text:
    Daniel Brackett v. Volney L. Barney and Sarah A. Barney.
    A deed may be delivered to the grantee to await a complete execution or acknowledgment by another party, without authorizing the conclusive inference that such delivery gives effect to the instrument.
    In June, 1854, the plaintiff'loaned to B. $1000, as security for the repayment of which it was agreed that B. and his wife, should execute and deliver a bond and mortgage, and that B. should pay the plaintiff $10 in addition to the legal interest, for such loan, which was paid, and the bond and mortgage signed by B. and delivered to the plaintiff, with the agreement that the mortgage should thereafter be signed by his wife, who was then ill, and acknowledged by both. On the 27th of March, 1855, the parties met, before a justice, for the purpose of having the mortgage acknowledged, when B. and his wife refused to acknowledge the execution unless the plaintiff would repay the $10, paid as usurious interest. The plaintiff repaid the money, and the mortgagors then acknowledged the mortgage, and the same was delivered.

      Held, that prior to the 27th of March, 1855, the bond and mortgage had never taken effect as delivered instruments, but were in the hands of the plaintiff, awaiting completion and acceptance. That before any effective delivery took place, the contract between the parties had been made legal by the repayment of the usurious premium; and that the bond and mortgage, when first delivered to take effect, were delivered in pursuance of a lawful contract, which they correctly represented; and that they were therefore vaild."
    Action to foreclose a mortgage, bearing date June 22, 1854, executed by the defendants to the plaintiff to secure the payment of one thousand dollars, one half payable in three, and the other half in six years from the date of the mortgage, with annual interest; the mortgage having been given as collateral to the bond of Volney L. Barney, in the same terms with the mortgage, as to amount and time of payment.
    The defense set up by the answer was, that the bond and mortgage were given to secure a usurious loan, the terms of which were stated.
    The facts found by the referee before whom the cause was tried were, in substance, as follows: that the bond and mortgage were executed by Volney L. Barney, on the day of their date, as security for a loan of one thousand dollars, then made by the plaintiff to Barney, and the money paid to the latter; that it was at that time agreed, between the plaintiff and Barney, that Sarah A. Barney, the wife of Volney L., should thereafter execute the mortgage, and, together with her husband, acknowledge its execution; that it was also at ' the same time agreed, as part of the contract for the loan, that Barney, in addition to the payments for principal and interest mentioned in the bond and mortgage, should pay- to the plaintiff the further sum of ten dollars, for the forbearance and giving day of payment of the sum of one thousand dollars, so loaned for the times and on the conditions in the mortgage mentioned, and in pursuance of that agreement the defendant Barney, afterwards and before the acknowledgment of the execution of the mortgage, paid to the plaintiff such ten dollars. That the bond and mortgage on the day of their date were delivered to the plaintiff, and the mortgage was soon afterwards signed by Mrs. Barney, but was not acknowledged by her or her husband until March 27, 1855; that the defendants then refused to acknowledge the execution of the mortgage unless the plaintiff would repay the ten dollars ; and thereupon the plaintiff did repay the ten dollars, and the said Volney L. Barney agreed to' receive and did receive the same in full satisfaction and discharge of any and every claim or right, which he had or might have by reason of the payment of the same by him to the plaintiff; with the mutual agreement, understanding and intention, by and between both of them, that the bond and mortgage should "be thereby discharged and purified from all claim, pretense or taint of usury, and from any and all defenses by reason thereof; and thereupon the defendants severally acknowledged the execution of the mortgage, so that the same was afterwards duly recorded. The referee also found that there" was due, on the bond and mortgage, one hundred and forty dollars, for two years interest, which became due on the 22d of June, 1855, and on the 22d of June, 1856, and that all the principal remained unpaid, but not due at the date of the report; and that the mortgaged premises could not be sold in parcels, without material injury to the interest of the parties. Upon these facts, judgment was entered, directing a sale of the mortgaged premises, a foreclosure of the defendants’ equity of redemption, and payment of the amount of the bond and mortgage, and costs, to the plaintiff, from the proceeds of the sale. That judgment was affirmed at the general term of the Supreme Court, and the defendants appealed to this court.

      George Sprague, for the appellants.
    I. If, by agreement, interest exceeding the legal rate be contracted for, although no more than lawful interest be reserved in the written securities, yet the contract is all void and the securities usurious; whether the usury is paid, or only promised (to be paid.) (Merrills v. Law, 9 Cowen, 65; 6 Wend. 268, Same Case in error, judgment reversed, but on different grounds—same doctrine maintained in Macomber v. Dunham, 8 id. 550; Hammond v. Hopping, 13 id. 505; Ord on Usury, 97; Comyn on Usury, 164.)
    II. Such security can not be purged of the taint of usury by any other agreement, contrivance or device; but if destroyed or canceled and new securities be taken for the original consideration without the usury included, the new securities will be valid, and the total annihilation, of the usurious securities is absolutely necessary for this purpose. (13 Wend; 505, above cited; Miller v. Hull, 4 Denio, 104; Ord on Usury, 105; Comyn on Usury, 183.)
    III. The bond is the principal security. The mortgage is incident or collateral to the bond, and was given to secure the payment thereof. (Jackson ex dem. Norton and Burt v. Willard, 4 John. 41; Jackson ex dem. Curtis v. Bronson,
      19 id. 325; Wilson v. Troup, 2 Cowen, 195; Runyan v. Messereau, 11 John. 534; Story’s Eq. Juris, sec. 1015; 1 Hilliard on Mort. 163, 164, 166, 171, 193, 306, 327, 385; 2 Hilliard on Mort. 60, 64, 69.) The bond was perfected at the date thereof, and it never was canceled, or reformed so as to make it valid, as there were no subsequent transactions about it. The mortgage as delivered at its date was a security against Barney, his heirs, subsequent purchasers and incumbrancers with notice. (1 Hilliard on Mort. 494, 496, 497; Tuthill v. Dubois, 4 John. 216.) Neither the renewal of the old, nor substitution of a new security between the same parties can efface the usury, nor further security. (Brinckerhoff v. Foote and Lathrop, Hoff. Ch.291; Clinton’s Dig. 3375.) The renewal therefore of the mortgage, or an acknowledgment thereof by the parties, could not efface the usury in the bond which was the principal security. If the bond falls, the mortgage must also fall, as collateral securities, even if valid can not be enforced by the usurer against the borrower. (Bell v. Lent, 24 Wend. 230.) The extinguishment of the bond extinguishes the mortgage. (1 Hilliard on Mort. 306, 307 and notes, 327 and cases cited.)

      S. E. Ohurch, for the respondent.
    I. The securities had not been perfected, and it was not too late to correct and purify the agreement upon which the security was to be delivered. There was no execution of the mortgage by Mrs. Barney so as to affect her interest, until she acknowledged it. (Jackson and others v. Stevens, 16 John. 110; Jackson and others v. Cairns and others, 20 id. 301; Doe and others v. Howland, 8 Cowen, 277.) Until such acknowledgment her right of dower. could be affected. (1 R. S. 742, § 16.) As to Mr. Barney, it was not a security. There was no subscribing witness, it was not acknowledged, could not be proved, and could not therefore be recorded, and by the statute could not take effect as against a purchaser or incumbrancer until acknowledged. (1 R. S. 738, § 137.) Mr. Barney could have defeated the mortgage as a security at any time, by conveying or incumbering the mortgaged premises. It was not a security so long as it remained, in the power of the mortgagor to defeat it.
    II. There was no delivery until execution—until the mortgage was fully executed. Possession by the grantee is not even prima facie evidence of delivery. (4 Pick. 520; 14 Peters, 327; 3 Metc. 109.) Until delivery, the contract was within the control of the parties, and could be reformed. (Wright v. Wheeler, 1 Camp. N. P. 165, note; Barnes and others v. Headley and others, 2 Taunt. 182; Early v. Mahon, 19 John. 147; De Wolf v. Johnson, 10 Wheat. 367; Hammond v. Hopping, 13 Wend. 505.) Having reformed the usurious agreement, and acknowledged and delivered the security upon the reformed agreement, it then took effect as a valid conveyance. (Doe v. Howland, 8 Cowen, 277; Jackson v. Phillips, 9 id. 94-113.)
   Selden, J.

The principle that when a written contract has been entered into, as security for money loaned at a usurious rate of interest, such written contract is not only void, but is incapable of being made valid by any new agreement between the parties, has long been recognized impliedly at least, and in the dicta of judges as one of the established rules of law applicable to usurious contracts. (Comyn on Usury, 183; Blydenburgh on Usury, 91; Barnes v. Headley, 1 Camp. 157, 165 note; S.C. 2 Taunt. 184; Hammond v. Hopping, 13 Wend. 505; Miller v. Hull, 4 Denio, 104.) The soundness of the rule when applied to some of the cases which may be included within its terms, in the sense in which those terms are ordinarily understood, may well be questioned. I do not find any decision applying that rule to facts similar to the present, and therefore think we are not embarrassed by precedents bearing upon the question. The proposition that an illegal contract can never be made' legal by any new agreement of the parties, no one will dispute; but when the incurable vice is transferred from the contract to the writing which represents it, and ■ it is held that a writing, which at one time represents an illegal contract, can never, by a subsequent arrangement between the parties, be made to represent a legal one, I think the doctrine is extended beyond any ground of reason upon which it can rest.

Where, by the new contract, the usurious agreement is not only abandoned, but the actual facts of the transaction are so modified that the writing' will truly represent a legal and not an illegal contract, no good reason is perceived why the parties may not properly agree to beep on foot the original writing as evidence of the new contract. The reason on which the contrary rule is supposed to rest is that the written .contract, being tainted by the" vice of its original illegality, can never be made valid by any subsequent agreement. But the vice of usury affected the substance of the contract, as well as the written evidence of it, and made the one as illegal as the other; and yet it is abundantly settled that the parties, by a subsequent agreement, may exchange the usury, and render the original consideration valid and effectual to sustain a new promise for the repayment of the money loaned, with lawful interest. I am unable to discover the propriety of the rule which concedes to parties the right, by a new agreement, to remove the taint of usury from the consideration or substance of the contract, and denies the right to remove it from. the written evidence of it, by such a change in the actual transaction as will make the writing represent a legal instead of an illegal contract. It may be said that the writing refers to the original contract, which was illegal, and not to the new contract, and this in one sense is true; but the same difficulty applies to the new contract in its substance, as that must be referred to its original illegal contract for its consideration, and if the vice which affected the consideration of the illegal contract is capable of being extinguished, why not the vice which affected the evidence of that contract? It can not ho denied, that in such a case, if the written evidence of the original contract were destroyed and a new instrument executed in its place, in the same words, so that one should he a fac simile of the other,- the substituted instrument would be valid. Take the case now before the court as an illustration of this position. If at the time of the repayment of the ten dollars which constituted the usury, the bond and mortgage now in suit had been canceled, and new ones executed bearing the same date and in the same terms, the new instruments would have been valid, because they would have truly represented a transaction from which the legal taint of usury had been expunged by the new contract; and yet the rule, which I am considering, would deny to the parties the power to make a valid agreement that the original bond and mortgage should stand as the lawful evidence of that new contract. Such a distinction places form above substance;- it gives to the written evidence of a contract an importance which it denies to the contract itself.

If A. makes a usurious contract with B., by which he loans to him $400 for a year, and takes a note for $500, and afterwards the parties agree to éxtinguish the usurious contract, by Increasing the loan to $500, and allowing the note to stand as evidence of the new and lawful contract, I think they may as well do so, as to cancel the old note and make a new one in the same terms. The transaction is in substance a surrender of the note, and a redelivery of it upon the new contract.

If parties make contracts in violation of law, they should be subjected to all the penalties which the law prescribes for such violation; but I am opposed to'any rules of interpretation or of evidence which will place unnecessary obstacles in the way of'parties who honestly seek to avoid such penalties by undoing the wrong, and rendering their conduct conformable to the law. I should therefore hold the bond and mortgage valid, even if they had been at first absolutely delivered in pursuance of the- usurious agreement.

The judgment in this case, however, may be sustained, whether it be possible to give validity, by a subsequent agreement, to a security once delivered in pursuance of a usurious contract, or not. The bond and mortgage in suit, prior to the abandonment of the usurious agreement, had not become valid and binding contracts. Laying the subject of usury aside, as not bearing upon the question of the delivery of the bond and mortgage, it is very certain tliat the plaintiff, on the refusal of the defendants to perfect the mortgage,' according to the agreement, could have returned the bond _ and mortgage to the defendant Barney, and maintained an action immediately against him for the thousand dollars.' (Graves v. Dudley, 20 N. Y. Rep. 79.) The delivery of the $1000 was not absolute,, but conditional. It was not delivered as a loan for the three and six years, except upon the condition that the defendants should perfect the security according to the agreement. This condition, whether expressed or not, is necessarily implied from the transaction. It can not be presumed that the plaintiff intended to receive the bond and mortgage in their imperfect condition, as perfected securities, and thus bind himself to allow the loan to remain for six years without the security for which he had contracted; .and although they were placed in his hands, I think they did not take effect as perfected and delivered obligations.

The delivery of a deed without acceptance is nugatory; (Crosby v. Hillyer, 24 Wend. 284,) and the mere taking of an instrument into his hands by the grantor and retaining it, of. itself amounts to nothing, where the circumstances show that he did not receive or hold it as an effective conveyance. (Jackson v. Richards, 15 Wend. 617.) The question of delivery, involving acceptance, is always one of intention depending on the circumstances of the transaction. (Bell v. Ingestree, 12 Ad. & Ellis, N. S., 317; Chouteau v. Suy dam, 21 N. Y., 179.) In some cases the intention is clear, in others it is doubtful; but the intention always determines the character of the act. An intention to deliver on the'one hand and to accept on the other, is necessary to give effect to the instrument. The delivery of a deed by the grantor to the grantee, to be held as an escrow, and to become effectual on the performance of some collateral act, is held to operate as an absolute delivery immediately. (Worrall v. Munn, 1 Seld. 229.) But this rule is applicable only where the deed is intended ultimately to take effect as a conveyance from the force of such delivery, without further act on the part of the grantor. But a deed may be delivered to the grantee to await his determination, whether he will accept it or not, (Jackson v. Richards, 15 Wend. 617;) or to be carried by the grantee and delivered to a third party, (Gilbert v. N. Am. Fire Ins. Co., 23 Wend. 43,) or to be examined and returned if found defective, (Graves v. Dudley, 20 N. Y. 77,) and as in the present case, to await complete execution by other parties, (Chouteau v. Suydam, supra,) without the "conclusive inference in any of the cases, that such delivery gives effect to the instruments. In every such case, when an absolute delivery was not intended, the grantee would be a mere trustee of the instrument for the grantor. If it be conceded, that in the present case, under its peculiar circumstances, the plaintiff on the refusal of the defendants to complete the execution of. "the mortgage, might have held the bond and mortgage as security, such as they would furnish in their unfinished state', for the return of the thousand dollars, this would be a right dependent upon his election, and until he made such election there would be no acceptance by him, which would bind him to allow the loan to remain for the" time agreed upon; even if his election, after their default thus" to hold them, would have that effect. Until such election should be made, which could not be made until after the other parties were in default, he would hold the instruments merely as their trustee. As no such election was ever made, if he had any such right, he never held the instruments, prior to their full execution, otherwise than as the defendant’s trustee. Ho distinction in this respect can be made between the bond and the mortgage. It is true that the bond was the principal obligation, and the mortgage collateral, and that the bond was complete in its form of execution, needing nothing in that respect to make its delivery complete. But in regard to delivery, the bond must stand on the same footing as the mortgage. Both were to be taken together as one instrument; the two, united, constituted the security which the plaintiff was to receive for his loan, and he was not bound to accept, and without direct evidence to that effect, should .not be held to have accepted either-, absolutely, until the execution of both was perfect.

The case of Bronson v. Noyes, (7 Wend. 188,) is in accordance with the principle which I have asserted. In that case Hoyes, as under sheriff, arrested the plaintiff, D. C. Bronson, upon a capias at respondendum. Bronson applied to his brother, H. 0. Bronson, to become bail on the arrest. He declined becoming bail, but told the sheriff he would see the plaintiff forthcoming in the morning. The sheriff said, “sign the bond, and he will get some other person to sign with you, or get other bail in the morningupon which the two Bronsons signed the bond, conditioned for the appearance of the plaintiff, (defendant in the capias,) on the return of the writ. The sheriff took the bond and the plaintiff was suffered to go at large. A few days afterwards the sheriff and H. 0. Bronson called upon the plaintiff to have him procure new or additional bail, and failing in that effort, the sheriff committed him to jail; whereupon the action, for false imprisonment, was brought. On these facts it was held, that there had been no delivery of the bond, and that consequently the plaintiff could not recover. Helson, J, delivering the' opinion of the court said, “ There must be a delivery as well as an acceptance to give validity to a deed. It is true, the bond was delivered to the defendant at the time of its execution, but for' what purppse ? If for the purposes expressed therein, then it would be valid; if as a mere deposit until additional security was obtained, clearly there was no delivery ; and if an escape had taken place, the defendant could not have enforced its obligation for indemnity. The mere manual tradition of a deed by the grantor to the grantee, or obligee, and nothing else, would be prima facia evidence of a legal delivery, but not necessarily conclusive and inexplicable. The. party may explain and rebut the prima facia legal effect of the act. This is not impugning the doctrine applicable to an escrow; it is only allowing a party to contest the delivery.”

The principle upon which that decision rests is clearly applicable to the present case, and I am of opinion, therefore, that the bond and mortgage, prior to the 27th of March, 1855, had never taken effect as delivered instruments, but were in ■ the hands of the plaintiff, awaiting completion, and acceptance. That before any effective delivery took place, the contract between the parties had been made legal by the repayment of the usurious premium, and that the bond and mortgage when first delivered to take effect, were delivered in pursuance of a lawful contract, which they correctly represented, and that they were therefore valid.

The judgment of the Supreme Court should be affirmed.

All the Judges were in favor of affirmance upon the ground last stated by Selden, J. without passing upon the question first discussed.

Judgment affirmed.


source: Caselaw Access Project

author: Selden, J. Rosekrans, J.

license: Public Domain

text:
    Werely, by his guardian, v. Persons.

    In an action for an assault and battery, the plaintiff’s complaints of pain and soreness, made to other persons, at the time and soon after the commisssion of the assault, are competent evidence in his own hehalf, in respect to the extent of the injury, in connection with other testimony.
    Appeal from the Supreme Court. The action was for an assault and battery. It was proved that the defendant kicked the plaintiff, a boy of 14 years, in his side. The plaintiff immediately complained that he was injured, and went away with his hand upon his side crying. He left the defendant’s, where he was at work when the assault occurred; and the next day commenced work for a farmer in the same neighborhood, where he cradled all day and continued to do .good days’ work regularly, afterwards. A man who worked with him and slept with him during this time, for two or three weeks, was allowed to testify, that when he slept with him he complained of pain and soreness in his right side, and said he could not sleep on that side because it hurt him. An objection to this testimony presents the only question in this case.

         Decided March Term, 1863.

   Selden, J.

I am not able to distinguish this case, in principle, from those of Aveson v. Lord Kinnaird, (6 East, 188;) Gray v. Young, (Harper, 38;) and Caldwell v. Murphy, (1 Kern. 416.) The declarations in this case are a little more remote than in the previous cases, and the circumstances are such as to throw more doubt upon their sincerity, but their remoteness was not such as to furnish a ground for their exclusion. I think it entirely safe to leave the question to the jury in all such cases, whether any and what credit shall be given to such declarations. As was said by Judge Johnson, in the case of Gray v. Young, (supra,) wherej in an action on the warranty of the soundness of a slave} the declarations of the slave were allowed to he proved against the defendant, “No evil can possibly result from such a principle; for if unattended by any external symptoms of disease, they never could gain credit. "Whatever might be the declarations, or complaints, no one would be accredited for them, who" exhibited all the appearances of robust health and vigor, without the most palpable demonstration of an existing disease.” The present case appears to me to illustrate the correcttiess of this reasoning. If the jury had given the least credit to the declarations of the plaintiff, as to the long continuance of his suffering, their verdict would probably have been much larger than it was.

I think the judgment should be affirmed,

Rosekrans, J.

The plaintiff, in this case, gave evidence tending to show that the immediate effect of the violence to his person, inflicted by the defendant, was to produce a pain in the plaintiff’s side. Soon after he was kicked by the defendant he came from the barn where he received the injury, to the defendant’s house, and as he went he walked lame and held his side, and upon being asked what was the matter, he answered that the pain was in his side. Soon after, the plaintiff left the defendant’s house to go to his father’s, and as he walked away he held his side and talked as if he were crying. On his way home he passed the house of a witness and was crying and holding his right side. The next day he went to one Cherritree’s to work, and remained for two months, and while there slept with one Q-eeley. The plaintiff was allowed" to prove by Greeley, notwithstanding the defendant’s objection, that during the entire two months the plaintiff in the night time complained of his right side, and said that he lay on his left side because it hurt him to lie upon his right side.

The only question in the case is whether this testimony was properly admitted. And that question seems to have been determined by this court in the case of Caldwell v. Murphy, (1 Kern. 416.) There a witness, not a physician, who attended upon the plaintiff for ten days after he received the injury complained of, was allowed to testify that during that time the plaintiff had invariably complained. This testimony was of the same nature as that given in the case under consideration. The character of the witnesses in the two cases is precisely the same. Phillips says, in his treatise on Evidence, (vol, 1, 182, Edw. ed.) the representations of a patient to his medical attendant who has an opportunity of observing whether they correspond with the symptoms to which they refer, appear to be entitled to greater weight than if made to an inexperienced person, and to afford stronger presumption that they are genuine; but that they are admissible in evidence, though made to another not a medical attendant. Greenleaf lays down the same, (1 Greenl. Ev. § 102,) and both of these authors say that when it is material to inquire as to the bodily or mental feelings of a party, the usual expressions of such feelings, made at the time in question, are in the nature of original evidence. This court, in Caldwell v. Murphy, (supra,) held that such evidence did not fall within the rule which excludes the. declarations of a party in his own favor; that it is admissible from the necessity of the case, and may safely be left to the jury in connection with the other evidence touching the alleged injured person’s condition. Within these rules the testimony objected to was properly admitted.

The judgment should be affirmed.

All the other Judges concurring,

Judgment affirmed.


author: Rosekrans, J.

text:
    J. Warren Tompkins v. George E. L. Hyatt and others.
    It may now be regarded as the established law of this state, that where a purchaser takes possession of premises under an agreement to purchase, he c'an not rescind,the contract without surrendering the possession; and that less diligence in perfecting the title is required of the owner when the purchaser is in possession than when he is not.
    A delay, on the part of the vendor, or his heirs, to deliver the deed, for a period of ten years after the time fixed by the contract, furnishés no ground for a rescission of the contract by the vendee, so long as he continues in the undisturbed possession of the premises, under the contract.
    And the vendee can not recover back the purchase money paid, so long as he retains the possession.
    If a demand of a deed, upon a tender of the purchase money, on the day the contract was to have been performed, will put the heirs of the vendor in fault, the subsequent taking possession of the premises, by the vendee, and occupation of them, will amount to a waiver of that default, as long as the vendee’s possession continues.
    But if the heirs of the vendor, or a part of them, are infants, and therefore incapable in law, at the time, of complying with the demand, the only legal course which the‘Vendee can take to enforce the liability cast upon the infant heirs by the contract of their ancestor and his death, is to apply to the court to compel them specifically to perform the contract.
    Where, in an action brought by the vendee, against the heirs of the vendor, for a specific performance, the court made á decree adjudging that the contract ought to be carried into effect, and that it should be specifically performed by the heirs, by their executing a deed, upon the payment of the purchase money; Meld, that the decree was a final order or decree which disposed of every question before the court, and absolutely concluded the parties, unless they appealed.

      Sdd, also, that such decree should be regarded as a bar to a subsequent action brought by the assignee of the vendee, to rescind the contract of purchase; and that the court below erred, in the subsequent suit, in disregarding the previous decree and in adjudging, in direct opposition to it, that the vendor should recover back the purchase money he had paid, &c.
    If a vendee takes possession of the premises, under the agreement, with knowledge of a defect in the title, he thereby waives all claim to relief on that ground.
    BA will also waive all claim to relief on account of such defect of title, by assenting to an order of the court directing a specific performance of the contract; and by his omission to appeal from such order.
    Where a vendee has occupied the premises, and enjoyed the undisturbed use of a water privilege, for a period of over twenty years, he will he held to have waived any right to damages on account of a defect in the title to the water.
    Appeal from the Supreme Court. The leading facts in the case are, that on the 8th of December, 1847, Joseph R. Hyatt made an agreement in writing with Columbus W. Seeley for the sale of four acres of land, with the buildings thereon, in Yorktown, Westchester county, for the sum of $5000, as follows: $3000 to be paid on the 1st day of April, 1848, and $2000 by “suffering the premises to remain mortgaged as they now are to Seth Whitney for $2000.” Hyatt, died on the 24th of March, 1848, leaving children, some, of them infants, and the agreement unexecuted. George E. L. Hyatt administered, and presented his petition to the Supreme Court, on the 6th of April, 1848, for a specific performance of the agreement, with Seeley’s consent indorsed thereon, that the prayer of the petition be granted. Regular proceedings were taken under this petition, and on the 6th of June, 1848, a final order was made authorizing a conveyance of the land according to the. terms of the agreement, which order proved to be defective, as hereinafter stated. Seeley appeared before the referee, and upon the hearing, when the order was made. This order contained a provision that either of the parties might thereafter apply to the court for its aid to carry the order into effect. A deed was tendered to Seeley under this order, and refused. Seeley on the 1st of April, 1848, took possession of the land and principal dwelling house, and the family of Mr. Hyatt moved into an old tavern and storehouse on the premises, where they lived till the 20th of J une, 1851, when they moved off and left Seeley in full possession, in which he continued till the sale under the judgment in this action. On the 6th of April, 1848, Seeley deposited in the Hew York Life Insurance Company $1500, which, with the interest at four per cent, was paid to George E. L. Hyatt on the 1st day of Hovember, 1851, under an order of the Supreme Court, on account of the purchase money, leaving the Whitney mortgage and fifteen hundred dollars unpaid. The order of the 6th of June was never appealed from, and remained in full force when this action was commenced. A motion was made by Hyatt to compel Seeley to perform. Judge Edmonds, on the 2d of October, 1848, directed a deed, with further covenants, to be tendered to Seeley. ■ This was prepared and submitted to the plaintiff in this suit, (who was at that time counsel for Seeley,) on the 7th of October, by Mr. Stoughton, the counsel for Hyatt, with a request that Mr. Tompkins would suggest any. alterations he might desire. This was returned on the 23d day of October, without any objection as to its form. On the 16th of November this deed was tendered to Seeley, who ’refused it. On the 20th of February, 1849, Judge Edmonds made an order that Seeley receive the deeds, or that an attachment issue. From this order Seeley appealed to the general term, where the order was affirmed, and then to the Court of Appeals, where it was reversed, upon grounds that had never been suggested or claimed by Seeley as an excuse for declining the deeds. (See Hyatt v. Seeley, 1 Kern. 52.) No interest having been paid on the Whitney mortgage since the premises passed into Seeley’s possession, it was foreclosed, and the property was advertised to be sold under a decree in that suit, on the 20th of June, 1851, on which day Seeley assigned the contract of sale and all his interest in the premises to the plaintiff. The plaintiff then paid to the sheriff the judgment on the Whitney mortgage, principal, interest and costs, amounting to the sum of $2633.06. No demand or request was ever made by the plaintiff for a deed, but the defendants, after the decision of the Court of Appeals, again tendered Seeley a deed, having had no notice of the assignment to the plaintiff. The plaintiff then commenced this suit, setting out as the foundation of his action the agreement of sale between Hyatt and Seeley, which is recited in the complaint, averring its binding force on the parties, and that Seeley had tried to perform it, and praying, among other things, for a specific performance of it. The answer admits the contract to be in full force; that the defendants have in good faith been making their best effort to have it performed, having been always ready and willing on their part to perform it since the order of June 6, 1848. The following facts, among others, were found at special term, viz: That such agreement was on the 8th of December, 1847, made and entered into between Joseph K. Hyatt and Oolumbus W. Seeley, as ip set forth in the complaint. That the said lands have never been conveyed to the said Seeley nor to the plaintiff. That no sufficient deed in execution or fulfillment of the said agreement has ever been tendered to them, or either of them; that neither of them has waived a performance thereof, nor any .right under the same, and that no proceedings had been instituted since the above mentioned judgment of the Court of Appeals, by the administrators and heirs of the deceased, or either of them, for the performance, in any court, o.n the 23d of June, 1857, (the time of the commencement of this action.) Thus finding the agreement to have been in full force and effect between the parties, when this suit was commenced.. Notwithstanding this finding, the decision at special term directed a judgment to be entered entirely disregarding the contract, and directing a sale of the premises under the judgment in. this case, and under the Whitney mortgage, and out of the proceeds to pay to the plaintiff, 1st, the costs and allowance in this suit and expenses of sale; 2d, the amount, due foi; principal, interest and costs on the 21st of June, 1851, on the Whitney judgment, and the interest thereon to the time of payment. These sums are to be paid in any event, (if the premises produce a sufficient amount,) without any deduction for the use and occupation by Seeley of the premise's since April, 1848. 3d. If there be a surplus, that the sheriff pay to the plaintiff the sum of $1500 deposited in the trust company, with interest (that is, at seven per cent) from the 6th day of April, 1848, to the time when it shall be paid, after deducting therefrom the amount which shall be found due for rent, use and occupation of the premises by Seeley or the plaintiff, to be established on a reference. This rent to be reduced by certain allowances, amounting to $500, for an icehouse and stone walls put on the premises by Seeley. The judgment entered upron this decision was affirmed by the general term, and the matters therein directed to be ascertained by a reference, were afterwards, reported upon by the referee, and an order thereupon made distributing the balance of the purchase money. The premises were sold under the judgment, on the 24th day of May, 1859, for $5000, out of which sum were paid the costs and expenses of the sale and of the action, and the amount paid by the plaintiff upon the Whitney foreclosure, with interest, leaving a balance of $393.73, which was subsequently distributed in pursuance of an order made at special term, in September, 1860, as follows: $120 were paid for referee’s fees in said accounting, and the residue paid to the plaintiff on account of the amount reported due him upon the accounting. After thus receiving the proceeds of the entire property, the plaintiff, according to the scheme of the judgment, is still unpaid the sum of $605.54 on his claims against these defendants. After the judgment of affirmance by the general term, and pending the reference as to the accounting, the defendants appealed to the Court of Appeals, giving the necessary security to.stay the execution of the judgment. That appeal was- dismissed by this . court, for the reason that the judgment appealed from would not be a final judgment, until the coming in of the report of the referee thereby appointed to take the account. • (Reported 19 N. T. Rep. 534.) Application was then made to the Supreme Court by the defendants, in accordance with the suggestion of the Court of Appeals, to stay the distribution of the proceeds of the sale, until by the filing of the report the judgment should be made final and appealable. This application was denied, and 'the proceeds were paid as before stated. The defendants appealed.

      Samuel E. Lyon, for the appellants.

      J. W. Tompkins, respondent, in person.
   Rosekrans, J.

The plaintiff should have been compelled specifically to perform the contract between Joseph R. Hyatt and Seeley, the plaintiff’s assignor, instead of being allowed to recover the payments made upon and' in pursuance of the contract, as if the contract had been rescinded. The ground upon which the decision appealed from was made, relieving the purchaser and his assigns from the obligation to perform the contract, and allowing the plaintiff to recover such payments and the value' of improvements made upon the premises by the purchaser, was the delay on the part of the heirs of the vendor to deliver a deed in fulfillment of the contract of their ancestor, for the period of nine years, the vendor having died a few days before the day fixed for the performance of the contract. The perfect answer to this position is, that the purchaser, in pursuance of a stipulation in the contract, entered into possession of the premises contracted to be sold to him, on the day when the contract was '.to have been performed, and retained such possession until after the trial of this action, a period of over ten years, during which time he paid the taxes and insurance upon the premises, and made permanent and valuable improvements thereon, to the amount of over $ 1150. And the plaintiff, as his assignee, paid the mortgage which the purchaser was to assume and pay as a part of the consideration of the purchase, and during that time neither the purchaser nor the plaintiff insisted upon a right to rescind the contract, either on the ground of any defect in the title to the premises or any delay in fulfilling the agreement. Aside from any influence which the order of the Supreme Court of the date of June 6, 1848, decreeing that the contract should be specifically performed, can have upon the case, the plaintiff was not in a position to abandon the contract, under the circumstances above alluded to, nor was the court* authorized to declare it rescinded, under the findings of fact. It may now be regarded as the established law of this state, that where the purchaser takes possession of the bargained premises under the agreement, he can not rescind the contract without surrendering the possession; and that less diligence in perfecting the title is required of the owner when the purchaser is in possession than when he is not. In More v. Smedburgh, (8 Paige, 606,) it was decided that the purchaser, in case he elected to rescind the contract, was bound to give up the possession of the property which he had taken possession of under the agreement; and that he was not at liberty, after occupying the premises for nine months without paying any thing for their use, to say to the vendor, “Our contract is at an end, but I shall continue to occupy the premises until I shall have no further use for them.” The Chancellor says: “ Here the answer insists upon a rescission of the contract before the complainant had cleared off the incumbrances and tendered the deed, and yet it is admitted in the same answer that the purchaser was in the occupation of the premises when the answer was put in.” Again he says: “As a general rule, if a vendor receives payment of a part of the purchase money after the time of payment fixed by the agreement has expired, or if the vendee continues in possession under the agreement long after the time specified therein for giving the deed, a court of equity may consider a strict performance at the day is waived.” In that case a specific performance was denied, and the decree was affirmed in the Court of Errors by an equal division of the court. (26 Wend. 328.) On that occasion Bronson, J. said that no adjudged cases could be found in which a contract was refused to be enforced when the purchaser had entered into possession of the bargained premises, andremained in possession at the filing of the bill for specific performance. In the case of Stevenson v. Maxwell, (2 N. Y. Rep. 415,) it was said by Gardiner, J., “Upon general principles I am inclined to think that whenever a vendee takes possession of premises as owner under a contract of sale of this description, he is bound to pay interest, whether the land is or is not productive, so long .as his possession is undisturbed, and the vendor is not in default; and that the omission to execute-a •conveyance before demand, and an offer to pay- the purchase money by the vendee, is not a default within the rule.” I shall show, hereafter, that the tender of purchase money in this case and demand 'of a deed did not put the heirs of the vendor in fault, and that they were waived by the vendee. In the case of Viele and others v. The Troy and Boston R. R. Co., (20 N. Y. Rep. 184,) the defendant was to take possession of land required for its track, and pay the damages to be determined by three appraisers, within ten days after notice of the appraisal, when the plaintiffs were to give a good and valid deed which should convey a title free from incumv * o brances. The award was. made, and within thirteen days afterwards the plaintiffs tendered1 a deed, which was refused because the premises were incumbered. The incumbrances were satisfied within five days'after wards. Immediately after the award, the defendant’s workmen commenced work upon the land, and the defendant continued in possession down to the time of the trial. Comstock, J. said, “ Some of the points which have .been urged on the part of the defendants might be worthy of a serious consideration, if they had not taken possession of the land in question fór the purposes of their road, and continued in occupation, so far as we know, to the present time. The defendants were not entitled to a nonsuit on the ground that an incumbrance existed against the land at the time a deed was tendered to them. The title, it is true, was to be clear of incumbrance, and if the defendants themselves acted upon the award by taking possession of the premises, it may be that they could resist a specific performance on the ground that the condition precedent was not strictly performed on the part of the plaintiffs.. Such a question need not be examined. The incnmbrancg wag satisfied eight days after the deed was tendered,- and. although this was after the time when a clear title was to have been made according to the terms of the submission, yet the defendants, by their own conduct, lost the right of insisting upon such ground of defense. If they were not content with the title offered to them, they should have specified the objection, and given up the possession of the land.” And a similar answer must be given to another objection prominently urged on-the argument before us. “The defendants offered to show that the abitrators allowed to be proved, and took into consideration, one or more items not embraced in the submission, and which could not legally form any part o.f the sum to be paid to the plaintiffs as a compensation for their land. It appears that both parties attended and were heard before the arbitrators, and the fact is not found, nor is it pretended, that the defendants took and retained possession of the land in ignorance of the irregularities which they offered to prove. In such circumstances they can not reject the award, even if it could be otherwise impeached, for misconduct or excess of power. If they intended to deny the validity of the decision, they should have kept away from the premises, or proceeded in some other manner to acquire the title. They did neither of these things, and having taken and appropriated the land with no other right to it than such as they took under the submission and award, they are, on the plainest principles, estopped from interposing a defense of this nature.” . And G-rover, J. said, “ The defendant having taken possession of the land, and continued such possession up to the trial of the cause, could not insist upon the failure of the plaintiff to tender a deed conveying to it an’unincumbered title within the time limited by the agreement. Such failure constituted no defense to the agreement.” In Gale v. Nixon, (6 Cowen, 445,) which was an action for the recovery of the purchase money, and the vendor had failed to deliver a deed within the time prescribed by the agreement, the vendor having taken possession pursuant to the terms of the agreement, and retained it to the time of trial, it was held not to he material that the deed was not tendered on the day fixed hy the contract. Sutherland, J. said: “ The defendants were in possession of the land. They do not offer to deliver up the possession and rescind the contract, hut seek to retain the land and avoid paying the -stipulated price. This- they can not do. They must either avoid the contract in toto, or else perform.” In Waters v. Travis, (9 John. 467,) twelve years had elapsed after the time fixed by the agreement for the delivery of a deed, during which time the purchaser had been in- possession of" the bargained premises. Spencer, J., delivering the unanimous opinion of the Court of Errors, said: “The lapse of time in a case like the present, where no material inconvenience has been suffered by the appellant, can be urged only on the ground that the agreement has lain dormant, and that this is evidence of the abandonment of it by the parties. Here has been a continued possession on the part of the respondent from the period of the agreement to this time, not as tenant liable to rent, but as holding under the agreement. The. continuance of the possession by the tacit consent of the appellant was a constant and continued affirmance on the part of the appellant, that the holding was under the agreement. This is irresistible evidence that the agreement was not abandoned by the parties, and their conduct was such as to leave no doubt that they both looked to the future performance of it. The fair and natural interpretation- of the act of .possession is, that it was because this agreement had been entered into and was expected by both parties to be performed.” These authorities are sufficient to show that the delay, on the part of the vendor or his heirs, to deliver the deed for a period of ten year's after- the time fixed by the contract, furnished no ground for a rescinding of the contract by the vendee so long as he continued in the undisturbed possession of the premises under the contract; and that the vendee could not recover the purchase money paid, so long as he retained the possession. If the demand of a deed, upon a tender of the purchase money, on the day the contract was to have been performed, put the heirs of the vendor in default, the subsequent taking possession of the premises by the vendee and occupation of them, amounts to a waiver of that default, as long as the vendee’s possession continues. But the demand did not put the heirs of the vendor in fault. It was made of parties who were incapable in law, at the time, of complying with the demand. Two of the heirs of the vendor were then infants. They could not alien the lands. They could neither assent or dissent to the demand. The only legal course which the vendee could take to enforce the liability cast upon these infants by the contract of their ancestor and his death, was to apply to the court to compel them specifically to perform the contract. (2 R. S. 5th ed. 275, §§ 97 and 99.) The adult heirs were not put in default by the demand. Two of them were not present when the demand was made. Those who were present proposed to prepare a deed in a few weeks, and this was assented to by the vendee. All of the adult heirs subsequently offered to comply with the demand by tendering a deed in pursuance of the order of the court, bearing date the 6th of June, 1848, which was obtained upon the joint application of the adult heirs and the vendee. The deed, with the covenants of the adult heirs, was certainly unobjectionable, so far as related to the interest which had descended to them. But if these > views are not correct, the taking and continuing in possession of the bargained premises after the demand was made, within the authorities referred to, was a waiver of any default by reason of the demand not being complied with.

I am also of the opinion that the order of the 6th of June, 1848, should be regarded as a bar to the. plaintiff’s action. It is an adjudication in relation to the subject of this action made in a proceeding to which the vendee was a party. As was held by this court in the case of Hyatt v. Seeley, (1 Kern. 52,) it was a final order which disposed of every question before the court and absolutely concluded the parties, unless they appealed. It adjudged that the contract ought to be carried into effect, and that it should be specifically performed. It decreed that nine of the eleven heirs of the vendor should execute and deliver a conveyance of all their interest in the bargained premises, and that upon receiving that deed the vendee should pay the sum of $3000, and assume the payment of the Whitney mortgage and interest; provided that either of the parties to the proceeding might apply to the court for its aid to carry that order into effect. Assuming that the conveyance, directed by the order to be given, would not convey a perfect title to the bargained premises to the vendee, still the ofder was' valid so far as it adjudged that a specific performance should be decreed, and as to the direction that some of the heirs of the vendor should convey, and as to its final" provision authorizing either of the parties to the proceeding to apply to the 'court for its aid to carry the order, into effect. That provision was sufficient to enable the* vendee to obtain the interest in the premises of the two remaining heirs of the vendor. The omission of their names was doubtless a clerical error, which would have been corrected upon motion. The defendants rely upon this order in their answer as being still in force, and it is found by the court to have .-been made. It has never -been appealed from-. The decision of the court, in relation to the subsequent proceedings taken to enforce the order of the fith of June, 1848, do not affect that order. The parties' should •have proceeded upon and under that order to effect the specific performance of the agreement. The rights of all parties could have been protected by such proceedings.

The court erred, in the case under consideration, in disregarding the order of the 6th of June and adjudging in direct opposition to it, that the agreement should be rescinded and that the plaintiff, should recover the purchase money paid1 upon' it and the money paid on the Whitney mortgage, which the order adjudged that the vendee should assume and pay.

The plaintiff alleges in hig complaint that at the time he made the purchase the premises were supplied with water, by conducting the same from a spring on the lands of an adjoining owner. That the vendee believed Hyatt had a legal right to the water of the spring and to conduct it as it was then conducted; that this privilege was of great value to the premises, but that after Hyatt’s death he had discovered that Hyatt had only a verbal license thus to use the water, which could at any time be revoked, and he asks damages to the amount of $500 for failure of title to the water. The defendants denied the allegation that the water privilege was of great value to the premises, and no evidence was given on that point,'nor is there any finding in relation to it. From the facts appearing in the case and the allegations in the pleadings, neither thé plaintiff nor Seeley were entitled to any relief on the ground of want of title in Hyatt to the. water, and the pipes by which it was conducted. For aught that appears in the complaint, Seeley knew of the defect of title before he took possession of the premises under the agreement. It is alleged that he made the discovery of Hyatt’s want of title after the death of Hyatt, which occurred a week before the time for fulfilling the contract and the day Seeley took possession. Seeley did not testify where he acquired his knowledge off this defect of .title. He made the same omission in his affidavit to obtain a rehearing of the order, which was finally reversed by this court. The inference is fair, from these circumstances, that, he had such knowledge on the day the contract was to have been fulfilled; and if so, he waived all claim to relief on that ground, by taking possession of the premises. He also waived it by assenting to the order of the 6th of June, and by his omission to appeal from that order. It may be that the court, at an earlier day, would have relieved the vendee upon satisfactory evidence that he was mistaken in the effect of that order, and that the loss or danger of loss of the water privilege materially affected the value of the premises. But after so long a delay, during which time the vendee occupied the premises, and for aught that appears enjoyed the undis» turbed use of the water as it was accustomed to run since 1838, a period of over twenty years, the vendee and the plaintiff should be held to have waived any right to damages on account of the defect of title to the water.

The judgment in this case should be reversed, the parties should be restored to the condition which they occupied when this action was commenced, and the plaintiff should be directed to take proceedings under the order of the 6th of June, 1848, to perfect his title to the premises.

Weight, Davies and Baloom, JJ. concurred.

Selden and Emott, JJ. were for affirming the judgment. Marvin, J, was in doubt.

Judgment reversed.


author: Emott, J.

text:
    Frederick A. Conkling and others v. Chester F. Shelley, Sheriff, &c.

      A chattel mortgage of “ all the dry goods, boots and shoes, millinery goods, and gentlemen’s furnishing goods and stock in'trade now in the store occupied by” the mortgagors, is neither fraudulent on its face nor invalid by' reason óf the generality and indefiniteness of the description.
    It can be rendered sufficiently definite by evidence of the facts as to the goods in the store at the time, and will convey whatever in fact* answers the description.
    An agreement between a mortgagor and mortgagee of chattels that the former shall continue in possession, and that while thus in possession, he shall sell the goods, from time to time, and pay over the proceeds to the latter, is not unlawful, or fraudulent j)®1 se.

    But in such a case the mortgagee makes the mortgagor his agent, and .the latter’s dealing with the property, under the agreement constituting him such, must be considered as the act of an agent and not of a mortgagor, and will affect Ms principal accordingly.
    And the sales made, and proceeds received by the mortgagor, under such an arrangement, should he applied in payment and satisfaction of the mortgage ; whether the money is ever actually paid over to the mortgagee, or not. -
    This was ah action of replevin. The plaintiffs claimed the property by virtue of a chattel mortgage made to them February 28, 1857, by Peter M. J: Mitchell and James H. Dewey, and the defendant justified his taking' the property as sheriff, by executions upon judgments against Mitchell & Dewy. At the trial the plaintiffs introduced the mortgage. The property was described as “all the dry goods, boots and shoes, millinery goods, and gentlemen’s furnishing goods and stock in trade now in the store occupied by the said parties of the first part, at the village of Niagara city.” The mortgage recited the indebtedness of the mortgagors to the mortgagees, and conveyed the property for securing the payment thereof. The condition was for the payment of $2134.27 in three months with interest. In case of non-payment, the mortgagees were authorized to take possession, sell &c. So also if the mortgagees considered themselves unsafe, they might take possession and sell even before it was due. The defendant objected to the mortgage for insufficiency of description. The objection was overruled and the defendant excepted: The plaintiffs gave evidence of an agreement between their agent and the mortgagors, that the latter should sell the goods and remit the proceeds to the plaintiffs. It was proved that the mortgagors had sold more than enough property to satisfy the mortgage debt, and applied it to other claims, and there was conflicting evidence as to the consent of the plaintiffs to such application. The judge was requested to charge - that the. mortgage was void for uncertainty in its description of property. He declined, and the defendant excepted. He was requested to charge that the agreement that the mortgagors might sell, being then in possession, made the mortgage void. He declined, and left the question of good faith to the jury. The defendant excepted. He was requested to charge that if sales had been made by the mortgagors to an amount sufficient to satisfy the mortgage, the plaintiffs could not recover. He declined and the defendant excepted. The plaintiffs had a. verdict and judgment, which was reversed upon appeal, and a new trial ordered. From the order granting a new trial the plaintiffs appealed to this court and stipulated.
   Emott, J.

The case of Gardner v. McEwen (19 N. Y. Rep. 123) is in point to show that the mortgage held by the plaintiffs was neither fraudulent on its face nor invalid by reason of the generality and indefiniteness of the descriptions. It was a mortgage of “all the drygoods, boots and shoes, millinery goods, and gentlemen’s furnishing goods and stock in trade then in the store occupied by” the mortgagors. This, although general, could be rendered sufficiently definite by evidence of the facts as to the goods in the store at the time, and would convey whatever in fact answered the description.

f Where a mortgage contains a clause permitting the mortgagor not only to remain in possession, but to dispose of the mortgaged property at his discretion and apply the proceeds to his own benefit, it will be void as a fraud upon creditors. (Edgell v. Hart, 5 Seld. 213.) Where such agreement is made between the parties, outside of the mortgage but at the time of its execution, I should be inclined to agree with the idea expressed by Judge Denio in Edgell v. Hart, and in Gardner v. McEwen, that it would invalidate the instrument, in the same manner as if it were written in its provisions. At all events it would be irresistible evidence of a fraudulent purpose. But this case differs from those in the very material fact that here the agreement was that the mortgagors, while permitted to continue in possession, might sell the mortgaged property, not for their own benefit, but for the mortgagees, accounting to them, and applying the proceeds of their sales to the satisfiaction of the debt which the mortgage was given to secure. It was to be implied from the opinion in Ford v. Williams, (3 Kern. 577,) and was expressly decided in the same case in 24 N. Y. Rep. 359, that such an agreement is not unlawful or fraudulent per se. It is, I think, in this case open to no such exception. The agreement is, first, that the mortgagors should continue in possession and next, that while they did so continue, they should sell the goods from time to time and pay over the proceeds to the mortgagees. The continuance in possession of the mortgagors is evidence of fraud, by the statutes, and, unexplained, is conclusive. But that is a question- of fact, and was properly submitted to the jury. The further agreement, that while so in possession they should make sales of the property for the benefit of the mortgagees, was simply creating them agents to do what the statutes and public policy’require mortgagees themselves to do, or to excuse themselves for not doing, viz. to make immediate and direct application of property of this description when it is mortgaged, to the payment of the debt. If the retention of the possession by Mitchell & Dewy is explained and excused as consistent with good faith, which we must assume upon the verdict of the jury to be the fact, sales by them for the benefit of the mortgagees and in satisfaction of the debt, were neither a fraud nor an injury to other creditors, but the contrary. #

But the Supreme Court reversed the judgment, and order-j ed a new trial in this case, on the ground that the sales made ¡and. proceeds received by the mortgagors,' under such an arrangement between them and the mortgagees, should have been applied in payment and satisfaction of the mortgage, whether the money was ever actually paid over to the mortgagees or not. In this I think they were right. Such an \agreement made the mortgagors agents of the mortgagees, ' Their possession and their sales were in effect those of the mortgagees. It was as. if the latter had taken possession ' and placed a third person in.charge as agent to sell and account to them. They could not have escaped from crediting on their indebtedness the proceeds of sales made by such an agent, because he had fraudulently or dishonestly misapplied or employed the money. As far as this part of the transaction was concerned, Mitchell & Dewy were the agents and not the debtors or mortgagors of. the plaintiffs, and their acts must be regarded accordingly. The case does not resemble that of a mortgagor of real estate who receives the rents and profits under an ■ agreement to pay them over to the mortgagee. The mortgagee óf lands has no fixed real right or title to their rents and profits, and could not be charged with them if the mortgagee should voluntarily agree to account for them and then fail to' perform his agreement.

It is true that the execution. creditors pan only levy upon the interest of the mortgagee in the goods. But the extent or amount of that interest depends upon the amount due upon the mortgage. ' All that remains after satisfying the mortgage belongs to the mortgagor, and is subject to the executions, and must be applied upon the judgments in the sheriff’s hands. It is not a question between the mortgagagees and the mortgagors, who of course could not take advantage of their own wrong, and who remain liable to the plaintiffs for the money received and misapplied by them. But the question here is between the -mortgagees and other creditors who have obtained a lien or an interest in the mortgaged property after the satisfaction of the mortgage. The mortgagees have made the mortgagors their agents, and their dealing with the property under the agreement constituting them such, must be considered as the acts of agents and not of mortgagors, and will affect their principals accordingly. The moneys received by them from sales were in legal effect received by the mortgagees, not because the sales were a fraud upon their creditors, but because they were made by authority and for .the benefit of the mortgagees, and the mortgagors in making them may he looked upon simply as their agents, as' third persons would have been.

I agree with the .view taken by the Supreme Court of this part of the case. Their order should be affirmed.

Davies, J, read an opinion in favor- of reversal.

All the other Judges concurring with Emott, J.,

Judgment affirmed.


author: Davies, J.

text:
    Smith Ely v. George Cooke and others.
    Where the defendant in a suit, after the commencement thereof, and previous to the trial, made an ■ agreement with his attorneys that his costs, to be recovered in that action, were to belong to said attorneys; and after a judgment had been recovered by him, for costs, in that action, he assigned the judgment to his said attorneys; Held that the agreement was good and valid; that the assignment passed to the attorneys the costs and judgment ; and that the plaintiff in the suit had no right to set off, against such judgment, to the prejudice of the attorneys’ rights, a judgment previously recovered by him against the defendant.
    When the affidavit annexed to the petition of an insolvent, in proceedings under the two-thirds act was not sworn to by him before the judge, nor subscribed by the judge prior to granting the order for the creditors to appear and show cause; Held that there was a fatal defect in the proceedings, which rendered the assignment and discharge void, for want of jurisdiction in the officer; and that a subsequent verification of the petition would not cure the defect.
    A judgment by confession was entered upon the following statement of the nature of the indebtedness: 1. The sum of $1500 for cash borrowed of . the plaintiff from time to time, for which he held the note of the defendant, dated &c. 2. That the plaintiff had assumed for the defendant the payment of $2000, for which the latter had given the former his two notes fór $1000 each, payable &c. Held that this statement conformed to the requirements of the code. '
    Appeal from a judgment of the New York Common Pleas. The action was brought to compel the defendant Cooke to set off and allow a judgment recovered by him against the plaintiff, upon a judgment which the plaintiff had previously recovered against Cooke, to a much larger amount. The facts found by the judge who tried the cause are: 1st. That on or about the 29th day of November, 1850, the defendant G-eorge Cooke confessed a judgment in favor of the plaintiff, Smith Ely, for the sum of $3550, and that there was due thereon to the plaintiff the sum of $1555, and interest from the 15th day of Hay, 1851. [This confession was accompanied-by the following statement'of the nature of the indebtedness: “ The defendant has, from time to time, borrowed, of the plaintiff money, and there is now due to the plaintiff from the defendant the sum of fifteen hundred dollars for cash borrowed, for which the plaintiff holds the note of defendant, bearing date the 12th day of November, 1850, and payable six months after date. The plaintiff has assumed for the defendant the payment of the sum of two thousand dollars, for which the defendant has given to the plaintiff two notes made by said defendant of one thousand dollars each; one payable in sixty days from the 12th of November aforesaid, and the other in ninety days from said date.”] 2d. That the defendant George Cooke, on the 29th day of October, 1856, recovered a judgment in the Supreme Court of this- state in an action pending therein, wherein Smith Ely was plaintiff and .George Cooke, Joel W. Foot and Thomas Gross were defendants, against the said Smith Ely, the plaintiff in this action, for the sum of $382.42, being for costs in that action. [That action was brought by Ely, against Cooke, Foot and Gross, to set aside a voluntary assignment made by Cooke to Foot- and Gross.] 3d. That on or about the, 12th day of, September, 1851, the said George Cooke, as an insolvent, presented his petition to Frederick A. Tallmadge, then recorder of the city of New York, for a discharge from .his debts, under the the statute commonly called the two-third act, and that such proceedings were afterwards had in said matter; that on the" 31st day of December the said recorder granted to the said George Cooke a discharge from his debts. That the affidavit annexed to the petition of the said insolvent was not sworn to by said petitioner before the recorder, nor subscribed by the recorder prior to granting the order for the creditors tó appear and show cause why the discharge should not be' granted. 4th. That after the commencement of the said action, in which the judgment in favor of George Cooke against Smith Ely was rendered, and after the answer was put in and before any trial therein, an arrangement and agreement was made between the said George Cooke and the defendants J. & E. H. Sherwood, his attorneys in that action, by which the costs of said defendant, to be recovered in that action, were to belong to the said attorneys, and that after said" judgment, and on the 6th day of November, 1856, said George. Cooke assigned such judgment to the defendants Sherwood. And thereupon the said judge found as conclusions of law r 1. That the discharge granted by the recorder to the defendant George Cooke was void, for want of jurisdiction. 2. That tli» judgment in favor£of Smith Ely against the defendant George Cooke was a good and valid judgment, subsisting against the said Cooke to the extent of $1555 and interest. 3. That the agreement made between the said defendant Cooke and the defendants Sherwood, his attorneys, and the assignment of said judgment to them, were good and valid, -and passed .thereby to said defendants Sherwood the costs and judgments recovered therefor in favor of the defendant' Cooke against the said plaintiff Smith Ely. 4. That the plaintiff, by reason of said agreement between the defendant Cooke and his attorneys Sherwood, in this action, had no right to set off the amount of his said judgment, or any part thereof, recovered in his favor, against said George Cooke, against said judgment recovered in favor of Cooke against Smith Ely. Judgment was given, at the special term, in favor of said Sherwoods, dismissing complaint as to them with costs, and judgment against said George 'Cooke for the costs of said action. And on appeal to the general term of the Hew York Common Pleas the judgment as to the Sherwoods was affirmed and that as to George Cooke was reversed, and the complaint as to him was also dismissed with costs,
       The plaintiff thereupon appealed to this court.

      G. Bainbridge Smith, for the appellant.
    I. This court having held that a judgment "by confession is valid as between the parties, though the statement on which it is founded is insufficient, and the court below having held otherwise, so much of the judgment of the general term reversing the judgment of the special term should be-reversed. (Miller v. Earle, 24 N. Y. Rep. 110; Neusbaum v. Keim, Id. 325; see Ely v. Cooke, 2 Hilt. 406-421.) 1. The statement on which the' judgment was entered .is sufficient. (Hopkins v. Nelson, 24 N. Y. Rep. 518; Neusbaum v. Keim, Id. 325; Freligh v. Brink, 22 id. 418; Lanning v. Carpenter, 20 id. 447.) 2. The judgment was not in issue, and by the pleadings its validity is admitted.
    II. The discharge procured by the defendant Cooke under the two-third act is void, for the defect in the affidavit above stated. The officer who granted it acquired no jurisdiction. (2 R. S. p. 17, § 7; Small v. Wheaton, 4 E. D. Smith, 306; Rusher v. Sherman, 28 Barb. 416; Stanton v. Ellis, 16 id. 319; S. C., 2 Kern. 375.)
    III, The lien of an attorney for his costs is subordinate to the equities existing between the parties, and' the court was bound to adjudge the set-off. (Nicoll v. Nicoll, 16 Wend. 446; The People v. N. Y. Com. Pleas, 13 id. 649; Martin v. Kanouse, 17 How. Pr. Rep. 146; 9 Abbott, 370.) 1, The code has not changed the rule. The lien of an attor* ney did not arise from any fee bills, but was established by a long current of authorities. (See 1 Abb. Dig. 346; Rooney v. Second Avenue R. R. Co., 18 N. Y. Rep. 368.) 2. The attorney was always regarded as the equitable assignee of the judgment, to the extent of his claim for services in the action. The conversation between one of the attorneys .and the defendant Cooke, which the court below construed into ££an arrangement.and assignment” of the costs to be recovered, transferred to the attorneys no greater interest than the law conferred without such an arrangement and aggreement. (Wilkins v. Batterman, 4 Barb. 47; Nicoll v. Nicoll, 16 Wend. 446.) 3. The plaintiff’s judgments existed at the time the suit was commenced, on which the defendant Cooke recovered his judgment for costs. The attorneys had notice of the plaintiff’s judgment—1st, the costs of the defendant were in the discretion of the court; 2d, and the court, 'in awarding them, reserved to the plaintiff the right of set-off; 3d, the costs did not exist until they were awarded, and at that moment the right of set-off attached. (Code of Procedure, § 306; Travis v. Waters, 12 John. 500.) 4. The defendants Sherwood took the costs and the judgments in favor of the' defendant Cooke, like any other assignors of a chose in action, subject to all the equities which existed against them in the hands of the assignor, “including the equitable right of set-off, if any such right existed against the assignor.” (Gay v. Gay, 10 Paige, 369.) 5. The right of set-off is a statutory right, and the plaintiff’s right to set off can not be defeated by any secret agreement between the defendant and his attorneys. (Nicoll v. Nicoll, 16 Wend. 446; Martin v. Kanouse, 17 How. Pr. R. 146; Simson v. Hart, 14 John. 63.)
    IY. It is submitted that the judgment should be reversed and a new trial granted, or that the rights of the parties be determined by the court without a new trial.

      M. A. Oram, for the respondents.
    I. The right to get off judgments, whether on motion or by hill, is ,a merely equitable right. “On a bill filed, the ground on which relief is granted is the equitable control which the courts are authorized to exercise over the parties and proceedings in causes before such courts, to prevent injustice.” (Per Chancellor in Dunkin v. Vandenbergh, 1 Paige, 623.) There is no provision of the statute of set-off providing for a set off in this case. There is not a single clause that authorizes it. The notion that it is a statutory right is a groundless error.
    • II. The right of set-off of judgments is not superior in equity to the equity of the attorney’s lien; and to allow the set-off does “not prevent,” but does injustice. The King’s Bench in England would not allow the right of set-off to prevail over the attorney’s lien. Sor would the court of chancery in this state. (Dunkin v. Vandenbergh, 1 Paige, 623.) The English Common Pleas having followed a. different-rule, all the English courts, by a rule binding on all the courts, in 1832, agreed to protect the attorney’s lien as paramount to the right of set-off. (The People v. N. Y. Com. Pleas, 13 Wend. 650; Nicoll v. Nicoll, 16 id. 446.)
    III. In this case there is a still higher equity, which renders the preceding points immaterial, viz. a valid contract made between the attorney and client before the costs are earned, the consideration of which on one side is the service to he rendered, and on the other side the right to the costs. The costs, as soon as earned, become by the contract the property of the attorney, and never having been the property of the client, no set-off could or ought to be made of a judgment against the client; the client has never had any interest in the judgment. Surely, to allow the set-off in face of such a contract would do, and not “ prevent,” injustice. (See Robbins v. Alexander, 11 How. 106.) That the contract was valid, see 2 Sand. 141; and 1 E. D. Smith, 318.

      IV. The judgment in the case of Ely v. Cooke can not be set off against a judgment for costs in the case of Ely v. Gooh, Foot and Gross. Upon the records in the two cases, the debts are not mutual or due to and from the same persons. (Barber v. Spencer, 11 Paige, 517; Dale v. Cooke, 4 John. Ch. 11; Wolfe v. Washburn, 6 Cowen, 261; Warner v. Barker, 3 Wend. 400.)
    V. The judgment by confession against George Cooke is void, because the statement necessary to authorize the entry of judgment by confession without action is clearly insufficient. The first part of the statement omits to set forth the dates or amounts or particulars of cash borrowed. The fact that a note was given, does not obviate the difficulty: (Chappel v. Chappel, 2 Kern. 215; Neusbaum v. Keim et al., 24 N. Y. Rep. 329, 30.) The second part is still more uncertain, in not showing whether any debt is due by the defendant to the plaintiff, in omitting dates and amounts, and in omitting to show how, when or where any debt was assumed by the plaintiff.
    VI. This question is jurisdictional, as' there is'no control by the court over this statutory proceeding without action, until a valid judgment is entered, when the court acquire for the first time jurisdiction by virtue of their control over their own judgments. Such a judgment is not merely irregular ; it is void. The statement must be sufficiently full and accurate to conform to the statute. “It constitutes a condition precedent to the right of the party to confess the judgment.” (Dunham v. Waterman, 17 N. Y. Rep. 14.) The defendants Sherwood may raise the objection as creditors of Oooke, and Oooke himself may raise the question as one of jurisdiction. There is no proof of the bona fides of the judgment, as in the cases-of Neusbaum v. Keim, and Miller v. Earle, (24 N. Y. Rep. 325.)
    VII. The insolvent’s discharge is not Void. _ The proof of the manner of taking the affidavit is not sufficient to authorize the finding of the fact; and the plaintiff’s part of the judgment obtained at special term was reversed at general term. The finding in that respect is, therefore, not conclusive.

       See 2 Hilton, 406, S. C.

   Davies, J.

If the plaintiff is not entitled to the set-off claimed, upon the facts found, it is of no importance, so far as the defendants Sherwood are concerned, to consider the other questions raised, namely, whether the plaintiff has or has not a valid judgment, against Cooke, and whether the discharge of Cooke under the insolvent laws was toid or not.

Assuming the judgment to be valid, "and the discharge void, the plaintiff clearly would be entitled to no. relief in this action against the defendants Sherwood, if the conclusion of law of the. judge is correct, viz. that the agreement made between Cooke and'the Sherwoods was good and valid, and the subsequent assignment of that judgment by Cooke to them passed to them the said costs and judgment. If we adhere to the case of Rooney v. The Second Avenue R. R. Co., (18 N. Y. Rep. 368,) there would not seem to be much doubt upon this subject. • In that case it had been agreed between the plaintiff and his attorney, that the latter should commence and prosecute that action to its final termination, without fee and at his own risk, and upon his final success, he should receive for his services one half of the recovery, and if the amounts should not exceed $600, he was also to. have the taxable costs. The plaintiff gave the attorney an irrevocable powér of attorney to' receive'the amount of the recovery, and this court held that the.attorney had a lien upon the judgment recovered-by him, for his services. That the legal measure of these services was the taxable costs, so that it always happened that the extent of the lien was equal to the costs recovered in the action. And cases were cited showing that to this extent the attorney was regarded as the equitable assignee of the judgment. Judge Habéis, in his opinion, says, that the principle upon which the right of the attorney to the protection of his lien had been sustained is certainly unaffected by the code. As in other cases of lien, the attorney is protected, because it is by his labors and skill that the judgment has been recovered. In that case, the agreement between the attorney and his client was sustained; thus holding that the attorney, independent of any agreement, had a lien upon the judgment recovered, for his costs, to the extent of the amount thereof, but that it was competent for the attorney and client to fix a larger or different amount of compensation; and the right of the attorney, under such agreement, would be protected. That case is therefore an authority directly in point to sustain the judgment rendered in this action. The agreement made here is a fact established in this case, and it can be decided on that ground, independent of the question of lien of the attorney for costs, as such. Here the attorney was to have-the whole amount of the recovery, as his compensation for carrying on the defense to the action prosecuted by this present plaintiff, to set aside Cooke’s assignment. It was lawful to make such an agreement. It was based upon a good consideration, namely, services rendered and to be rendered in the defense of that action. After such agreement was made, Cooke ceased to have any interest in the'recovery in that action. Whatever judgment he should recover therein, of right belonged to the defendants. Sherwood, and not to the defendant Cooke. In executing to them the assignment of November 6,1856, he did but do what in equity he would have been compelled to do. The plaintiff has therefore no legal or equitable claim to have this judgment, which, although recovered in the name of Cooke, did not in-fact belong to him, nor had he any interest therein, applied in reduction of the debt which Cooke owes to him, upon his judgment. The judgment, therefore, of the New York Common Pleas was in all respects correct, and should be affirmed with costs. But the judgment of the general term reversing that of the special term, against the defendant Cooke, must be reversed, and the judgment of the special term against him affirmed with costs. The plaintiff’s judgment against him was valid, and in all respects a compliance with the provisions of the code. The statement conforms to its requirements, and the assignment and discharge of the defendant' Cooke were void, for the reason that the recorder had no jurisdiction of the proceedings. There was a fatal defect in these proceedings, in that the affidavit annexed to the insolvent’s petition was not' sworn to by him before the recorder, nor subscribed by the recorder, before granting the order for the creditors to appear and show cause. The subsequent verification of the petition did not cure this defect; and the special term of the Common Pleas, therefore, correctly held the discharge to be void. The plaintiff was entitled, therefore, to a judgment against the defendant Cooke, declaring such assignment and discharge void, and for the amount due to him.

^ Baloom, J. read an opinion in favor of reversing the judgment appealed from, and for a new trial.

All the other judges concurring with Daviés, J.

Judgment affirmed as to the defendants J. & B. H. Sherwood, and reversed as to the defendant Cooke; and the judgment of the special term against him affirmed with costs.


author: Selden, J.

text:
    Van Alstyne and others, ex’rs &c., v. P. E. Van Alstyne.
    A testator, by his will, executed in 1850, after giving certain real and personal estate to his son P. E., ordered him to pay the testator’s debts, and to pay an annuity to his brother John", for life. He gave other real and personal property to two other sons, Hugh and James, and then directed as follows: “I release and acquit all and each of my children from any charge I have made against them, or either of thqm.” In March, 1855, he executed a codicil to the will, by which he revoked the direction to P. E. to pay an annuity to John, and also the order to pay debts. The testator died in 1857, owing no debts, and possessed of considerable personal estate, including two notes executed to him by P. E., the one dated in November, 1854, and the other dated in April, 1856. Sold, that the words of the will, “from any charge I ham made," showed an intention on the part of the testator to limit the release to charges existing at the time when the will was executed. But that the codicil amounted to a republication of the whole will, not revoked by the codicil, and must be held to speak, in regard to the release of charges, as of the time of the execution of the codicil.

      Sold, also, that the words of the will, releasing the testator’s children from “any charge I have made against them, or either of them,” could not be held applicable to promisstiry notes, so as to release the notes of P". E. held by the testator.
    Appeal from a judgment of the Supreme Court, in an action brought to recover the amount of two promissory notes executed by the defendant to the plaintiffs’ testator, of which the following are copies:
    “$1157. For value received, I promise to pay Adam Van Alstyne, or bearer, eleven hundred and fifty-seven dollars, with interest from date. Stuyvesant, November 1,1854.
    P. Edward Van Alstyne.”
    “$1000. One year after date, for value received, I promise to pay Adam Van Alstyne, or bearer, one thousand dollars, with use. Stuyvesant, April 1, 1856.
    P. Edw’d Van Alstyne.”
    [Indorsed.] “1857, April 6. Eeceived seventy dollars, for one year’s interest on this note, to 1st inst.”

      The only defense relied upon was, that the notes were released by the will of the payee, Adam Van Alstyne.
    On the trial, before Hr. Justice Peckham, without a jury, at the Columbia circuit, in September, 1860, in addition to the giving of the notes, the following facts were found, as certified by said justice, viz: That on the 29 th of June, 1850, the testator made his last will and testament, whereby, after giving certain real and personal estate to1 his. son, (the defendant,) he ordered him to pay the testator’s debts, and to pay an annuity to his (defendant’s) brother John during his natural life; he gave other real and personal property to two other sons, Hugh and James, and then directed as.follows : “I release and acquit all and each of my children from any charge I have made against them, or either of them.”
    On the 20th of March, 1855, he made a codicil to the will, by which he revoked the direction to the defendant to pay an annuity to John, and also the order to pay the testator’s debts. He stated in the codicil that he had made other provision for his son John. In no other respect did the codicil alter the will. On the 21st of May, 1857, the testator died, owing no debts, and possessed of personal estate to the amount of about seven thousand dollars, and leaving his said four sons his only 'children and heirs at law. Several years prior to the making of the will, the testator had conveyed a farm to his son Hugh. The testator had been a farmer up to within two or three years of his death, during which latter years he had done no business except the taking care of his property. A residuary clause in the will gave his personal estate, not otherwise disposed of, to his sons Hugh and James.
    On these facts the said justice found that there was due to the plaintiffs the amount of the two notes, with interest, for which amount he ordered judgment. The defendant’s counsel excepted to this finding. There was also an exception on the part of the defendant to a refusal, by the justice on the trial, to allow the defendant to show by his own oath that the note for $1157 was given by him to the testator, on his purchasing from the testator the identical personal property given to him by the will.
    The judgment, entered in pursuance of the foregoing directions, was affirmed by the generg.1 term of the Supreme Court, and the defendant brought the present appeal.

      John PL. Reynolds, for the appellant.

      John K. Porter, for the respondents.
   Selden, J.

Although, as a general rule, a will of personal property is held to speak as if made at the time of the death of the testator, yet, where there is any thing in the nature of the bequest, or in the language in which it is made, to show that the testator intended to confine his gift to the subject of the bequest as it existed at the time of the making of the will, its construction will be governed by such in ten-' tion. (8 Paige, 116.) Words of present tense have often, though not uniformly, been held thus to limit the subject of the gift. (1 Jarman on Wills, 278, 279.) My interpreta-tion of the present will is, that the words, “from any charge I have made,” show an intention on the part of the testator to limit the release to charges existing at the time when the will was executed.

A codicil to a will, however, amounts to a republication of the whole 'will, not revoked by the codicil, and under the interpretation above given to its language it must be held to speak, in regard to the release of charges, as of the time of the execution of the codicil. (1 Williams on Exec’rs, 175; 1 Hill, 590.) There is a peculiar propriety in the application of that rule to the present case, inasmuch as the codicil, by revoking “all that part of the sixth clause” of the will which provided for the payment of the testator’s debts by his son Edward, revoked the whole of the sixth clause, excepting the provision releasing all charges which he had made against his children; showing, therefore, a clear intention on his part to keep that provision in force and to have it speak as of that date. The codicil was made March 20, 1855, after the execution of the -first note, and that note at least was canceled, if the terms of the release were broad enough to 'include promissory notes.

Without attempting to define precisely what claims would be embraced by the words used by the testator, “any charge I have made against them, or either of them,” I am of opinion that they can not be held applicable to promissory notes. An interpretation which should make the release include notes, would of necessity extend it to all debts and liabilities of the children to the' testator. If it was the intention to make the release thus general, no reason can be given why general words were not used, instead of the restrictive ones which were employed. This argument derives additional force from the use, in the previous sentence, of such general words, viz. “all my just debts,” in the clause directing the payment of the testator’s debts by this defendant. It is said that this interpretation of the clause in question renders that clause nugatory, as there were no charges upon which it could operate if it did not embrace the notes. Such may be the result of our interpretation, as it does not affirmatively appear that there were any such charges, but as it is not proved or found that there were none, I -think we can not, consistently with the rules heretofore adopted, assume as an established fact their non-existence. (21 N. Y. Rep. 550, 551, 552; 22 id. 324.) But if that fact had been affirmatively established, I should have still held that the release did not ipclude • promissory notes, because if notes only were to be released, the expression of that fact, simply, would have been so much easier and more natural than the language actually used, that the adoption "of the present phraseology would, in that case, be unaccountable.

The only remaining question relates to the rejection of the defendant as a witness, to prove the consideration of one of the notes. The limitation upon the right of a party to testify in his own behalf, as the law stood at the time when this trial was had, was as follows: “A party shall not be examined against parties who are representatives of a deceased person, in respect to any transactions had personally between the deceased person and the witness.” (Code, § 399, as amended in 1860.) The testimony offered to be given related to a transaction had personally between the testator and the witness, and was therefore directly within the prohibition of the statute."

The Judgment should be affirmed."

All the. Judges concurring,

Judgment affirmed.