author: O’Briek, J.

text:
    Libbie Spannochia, App’lt, v. Frederick W. Loew et al., as Executors, etc., Resp’ts.

      (Supreme Court, General Term, Third Department,

      Filed May 14, 1895.)

    Contract — Fraud—Rescission.
    A party cannot rescind a contract for fraud without restoring whatever has been received under it, unless he was bound to pay some unascertained amount before relief can be granted, or the particular sum in question was indisputably due him.
    Appeal from a judgment entered on a verdict in favor of defendants, directed by the court.

      John D. Townsend, for app’lt; William Man, for resp’t George B. Vanderpoel; William V. Rowe, for resp’t Loew.
   O’Briek, J.

Jacob Vanderpoel was married to the plaintiff December 12, 1872, and he died in February, 1884. The action was commenced in March, 1893, against the executors of his last will and testament and others interested in the property, by his wife, Libbie Spannochia (who after his death had married again), to compel admeasurement of her dower. Prior to his death, and on June 1, 1891, Vanderpoel had conveyed to Frederick W. Loew all his real estate. The plaintiff, in consideration of $20,-000, admitted to have been paid, released to her husband’s grantee all her inchoate right of dower in the real estate by sealed release duly acknowledged on June 2, 1891. In March, 1883, a suit for limited divorce was brought by plaintiff against her husband, and an agreement was made between her then attorney (who is the same person that represents her in this action) and Mr. Loew, representing the husband, by which it was agreed that she was to bring an action for absolute divorce, to which no opposition was to be made, and in which she was to receive $10,000 in lieu of alimony and of all claims that she had or might have against Vanderpoel or his property, and, in addition, that her attorney was to receive $1,500 for his fees and expenses, and that upon such payment she should “ give to the said Jacob Vanderpoel a general release from all claims and demands which she or her heirs or assigns have or may have against the said Vanderpoel oi his property.” The agreement also provided for making irrevocable a power of attorney theretofore given to Mr.' Loew as to authorize him “ to act in her stead in all matters in which she has or had any interests in common with her husband growing-out of their relations.” This agreement was carried out. She got an absolute divorce on June 29, 1883, and received her $10,000, and her attorney the $1,500 as agreed ; and she executed on the back of the old power of attorney a declaration, dated July 11, 1883, that, for value received, she made it irrevocable; and she gave a general release to Mr. Vanderpoel. In 1892 she brought suit against Mr. Loew for damages, alleging that she had been induced, through fraud and misrepresentations, to sign the release of dower to the realty conveyed by Vanderpoel to Loew in June, 1881. On March 6, 1893, this suit was compromised by the payment of $500 in settlement and the execution of a release to Mr. Loew of the cause of action ; and on the same day upon which the suit was compromised, viz., March 6, 1893, the summons in this action was dated, and the complaint verified.

Upon the trial it was admitted that of the moneys thus paid to plaintiff, which included the $20,000 received by her upon the execution of the original release of dower to the defendant Loew on June 2, 1881, the $10,000 and $1,500 paid in connection with the divorce suit, and the $500 paid by Loew in settlement of the action against him, none was either tendered or returned, nor did the plaintiff make any offer to return any or all of such sums. After these various releases o£ dower and other documents were introduced by the defendants, and the latter had rested, plaintiff sought in rebuttal to attack them, on the ground that the defendant Loew had procured them by fraud, the claim made by counsel being that he had evidence tending to prove that the defendant Loew had misrepresented to the plaintiff the value of Jacob Vanderpoel’s property and his wealth, and the nature of the instruments which he had induced her to sign ; but such testimony was objected to, and in the oral opinion sustaining such objection, the learned trial judge, among other things, said:

“ In 1883, when she brought her action for separation, Mr. Vanderpoel and she having, as I understand the matter, been previously actually separated, in her complaint in that action she alleged that she had been deceived as to the amount of his property, and that he was then the owner of some $700,000 worth of real estate, showing that at that time she had information upon the subject as to the amount of his real estate. Whether it was correct or not there is nothing before me to show. Then it appears that an agreement was entered into between Judge Loew and Mr. Townsend, representing the parties, which provided for a variety of matters ; and, among others, it provided that she should receive $10,000 more in addition to the $20,000 which she had received when she executed the first release, and that a divorce should be secured by her without opposition on the part of her husband, in some state other than New York, and that her counsel should receive $1,000 for counsel fees and $500 for expenses. It appears that that agreement was carried out, with the difference that the divorce was obtained in this state which was an absolute divorce on the ground of adultery, and, of course, entirely separated the parties for all legal purposes. Then it appears that the $10,000 was paid her, and the other sums agreed upon were paid ;> and at that time, in consideration of this arrangement, she executed a general release to Mr. Yanderpoel himself of all claims and demands of every description whatever, including any possible claim for dower, although'I do not remember whether dower was specifically mentioned or not. * * * Then it appears that nothing further "was done, as I understand it, until the action was brought in the court of common pleas in the year 1893, in which it was set up in the complaint that she had given these releases as the result of fraudulent representations made to-her by Judge Loew. In that action she demanded $150,000 damages because of these fraudulent representations. That action assumed the existence of the release and its validity, and demanded damages because she had given it. It appears that that, action was subsequently settled upon the payment of $500,-and thereupon the plaintiff executed a third release to Judge Loew, releasing him from all claims of every sort and description.. Thereupon a consent was made, and that action was discontinued, and "immediately afterwards the present action was brought. Here are these three releases that have been given by the plaintiff: The original one of dower specifically to Judge Loew, in 1881 ; the second one, in 1883, to Mr. Yanderpoel himself, after she had been divorced, which was a general release, and also a release ,of dower ; and, in the third place, a release to Judge Loew, in 1893, which was also a general release. Upon this state of facts, the defense raises four objections to the admissibility of this testimony. The first one is that in this suit it is sought to avoid the effect of the statute of limitations, because, if an action was brought at the time this was brought to set aside these releases, it would have been barred by the statute of limitations; therefore, an attack cannot be made upon these releases collaterally in this suit. The second is that, having received $20,000 in consideration of releasing her dower, she cannot maintain an action without-restoring that $20,000. The third is that having in the first suit, which she brought in the common pleas elected, not only her remedy, but her right, and insisting that the release which she had given was in full force, and demanding damages because of the release, she cannot now, at least as against Judge Loew, insist that the release is void. Fourth, it is claimed that under the Revised Statutes she has made the election as to her dower. The statute provides that where any arrangement is made by a married woman, and pecuniary provision is made, she must elect within a year whether she will accept that pecuniary provision, or whether she will stand upon her rights and claim her dower in the land; and it is insisted that she elected to take the pecuniary provision, and has never returned it, and,"therefore, she cannot maintain such an action as this. As to the first ground of objection, my impression is that the point is not well taken. As to-the third and fourth grounds, I am inclined to think that the objections are well taken, but it admits of arguments pro and con as to those two points. But, as to the second objection, it appears to me there is no answer to it. At least I have heard none suggested, and I have not been able to think of any answer; that is, that, before she can maintain this action, she was bound to return the $20,000.”

We have thus quoted at length from the views expressed by the court in disposing of the objection to the testimony offered by the plaintiff in rebuttal, because it contains a clear summary of the facts as they were then made to appear, and shows a clear apprehension on the part of the trial judge of the legal principles applicable thereto; and we might be well content to rest our affirmance upon his opinion, were it not that the principal ground upon which the ruling was claimed to be supported is strenuously assailed upon this appeal, and it is therefore necessary that we should supplement his views by a brief reference to the legal principles and the authorities which we think control.

As correctly said by one of the respondents, this is an action at law, not for damages for the claimed fraud or deceit, but for the identical thing released or sold. The plaintiff retains the consideration paid her, and thereby affirms the sale, and yet sues to get the identical thing and the whole thing that was the subject of sale. Unless the release of dower is set aside, it is an absolute bar to any recovery of dower. If fraudulently obtained from her, she had three remedies : She might sue for the deceit, admitting that she got $20,000, and keep it, stating that the right she parted with was worth much more, and upon proof she could recover whatever amount of damages the evidence showed would make her as well off as if she had not been defrauded. She might have sued in equity to rescind, offering in her complaint to repay the $20,000, and tendering it on the trial. Or she could have brought her action at law, such as was here brought, for an admeasurement of dower; and whether in such action she should pay back or tender the $20,000 upon the trial the authorities must determine. At the time of the release of dower was delivered, the plaintiff was not entitled to any sum whatsoever, and what was paid her then was not in satisfaction of any absolute right or claim that she then had, but was given in consideration of the release and transfer of her inchoate and contingent right or claim for dower. This sale, settlement, or release she seeks to repudiate upon the ground of fraud, claiming that she was entitled to dower in the lands; so that, if she were permitted to recover without paying back or offering to refund what she had received, she would have both the land and the money.

The general rule is that a party cannot rescind a contract for fraud without restoring whatever has been received under it. Lee v. Oil Co, 126 N. Y. 579, 586; 38 St. Rep. 662. The exceptions to this rule are: (1) In equity, where it appears that the party seeking the relief was bound to pay some unascertained amount before the relief could be granted, it is not necessary to pay or tender the amount before bringing suit; it is enough if the plaintiff offers in his bill to pay or to perform whatever obligations rest upon him in that regard. Zebley v. Trust Co., 139 N. Y. 470: 54 St. Rep. 721. (2) If the particular sum in question “was indisputably due the plaintiff, it would have been unnecessary for the plaintiff to tender or return * * * the money paid, because, in any view of the case, so much would have been due the plaintiff." Gould v. Bank, 86 N. Y. 75 ; Kley v. Healey, 127 id. 555 ; 40 St. Rep. 215. Whether the plaintiff was entitled to the benefit of this second exception is to be determined by the answer to be furnished to the query whether, in any event, she was entitled to retain the $20,000 paid her at the time the release sought to be set aside was delivered. The action is to obtain an admeasurement of plaintiffs’s dower, or to have set apart her interest in the land; and she would not be entitled to both that relief and any sum equal to or in excess of the $20,000 paid her. Therefore, under the general rule, she would be required to refund what she had received under the contract which she seeks to have rescinded for fraud.

It will thus be seen that we concur in the conclusion reached by the learned trial judge, and leave undisposed of the other questions which are serious obstacles to plaintiff's right to maintain this action. That little weight is to be attached to the claim that her knowledge of the deception practiced upon her in misstating the amount of Mr. Vanderpoel’s wealth was but recently obtained is shown by the fact that in her verified complaint in March, 1883 (ten years before the commencement of this action), she alleges that Yanderpoel “is a man of very large fortune, as the plaintiff believes, being worth atleastthesum of $700,000.” And she therein further alleges that she was “induced to sign off her dower right in all the defendant’s (Yanderpoel’s) estate nominally forthe sum of $20,000, but in reality for the sum of $10,000.” It was subsequent to verifying such complaint that, with the assistance and advice of her present attorney, she entered into the agreement relating to her obtaining an absolute divorce, and receiving for herself the $10,000 and for her counsel the $1,500, which agreement was fully carried out by the payment of the sums named, and by her giving, as she had agreed to do, another release of all her claims against her husband’s property. If the maxim that there should be an end to litigation can ever be invoked, this would seem an eminently proper case for its application. Not content with her former steps, and claiming to have been defrauded, she elected after an interval of years to sue Mi’. Loew personally for damages for such fraud, which action, as shown, was compromised and settled on the very day that the present action was commenced. We do not think it can be seriously contended that the plaintiff has not had her day in court, or has not had the advice and assistance of competent counsel, because it is made to appear that, by shifting her position, she has succeeded up to the present time in obtaining three different settlements, which apparently have no other force or effect upon her than to whet her appetite for additional litigation ; and, if this action can be maintained, we fail to see when there is to be end to the dispute between this plaintiff and the estate of her former husband. Where parties disagree, the law favors a fair adjustment of their differences between themselves out of court; and it is only upon a clear showing that the one complaining has been overreached by fraudulent means that the court’s aid can be invoked to right the wrong. But where, as here, the plaintiff urges her claims through the same attorney that conducted the negotiations for her leading up to the settlement from which she obtained pecuniary compensation, and after the lapse of years, during which, with knowledge, she rested upon her right, she does not make a showing commending her to the favorable consideration of the court. We think, upon the merits, that the disposition made by the trial judge was right, and that the granting of the full allowance was a proper exercise of discretion, because warranted by the extraordinary character of the action, and justified by the only conclusion to be drawn from the facts, — that the plaintiff, without any just cause of complaint, speculated upon the chances of a recovery, and, having lost, should, as all other suitors in similar actions, pay the penalty.

Judgment accordingly confirmed, with costs.

All concur.


source: Caselaw Access Project

author: Follett, J.

license: Public Domain

text:
    Empire City Subway Company, Limited, App’lt, v. Broadway and Seventh Avenue Railroad Company et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    1. Injunction — Violation of statute. .
    A private corporation cannot maintain an action in equity to restrain the violation of a statute, enacted for the protection of the public, unless it shows that it has been, or will be, injured in property by such violation.
    2. Same — Electric subways. '
    An electric subway company, to whom the right to construct subways in certain streets has been granted, cannot enjoin the maintenance of electric wires in such streets, not placed in its subways, in violation of the laws relating to electrical conductors, unless it has the exclusive right, either by contract or by statute, to have all electric conductors placed in its subways.
    3. Same.
    In this case, such exclusive right was held not to have been conferred upon the plaintiff, either by statute or contract.
    4. Costs — Extra allowance.
    The value of the privilege, sought to be enjoined, in an action by an electric subway company to restrain a cable road from maintaining electric wires in the cable conduit of its road, or using any electrical conductors not placed in plaintiff’s subways, is the amount in controversy, for the purpose of computing an extra allowance.
    Appeal from a judgment, dismissing the complaint on the merits, and from an order granting an extra allowance of costs.
    This action was begun July 11, 1893, to enjoin the defendants from maintaining a conduit for the reception and operation of a telegraphic and telephonic conductor on the line of the defendants’ road, and to restrain them from using any electrical conductor not placed in the plaintiff’s subways and conduits. The defendants were incorporated under chapter 252 of the Laws of 1884, for the purpose of constructing, maintaining, and operating railroads in certain streets of the city of New York. The Broadway & Seventh Avenue Railroad Company owns the road extending from South Ferry, through Whitehall street, Broadway, and Seventh Avenue, to Central Park, at the intersection of that avenue and Fifty-Ninth street. Formerly the Broadway & Seventh Avenue road was operated with horses, but, by chapter 581 of the Laws of 1889, it was authorized, upon obtaining certain consents, to move its cars by a hable, and make such changes in its road and bed thereof as should be necessary so to operate its line. Afterwards the consents of the owners of more than one-half in value of the property on this line were obtained that the corporation might substitute a cable for horse power ; and November 12, 1889, the common council of the city consented that the corporation might operate the road by a cable, on terms and conditions agreed on, which were expressed in a preamble and resolutions adopted on that day, and approved by the mayor November 13, 1889. By chapter É59 of the Laws of 1890, the aforesaid acts of the authorities of the city were validated and confirmed. On the 13th of May, 1890, the roads owned by the Broadway & Seventh Avenue Railroad Company were leased to the Houston, West Street & Pavonia Ferry Railroad Company, since which date the leased lines have been operated by the lessee.. On the 31st of July, 1890, the board of railroad commissioners of this state approved of the proposed change of power, and the terms and conditions agreed to between the city and the corporation, and imposing certain other conditions, which were expressed in their determination on file in the office of said board, among which is the following: • “ The counsel of the company agreed that every provision that ingenuity could suggest would be adopted to operate the cable with safety to the traveling public, particularly in the form of grip and system of signaling to the central house to stop the engines in case of accident.” Pursuant to the authority so obtained, cable power was substituted for horse power for propelling the cars. To affect the change, a central or power house was erected, where power was generated and applied to the cable, and a subway constructed in the roadbed for the cable ; and an . iron pipe two and one-half inches in diameter was laid, wherein were placed electric wires for the purpose of transmitting signals between the power house and signal boxes placed along the line and about 600 feet apart. These wires are used solely for communicating between the power house and the'various signal boxes intelligence relating to the oDeration of the road, and especially for the purpose of stopping the movement of the cable in case of an accident on the line. Prior to July, 1886, the Consolidated Telegraphic & Electrical Subway Company was incorporated under the Laws of this state for the purpose of building and maintaining subways in the city of New York, and renting space in such ways to the owners of electrical conductors. In July, 1886, and in April, 1887, the board of commissioners of electrical subways entered into contracts with the Consolidated Telegraphic & Electrical Subway Company by which this . corporation was ¡granted the right to construct subways in accordance with plans thereafter to be agreed on, manage, and operate the same, and charge and receive compensation for the use of space in such subways. By chapter 716 of the Laws of 1887 the board of electrical control in the city of New York was created and invested with power previously conferred upon the board of commissioners of electrical subways in said city; and by the sixth section of the act the contracts of July, 1886, and of April 1887, were ratified and confirmed. On the 26th of April, 1890, the Empire City Subway Company, Limited (the plaintiff), was incorporated, pursuant to chapter 611 of the Laws of 1875 and the acts amendatory thereof and supplemental thereto, for the purpose of constructing, maintaining, and operating electrical conductors, subways, and conduits, and to lease space in the subways and conduits so constructed to persons and corporations having the right to operate electrical conductors in this city. December, 1890, the Consolidated Telegraphic & Electrical Subway Company, with the consent of the city, conveyed to the plaintiff all subways and conduits for telegraphic and telephonic conductors of the Edison Electric Illuminating Company of New York, May 15, 1891, the board of electrical control and the plaintiff entered into a contract by which the latter agreed to construct, equip, maintain, and operate subways, conduits, and ducts for telegraphic and telephonic conductors, and for low tension electrical light and power conductors of the Edison Electric Illuminating Company in certain streets and avenues in the city of New York. By the fourth article of this contract it is provided: “This contract to be without prejudice to the right of the party of the first part (the city authorities) to enter into such other, further, or different contracts as shall be necessary to carry out the intent and purpose of chapter '716, Laws of 1887.” The fifteenth article of this contract contains this provision: “Nothing in this contract shall be construed as granting to the party of the second part (the plantiff) any exclusive privileges, immunity, or franchise whatsoever.” Pursuant to the statutes and contracts referred to, the plaintiff has constructed •and maintained subways and conduits for electrical conductors in the streets occupied by the defendants’ roads, and is engaged in renting space to the owners of such conductors.

      Melville Egleston and Edward Lauterbach, for app’lt; Elihu Root, for resp’t.
   Follett, J.

It is a general rule, subject to few exceptions that an individual cannot maintain a suit in equity to restrain the violation of a statute enacted for the protection of the public, unless he shows that he has been or will be injured in person or property bv the violation of the statute. It must be shown that the plaintiff has sustained or will sustain special damage. The same rule is applicable to private corporations, and this plaintiff is not within any of the exceptions to the rule. A concession that the defendants have violated the subway statutes, and that the city or the commissioners of electrical control might maintain an action to restrain the defendants from continuing such violation, would not constitute a cause of action in favor of the plaintiff, unless it could be shown that some right of property had been injured by the violation. Woodruff v. Paddock, 130 N. Y. 618 ; 42 St. Rep. 650; Smith v. Lockwood, 13 Barb. 209. The authorities holding that an-action to restrain the defendants could be maintained by the people or by the municipal authorities are not in point, and need not be considered. ■ The only theory upon which this action can be maintained is that the plaintiff has acquired an exclusive right to maintain subways and conduits for electrical conductors in certain streets in this city, and that all persons and corporations using such conductors must place them in their subways, and pay rent for the privilege. Such a right can be acquired only by contract or by statute. No contractual relations have ever existed been the litigants, and the' plaintiff had acquired no right as against the defendants by virtue of any contract with them.

This brings us to the question whether the plaintiff has acquired by statute or by grant from the city, pursuant to some statute, an exclusive right to maintain subways and conduits for electrical conductors. Our attention has not been called to any statute con- 1 ferring an exclusive franchise on the plaintiff or on its grantor, and upon an examination of the statutes relating to the subject, we find no provision from which'it can be inferred that the legislature intended to confer an exclusive right upon any corporation, nor do we find any statute authorizing the authorities of the city or the board of railroad commissioners of the state to grant such a franchise. But, apart from the question of authority, it is manifest that the authorities of the city and the board of railroad commissioners did not grant or intend to grant to this plaintiff, an exclusive right to construct, maintain, and operate subways and conduits in which all electrical conductors must be placed. By the fifteenth article of the contract of May 15, 1891,'entered into with this-plaintiff, it is expressly provided:

“Nothing in this contract shall be construed as granting to the party of the second part (the plaintiff) any exclusive privileges, immunity, or franchise whatsoever.’’

By the fourth article of the same contract it is provided:

“This contract to be without prejudice to the right of the parties of the first part.- (the city authorities) to enter into such other, further, qr different contracts as shall be necessary to carry out. the intent and purposes of chapter 716, Laws of 1887."

, Under these limited grants there is no ground upon which it can be successfully contended that this plaintiff has any conclusive right to maintain subways and conduits for electrical conductors. The bóard of railroad commissioners in approving of the proposed change of power for the operation of the defendant’s roads, expressly provided that it should adopt and use a “system of signaling to the central house to stop the engines in the case of accident.” There is.no provision in the statutes which makes it obligatory upon the-defendants to place their wires forming a part of their signal system in the conduits owned by the plaintiff, nor is there any provision preventing the defendants from constructing and using-conduits of their own. If the construction of the subway statutes-contended for by the plaintiff is to prevail, it would be impossible for a surface road to be operated on many of the streets by electricity, as authorized by chapter 531 of the Laws of 1889, unless its conductors were placed in the plaintiff’s subways.

On dismissing the complaint, the court granted an extra allowance of $750, which is at the rate of five per cent, on $15,000. Upon the application for this allowance, it was shown that the annual rent charged by the plaintiff for the use of such conductors as are used by the defendants wo'uld be $700 per mile, and that the value of the subway, the right to maintain which was in controversy, was at least $60,000. These facts are not disputed, and they are quite sufficient to sustain the allowance granted.

The judgment and order should be affirmed, with costs.

All concur.


text:
    Empire City Subway Company, Limited, App’lt, v. Columbus and Ninth Avenue Railroad Company, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Appeal from an order denying, a motion for injunction pendente lite.

      Melville Egleston, for app’lt; Elihu Root, for resp’t.
   Follett, J.

The same questions are involved in this appeal as those determined in the case of Empire City Subway Co. v. Broadway & S. A. R. Co., (decided at this term), 67 St. Rep. 741; and the order in this case is affirmed, with costs, on- the opinion, delivered in the case referred to.

All concur.


author: Van Brunt, P. J.

text:
    Emma C. Smith, Resp’t, v. Isabella H. Fisher, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Equity — J ukisdiction — J udgment.
    The court may, in an action by the grantee to declare a deed a mortgage and to forclose it, give a money judgment for the amount he advanced on the faith of the deed, where the premises had been sold on the foreclosure of a prior mortgage.
    Appeal from a judgment entered in favor of plaintiff.

      E. MacKinstry, for app’lt; Alex. Thain, for resp’t.
   Van Brunt, P. J.

The complaint in this action alleged that on or about the 30th day of December, 1892, the defendant was-the owner of certain premises in the city of New York, and, designing to mislead and wrong and cheat and defraud the plaintiffs', made certain representations in respect to the house erected upon said premises; that the plaintiffs, relying upon these representations, on the 30th of December, 1892, entered into a contract in writing with the defendant, whereby the plaintiffs undertook and agreed to purchase the premises, upon certain terms therein named, the deed to be delivered on or before the 10th day of March, 1893 ; that for the purpose of giving the plaintiffs immediate possession of said premises pending the delivery of the deed mentioned in said .contract, the defendant, simultaneously with the execution of said contract, executed to these plaintiffs a lease of said premises, bearing the same date as said contract, in and by which lease defendant rented the said premises to these plaintiffs for the term of two months and eleven days from the 30th of December, 1892; and that the plaintiffs thereupon paid to the defendant the sum of- $500 required to be paid by said contract, and entered into possession of said premises, and that at various times up to and including the 30th day of March, 1893, they made further payments to the defendant, amounting to $3,000. The complaint further alleged : That during the occupation of said premises by the plaintiffs from the 30th of December, 1892, to the 10th of March, 1893, they discovered that the representation made by the defendant to the plaintiffs in respect to the construction of said house were untrue, and that various and grievous defects existed therein; and that thereupon the defendant agreed with the plaintiffs as' aforesaid, but represented to the plaintiffs that she was at that time unable to return to the plaintiffs the moneys advanced to her on her faith of the representations aforesaid, and requested the plaintiff to forbear urging for a time the return of the said moneys, and the defendant made the request that the plaintiffs should advance and loan to the defendant a further sum of money to aid the defendant in improving certain lots, etc. That thereupon the defendant proposed that the plaintiffs should, in form, carry out the contract of the 30th of December, 1892, and that the defendant should execute to the plaintiffs a deed of said premises, and that there should then be given back the bond of the plaintiff Emma Condit Smi,th for the sum of $12,500, to be secured by a mortgage on said premises, and that the plaintiffs should then advance to the defendant the sum of $4,000, and the defendant should contract and agree with the plaintiffs that, if the plaintiffs should, on or before the ■30th day of December, 1893, conclude to retain said house, and accept the deed, the same should stand as a conveyance of said premises, and the advances aforesaid apply on the purchase money ; the defendant further agreeing that, if the plaintiff Emma 0. Smith decided to keep said house, then the defendant was to make •certain improvements and repairs in said house, and that, should the defendant begin such repairs, the contract for the repurchase of said premises by .the defendant should become null and void, and that the act of the defendant in beginning said repairs was to be deemed an acquiescence by the plaintiff as indicating that she was to retain the house, etc., but that in the meantime the transaction should be deemed a loan of the amount of said advances by the plaintiffs to the defendant, and thát the plaintiffs should continue in the possession of said premises, and should hold the same and the deed of conveyance of said premises, and the contract to repurchase the same, as security for the repayment of said moneys on the 30th day of December, 1893. The complaint further alleges that the plaintiffs then proposed that the advice of a lawyer should be sought to draw the papers, but the defendant represented that she was not acting under legal advice, and that it would only complicate matters if the plaintiffs, employed counsel; that it was better for all parties that counsel should not be employed, and thereby induced the plaintiffs to refrain from having the papers which they were ■called upon to execute examined by competent counsel. The complaint further alleged that on the 15th of October, 1893, for the purpose and with the intent of forestalling plaintiffs, and foreclosing and cutting off their right to treat the said conveyance and the contract to repurchase and the possession of said premises by the plaintiff as security for the return of said advances made to the defendant, notwithstanding the previous announcement by the plaintiffs to the defendant that they had decided not to keep the house, and not to treat said deed of conveyance as other than a mortgage security for said advances, the defendant, by her agents, forcibly entered said premises without the knowledge or consent of the plaintiffs, and undertook to repair said house, and to put in a new furnace, so that said contract for repurchase should thereby become null and void; that on or about the 29th of December, 1893, the plaintiffs again elected not to .keep said house, but to treat said conveyance and the possession of said premises and the contract to reconvey the same as security for said advances, and offered to feconvey said premises to the defendant; and on the SOth of December, 1893, the plaintiffs vacated said premises and tendered a surrender of the same to the defendant, and offered to reconvey the same to the defendant, and demanded the return of the advances aforesaid, but the defendant refused to receive possession of said premises, or to accept a reconveyance thereof. The complaint then alleged upon information and belief that defendant had been trying to negotiate said $12,500 mortgage which had been given by her upon the conveyance of said premises to her, and alleged, further, a willingness upon the part of the plaintiff to convey said premises to the defendant upon the repayment of said advances; and judgment was thereupon demanded that the deed of conveyance executed by the defendant to the plaintiff, and the contract for the reconveyance of said premises might be adjudged to be a mortgage to secure the plaintiffs for the advances made by them to the defendant, and that the instruments might be reformed so as to express the terms of the contract between the plaintiffs and the defendant; the right, title, and interest of the defendant in the premises acquired after the commencement of the action might be foreclosed and sold, and that out of the proceeds there should be paid to the plaintiffs the amount of their advances, with interest and the costs of the action ; and that the defendant should be enjoyed from assigning the mortgage executed by the plaintiff Emma C. Smith to the defendant, etc. The defendant, by her answer, admitted the allegations of ownership, leasing, and payment of the $500 upon the contract; denied the allegation of fraud, and that the arrangement entered into with the plaintiffs was intended as security for the advances which had been made by the plaintiffs. The defendant further alleged that the plaintiffs had not performed the covenants contained in the contract of December 30, 1892, in that they had failed to make , the payments provided for in said contract; and alleged affirmatively that defendant begun and made certain repair specified in the agreement of April 12, 1892, and that such agreement, by its terms, thereby became void. The defendant further alleged that said agreement of April 12, 1892, was, by its terms, optional, and not absolute; and further, that said agreement was and is not a valid contract at law. Subsequent to the commencement of this action, and prior to its trial, an action was commenced to foreclose the first mortgage upon the premises, and the same were sold under a decree of foreclosure entered in said action to one Bichard Deeves on the 12th of June, 1894, for $27,000. He thereupon assigned his bid to the defendant, and on the 13th of June, 1894,. the premises were conveyed by the referee to the defendant by a .deed which expressed the consideration last mentioned. On the same day the defendant executed and delivered to the Liverpool, London & Globe Insurance Company, the plaintiffs in the foreclosure suit, a new mortgage for $25,000, the amount of the original mortgage. Before the commencement of the trial the attorney for the defendant stated that, unless the plaintiff proved fraud, he should move to dismiss the complaint on the ground that a court of equity had no jurisdiction of the action, it being merely a legal right of action ; and claimed that the defendant had a constitutional right to trial by jury unless the plaintiff succeeded in establishing fraud. The trial then proceeded, the learned court made certain findings, and. gave the plaintiff a. judgment enjoining the assignment of the bond of $12,500 referred to in the complaint, and a money judgment for the amount which was due from the defendant to the plaintiff; and from this judgment this appeal is taken.

It is claimed upon the part of the defendant that, the plaintiff having failed to maintain her action on equitable grounds, the complaint should havfe been dismissed. The learned counsel urges that the defendant gave notice at the opening of the trial in a court of equity on the ground that a court of equity has no jurisdiction, 'unless it could be sustained on the ground of fraud on the part of the defendant. He then contends that this action was begun and tried as an action in equity, seeking upon various allegations equitable relief only, viz. reformation, and foreclosure and cancellation. The action proceeded on the theory of fraud, and resulted in an award of damages therefor, which is an action for the recovery of money only. The position seems to be somewhat contradictory. In the first paragraph the counsel asserts that á court, of equity had no jurisdiction unless the action could be-sustained on the ground of fraud. He then alleges that because a recovery was had upon that very ground he was entitled to a jury trial, because it was an action for the recovery of money only.

It is further urged that in the form in which the action was brought, it was triable by the court only, and unless the plaintiff sustained her cause of action as set out in the complaint, she must fail; that the defendant had no alternative, and had no right to-object to the trial of the cause by the court in the form in which it was brought; and that, if the plaintiff could recover at all, she must recover under the relief prayed for, to wit, reformation, and, as incidental thereto, foreclosure and cancellation, and on the face of the complaint there was no other ground for her cause of action ; that the case presented no cause of action for damages, and no damages were prayed for, and the defendant went to trial to meet that precise claim. The counsel further alleges, as already stated, that, damages being recovered, the defendant was entitled to a trial by jury. We think that the learned counsel has entirely mistaken the relief which has been granted. He concedes that the judgment proceeds upon the theory that fraud was established, which is clearly the case. There is no question, as stated by the court below, but that this was a scheme upon the part o,f the defendant and her husband to get possession of the plaintiff’s money, and then to cheat her into a ratification of her contract of purchase and alleged acceptance of the deed. The evidence is con-elusive that when this arrangement was entered into, on the 12th of April, 1893, at which time the plaintiff accepted the deed and the defendant made the contract to repurchase, it was the intention of the parties that these instruments should operate as security for the money which the plaintiff had advanced, the defendant being in hopes that the plaintiff might still ratify the contract, and take the premises. The correspondence referred to by the learned court below clearly indicates that the agreement and understanding between the parties were that the plaintiff was to hold these premises merely as security, unless she should elect to accept the deed on the 30th of December, 1893. The proof showed a refusal by the plaintiff to accept such deed, and an insistance upon her security. When the action was commenced, the right to foreclosure, and the right to the relief which was asked for in the complaint, existed. But in consequence of the foreclosure of the first mortgage permitted by the owner of the premises, which resulted in a sale of the premises and in the buying in thereof by the defendant,, the court was prevented from giving all the equitable relief to which the plaintiff had shown herself entitled by her proof. The court thereupon gave such equitable relief as the proof showed the plaintiff to be entitled to under existing circumstances, and, in addition thereto, gave a judgment for the repayment of the money which the plaintiff had advanced to the defendant upon this alleged purchase. The defendant, by her acts of omission or commission, could not deprive the court of the jurisdiction to grant such relief as the necessities of the case required, simply by permitting this first mortgage to be foreclosed. It might very well be inferred, without doing violence to the conceded facts of the case, that this foreclosure was part and parcel -of the scheme of this defendant to defraud the plaintiff of the money which she had advanced, and of the security which the defendant had given her therefor.

It is further urged that the judgment is not consistent with the case made by the complaint and embraced within the issue. It is undoubtedly true that the court could not give all the relief which was prayed for, namely, the foreclosure and sale of the premises in order to repay the money advanced by the plaintiff to the defendant, because the premises had already been foreclosed and sold under a prior mortgage; but it gave the other relief, namely, a j udgment for the deficiency in the amount for which these premises had been given as security, and it also gave injunctive relief against the negotiation of the plaintiff’s bond, which the defendant had secured by her fraudulent connivance.

It is further urged that neither fraud nor surprise is established by the evidence. It seems to us from a consideration of the evidence, as it did to the court below, that the case is reeking with fraud from beginning to end; that the whole scheme was conceived in fraud, and all the acts of the defendant to the very end were endeavors to cheat and defraud the plaintiff out of the moneys which she had in good faith advanced relying upon representations which were beyond question untrue; and that they were endeavoring to entrap her because of her inexperience, and they therefore resorted to this clumsy device,- apparently making her an absolute purchaser of these premises, when it is manifest that all that she intended to do was to attempt to secure that which she had already in good faith advanced. We not only see no reason for interfering with the judgment which has been appealed from, but we cannot imagine how the court below could have come to any other conclusion.

The judgment should be affirmed, with costs.

All concur.


text:
    Amelia Sieburg, Resp’t, v. Massachusetts Benefit Life Association, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Insurance — Forfeiture.
    Where an assessment is not paid within thirty days after notice, as required by the policy, which provides that on such default the policy should be void, unless the insured shall be reinstated in his rights by the officers-of the company, and the insured, upon receiving a duplicate notice of the assessment, pays it and a receipt therefor is delivered to him, stating that the payment is received on the condition that the insured is in good health, etc., the association waives its right to a forfeiture of the policy.
    Motion for new trial on exceptions, ordered to be heard at general term in the first instance.

      Andrew Shiland, Jr., for pl’ff; J. K. Hayward, for def’t.
   Follett, J.

This action was begun December 10, 1892, to recover the amount due on two policies of life insurance, and the only defense is that they had been forfeited by failure to pay mortuary assessment No. 71, of March • 1, 1892. The defendant is a mutual benefit association, incorporated in 1878, under the laws of the state of Massachusetts. The statute under which it was organized is not in evidence, nor referred to, nor are its articles of association, and so we assume that it was authorized to make the policies set out in the complaint. July 18, 1888, the defendant issued to Greorge Sieburg, of this city, two instruments,. each called a “ policy,” one being numbered 20,228, and the other-20,229, both being alike, except the numbers. By each policy the defendant promised, on the death of George Sieburg, to pay to Amelia Sieburg, his wife, $5,000. Each policy was issued in consideration of a prepayment of $20, and of the payment thereafter of certain sums as provided in the following articles of each policy:

“ Fifth. There shall be paid by the member under this contract in forty days from the date thereof, and annually from said date thereafter, to the treasurer of the association, an assessment of fifteen dollars, as a part of the expense fund, which fund is at the sole disposal of the officers of the association; and he shall not be liable for any further sum in each year, except as following :
“ Sixth. Upon the death of any member of the association, said member under this contract shall at once pay, if required, to its treasurer, an additional assessment of six 95-100 dollars, which can be used only for the payment of death losses and for the emergency fund, as authorized by law ; but such assessment will not be required so long as there remains in the death fund, subject to call of the treasurer, a sum sufficient to pay outstanding claims for death losses.
“ Seventh. The form of notice to and process of collection for each of the members of the assessments above named, shall be as follows : A notice shall be sent, announcing such assessment, to the last post-office address given to the association by each member. If the assessment is not received within thirty days from the mailing of the said notice, it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the association, which connection shall thereupon terminate, and the party’s contract with the association shall lapse and be void, and all rights thereunder be forfeited to the association; but said party may again renew his connection with the association by a new contract made in the same manner as at first; or he may be reinstated by the officers of the association, for reasons satisfactory to them, and upon such conditions as they may require. But such renewal of this contract or reinstatement shall not operate or be treated or construed to be a waiver of any of the terms, conditions or requirements of this contract.”

It is conceded that George Sieburg paid the annual assessment or premium on each policy in each year, as required by the fifth article above quoted. George Sieburg died April 18, 1892, leaving his widow surviving. Due proofs of death were made, and it is conceded that if the plaintiff is entitled to recover she is entitled to $10,000, with interest thereon from September 27, 1892, for which sum the verdict is directed. The only defense interposed is that March 1, 1892, the defendant made a mortuary assessment of $10.43 on each policy “ for the payment of death losses and for the emergency fund,” which George Sieburg neglected to pay, as required by said sixth and seventh articles..

March 1, 1892, the defendant mailed to George Sieburg the following notice:

“ Massachusetts Benefit Association.
“Offices: Exchange Building, Boston. 53 State Street.
Take the Elevator, 53 State Street. Hours : 9 A. m. to 5 F. M.
“ Boston, March 1, 1891.
g Mortuary call No. 71 is now made, and must be paid on a or before April 1, 1892, at the office of the association, in
0 order to maintain your policy in force, which will otherwise . lapse and be void. This call is for mortuary and disability
-g purposes, and not exceeding one-thirtieth of one per cent, on £ the amount insured for expenses under article XVI of the ^ by-laws of this association, and in accordance with the stat-g utes of Massachusetts. Full particulars of the last call will g be found on accompanying statement. The sending of this „§* notice shall not be held to waive any forfeiture or lapse of 8 g membership, if previous assessments remain unpaid. Pay- § g ment of mortuary calls will be demanded six times in each t! q year, one in every two months, beginning January 1. Next call is now made for May 2, 1892, and must be paid on or ají before June 1, 1892, in order to maintain your policy in
1 á force, which will otherwise lapse and be void. The payment -s ^ of this call will be accepted by the association, and a receipt g given therefor, on the express agreement that no condition g whatever, upon which any previous payment has been re-
ceived, is waived thereby.
th~ “W. G. Corthell, Treasurer.
l — i
”*S
e “ Pay now, and avoid overlooking it.
^ “ The cost in this association averages only about one-
's half that in level premium companies.
g “ Mortuary call 71 remittance may be made by checks, H drafts, money orders, postal notes, registered letters or express orders, but such remittance must reach the home office of the association in Boston on or before the expiration of the time limit named in the notice. Parties not keeping a bank account can easily obtain a check from some friend. Do not lose this original bill. Send bill and coupon to the treasurer when remittance is made, and receipt will be returned. Notice expires April 1, 1892.”

April 9, 1892, the defendant mailed George Sieburg a duplicate of the aforesaid notice, across the face of which was stamped the following:

“ Certificate forfeited for nonpayment. May be renewed by immediate payment, if the risk is approved by the association, upon receipt of said payment at the home office.”

April 11, 1892, the insured received the duplicate notice, and on the same day mailed the defendant this letter:

“ Office of George Sieburg, Manufacturer of Office and Bar Fixtures,
“Nos. 211 & 213 Woosser 'Street.
“New York, April 11th, 1892. u Massachusetts Benevolent Association.
“ Gents. — Having been away from business a couple of weeks, I find that the payment of your assessments have been forgotten. I herewith send you check for $20.86, requesting you to excuse the delay, and to acknowledge receipt, and oblige,
“ Yours truly,
“ George Sieburg.”
Inclosed in the letter was a check drawn by George Sieburg on the Germania Bank of New York, payable to defendant’s order. The letter and check were received by the defendant, April 12, 1892, and thereupon defendant mailed to George Sieburg the following receipt:
“ Massachusetts Benefit Association.
“ Exchange Building, Boston, Mass.
“ Received of Geo. Sieburg $10.43 on this 12th day ot April, 1892, for mortuary call or assessment No. 71, on policy No. 20,228, which amount became due and payable before this day (thirty •days allowed for payment thereof having expired). For nonpayment of said assessment on or before the date it became due, said certificate or policy lapsed or expired, and the above payment being tendered, after the same became due and payable, said payment is made and received, and this receipt given by the association and accepted by the member, and every person having or acquiring any interest in said policy, upon the following conditions, and not otherwise : First. That said member 'is now living, and of temperate habits, and is now in good health, and free from all diseases, infirmities, or weaknesses; otherwise said payment, and this receipt and said policy, shall be and is null and void. Second. The receipt and acceptance of the above sum by the association shall not be held to wáive forfeiture or expiration of membership, or to reinstate membership, or to create any liability on the part of the association under said certificate, except upon fulfillment of the first condition of this receipt. Third. The acceptance of the above sum after the same became due shall not establish a precedent for acceptance of future payments to the association, nor shall any subsequent payment upon said certificate impair, waive, alter, or change any of the conditions of this receipt or of said certificate.
“ W. G. Oorthell, Treasurer.
“Not valid unless countersigned by E. Clark, Cashier.”

A like receipt was mailed on account of policy No. 20,229. The check was indorsed by Wendell G. Covthell, the defendant’s treasurer, for collection, and was paid April 19, 1892, upon presentation to the drawee. The defendant’s cashier testified that the check and letter were received April 12,1892, “and it was treated as if check was in payment of the March assessment on said Sieburg policies, respectively.” The treasurer also testified that the check was not immediately deposited for collection, but was held until a sufficient number of checks were on hand to justify a deposit. In the proofs of loss the plaintiff and two physicians, who attended the decedent in his last illness, testified that he was taken sick. April 13, 1892, two days subsequent to mailing' the check, was ill five days, and died from acute rheumatic disease of the heart. The defendant offered no evidence tending to show that the insured was not in good health on the day that the check was mailed and on the day the defendant mailed the foregoing receipts. The defendant did not show, or offer to show, that it had returned, or had offered to return, the payment of April 11, 1892, and it now insists as a defense that the policies were forfeited because the assessments were not paid wdien due, and that, notwithstanding its acceptance" and retention of the money, it is not es-topped from insisting that the failure to pay the assessments when due caused a forfeiture of the policies.

This contention cannot be sustained. By the seventh article of the policy above quoted it is provided:

“ If the assessment is not received within thirty days from the mailing of said notice, it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the association, which connection shall thereupon terminate, and the party’s contract with the association shall lapse and be void, and all rights thereunder be forfeited to the association ; but * * * he may be reinstated by the officers of the association,, for reasons satisfactory to them, and upon such conditions as they may require.”

It is apparent that the insured did not intend that his policies should be forfeited, and it is also apparent that the defendant did not accept the failure to pay the assessments within thirty days as-sufficient evidence that the insured had decided to terminate his connection with the association; and it is apparent that the defendant did not intend to terminate such connection, provided the assessments were subsequently paid. The intention of the insured is shown by his letter and check, and the intent of the defendant, is manifest by its second notice, its acceptance, and retention,' of the amount of the assessments, and by its two receipts given for them. On the second notice the defendant stated that the policies might be renewed “by immediate payment, if the risk is approved by the association, upon receipt of said payment at the home office." Immediate payment was made at the home office, the risk approved by the association, arid the policies were renewed by the defendant. By these acts the defendant expressly waived its right to insist that the policies were forfeited, and is estopped'from asserting that they were not in full force at thé time of the death of the insured. Wyman v. Insurance Co., 45 Hun, 184; 10 St. Rep. 36 ; Haas v. Insurance Co., 49 Hun, 272 ; 17 St. Rep. 732 ; Shay v. Society, 54 Hun, 109 ; 26 St. Rep. 579 ; Titus v. Insurance Co., 81 N. Y. 410; Dennis v. Association, 120 id. 496; 31 St. Rep. 662; Kenyon v. Association, 122 N. Y. 247; 33 St. Rep. 467; 2 Bid. Ins. p. 1106 et seq., and cases cited; 2 May, Ins. (3d ed.) § 362.

The exception taken by the defendant that it was not shown by legal and competent evidence that the plaintiff was the wife of George Sieburg is not worthy of much consideration. The policies are payable to “ Amelia Sieburg, wife.” A witness testified that he knew George Sieburg, who introduced the plaintiff as his wife; that he knew she was his wife, and knew she was the same person mentioned in the policies as the wife of George Sieburg. It was not necessary to prove their marriage by one who saw them married, nor by documentary evidence. It might as well be urged that a person designated as the son of one taking out a policy must, in an action to recover on the policy, show that he was begotten by the person insured. The defendant's exceptions should be overruled, and a judgment ordered for the plaintiff on the verdict, with costs.

All concur.


author: Per Curiam

text:
    The People ex rel., Hecker-Jones-Jewell Milling Company, App’lt, v. Edward P. Barker et al., as Commissioners, etc., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed April 11, 1895.)

    Taxes — Foreign corporation.
    A foreign corporation, in assessing for taxation its property invested in business in this state, is not entitled to any deduction on account of debts.
    Appeal from an order, dismissing the writ of certiorari.

      John M. Bowers, for app’lt; James M. Ward, for resp'ts.
   Per Curiam

Order affirmed, with costs, on opinion of court below.

The opinion of Mr. Justice Patterson at special term is as follows:

The questions discussed in this proceeding arise upon a writ of certiorari to review an assessment made by the tax commissioners for the purposes of taxation of the property of the relator within the state of New York, and upon the return to such writ, and what purport to be proofs taken before the referee, and sent up as forming part of the record before the court, The relator is a foreign corporation. The tax commissioners have fixed and assessed the amount on which the relator is to pay taxes for the year 1893 at $1,500,00U. This sum was ascertained by deducting debts of the company due in the state of New York from the sums of money invested in the state in the business of the relator, exclusive of the amount invested in real estate, and separately taxed. The items constituting in the judgment of the commissioners the amount invested in business of the relator, etc., are as follows, viz.: Machinery and tools, $700,000 ; office furniture, $7,500; horses and trucks, $32,000; cash (in bank), $25,000; merchantable stock, $2,500,000; bills receivable (estimated), $500,000,— $3,764,500. From that total a deduction of $2,264,000 was made for the debts referred to: The theory of the commissioners in fix-, ing the assessable amount recognizes to some extent that debts oE the relator were to be allowed In diminution of the principal sum otherwise taxable, but they limited such allowance to debts due in the state of New York. The present claim of the relator is that, having adopted that mode of ascertainment, the commissioners should have gone further, and allowed in reduction all indebtedness of the corporation, wheresoever payable and to whomsoever due, and that, as the unchallenged statement before the commissioners proved that the corporation owned over $5,000,000 in the aggregate, there was nothing left for taxation. That the commissioners were mistaken in their theory of the assessment is true, but their error was one greatly to the advantage of the relator. Instead of deducting debts due in the state of New York, in strictness of law they should have made no allowance for debts at all. Foreign corporations are taxed on all sums of money invested in any manner in their business in the state of New York. Domestic corporations are taxed on capital and surplus, to be assessed- at actual value. Hence, as to the latter corporations, indebtedness must be deducted before actual value can be ascertained; but, respecting the first-named corporations, the taxation seems to be specific upon the amount invested, without reference to the business or other obligations of the company. Such is the direct result of what was recently held by the court of appeals in People ex rel. Thurber- Whyland Co. v. Barker, 141 N. Y. 118 ; 56 St. Rep. 586. The present attitude of the relator upon this branch of the case' cannot be approved. The contention, in effect, is that, because the commissioners erred to a certain extent, the court must compel them to aggravate their error, in order that they may be logical and consistent. The learned counsel for the relator have presented a very interesting argument, treating as an original question, and one open to debate, the right of foreign corporations to have their general indebedness deducted before a'determination can be made as to moneys or amounts actually invested in. their business within this state; but the whole matter was set at rest by the decision of the court of appeals above cited, and the reasoning of the court in the opinion delivered in that case. Other objections are urged by the relator concerning the bank balance and certain bills receivable, the amounts of which are included in the assessment. As those objections were not stated, nor brought before the commissioners, they cannot be considered here ; and it may be said also that it is unnecessary to discuss them, “because the"sum assessed by the defendant is less than the amount which the affidavit of the president of the relator shows was invested in the business in this state at the time of the assessment.” (Thurber Whyland Case, supra); indebtedness being excluded from the computation. The writ must be dismissed.


text:
    Harriet S. A. Clark, Resp’t, v. Albert F. Jammes et al., App’lts.

      (Supreme Court General Term, First Department,

      Filed May 17, 1895.)

    Covenants — Construction.
    A covenant that the owners of the lands therein mentioned shall not or will not “at any time hereafter erect on the lots or lot owned by them, respectively, any building except brick or stone dwelling houses of at least two stories in height, and except buildings of brick or stone for private stables,” does not prohibit the use, for a dressmaking establishment, of a house erected for a private dwelling.
    Appeal from an order granting an injunction.

      James R. Fly and Roger Foster, for app’lts; T. G. Shearman, for resp’t.
   Van Brunt, P. J.

We think that the difficulty in the maintenance of the order appealed from is in the covenant contained in the agreement which forms the basis of the injunction. It seems to be assumed that this restrictive covenant prevents the occupation of any building which may be erected upon the premises therein described for any use except that of dwelling houses or private stables. In the construction of restrictive covenants of this kind, it must be borne in mind that they are to be construed most strictly against the covenant; and, unless the thing sought to be enjoined is plainly within the provisions of the covenant, an injunction will not issue. That part of the covenant which applies to the case at bar is that the owners of the lands therein mentioned shall not or will not “ at any time hereafter erect on the lots or lot owned by them, respectively, any building except brick or stone dwelling-houses of at least two stories in height, and except buildings of brick or stone for private stables.” Now, it is conceded that the house erected upon these premises was erected as a-private dwelling-house, and has all the exterior appearances of such a building. But it is urged in support of the injunction that, under such a restriction as was contained in the covenant in question, it could not be used for a dressmaking establishment or for any commercial purpose. We cannot find in the terms of the covenant any such restriction. The requirement of the covenant is fulfilled by the character of the building, and any occupation which may leave the building of the general character of a private dwelling-house does ■not seem to violate this restriction. This view is accentuated when we consider the balance of the covenant. It reads as follows:

“ And, further, that neither he nor they shall or will at any time hereafter erect or permit upon such lots, or any part of the same, any livery stable, slaughter-house, smithshop, forge, furnace, steam engine, brass foundry, nail or other iron factory, or any other manufactory of gunpowder, glue, vitriol, ink or turpentine, or tanning, dressing, or preparing skins, hides, or leather, or any brewery, distillery, museum, theater, circus, place for the exhibition of wild animals, or any other erections known as nuisances in the law.”

It will be seen that the parties evidently contemplated that the first part of the covenant, to which attention has been called, did not restrict the use to which the premises were to be put. It only designated the character of the building which was to be erected upon the premises; and they thought it necessary, in order to exclude its occupation for purposes which were considered detrimental to the neighborhood, to put in a provision prohibiting the permission upon said lots or any part of the same of such occupation. A consideration of the whole of the restrictive covenant, therefore, seems to lead inevitably to the conclusion that in its construction it is necessary to hold that the occupation of a portion of a house erected for a dwelling-house for any purpose not within the prohibition contained in the last clause of the covenant does not come within its restrictions. We think, therefore, that the court erred in issuing the injunction, and that the motion should have been denied.

The order should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs.

All concur.


text:
    Frank Frisbie, Resp’t, v. William W. Averell, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Pleading — Amendment.
    Leave to serve an amended complaint will not be denied because designated in the moving papers as a supplemental complaint.
    Appeal from an order, granting leave to file, a supplemental complaint on payment of costs, and giving defendant time to answer the same.

      Edward Hassett, for app’lt; J. W. Purdy, Jr., for resp’t.
   Van Brunt, P. J.

It is apparent that it was a misnomer to call the new pleadings which was to be served a “supplemental complaint” It was clearly an amended complaint, and not a supplemental complaint; and the fact that a party moves for relief under an erroneous name in no proper reason for the denial of the same. Under the circumstances of the case, however, we think that the terms which were imposed were entirely inadequate. The plaintiff was allowed to amend by declaring upon an entirely different instrument from that which he had declared upon in the original complaint, although the différence was but a change of date. The order appealed from should be reversed, with costs of appeal, and a motion to amend granted, upon payment of the costs of the action up to the time of said motion.

All concur


author: Per Curiam.

text:
    Andrew J. Rogers, App’lt, v. William A. Patterson et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Parties — Necessary—Action against heirs.
    The purchasers at a partition sale, who purchase with notice oí a pending action against the heirs to charge them with the debts of the deceased owner of the land, are necessary parties to such action.
    Appeal from an order denying plaintiff’s motion to bring in as parties defendant the purchasers, at a sale in partition, of the property described in the complaint, and for leave to serve a supplemental complaint.

      George M. Baker, for app’lt; Charles Fox, for resp’ts.
   Per Curiam.

It is the duty of the court, where a complete determination of a controversy cannot be had without the presence of other parties, to direct them to be brought in. Code Civ. Proc. section 452 et seq. The only question before this court, therefore, is whether the parties whom the plaintiff seeks to have brought in as defendants in this action are necessary parties, within the intent of the statute ? The complaint alleges a good cause of action, and, for the purposes of this motion, it must be assumed to be true; and, considering its allegations in connection with the facts stated in the affidavit of the plaintiff’s attorney, it seems quite clear that the motion to bring in other parties as defendants should have been granted.

The suit is brought under the statute (section 1843 et seq., Code Civ. Proc.) against the heirs at law of John H. Mccunn, deceased, to collect a debt due from him to the plaintiff. At the time of the commencement of this suit more than three years have elapsed since the decedent’s death, and hence that species of statutory lien running with the land which creditors have was terminated. Thereafter the remedy of the plaintiff was against the heirs of McOunn to the extent of the value of the lands which came to them by descent from him ; and in a suit timely brought against such heirs at law the plaintiff may acquire a lien upon such of the lands as have not been aliened by the heirs at the time of its commencement. Code Civ. Proc. § 1852.

Now, it appears that, when this suit was brought, certain real estate which had descended to these defendants as heirs at law of John H. McOunn had not been sold, and hence, under the provisions of the section last referred to, the final judgment (if plaintiff shall be successful, and, for the purposes of this motion, we must assume that he may be) may direct that the debt of the plaintiff be collected out of such real property. But in the meantime this property has been sold, by virtue of a judgment in partition, to the several parties whom the plaintiff insists must be brought in as defendants. It appears, not only by the filing of the Us pendens, but by actual notice given at the time of sale, that the defendants were informed fully of the pending action and the plaintiff’s claim thereunder. If the plaintiff shall be entitled in this suit to a judgment directing that his claim be collected out of the real property of McCann, it is also his right to have it determined in the same suit whether any or all of the purchasers are entitled to the protection of section 1853 of the Code of Civil Procedure, which provides that the title of a purchaser in good faith and .for value, acquired before the notice of the pendency of the action is filed, or. final judgment is entered and the judgment roll filed, is not affected by the judgment provided for by the three preceding sections. Otherwise, the plaintiff, after obtaining a judgment against the heirs of McCann, and directing the sale of the real estate which descended to them to satisfy it, might be confronted, in an attempt to enforce the lien, with the claim by some of the purchasers that they were purchasers in good faith, and entitled, therefore, to -the protection afforded by section 1853. Such unnecessary litigation the law abhors, and its -aim is to prevent a multiplicity of suits ; and, to accomplish that purpose, it is made the duty of the courts, m such cases as the one under consideration, to bring in the purchasers of the land upon which the lien is sought to be established, to the end that all possible question or questions relating to its enforceability, as well as to the right of acquisition, may be fully and finally determined.

The order should be reversed with $10 costs and printing disbursements, and the motion granted.


author:
Van Brunt, P. J.
      Follett, J.

text:
    William E. D. Stokes, Resp’t, v. Edward S. Stokes, Impleaded, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    1. Reference — Action against corporate officers.
    Where the object of the action is to compel the officers of a corporation to account for official misconduct, and not for the examination of a long account, a reference cannot be ordered until there is some proof to sustain the allegation that there has been some official misconduct, and a determination to that effect reached by the trial judge and put in the form of art interlocutory judgment directing the account.
    2. Appeal — Waiver.
    Under section 1316 of the Code, the right to appeal from an unauthorized order, directing an accounting before a referee, is not waived by appearing before the referee.
    Appeal from orders of reference.
    The facts are stated by Mr. Justice Follett as follows:
    'This action was begun December 28, 1892, by a stockholder, in behalf of himself and of other stockholders, against the Hoffman House (a corporation) and its officers, for an accounting as to their conduct in the management of the business of the corporation, and the possession of its funds and property. The Hoffman House wa.s incorporated August 18, 1890, under laws of New Jersey, with a capital stock of $750,000, divided into shares of' eight per cent, preferred, cumulative stock, of $100 each, and 5,000 shares-' of common stock, of $100 each. The plaintiff and Edward S. Stokes, -one of the defendants, are the principal owners of the-shares. It is alleged in the complaint that the individual defendants have mismanaged the affairs of the corporation and misappropriated its funds; and a judgment is prayed for that the defendants be required to account, and pay to the corporation all money and the value of the property which they have acquired, transferred, lost or wasted by fraud and negligence. Also, that all alienations of property contrary to law be set aside; that a receiver be appointed of the funds of the corporation, and the individual defendants restrained from acting as directors or officers thereof. All of the defendants answered, denying that the affairs of the corporation had been mismanaged. The Hoffman House and Edward S. Stokes answered separately, and the other defendants jointly, the same attorney appearing for all of the defendants. Upon the issues so joined the action came on for trial May 25, 1894, at a special term, all of the parties appearing. Evidence was given in behalf of all of the litigants, and at the close the defendants moved that the complaint be dismissed — no grounds stated. The motion was denied, and an exception taken; and thereupon the following order, except the italicised paragraphs, was granted, and entered on the day of its date:
    #‘At a special term of the supreme court of the state of. Hew York held at the county court-house in the city of Hew York on the 20th day of June, 1894.
    “ Present: Hon. George L. Ingraham, Justice.
    “ [Title of Cause.]
    “ Order.
    “ This being an action brought by the plaintiff, as a stockholder and a creditor of the Hoffman House, against the defendant, and proofs on the part of the plaintiff having been taken, and proofs having been taken on the part of the defendants, and it appearing that the defendant Edward S. Stokes has had certain transactions with the corporation, which appear upon the books of said corporation in three accounts therein, known as the ‘Edward S. Stokes Account,’ the ‘Fenwick Hall Account,’ and the 1 Yacht Account,’ and it appearing that the taking of an account of the transactions embraced in the said three accounts is necessary for the information of the court before a final judgment herein may be decreed and entered, it is, on motion of Holmes & Adams, attorneys for the plaintiff—
    “ Ordered, that it be referred to Middleton S. Burrill, Esq., as referee:
    “ First. To take and state an account of, all and singular, the dealings and transactions between the said Edward S. Stokes and the said Hoffman House embraced in the said three accounts. And also any oilier sum, or sums of money that have been received by the said Edward S. Stokes from the defendant corporation, the Hoffman House, or paid by the Hoffman House on account of said Edward S. Stokes.

      “Second. That the said referee shall, in taking and stating said account, make all just allowances to the said Edward S. Stokes for any just claims or demands that he may have against the said Hoffman House, and also any not appearing in said three accounts.
    “ Third. That said referee shall report what sums, if any, shall appear to be due from the said Edward S. Stokes to the Hoffman House, or from the' said Hoffman House to the said Edward S. Stokes; and said referee is at liberty to state and report any special circumstances, as well as his reasons for allowing or disallowing any claim or allowances that may be claimed by either party. And it is further—
    “ Ordered, that the question of costs, as well as all other questions, be reserved until the coming in of the report of the said referee, and the hearing thereon.
    “And it is further—
    “ Ordered, that either of the parties, plaintiff or defendants, have liberty to apply to the court for a further order or direction in the premises as he or they may be ordered.
    “ Ordered, that the defendant Edward S. Stokes produce and file with the referee appointed by said interlocutory decree of June W, 1894-, all books of account in his possession, or under his control, relating to the business of the said corporation, the Hoffman House, and leave the same in the custody of the referee for such times and under euch terms as the referee may direct."

    On the 8th of October, 1894, all the parties appeared before the referee and a hearing under the order was begun, without an objection being interposed by any of the parties, and was continued without objection from day to day until May 23, 1894. On the 26th of November, 1894, the referee made the following report :
    “I, Middleton S. Burrill, the referee to whom it was referred By the interlocutory judgment herein, dated the 20th day of June, 1894, to take and state'an account between the defendant Edward •S. Stokes and the Hoffman' House, do hereby report and certify that, pursuant to the said judgment, I proceeded to a hearing of the matter so referred, at my office in the city of New York, on October 8, November 14, November 19, and November 23, 1894, and on all of such hearings the plaintiff appeared and attended by his attorneys, Messrs. Tracy, Boardman & Platt, and the defendant Edward S. Stokes by his attorney, John J. Adams, Esq. Pursuant to my direction contained in the minutes of the hearing ■of October 8, 1894, the defendant Edward S. Stokes did file an account, and the plaintiff filed an objection thereto, both of which are now on file with me: At the hearings of November 14th, 19th and 23d, the defendant was examined upon said account by counsel for the plaintiff. At the hearing of November 3, 1894, the defendant had present in his custody and possession, the books and papers mentioned in the proceedings of that date; and I then ordered him to deposit such books and papers with me, as referee, for inspection by the plaintiff’s attorneys, which he refused to do, by the direction and advice of his attorney, John J. Adams, Esq. I further certify that the afmexed is a true copy of the record of the proceedings before me upon such hearings.
    “ Dated New York, November 26, 1894.
    “(Sgd.) Middleton S. Burbrill,
    “ Referee.”
    Annexed to this report is the evidence taken before him. On this report, and on all the papers and proceedings in the action, an order to show cause was granted on the application of the plaintiff, on the return of which (November 30, 1894), the order of June 20, 1894, was amended by adding thereto the italicized paragraphs. January 25, 1895, Edward S. Stokes appealed from both orders, the other defendants not appealing.

      John J. Adams, for app’lt; Frank H. Platt, for resp’t.
   Van Brunt, P. J.

This action was brought, under section 1781 of the Code of Civil Procedure, to compel the defendants to “account for their official conduct in the management and disposition of the funds and property of the corporation the Hoffman House, committed to their charge as directors, officers and trustees, and return the account books, papers and checks to the defendant corporation.” The complaint charges that “the defendants have had since its organization, and now hold, the control of the corporation, and have been guilty of official misconduct therein, and in the management and disposition of its funds and property committed to their charge, and that the said defendant Stokes has wrongfully acquired to himself, and transferred to others, money and property of the corporation, and has lost or wasted the same, with the knowledge and concurrence or acquiescence” of certain of the other defendants named. Upon the trial, after a certain amount of the evidence was taken, the learned trial judge, without having reached any conclusion upon the question of whether the defendant Stokes or the other defendants had been guilty of fraud, neglect, violation of law, or other misconduct, as charged, made an order appointing a referee to take and state an account of certain transactions had by defendant Stokes with the defendant corporation, the Hoffman House, which appears upon the books of the corporation in three accounts; the referee being directed, among other things, “ to state and report any special circumstances, as well as his reasons for allowing or disallowing any claims or allowances that may be claimed by either party.” The parties proceeded before the referee, and after certain testimony was taken an application was made for an amendment of the order of reference, directing an account by the defendant Stokes of all his dealings and transactions between him and the Hoffman House, and directing the latter to produce the books and papers of the corporation and deliver them to the referee. Thereupon this appeal was taken from both orders.

We can find no authority for the orders made. The object of this action was to compel the defendant officers to account for official misconduct, and not for the examination of a long account; and the latter could not be ordered until there was some proof to sustain the alienations that there had been some official misconduct, and a determination to that effect reached by the trial judge, and put in the form of an interlocutory judgment directing the account. The issue here presented was as to whether the defendants, or one of them (Stokes), had been guilty of official misconduct. Without', however, reaching any determination upon this, question, the trial judge, as already stated, appointed a referee. For such practice we .can find no authority either under section. 1013 or section 1015 of the Code of Civil Procedure, which,are the sections showing in what actions, and under what circumstances, references may be ordered. See cases cited in Judge Follett’s opinion.

The claim is made that there has been á waiver of the right to appeal, by reason of the fact that the appellant went on before the reference, and several authorities are cited to sustain this proposition. An examination of these cases will show that they arose under the old Code, and have no application to the condition of the law as it now exists. Section 1316 of the present Code of Civil Procedure is as follows :

“An appeal taken from a final judgment, brings up for review an interlocutory judgment or an intermediate order which is specified in the notice of appeal, and necessarily affects the final judgment ; and which has not already been reviewed, upon a separate appeal therefrom, by the court or a term of the court to which the appeal from the final judgment is taken. The right to review an interlocutory judgment, or an intermediate order, as prescribéd in this section, is not affected by the expiration of the time, within which a separate appeal therefrom might have been taken."

Under the old Code there was no authority to review an intermediate order upon the appeal from a j udgment. Such practice was introduced by the new Code, with certainly no good results, but all still exists, and must, be considered. A party may now go bn under an intermediate order, and wait until the judgment is entered, in order to review the same. There can be, therefore, no waiver of a right to appeal from such intermediate order by going on under it. In the case at bar the party did not waive his right to appeal by going on, because that exists until the entry of judgment, and his fight to appeal from the judgment is ended. Furthermore, the right to appeal from the last order entered was not waived, — if it could be waived by going on before the referee, —because the original order was materially amended, and then an appeal was taken from the order as amended, in consequence of such amendment. The party refused to go on before the referee under the amended order-of reference; and it is difficult to see how, because he proceeded under the original order of reference, and was content and willing so to do, when the court amended the order such procedure waived his right to appeal from the order as so amended. It seems to me that, it being conceded that the court had no power to make the orders of reference in question, as against the consent of the defendant, the right to review such order has not been impared by any of the proceedings of the defendant. The orders should be reversed, with costs.

O’Brien, J., concurs.

Follett, J.

(dissenting). — At the close of the trial before the special term, any one of the litigants had the right to require the court to determine the issues involved in the trial. The parties were entitled to a decision, Code Civ. Proc. § 1022; Wood v. Lary, 124 N. Y. 83; 35 St. Rep. 53, and to an interlocutory judgment to be entered thereon, deciding whether a cause of action had been established, and a case for an accounting made out. But no decision was made, no interlocutory j udgment was entered, and nothing was done except to enter the order, which determines no issue. In the proceedings had after entry of the order it is called an “interlocutory judgment” and an “ interlocutory decree; ” but it is neither, for it adjudges and determines no issue, — simply appoints a referee, with certain powers. On the argument it was intimated that there had been a mistrial, and that the orders would have to be reversed. Doyle v. Railroad Co., 136 N. Y. 505; 49 St. Rep. 746 ; Bank v. Houston, 44 Hun, 567 ; Griffin v. Cranston, 1 Bosw. 281; 5 id. 658 ; Const, art. 6, § 8; Const. 1895, art. 6, § 3. But the attention of the court was not then called to the fact that after the entry of the order of June 20, 1894, all parties appeared before the referee, and for several days engaged in taking the evidence, without any objection being raised to that mode of trial. Ho objection was raised to trying the matter under the order of reference until the referee ordered Edward S. Stokes to permit the plaintiff to examine the books of the corporation, and then the appellant raised no objection to the mode of trial; but, after the order was so amended that he was required to produce the books, this appeal was taken. The appellant, by voluntarily going to trial before the referee, without objection, waived his right to appeal from, or to move to vacate, the order of reference. Ubsdell v. Root, 1 Hilt. 173 ; Porter v. Parmley, 38 N. Y. Supr. Ct. 490 ; Grumberg v. Blumenthal, 66 How. Pr. 62 ; Brady v. Donnelly, 1 N. Y. 126 ; Baird v. Mayor, etc., of New York, 74 id. 382. The defendant could not go on under the order before the referee as long as he was satisfied with the rulings, and, when dissatisfied, object to that mode of trial, and then appeal from the order. A question of waiver of the right to appeal can never arise after the time to appeal has run, because the expiration of the time is an end of the matter; but a litigant may waive his right, though his time to appeal has not run, and, once waived, it is gone forever, and the waiver cannot be revoked by appealing within the time allowed by statute. A reference to take and state an account, as between a corporation and its officers who has kept and has possession of its books, of necessity, requires the officers to produce the books; and the express command introduced into this order by the amendment of Hovember 30,1894, added nothing to the force or effect of the original order. The provision of article 6 of the constitution, that the testimony in equity cases shall be taken in like manner as in cases at law,” does not prevent litigants by express stipulation, or by acquiescence with the assent of the court, from taking the evidence in such a case before a referee, and thereafter submitting it to the court as the evidence therein. The order should be affirmed, with costs.


text:
    Mary Manning, Resp’t, v. John B. Manning, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May 17, 1895.)

    Reference — Interlocutory judgment.
    "A referee, to whom a cause has been referred to hear and determine, may, in his discretion, either report in favor of an interlocutory judgment for an accounting to be taken before another referee, or, after determining-the rights of the parties, take and state the accounts and include the whole matter in his report, as a basis for a final judgment.
    Appeal from an order, granting a motion to set aside the referee’s report and the interlocutory judgment entered thereon.

      Thomas M. Rowlette and John A. Straley, for app’lt; Robert D. Murray, for resp’t.
   Per Curiam.

The learned judge at special term, in his statement of the reasons which persuaded him to set aside the report-of the referee, directing the entry of an interlocutory judgment, requiring the defendant “ to account to the plaintiff” for all interest, income,.and profits arising out of or resulting from the accounts opened by him in her name, and that he pay over and deliver to her all certificates of stocks, bonds, bank notes, money, or other property which, upon said accounting, may be found to be due to her,” and the interlocutory judgment entered thereon, conceded, that, in some cases, a referee has the power, and it is also his duty, to report in favor of an interlocutory judgment.- This concession *s in accordance with the practice as settled in Mundorff v. Mundorff, 1 Hun, 41. In that case it is held that the practice in vogue, prior to the adoption of the Code, of determining the rights of parties in suits at equity in the first instance, and declaring such rights by an interlocutory decree, which also provides for the manner in which the accounting should be had, and referring the case to a master for that purpose, still continues in full force, and that a report of a referee, to hear and determine, sustains all the relations to the case that the former interlocutory decree did in hearings had in the court of chancery. The order of reference in that case, was “ to hear and decide all the issues in the action, and to take any account that he may determine should be taken.” The referee made a report deciding the equitable-rights of the parties, and directing an accounting. Subsequently, on motion of plaintiff’s attorney, an order was made at special term referring the case to another referee to take and state the acl count, and the question of practice was presented by an appeataken from 'that order. This case has been frequently cited with approval. Hathaway v. Russell, 45 N. Y. Supr. Ct. 538, and note, affirmed in 46 N. Y. Supr. Ct. 103 ; Seymour v. Association, 45 St. Rep. 520 ; Bank v. Morton, 40 N. Y. Supr. Ct. 328-337. Ht has not been criticised, so far as we have observed, although the conclusion was reached in Gareznski v. Russell, 75 Hun, 495 ; 57 St. Rep. 673, that, under such an order of reference, the referee should hear and determine all the issues made by the pleadings, and, if the proof entitled the plaintiff to an accounting, that the referee should take and state the account as a part of his report. We do not understand that case, however, to deny that a referee has the power in certain cases, to report in favor of an interlocutory judgment; for, in the opinion expressing the views of a majority of the court, it is distinctly stated that the power of the court, in a proper case, to settle an interlocutory judgment upon the report of a referee, and to appoint another referee to take the accounting provided for by such judgment, is not questioned. But, were it otherwise, we should still feel called upon to concur in the position taken in Mundorff's Case and the authorities following it, to some of which we have referred. Conceding the power of a reference, in any suit in equity, to make a report directing the entry of an interlocutory judgment declaring the rights of the parties., and directing that an accounting be had, it is difficult to see any basis for the order under review. This was a suit in equity, the plaintiff claiming certain rights and interests which the defendant denied. If found in her favor, she was entitled to an accounting from the defendant, in order to ascertain what interest, income, stocks, bonds, and other chattels she was entitled to from him-. It may well be, that, in this particular case, it would have been better for all the parties, had the referee taken and stated the account in his report, upon which could have been entered a final judgment. The special term was impressed with this view, and it is not unlikely that its view, rather than the referee’s was the correct one; although, judging from the meagerness of the record before us, the referee had an advantage in passing upon that question, because having the evidence before him. But as this was a suit of such a nature as called upon the referee to determine whether an interlocutory judgment should be entered after determining the rights of the parties, or whether the accounts should be taken in addition, and the whole matter included in his report, as a basis for final judgment, he was at liberty to determine which course was the proper one to pursue ; and with his determination of the manner in which he should exercise such discretion the courts should not interfere, unless it appears that there was an abuse of discretion. This question was before the court in Palmer v. Palmer, 13 How. Pr. 363, where the court said:

“ The mode of conducting its trial, therefore, must be within the discretion of the referee, so far as relates to all questions within the ordinary discretion of a judge on the trial of a cause. If this cause had been tried in court, the judge would most likely have gone so far as to make an interlocutory order or decree for an account. But it would have been entirely competent for one of the judges of this court, at special term, to have gone on and tried the whole cause, and taken and stated the account, and found its result, as the referee has done here.”

The argument of the court was that the trial is to be conducted before a referee as before one of the judges of the court, and, for the purposes of the trial and disposition of the cause, he has, for the time being, the ordinary powers of the court. This referee might have disposed of all the questions, including the account, in a report for final judgment; but having in mind the power of the court at special term, and of referees appointed by the court in such cases, he reached the conclusion, as we must presume, that, under the facts of this case, it was his duty to direct the entry of an interlocutory judgment. Certainly there is nothing in this record which warrants the court in holding that there was in this case an abuse of the discretion which the law confers.

The order should be reversed, with $10 costs and printing disbursements.