit fraud (5 Documents Relating to the Colonial History of New York, pp. 807, 808, and see particularly p. 809, subd. 10). At these, we may fairly assume, the King’s repeal was aimed. In spite of the repeal, there stands for our enlightenment this significant recital: Whereas much the greater Number of the Townships Settled in this Province in dividing their Lands amongst themselves have done the Same by Virtue of and according to the directions of the Votes of the Freeholders and Inhabitants at their Publick Town meetings from time to time Assembled for that purpose which divisions being generally very well accepted of and Acceded to by the respective Proprietors and Possessors of those Lands” (p. 336). What was enacted as to the town allotments was merely an incidental feature of a comprehensive statute embracing other subjects. There was surely no purpose by the repeal to overturn or unsettle titles of immemorial acceptance. Confirmation of anything so fundamental must have been felt to be a mere formality. The final arbiter was usage. Doctrine had not established itself sufficiently to be superior to practice. To learn what the law was we must try to ascertain what the colonists of those days believed it to be, and to learn what they believed it to be we must try to discover what they did.

The respondents, rejecting the allotments as insufficient to divest the title of the township, take their stand upon the pas tian that in 1818 lots numbers 31 to 35 of the Quogue Purchase, Last Division, were still undivided commons, the title vested in the township or in the trustees that represent it. The reason why the year 1818 is important is because in that year the Legislature passed a statute whereby whatever title to the undivided lands had belonged theretofore to the Trustees for the Freeholders and Commonalty of the Town of Southampton was transferred to a new body corporate, “ the Trustees of the Proprietors of the undivided lands of the town of Southampton” (Laws of 1818, ch. 155). The provisions of this statute, since they are the source of the respondents’ claim of title, must be stated with precision. By section 1, “ the proprietors of the undivided lands and meadows, held by them as tenants in common,” were authorized to meet at a stated time, and annually thereafter, to elect for the term of one year not less than six nor more than twelve persons, being proprietors, trustees to manage all the undivided lands, meadows and min streams in said town of Southampton.” By section 2, the trustees were declared to have “ the same power to superintend and manage the undivided lands, meadows and mill streams ” as had formerly belonged to the trustees of the freeholders and commonalty of the town, and also to sell, lease and partition them. By section 3, the clerk of the trustees was charged with a duty “ to keep a record of the names of each proprietor, and the amount of right to him or her belonging, and to make transfers of the same;” and no person was to be “ entitled to a vote at any meeting of said proprietors, without their names are entered on said record.”

The respondents’ claim of title to the premises in suit is derived through mesne conveyances from a sale by the trustees of lands described as undivided. On November 7, 1882, the Trustees of the Undivided Lands of the Town of Southampton delivered to one Maxwell for a consideration of $500 a quitclaim deed of all the right, title and interest of the grantors in the undivided lands under water in Shinnecock bay within the limits of the Quogue Purchase; the lands under water in the Great South bay and connected creeks within the same limits; the lands under water in Canoe Place pond; and the beach and shore of Peconic bay within stated bounds. If the quitclaim had stopped there, it would have given no color of right to a claim of title to the land in suit. In closing, however, it supplements the detailed description by a more general one as follows: together with all other undivided lands which may exist within the limits of the said Quogue Purchase (so-called). This deed being intended to convey all the right, title and interest which the proprietors of the undivided lands have in said Quogue Purchase (so-called).” The respondents’ claim of title to the upland is based upon this clause. The later deeds in the chain of title repeat the same description without change of substance until May, 1928, when a deed was made to the defendant Hotchkiss. Then for the first time a new description makes its appearance. The land is then described for the first time as including lots 31 to 35 in the Quogue Purchase, Last Division, or the portions of those lots described in the complaint. Later Hotchkiss and wife conveyed an undivided third of what they owned to the plaintiff Beers. Campbell was then in possession of part of the property, having cleared it for an aviation field and built a hangar for aircraft. He does not, however, connect himself with the title of any of the early allottees. The referee has found that it is not possible by any connected chain of title to trace the interests of the several persons to whom said lots were laid out and allotted as aforesaid.” Some of the allottees did execute deeds conveying parts of lots 31 to 35 of the Quogue Purchase, though one cannot say at this day whether the parts so conveyed are the premises in suit or others. So far as this record shows, Campbell’s possession is that of a squatter, who has entered upon wild and vacant land and used it as his own. Even so, the respondents are in no position to disturb his possession or challenge his title unless they are able upon this record to make out a better right.

The trustees of the undivided lands of the town of Southampton were without authority to sell the premises in suit in 1882 unless what they sold was in truth undivided land within the meaning of the statute (Laws of 1818, ch. 155). The premises are not described in the conveyance by metes and bounds or monuments. They are described merely as the undivided lands in the Quogue Purchase. The respondents, to make out a title to the real property in suit, must prove that what they claim comports with that description. The burden is not on the appellants to show that the land was not undivided. The burden is on the respondents to prove that it was. The case hinges on the question whether such proof has been supplied.

In the existing uncertainty as to the law of colonial New York, we assume, without deciding, that in the year 1782, there was in existence in the Colony a statute of frauds, either the British one of 1677 or the colonial one of 1684, that regulated the form of alienation and conveyance for ordinary private grants. The result will be the same whether the rule derived its efficacy from the mandate of the Legislature or from an extension of the common law through the power of analogy. If the rule was in existence, we think it was understood to be subject to the usage whereby division of the town lands was made among proprietors by allotment or partition entered on the records. We find it incredible that the British statute — the act of 29 Car. II — which did not bind the colonies by any declared extension of its scope, should have been imported by the colonists and wrought by implication into the body of the local law with any thought that the local usages, though persisting unabated during the period of reception, would thus be overridden (cf. the recitals in Colonial Laws of New York, vol. 5, p. 689, already quoted). The statute, if it established itself in the new home, did not win its way over night. It worked itself into the tissues of the law with the progress of the years by a process of assimilation akin to the method by which common law develops. In becoming law, it acquired an incrustation of beliefs and usages that must have shaped its scope and meaning.

What is true of the British act is true also, for reasons not dissimilar, of the colonial acts of 1683 and 1684, if we assume that after 1691 they had the quality of law at all. The practice of partition by allotment and vote of the proprietors has had judicial recognition in other States and Colonies (Codman v. Winslow, 10 Mass. 146; Inhabitants of Springfield v. Miller, 12 Mass. 415; Coburn v. Ellenwood, 4 N. H. 99). There is evidence that in the Colony of New York the courts dealt with the practice in a like spirit of liberality. An opinion of the Attorney-General, John Tabor Kempe, was transmitted in November, 1764, to Cadwallader Golden, Lieutenant Governor of the Province (New York Historical Society Collections, vol. 55, p. 391; Golden's Papers). “I understand,” he says, that the Township was granted in Joint Tenancy and that all the Right the Inhabitants have to hold in severalty is the Orders made at their Town Meetings, and entered in their Minutes, & that tho this could convey no legal Title to hold in severalty, yet the Courts of Justice, considering the Ignorance of those Times, and the Confusion the Contrary would introduce have admitted them as valid for that Purpose.” In the face of that opinion we may well hesitate at this day to test the forms of alienation by a standard of formality unknown to the age that framed them.

There was, indeed, much to excuse the ignorance of the colonists, if ignorant they were, as the Attorney-General suggests. The Duke’s Laws of 1665, covering the same field as the acts of later date, expressly excepted conveyances by the inhabitants of towns, conveyances more nearly akin to partitions than to formal deeds of grant (Colonial Laws of New York, vol. 1, p. 30). We cannot feel assured today that the later acts were understood by the community to have retained their binding force. Still less can we feel assured that they were understood even by the framers to have repealed the old exceptions. A practical interpretation, too strong to be ignored, is evidence of the intention of the lawmakers that the exceptions should survive. Significant at all times in shaping the construction of a statute is contemporary usage, unless, indeed, the meaning is so plain that construction is excluded (United States v. State Bank, 6 Pet. [U. S.] 29; The City of Panama, 101 U. S. 453, 461; Logan v. Davis, 233 U. S. 613, 627). “ Contemporánea expositio est fortissimo in lege (The City of Panama, supra). Its potency is magnified many fold when the antiquities of the law must be explored to unearth the applicable rule. A landowner of 1782, the date of the allotment in suit, could not have discovered the existence of these acts by an examination of the oficial collection of the statutes then in force. He had little guide except the usages that were known to him and to his neighbors. All this must be taken into account in determining the validity of the traditional methods of conveyance. We are not at liberty a century and half later to give to ancient statutes, whose very existence is and was in doubt, a meaning and operation at variance with the practice of the vicinage. Conceding arguendo that the acts were in force and were applicable to private grants, we limit their application within the bounds of ancient usage, and thus exclude from their coverage the common forms of allotment by towns or their inhabitants.

Sanger v. Merritt (supra) does not, we think, constrain us to a different conclusion. The allotment there considered was made in 1797. The Colony of New York had then become a State, and the Legislature of the State had adopted a new statute (Laws of 1787, ch. 44), which was unquestionably law. The mists had been dispelled. Ignorance would no longer avail as an excuse. Landowners might not unreasonably be required, irrespective of past usage, to comply with the new mandate unequivocably declared. There would have been hardship in a like exaction in days when the very existence of the statute to be obeyed was shrouded in obscurity. In a primitive community, with unsettled and evolving rules, there is need of greater play for the joints of the machine. All this was recognized in our decision in Lawrence v. Town of Hempstead (supra), which may fairly be offset against the earlier decision in Sanger v. Merritt, if the case is to be decided on the basis of precedent alone. In Lawrence v. Town of Hempstead, the plaintiff’s title had its origin partly in a fencing order made in 1659, and partly in an allotment made in 1678. The court upheld the title both as to the lands covered by the order and as to those covered by the allotment. The trial judge was Mr. Justice Cullen, later Chief Judge of this court. In his opinion in the trial court he admitted the possibility that a slight extension of the doctrine of Sanger v. Merritt would withdraw the whole foundation of the plaintiff’s claim or ownership. He pointed out, however, that as “ a matter of common knowledge * * * the source of all titles in Hempstead, and in most of the Long Island towns, is found simply in town order votes or allotments.” “ It is now too late,” he said, after the lapse of two hundred and fifty years, to criticize, on account of absence of legal forms, transfers on which the titles of great communities are based.” This comment was quoted with approval when the case came before us here. Approaching the case in that spirit, the same spirit that is reflected in the opinion of the Attorney-General a century and a half before, the court arrived at the conclusion that the allotment was sufficient to divest the title of the town. “ It was not until 1787 that, by enactment in that year (Ch. 44, § 9), greater formalities were made requisite in the execution of conveyances of estates, other than at will” (p. 301). We think the problem now before us should be viewed from a like outlook. Thus approaching and weighing it, we uphold the ancient methods of conveyance by allotment, consecrated as they are by centuries of practice and tradition.

The respondents would have us hold that allotments, though entered upon the records, were ineffective as a source of title unless succeeded by possession. The burden is on them to show that possession was not taken. We cannot say upon this record that the burden was sustained. For all that appears the scrub pine and oak which is known to have been upon the land for upwards of forty years, is a second or recent growth. The plaintiff was unwilling to testify that the land had not been cleared before. Aside, however, from this lacuna in the proofs, we find no basis for a holding that possession was essential to give effect to an allotment. Much of the soil was unfit for cultivation; much, even if fit, was not needed for present use. This was true in 1782, and even more obviously true a century before. There was no thought, we may be fairly sure, in the minds of the people of those days, in the minds of members of an ■unsettled and primitive community, that immediate possession would be necessary to validate a title, except, perhaps, the symbolical possession that comes from livery of seizin. Forms of alienation established by tradition must be given a significance consistent with the beliefs and expectations of those who brought them into being. We do violence to probabilities if we impute to the landowners of the seventeenth century a state of mind that would condition the validity of allotments upon acts in pais thereafter. Worse than this, we place in jeopardy the security of titles if we hold that title fails unless possession can be proved. The secret is hidden by the centuries. There may have been possession not visible today, by fencing or by cutting timber or by any of the uses of husbandry as practiced in those times. We shall find it hard to know. Even harder shall we find it, if there was possession of some sort, to determine the extent, to fix the bounds of occupation when monuments have been leveled by the devastating years. There can be little doubt that some at least of the proprietors who had allotments under the Quogue division did enter into possession, even though the lots so occupied are not the particular parts of the division in controversy here. The allotment was a single act, good or bad in its entirety, and proprietors who acquiesced in the possession of co-proprietors in the faith that the division was binding upon all, would be greatly wronged if it were held to be binding as to the others and void as to themselves.

What has been written has confirmation when we consider the implications of the act of 1818 and consider at the same time the occasion for its passage. One finds it difficult to believe that in the year 1818, when the trustees were empowered to sell the lands then undivided, there was any thought by the proprietors that the premises now in controversy, or any premises allotted, were to be the subject of the sale. By the terms of the statute, the trustees were not to be chosen by the inhabitants generally, nor even by all who had once been recognized as proprietors. They were to be chosen by the proprietors of the lands then undivided, and the clerk was directed to keep a record of the names. The Legislature can hardly have expected that the allottees of the common lands, who certainly must have believed that the allotments were valid and sufficient, would cause their names to be registered as proprietors of undivided lands, and thus co-operate with the trustees in nullifying the foundations of their title. In those days many proprietors who knew the conditions that had prevailed in 1782 must still have been alive. If some further act of possession was necessary to give effect to the paroi division, they were in a position to do it even then and thus confirm their ownership (Wood v. Fleet, 36 N. Y. 499). There would have been injustice as well as futility in asking them to give that privilege away.

The act of 1818 must be read in the light of these conditions, notorious to the men who framed it. The aim was not to unsettle the old allotments or the titles built upon them. The aim, on the contrary, was security and peace. What had been divided was to be untouched, if division had been made according to the ancient forms. What was undivided, and nothing else, was to be the subject of the future sales. Nothing in the statute betokens a belief that the validity of past divisions was dependent upon proof that there had been livery of seizin followed by continuous possession. The colonists who had made these allotments decades and even centuries before were well aware that immediate occupation was not to be looked for in view of the nature of the soil and the conditions of life in a pioneer community. There was no thought in 1818 to thwart their expectations. We are rather to see in the statute a submission to the force of usage in an era when law was still unsettled, a legislative recognition of ancient forms of alienation and a confirmation of those forms as an independent source of title.

To avoid misapprehension, the fact should be here recorded that there is no evidence of occupation of the woodland for such a time or in such a manner as to establish for any of the parties an adverse possession sufficient to create a title.

The judgment of the Appellate Division and that of the referee should be reversed, and the complaint dismissed as to the appellants, with costs in all courts.

Crane, Lehman, Kellogg and O’Brien, JJ., concur; Pound and Hubbs, JJ., not sitting.

Judgments reversed, etc.


source: Caselaw Access Project

author: Pound, J.

license: Public Domain

text:
    Noah Fells, Appellant, v. Martin Katz et al., Respondents.

      (Argued February 13, 1931;
    decided March 24, 1931.)

      Conrad Saxe Keyes for appellant.
    The mail chute business is not similar to that of the corporate defendant. (People’s Trust Co, v. Schultz Novelty Co., 244 N. Y. 14.) The covenant against engaging in other business and providing that each of the parties would devote his entire time to the business of the corporation was an independent covenant, the violation of which did not justify the abrogation of the entire agreement between the parties. (Rosenthal Paper Co. v. National Folding Box & Paper Co., 226 N. Y. 313; Anheuser-Busch Ice Co. v. Reynolds, 221 App. Div. 174.)

      Samuel Gottlieb and William Weisman for respondents.
    Plaintiff’s misconduct warranted his being ousted as officer, director and employee of the defendant corporation. (Rosenthal P. Co. v. National Folding B. & P. Co., 226 N. Y. 313; Ming v. Corbin, 142 N. Y. 334; Portfolio v. Rubin, 233 N. Y. 439; Anheuser-Busch Ice Co. v. Reynolds, 221 App. Div. 174.) The court will not construe the agreement upon which plaintiff predicates his right to remain on the directorate as a covenant to keep him on the board, irrespective of whether he has been guilty of misconduct in that office. Such an agreement would be contrary to public policy and void. (Anderson v. Curtis, 223 N. Y. 313; West v. Camden, 135 U. S. 507; Jackson v. Hooper, 73 N. J. Eq. 592; Guernesey v. Cook, 120 Mass. 501; Rosenthal v. Light, 185 App. Div. 702; 227 N. Y. 587.)
   Pound, J.

A corporation, Fells, Lent, Cantor, Katz Corporation, the defendant corporation herein, was formed by the merger of two corporations, Fells, Lent & Cantor Corporation and New York Metal Store Fronts Co., Inc., which was owned and controlled by A. and M. Katz. The stock of the new corporation was divided equally among Fells, Lent, Cantor and the two Katz brothers. All the parties signed an agreement to pay $20,000 each for his equal share of the stock of the new corporation. They agreed to elect each one of their number an officer in the new corporation for a period of ten years. Fells was to be elected president. They also agreed to elect all the parties, together with Minnie Katz, as directors of the corporation and to elect annually the same persons as officers of the corporation.

The agreement further provided:

“ Sixteenth. Said corporation shall immediately enter into a contract of employment with each of the parties hereto for the period of ten years at the annual salary of not less than $5,200 per annum and not more than $12,000 per annum. Such salary to be payable in equal weekly installments of $100 at the end of each week, and the balance, if any, at the end of the fiscal year as hereinafter provided. Each of said contracts shall provide that the employee therein named shall receive or be entitled to receive a salary of not more or less than any of the other parties to this agreement.

“ Seventeenth. At the end of the corporate fiscal year before the declaration of any dividends there shall be paid to each of the parties hereto as salary an equal share of the net earnings which when added to the sum of $5,200 theretofore paid to each of the parties during the year, shall not aggregate more than $12,000 for that year.

Eighteenth. Said contracts shall provide that each of the parties hereto shall devote his entire time and attention to the business of the corporation in a general capacity to the end that each one will perform those duties for which he is best suited or qualified with the exception that Fells may devote as much time and attention to his own personal affairs as he may reasonably require.”

In accordance with this agreement contracts of employ-' ment were entered into, dated April 17, 1926, for the period of ten years from May 1, 1926. Fells was to receive a minimum salary of $5,200 per annum and a maximum salary of $12,000 per annum. In the event of illness or other incapacity he was to receive his full salary for a year and $5,200 a year thereafter. He agreed to “ devote his entire time and attention and best efforts to the furthering of the interests and in the service of the party of the second part.” Such duties were to be general in character and the same as those of his four associates.

The associates proceeded amicably under these agreements until plaintiff organized a new company, United States Mail Chute Corporation, to manufacture mail chutes. While the defendant company did not manufacture mail chutes the business was to an extent a competing business and it took the time of plaintiff away from the defendant corporation. The defendant corporation then proceeded to depose plaintiff as president and director and to terminate his contract of employment, at a special meeting, of the board of directors called for that purpose on September 17, 1929. No provision is contained in the by-laws for the removal of a director pr of the president of the corporation by the directors before the end of his term (People ex rel. Manice v. Powell, 201 N. Y. 194), but others were elected to take the place of plaintiff as director and president and no point is made of the fact that this was done at a special meeting and not at the regular meeting following the annual meeting of the stockholders.

Plaintiff brought action to compel his reinstatement as president of the company, director and employee under the contract above referred to. He did not succeed. The trial court held that he, in violation of his duty as an officer and employee of the defendant corporation, engaged in a competing business and devoted his time thereto to the prejudice of the defendant corporation and that it was justified in discharging him. Evidence is not lacking to sustain the finding of breach of duty.

It is further contended that even in the event of the breach of the contract of employment, the corporation had by reason of the agreements of the parties no power to discharge him but could merely call on him for an accounting or obtain an injunction against him and that the court should reinstate him. If the contract of employment is to be considered as a separate contract apart from the- merger agreement between the stockholders of the two original companies, the covenants are doubtless concurrent. The corporation could terminate the contract of employment for breach thereof. But it is urged that the contract of employment is something more; that the covenants are independent; that Fells was to receive at least $5,200 a year even if he became permanently incapacitated and that he should receive as much if he breached the contract; that it was the intention of the parties that salary should constitute not merely compensation for services but also a part of the purchase price of plaintiff’s stock.

But even in that event, we are dealing with the action of the board of directors of the defendant corporation. Provision for incapacity does not include provision for perversity. One is consideration for infirmity. The other would be a reward for neglect. Even if the stockholders may make agreements among themselves as to the management of corporate affairs by the election of directors which are valid and will be enforced, yet General Corporation Law (Cons. Laws, ch. 23), section 27, provides: “ the business of a corporation shall be managed by its board of directors,” and by the by-laws of defendant corporation it is provided that “ the board of directors shall have the control and general management of the affairs and business of the corporation.” Directors hold their office charged with the duty to act for the corporation according to their best judgment. Clearly the law does not permit the stockholders to create a sterilized board of directors.” (Manson v. Curtis, 223 N. Y. 313, 323.) The courts will not regulate their conduct in the reasonable exercise and performance of their duty, even though they may by such, conduct render the corporation liable to actions for damages for unlawful discharge. An agreement among stockholders whereby the directors are bereft of their power to discharge an unfaithful employee of the corporation is illegal as against public policy. (Manson v. Curtis, supra) The agreement of the stockholders to continue a man in the directorate must be construed as an obligation to retain him only so long as he keeps the agreement on his part faithfully to act as a trustee for the stockholders. An agreement to continue a man as president is dependent upon his continued loyalty to the interests of the corporation.

Hardship to the plaintiff may result from- this construction of the contract. Hardship to the corporation would result if it were held that the board of directors could not terminate the employment but were compelled to reward alike the faithful and the unfaithful and endure the unfaithful officer and employee while he diverted to a rival the business he might have obtained for the corporation that had employed his best efforts in its behalf. The question is not here how far the removal of the appellant may affect the right of the other parties to the contract to the continued enjoyment of the salary and other benefits provided therein.

The disposition of the case below was correct.

The judgment should be affirmed, with costs.

Cardozo, Ch. J., Crane, Lehman, Kellogg, O’Brien and Hubbs, JJ., concur.

Judgment affirmed.


author: Crane, J.

text:
    Henry Sanderson, Respondent, v. Jay Cooke et al., Appellants.

      (Argued February 17, 1931;
    decided March 24, 1931.)

      Harold H. Corbin, Carl M. Owen, Edward J. Bennett and Spencer Pinkham for appellants.
    The proof failed to show any present title in the plaintiff to the books of his three special partnerships; but, on the contrary, showed that he never had any title thereto. (Skolny v, Richter, 139 App. Div. 534; Madison County Bank v. Gould, 5 Hill, 309; Buck v. Alley, 145 N. Y. 488; Harris v. Murray, 28 N. Y. 574; Artisans’ Bank v. Treadwell, 34 Barb. 553.) - The proof failed to show any present title in the plaintiff to the books of his three general partnerships; but, on the contrary, showed that he parted with and lost all title. (Corticelli Silk Co. v. Balfour, 5 Terr. L. R. 385; Matter of Brown, 242 N. Y. 1.) The proof showed that the plaintiff lost any title he may have had by virtue of a tacit understanding with his partners that title to the books and records of each firm should vest in the next succeeding firm. (Menendez v. Holt, 128 U. S. 514; Pfleghar Hardware Specialty Co. v. Blair, 30 Fed. Rep. [2d] 614.) Plain principles of equity bar plaintiff from all relief. His failure and refusal to show reason ■for his request, or substantial injury from its denial are fatal — for equity will not interpose to vindicate one in the mere assertion of a technical legal right. (Packard Motor Car Co. v. Milwaukee Elec. Ry., 190 N. W. Rep. 914; Advance Oil Co. v. Hunt, 116 N. E. Rep. 340; Bouchard v. Zetley, 220 N. W. Rep. 209; Genet v. D. & H. R. R. Co., 122 N. Y. 529; Van Buren v. Posterano, 132 Am. St. Rep. 199; Gray v. N. R. Co., 128 N. Y. 499; Corning v. Troy Nail Factory, 40 N. Y. 191; Cabell v. Roberts, 6 Rand, 580; Woodbury v. Portland Mar. Soc., 90 Me. 17; Foster v. Mansfield, 146 U. S. 88; Purdy v. Manhattan Elec. Ry. Co., 13 N. Y. Supp. 295; Collins v. Martin, 248 S. W. Rep. 941.)

      Samuel Sedbury and Henry A. TJterhart for respondent.
    A partner has the right at all times to inspect and copy partnership books; if his copartners prevent him from exercising his right they commit a wrong which the aggrieved partner may redress in an action brought to enforce his right. He is not obliged to allege or prove that some other right has been invaded and to ask for inspection and copy as an incident to the establishment of such other right. (Matter of Trueman, 1 D. & C. 464; Davis v. Davis, 10 N. Y. Supp. 897.) The Partnership Law provides that general, as well as special, partners shall at all times have the right to inspect and copy partnership books. Books, like any other property of the firm, remain partnership property until disposed of, even though there be a dissolution; consequently, as long as the books remain partnership property, the right to inspect and copy continues, even though the firm be dissolved. (Kittredge v. Langley, 252 N. Y. 405; Matter of Truman, 1 D. & C. 464; Bearns v. Burras, 86 Hun, 258; Howlett v. Hall, 55 App. Div. 614; Davis v. Davis, 10 N. Y. Supp. 897.) Plaintiff has not assigned, transferred, abandoned or surrendered any of his partnership rights in his firms’ books. (Cruttwell v. Lye, 17 Ves. Jr. 334; Matter of Brown, 242 N. Y. 1; White v. Eiseman, 134 N. Y. 101.)
   Crane, J.

Charles D. Barney & Co. is an old-established brokerage house with which the plaintiff became connected in 1911. By articles of partnership, dated February 1, 1911, he, with six others, became general partners of the firm, with one special partner. The partnership was continued by another agreement dated November 29, 1912. Again, on the 1st day of February, 1915, articles of general partnership were signed, under which the firm continued until December 31, 1918, at which time, either by agreement dated that day, or January 1, 1919, the firm was dissolved and a new firm formed, in which the plaintiff and J. Horace Harding became special partners. This special partnership was continued by agreements dated December 23, 1919, and June 29, 1920, and terminated by agreement in writing dated' the 14th day of January, 1921.

As a special partner, Mr. Sanderson’s rights were limited to a return of his capital contribution, and a fixed percentage thereon. These he received upon retirement. His interests as general partner, prior to 1918, were disposed of by the agreements referred to, and by settlement. He at no time has claimed, and does not now claim, that any of the partnerships owe him one dollar, or that the settlements were unfair or fraudulent. He never has made and does not now make any claim of any kind or nature upon any of his former associates or the partnership of Barney & Co. Neither is there any intimation of existing creditors who might pursue a retired limited partner within the doctrine of Kittredge v. Langley (252 N. Y. 405, 418).

This litigation arises out of a supposed property right which the plaintiff claims to have in the old books of account. The various partnerships, beginning with 1911, and continuing down to the 28th day of February, 1921, were a continuation of the business of Charles D. Barney & Co. without interruption. The place of business was the same for each succeeding firm, with possibly one change — in the location of the offices. All office equipment, desks, chairs, tables, files, records and books remained with the new or incoming firm or partnership. As one man dropped out and another came into the firm, the only apparent difference was in the personnel and interests of the partners, and not in the business itself. The books, which included cash books, blotters, purchase and sales books, ledgers, stock records, journals, and bond ledgers, were passed on from firm to firm and used in continuity; that is, the new or succeeding firm did not open new or fresh books actually, but continued to write and make entries in the old books until all the pages were used up. One book, therefore, might contain the business of more than one of these firms. The fact is beyond dispute — because Mr. Sanderson himself says so — that the business could not be carried on without the information contained in all these records. The books of the previous firm were necessary to carry on the business as a going concern. “ Their books and records are necessary to the business to continue it as a going business.”

In 1926, Mr. Sanderson asked to see and examine the books of the old firms, which were then in the possession of Charles D. Barney & Co., and was afforded the opportunity, not only of inspecting the books personally, but of having them examined by public accountants, Barrow, Wade, Guthrie & Co. From November 22, 1926, to December 23, 1926, two men were on the books, assisted by William J. Woods, of Barney & Co., who took himself out of his own work to assist the accountants. Private or family accounts were kept by the senior member of the firm, J. Horace Harding. The defendants were willing to have the plaintiff inspect these personally, but refused to permit him to make and take copies of them.

The plaintiff thereupon, on the 15th day of November, 1928, or eight years after his final termination of all relationships with Charles D. Barney & Co., commenced this action, basing it solely upon the claim that the books belonged to him, were his property the same as a desk or a chair could be property; that he was entitled as a matter of right to see, inspect and copy all or any part of the books in question, including the Harding personal account. He has been sustained by the judgments in the courts below, holding that the books, records and papers of the various firms are the property of the plaintiff, with the other members of the then firms, and the defendants are enjoined from removing or disposing of any of them. The plaintiff is given the right personally or by his duly authorized agents to copy, photograph or photostat any and all of these books, records and papers. Has the plaintiff any such right, as matter of law, on the conceded facts of this case?

The general rule regarding business partnerships is that books should be kept, open to the inspection of any partner at all reasonable times, even after dissolution, subject, however, to special agreement. (Bindley on Partnership [Amer. ed., Ewell], vol. 2, pp. 404, 420; Rowley on Partnership, vol. 2, § 913; Partnership Law; Cons. Laws, ch. 39, §§41,99.) Even under these broad statements of the law, a partner’s rights are not absolute. He may be restrained from using the information gathered from inspection for other than partnership, purposes. (Trego v. Hunt, L. R. [1896] A. C. 7.) The employment of an agent to make the inspection does not authorize the selection of anybody he may choose for the purpose. The agent employed must be a person to whom no reasonable objection can be taken, and the purpose for which he seeks to use the right of inspection must be one consistent with the main purposes and the well being of the whole partnership. (Bevan v. Webb, L. R. [1901] 2 Ch. 59.) The right of inspection by an agent is not so absolute as the right to a personal inspection, and may be refused if the court is satisfied that the assistance of an agent is not reasonably required, or that the inspection is wanted for an improper purpose. An agent may be required to give an undertaking that the information acquired will not be improperly used. (Lindley on Partnership [9th ed.], p. 492.) Howlett v. Hall (55 App. Div. 614) recognizes that the right is not a strict property right the same as part ownership in other personal property, but is confined within limitations. Motive plays a part, which of course attaches to the ownership of no other kind of property, for in this case it was stated that the application to examine the books may be refused,if it be made in bad faith. And in Bearns v. Burras (86 Hun, 258) it was said: “ The courts have sufficient serious business to engross their time, and cannot permit a party, simply for the purpose of gratifying his fancy, to call upon its power to get in some way more pleasing to him that which is freely offered to him.” This was said, although the court also stated that a partner has the right notwithstanding dissolution, to examine the books of the-concern at a reasonable time and place, because they are as much his property as that of his copartner. Kelly v. Eckford (5 Paige Ch. 548) and Stebbins v. Harmon (17 Hun, 445) were actions for accounting.

We are not treating here, however, with a partnership in existence, a going concern, nor with an action for a partnership accounting and the inspection incident thereto, nor with joint partnership property left on dissolution, for safe-keeping, in the custody of the other partner or partners. We have much more than this. Whatever may be the property right of a partner in the partnership books, he may transfer and dispose of it like his right to any other bit of property by express, or necessarily implied, agreement. This is succinctly and forcibly stated in a short opinion by Mr. Justice Albert Cardozo, in Platt v. Platt (61 Barb. 52, p. 53). Writing of a former partner, whose executors claimed a right to inspect partnership books, the justice said: Nathan C. Platt had parted with his interest in the partnership, and conveyed it to the defendant. While that sale stands, the plaintiffs have no rights in the property. While that sale stands, the books belong to no one but the defendant; and while they belong exclusively to him, no one else has the right to a general inspection of them.”

The plaintiff is mistaken, I think, in the extent of the burden and duty cast upon partners regarding the books on dissolution. Where there is no other agreement, express or implied, the books belong to both of the partners; one has as much right to them as the other. There is no law which compels one partner on dissolution to continue the business for the sake of keeping the books and preserving them for the inspection of the other partner. They may be'put in storage; sometimes they are quite numerous, and the rental of storage space is no small charge. Is one partner to bear all the expense for the benefit of the other? The expense of preserving the books must be a joint charge and a joint burden. When, therefore, section 41 of the Partnership Law states that the partnership books shall be kept at the principal place of business of the partnership, and every partner shall at all times have access to, and may inspect and copy any of them, it necessarily refers to a going partnership, as there is no duty to maintain the place of business after dissolution. Likewise, there is no duty on a purchaser of the good will and business of a firm to keep the books of the prior concern. The new partnerships of Barney & Co. were not bound to store the books of the plaintiff’s firm for his benefit. That the plaintiff never made inquiry about the old books, apparently assuming that they would be kept by new and succeeding firms, without charge to him, indicates that he realized that these successors had an interest in preserving them. That interest is to be found in his own assertion, that these books of the Charles D. Barney & Co., under any and all the firms, were necessary and requisite for the carrying on of the business. Possession and use passed on without interruption. This he understood, when he formed the limited partnership in 1918, from which he was to draw his interest on his capital investment, as well as in 1921, when he withdrew from the firm.

The trial judge has found that there was nothing in any of the partnership agreements with the plaintiff which refers to the books, records and correspondence. Neither was there any reference to office furniture and fixtures in all of the agreements. The plaintiff has never made any claim to be a part owner or have a property interest in these. He says at one point that the furniture, and the making over of the offices were very expensive. What became of his property interest in these assets? They passed, as he intended that they should pass, to the firms continuing the business, and which of necessity were obliged to have the office equipment to carry on the business. The books and the records and the files were much more necessary for the continuance of that business. We find expressions running through all these various partnership agreements clearly indicating that it was the intention that every succeeding firm continuing the business of Charles D. Barney & Co. should take as its property the books, records, files, office chattels, used by the preceding firm;

The first partnership agreement, dated February 1, 1911, contains this: “ The firm created hereby takes over all the residue of the assets and property of the late firm of Chas. D. Barney & Co. as they existed upon the 31'st day of January, 1911, and assumes all the debts and liabilities of said firm as they existed on said date.” The good will and the right to use the firm name upon dissolution vests in J. Horace Harding.

The agreement of November 29, 1912, has nothing to say upon this point, apparently continuing the former agreement, with change of interests.

That of February 1, 1915, says: “ The firm created hereby takes over all the residue of the assets and property of the late firm of Chas. D. Barney & Co. as they existed upon the thirty-first day of January, Nineteen hundred and fifteen, and assumes all the debts and liabilities of said firm as they existed on said date.” The good will and the right to use the firm name is to pass to J. Horace Harding on the dissolution of the partnership. This agreement was to terminate on the 31st day of January, 1917. It continued in effect until the 31st day of December, 1918, without any apparent written extension. On December 31,1918, or January 1,1919 (plaintiff’s Exhibits 4, 5 and 15), the partnership was again reorganized by making Harding and Sanderson special partners. The old firm was dissolved on the 31st day of December, 1918, and the good will and the right to use the firm name were assigned and transferred to Henry E. Butler, for the use of the new firm of Charles D. Barney & Co. These words are found in the agreement: “All customers accounts of the firm of Chas. D. Barney & Company shall be taken over by the Limited Partnership of Chas. D. Barney & Company except as hereinafter otherwise provided. * * * ” In the articles of limited partnership dated the next day, January 1, 1919, we find the words: “ The firm created hereby takes over all the residue accounts of the late firm of Chas. D. Barney & Co. as they existed upon the thirty-first day of December, 1918, and assumes all the debts and liabilities of said firm as they existed on said date.” Thus was created the partnership in which Sanderson became the limited partner. He knew that the business could not be carried on without all the books, accounts, papers and files of the previous general partnership. He knew, also, that the books of the old firm were not physically closed and laid aside for preservation, but were continued in use by the new limited partnership for their entries and accounts; in other words, as heretofore stated, one book might have the entries of the former general partnership and also the entries of the new limited partnership, all under the name of Charles D. Barney & Co. To whom did such a book belong? To the old firm and also to the new? Was the new firm keeping its accounts and business transactions in books which did not belong to it? Could the old firm at any time take its books away, put them in a storehouse? To ask these questions is to show the weakness of the claim that title to these books and the property in these books remained in Sanderson after the termination of his general partnership. When he became a special partner, he ceased to have any interest in the assets, and among the assets of the new limited partnership were the books, records, etc., demanded in this case.

We must not overlook the obligations which this new firm assumed. They agreed to pay all the debts and liabilities of the old general partnership as they existed on the 31st day of December, 1918. We cannot imagine the assumption of such an obligation without the right to the records forming the lasting and legal evidence of the transactions. The debts assumed were those stated in the accounts recorded in the books. To enter the credits from time to time, the books would be constantly in use, and all this the plaintiff knew, and states that he knew.

These agreements, their method of doing business, the relationship of the parties, the assets transferred and the obligations assumed, all center around the heart of the business, which was in the books; without these, no life, no circulation. To transfer the accounts which constituted the business, without the records of the accounts, appears to be meaningless. They were one and the same thing for the purpose of this transaction. We must, therefore, conclude that of necessity the books of the old general partnerships passed to the new special partnership of Charles D. Barney & Co. on the first day of January, 1919.

In the special partnership agreement of December 31, 1918, certain accounts were excepted — did not pass to the limited partnership — they remained the property of the partners of the old general partnership. Schedule A, annexed to the agreement, listed these accounts. It is not in the record, or now annexed to that agreement. The general partners, in passing over all the property in the accounts, and necessarily the books, to the limited partnership, excepted these accounts in Schedule A. They were, however, transferred to and carried on the books of the new partnership. As Sanderson says, They were carried into the new firm.” Of course, they were not carried on the books of the new firm or into the new firm, as property of that new partnership; they appeared there like any other customer’s accounts, that is, property belonging to the individuals composing the old firm, who, in this instance, must have been recorded as creditors, or customers, not as partners. Apparently these reserved accounts have been closed, as no reference is made to them, nor- hint given that they have not been paid.

Much reliance has been placed upon the case of Ex parte Joseph Trueman In the Matter of Richard Martindale (1 Deacon & Chitty’s Reports, 464 [Bankruptcy], 1832). The case was based upon two things: first, the agreement between the partners as to the-disposition of the books after dissolution; second, on an act of Parliament (6 Geo. IV, ch. 16, § 33) vesting power in commissioners to examine books relating to dealings with a bankrupt. In the year 1811 the petitioner entered into partnership with the bankrupt and by their articles of partnership it was stipulated that the account books should remain the joint, property of the partnership at its dissolution. The partnership was dissolved and all accounts wound up in 1820. In May, 1830, one of the partners, named Martindale, was declared a bankrupt, and his assignees claimed the right to inspect the books of the partnership. They summoned the other partner, the petitioner, to produce the books before the commissioner. Trueman, the other partner, petitioned to restrain the examination. Erskine, C. J., said that by agreement the books were to remain upon dissolution the joint property; that Trueman had kept the books in his custody with the approval and consent of Martindale; that there had never been any change in ownership. He also stated that the act of Parliament authorized the production of the books; and that the question as to the right or necessity of inspection of them after being produced could be determined later. Evidently the latter point influenced the other two judges.

Although the agreement in this Trueman case was no extension of the common-law right of partners on dissolution, and is still the law in the absence of any other arrangement (Zimmerman v. Harding, 227 U. S. 489, p. 494), we have the facts, as above stated, which show that the retiring partner, Sanderson, expressly and by implication made other arrangements.

We, therefore, conclude that the plaintiff in the formation of the limited partnership January 1, 1919, transferred his property interest in the books to the new firm, in which he became a limited partner, and that he is not entitled absolutely, as matter of right, to an examination of them. His property interest in them has ceased. This, however, does not mean that he may not at any time have an examination of the books for any sufficient reason recognized by law. Equity is very liberal in permitting a partner to examine the partnership books, even when the property in them has passed into other hands. Any plausible or sufficient reason for the protection and enforcement of rights or for the preservation of evidence will move the court. Equity will not, however, in the absence of such property right, direct the extensive examination here demanded in the absence of any reason or necessity therefor, or without any excuse other than the mere desire of the plaintiff to exercise a naked right.

’ For the reasons here stated, the judgment of the Appellate Division and that of the Special Term should be reversed, and a new trial granted, with costs to abide the event.

Cardozo, Ch. J., Lehman, Kellogg and O’Brien, JJ., concur; Pound and Hubbs, JJ., not sitting.

Judgments reversed, etc.


author: O’Brien, J.

text:
    The Missionary Society of the Salesian Congregation, Respondent, v. Adam Evrotas, Appellant.

      (Argued February 19, 1931;
    decided March 24, 1931.)

      William A. Davidson for appellant.
    The easement in the lane is not limited to mere passage over the surface of the soil. (New York Central & H. R. R. R. Co. v. Schattamuc Yacht & Canoe Club, 57 Misc. Rep. 482; Blackman v. Striker, 142 N. Y. 555; Mitchell v. Reid, 192 N. Y. 263; Wells v. Garbutt, 132 N. Y. 430.) The injunction if warranted at all is improperly drawn and too sweeping in its terms. (Herman v. Roberts, 119 N. Y. 37; McMillan v. Cronin, 75 N. Y. 474.) The defendant has the right to maintain a board walk on the lane. (Herman v. Roberts, 119 N. Y. 37.) The maintenance of gates across the private road is a violation of defendant’s rights and the injunction in this respect is improper. (Hanrahan v. Terminal Station Comm., 206 N. Y. 494; 33 C. J. 1097.)

      Richard Leo Fallon for respondent.
    The judgment properly fixes the rights of defendant in the right of way. (Olin v. Kingsbury, 181 App. Div. 348; Ogden v. Jennings, 62 N. Y. 526; Bremer v. Manhattan Ry. Co., 191 N. Y. 333; Lewis v. N. Y. & H. R. R. Co., 162 N. Y. 202; Smith & Sons Carpet Co. v. Ball, 143 App. Div. 83;
      Brill v. Brill, 108 N. Y. 511; Peabody v. Chandler, 42 App. Div. 386.)
   O’Brien, J.

Defendant owns Clifford Island situated in Long Island Sound in the city of New Rochelle. On this property consisting of ten acres he leases plots as sites for bungalows and he has more than seventy-five tenants. The island is connected by a footbridge with a dock owned by him on the mainland. The only access to the dock and the island from any highway is by a right of way extending in a southerly direction from the Boston Post Road over a private lane and thence over land owned by plaintiff. It is thirty-five feet wide and is described in various deeds as “ a right of way over a certain private road or lane known as LeFevre’s Lane and a continuation thereof extending from the Boston Road or Main Street to the shore of Long Island Sound * * * with the right to the free and unobstructed use of the said private road or lane from the said'Boston Road or Main Street to the shore of Long Island Sound, aforesaid, for passage of horses and vehicles of every kind and for all other lawful purposes in common with the owners of the said lands late of Julia A. T. Stephenson and John Stephenson adjoining said road or lane.” The complaint alleges and the evidence supports the allegations that defendant’s tenants have parked automobiles on the right of way and that defendant has caused a wooden walk to be erected and has dug a trench and laid water pipes therein. For relief it demands that defendant be restrained from using the way for any purpose except for ingress and egress and from parking automobiles thereon and that he be required to remove the walk and the pipes. The answer alleges and the evidence supports the allegations that for some years past a small pipe had existed along the right of way supplying defendant’s island with water, that it had become rusted and broken and that defendant had dug a trench and endeavored to lay a new water line. It also alleges that the land is rough and rocky and that defendant has endeavored to repair and grade it but that plaintiff has interfered with his attempt. The Appellate Division reversing certain findings and conclusions and making new ones, has decreed that plaintiff, as owner of the fee of the land lying south of LeFevre’s Lane, is entitled to erect a gate to remain unlocked across the northern boundary of its property, provided it does not interfere with the free and unobstructed use of defendant’s right of way, that defendant be enjoined from digging or excavating on any part of the right of way and he and his tenants be enjoined from parking automobiles thereon. Nevertheless, after reciting the fact that plaintiff has stipulated that defendant may dig a trench for the purpose of laying a two-inch water pipe, the judgment decrees that plaintiff’s permission to defendant shall be construed as a license only, that it shall carry no prescriptive rights and that such license may be revoked by a court of equity at any time and that the court shall determine the time and manner in which such license shall be deemed revoked. Even this revocable license, as so decreed, is limited to plaintiff’s land and under the judgment does not operate within the boundaries of LeFevre’s Lane.

The grant to defendant and his predecessors is unusually broad. Certainly it confers far more extensive rights than those of mere ingress and egress. It differs from the easement in Grafton v. Moir (130 N. Y. 465) where the right of way was not for all * * * purposes ” but merely for convenient access. By its language the grantee is entitled not only to a right of way but one which carries with it a free and unobstructed use of the described land for passage of horses and vehicles of every kind and for all other lawful purposes ” in common with the owners of other abutting lands. When the terms of a grant are doubtful, the grantee may take the language most strongly in his favor. (Wells v. Garbutt, 132 N. Y. 430, 435; Mitchell v. Reid, 192 N. Y. 255, 263.) Being in general terms, it must be construed to include any reasonable use to which the land may be devoted. (Jones, Law of Easements, § 374; Abbott v. Butler, 59 N. H. 317.) The only limitation is that all the uses must be lawful. A right of way subject to gates, as in McMillan v. Cronin (75 N. Y. 474), is restrictive, but here the use granted is free and unobstructed. The erection of a gate, even if kept unlocked, to some extent interferes with and obstructs defendant’s right of passage and is inconsistent with the grant. The judgment does indeed provide that the gate shall not interfere with defendant’s free and unobstructed use of his right of way, but such a provision is too vague and is harmful in the sense that it may prove productive of much litigation. The only kind of gate which can fail to interfere with defendant’s right is one which not only remains unlocked but which is perpetually kept open. Such a gate is useless for any purpose. Particularly is this provision unnecessary in this case for the property does not consist of farm land¿ and unlike the premises which were the subject of litigation in Brill v. Brill (108 N. Y. 511) and Blydenburgh v. Ely (161 App. Div. 91; affd., 220 N. Y. 641), cattle are not kept thereon. No part of the premises is used for pasture.

In other respects, the judgment against defendant is too sweeping. Particularly is this true in respect to that part which restrains him, as matter of right, from digging or excavating. It is correspondingly too narrow in according him a privilege only by way of a revocable license to lay water pipes. Even if defendant’s easement were to be construed as no broader than a right of passage, he would be entitled to break up the soil, level irregularities, fill up depressions, blast rocks and not only remove impediments but supply deficiencies in order to construct a suitable road. (Herman v. Roberts, 119 N. Y. 37, 42; McMillan v. Cronin, supra.) In so far as such operations would not interfere with the rights of the other abutting owners his actions would not proceed beyond the intent of the grant. His right to use the land for the passage of vehicles cannot be regarded as free and unobstructed if he be obliged to refrain from putting it in a reasonably convenient condition for such a use. We think, moreover, that the phrase “ for all other lawful purposes ” compels an extension of defendant’s right beyond the limits of ordinary passage by horses and vehicles of all kinds.' Pedestrians also may travel upon it (Arnold v. Fee, 148 N. Y. 214; Gillespie v. Weinberg, 148 N. Y. 238) and for their accommodation defendant may build a sidewalk. Automobiles belonging to defendant and his tenants may be parked at reasonable times and in such a manner as not to interfere with the other holders of the easement. The comprehensive language of the grant is such as to carry the necessary implication that, as an incident to the connection of this island with a public highway, the right to communicate by every means not forbidden by law or unreasonably interfering with the rights of adjoining landowners was conferred upon the grantee. The laying of water pipes is a lawful purpose and reasonably incidental to the use of a way. (Thompson v. Orange & Rockland Elec. Co., 254 N. Y. 366, 369.) When a use for all lawful purposes is granted and when the grantee is unable to distribute water to his isolated property except over this strip of land, a requirement that he must purchase that right from the owners of land lying further to the west seems entirely unreasonable. For several years defendant has maintained a water pipe and a sidewalk and has temporarily parked automobiles and evidence of the use made of this right of way is evidence of the extent of the right but not of its existence. (Rexford v. Marquis, 7 Lans. 249.)

The judgment should be modified in accordance with this opinion and as so modified affirmed, with costs to the appellant.

Cardozo, Ch. J., Crane, Lehman and Kellogg, JJ., concur; Pound and Hubbs, JJ., not sitting.

Judgment accordingly.