author: Per Curiam.

text:
    Emily A. Clark, appellant, v. Luke Clark, respondent.
    Equity will relieve from a contract entered into by a person under mistake of his legal right where the other party to the contract, perceiving the mistake, not only fails to apprise of it but is guilty of unfair and deceptive conduct which tends to confirm the mistake and conceal the truth and influence the entry into the contract under the mistake.
    On appeal from a decree of the chancellor, who delivered the following opinion:
    The complainant bases his claim to relief upon his ignorance that the defendant’s demand was barred by the statute of limitations when the arbitration agreement was entered into, coupled with the fact that the defendant’s attorney, while dealing with him, knew that circumstance, and not only failed to disclose it, but so unfairly dealt with him as to confirm him in his mistake and effect a concealment of the truth.
    The principle invoked for the complainant’s relief is well stated by Professor Pomeroy (2 Pom. Eq. Jur. §§ 847, 849) in this language:
    “Whatever be the effect of a mistake, pure and simple, there is no doubt that equitable relief, affirmative or defensive, will be granted when the ignorance or misapprehension of a party concerning the legal effect of a transaction in which he engages or concerning his own legal rights which are to be affected is induced, procured, aided or accompanied by inequitable conduct of tbe other parties. It is not necessary that such inequitable conduct should be intentionally misleading, much less that it should be actual fraud; it is enough that the misconception of the law was the result of, or even aided or accompanied by, incorrect or misleading statements or acts of the other party. * * * The scope and limitations of this doctrine may be summed up in the proposition that a misapprehension of the law by one party of which the others are aware at the time of entering into the transaction, but which they do not rectify, is a sufficient ground for equitable relief. A court of equity will not permit one party to take advantage and enjoy the benefit of an ignorance or mistake of law by the other, which he knew and did not correct. * * * Whenever a person is ignorant or mistaken with respect to his own antecedent and existing private legal rights, interests, estates, duties, liabilities, or other relation, either of property or contract or personal status, and enters into some transaction the legal scope and operation of which he correctly apprehends and understands, for the purpose of affecting such assumed rights, interests or relations or of carrying out such assumed duties or liabilities^ equity will grant its relief, defensive or affirmative, treating the mistake as analogous to if not identical with a mistake of fact.”
    And in Haviland v. Willets, 141 N. Y. 35, Mr. Justice Finch, declaring the same principle, said: “It is equally well settled that where there is a mistake of law on one side and either positive fraud on the other or inequitable, unfair and deceptive conduct, which tends to confirm the mistake and conceal the truth, it is the right and duty of equity to award relief. All the cases which deny a remedy for mere mistake of law on one side are careful to add the qualification that there must be no improper conduct on the other.”
    The complainant was seventy-six years old when he negotiated with Mr. Fisk. He was not a láwyer. His education had been a practical one at the Washington market in New York city. Whether or not his intellect was enfeebled by age at the time of his negotiation is a question not determinable from the variant ex parte affidavits upon which the case has been submitted. He dealt with a lawyer who was fully aware of the legal status of his client’s claim; who knew that to an action brought by her the statute of limitations might be effectively pleaded and that therefore nothing could be had for her except through her father’s bounty or through some advantage happening from ignorance of his legal defence. The letter by which Mr. Fisk first called the complainant to his office did not expressly affirm a legal claim,, but yet it was the letter of a law firm, engaged in the business of securing the legal enforcement of client’s demands, which, after the first interview, imported to the complainant’s mind that litigation would ensue upon his failure to acquiesce in and settle the demand. When he called upon the lawyer he was charged with having assaulted and seriously injured his daughter. Being ignorant that lapse of time had barred an action against him, if he chose to assert that bar, and failing to contemplate the possibility of his having a purely legal defence, in answer to the demand, he at once entered upon a discussion of the merits of the charge and denied that he had committed the assault alleged. Thus he betrayed to Mr. Fisk his ignorance of the legal defence. It is clear that Mr. Fisk was embarrassed by this discovery and shrank from taking advantage of it. He therefore sought to make the basis of the subsequent negotiation the duty of a parent to assist a daughter in helpless physical condition, without reference to the truth or enforcibility of the charge she made against him. Several interviews followed between the lawyer and the complainant, in which, at times, a son of the complainant participated, at all of which the subjects-of discussion were either the truth of the allegation of assault or what bounty the father should give. Throughout these interviews, although Mr. Fisk did not, in direct words, assert that his client had a legal demand against the complainant, he assumed the attitude of one who demanded a legal and enfprcible right- and thereby left the complainant to imply that such a right exisited. This conduct is notably instanced by Mr. Fisk’s remark, testified to by the complainant and not denied, that if the-parties should go to court the jury would sympathize with the woman. It is apparent also, that the complainant shrank from the notoriety and scandal which a public contest with his-daughter would occasion and hence begged that the matter might be kept private, and suggested that the differences should be submitted to the judgment of some third person. Under the fear of litigation and notoriety and because of the pressure of Mr. Fisk' and his own son, the complainant made two offers, both of which were rejected. Mr. Eisk saw that the complainant would not voluntary exceed the amounts of his rejected offers and doubtlessly thought that if the complainant should be apprised of the legal defence available to him, he would not adhere to either of those offers and therefore deemed it to be his duty to his client not to inform the complainant of his defence. To relieve himself of the responsibility of the situation he asked the complainant why he did not consult counsel and was answered that the services of a lawyer were not needed and that the complainant did not want to go to the expense of such employment. This answer clearly manifested the complainant’s ignorance of his legal position and his entire misapprehension of Mr. Fisk’s purpose in sending him to counsel. On the 23d of November, the negotiations having been fruitless in order to reach conclusions, Mr. Fisk proposed, as an ultimatum, that the complainant should do one of two things: either agree to pay the defendant a monthly sum or leave the questions in dispute to arbitrators. The complainant said that he would answer the proposition in a week, and then Mr. Fisk wrote a memorandum of his proposition indicating thereon that the matters in dispute were “claims” and “amount of damages to be paid.” At this point the complainant’s ignorance of his legal defence again embarrassed Mr. Fisk, and for a second time he advised the complainant to consult his lawyer, adding, however, as if to keep the complainant from attaching to that advice the significance that he needed a lawyer, these words, “ or Mr. Nugent, or any one else in whom you have confidence.” A week later the complainant expressed his willingness to arbitrate, and then Mr. Fisk wrote that the questions to be submitted were, whether the complainant had assaulted the defendant ; whether the assault had resulted in injury to her, and what damages should be paid, and said to the complainant, “you understand that these questions and no others ” are to be submitted, to which the complainant responded, betraying a continuance of his ignorance of his legal defence and giving evidence of apprehension of a scandalous litigation before a prejudiced jury, “I think that a family dispute like this should be kept private, and I would rather submit a question of this character-to three arbitrators than to an ordinary jury, who are apt to be prejudiced if a woman is a party.”
    After the arbitration agreement was prepared in duplicate and before its execution, it was read over by Mr. Fisk to the complainant, who, during the reading, held one of the copies. After the reading, question as to the personnel of the arbitrators arose, and the complainant said that he would select Mr. Collins, who had been his counsel, and thereupon Mr. Fisk remarked that he should think that the complainant would want Mr. Collins for his counsel and not as arbitrator, and then went with the complainant to see Mr. Collins, but they failed to find him, and another person was selected and the arbitration agreement was executed. It contains this clause: “ Expressly waiving all statutory and technical questions in connection therewith,” to bar the legal defence available to the complainant, and also an agreement that it might be made a rule of court by either party.
    It is urged that the conduct of Mr. Fisk manifested a purpose upon his part that the complainant should believe that his daughter had a cause of action against him to which there was no legal defence, and that satisfactory evidence of that purpose is found, not only in the suggestion of Mr. Fisk that a jury would sympathize with a woman, predicating the appearance before a jury, but also in the general and indefinite terms in which the waiver of the complainant’s right under the statute of limitations was couched, and in the admitted fact that while he took pains to explain in the effect of the provisions that the arbitration agreement might be made a rule of court, he failed to make any explanation of the obscure waiver. I am unwilling to give my assent to this proposition. I think that Mr. Fisk, realizing that the complainant was ignorant of the defence that was available to him and conscious that he was acting under the spur of what he conceived to be impending litigation, was perplexed between what he conceived to be his duty to his client and his anxiety to recover for her on the one hand, and an honorable shrinking from taking advantage of the ignorance and misapprehension of the man with whom he dealt on the other. He feared that if he enlightened the complainant, his client would obtain little or nothing by way of bounty, and would reproach him with infidelity to her interest. His resolution was that it was not his duty to inform the complainant of his legal defence, but at the same time his sense of equity admonished him to at least afford the complainant ample opportunity to become informed of that defence. Actuated by the last conclusion he twice advised complainant to consult counsel and friends, and once went with him to find his counsel, before the agreement was executed, but he did not intimate to the complainant that it was necessary that he should be advised by counsel as to legal rights of which he was in ignorance.
    It is suggested that the complainant, in entering into the agreement, was moved by the consideration that as a father he should deal justly with his child, without question whether there existed a legal obligation which the child could enforce. I do not think so. He clearly dealt under the spur of apprehended litigation and its attendant scandal and the sympathy it would engender against him, which, in view of the fact that the arbitrators have found that he did assault and injure his daughter, perhaps was quickened by conscious guilt. His object evidently was to avoid publicity and escape from his predicament at the least possible cost.
    I think that the case must be resolved to this: Mr. Fisk, appreciating the power which the complainant’s ignorance and apprehension gave him, without disclosing the truth, took from him an agreement, by which, in general and indefinite terms unexplained, and apt to leave him in his ignorance, an available legal defence was waived, and the complainant subjected himself to an award which otherwise would not have been had. Barring the somewhat indifferent attempts of Mr. Fisk to put him in the hands of counsel and thus afford him an opportunity to correct his mistake, the whole course of negotiation tended strongly to confirm the mistake and conceal the truth. It was a mistake on the part of Mr. Fisk to conclude that loyalty to his client prevented a disclosure to the complainant or at least a determined refusal to proceed with him to arbitration until he should be advised by competent counsel. The matter was between his client and the complainant, one in which Mr. Fisk spoke and acted for his client, in which she became chargeable with the consequences of his acts and omissions, and it would not have been disloyal to her for him to have done that which in equity she should herself have done if she had been in Mr. Fisk’s place. I think it would be inequitable to permit the advantage had to be retained, and I am therefore constrained to grant the relief sought.

      Mr. Willard C. Fish, for the appellant.

      Mr. Charles L. Corbin, for the respondent.
   Per Curiam.

Decree affirmed, for the reasons given by the chancellor.

For affirmance — The Chief-Justice, Depue, Lippincott, Ludlow, Van Syckel, Adams, Bogeet, Hendeickson — 8.

For reversal — Dixon, Gaerison, Nixon — 3.


source: Caselaw Access Project

license: Public Domain

text:
    Pennsylvania Railroad Company and United New Jersey Railroad and Canal Company, appellants, v. National Docks and New Jersey Junction Connecting Railway Company, respondent.
    On appeal from an order advised by Vice-Chancellor Reed, whose opinion is reported in National Docks Railway Co. v. Pennsylvania Railroad Co., 9 Dick. Ch.. Rep, 142.

      Mr. James B. Vredenburgh and Mr. Bichard V. Lindabury, for the appellants.

      Mr. Charles D. Thompson and Mr. Charles L. Corbin, for the respondent.

       Decided at March Term, 1896. — Rep.

   Per Curiam.

Order affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Garrison, Gummere, Lippincott, Ludlow, Magie, Van Syckel, Bogert, Brown, Nixon, Barkalow — 12.

For reversal — None.


text:
    Andrew J. Smith, appellant, v. Eveline V. Smith et al., respondents.
    On appeal from a decree of the chancellor, whose opinion is reported in Smith v. Smith, 9 Dick. Ch. Rep. 1.

      Mr. Samuel H. Grey and Mr. Cortlandt Parker, for the appellant.

      Mr. Mark B. Sooy and Mr. Charles L. Corbin, for the respondents.
   Per Curiam.

Decree affirmed, for the reasons given by the chancellor.

For affirmance — Lippincott, Magie, Van Syckel, Barkalow, Hendrickson, Nixon — 6.

For reversal — Depue, Dixon, Garrison, Gummere, Dayton — 5.


text:
    Frank C. Edwards and Charles Bierman, appellants, v. Norman McClave et al., respondents.
    On appeal from an order advised by Vice-Chancellor Emery, whose opinion is reported in Edwards v. McClave, 10 Dick. Ch. Rep. 151.

      Mr. Howard W. Hayes, for the appellants.

      Mr. Edwin B. Williamson, for the respondents.
   Per Curiam.

Order affirmed, for the reasons given in the court of chancery.

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Mague, Van Syckel, Barkalow, Bogert, Dayton, Hendrickson,. Krueger, Nixon — 13.

For reversal — None.


text:
    Protection Building and Loan Association, appellant, v. William H. Chickering, administrator ad pros. &c., respondent.
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in Protection Building and Loan Association v. Knowles, 9 Dick. Ch. Rep. 519.

      Mr. J. Franklin Fort, for the appellant.

      Mr. Edward S. Atwater, for the respondent.
   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — Depue, Dixon, Gummere, Lippincott, Mache, Van Syckel, Bark alow, Dayton, Hendrickson,' Krueger, Nixon — 11.

For reversal — None.


text:
    Kate J. Klein, executrix &c., appellant, v. Mary Ida Ivory, respondent.
    On appeal from a decree of the ordinary, whose opinion is reported in Ivory v. Klein, 9 Dick. Ch. Rep. 379.

      Mr. Levi T. Hannum, for the appellant.

      Mr. James Buchanan, for the respondent.
   Per Curiam.

Decree affirmed, for the reasons given by the ordinary.

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van Syckel, Barkalow, Bogert, Hendrickson, Krueger, Nixon — 12.

For reversal — None.


author: Pee Cueiam.

text:
    The Sterling Iron and Zinc Company, appellant, v. The Sparks Manufacturing Company, respondent.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Beach v. Sterling Iron and Zinc Co., 9 Dick. Ch. Rep. 65.

      Mr. Charles L. Corbin and Mr. Charles D. Thompson, for the appellant.

      Mr. Thomas N. McCarter, for the respondent.
   Pee Cueiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Gaeeison, Gummeee, Lippincott, Ludlow, Van Syckel, Bogeet, Dayton, Hendeickson, Nixon — 11.

For reversal — None.


author: Pee Curiam.

text:
    Martha S. Howell, appellant, v. Joseph D. Shotwell, executor of Jacob R. Shotwell, deceased, et al., respondents.
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in Robeson v. Shotwell, 10 Dick. Ch. Rep. 318.

      Mr. Schuyler B. Jackson, for the appellant.

      Mr. Benjamin A. Vail, -for the respondent.
   Pee Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — Depue, Garrison, Gummebe, Lippincott, Ludlow, Van Syckel, Adams, Bogebt, Hendbickson, Nixon — 10.

For reversal — None.


text:
    Allen R. Shinn and The York Manufacturing Company, appellants, v. The Vineland National Bank, respondent.
    On appeal from an order advised by Vice-Chancellor Grey, whose opinion is reported in Vineland National Bank v. Shinn, 10 Dick. Ch. Rep. 415.

      Mr. Henry S. Alvord, for the appellants.
   Per Curiam.

Order affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummebe, Lippincott, Ludlow, Van Syckel, Adams, Bogebt, Hendbickson, Krueger, Nixon,

V BEDENBUBGH — 15.

For reversal — None.


text:
    John H. Cash, appellant, v. Richard L. Powell, respondent.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Powell v. Cash, 9 Dick. Ch. Rep. 218.

      Mr. Craig A. Marsh, for the appellant...

      Mr. John Griffin, for the respondent.
   Per Curiam.

Decree affirmed, for'the reasons given in the court of chancery.

For affirmance — Depue, Dixon, Gummere, Lippincott, Magie, Barkalow, Bogert, Dayton, Hendrickson, Krueger, Nixon — 11.

For reversal — Garrison, Van Syckel — 2.


author: The Chancellor.

text:
    Orrin Vanderhoven v. John W. Romaine, Alfred Healey and Richard Evans.
    [Filed January 5th, 1898.]
    1. The fact that a deed, absolute on its face, was made only as security for a loan may Re shown by parol, and the deed will be regarded as a mortgage, which the real owner of the property may redeem.

      2. When the grantee in such deed, in the nature of a mortgage, sells the land without notice to the equitable owner, he should account for the fair net cash value of the property at the time of the sale, with interest from date of sale, against which he should be allowed credit for the amount due to him for the principal and interest of his advances at the time of the sale, with interest thereon from that time.

      3. Under the circumstances of this case no costs allowed to either party.
    On bill, answers and proofs.

      Mr. Isaac N. Miller, for the complainant.

      Mr. De Witt C. Bolton, for the defendant Healey.

      Mr. Frank Van Cleve, for the defendants Romaine and Evans.
   The Chancellor.

In December, 1885, the complainant applied to the defendant John W. Romaine to assist him in securing the title to thirteen lots of land in the city of Paterson. He had theretofore paid $90 on account of $500, the purchase price of the lots, and Emma C. T. Mortimer, who held the legal title to the lots, admitted his right to have a conveyance of them upon his paying to her $410, the unpaid balance of the $500, with the interest from March 2d, 1885. The complainant’s difficulty was that he did not have the money to pay Mrs. Mortimer, who was unwilling to wait longer for the payment.

Mr. Romaine agreed to assist him, and taking from Mrs. Mortimer a deed for the land gave her a mortgage upon the property, payable in one yeár with interest, for $250, and paid her in cash $197.84, the balance due to her, Mr. Romaine says that he acted thus under a parol agreement with the complainant that he should take the title to the property absolutely and that the complainant would buy the property from him, within a year, for the amount of his advances with interest. On the other hand, the complainant insists that it was first proposed that the complainant’s son should take the title to the property and give Mrs. Mortimer a mortgage for $250, and that Mr. Romaine should lend $160 to enable the complainant to make the cash payment which Mrs. Mortimer required, but that as that plan, would leave Mr. Romaine without security for the cash he should advance, it was subsequently arranged that Romaine should take title, as he did, as security for his advances or loan until the complainant should repay him.

These contentions present the question of fact whether the deed to Romaine consummated an absolute purchase of the property by him, or was merely taken by him in resulting trust for the complainant and as security for a loan made by him to the complainant.

The transaction at which the money was paid and the deed , and mortgage were delivered took place in the office of William H. Williams, the lawyer of Mrs. Mortimer.

It does not appear that the complainant gave Romaine any acknowledgment of the indebtedness, but it does appear that in February, 1886, less than three months after the settlement with Mrs. Mortimer, he gave Mr. Romaine an order upon the comptroller of the State of New Jersey for $197.84, the amount of cash advanced by Romaine, to be paid out of moneys which should thereafter become due to the complainant for publishing the laws in a newspaper of which he was the proprietor. Later, $817.25 did become due to the complainant from the state for the publication mentioned and was paid to him or to others to whom he had given orders upon it. Mr. Romaine says that in August, 1886, he presented his order to the comptroller but was refused payment, the comptroller stating that the money due to the complainant was already fully covered by orders.

Mr. Williams testifies that after the delivery of the deed from Mrs. Mortimer to Romaine, Mr. Romaine made statements to him which led him to believe that Romaine had loaned the money advanced to the complainant. He remembers that Mr. Romaine said that he wanted to help the complainant, and that he showed him some orders on either the treasurer or comptroller of the state, which the complainant had given him as security. He remembers, also, that in 1887, more than a year after the deed was taken by Romaine, he was instructed by Mrs. Mortimer to collect the amount due upon the mortgage Romaine had given her and that he urged both Romaine and the complainant to pay the mortgage, and that Romaine then stated to him that he was trying to get the orders he had had from the complainant cashed, that he did not wish to advance any more of his money, that he was simply acting in the matter as the friend of the complainant.

On the 3d of July, 1887, after foreclosure of the Mortimer mortgage had been commenced, Romaine paid the mortgage off; his payment being $293.75 for the principal and interest of the mortgage and the costs of the foreclosure proceedings to the time of payment.

After he had paid the mortgage off he several times asked the complainant to pay him the money he had advanced and take the property off his hands. Twice he talked with the complainant about temporary uses to which the land could be put, and two years after he received the deed from Mrs. Mortimer, he reported to the complainant that he had had the taxes reduced. In these matters he conducted himself as though the complainant had at least some right and interest in the land not inconsistent with that now claimed.

By the testimony of the complainant and of Mr. Williams- and the corroborative circumstances adverted to, I am of opinion that it clearly appears that Mr. Romaine took the conveyance-from Mrs. Mortimer in resulting trust for the complainant and! as security for the repayment of his advances for the complainant, and that though the deed was absolute upon its face, it, in reality, must be regarded between him and the complainant, as having been a mortgage. It is well settled that the fact that a deed, absolute on its face, was made only as security for a loan may be shown by parol, and that the deed will be regarded as a mortgage from which the real owner of the property may redeem. Clark v. Condit, 3 C. E. Gr. 358; De Camp v. Crane, 4 C. E. Gr. 166; S. C. on appeal, 6 C. E. Gr. 414; Van Keuren v. McLaughlin, 4 C. E. Gr. 187; Phillips v. Hulsizer, 5 C. E. Gr. 308; Cake v. Shull, 18 Stew. Eq. 208; Pace v. Bartles, 2 Dick. Ch. Rep. 170; Winters v. Earl, 7 Dick. Ch. Rep. 52.

The complainant, by means of the loans by Romaine to him and his previous payment of $90, furnished the full consideration paid Mrs. Mortimer for the property and became the real or equitable owner, and Romaine therefore not only held the legal title by way of mortgage to himself to secure the repayment of his loan, but also as trustee for the complainant upon the repayment of his advances.

In November, 1889, without notice to the complainant, Romaine sold the land to the defendant Healey for $900, $300 of which was paid to Romaine in cash and $600 of which was secured to be paid to Romaine by a purchase-money mortgage upon the land sold.

The proofs abundantly satisfy me that Mr. Healey was a bona fide purchaser without knowledge or notice of the interest of the complainant in the property. He paid a price for the property which, although perhaps below the full value of the land, was not so much below it as to arouse suspicion and put him upon inquiry.

Subsequently, in February, 1890, Mr. Romaine sold and assigned the purchase-money mortgage he had received from Healey to the defendant Evans for $575. I think that Mr. Evans purchased in good faith without notice or knowledge of the complainant’s right or interest.

It appears that the sale to Mr. Healey was negotiated by one Crooks, who acted as the agent of Mr. Romaine and was paid by Romaine $25 for his services. Crooks knew of the complainant’s interest in the property, but did not say anything to Healey about it, yet he did tell the complainant of the proposed sale and warned him that if there was anything coming to him he should take care of his interest. It does not appear that the complainant took any steps to stop the completion of the transaction.

The proofs indicate that, so far as the opinions of witnesses go, the land sold to Healey at the time of the sale was worth about $1,200, but there is no proof which fully satisfies me that such a price could have been obtained for it in cash. Possibly more than $900 might have been had.

As the case stands we have this state of facts: That Mr. Romaine sold the property at private sale, upon his own discretion, without consulting the complainant or regarding him in the matter, and that the price realized was below the estimated value of the property, and that, shortly after the conveyance of the land, he sold and assigned the purchase-money mortgage at a considerable discount.

The bill, in substance, prays that Evans may reassign the $600 mortgage to Romaine upon just terms, and that Romaine may cancel it, and that Healey may be decreed to hold the property in trust for the complainant, and upon the complainant’s payment to him of $410, with interest from March 2d, 1885, that he shall convey the same to the complainant or convey it to Romaine, who shall convey it to the complainant, “and that the complainant may have such other and further relief in the premises as shall be agreeable .to equity and as the nature and the circumstances of the case may justify and require.”

It is very clear that the relief specially prayed cannot be granted. The defendants Healey and Evans having been bona fide purchasers without notice of any right in the complainant or claim upon his part, are entitled to have the bill, as against them, dismissed, with costs. I think, however, that, under the prayer for general relief, the complainant is entitled to have redress against the defendant Romaine.

Romaine had the right to be repaid his loan, with interest, but he should not have sold the land without notice to the complainant. Having done so, he should account for the fair net cash value of the property at the time of the sale, with interest from the date of sale, against which he should be allowed credit for the amount due to him for the principal and interest of his advances at the time of sale, with interest thereon from that time. Clark v. Condit, supra.

This suit is, in effect, like a suit for redemption by a mortgagor. In such suits the mortgagor will be required to pay costs unless the conduct of the mortgagees has been unfair and oppressive. Phillips v. Hulsizer, supra; Winters v. Earl, supra.

In this case I think that the conduct of the defendant Romaine, in making a secret sale, was unfair, and that his resistance in this suit has been in a degree oppressive, and hence that he should not have costs as against the complainant. At the same time, I am of opinion that the complainant’s delay in repayment to Romaine so far induced Romaine’s arbitrary action that it will be improper to permit him to recover costs against Romaine; therefore, no costs will be allowed between the complainant and the defendant Romaine.

The realization by Romaine from the sale of the property after deducting the $25 paid to Crooks for effecting the sale, was $875. The amount due to the defendant Romaine at the time of the sale was $574.67. I will decree that the $875, with interest thereon from the date of the sale, November 18th, 1889, less $574.67, with interest thereon from the same date, be paid by the defendant Romaine to the complainant, unless the complainant shall elect to have the cash value of the property at the time of the sale ascertained, in which case there will be reference to a master, to ascertain what the cash value of the land then was, and that value, with interest, will be allowed to the complainant after deducting therefrom the $574.67 due to the defendant Romaine, with interest thereon from the date of the sale.


author: Pitney, V. C.

text:
    Thomas P. Lennon v. Sixtus Heindel and The Second National Bank of Hoboken.
    [Filed April 15th, 1897.]
    1. That property sold on execution for only §6,200, when worth from §9,000 to §15,000, is not of itself ground for setting aside a sale.
    2. Execution sale of land described in two parcels will not be set aside because the property was sold as a whole, there having been no preparation or request of the sheriff for sale by the parcel.
    3. Execution sale will be set aside at suit of execution debtor and of a judgment debtor not protected by the sale, though induced to believe it would be; two persons having dissuaded others from bidding and one of them having bid it off under an arrangement that he should get it as cheap as possible and the other (who, before such arrangement, had intended to bid) should give him an advance of §700 on the purchase price, which he did, and it having sold for §6,200 when worth from §9,000 to §15,000.
    On bill, answer of Sixtus Heindel and answer and cross-bill of the Second National Bank and replication thereto by Heindel.

      Mr. Charles L. Corbin and Mr. John W. Queen, for the complainant.

      Mr. William D. Edwards and Mr. Frederick Frambach, for the defendant Heindel.

      Messrs. Russ & Heppenheimer, for the bank.
   Pitney, V. C.

The object of this bill is to set aside a sale of lands of the complainant, made by the'sheriff of Hudson county under divers executions in the sheriff’s hands against the complainant. The Second National Bank of Hoboken was made a party defendant because it holds a judgment against complainant which was cut off by the sale, and by its cross-bill incorporated in its answer joins in the prayer of the bill that the sale may be set aside.

The bill sets up that the complainant, in October, 1891, became the owner of five lots of land situate in Bergen township, Hudson county, containing, in the aggregate, about three and one-half acres, and that in August, September and December, 1893, and January, 1894, several judgments were entered against him in the circuit court of the county of Hudson and in the supreme court, amounting, in the aggregate, to about $3,000; that executions were duly issued on these judgments; that those issuing prior to November, 1893, were delivered to Edward P. Stanton, sheriff of Hudson county, and those issuing after that time were delivered to John J. Toffey, sheriff of the same county; that Sheriff Stanton advertised under his executions, but that the judgments and executions were assigned to the defendant Heindel before the sale and the sale dropped; and that afterwards, in December, 1893, Sheriff Toffey advertised under the executions then in his hands (being three in number) for the 1st of February, 1894, and that the sale was adjourned by Sheriff Toffey from time to time until April 26th, 1894, on which day it was sold to Heindel for the sum of $900; that the deed was made on the 28th of April and delivered to Heindel.

The bill was filed on the 28th day of May, 1894. The facts of the ease are as follows: The complainant is a building contractor and apparently an active business man. He has a brother Edward, who has been a dealer in real estate, and had a sister, a Mrs. Cavanagh, who died in 1893. The complainant Thomas and his brother Edward are bachelors, and they lived for many years with their sister, Mrs. Cavanagh (until her death), and her husband and her daughters upon the premises in question. They consist of two dwellings, a stable and three and a half acres of land, situate at a place called Hudson Heights, on the Palisades, immediately back of Bulls Ferry, in Hudson county.

The premises were at first owned by Edward Lennon. He became embarrassed, judgment went against him in 1891 and the premises were sold at sheriff’s sale and purchased by Thomas, the complainant. Edward later conveyed to Thomas by deeds* Subsequently Thomas became embarrassed, and in the fall and winter of 1893-94 several judgments were entered against him* These judgments were subject to two mortgages, one for $3,000, which was a first encumbrance, and one for $500, which intervened between the judgments. Executions on two of the judgments were in the hands of Sheriff Stanton, whose term expired in the fall of 1893, and three or four later executions were in the hands of Sheriff Toffey, who succeeded Stanton. In this state of affairs the premises were advertised for sale by Sheriff Toffey for February 1st, 1894.

The judgment against Edward under which the premises were sold and bought by Thomas in 1891 was for a comparatively small amount, and the indications are that the consideration named in the deeds — $3,000—was not paid, and that, subject to whatever he paid on the judgment, Thomas held the premises, in trust for his brother Edward. No direct issue was made on this subject, either in the pleadings or at the hearing. The last judgment against Thomas was in favor of the Second National Bank of Hoboken, recovered after the advertisement by Sheriff Toffey, except one or two docketed judgments from justices’ courts, upon which execution was issued and delivered to the sheriff, but not mentioned in the advertisement.

The prior executions against Thomas were issued by Mr. Smythe, an attorney living in the neighborhood, and the creditors were rather urgent for their pay. In the meantime Mr. Thomas Lennon was trying to obtain loans upon , the premises, but the amount required to clear off all the encumbrances was a little more than a careful investor would be inclined to loan upon it. Adjournments were had from time to time in order to give Mr, Lennon an opportunity to make arrangements for a loan. I-n the meantime Mr. Cavanagh, his brother-in-law, commenced an intrigue to have the property brought to a sale and bought in by somebody and held for the benefit of his daughters, who seem to have been estimable persons and to have had friends in the neighborhood. In' this intrigue Cavanagh, who lived on the premises, discouraged all persons who came to look at them or talked of loaning money or buying them at sheriff’s sale, and applied to the defendant Heindel to assist him, Cavanagh, by buying in the property cheap and holding it for the joint benefit of Heindel and Cavanagh’s family. He says that Heindel gave him distinct encouragement that he would do this. Heindel rather denies it. But the evidence of Heindel’s friend, Fahbeck, tends to corroborate Mr. Cavanagh.

Thomas Lennon also applied to a Dr. De Graff, a person of means in the neighborhood, to assist him either by loaning money or buying in the premises at sheriff’s sale and holding them for him, Thomas. He swears, in substance, that he procured from Smythe a statement of the amount due upon all the liens, and had several interviews with De Graff, and several with Smythe, and one with De Graff and Smythe together, in which latter interview the matter was discussed and the amount necessary to cover the claims was mentioned, and that he, Lennon, expressed a wish to have the property bid up to enough to cover all liens, including the bank judgment; that Smythe and De Graff objected, and advised him to cut off the bank, but that he persisted, and that finally, when they parted, it was understood that the bank’s claim was to be protected, and that he, Lennon, so informed Mr. Rabe, the president of the bank, before the sale.

At the hour fixed for the sale Mr. Rabe was in the sheriff’s salesroom on other business, but left just before these premises were put up for sale, in the confident supposition that if the property was sold his judgment would be covered and protected.

In this connection is to be considered the evidence of Edward Lennon, who, as we shall see, attempted to assist his brother, Thomas, in protecting the property, and who swears that on the morning of the sale, in a conversation with Mr. Smythe about the sale and the proposed purchase by Mr. Heindel, he inquired if the bank had notice that it was to be sold without further adjournment, and that Mr. Smythe said to him, “ Keep quiet about that, and let the bank take care of itself, and you will have so much the less money to pay.”

Edward Lennon, as we have seen, attempted to assist his brother to find some person either to make a loan to pay the judgments, or to buy the property in at their amount and hold it for the benefit of his brother. And he heard through his nieces that Mr. Heindel was inclined to assist pecuniarily, but did not understand until just before the sale that Cavanagh’s plan was to have Mr. Heindel buy it in for the benefit of the nieces, cutting off Thomas and Edward. Edward called on Heindel a few days before the sale, and Heindel gave him no encouragement.

In the meantime, Thomas Lennon applied to a Mrs. Butts, a French lady of some means, who lived in the neighborhood, and who was a friend of the Misses Cavanagh, and asked her to loan the money in order to save the property. She undertook to do so, and swears — and I am inclined to believe her — that if she had had time enough she could have procured the money. She had already learned from the Misses Cavanagh that Mr. Heindel was their friend and that he talked of buying the property in to hold for their benefit. Mrs. Butts called upon Mr. Smythe to know how long the sale Could be postponed in order to give her an opportunity to raise the money, and was informed by him that Mr. Heindel was making preparations to buy it; and she supposing that Mr. Heindel was buying it in the interests of the Misses Cavanagh was entirely satisfied and dropped the matter. She swears that Smythe asked her why she bothered herself with helping the Lennons, and spoke discouragingly of her doing so.

Mr. Heindel, having had his attention called to the property by Cavanagh and his daughters, looked into it, and concluded that if he could buy it cheap enough he would purchase it on his own account, and spoke to Mr. Smythe, the attorney for the creditors, and asked him to act for him, but Mr. Smythe finding that he spoke English imperfectly, sent him to Mr. Frambach, his present solicitor. Mr. Frambach examined the title and the amount of the encumbrances, and prepared to bid; and Mr. Smythe learned through Mr. Frambach or Mr. Heindel that the latter was ready to bid enough upon the property to cover all of Mr. Smythe’s clients’ liens.

About this time a Mr. Fahbeck intervened. He lived in the neighborhood and had a judgment for $700 against Edward Lennon, which he desired to secure, and he believed, or suspected, that the property really belonged to Edward, although the title was in Thomas. He called upon Mr. Heindel and made a proposition to him that he would buy it for as low a price as he could, and then sell it to Heindel for $700 advance, or enough to cover his judgment. Heindel agreed to this upon condition that the price did not exceed a certain amount.

Then Fahbeck heard that Dr. De Graff thought of buying the property. The fact that De Graff had been applied to by the Cavanaghs, or by one of the Lenno.ns, to assist them with money, came in some way to Fahbeck’s ears. He called upon De Graff to dissuade him from bidding, and told him what he desired to do, and brought Heindel to see him to assure him (De Graff) that he and Heindel had made an arrangement to buy the property, by which Fahbeck would secure his judgment against Edward Lennon. The result of the interview was that De Graff agreed not to bid on the property or to interfere with the plans of Fahbeck and Heindel.

Adjournments of the sale had been made from time to time upon the written consent of all the judgment creditors, and a day or two before the sale Edward Lennon called upon Mr. Smythe for another adjournment, and Smythe sent him out to procure the consents of all the judgment creditors, and told him that he must also have Mr. Heindel’s consent because he was ready to bid enough to secure Smythe’s clients and he did not wish to lose him as a purchaser. Edward got the consent of all the judgment creditors but one, who had been paid his judgment by a joint defendant, and so the strict terms made by Mr. Smythe were not fulfilled. Nevertheless, he applied to Heindel for his consent upon the supposition, as he swears, that Heindel was to lend the money to pay it all, and Heindel refused. This was on the morning of the sale. An interview was had between Heindel, Fahbeck, Smythe and Lennon in which Fahbeck declared that he was going to buy the property in at a low price so as to save his judgment against Lennon, and the result was a complete refusal cm the part of Smythe to consent to another adjournment. Edward Lennon, however, swears that he understood from Smythe that Heindel intended to buy the property in for the benefit of him, Edward Lennon, after paying the judgments, and Lennon gives this as an excuse why he did not go to the sale or pay any further attention to it. He swears that Smythe advised him to keep away. This statement of Lennon is denied by Heindel and Smythe and Fahbeck, but I am satisfied that Smythe did at least encourage Edward to stay away from the sale.

The sale took place, the property being bid up to $900, which was enough to cover all the executions in Sheriff Toffey’s hands, except that of the bank, and was bid off by Mr. Frambach, as attorney for both parties, the arrangement being that the deed should be made to Fahbeck unless Heindel paid him the $700. Heindel paid Fahbeck $700, and the deed was thereupon made to Heindel. The cost of the premises to Heindel, including all taxes and previous encumbrances, with interest, but not including the amount paid his counsel and Fahbeck, was less than $6,200.

The value of the property is put by the best witnesses for the defendants at $9,000 or $10,000; others for the complainant put it as high as $15,000.

Four grounds are relied on for the setting aside of the sale.

First. That it was sold at too great a sacrifice.

Second. That the property had been laid out in parcels, and should have been sold in parcels.

Third. Surprise on the part of Thomas Lennon, Edward Lennon and the president of the bank, and

Fourth. An illegal combination between Fahbeck and Heindel to prevent bidding on the property.

With regard to the value of the property; the price obtained was not so much below what it was actually worth as to induce the court to set the sale aside, if that circumstance stood by itself. There is no pretence but that the property was advertised according to law, and the various adjournments were obtained at the request of the defendants in execution. When the property was finally sold there was substantially no advertisement of it, but that is the complainant’s fault in asking for adjournment. However, the smallness of the price is not to be lost sight of when we consider the other grounds relied upon.

The second ground is that the property should have been sold in parcels. I think this ground fails for two reasons — first, I am not sure that it would have sold for more if it had been sold in parcels, though it is probable that it would; second, no serious request of the sheriff was made, no preparation or surveys or plots were made. The property was described in two parcels, but it was not suggested that it should have been sold in the parcels thus designated. And if the defendants in execution had wished the property sold in parcels they should have got up a scheme, maps and plots, and requested the sheriff to make the sale in that way. Next, third, as to surprise.

I think, undoubtedly, the president of the bank was 'surprised. He is a business man. He says that he did, indeed, have collateral for the loan, but that the collateral was of no value, and that he relied upon Thomas’ credit as the owner of this real estate, and had confidence in him, and that he was assured by Thomas, two or three days before the sale, that neither he nor his solicitors, Messrs. Russ & Heppenheimer, need pay any attention to it, that the sale would either be adjourned or his j udgment would be protected.

How, in this connection comes the evidence of Mr. Thomas Lennon, which has not been denied by Mr. Smythe or De Graff, that the question of whether or not the bank’s judgment should be protected in the arrangement they had on foot was discussed, and Mr. Smythe and Dr. De Graff insisted at first that it should not be protected, but finally it was agreed between them that it should be protected.

Then we have the evidence of Edward Lennon that Mr. Smythe advised him not to trouble himself about the bank’s j udgment but to cut that off by the sale.

And in this connection is the evidence of Mr. Smythe that he urged on the sale and declined to consent to an adjournment because he was anxious that his clients should have the benefit of Mr. Heindel’s proposed bid. He swears that they were not able to protect themselves by buying in this property. Now, it. strikes one at once that Mr. Smythe, in his anxiety to protect his clients, would naturally apply to the bank, which was, presumably, rich and able to protect itself, and induce the officers of the bank to attend the sale and bid the property up to reach the executions. Instead of doing that he did not inform Mr. Rabe, the president, whom he must have seen in the salesroom— Mr. Fahbeck says that he saw him there — but allowed him to-leave the room without calling his attention to the sale which was about to take place and asking him to protect his (Smythe’s). clients.

These little circumstances, together with several other small matters that cropped out in the evidence — his discouraging Mrs. Butts in her offer to assist — satisfy me that Mr. Smythe, though he 'disavows being retained by Mr. Heindel to examine the title,. &c., was, in fact and in effect, using his position to assist Mr. Heindel and Mr. Fahbeck to do precisely what they did do— buy in that property for enough to cover his clients’ claims and cut off the bank for the benefit of Mr. Fahbeck.

But, without deciding at present whether or not there is enough in these circumstances to give the complainant and the bank relief, I pass to the fourth reason, which must be considered in connection with the other matters already mentioned.

The amount actually paid by Mr. Heindel to Mr. Fahbeck was $700 more than the amount of his bid. That $700 should have been bid upon the property openly and paid to the sheriff, to be applied upon the bank’s execution. Instead of that, it was-diverted and turned over to Mr. Fahbeck; and that was the result of a distinct, deliberate, previous arrangement, for which , Mr. Fahbeck justifies himself on the ground that he had a judgment against Edward Lennon, who was the equitable owner of the property, and therefore, in equity, was entitled to-obtain it. But the net result is that both the judgment of the bank against Thomas Lennon and that of Fahbeck against Edward Lennon are still outstanding and unsatisfied. No cross-bill is filed to set aside the conveyance by Edward to Thomas or to adjust the equities between them. No proof has been offered upon- which the court could base a decree that Edward Lennon was the equitable owner as against Thomas, and that Thomas had not paid Edward as much for the property as it was worth, or upon which Mr. Fahbeck could have sustained a bill in equity to set aside the conveyances under which Thomas acquired the title from Edward. The whole case, in that respect, rests upon suspicion and inference, which are insufficient to sustain a decree.

The result of the sale is a distinct injustice to Thomas Lennon, the complainant, in that it leaves the judgment against him in favor of the bank unpaid to the extent, at least, of $700, the actual amount bid by Heindel for the property, and is also an injustice to the bank, which was cut off by the sale. Such transaction will not stand the test of examination in a court of equity. It was condemned by Chancellor Halsted in Hamburgh Manufacturing Co. v. Edsall, 1 Hal. Ch. 249 (at p. 314), and by Chancellor Runyon in Morris v. Woodward, 10 C. E. Gr. 32, and again by the same learned judge in Van Dyke v. Van Dyke, 4 Stew. Eq. 176. These cases rest on well-settled principles.

The case is not within the principle of the exceptional cases cited by defendants’ counsel in support of combinations by parties to buy at public sales.

Taking all the circumstances into consideration — the price bid as compared with the actual value of the premises, the fact that, the real price paid was $700 more than the bid, this result being-the product of an unlawful contract to stifle bidding, the indications that there was management to prevent the bank from bidding and the direct proof of management to prevent De-Graff from bidding, the fact that the president of the bank had some assurance that its judgment was provided for, and therefore did not look after the sale — I conclude that justice requires that it should be set aside.

I will hear counsel as to the terms upon which relief should be granted.


text:
    John D. Klie and John F. Klie v. Charles Von Broock and Walter W. Wiedermann.
    [Filed April 30th, 1897.]
    1. Upon the facts established in this case — Held, that the lease from the complainants to the defendants did not include the yard in the rear of the restaurant building, but covered only the right of the use of the yard for light and air.
    2. The lessee, rented from a third person the lot next adjoining, and to the building on it added a brick extension in the rear, the wall of which was built up to the line. In this wall were left places for a window and door opening on the yard, the intention being to open a door from the rear of the restaurant. The owner of the restaurant thereupon closed the openings left in the third person’s wall by building up to the line on his side a brick wall twelve inches thick. — Held, that the rights of the lessee in the third lot were no greater than those of its owner, and the owner of the restaurant lot was justified in so closing the openings.
    3. A lessee in possession under a lease for five years commits waste when, without the permission of the lessor, he partially destroys a party wall by cutting out an opening for a door to connect with adjoining premises, though done with the permission of the.other joint owner of the wall.
    4. The test in such a case is not alone whether a material injury is done to the building, but whether it is altered in a material manner and to an extent beyond what is fairly implied from the terms of the original contract of letting.
    5. A person owning two adjoining and connecting buildings, in one of which he kept a saloon, let the other for a restaurant, on the express condition that no beverages should be sold there in competition with the saloon, and the lessee hired the premises adjoining the restaurant on the other side, and cut a door through the party wall to connect with the other premises, intending to open a saloon therein.— Held, that such action constituted waste, and that a mandatory injunction should be awarded to compel the lessee to close the door.
    On bill, combined answer and cross-bill and replication.

      Mr. William S. Stuhr and Mr. John I. Weller, for the complainants.

      Mr. Abel I. Smith, for the defendants.
   Pitney, V. C.

The undisputed facts in the cause are as follows:

The complainants, prior to March, 1895, were the owners of a corner lot covered by a building, in the city of Hoboken, bounded on the north by Newark street, and on the east by River street. The building was four stories high, about thirty-six feet front on Newark street, seventy feet on River street, and had a width in the rear of forty-two and a half feet from River street. The increased width in the rear is due to an offset of six and a half feet in the west side line at a distance of thirty-three feet from Newark street; the side lines being parallel to each other. The first floor was used by them as a liquor saloon, and the other floors as an apartment-house.

The legal title to the lot adjoining the foregoing, on the west, and fronting on Newark street, was at that time held by the Hoboken Land and Improvement Company, subject to a contract to purchase from that company held by Messrs. Ernst and August Scheland, and there was a small building upon it, as I infer, one story in height. Late in February, 1895, the defendant Von Broock purchased this contract from the Schelands for $13,250, and immediately assigned it to the complainants for the same consideration. That lot was twenty-eight feet two inches in front, seventy feet deep, and twenty-one feet and six inches in width in the. rear, fitting in, on the east side, to the offset above mentioned in the west line of the complainants’ corner lot. This lot was known as No. 35 Newark street.

On the west of it was a lot known as No. 39 Newark street, also owned by the Hoboken Land and Improvement Company, upon which was erected a four-story building, and between Nos. 39 and 35 was a twelve-inch brick party wall extending back about thirty-five or forty feet. On the rear of No. 39 was a wooden extension ten or twelve feet high, to the full depth of the lot, and abutting on the easterly line, without any openings toward No. 35, and forming a fence or division between the two lots. The rear of these lots abutted on the blank wall of a theatre. Immediately after the complainants became the assignees of the contract for No. 35, they removed the old building and commenced the erection of a one-story building with basement upon it.

There was an understanding from the first between complainants and the defendant Von Broock that Von Broock should have a lease of the new building for a restaurant; he was consulted with regard to the interior arrangement of it, and his wishes followed in some of its details. Before it was finished, to wit, on the 14th of June, 1895, the complainants and defendants entered into a written lease and agreement as follows:

“Witnesseth: That the said parties of the first part have hereby let and rented to the said parties of the second part, and the said parties of the second part have hereby hired and taken from the said parties of the first part, all that certain store, basement and vault now in course of erection on that certain lot of land and premises situate on the southerly line of Newark street in the city of Hoboken, Hudson county, New Jersey, particularly mentioned and described in a certain agreement dated September twenty-fourth, eighteen; hundred and eighty-three, and made between the Hoboken Land and Improvement Co. and William Hersee, and recorded January 17th, 1889, in Book 17 of Miscellaneous Records for said Hudson county, on page 367, and assigned on the 19th day of June, 1894, by the said William Hersee to Ernst Schellan. and August Schellan, and by the said Ernst Schellan and August Schellan to Charles Von Broock, by assignment dated March 4, 1895, and by the said Charles Von Broock assigned to said John D. Klie and John F. Klie, by assignment dated March 4, 1895, and recorded &c., as by reference to said agreement and assignments will fully appeal-, and known as premises street number 35 Newark street, Hoboken, New Jersey;
“ Excepting and reserving to the parties of the first part the right to use, in connection with their business, the ladies toilet-room in said leased premises, in common with the said parties of the second part, during the hours that said leased premises are kept open by said parties of the second part for business-purposes ;
For the term of five years, to commence on the first day of August, 1895, at the yearly rent of $1,200. * * *
“And the said parties of the second part covenant that they will not, during said term, sell upon said leased premises, or offer for sale thereon, or give, in connection with their business or otherwise, with or without consideration, any vinous, spirituous or malt liquors or any ale or lager -beer, under penalty of forfeiture of this lease or the term of said parties of the second part thereunder.
“And the said parties of the second part further agree that they will not, during said term, sell or offer for sale any cigars on said premises excepting such as they may purchase for the purpose of such sale from said parties of the first part, and which the said parties of the first part agree to sell and furnish to said parties of the second part at the cost price of the same to said parties of the first part and a profit thereon of ten dollars a thousand, on all such brands of cigars as are or shall, during said term, be sold by said parties of the first part in their premises adjoining said leased premises for ten cents apiece, and a profit of five dollars a thousand on all such brands of cigars as are now, or may during said term, be sold by said parties of the first part for five cents apiece.
“This lease is made and accepted on the following express conditions:
First. That in case the parties of the second part shall, during said term, sell upon said leased premises, or offer for sale thereon, or give away in connection with their business or otherwise, with or without consideration, any vinous, spirituous or malt liquors or any ale or lager beer, or
“Second. In case the said parties of the second part shall assign this lease or underlet the said premises or any part thereof, without the written consent of the parties of the first part,
“ That then, in either of said events, the parties of the first part, their heirs or assigns, in their option, shall have the power and the right of terminating and ending this lease immediately, and be entitled to the immediate possession of said premises, and to take summary proceedings against the parties of the second part or any person or persons in possession as tenant having had due and legal notice to quit and surrender the "premises holding over their term.” * * *

The building was erected according to plans and specifications, under the supervision of an architect, and the lessees undoubtedly knew, when they signed the lease, just what the building would be when finished. It covered the whole lot from the front to within about ten feet of the rear. From that point a projection extended about six feet further — that is, to within four feet of the rear, but to the width of only about twelve feet, leaving on each side an open space of about five or six feet, which was excavated to nearly the depth of the basement and walled in with brick walls a little higher than the earth, thus making an ordinary window area, with a sink in the bottom to carry off rain water. Besides these two window areas there was left a clear strip of open yard about four feet wide, extending across the whole width of the lot. The object of this was to afford light and air to the basement of the new building, and also to leave light and air for the westerly side of the main floor and basement of the rear of the four-story corner building.

In building on this lot the’complainants made use of the party wall between No. 35 and No. 39 as far to the rear as it reached, and then built an independent wall on their own side of the line as far as the main body of the building, which, as we have seen, is ten feet from the rear of the line.

Upon each of the two areas two windows opened from the basement — one upon each from the main building, and one upon each on the side of the rear extension. There was no door leading into the back yard or areas.

The rear basement was used as a kitchen, the range being on the west. On the main floor was a gentlemen’s toilet-room on the west side, and a ladies’ toilet-room on the°east side adjoining the complainants’ liquor saloon, and there was an open doorway connection with the complainants’ saloon, so that, persons could pass freely from one to the other.

The restaurant was finished in August, 1895, and the defendants immediately took possession and have since occupied it for their business.

By the permission of complainants the defendants, in the fall of 1895, enclosed the easterly area and placed in it their ice-box and refrigerator.

In the spring of 1896 the defendants conceived the idea of enlarging their business, and rented from the Hoboken Land and Improvement Company the premises adjoining on the west (No. 39) and immediately commenced to alter them and fit them up for a restaurant. In doing this they tore down the wooden building in the rear which had formed a dividing barrier between-Nos. 39 and 35, and erected a one-story brick building in its place, with the side wall placed, or intended so to be, up to the line of the Hoboken Land and Improvement Company’s land, and left in this wall two open spaces on the side next to No. 35 — one a window opening upon the west area of No. 35, and another a door opening upon the main yard. The object of this door was to make a passageway from No. 39 to the kitchen of No. 35, and with this view they tore out the window looking from the kitchen upon the west area, and prepared to make a door in its place by enlarging the opening.

Complainants being apprised of*this project protested and forbade it, and made use of a window which opened from the rear of the corner lot occupied by them upon the yard of No. 35 to gain access thereto, for the purpose of building a brick wall as a hoarding or barrier on the rear of the westerly line of No. 35, and thus shut up the window and door so proposed to be opened upon their lot from No. 39. In this attempt, made on Saturday, May 9th, they were forcibly resisted by the defendants. At about the same time they heard that the defendants were about to break through the party wall between No. 35 and No. 39, in the basement, and- make a passageway between the two premises. They thereupon prepared their bill in this cause, and presented it to a vice chancellor on the afternoon of May 11th, setting out their title to' the two lots, the lease to the defendants, and most of the facts hereinbefore stated, and praying an injunction against the breaking through of the party wall in the basement, and also against interference with their entry upon the yard in the rear of No. 35 to erect a brick hoarding against the door and window opening upon their premises from No. 39.

A restraining order was granted, but before it was granted or served the defendants had succeeded, by employing laborers on Saturday evening, May 9th, to work that night and the next day, Sunday, in cutting an opening in the party wall, and constructing a door and passageway therein between the two buildings.

Under the protection of the restraining order the complainants gained access to the enclosed yard in question from the window in the rear of their corner building, and erected a solid brick wall twelve inches wide, and about twelve or fourteen feet high, close up to their westerly line, partly upon a new foundation, and partly upon the stone coping of the area wall of the westerly rear area, the result of which was to prevent the defendants from using the door and window which they had left in the wall of the new building on the Hoboken Land and Improvement Company’s land, but to leave them the use of the passageway resulting from the breaking through of the party wall. The defendants subsequently partially restored the window in the basement, and inserted in it a ventilator operated by electricity to cool the air of the kitchen.

The defendants, by their cross-bill, pray that the complainants may be decreed to abate and take down this wall in the rear. Complainants pray that the defendants may be restrained from using the passageway in the party wall, and may be decreed to fill it up and restore it to its former condition.

The questions litigated are:

First. Did the lease from the complainants to the defendants include the yard in the rear of the restaurant, or did it cover only the right of the use of the yard for light and air ?

Second. Were the complainants justified in building the brick hoarding or barrier on the west side of the rear of lot No. 35?

Third. Was the breaking through of the party wall and inserting a door in the basement, waste on the part of the defendants ? And, if so, then

Fourth. Should the defendants be ordered to restore it?

I think the first question must be resolved in favor of the complainants. The construction of the clause of demise in the lease is not free from difficulty, but it seems to me that the better view is that the thing demised was the building itself as it stood, and not the yard in the rear. If the parties intended to include in the letting the whole lot, it would have been easy to express that intention in a few words. And the express mention of the building is an indication that nothing more was intended to be demised. The word “ on ” in the first part of the clause cannot be read as “ and.”

Then the plan of the building must be considered. There were no doors opening upon the little yard, and the only means of access to it were ordinary windows, and such do not indicate any intention that they should be used as doors in order to gain access to the yard, but the contrary. And, in fact, the yard was capable of little or no actual occupation or use.

Then, again, complainants would naturally desire to keep it free from obstructions to light and air for their corner lot, and free from any objects which might in any degree annoy their customers or tenants.

Stress was laid by defendants’ counsel on the last clause of the described premises, namely, and known as premises street number 35 Newark street.” But clearly these words, by correct grammatical construction, refer to the preceding description of the lot on which the building demised was in course of construction, and not to the thing demised.

Further, I am unable to distinguish between the two little areas and the remainder of the uncovered space. They are simply depressions in the earth, made to give light and air to the basement, and the rain-water sinks in their bottoms indicate that they were not constructed or intended as a part of the building so as to pass with it.

My conclusion is that the only right in this yard which the defendants acquired by their lease was the right of light and air, and this right flowed from the fact that the building demised to them was provided with windows opening upon it.

Second, as to the right of the complainants- to erect the brick wall intended as a hoarding or screen to obstruct the newly-constructed door and window which opened into this yard and area from No. 39.

This question must be considered precisely as if that work had been done by the Hoboken Land and Improvement Company itself, and the defendants were not tenants of that building, for I cannot see that the defendants have the right to add their right as lessees of No. 39 to that as lessees of No. 35, or stand in any better light before the court on this part of the case than would their landlord of No. 39. There can be no doubt of the right of an owner of a vacant lot to erect a screen or hoarding on his own premises in order to prevent his neighbor, who builds up to the line between them and places windows in his building looking upon his neighbor’s ground, making use of them for that purpose. In fact, it is not an uncommon occurrence and quite a natural and proper thing to be done by the person whose vacant land is about to be subjected to such a use by his neighbor.

The precise question here is narrowed down to this: Whether or not the erection of the hoarding in this case was an actual infringement of the right of the defendants to the light and air of the yard in the rear of their restaurant on No. 35. It did, in a very slight degree, tend to reduce the light which entered their basement windows by narrowing, by one foot, the width, or rather, shortening the length of the open space or yard in the rear of their building. But the defendants brought this slight injury upon themselves by attempting to make a use of the yard which was certainly not within the letter of their contract, and clearly not within the contemplation of the parties when the lease was made, and I think that unjustifiable attempt prevents them from complaining of the adoption by complainants of the only efficient means they had to prevent a misuse of the premises.

Besides, the matter of light in the rear of the demised premises has, by the voluntary act of the defendants, become of slight importance. The window opening from the basement of the main building upon the westerly area has been devoted to the purposes of ventilation and not of light, and the whole of the projection from the main building has been shut off from the basement by a temporary wooden partition, and the projection itself is used simply for a spiral stairway from the main floor of the restaurant to the kitchen. The eastern window of the main building has been stopped by the placing of a refrigerator therein. The kitchen itself is lighted entirely by gas.

There remains the third question, namely, that of waste.

The defendants obtained permission from the Hoboken Land and Improvement Company to cut the doorway through the partition wall, but, clearly, that company could not give them the right to do so without the permission' of the complainants, who owned one-half of the wall. And the result is the same whether we consider that ownership as of the particular one-half which was on their side of the line or as the undivided one-half of the whole. The question, then, is whether or not, under the terms of the lease, the defendants acquired such a right in the premises as authorized them to make the opening.

The opening, as first made, was between four and five feet wide and seven or eight feet high. The bricks and mortar were actually removed, and these composed an essential part of the building itself.

Now, it seems to me too plain for argument that such an abstraction amounted to waste at the common law. It was a “ spoil ” and “ destruction,” pro tanto, of the building. 2 Bouv. Law Dict. tit. “ Waste ; 6 Jac. Law Dict. tit. “ Waste 393 (at p. 399), where the author uses this language, citing authorities :

“If a lessee flings down a wall between a parlor and a chamber, by which he makes a parlor more large, it is waste; it cannot be intended for the benefit of the lessor, nor is it in the power of the lessee to transpose a house. So, if he pulls down a partition between chamber and chamber, it is waste. Or, if a lessee pulls down a hall or parlor and makes a stable of it, it is waste. If a lessee pulls down a garret overhead, and makes it all in one and the same thing, it is waste. Breaking of a wall covered with thatch, and of a pale of timber covered, is waste.”

To the same effect precisely are 7 Bac. Abr. tit. “ Waste ” (at p *256) and Tayl. Land. & T. § 348; Kerr. Inj. *250, *251, where the author says :

“An alteration of buildings which changes their nature and character is waste, even although the value of the premises be thereby increased. Thus, the converting two chambers into one, or e converso, or the converting a hand-mill into a horse-mill, or a corn-mill into a fulling-mill, or a malt-mill to a corn-mill, or a logwood-mill to a cotton-mill, have been held to be waste. So, also, the conversion of a private house into a shop is waste. So, also, may the building of a new house where there was one before be waste if it impair the evidence of title.”

And he cites Lord Romilly, in Smith v. Carter, 18 Beav. 78, for authority that a tenant will be restrained from pulling down a house and building another, which the landlord objected to. “It is not sufficient,” said his lordship, “that the house proposed to be built is a better one. The landlord has a right to exercise his own judgment and caprice whether there shall be a change; if he objects the court will not allow a tenant to pull down one house and build another in its place.”

And see 1 Washb. Real. Prop. *113, where the learned author adopts the rule as laid down by Lord Romilly.

This restriction on the right of a tenant for years is based upon the character of his tenancy. “ He has the use, but not the dominion of the property.” Farrant v. Thompson, 5 Barn. & Ald. 826, per Mr. Justice Holroyd.

Evidence was given as to whether or not the destruction in this case materially injured the party wall. I think that the weight of the evidence is that it did materially injure it. The wall itself, being only twelve inches in thickness, was, at best, a very slight affair to maintain a four-story building; so much so, that it will, sooner or later, require a shoring on each side. Now it seems to be contrary to common knowledge and common sense to say that taking out and absolutely abstracting a piece of the wall four or five feet wide and seven or eight feet high, will not weaken it, and materially weaken it. A contrary view would result in holding that several such openings could be made in this wall without injuring the building.

Then the evidence satisfies me that the attempt to properly secure and support the wall over the opening was not well carried out, and was not successful. New jambs of brick were added to the ragged edges of the opening, in order to make it-square and proper to be stopped by doors. Those jambs, being of new material, required the greatest care in their construction in order to make them unite and be homogeneous with the old work, but the complainants’ architect swears that upon an inspection made during the hearing he found a crack and opening between the new and the old work. Then iron beams or lintels were placed upon these new jambs to sustain the weight of the wall above. The architect in question gave it as his opinion — and I agree with him — that the proper mode of sustaining those lintels was to place them upon iron plates, placed in turn upon the top of the old part of the wall on each side, and then to key them up with iron wedges so as to make them bear up and press against the old brick work. Instead of this, they were simply laid upon the bare bricks of the new jambs, which, as we have seen, were, from defective construction, insufficient for that purpose. The result of this mode of adjusting them was to render them substantially useless so far as regards preventing any subsidence in the wall above the opening. The architects called by the defendants swear that the opening was made in the usual manner, and well done. But I cannot accept their judgments on this subject. It seems to me they are not sound.

But, in- my judgment, the test in such a ease is not alone whether a material injury is done to the building, but whether it is altered in a material manner, and to an extent beyond what is fairly implied from the terms of the original contract of letting.

It is said by the treatise-writers, and authorities are cited for the position, that the severity of the ancient rule of waste has been relaxed, and that many alterations are now held not waste which in ancient times would have been held as waste. I have examined the cases which are said to illustrate this modification, and my conclusion is that in most of them a permission by the owner to the tenant to alter and change the building is either found in the terms of the demise, or is to be implied from the circumstances of the case. Thus, if the owner of a dwelling in a neighborhood which is rapidly being converted from a dwelling region into a business region, lets it to a party for a long term of years, knowing that he expects to use it for business purposes, that, by implication, is permission to him to make such alterations as are necessary and usual for that purpose. And so where a demise is made for a great number of years — say one hundred or two hundred — for a fair rental value of the premises, there it must be presumed that the parties intended that the tenant for years should have well-nigh unrestricted use of the premises, provided he does not reduce their rental value. For, in such a case, the reversion, independent of the rent, is of mere nominal value.

So, I should say that if a building be erected and let for a hotel, and through oversight or miscalculation some mistake in the interior arrangements occurs which materially interferes with its beneficial use for that purpose, and requires a change, it is probable that the right to make such change could properly be inferred from the circumstances. An illustration is found in this case. At the special request of the tenants the landlords divided the basement into two parts by a cross-wall of brick, not a part of the original plan and not necessary for the support of the building. This was done in order to keep the heat of therange in the kitchen from penetrating to the front part of the basement. When the building came into actual use it was found that this wall was an injury rather than a benefit, and was in whole or in part removed by the defendants. They assert that it was done with the consent of the landlords; but the landlords deny this. Be that as it may, I think it was not waste, and its removal was not relied upon as a part of complainants’ case.

The cases in this country relied upon to show an amelioration of the strict English rule are Jackson v. Tibbits, 3 Wend. 341, and Winship v. Pitts, 3 Paige 259.

Jackson v. Tibbits was an ejectment by landlord against tenant, based upon waste committed by the tenant in the leased premises, which were a tavern in the village of Utica, and the waste was the cutting a door between two rooms in the second story, and putting a window in the door of the cellar kitchen. It appeared that they were beneficial, and not injurious, to the premises. The judge, at the trial, charged the jury that they amounted to waste and worked a forfeiture of the defendants’ rights in all the premises. There was evidence, however, of waiver by the plaintiff of the waste. The opinion was per curiam, by Mr. Justice Marcy, and he granted a new trial, not only on the ground that the act committed was not waste, but also that, according to the authorities, the whole premises were not forfeited, but only the part wasted; and further, that there was proof from which the jury might have inferred a waiver. Of course, in considering the effect of this case, and others like it, we must bear in mind that the courts are always anxious to save an actual forfeiture of the term.

Winship v. Pitts, supra, was decided by Chancellor Walworth. There a tenant of a corner lot, which had vacant land in the rear abutting on a side street, proposed to erect a stable there, and the landlord, owning other property in the neighborhood, filed a bill for an injunction. The chancellor held that the mere erection of a stable on vacant land was not waste. In fact, it never was waste; a dictum to the contrary by Lord Coke was very shortly afterward overruled.

After a full review of all the cases in both countries, Professor Dwight, sitting in the commission of appeals, in Agate v. Lowenbein, 57 N. Y. 604, declares that “ there can be no pretence of any relaxation of the rule against waste in the case of tearing down houses or taking away inner walls or partitions. It would be difficult to set any limits to such acts by judicial decisions. Where such changes are desired they should be left to the agreement of the parties.” In this view I heartily concur.

Then there is a distinction taken by the judges between an alteration in the outside walls of a building forming a property boundary and those more trifling alterations which may be made in the interior partitions — taking away or cutting a door through an interior partition or altering a street window into a door. As late as 1817 Lord Ellenborough, after hearing the most distinguished counsel of the day, held that the cutting of a doorway through the outside wall of a demised house into an adjoining house and keeping it open for a long space of time, amounted to a breach of a covenant to repair, which was a continuing breach, and which caused a forfeiture and entitled the landlord to recover in an action of ejectment against his tenant. Doe, ex dem. Vickrey, v. Jackson, 2 Stark. *260.

In Doe v. Jones, 4 B. & Ad. 126, attempt was made to forfeit a lease on account of a breach of covenant to repair. The term was for forty years, and the lease contained a covenant to keep in repair the premises “and all such buildings, improvements and additions as shall be made by the lessee during the term,” with a proviso for re-entry in case of breach. The lessee changed the lower windows opening on the street, and stopped up a doorway, making a new one in a different place in an interior partition of the house, and it was held that there was no waste because it appeared that the changes were not injurious and were contemplated by the language of the lease. Doe v. Jackson, supra, was cited, but the judges distinguished it on the ground that in that case the breaking was of a wall between two houses, and not in an interior partition of the house.

Young v. Spencer, 10 B. & C. 145, was an action on the case by landlord against tenant for injury to the leased premises. It appeared that the defendant had opened a door from the house into the street, and the jury found specially that no injury was done to the house itself or to any of the other houses owned by the plaintiff on that street. The judge directed a judgment for the plaintiff, but the court held that it was for the jury to say whether there was any injury to the plaintiff’s reversionary right, and granted a new trial.

Some of the authorities cited by the defendants’ counsel were cases of equitable waste, and so not applicable here ; the distinction being that equitable waste is an abuse by a tenant, without impeachment of waste, of his legal right to commit waste.

I can find no authority holding that a breach in and partial destruction of a wall dividing the demised premises from those adjoining owned by another party is not waste.

In the present instance there can be no pretence that the right to make such a breach can be implied from anything contained in the contract or found in the circumstances surrounding its inception and conclusion. The building was designed especially for a restaurant, to be used in connection with the complainants’ liquor saloon, and the defendants were consulted and knew and agreed to all the details of its construction. Indeed, in their answer they claim a greater voice in those details than the complainants admit. It was not contended that, as constructed, it did not answer the expectation of the parties. There was and can be no pretence that the change effected by the opening in question tends to make the building more convenient for the use for which it was designed and leased.

These considerations lead to the conclusion that the case is not covered by any well-considered authority in which tenants have been held justified in changes of this character.

Fourth, as to the remedy.

In the prayer of complainants’ bill they ask that the defendants may be ordered either to restore the opening in the party wall, or to give security for its restoration at the end of the term. By thus praying for alternative relief I understand that the complainants did not intend to give to the defendants an option of submitting to the latter remedy, but simply to ask that the court should give it if the first remedy of immediate restoration was not considered by the court proper and equitable. The defendants, by their answer, and at the hearing, offered to give security for restoration at the end of the term, but complainants at the hearing insisted upon immediate restoration.

It is well settled that complainants are entitled to immediate relief, and are not obliged to wait until the end of the term. Agate v. Lowenbein, 57 N. Y. 604, and cases cited at p. 612 et seq.

In the present case the waste was committed against the known wishes and protest of complainants, and with such haste that it was substantially completed before complainants could obtain preventive relief from this court.

It further sufficiently appears that the carrying out of defendants’ plan will be inconsistent with the spirit, if not the letter, of the agreement. The intention was that the restaurant should be conducted in such a manner as to increase the patronage of complainants’ liquor saloon, and should not be in any sense a competitor for their business. The complainants allege in their bill that’the intention of defendants is to keep a rival liquor saloon in No. 39. This is not denied by defendants in their answer. In fact, they say they propose to keep an hotel there. If so, and a passageway is kept open between the two buildings, patrons of the restaurant in No. 35 may possibly be served with intoxicants from a bar in No. 39 without a breach of the letter of the agreement. This consideration shows the motive, or one of the motives, behind complainants’ action, and it cannot be affirmed that it is unworthy or inequitable.

In the somewhat similar case of Bonnett v. Sadler, 14 Ves. *526, Lord Eldon did not think it inequitable. In that case the complainants were the proprietors of a carriage factory and salesroom, and owned an adjoining house, which was a dwelling. The defendants leased the dwelling, concealing from the complainants .the fact that they intended to set up a rival establishment, and after getting possession proceeded to change the front and interior of the building so as to make it fit for that purpose, and Lord Eldon remarked upon their conduct in that respect as inequitable. And Lord Selborne, in Goodson v. Richardson, L. R. 9 Ch. App. 221 (1874) (at p. 224), spoke approvingly of a landowner, who was interested in a water company, standing on his strict rights in equity to prevent a rival company from laying its water mains in the street in front of his lands.

The presumption is that the restriction against selling liquors contained in the lease affected the amount of the rent. At all events, the complainants are entitled to the benefit of their contract, and are justified in using all legal means to preserve it.

For these reasons complainants, in my judgment, have a clear right to relief in this court.

The authorities justify the use of a mandatory injunction in such cases. The leading case is Vane v. Lord Barnard, 2 Vern. 738, known as the Raby Castle Case. This was followed by Rolt v. Lord Somerville (1737), decided by Lord Hardwicke and reported in 3 Eq. Cas. Abr. (at p. 759), where there was a cutting of trees and also pulling down houses and buildings. The prayer was that the premises might be restored. Lord Hardwicke said that he could not compel the restoration of the trees, but he said, “ yet, as to the pulling down the houses and buildings and laying the lead pipes they may be restored or put in as good condition again,” citing with approbation the case of Vane v. Lord Barnard.

I think the present a proper case for immediate restoration.

I will advise a decree that the defendants be restrained from permitting the opening in the party wall, made by them on or about May 10th, 1896, to remain in its present condition, or from permitting the party wall between the leased premises and those of the Hoboken Land and Improvement Company on the west, to be in any other condition than it was prior to the opening made therein by the defendants; and further, if complainants desire themselves to do the work of restoration, then that the defendants be restrained from preventing the complainants from so doing, at a reasonable time and in a reasonable manner, and the court will name a special master, under whose supervision the work of restoration shall he done, if the parties cannot agree thereupon. The provision for restoration may also include the window opening upon the area, if the brickwork has not already been restored to its original condition.