text:
    Lucy Latham et al., on Behalf of Themselves and Others Similarly Situated, Appellants, v. Father Divine et al., Respondents.
    Argued January 11, 1949;
    decided March 3, 1949.

      William C. Martin and Philip L. Zenner for appellants.
    I. The amended complaint sets forth a cause of action in equity. (Riggs v. Palmer, 115 N. Y. 506; Restatement, Restitution, § 184; 3 Scott on Trusts, §§ 489.5, 489.6, pp. 2374-2376; 3 Bogert on Trusts and Trustees, § 473, p. 20; 1 Perry on Trusts [7th ed.], § 211, pp. 265, 371.) II. The facts alleged in the amended complaint entitle plaintiffs to the equitable relief sought. (Riggs
      v. Palmer, 115 N. Y. 506; Ransdell v. Moore, 53 N. E. 767 [Ind.]; Vance v. Grow, 185 N. E. 335; Thomas v. Briggs, 189 N. E. 389; 4 Page on Wills, § 1764, p. 961; Dixon v. Olmius, 1 Cox Ch. Cas. 414; Kelly v. Kelly, 10 La. Ann. 622.) III. The rule of Riggs v. Palmer is in harmony with the statutes and the established policy of the State of New York regarding the statute of wills and the disposition of estates and supports plaintiffs ’ amended complaint, which seeks to enforce a constructive trust against defendants. (Pope v. Garrett, 211 S. W. 2d 559; Monach v. Koslowski, 78 N. E. 2d 4; Matter of Sparks, 172 Misc. 642; People v. Schmidt, 216 N. Y. 324; 130 Cedar St. Corp. v. Court Press, Inc., 267 App. Div. 194; Matter of Horan v. Wallander, 186 Misc. 40; Bosworth v. Allen, 168 N. Y. 157; Lightfoot v. Davis, 198 N. Y. 261; Falk v. Hoffman, 233 N. Y. 199.)

      Benjamin E. Shove and John J. Young for David Diamond and another, individually and as administrators with the will annexed of Mary S. Lyon, deceased, respondents.
    I. The amended complaint fails to state a cause of action because it- affirmatively appears on the face thereof that plaintiffs have no rights or interest in the estate of decedent and, therefore, plaintiffs having nothing upon which the court can act cannot call on the court either on its law side or its equity side for any protection, remedy or relief. (Hutchins v. Hutchins, 7 Hill 104; Frankenberger v. Schneller, 258 N. Y. 270; 3 Scott on Trusts, § 489.4, p. 2371; Jex v. Straus, 122 N. Y. 293; Cohen v. Fisher & Co., 135 App. Div. 238; Deobold v. Oppermann, 111 N. Y. 531; Herman v. Gutman, 244 App. Div. 694; Rhodes v. Ocean Accident & Guar. Corp., 235 App. Div. 340.) II. The amended complaint is fatally defective because it appears on the face thereof that what plaintiffs are seeking is to take under an unexecuted will. (Matter of Allen, 282 N. Y. 492; Matter of McGill, 229 N. Y. 405; Matter of Andrews, 162 N. Y. 1; Reynolds v. Reynolds, 224 N. Y. 429; Matter of Rand, 120 Misc. 670; Matter of McCaffrey, 174 Misc. 162.) III. Plaintiffs can claim no benefits or relief under Riggs v. Palmer (115 N. Y. 506). (Matter of Sparks, 172 Misc. 642; Matter of Lonergan, 63 N. Y. S. 2d 307.) IV. The amended complaint fails to state a cause' of action in favor of plaintiffs because, except in paragraph 13, there is no allegation that decedent in any way made known to defendants her desire to make any bequest to plaintiffs. (4 Pomeroy on Equity Jurisprudence [5th ed.], p. 125.) V. The amended complaint fails to state a cause of action because it is founded on an oral promise which the Statute of Frauds declares to be void. (Bayreuther v. Reinisch, 264 App. Div. 138, 290 N. Y. 553; Blanco v. Velez, 269 App. Div. 133, 295 N. Y. 224; Matter of O’Hara, 95 N. Y. 403; Edson v. Bartow, 154 N. Y. 199; Reynolds v. Reynolds, 224 N. Y. 429; Matter of Ditson, 177 Misc. 648.)
   Desmond, J.

The amended complaint herein has, in response to a motion under rule 106 of the Buies of Civil Practice, been dismissed for insufficiency. Its principal allegations are these: plaintiffs are first cousins, but not distributees, of Mary Sheldon Lyon, who died in October, 1946, leaving a will, executed in 1943, which gave almost her whole estate to defendant Father Divine, leader of a religious cult, and to two corporate defendants in some way connected with that cult, and to an individual defendant (Patience Budd) said to be one of Father Divine’s active followers; that said will has been, after a contest instituted by distributees, probated under a compromise agreement with thedistributees, by the terms of which agreement, to which plaintiffs were not parties, the defendants just above referred to will receive a large sum from the estate; that after the making of said will, decedent on several occasions expressed “ a desire and a determination to revoke the said will, and to execute a new will by which the plaintiffs would receive a substantial portion of the estate “ that shortly prior to the death of the deceased she had certain attorneys draft a new will in which the plaintiffs were named as legatees for a very substantial amount, totalling approximately $350,000 ”; that “ by reason of the said false representations, the said undue influence and the said physical force ’ ’ certain of the defendants ‘ ‘ prevented the deceased from executing the said new Will ”; that, shortly before decedent’s death, decedent again expressed her determination to execute the proposed new will which favored plaintiffs, and that defendants thereupon conspired to kill, and did kill, the deceased by means of a surgical operation performed by a doctor engaged by the defendants without the consent or knowledge of any of the relatives of the deceased.”

Nothing is better settled than that, on snch a motion as this, all the averments of the attacked pleading are taken as true. For present purposes, then, we have a case where one possessed of a large property and having already made a will leaving it to certain persons, expressed an intent to make a new testament to contain legacies to other persons, attempted to carry out that intention by having a new will drawn which contained a large legacy to those others, but was, by means of misrepresentations, undue influence, force, and indeed, murder, prevented, by the beneficiaries named in the existing will, from signing the new one. Plaintiffs say that those facts, if proven, would entitle them to a judicial declaration, which their prayer for judgment demands, that defendants, taking under the already probated will, hold what they have so taken as constructive trustees for plaintiffs, whom decedent wished to, tried to, and was kept from, benefiting.

We find in New York no decision directly answering the question as to whether or not the allegations above summarized state a case for relief in equity. But reliable texts, and cases elsewhere (see 98 A. L. R. 474 et seq.) answer it in the affirmative. Leading writers (3 Scott on Trusts, pp. 2371-2376; 3 Bogert on Trusts and Trustees, Part 1, §§ 473-474, 498, 499; 1 Perry on Trusts and Trustees [7th ed.], pp. 265, 371) in one form or another, state the law of the subject to be about as it is expressed in comment i under section 184 of the Restatement of the Law of Restitution: “ Preventing revocation of will and making new will. Where a devisee or legatee under a will already executed prevents the testator by fraud, duress or undue influence from revoking the will and executing a new will in favor of another or from making a codicil, so that the testator dies leaving the original will in force, the devisee or legatee holds the property thus acquired upon a constructive trust for the intended devisee or legatee.”

A frequently-cited case is Ransdel v. Moore (153 Ind. 393) where, with listing of many authorities, the rule is given thus (pp. 407-408): when an heir or devisee in a will prevents the testator from providing for one for whom he would have provided but for the interference of the heir or devisee, such heir or devisee will be deemed a trustee, by operation of law, of the property, real or personal, received by him from the testator’s estate, to the amount or extent that the defrauded party would have received had not the intention of the deceased been interfered with. This rule applies also when an heir prevents the making of a will or deed in favor of another, and thereby inherits the property that would otherwise have been given such other person.” (To the same effect, see 4 Page on Wills [3d ed.], p. 961.)

While there is no New York ease decreeing a constructive .trust on the exact facts alleged here, there are several decisions in this court which, we think, suggest such a. result, and none which forbids it. Matter of O’Hara (95 N. Y. 403), Trustees of Amherst College v. Ritch (151 N. Y. 282), Edson v. Bartow (154 N. Y. 199), and Ahrens v. Jones (169 N. Y. 555) which need not be closely analyzed here as to their facts, all announce, in one form or another, the rule that, where a legatee has taken property under a will, after agreeing, outside the will, to devote that property to a purpose intended and declared by the testator, equity will enforce a constructive trust to effectuate that purpose, lest there be a fraud on the testator. (In Williams v. Fitch, 18 N. Y. 546, a similar result was achieved in a suit for money had and received.) In each of those four cases first above cited in this paragraph, the particular fraud consisted of the legatee’s failure or refusal to carry out the testator’s designs, after tacitly or expressly promising so to do. But we do not think that a breach of such an engagement is the only kind of fraud which will impel equity to action. A constructive trust will be erected whenever necessary to satisfy the demands of justice. Since a constructive trust is merely the formula through which the conscience of equity finds expression ” (Beatty v. Guggenheim Exploration Co., 225 N. Y. 380, 386; see 3 Bogert on Trusts and Trustees, Part 1, § 471; Lightfoot v. Davis, 198 N. Y. 261; Falk v. Hoffman, 233 N. Y. 199; Meinhard v. Salmon, 249 N. Y. 458; also, see, Warren in 41 Harv. L. Rev. 309 et seg.), its applicability is limited only by the inventiveness of men who find new ways to enrich themselves unjustly by grasping what should not belong to them. Nothing short of true and complete justice satisfies equity, and, always assuming these allegations to be true, there seems no way of achieving total justice except by the procedure used here.

The Appellate Division held that Hutchins v. Hutchins (7 Hill 104) decided by the Supreme Court, our predecessor, in 1845, was a bar to the maintenance of this suit. Hutchins v. Hutchins (supra) was a suit at law, dismissed for insufficiency in the days when law suits and equity causes had to be brought in different tribunals; the law court could give nothing but a judgment for damages (see discussion in 41 Harv. L. Rev. 313, supra). Testator Hutchins’ son, named in an earlier will, charged that defendant had, by fraud, caused his" father to revoke 'that will and execute a new one, disinheriting plaintiff. The court sustained a demurrer to the complaint, on the ground that the earlier will gave the son no title, interest or estate in his father’s assets and no more than a hope or expectancy, the loss of which was too theoretical and tenuous a deprivation to serve as a basis for the award of damages (see, also, Simar v. Canaday, 53 N. Y. 298, 302, 303). Plaintiffs’ disappointed hopes in the present case, held the Appellate Division, were similarly lacking in substance. But disappointed hopes and unrealized expectations were all that the secretly intended beneficiaries, not named in the wills, had in Matter of O’Hara, Trustees of Amherst College v. Bitch and Edson v. Bartow (supra) but that in itself was not enough to prevent the creation of constructive trusts in their favor. Hutchins v. Hutchins (supra), it seems, holds only this: that in a suit at law there must, as a basis for damages, be an invasion of a common-law right. To use that same standard in a suit for the declaration and enforcement of a constructive trust would be to deny and destroy the whole equitable theory of constructive trusts.

Nor do we agree that anything in the Decedent Estate Law or the Statute of Frauds stands in the way of recovery herein. This is not a proceeding to probate or establish the will which plaintiffs say testatrix was prevented from signing, nor is it an attempt to accomplish a revocation of the earlier will, as were Matter of Evans (113 App. Div. 373) and Matter of McGill (229 N. Y. 405, 411). Tbe will Mary Sheldon Lyon did sign has been probated and plaintiffs are not contesting, but proceeding on, that probate, trying to reach property which has effectively passed thereunder (see Ahrens v. Jones, 169 N. Y. 555, 561, supra). Nor is this a suit to enforce an agreement to make a will or create a trust, or any other promise hy decedent (Personal Property Law, § 31; see Frankenberger v. Schneller, 258 N. Y. 270; Bayreuther v. Reinisch, 264 App. Div. 138, affd. 290 N. Y. 553; Blanco v. Veles, 295 N. Y. 224). This complaint does not say that decedent, or defendants, promised plaintiffs anything, or that defendants made any promise to decedent. The story is, simply, that defendants, by force and fraud, kept the testatrix from making a will in favor of plaintiffs. We cannot say, as matter of law, that no constructive trust can arise therefrom.

The ultimate determinations in Matter of O’Hara and Edson v. Bartow (supra) that the estates went to testators’ distributees do not help defendants here, since, after the theory of constructive trust had been indorsed by this court in those cases, the distributees won out in the end, but only because the secret trusts intended by the two testators were, in each case, of kinds forbidden by statutes.

We do not agree with appellants that Riggs v. Palmer (115 N. Y. 506) completely controls our decision here. That was the famous case where a grandson, overeager to get the remainder interest set up for him in his grandfather’s will, murdered his grandsire. After the will had been probated, two daughters of the testator who, under the will, would take if the grandson should predecease testator, sued and got judgment decreeing a constructive trust in their favor. It may be, as respondents assert, that the application of Riggs v. Palmer (supra) here would benefit not plaintiffs, but this testator’s distributees. We need not pass on that now. But Biggs v. Palmer (supra) is generally helpful to appellants, since it forbade the grandson profiting by his own-wrong in connection with a will; and, despite an already probated will and the Decedent Estate Law, Riggs v. Palmer (supra) used the device or formula of constructive trust to right the attempted wrong, and prevent unjust enrichment.

The reference to a conspiracy in the complaint herein makes it appropriate to mention Kevicsky v. Lorber (290 N. Y. 297). Keviczky, a real estate broker, got judgment on findings that a conspiracy by defendants had prevented him from earning a commission which he would otherwise have gotten. All sides agreed that he had not in fact performed the engagement which would have entitled him to a commission as such; thus, when the conspiracy intervened to defeat his efforts, he had no contractual right to a commission but only an expectation thereof which was frustrated by the conspirators. Thus again we see, despite the broad language of Hutchins v. Hutchins (supra) that it is not the law that disappointed expectations and unrealized probabilities may never, under any circumstances, be a basis for recovery.

This suit cannot be defeated by any argument that to give plaintiffs judgment would be to annul those provisions of the Statute of Wills requiring due execution by the testator. Such a contention, if valid, would have required the dismissal in a number of the suits herein cited. The answer is in Ahrens v. Jones (169 N. Y. 555, 561, supra): “ ‘ The trust does not act directly upon the will by modifying the gift, for the law requires wills to be wholly in writing, but it acts upon the gift itself as it reaches the possession of the legatee, or as soon as he is entitled to receive it. The theory is that the will has full effect by passing an absolute legacy to the legatee, and that then equity, in order to defeat fraud, raises a trust in favor of those intended to be benefited by the testator, and compels the legatee, as a trustee ex maleficio, to turn over the gift to them. ’ ”

The judgment of the Appellate Division, insofar as it dismissed the complaint herein, should be reversed, and the order of Special Term affirmed, with costs in this court and in the Appellate Division. [See 299 N. Y. 599.]

Loughran, Ch. J., Conway and Fule, JJ., concur with Desmond, J.; Lewis and Dye, JJ., dissent and vote for affirmance upon the grounds stated by Vaughan, J., writing for the Appellate Division.

Judgment reversed, etc.


source: Caselaw Access Project

author: Conway, J.

license: Public Domain

text:
    Harrison L. Chapin et al., as Surviving Successor Executors of William W. Chapin, Deceased, et al., Appellants, v. Rose E. Posner et al., Respondents.
    Argued November 18, 1948;
    decided March 3, 1949.

      Anthony L. Dividio and J. Sawyer Fitch for appellants.
    I. Upon all of the pleadings and upon the affidavits, triable issues of fact exist which cannot be disposed of upon motion. Hence, defendants are not entitled to summary judgment. (Curry v. Mackenzie, 239 N. Y. 267; Peoples Nat. Bank & Trust Co. v. County of Westchester, 261 N. Y. 342; Chelsea Exch. Bank v. Munoz, 202 App. Div. 702; Dwan v. Massarene, 199 App. Div. 872; Piedmont Hotel Co. v. Nettleton Co., 263 N. Y. 25; Werfel v. Zivnostenska Banka, 287 N. Y. 91.) II. An oral extension of the time of payment of a mortgage, made after default, does not alter the terms of the written instrument, and such oral agreement is enforcible. (Dodge v. Crandall, 30 N. Y. 294; Fish v. Hayward, 28 Hun 456, 93 N. Y. 646; Antisdel v. Williamson, 37 App. Div. 167, 165 N. Y. 372; Kane v. Cortesy, 100 N. Y. 132; Thomson v. Poor, 147 N. Y. 402; Firestone v. Miroth Constr. Co., 215 App. Div. 564; Jacobson v. Jacobson, 268 App. Div. 770; Miorin v. Miorin, 257 App. Div. 556, 257 App. Div. 1084; Evadan Realty Corp. v. Patterson, 297 N. Y. 732; Persky v. Bank of America Nat. Assn., 261 N. Y. 212.) III. Two of the three defendant owners have been absent from the State of New York. Therefore, the running of the Statute of Limitations has been tolled by section 19 of the Civil Practice Act. (Bank for Sav. in City of N. Y. v. Ashley Garages, Inc., 186 Misc. 293; Ackerman v. Ackerman, 200 N. Y. 72; Simonson v. Nafis, 36 App. Div. 473; Osborne v. Randall, 7 N. Y. Civ. Pro. Rep. 323; Fowler v. Wood, 78 Hun 304; Anagnost v. Silvestri Bros., Inc., 174 Misc. 335; Herrmann v. Cabinet Land Co., 217 N. Y. 526; Conolly v. Hyams, 176 N. Y. 403; San Diego Realty Co. v. Hill, 168 Cal. 637; Love v. West, 169 N. C. 13; Whalley v. Eldridge, 24 Minn. 358; Peters v. Dunnells, 5 Neb. 460; Heyer v. Pruyn, 7 Paige Ch. 465; Hulbert v. Clark, 128 N. Y. 295; House v. Carr, 185 N. Y. 453.) IV. Plaintiffs’ cause of action is good at least for installments of interest which became due between January 27, 1941, and September 1,1944, and they may have foreclosure therefor. (Ernst v. Schaack, 271 App. Div. 1012, 297 N. Y. 566; Matter of Bond & Mtge. Guar. Co. [570 Kosciusko St.], 272 App. Div. 944, 297 N. Y. 765.)

      Joseph W. Martin and Darrow A. Dutcher for respondents.
    I. The Statute of Limitations is a complete bar to plaintiffs’ alleged cause of action. (Mack v. Mendels, 249 N. Y. 356; Reichert v. Stilwell, 172 N. Y. 83; Rookery Investing Co. v. Audley Constr. Corp., 188 Misc. 693; Wetyen v. Fick, 178 N. Y. 223; Garfein v. McInnis, 248 N. Y. 261.) II. There was no valid agreement extending the time of payment of the mortgage. (Syracuse Trust Co. v. First Trust & Deposit Co., 239 App. Div. 586; Kellogg v. Olmsted, 25 N. Y. 189; Carpenter v. Taylor, 164 N. Y. 171; Central Hanover Bank & Trust Co. v. Romer Holding Co., 234 App. Div. 419; Carr v. Morris, 191 App. Div. 671; Olmstead v. Latimer, 158 N. Y. 313; Mutual Life Ins. Co. v. Aldrich, 44 App. Div. 620; Schwarts v. Smith, 143 App. Div. 297, 207 N. Y. 714; Steinberg v. Simon, 179 App. Div. 67; Lion Brewery v. Fricke, 204 App. Div. 470; McKenzie v. Harrison, 120 N. Y. 260.) III. There is no estoppel against defendants. (Firestone v. Miroth Constr. Co., 215 App. Div. 564; Thomson v. Poor, 147 N. Y. 402.) IV. The action to foreclose being in rem and the alleged oral agreement being invalid as a matter of law there are no questions of fact to try and summary judgment will lie. V. Plaintiffs have no cause of action for interest installments as there is no personal liability on defendants. (Johnson v. Meyer, 268 N. Y. 701; Union Trust Co. v. Kaplan, 249 App. Div. 280; Levinson v. Rosovsky, 263 App. Div. 793, 288 N. Y. 559; Werbelovsky v. Rosen Bros. News Agency, Inc., 249 App. Div. 758; Bank of New York v. Blumenthal, 285 N. Y. 598; Buell v. Sullivan, 250 App. Div. 780; Rochester Trust & Safe Deposit Co. v. Hatch, 273 N. Y. 507.)
   Conway, J.

This is an action to foreclose a mortgage upon property in Eochester. The mortgage was delivered, executed and recorded in July, 1921. It was a mortgage, originally in the amount of $72,000, given by two purchasers Kaplan and Kovel, the predecessors in title of the defendants Posner and defendant Greenberg, to the predecessors of plaintiffs. It was under seal and secured a bond which was also under seal. The condition of the bond was that $1,250 was to be paid every three months, together with interest on all sums remaining unpaid, until the whole amount of principal and interest was fully paid.

Concededly the last payment of principal was made on November 4, 1931, and the last payment of interest was made on September 1, 1936.

Plaintiffs have set forth, in their bill of particulars, an oral agreement entered into in the fall of 1939, or in the fall of 1940, between them and certain of the defendants under which plaintiffs claim they forebore to foreclose the mortgage and instead extended the time for payment of principal and interest. We need not pause to determine whether or not the agreement was a valid one since between the years 1936 (L. 1936, ch. 685) and 1941 (L. 1941, ch. 329, § 1) it was provided in section 342 of the Civil Practice Act as follows: “A sealed instrument may not be changed, modified or discharged by an executory agreement unless such agreement is in writing and signed by the party against whom it is sought to enforce the change, modification or discharge.” (See 1936 Report of N. Y. Law Revision Commission, pp. 76-77, 310-345.)

The complaint demanded judgment of foreclosure and sale of the premises affected but made no demand for a deficiency judgment against any of the defendants.

The answer of the defendants pleaded as a defense that the cause of action accrued more than six years prior to the commencement of the action.

Then defendants moved for judgment dismissing the complaint pursuant to rule 113 of the Rules of Civil Practice and section 476. of the Civil Practice Act with supporting affidavits from the defendants Rose Etta Posner and Ella P. Greenberg.

The plaintiff Louis W. Chapin submitted an affidavit in which he deposed that the Statute of Limitations had not run as against two of the defendants because of their absence from the State ; that defendant Ezra Posner left New York in 1934, for Washington, still resides there and has been absent from New York State during that period (there is no denial of this fact by defendants); that defendant Greenberg left New York and resides in Arizona and that while he did not know when she left New York he had been informed and believed that she had been without the State for such a length of time that the Statute of Limitations had not run as against her.

In the affidavit of the defendant Greenberg she stated that she had not changed her residence from Rochester, New York, but that she had left New York State on June 3,1944, for Tucson, Arizona, because of the health of her son, had returned to New York about June 3, 1946, and had remained here until September 27, 1946.

The interest of the defendant Harry Z. Harris does not appear in the record beyond the statement in the complaint that the interest which he has or claims to have in the mortgaged premises accrued subsequently to the lien of plaintiffs’ mortgage and is subordinate thereto.

Defendants do not deny that there are questions of fact raised by the pleadings and affidavits but contend that summary judgment must still be granted because even if those issues were resolved in plaintiffs’ favor, the action is barred as matter of law by the Statute of Limitations.

As indicated above, the last payment of principal was made on November 4,1931, the last payment of interest was on September 1, 1936, and no payments were made after the latter date. Assuming that plaintiffs’ cause of action for foreclosure of the mortgage accrued in 1936, upon the failure to make the next regular payment of interest, under the twenty-year period of limitations then existing, the plaintiffs’ action could have been brought at any time up to 1956. However, by chapter 499 of the Laws of 1938, effective September 1, 1938, the period of limitation was reduced to six years. (Civ. Prac. Act, § 47-a.) Since plaintiffs’ cause of action accrued prior to the effective date of that section and since on that date there remained a period longer than six years for commencement of the action, under the express terms of section 47-a of the Civil Practice Act, plaintiffs’ period for bringing action was shortened to six years from September 1, 1938, i.e., to September 1, 1944. The summons and complaint in the instant case were served upon the various defendants between January 27, 1947, and March 12, 1947, and thus the action would normally be barred.

Plaintiffs argue, however, that section 19 of the Civil Practice Act saves their cause of action, at least as to defendants Ezra Posner and Ella P. Greenberg as to the principal of the mortgage and that as to an action for certain installments of interest the statute has not run as to any of the defendants. We shall discuss later the question of liability for installments of interest.

That brings us to a consideration of the wording of section 19 of the Civil Practice Act, which reads as follows:

§ 19. Effect of defendant’s absence from state or residence under false name. If, when the cause of action accrues against a person, he is without the state, the action may he commenced, within the time limited therefor, after his coming into or return to the state. If, after a cause of action has accrued against a person, he departs from the state and remains continuously absent therefrom for the space of four months or more, or if, without the knowledge of the person entitled to maintain the action, he resides within the state under a false name, the time of his absence or of such residence within the state under such false name is not a part of the time limited for the commencement of the action. But this section does not apply in either of the following cases:
“ 1. While a designation or appointment, voluntary or involuntary, made in pursuance of law, of a resident or nonresident person, corporation, or private or public officer on whom a summons may be served within the state for another resident or nonresident person or corporation with the same legal force and validity as if served personally on such person or corporation within the state, remains in force.
2. While a foreign corporation has had or shall have one or more officers or other'persons in the state on whom a summons for such corporation may be served. ’ ’

Considering first the case of Ezra Posner, if section 19 of the Civil Practice Act be applicable, the Statute of Limitations has not yet begun to run as against him. (Mack v. Mendels, 249 N. Y. 356, 361.)

As to defendant Ella P. Greenberg, plaintiffs assert that they are not certain when she left the State of New York but that they are informed and believe that she has been without the State for such a length of time that the Statute of Limitations has not run as against her. If section 19 of the Civil Practice Act be applicable to her, then if she were without the State when the cause of action accrued and her absence has continued, the Statute of Limitations has not yet commenced to run. If she were within the State when the cause of action accrued, then the Statute of Limitations has been suspended during the time .of her subsequent absence. (Mack v. Mendels, 249 N. Y. 356, 361, supra.) Had she stayed in New York, the statute would have run in her favor by September 1,1944. In her affidavit, she deposes that she is a resident of New York State but admits that she left New York on June 3, 1944 — two months and twenty-seven days before the statute would normally have run. She further deposes, however, that she returned to New York on June 3, 1946, and remained here until on or about September 27,1946 —• a total of three months and twenty-four days. Thus, her claim is that she has been present in this State twenty-seven days longer than a total of six years since September 1, 1938, and that the Statute of Limitations has thus run in her favor. We must accept the allegations of plaintiffs’ complaint and affidavit as true for the purpose of this motion. In addition, the allegations of the separate defense have been put at issue by section 243 of the Civil Practice Act. Thus we must assume that the statute has been tolled by the absence from the State of Ezra Posner and Ella P. Greenberg, if section 19 of the Civil Practice Act be applicable.

We come then to the question of whether section 19 of the Civil Practice Act is applicable here since the action is one in rem and there is no personal deficiency judgment asked as against any of the defendants.

Defendants argue that plaintiffs could have brought a foreclosure action at any time within the period limited by the statute, despite the absence of some of the defendants from the State, by obtaining an order for publication and mailing (Civ. Prac. Act, § 232, subd. 2) or by personal service without the State (Civ. Prac. Act, § 235). (See Eleventh Annual Report of N. Y. Judicial Council, 1945, pp. 193-194, 213.)

The basic purpose in enacting the tolling provision in section 19 of the Civil Practice Act was to save the remedy of the creditor in all cases where he was prevented from prosecuting the debtor in our courts, in consequence of the absence of the latter from the State.” (Olcott v. Tioga R. R. Co., 20 N. Y. 210, 221-222; Mack v. Mendels, 249 N. Y. 356, 358, supra.) The question for our consideration then is this: Does the existence of alternative methods of service upon defendants who are without the State under which an action to foreclose a mortgage could have been commenced within the normal time limited therefor, prevent the application of section 19 of the Civil Practice Act when no personal judgment is sought against the absent defendants ?

Chief Judge Cullen, when on the Appellate Division, Second Department, had before him the ease of Simonson v. Nafis (36 App. Div. 473) which was an action to foreclose two mortgages. In the course of his opinion he wrote (p. 474): ‘ ‘ The claim is that section 401 [the predecessor of present Civ. Prac. Act, § 19] does not apply to the foreclosure of a mortgage, because in such an action the court by publication can acquire jurisdiction of a defendant whether he is within or without the State. The section is comprehensive in its terms and includes all limitations of time prescribed in the Code; and the period in which an action for foreclosure of a mortgage-must be brought is governed by section 381 of the Code. (Hulbert v. Clark, 128 N. Y. 295.) The argument that the court may proceed against the defendants by publication is not sufficient to limit the effect of section 401. * * * ” After he became an Associate Judge of our court, in the case of Conolly v. Hyams (176 N. Y. 403, 407) he wrote, citing three cases: “ The tendency of the latest decisions of this court has been to extend to all claims the benefit of the exceptions given by the Code of Civil Procedure to the bar of the Statute of Limitation, except where there is an express statute or contract to the contrary.” Two volumes later in Wetyen v. Fick (178 N. Y. 223) a widow had brought an action for dower almost forty years after the death of her husband and claimed the protection of provisions similar to those now found in section 19 of the Civil Practice Act but then contained in section 401 of chapter IV of the Code of Civil Procedure. We held that this latter section was not applicable because there had been provided a “ different and unusual limitation, specially prescribed by law ” (p. 235). At that time, there was present in the Code of Civil Procedure, also in chapter IV thereof, section 414 (now Civ. Prac. Act, § 10) which, so far as material here, was headed and read as follows: “ Cases to which this chapter applies. The provisions of this chapter apply, and constitute the only rules of limitation applicable,' to a civil action or special proceeding, except in one of the following cases: 1. A case, where a different limitation is specially prescribed by law, or a shorter limitation is prescribed by the written contract of the parties.” The Code of Civil Procedure (§ 1596, now Real Property Law, § 460) at that time expressly provided that actions for dower had to be commenced within twenty years after the death of the husband. The case was properly decided upon the ground that the predecessor of section 19 of the Civil Practice Act was not applicable because a different limitation had been specially prescribed by law in the type of action presented. In the opinion, however, there was a dictum to the effect that if the premises had been occupied by a tenant, the absent. defendants were not necessary parties and that if there were no occupant of the premises or any person exercising acts of ownership thereupon, the plaintiff could have served the nonresident defendants by publication under subdivision 5 of section 438 of the Code of Civil Procedure. (Pp. 232-233.) The premises had in fact been leased to and occupied by tenants. The dictum as to service by publication on page 233 was in the course of -a discussion of a suppositious case where there were no tenants in occupancy. Judge Cullen concurred only in the result.

In Ackerman v. Ackerman (123 App. Div. 750, affd. 200 N. Y. 72), a matrimonial action, we held that the limitation in section 1758 of the Code of Civil Procedure was subject to the exceptions in section 401 of the Code of Civil Procedure (now Civ. Prac. Act, § 19). The two dissenting Justices in the Appellate Division had concluded their opinion with these sentences (p. 758): “It [Code Civ. Pro., § 1758, subd. 3, providing that the plaintiff is not entitled to a divorce when the action was not commenced within five years after the discovery, by the plaintiff, of the offense charged ’•] makes no exception where the guilty spouse is a non-residént. The action may be commenced in such a case by publication.” We affirmed the judgment of the Appellate Division in an opinion (per Collin, J.), in which Cullen, then Chief Judge, concurred and in which there was the following sentence (p. 83): “Nor is the fact that the plaintiff might have commenced the action by the substituted service of process provided by section 435 and the' following sections of the Code of Civil Procedure material here. (Simonson v. Nafis, 36 App. Div. 473.) ” The opinion also contained approval of the language of Associate Judge Cullen in the Conolly v. Hyams case (supra) which we have quoted (supra, p. 39). The Ackerman case (supra) was followed by Sharrow v. Inland Lines, Ltd. (214 N. Y. 101,109), where again there was approval of the sentences quoted from the Conolly v. Hyams case (supra).

While all. this establishes that our court has now accepted the holding of Simonson v. Nafis (36 App. Div. 473, supra) which is determinative here, our course is made more clear by the fact that the Statute of Limitations for a mortgage foreclosure case is found in article 2 of the Civil Practice Act which prescribes general limitations and so there is here no claim of a special or unusual limitation prescribed by law.

Moreover, section 19 of the Civil Practice Act is all-inclusive and does not except from its saving force a mortgage foreclosure action. If the Legislature had intended to except such actions from the operation of section 19 of the Civil Practice Act, it could have expressly so provided. It did not do so and we do not think that we should read an exception into the statute by implication. “ The Legislature determines under what circumstances the time limited by statute for commencing an action shall be suspended. The. courts construe provisions made by the Legislature creating exceptions or interruptions to the running of the time limited by statute in which an action may be begun. They may not themselves create such exceptions.” (Mach v. Mendels, supra, pp. 358-359.)

Furthermore, the Legislature has expressly provided for two situations in which the absence of the defendant does not toll the running of the Statute of Limitations in plaintiff’s favor. These exceptions seem to be predicated upon the theory that where the plaintiff is at all times able to commence his action by service within the State against an absent defendant for the full relief sought within the regular time limited therefor, the reason for the tolling provision disappears and plaintiff cannot claim its protection. Thus, when some person or corporation or public officer has been designated or appointed in pursuance of law, voluntarily or involuntarily, upon whom plaintiff may serve a summons within the State with the same legal force and validity as if served personally upon the defendant person or corporation within the State, Civil Practice Act, section 19, by virtue of subdivision 1 thereof, has no application. Also, when a foreign corporation has one or more of its officers in this State upon whom a summons for the corporation, may be served here, Civil Practice Act, section 19, by virtue of subdivision 2 thereof, has no application. The two exceptions illustrate particular situations in which the Legislature has determined that the existence of a method of service in this State upon an absent defendant, under which the plaintiff could obtain all the relief to which he might be entitled, dispenses with the need for the tolling provisions of section 19 of the Civil Practice Act. However, the Legislature has gone no further. It has not expressed a general rule that section 19 of the Civil Practice Act does not apply to all cases in which the plaintiff could have commenced his action within the time limited therefor by a method of service other than personal service within the State upon the defendant. Until the Legislature does express such a rule, we may not limit the applicability of section 19 of the Civil Practice Act by judicial construction. For this reason, we must hold, under the present form of section 19 of the Civil Practice Act, that even in a strictly in rem action where no personal claim is or could be made against the defendant, the absence of a person upon 'whom service may be made within this State and the absence of such defendant from the State will toll the running of the Statute of Limitations.

Accordingly, the complaint states a cause of action for foreclosure against Ezra Posner and Ella P. Greenberg.

Finally, we come to the question whether in any event there is a cause of action stated here as to the defendants Rose Etta Posner and Harry Z. Harris so that their interests may be foreclosed upon and sold to satisfy installments of interest which became due during a period beginning six years prior to the commencement of this action against those respective defendants in 1947, and the termination of the limitation period as to principal, viz., September 1, 1944. We think a cause of action is stated against those two defendants as to such installments under the authority of Ernst v. Schaack (271 App. Div. 1012, affd. 297 N. Y. 566).

The judgment of the Appellate Division should be reversed and the order of the County Court affirmed, with costs in this court and in the Appellate Division.

Loughran, Ch. J., Lewis, Desmond, Dye and Fuld, JJ., concur.

Judgment reversed, etc.


author: Desmond, J.

text:
    In the Matter of the Estate of Max Goldstein, Deceased. Erna Goldstein, as Administratrix of the Estate of Max Goldstein, Deceased, Appellant; National City Bank of New York, Respondent.
    Argued February 23, 1949;
    decided April 7, 1949.

      Peter J. Kooiman, Frank Marcellino and John J. Abberley for appellant.
    I. The Surrogate’s jurisdiction to grant letters of administration and to make the decree under appeal was not in any wise dependent upon proof of death by more than the fair preponderance of the evidence. (Griffith v. Frazier, 8 Cranch [U. S.] 9; 2 Warren’s Heaton on Surrogates’ Courts [1948 Supp.], p. 160.) II. The evidence of death presented to the Surrogate was competent, and supports the finding of death. (Sturla v. Freccia, 5 App. Cas. 623; 5 Wigmore on Evidence, §§ 1398, 1671a; Sergeson v. Sealey, 2 Atk. 412; Johnston v. Compagnie Generale Transatlantique, 242 N. Y. 381.) III. The Surrogate’s ordinary jurisdiction over decedent estates is in no wise restricted by subdivision 2 of section 119 of the Surrogate’s Court Act, which extended the court’s jurisdiction over estates of “ absentees ”. (Coler v. Corn Exch. Bank, 250 N. Y. 136. 280 U. S. 218; Scott v. McNeal, 154 U. S. 34.)

      Paul L. Weiden for Permanente Commissie tot de Algemene Zaken van het Nederlandsch-Israelietische Kerkgenootsekap and others, amici curiae, in support of appellant’s position. The Dutch decree certified not probable or presumed, but certain death.

      Herman E. Compter, Ghauncey B. Garver and Edmond K. Leach for respondent.
    I. The Surrogate’s Court was without jurisdiction to grant letters of administration if the alleged decedent was not in. fact dead. (Scott v. McNeal, 154 U. S. 34; Roderigas v. East Riv. Sav. Inst., 63 N. Y. 460; Matter of Killan,
      172 N. Y. 547.) II. Appellant should have applied, and may still apply, for letters of administration under subdivision 2 of section 119 of the Surrogate’s Court Act. (Cunnius v. Reading School Dist., 198 U. S. 458; Blinn v. Nelson, 222 U. S. 1; Walz v. Dawson, 235 Mich. 344; Barton v. Kimmerley, 165 Ind. 609; New York Life Ins. Co. v. Chittenden & Eastman, 134 Iowa 613; Chamberlain v. Anderson, 195 Iowa 855; Savings Bank of Baltimore v. Weeks, 110 Md. 78; Matter of Emery, 108 N. J. Eq. 601; Carroll v. Carroll, 60 N. Y. 121; Marks v. Emigrant Ind. Sav. Bank, 122 App. Div. 661.) III. There was no evidence of Max Goldstein’s death sufficient to justify a decree directing respondent to pay the balance in his bank account to appellant as administratrix. (Weitling v. Sorenson, 254 App. Div. 539; Lasher v. Gerlach, 107 Ind. App. 572; Century Ind. Co. v. Norbut, 117 N. J. Eq. 584; Southern Glass Co. v. Beverly Dairies, 7 Cal. App. 2d 451; Matter of New York State Labor Relations Bd. v. Holland Laundry, Inc., 294 N. Y. 480; Matter of Wyllie, 134 Misc. 715; Matter of Wilbert, 228 App. Div. 703; Marks v. Emigrant Ind. Sav. Bank, 122 App. Div. 661.)
   Desmond, J.

In 1946, appellant Erna Goldstein obtained from the Surrogate’s Court of New York County letters of administration on the estate of Max Goldstein, her father,-alleging in her petition that her father had been a resident of The Netherlands and had died in 1944, the asserted basis for jurisdiction in New York County being that New York County was the situs of a debt owed by respondent National City Bank of New York to Max Goldstein. In 1947, petitioner as such administratrix brought the present discovery proceeding in the same court. In her petition she alleged that decedent had a credit balance with respondent bank in the amount of about $9,000, in a deposit account which he had opened by mail from The Netherlands in 1939, and that respondent bank had refused to turn over said fund to the petitioner, wherefore she prayed the Surrogate to order such delivery to her. The bank in its answer admitted that it had the moneys on deposit to Max Goldstein’s credit but denied knowledge or information as to his alleged death, and asserted that his death had not been established by the petitioner, that the Surrogate had made no decree determining such fact, that death was a necessary jurisdictional fact and that, accordingly, petitioner’s letters of administration were void.

There was then a trial before the Surrogate at which petitioner testified that she and her father had both been residents and citizens of Amsterdam in The Netherlands, that she had last seen him in 1942, in Amsterdam, at which time the two agreed that they would go into hiding because of their fear of the German forces. She offered in evidence before the Surrogate, on the trial of this proceeding, a translation of an authenticated decree of the District Court of Amsterdam, dated January 23, 1947, which decree directed the Register of Civil Records of that city to record a document which certified that Max Gold-stein had died at Auschwitz, Poland, on or about January 28, 1944. Auschwitz was the site of one of the German concentration camps. The Amsterdam decree was based, as is stated therein, on a certificate or declaration (which does not appear in the record) of the Dutch Red Cross, which certificate or declaration was, apparently, to the effect that a man by the name of Max Goldstein of the same age, description and residence as petitioner’s father, had died at Auschwitz on January 28, 1944. It further appeared from the testimony before the Surrogate that the Amsterdam court which issued the decree was one of general jurisdiction, and that the decree was not issued in any proceeding concerned to do with administering the estate of Max Goldstein. The Amsterdam decree itself shows on its face that it does not purport to do more than order the recording, in the local vital statistical records, of the death of petitioner’s father. A second exhibit before the Surrogate showed that an appropriate entry had thereafter been made in the civil registry of Amsterdam. On this proof the Surrogate found that the death of decedent had been established by competent proof, and signed a decree directing respondent bank to pay over to petitioner the balance standing to the credit of Max Goldstein.

On appeal to the Appellate Division, First Department, that court reversed (two Justices dissenting) upon questions of fact and of law ” and denied the application for discovery but “ without prejudice to an application under Subdivision 2 of Section 119 of the Surrogate’s Court Act ”. Neither the majority nor the dissenting Justices in the Appellate Division wrote an opinion, but the statement in that court’s order that the reversal was on the facts as well as the law, plus the permission given therein for the making of a new application under subdivision 2 of section 119 of the Surrogate’s Court Act, sufficiently shows, we think, what the Appellate Division had in mind. Petitioner’s letters of administration had been granted to her under subdivision 1 of section 119 of that act, which subdivision is the general statutory authority for an award of administration. However, subdivision 2 of section 119, referred to by the Appellate Division, provides for a somewhat different procedure, where a person of whose estate the surrogate would have jurisdiction if he were shown to be dead, disappears under such circumstances as to afford reasonable ground to believe that he is dead ”. In that latter case the Surrogate, on petition of a creditor or other person interested, may, under paragraph (a) of subdivision 2, grant letters of administration but only after the return of a citation issued to all of the parties who would be interested in the estate, if the alleged decedent were dead, and to the alleged decedent ”, service being made on the alleged decedent by publication. Upon the return of such a citation and after proof taken before the Surrogate in a proceeding under subdivision 2 of section 119, the court, if it appear that the alleged decedent is dead and that he left no will, may make a decree determining the fact of death and awarding letters of administration. A difference between subdivision 2 of section 119, and subdivision 1 applicable in ordinary circumstances, is that if letters are granted under subdivision 2 of section 119 then ‘ in- the event that the person upon whose estate such administration shall have been granted shall return, he may sue only the distributees for and recover the moneys or the value of other assets distributed to them in the administration of the estate ” (par. [c]). The Surrogate’s decree in the present case, directed respondent bank to turn over the deposit moneys to petitioner as an administrator who had been appointed, without notice, under subdivision 1 of section 119, and so, if Max Gold-stein should later be found to be alive respondent bank would be liable to him for payment of his deposited funds, despite the prior payment thereof to petitioner under the present order (Scott v. McNeal, 154 U. S. 34). Scott v. McNeal (supra) held that the appointment by a probate court of an administrator of the estate of a living person, without notice to him, was without jurisdiction and wholly void, as were all that administrator’s acts, and that receipt of money by such an administrator did not discharge a debt (154 U. S. at p. 49). In a'later case, however, the Supreme Court said that, notwithstanding Scott v. McNeal (supra) a State statute was valid which provided for the administration of the estate of a person who later turned up to be alive, where the statute provided for notice to the absentee and gave him protection by allowing him a cause of action against the distributees for any assets turned over to them in the administration of the estate (Cunnius v. Reading School Dist., 198 U. S. 458). After the Cunnius decision (supra) the New York Legislature, responding to suggestions made by the Commission to Investigate Defects in the Laws of Estates, enacted, in 1929 (L. 1929, ch. 229, § 8, as amd. by L. 1930, ch. 174, § 6), the new statutory plan found in subdivision 2 of section 119, above referred to. Thus, when the Appellate Division in the present case reversed on the facts and the law without prejudice to a new proceeding under subdivision 2 of section 119, it in effect said this: In view of the fact that Max Goldstein if alive, has had no notice either of the award of letters to petitioner or of the present discovery proceeding, and in the light of the Scott v. McNeal rule (supra), the proof here offered of death was insufficient, consisting, as it did, only of a decree of a foreign court based on a certificate that Max Goldstein appeared to be dead and that.he had not been heard from for several years. It is not necessary to speculate as to what the Appellate Division meant in reversing ‘ ‘ on the law ’ ’ and we need not decide now whether that meant that the Surrogate’s Court was wholly without jurisdiction and if so, whether that holding was correct. The Appellate Division’s reversal on the facts was amply justified on the record here, particularly in view of section 309 of the Surrogate’s Court Act which gives the Appellate Division the same power to decide the questions of fact, which the surrogate had ”. The permission given to appellant, by the Appellate Division’s order here, to start anew under subdivision 2 of section 119, was proper as safeguarding the interests of all concerned.

The order should be affirmed, without costs.

Loughran, Ch. j., Lewis, Conway, Dye, Fuld and Bromley, JJ., concur.

Order affirmed.


author: Dye, J.

text:
    John P. Didier, Doing Business under the Name of Didier Publishers, Appellant, v. Macfadden Publications, Inc., Respondent, et al., Defendants.
    Argued January 6, 1949;
    decided April 14, 1949.

      Milton E. Mermelstein and Jay I. Julien fox appellant.
    I. The pleadings state a cause of action for breach of express warranty of title. (Brodsky v. Hibel, 94 Misc. 312; Abrams v. Allen, 297 N. Y. 52; Condon v. Associated Hosp. Service of N. Y., 287 N. Y. 411; Dyer v. Broadway Central Bank, 252 N. Y. 430.) II. The pleadings state a cause of action under the doctrine of anticipatory breach for Macfadden’s repudiation of the contract in advance of Macfadden’s complete performance. (Dimon Corp. v. Federal Sugar Refining Co., 215 App. Div. 140; Parsons v. Dura Realty Corp., 136 Misc. 700; 5 Williston on Contracts [Rev. ed.], § 1325; De Forest Radio Tel. & Tel. Co. v. Triangle Radio Supply Co., 243 N. Y. 283; Ga Nun v. Palmer, 202 N. Y. 483; Windmuller v. Pope, 107 N. Y. 674; Howard v. Daly, 61 N. Y. 362.) III. The pleadings state a cause of action for breach of implied obligations not to repudiate the contract or interfere with performance. (Kirke La Shelle Co. v. Armstrong Co., 263 N. Y. 79; Cameron-Hawn Realty Co. v. City of Albany, 207 N. Y. 377; Patterson v. Meyerhofer, 204 N. Y. 96; Losche v. Hurtig, 221 App. Div. 775, 250 N. Y. 619; Anderson v. Steinway & Sons, 178 App. Div. 507, 221 N. Y. 639; McKean v. Hill, 166 App. Div. 18; Anvil Mining Co. v. Humble, 153 U. S. 540.)

      Henry E. Schultz, Joseph Schultz and Joseph E. Ginn for respondent.
    I. The first cause of action of the complaint, together with the bill of particulars, does not state facts sufficient to constitute a. cause of action for anticipatory breach of contract. II. The first cause of action, together with the bill of particulars, does not state facts sufficient to constitute a cause of action for breach of contract. (Anderson v. Steinway & Sons, 178 App. Div. 507, 221 N. Y. 639.) III. There is no basis for the contention that the complaint may be sustained as a cause of action for breach of the warranty by defendant that it had absolute title to the book rights.
   Dye, J.

This is an appeal by permission of the Appellate Division, First Department, from its order affirming an order of the Special Term, Supreme Court, New York County, dismissing the plaintiff’s complaint, in a contract action, for insufficiency under rule 112 of the Buies of Civil Practice with leave to plaintiff to amend and upon the following certified question: ££ Does the first cause of action of the complaint, together with the bill of particulars, contain facts sufficient to state a cause of action? ”

The complaint alleges two causes of action, the first against defendant, Macfadden, and the second against defendant, Colbert, but as the latter has not been served and has not appeared, only the first cause of action is being considered.

The plaintiff alleges in substance for the first cause, that it is a book publisher; that on July 11, 1946, it entered into a written contract with the defendant Macfadden by which the latter assigned and granted plaintiff the sole and exclusive right to publish or have published in hook form, a series of articles written by Claudette Colbert which had appeared in its magazine, Photoplay, entitled “ What Should I Do? ” The contract is annexed to the complaint and is incorporated by reference. It appears to be a stock form in common usage among authors and publishers, of which many clauses were inappropriate to the present transaction and were lined out, the margin being initialed by the respective parties. The approved recitals contained, among others, a warranty that the defendant was sole proprietor of the work and had full power and authority to enter into the agreement and a provision for indemnification of the plaintiff for its loss for breach prior to publication and a covenant to deliver any and all documents necessary to effectuate the terms of the contract. The contract is comprehensive in scope and appears to he complete on its face and in fact, recites that it is ££ the entire understanding of the parties.” The complaint alleges that the plaintiff was ready, able and willing to perform and offered to perform, and includes:

£ £ Seventh : * * * but the defendant, Macfadden Publications, Inc., prevented due performance by the plaintiff of the said contract in that said defendant failed and refused to permit the plaintiff to publish the work described in said contract and threatened to bring injunction proceedings to restrain plaintiff from publishing said work.
‘1 Eighth : The defendant, Macfadden Publications, Inc., has breached and violated its said contract with the plaintiff in that it failed and refused to permit the plaintiff to publish the work described in said contract, and prevented plaintiff from publishing the said work by threatening to bring injunction proceedings to restrain the plaintiff from publishing the said work. ’ ’

The defendant filed its answer, generally denying such allegations and as a separate defense, alleged that the parties had entered into a separate coincident agreement to the effect that the plaintiff was to get the approval of Miss Colbert to the jacket of the proposed book and proofs of the manuscript before publication and this it had failed to do.

The plaintiff thereafter furnished its bill of particulars which referred to a telephone conversation and to certain letters written by the defendant after the signing of the contract, copies of which were attached, all dealing with Miss Colbert’s unwillingness to approve the publication. One such letter dated April 25, 1947, written by defendant’s attorneys referred to their examination of the contract as indicating that publication of the book was conditioned upon u the approval by Miss Colbert of the jacket and the proofs of the manuscript ” and concluded with the statement, “ We trust that you will not make it necessary by your disregard of this essential provision for us to proceed with injunction proceedings and an action to recover consequent damages.”

The certified question makes reference to the bill of particulars so we are reading it in connection with the sufficiency of the complaint. Our task is made difficult by the circumstance that the plaintiff in Special Term and in the Appellate Division has contended for an application of the doctrine of anticipatory breach, it being his contention that when Macfadden insisted that the contract was conditioned on Miss Colbert’s approval, which condition did not appear in the contract and threatened injunction proceedings, it repudiated and breached the contract and made performance by the plaintiff futile. Counsel also claimed breach of an express warranty of title and breach of an implied warranty inherent in the contract not to repudiate or interfere with its performance.

It is, of course, axiomatic that pleadings under attack shall be accorded every fair and reasonable intendment but in so doing it is necessary to keep in mind that a good pleading shall contain a plain and concise statement of material facts on which the party pleading relies. (Civ. Prac. Act, §§ 241, 255.) While this bespeaks liberality, it cannot be used as a substitute for matters of substance (Union Trust Co. v. Main & South Sts. Holding Corp., 245 App. Div. 369), nor may conclusory statements of law be utilized to supply material facts by inference within the doctrine of liberal construction. (Kalmanash v. Smith, 291 N. Y. 142.)

The language used in the pleading is so indefinite as to leave one in doubt just which of two inconsistent remedies the plaintiff seeks to employ. Whether he seeks damages for a breach of an express or implied warranty is hard to determine in the absence of ‘an allegation showing the fact of the existence of such warranty .and its breach by the defendant. (Du Pont Automobile Distributors v. Du Pont Motors, 213 App. Div. 313.) On the other hand, the pleading lacks sufficient allegations excusing his own nonperformance because of defendant’s threatened injunction proceeding. The contract sued upon is executory in part and before plaintiff may sue for its breach he must show an absolute repudiation by language or act making it futile for him to proceed. (5 Williston on Contracts, § 1324; 17 C. J. S., Contracts, § 472.) Here such allegations are a matter of substance which cannot be overlooked under the guise of liberal construction required by section 275 of the Civil Practice Act. It may be the plaintiff can amend, his pleading showing sufficient facts that he is entitled to pursue one or the other remedy. We have authority to grant such permission. (Al Raschid v. News Syndicate Co., 265 N. Y. 1; Eichhammer v. Parsons, 273 N. Y. 208; Fitzgerald v. Title Guar, & Trust Co., 290 N. Y. 376.)

The order of the Appellate Division should be affirmed, with leave to the plaintiff to serve an amended complaint within twenty days upon payment of costs in all courts. The question certified is answered in the negative.

Loughran, Ch. J., Lewis, Conway, Desmond and Fuld, JJ., concur.

Order affirmed, etc.


author: Fuld, J.

text:
    Julius L. Neidle, as Remaining Executor of Henry S. Rosenwald, Deceased, Appellant, v. Prudential Insurance Company of America, Respondent.
    Argued February 22, 1949;
    decided April 14, 1949.

      Paul O’Dwyer, Julius L. Neidle and David Drucker for appellant.
    I. The military clause of the policies did not exempt the insurance company from liability for accidental death if such death did not result from insured’s participation in military action. (Aschenbrenner v. United States Fidelity & Guar. Co., 292 U. S. 80; Atkinson v. Indiana Nat. Life Ins. Co., 194 Ind. 563; Equitable Life Assur. Soc. v. Dyess, 194 Ark. 23; Hartol Products Corp. v. Prudential Ins. Co., 290 N. Y. 44.) II. Insured’s death did not result from his participation in military service in time of war or from a state of war within the fair intendment of the exclusion clause. (Kelly v. Fidelity Mut. Life Ins. Co. of Phila., 169 Wis. 274; Johnson v. Mutual Life Ins. Co., 154 Ga. 653; Young v. Life & Cas. Co. of Term., 29 S. E. 2d 482; Malone v. State Life Ins. Co., 202 Mo. App. 499; Atkinson v. Indiana Nat. Life Ins. Co., 194 Ind. 563; Smith v. Sovereign Camy W. O. W., 28 S. E. 2d 808; Mattes v. Merchants Reserve Life Ins. Co., 221 Ill. App. 648; Lee v. Guardian Life Ins. Co., 187 Misc. 221, 267 App. Div. 985; Funk v. New York Life Ins. Co., 186 Misc. 449; Clapper v. Aetna Life Ins. Co., 157 F. 2d 76.)

      Merwin F. Le Vine for respondent.
    Defendant’s evidence established that insured’s death resulted from participating in military service in time of war, or from a state of war. (Hooker v. New York Life Ins. Co., 161 F. 2d 852; Selenack v. Prudential Ins. Co., 160 Pa. Superior Ct. 242; Eggena v. New York Life Ins. Co., 236 Iowa 262; Railey v. United Life & Accident Ins. Co., 26 Ga. App. 269; Stankus v. New York Life Ins. Co., 312 Mass. 366; Johnson v. Travelers Ins. Co., 269 N. Y. 401; Drilling v. New York Life Ins. Co., 234 N. Y. 234; Bergholm v. Peoria Life Ins. Co., 284 U. S. 489.)
   Fuld, J.

Sergeant Henry Bosenwald, an American soldier, met death in Italy during the war and while military operations were in progress. He was assigned, at the time, to the Advance Documents Section of Fifth Army Intelligence, and, as part of his military • duties, interviewed captured enemy soldiers at' forward area prisoner of war cages. On October 27, 1944, Eosenwald, returning from such a mission to his headquarters in Florence, was killed when the jeep in which he and other military personnel were traveling collided with an army ammunition truck. The War Department reported that his death “ occurred in the line of duty, while riding in a government vehicle, while engaged in the execution of military duty.”

Upon receiving proof of death, defendant insurance company paid the face amount of three policies issued to Eosenwald in 1939 and 1940. Eosenwald’s executor claimed that, death having been accidental, double indemnity benefits were due under the policies, and brought suit to enforce payment. The defense was that such benefits were excluded by the terms of the policies because the insured’s “ death resulted * * * from participating * # * in military or naval service in time of war”. On that ground, the court at Special Term awarded summary judgment in defendant’s favor and the Appellate Division unanimously affirmed. The importance of the decision, its far-reaching consequences, moved us to grant leave to appeal.

Military service in wartime engenders mortal risks from many quarters apart from enemy bombs, shells and bullets, and an insurer is privileged to protect itself from those broader risks. It may write its contracts to exclude from accidental death benefits all those who don the uniform and embrace military status in time of war, regardless of how they die, and, if words expressive of that meaning are chosen, the courts will not hesitate to enforce them.

The clause with which we are concerned, however, is not a status provision; it requires a causal link between military service and the insured’s death. In the aspect presently pertinent, the proviso bars accidental benefits only if death resulted * * * from participating ” in military service in time of war. While that language, of course, excludes from double indemnity coverage death on the fighting line, in actual combat, it is equally clear that it also excepts therefrom violent death under other circumstances. The proviso, given fair and reasonable construction, encompasses those eases where death results from an accident made more probable and more likely by the demands and hazards of military service. Although the test to be applied defies precise and hairline definition, it may be stated in round terms in this way: If the fatal hazard was one incidental to military training, to military movement or to military operations, death may be said to have resulted from participating in military service in time of war.

That test applicable, it is evident that Rosenwald died of an excluded cause. His death occurred in a zone of military operations at a time when he was subject to military discipline1,, while he was carrying out assigned duties, and, indeed, at the very moment when he was participating in the military effort as a soldier. Whether a different result would be reached if the fatal accident occurred while the insured was neither engaged in performing his duties nor subject to army orders and discipline, we need not now decide. The case would perhaps be different if, for instance, death resulted while the insured, though in military service, met death while on a furlough, under conditions having nothing to do with the war effort. It is sufficient for present purposes to say that, since-Rosenwald was on a military mission in a military situation when he died, his death resulted from participating in military service in time of war;

The judgment of the Appellate Division should be affirmed, with costs.

Loughran, Ch. J., Lewis, Conway, Desmond, Dye and Bromley, JJ., concur.

Judgment affirmed.


text:
    Frances Arnold, as Administratrix of the Estate of John Arnold, Deceased, Respondent, v. Mayal Realty Company, Inc., et al., Defendants, and John J. Meenan, Inc., Appellant.
    Submitted February 21, 1949;
    decided April 14, 1949.

      Joseph Kane for appellant.
    I. An action against appellant is barred by the Statute of Limitations. (Cohen v. Steigman, 249 App. Div. 819; Mossip v. Clement & Co., 283 N. Y. 554; Gray v. Vought & Co., 216 App. Div. 230, 243 N. Y. 585; Johnson v. Phoenix Bridge Co., 197 N. Y. 316; Sapone v. New York Central & Hudson Riv. R. R. Co., 130 Misc. 755; MacFarland v. State of New York, 177 Misc. 117; Slocum v. State of New York, 177 Misc. 114.) II. The action was not commenced against appellant before the two-year Statute of Limitations had run. (Paterno v. Eager, 179 Misc. 989; Schram v. Keane, 279 N. Y. 227; Gray v. Vought & Co., 216 App. Div. 230, 243 N. Y. 585; Crossman v. Consolidated Edison Co. of N. Y., 48 N. Y. S. 2d 701; Harriss v. Tams, 258 N. Y. 229; Moses v. Benjamin, 185 Misc. 50; Matter of Callahan, 262 App. Div. 398.) III. The proposed supplemental summons and proposed amended complaint served with the motion papers were not a summons and complaint as against appellant. (Rockefeller v. Hein, 176 Misc. 659; Bowler v. Ennis, 46 App. Div. 309; Zurich Gen. Accident & Liability Ins. Co. v. Watson Elevator Co., 253 N. Y. 404; Currie v. International Magazine Co., 256 N. Y. 106.)

      Andrew M. Lawler for respondent.
    The action against appellant is not barred by the Statute of Limitations. (Civ. Prac. Act, § 16; Prudential Ins. Co. v. Stone, 270 N. Y. 154; New York Central & Hudson Riv. R. R. Co. v. Kinney, 260 U. S. 340; Schram v. Keane, 279 N. Y. 227.)
   Dye, J.

The within action to recover for the wrongful death of plaintiff’s intestate was commenced in June, 1945, against the defendants, Mayal Realty Company, Inc., and Julius Weiss, doing business as Weiss Pulp Produce Company, and issue was joined by the filing of their answers on June 27, 1945, and June 29,1945. Thereafter on January 22,1947, exactly two years from date of decedent’s death, the plaintiff served a notice of motion for leave to bring in John J. Meenan, Inc., the appellant here as an additional defendant and for leave to issue and serve a supplemental summons and amended complaint on the said John J. Meenan, Inc., and the defendants, Mayal and Weiss. The motion was returnable January 30, 1947. The Special Term, by order entered March 17, 1947, granted the motion and thereafter on May 29, 1947, the supplemental summons and amended complaint were served on the appellant Meenan as an' additional defendant who now challenges such service as untimely because not made within two years after decedent’s death.. (Decedent Estate Law, § 130.) Upon appeal, the Appellate Division, by a divided court, found that annexation of the proposed supplemental summons and amended complaint to the moving papers was notice to the defendant of the plaintiff’s claim against it and served to extinguish the reasons for the Statute of Limitations. A liberal rule of construction was then applied to hold the service timely. It granted leave to appeal to this court and certified the question: “Was the action commenced against appellant before the 2 years Statute of Limitations had run? ”

We must reject the construction adopted by the court below as unwarranted and unauthorized. A Statute of Limitations is not open to discretionary change by the courts, no matter how compelling the circumstances (Gregoire v. Putnam’s Sons, 298 N. Y. 119) and when given its intended effect such a statute is one ofi repose, and experience has shown that the “ occasional hardship is outweighed by the advantages of outlawing stale claims.” (Schmidt v. Merchants Desp. Transp. Co., 270 N. Y. 287, 302; Jackson ex dem. Bleecker v. Wiseburn, 5 Wend. 136; Wait v. Van Allen, 22 N. Y. 319; People ex rel. Northchester Corp. v. Miller, 288 N. Y. 163, 166.)

The service of the motion papers cannot be enlarged beyond their express scope which was to bring in Meenan as an additional defendant. The annexed supplemental summons and amended complaint were evidentiary in nature and offered in support of the motion. Even though they had not been defective as they were here for lack of Meenan’s name as a defendant in the respective titles (Rules Civ. Prac., rule 45) and even though treated as a notice of the existence of the claim, such annexation is not a substitute for nor is it equivalent to service of process contemplated by the statute necessary to commence an action. The service of the supplemental summons and amended complaint when made May 29, 1947, on the additional defendant, Meenan, came too late to satisfy the statute and was irretrievably barred. (Decedent Estate Law, § 130; Civ. Prac. Act, § 16.) This is not a situation involving a mistake, omission, defect or irregularity such as may be corrected upon proper showing that a substantial right of a party shall not thereby be prejudiced (Rules Civ. Prac., rule 105) but goes to the jurisdiction of the court which depends on constitutional or statutory authority.

To answer the question certified in the negative is not contrary to our decision in Prudential Ins. Co. v. Stone (270 N. Y. 154) which had to do with whether the beneficiary wife of a deceased insured was a party united in interest with him within the meaning of the statute and having held that she was, service of process upon her within a one-year time limitation for contesting liability, was deemed proper. The granting of a provisional remedy prior to the service of a summons, while deemed the commencement of an action, will nevertheless fail if the service of the summons thereafter is untimely. (Schram v. Keane, 279 N. Y. 227.) The applicable statutes as we read 'them (Decedent Estate- Law, § 130; Civ. Prac. Act, §§ 16, 218, 219) are not open to discretionary construction but must be read and applied according to the express language used. Any other view would lead to confusion and uncertainty.

The orders should be reversed and the motion denied, with costs in all courts, and the question certified answered in the negative.

Lewis, Conway, Desmond, Fuld and Bromley, JJ., concur; Loughran, Ch. J., taking no part.

Orders reversed, etc.


author: Fuld, J. Desmond, J.

text:
    Hollywood Plays, Inc., et al., Respondents, v. Columbia Pictures Corporation, Appellant.
    Argued January 10, 1949;
    decided April 14, 1949.

      Louis D. Frohlich and Arthur Karger for appellant.
    I. Defendant was as a matter of law warranted in refusing to consummate the sale because of defects in plaintiffs’ chain of title. The title offered to defendant by plaintiffs was not one that was free from reasonable doubt in respect to the rights acquired in Woods’ bankruptcy proceedings. (Matter of Gerstenzang, 5 F. Supp. 904; Thayer v. Finton, 108 N. Y. 394; Fitzpatrick v. Sweeny, 56 Hun 159, 121 N. Y. 707; Coleman v. Manhattan Beach Improvement Co., 94 N. Y. 229; McPherson v. Schade, 149 N. Y. 16; Crocker Point Assn. v. Gouraud, 224 N. Y. 343; Irving v. Campbell, 121 N. Y. 353; Murray Co. v. Lidgerwood Mfg. Co., 241 N. Y. 455.) II. Defendant was not required to accept a title as to which there was a reasonable doubt. (Vought v. Williams, 120 N. Y. 253; Brokaw v. Duffy, 165 N. Y. 391; Lynbrook Gardens v. Ullmann, 291 N. Y. 472; People v. Open Board of Stock Brokers Bldg. Co., 92 N. Y. 98; Wallach v. Riverside Bank, 206 N. Y. 434; Harris v. Moskowits, 236 App. Div. 196, 261 N. Y. 605; Van Vliet & Place v. Gaines, 249 N. Y. 106; Isaacs v. Schmuck, 245 N. Y. 77.) III. A prior unrecorded assignment of all but 25% of Woods’ interest in the stage rights to the play would be valid for the additional reason that it would not conflict with the subsequently executed bill of sale specifying only a 25 % interest. Recording acts such as that here involved afford protection only as against a prior unrecorded assignment of the same rights or interests as are subsequently conveyed by the recorded assignment; and it has been held that the prior assignment will be given effect, though unrecorded, where that can be done without defeating the subsequent recorded assignment. (Brown v. Jackson, 3 Wheat. [U. S.] 449; Turnbull v. Weir Plow Co., 6 Biss. 225, 14 F. 108; 2 Walker on Patents [1937 ed., Deller], p. 1414.) IV. Nor is there any evidence that plaintiffs made any diligent inquiry, of Woods or through other sources, to ascertain whether Woods actually owned more than the specified 25% interest at the time of his bankruptcy or whether he had made any pre-bankruptcy assignment. (Auburn Button Co. v. Sylvester, 72 Hun 498,147 N. Y. 714.) V. The United States Copyright Act obviously has no extraterritorial force; and the recording requirement of that act is a limitation only on copyright protection in this country, and could have no effect on the stage or dramatic rights in other countries. (United Dictionary Co. v. Merriam Co., 208 U. S. 260; Ferris v. Frohman, 223 U. S. 424; Dowagiac Mfg. Co. v. Minnesota Moline Plow Co., 235 U. S. 641; American Code Co. v. Bensinger, 282 F. 829.)

      Abraham Shamos, Rudolph E. TJhlman and Norman Hammer for respondents.
    I. Whether the minds of the parties met in an agreement is a question of fact which the courts below have resolved in favor of plaintiffs. Since that decision rests upon substantial evidence, it is not open for further review. (Orr v. Doubleday, Page & Co., 223 N. Y. 334; 1240 Third Ave. v. Birns, 232 App. Div. 522; Wise & Co. v. Wecoline Products, 286 N. Y. 365.) II. Defendant’s refusal to complete the purchase of the motion-picture rights was not justified upon any of the grounds set forth in its letter of refusal. (Littlejohn v. Shaw, 159 N. Y. 188; Norwegian Evangelical Free Church v. Milhauser, 252 N. Y. 186; Whittier Estates v. Manhattan Sav. Bank, 181 Misc. 662, 268 App. Div. 1037; Hanbury v. Metropolitan Securities Co., 215 App. Div. 225; Bankruptcy Act, § 70, subd. [a]; U. S. Code, tit. 11, § 110, subd. [a]; Gross v. Irving Trust Co., 289 U. S. 342; First Nat. Bank of Jacksboro v. Lasater, 196 U. S. 115; Stephan v. Merchants Collateral Corp., 256 N. Y. 418; Matter of Burr Mfg. & Supply Co., 217 F. 16; Gorman v. La Bella, 146 Misc. 408; Matter of Central Park Dairyland, 179 Misc. 611.)
   Fuld, J.

“ Ladies’ Night ”, under various titles, had been a hit on the stage, and in 1943, Columbia Pictures Corporation negotiated with plaintiffs for the motion-picture, television and radio rights to the play. A purchase price of $150,000 was agreed upon. Telegrams were exchanged embodying terms of the deal, but before a formal contract was drawn, defendant, claiming that plaintiffs’ title to the motion-picture rights was defective, refused to proceed further.

Some time later, plaintiffs instituted this action for breach of the alleged contract. They have thus far prevailed, a judgment for $50,000 rendered in their favor in the trial court having been affirmed by the Appellate Division. There was a dissent upon the ground that approval by an organization known as the Dramatists’ Guild, in the opinion of the dissenting Justice a necessary prerequisite to the creation of a contract, had not been obtained. The view which we take — that defendant was excused from performance because of a defect in plaintiffs’ title — requires reversal without more and renders unnecessary consideration of any question bearing upon the validity and the binding effect of the alleged contract.

By the telegraphic exchanges, plaintiffs had bound themselves to deliver the complete “ world motion picture rights ” and “ world talking motion picture rights ” to “ Ladies’ Night ” and defendant was, of course, entitled to no less. A purchaser or one who undertakes to buy will not be compelled to abide by his promise if the seller proffers a title which is prey to doubts and challenges, which threatens to involve the buyer in costly litigation. (See, e.g., Lynbrook Gardens v. Ullmann, 291 N. Y. 472, 477; Van Vliet & Place v. Gaines, 249 N. Y. 106, 110; Brokaw v. Duffy, 165 N. Y. 391, 399; Heller v. Cohen, 154 N. Y. 299, 306; Vought v. Williams, 120 N. Y. 253, 257.) To render a title doubtful, it is not necessary that it in fact be bad or that bitter experience has stamped it so; it is enough if the title be uncertain, clouded by apparent defects or subject to reasonable misgivings. (See, e.g., Brokaw v. Duffy, 165 N. Y. 391, 399, supra; Heller v. Cohen, 154 N. Y. 299, 306, supra; Vought v. Williams, 120 N. Y. 253, 257, supra.) “ A purchaser ”, this court wrote in the Vought case is not to be compelled to take property the possession of which he may be compelled to defend by litigation ” (120 N. Y., supra, at p. 257). And in the Brohaw case, we likewise pointed out that “ 1 The title tendered need not in fact be bad ’ ” in order to relieve the purchaser from his obligation; if the title is “ so clouded by apparent defects, either in the record or by proof outside of the record, that prudent men, knowing the facts, would hesitate to take it ’ ”, the purchaser is excused from performing (165 N. Y., supra, at p. 399).

In the light of this principle, consideration of the record is persuasive that plaintiffs’ title was so uncertain “ ‘ that prudent men * * * would hesitate to take it ’ and that conclusion is rendered the more certain when we bear in mind that defendant would have had to invest about a million dollars to complete its venture, to screen and produce the picture, after it had paid $150,000 as the purchase price.

Plaintiffs, of course, insist that they do possess 100% of the motion-picture rights and that they can deliver these rights to defendant as they promised. It is undenied that 50% of plaintiffs’ rights derive from A. H. Woods, through his trustee in bankruptcy. The dispute focuses upon the issue of whether plaintiffs ever acquired a clear and unclouded title to that 50% interest, and, accordingly, we address ourselves to that narrow question.

The record reveals that, through contracts with the author Charlton Andrews and the playwright Avery Hopwood, Woods obtained the exclusive stage rights to a revised version1 of the play, and, in addition, to 50% of the motion-picture rights. There seems little question that Woods retained that 50% interest until as late as 1929. In 1931, however, he filed a petition in bankruptcy, and, in connection therewith, listed all the assets available to creditors. Schedule B-2, annexed to the petition, carried a listing of his interests in 11 Silent and Talking Motion Picture Bights ” and of his holdings in Beldases for Stock Production ”. To each page of that schedule he affixed Ms name, and over Ms signature, in meticulous detail, he documented to the fraction and to the decimal Ms per centum interests in each of the plays which he Owned. Coming .to “ Ladies’ Night ”, Woods described Ms share in the “ talking motion picture rights ” as 25%, and his interest in “ releases for stock productions ” as 50%. Those identical percentages were listed as Ms holdings in the bill of sale thereafter executed by Irving Trust Company as trustee in bankruptcy; once again, most significantly, Ms interest in the “ talking motion picture rights ” was given as 25%.

Thus, it is indisputable that the essential documents, those to which plaintiffs trace — indeed, must perforce trace — their claim of ownership, indicate that Woods and his trustee in bankruptcy had but a 25% interest in the “ talking motion picture rights ” to Ladies’ Night ”. There is no gainsaying the fact that those documents in no "wise accounted for or explained the whereabouts of the remaimng 25% interest in those rights. What happened to that missing 25% we'do not know. It is impossible to shrug off, as mere clerical error or inconsequential oversight, this disparity in the figures listed with equal exactitude by the bankrupt and his trustee. It is not unreasonable to conclude that Woods had, between 1929 and his bankruptcy in 1931, sold or otherwise disposed of that vital 25% share.

Though it may be true, as plaintiffs urge, that all of the bankrupt’s assets passed to his trustee and that the trustee, in turn, intended to transfer all of Woods’ interests to the purchaser at the bankruptcy sale, that leaves unanswered the question to be decided, namely, the interest which Woods actually owned at that time. Was it 50% or 25% ? In the light of the detail and precision employed in enumerating his interests, Woods’ description of his “ talking motion picture rights ” in “ Ladies’ Night ” as 25% rather than the asserted 50%, would strongly suggest that he knew and understood the exact extent of his interest in that play and that he intended to give and was able to give only 25%. If that be so, the trustee in bankruptcy obviously could give no more than that 25%, despite the fact that in its bill of sale it had conveyed all ” of Woods’ rights.

It was, as indicated, at the bankruptcy sale that plaintiffs acquired their interest. Consequently, if the 25% specified in Woods’ petition and in the trustee’s bill of sale was the extent of Woods’ interest and if it was the interest which the purchaser acquired, plaintiffs obviously did not procure and were not able to convey a complete or valid title. And, as bearing upon the matter, when one of the- plaintiffs, Hopwood Plays, Inc., copveyed its interests to another, Hollywood Plays, Inc., the grant was only as to plays and assets * * * more particularly set forth and enumerated in * * * the [trustee’s] Bill of Sale

On the other hand, even if Woods actually owned a 50% interest when he became a bankrupt, even if the recitals in his schedule and in the trustee’s bill of sale were merely mathematical errors, the title, so far as defendant was concerned, still remained defective. For example, Woods or one of his creditors was free to petition the bankruptcy court at any time to reopen the estate for the purpose of administering the previously undisclosed and undistributed assets of the bankrupt. Although eleven years had intervened since the closing of the estate, a lapse of that time constitutes no bar to its reopening for that purpose. (See Tuffy v. Nichols, 120 F. 2d 906, certiorari denied 314 U. S. 660; Matter of Mirsky, 124 F. 2d 1017, certiorari denied 317 U. S. 638; Matter of Graff, 255 F. 241; cf. Lyn brook Gardens v. Ullmann, 291 N. Y. 472, supra.) Dispute as to whether the bill of sale could have been amended is somewhat beside the point. Until it was in fact modified to describe the interest sold as “ 50% ”, the instrument could not be varied collaterally, and defense of the title at the suit of a third party claimant would be a difficult, if not a hopeless, matter. In any event, it was surely not defendant’s burden to effect the amendment ; that was a duty imposed upon the seller. (See, e.g., Heller v. Cohen, 154 N. Y. 299, 310-311, supra; Carey v. Keith, Inc., 250 N. Y. 216, 220.)

The circumstance that no one had come forward to claim any share in the talking motion-picture rights since the bankruptcy does not render the title to those rights less free from doubt. Suffice it to observe that, although 1 ‘ Ladies ’ Night ’ ’ had been staged in San Francisco and Chicago in 1942 and 1943, no such moving picture had been produced. There was, then, no occasion for an adverse claimant of talking motion-picture rights to appear and dispute plaintiffs’ title.

A practical problem calling for choice of action, not a theory, confronted defendant and its attorneys. They might either have refused to go through with the transaction or they might have disregarded the palpable flaw in plaintiffs’ title, accepted it, paid $150,000 for the play and invested another million dollars to screen and produce it. To have pursued the latter course might well have jeopardized the entire investment. As a practical common-sense matter, no businessman could reasonably be expected to invest so large a sum in a title that might at any moment have generated a lawsuit. As a legal matter, no court should condemn the course which the defendant actually took. Though there existed the possibility that the buyer’s fears concerning plaintiffs ’ title might later have proved groundless, those fears certainly had substance, founded as they were upon reasonable doubts and uncertainties. ‘‘ A prudent purchaser may not be labelled as unduly cautious when he refuses such a title.” (Van Vliet & Place v. Gaines, supra, 249 N. Y., at p. 110.)

In sum, even assuming that a contract had been effected, defendant, in declining to accept such title as plaintiffs could deliver, simply balked at buying a lawsuit. That refusal was-justified by the principle excusing nonacceptance where the purchaser reasonably believes that what he buys will involve him in litigation." The real and substantial considerations to which we have called attention, not technicalities or ephemeral abstractions, move us to our conclusion.

The judgments should be reversed and the complaint dismissed, with costs in all courts.

Desmond, J.

(dissenting). Woods’ whole interest in the play-passed, automatically and by operation of law, and regardless of statements in the schedules, to Woods’ trustee in bankruptcy (U. S. Code, tit. 11, § 110; see Stephan v. Merchants Collateral Corp., 256 N. Y. 418, 422; First Nat. Bank v. Lasater, 196 U. S. 115, 119; Gray v. Gudger, 260 F. 931, 932). Thereafter the trustee sold and transferred that whole interest, formerly of Woods, to plaintiffs’ predecessor, as appears without doubt from the trustee’s notice of sale, his statements at the sale, the referee’s order of confirmation and the trustee’s bill of sale. Thus there can be no question here of any partial interest in this play being an unadministered asset of the A1 Woods bankruptcy, or .of any possible reopening of the estate hereafter, for disposal thereof. It is, therefore, clear beyond all doubt that the trustee got all Woods’ rights and sold all those rights to plaintiffs’ predecessor.

It follows that any defect in the bankruptcy vendee’s title to the "50% could only have come about because Woods, between 1929, when he unquestionably owned 50%, and 1931, when he was adjudged bankrupt, somehow, in some manner, at some time and to some person undisclosed, transferred out a 25% interest. Whether or not he did so is in its essence a question of fact. As the sole suggested basis for an affirmative answer to that question, we have defendant’s speculation or guess, with nothing to support it except the listing by Woods, in his bankruptcy schedules, of a 25% interest, not a 50% interest'. As against that mere guess, there is the much more reasonable one that, in setting down his claimed ownerships in scores of plays — good, bad and indifferent — Woods just simply made a mistake as to the quantum of his rights in Ladies’ Night ”.

But, what is more important, we have in this record, as against that guess that Woods somehow got rid of 25% before his bankruptcy, much more than a contrary guess. First, we have the fact that Woods owned 50% at least up to 1929. Second, we have the presumption that such ownership continued (Chapman v. Town of Taylor, 136 N. Y. 663; Cuyler v. Wallace, 183 N. Y. 291; Claris v. Richards, 260 N. Y. 419, 423; Matter of A. O. Brown & Co., 183 F. 861, 863). Third, we have the fact that Woods before the bankruptcy, and the bankruptcy sale vendee thereafter, were treated always as 50% owners, as to royalties, etc. Finally, we have the Trial Justice’s remarks on this matter in his opinion, which remarks cannot be read other than as a finding that Woods’ bankruptcy trustee had, and sold, a 50% interest; that finding was, by failure to find otherwise, affirmed by the Appellate Division, and the only opinion in that court (the Presiding Justice’s dissent) did not even mention the matter. We cannot make a contrary finding.

A contract vendee should not be forced to take a doubtful title, but he cannot escape liability for nonperformance by erecting his vague and baseless speculations into substantial doubts. Even if this be no more than a matter of judgment — as to whether this supposed break in the title is real and important — then both courts below have given us their judgment that it is not.

The judgment should be affirmed, with costs. [See 299 N. Y. 683.]

Loughran, Ch. J., Lewis and Conway, JJ., concur with Fuld, J.; Desmond, J., dissents in opinion in which Dye, J., concurs.

Judgments reversed, etc.