text:
    Archie D. Sanders et al., App’lts, v. Pottlitzer Bros. Fruit Company, Resp’t.

      (Court of Appeals,

      Filed December 18, 1894.)

    1. ContbaÍíp—When binding.
    A stipulation to reduce a valid written contract to some other form cannot be used for the purpose of imposing upon either party additional burdens or obligations, or of evading the performance of the agreement.
    2. Same.
    This principle applies, where the parties have exchanged letters and telegrams with a view to an agreement and have arrived at a point where a clear and definite proposition is made on the one, and accepted on the other side, with the understanding that the agreement shall be expressed in a formal writing.
    3. Same.
    Such contract is obligatory upon both parties, though their intention to put it into another form is rendered impossible by the act of one of such parties, in his insisting upon the insertion of conditions and provisions not contemplated or embraced in the correspondence.
    Appeal from judgment of the general term of the supreme court in the fifth judicial department, entered upon an order, which affirmed a judgment in favor of defendant entered upon the report of a referee.

      Eugene M. Bartlett, for app’lts; George W. Daggett, for resp’t

       Reversing, 53 St. Rep. 645.

   O’Brien, J.

The plaintiffs in this action sought to recover damages for the breach of a contract for the sale and .delivery of a quantity of apples. The complaint was dismissed by the referee and his judgment was affirmed upon appeal. The only question to be considered is whether the contract stated in the complaint, as the basis for damages, was ever in fact made so as to become binding upon the parties. On the 28th of October, 1891, the plaintiffs submitted to the defendant the following proposition in' writing:

“ Buffalo, N. Y., October 28, 1891.
“Messrs. Pottlitzer Bros. Fruit Co., Lafayette, Ind.
“Gentlemen:—We offer you ten carloads of apples to' be from 175 to 200 barrels per car, put up in good order, from stock inspected by your Mr. Leo Pottlitzer at Hunda and Silver Springs. The apples not to exceed one-half green fruit, balance red fruit, to be shipped as follows:
“First car between 1st and 15th December, 1891.
“ Second car between 15th and 30th December, 1891, and one car each ten days after January 1, 1892, until all are shipped. Dates above specified to be considered as approximate a few days either way, at the price of $2.00 per barrel, free on board cars at Silver Springs and Hunda, in refrigerator cars, this proposition to be accepted not later than the 31st inst., and you to pay us $500 upon acceptance of the proposition, to be deducted from the purchase price of apples at the rate of $100 per car on the last five cars.
“Yours respectfully,
*“ J. Sanders & Son.”

To this proposition the defendant replied by telegraph on October 31st as follows:

“ Lafayette, Ind., 31st October.
“J. Sanders & Son:
“We accept your proposition on apples, provided you will change it to read every eight days from January first, none in. December; wire acceptance.
“ Pottlitzer Bros. Fruit Co.”

On the same day the plaintiffs replied to this dispatch to the effect that they could not accept the modification proposed, but must insist upon the original offer. On the same day the defendant answered the plaintiffs’ telegram as follows:

“ Can only accept condition as stated in last message. Only way we can accept Answer if accepted. Mail contract and we will then forward draft.
“Pottlitzer Bros. Fruit Co.”

The matter thus rested till Hovember 4, when the plaintiffs received the following letter from the defendant:

“ Lafayette, Ind., November 2, 1891.
“ J. Sanders & Son, Stafford, H. Y.
“Gents:—We are in receipt of your telegrams, also your favor of the 31st ult. While we no doubt think we have offered you a fair contract on apples, still the dictator of this has learned on his return home that there are so many near-by apples coming into market that it will afféct the sale of apples in December, and, therefore, we do not think it advisable to take the contract unless you make it read for shipment from the 1st of January. We are very sorry you cannot do this, but perhaps we will be able to take some fruit from you, as we will need it in the spring. If you can change the contract so as to read as we wired you we will accept it and forward you draft in payment on same.
“POTTLITZER FRUIT Co.”

On receipt of this letter the plaintiffs sent the following message to the defendant by telegraph:

“November Ifih.
“ Pottlitzer Brothers Fruit Oompany, Lafayette, Ind.:
“Letter received. Will accept conditions. If satisfactory, answer and will forward contract. “J. Sanders & Son.”

The defendant replied to this message by telegraph, saying: “All right, send contract as stated in onr message.” The plaintiffs did prepare and send on the contract precisely in the terms embraced in the foregoing .correspondence, which was the original proposition made by the plaintiffs, as modified by defendant’s telegram above set forth, and which was acceded to by the plaintiffs. This was not satisfactory to the defendant, and it returned it to the plaintiffs with certain modifications, which were not referred to in the correspondence. These modifications were: (1) That the fruit should be well protected from frost and well hayed; (2) that if, in the judgment of the plaintiffs, it was necessary or prudent that the cars should be fired through, the plaintiffs should furnish the stoves for the purpose, and the defendant pay the expense of the man to be employed in looking after the fires to"be kept in the cars; (3) that the plaintiffs should line the cars in which the fruit was snipped. These conditions were more burdensome and rendered the contract less profitable to the plaintiffs. They were not expressed in the correspondence and I think cannot be implied. They were not assented to by the plaintiffs and on their declining to incorporate them in the paper the defendant treated the negotiations as at an end and notified the plaintiffs that it had placed its order with other parties. There was some further correspondence but it is not material to the question presented by the appeal. The writings and telegrams that passed between the parties contain all the elements of a complete contract Nothing was wanting in the plaintiffs’ original proposition but the defendant’s assent to it in order to constitute a contract binding upon both parties according to its terms. This assent was given upon condition that a certain specified modification was accepted. The plaintiffs finally assented to the modification and called upon the defendant to signify its assent again to the whole arrangement as thus modified and it replied that it was “all right," which must be taken as conclusive evidence that the minds of the parties had met and agreed upon certain specified and distinct obligations which were to be observed by both. It is true, as found-by the learned referee, that the parties intended that the agreement should be formally expressed in a single paper which, when signed, should be the evidence of what had already been agreed upon. But neither party was entitled to insert in the paper any material condition not referred to in the correspondence, and if it was inserted without the consent of the other party it was unauthorized. Hence the defendant, by insisting upon further material conditions not expressed or implied in the correspondence, defeated the intention to reduce the agreement to the form of a single paper signed by both parties. The plaintiffs then had the right to fall back upon their written proposition as originally made and the subsequent letters and telegrams, and if they constituted a contract of themselves the absence of the formal agreement contemplated was not under the circumstances material. When the parties intend that a mere verbal agreement shall be finally reduced to writing as the evidence of the terms of the contract it may be true that nothing is binding upon either party until the writing is executed.

But here the contract was already in writing, and it was none the less obligatory upon both parties because they intended that it should be put into another form, especially when their intention is made impossible by the act of one or the other of the parties by insisting upon the insertion of conditions and provisions not contemplated or embraced in the correspondence. Vassar v. Camp, 11 N. Y. 441; Brown v. Norton, 50 Hun, 248; 19 St. Rep. 220; Pratt v. H. R. R. R. Co., 21 N. Y. 308. The principle that governs in such cases was clearly stated by Judge Selden in the case last cited in these words: “A contract to make and execute a certain written agreement, the terms of which are mutually understood and agreed upon, is, in all respects, as valid and obligatory, where no statutory objection interposes, as the written contract itself would be, if executed. If, therefore, it should appear that the minds of the parties had met; that a proposition for a contract had been made by one party and accepted by the other; that the terms of this contract were in all respects definitely understood and agreed upon, and that a part of the mutual understanding was, that a written contract, embodying these terms, should be drawn and executed by the respective parties, this is an obligatory contract, which neither party is at liberty to refuse to perform.”

In this case it is apparent that the minds of the' parties met through the correspondence upon the terms as well as the subject-matter of the contract, and that the subsequent failure to reduce this contract to the precise form intended, for the reason stated, did not affect the obligations of either party, which had already attached, and they may now resort to the primary evidence of their mutual stipulations. Any other rule would always permit a party who has entered into a contract like this through letters and telegraphic messages to violate it whenever the understanding was that it should be reduced tó another written form, by simply suggesting other and additional terms and conditions. If this were the rule the contract would never be completed in cases where by changes in the market or other events occurring subsequent to the written negotiations it becatne the interest of either party to adopt that course in order to escape or evade obligations incurred in the ordinary course of commercial business. A stipulation to reduce a valid written contract to some other form cannot be used for the purpose of imposing upon either party additional burdens or obligations or of evading the performance of those things which the parties have mutually agreed upon by such means as made the promise or assent binding in law. There was no proof of any custom existing between the shippers and consignees of such property in regard to the payment of the expense of firing, lining and haying the cars. If it be said that such precautions are necessary in order to protect the property while in transit, that does not help the defendant. The question still remains, who was to bear the expense ? The plaintiffs had not agreed to pay it any more than they had agreed to pay the freight or incur the other expenses of transportation. The plaintiffs sent a plain proposition which the defendant accepted without any such conditions as it subsequently sought to attach to it. That the parties intended to make and sign a final paper does not warrant the inference that they also intended to make another and different agreement. The defendant is in no better position than it would be in case it had refused to sign the final writing without alleging any reasons whatever. The principle, therefore, which is involved in the case is this, can parties who have exchanged letters and telegrams with a view to an agreement, and have arrived at a point where a clear and definite proposition is made on the one side and accepted on the other, with an understanding that the agreement shall be expressed in a formal writing, ever be bound until that writing is signed? If they are at liberty to repudiate the proposition or acceptance, as the case may be, at any time before the paper is signed, and as the market may go up or down, then this case is well decided. But if at the close of the correspondence the plaintiffs became bound by their offer and the defendant by its acceptance of that offer, whether the final writing was signed or not, as I think they did, under such circumstances as the record discloses, then the conclusion of the learned referee was erroneous. To allow either party to repudiate the obligations clearly expressed in the correspondence, unless the other will assent to material conditions, not before referred to, or to be implied from the transaction, would be introducing an element of great confusion and uncertainty into the law of contracts. If the parties did not become bound in this case, they cannot be bound in any case until the writing is executed.

oThe judgment should be reversed and a new trial granted, costs to abide the event.

All concur, except Earl, Gray and Bartlett, JJ., dissenting.

Judgment reversed.


source: Caselaw Access Project

author: Ajstdeews, Oh. J.

license: Public Domain

text:
    Edmund Deyo, App’lt, v. Foster B. Morss, as Executor, etc., et al., Resp’ts.

      (Court of Appeals,

      Filed December 18, 1894.)

    Pleadings—Amendment.
    The special terra has power to authorize, before trial, an amendment of a complaint, so as to permit a substitution of a different cause of action from that originally alleged, especially where the result sought to be reached is the same.

      Appeal from order of the general term of the supreme court in the third judicial department, which reversed an order of special term denying a motion to strike out an amended or supplemental complaint and granted said motion.

      J. A. Griswold, for app’lt; Howard Ghipp, Jr., for resp’ts.

      Reversing 56 St. Rep. 364.

   Ajstdeews, Oh. J.

The stipulation authorized the plaintiff’s attorney to serve an amended or supplemental complaint, reserving to the defendants the right to make0such motion in relation thereto as they should be advised, and it authorized the defendants to serve an amended or supplemental answer. Before the stipulation was made both parties contemplated making an application to the court for permission to serve amended pleadings. The plain object of the stipulation was to enable the parties, without notice, to do what the court upon application might authorize to be done. The plaintiff’s attorney thereupon served an amended complaint, setting out a cause of action based on the statute, art. 2, title 3, .chap. 15, of the Civil Code, against the defendants as devisees, to recover the proceeds of real estate devised to them, situated in the state of Pennsylvania, which they had conveyed. The action was brought by the plaintiff as creditor of the decedent, in behalf of himself and all others similarly situated. The cause of action set out in the original complaint was based upon the theory that the defendants had fraudulently conspired to defeat the "claims of creditors by means of a sale and conveyance of the real estate devised, and the complaint asked that the conveyance be set aside, or in the alternative that the defendants account for the proceeds received by them on the sale, and for the appointment of a receiver. The causes of action in the two complaints were distinct. The original complaint was based on fraud, and the amended complaint on the statute, and in such an action the element of fraud has no' place. The general term reversed the order of the special term, which denied a motion in behalf of the defendants to strike out the amended complaint, made on the ground that it set up a new and different cause of action from that in the original complaint. The ground of the reversal seems to have been based on the view that the power of the court to authorize an amendment of a complaint before trial, does not extend to an amendment which changes the cause of action.

We think the settled practice is opposed to the rule declared by the general term. Whether an amendment of a pleading shall be allowed in such a case is, in general, a matter of discretian in the court. The general term has the right to review the exercise of such discretion by the special term, and its order made in the exercise of this power of review could not be reviewed here. But the stipulation, by its true construction, authorized such amendment as the court had power to grant, and the case, therefore, depends on the power of the special term to authorize an amendment before trial of a complaint, so as to permit a substitution of a different cause of action from that originally alleged. We think this question was, in principle, determined in the case of Brown v. Leigh, 49 N. Y. 78, where it was held that, under § 172 of the former Code, which permitted a pleading to be once amended by a party, of course and without costs, an amendment of a complaint which changed the cause of action and substituted another cause of action belonging to a different class was authorized. The power of amendment given to the court by § 723 of the present Code is entitled at least to as liberal á construction as the power granted to the party to amend as of right under § 172 of the former Code. The power of the court to grant or deny the relief, or to impose such terms as justice may seem to require, is an adequate protection against an oppressive exercise of .the power. To deprive the court of this power would in many cases result in injustice and encourage litigation. ' The present case is an illustration. The causes of action were legally distinct, but the purpose of both complaints was to compel the application of the decedent’s property to the payment of his debts, and whether the result was reached by treating the con vey - anee by the defendants as fraudulent, or by compelling them account for the proceeds of the property, as .provided under the statute, does not affect the substantial purpose of the action. The amended complaint relieved the defendants from the imputation of fraud, and in that respect might be deemed more favorable to' them. If they could have defeated the action in its original form this was no j ust reason why they should not, by amendment of the complaint, be put in a position where the real controversy as between the creditors and themselves may be tried and adjudicated.

The order of the general term should be reversed, and that of the special term affirmed, with costs in both courts.

All concur. Ordered accordingly.


author: O’Brien, J.

text:
    George W. Van Allen, Resp’t, v. The New York Elevated Railroad Company et al., App’lts.

      (Court of Appeals,

      Filed December 11, 1894.)

    1. Equity—Jurisdiction.
    The jurisdiction oí equity depends upon the position of the plaintiff, and the relief to which he is entitled at the time the action is brought.
    2. Same.
    A court of equity, having once "obtained jurisdiction, cannot be deprived thereof, for the reason that the sole ground, upon which plaintiff can invoke that equity, has ceased to exist, so long as there remains any injury to be redressed, though as to that there may be an adequate remedy at law.
    3. Same.
    A portion of the judges, while concurring in the result, held that, this principle does not apply where the party, by his own voluntary act, has withdrawn from the case the main fact which originally was the ground upon which equity jurisdiction attached ; but all agreed that,, by virtue of the stipulation, referring the issues in the action, the suit was properly proceeded with.
    4. Same.
    Such stipulation was held to be a waiver of a jury trial.

      Appeal from judgment of the general term of the court of common pleas for the city and county of New York, entered upon an order, which affirmed a judgment in favor of plaintiff entered upon the report of a referee.

      Reuben Leslie Maynard, for app’lts; J. Aspinwall Hodge, Jr., for resp’t.

       Modifying and affirming, 51 St. Rep. 767.

   O’Brien, J.

This was the usual action by the owner of real estate to restrain, by bill in equity, the further operation and maintenance of the defendant’s elevated railroad, in front of his premises in East Thirty-fourth street, in the city of New York, and for the recovery of the damages caused thereby. The cause was referred by stipulation, and the referee reported that the plaintiff was not entitled tp restrain the operation and maintenance of the road but to judgment for damages only. The defendants’ counsel insists that upon the conceded facts the complaint should have been dismissed and judgment given for the defendants. »

The "issues were joined in the action on the 2d day of November, 1889. On the 15th day of December, 1890, the plaintiff conveyed the premises, retaining no interest in them, and without, in terms, reserving the cause of action. On the 10th of February, 1891, the counsel for the respective parties made a written stipulation referring the issues in the action to a referee to hear, try and determine, upon. which an order of reference • was duly entered, but the defendants’ counsel was then ignorant of the fact that the plaintiff had conveyed. On learning that fact th'eymade a" motion to the court, in which the action was pending, to vacate the order, which was denied, and" on appeal to the general term the order denying the motion was affirmed. In this decision the defendants have apparently acquiesced, as no appeal was taken to this court. The cause was brought "to trial before the referee on the 29th of January, 1892, and on the trial the defendants’ counsel requested him to dismiss the complaint on the ground that the plaintiff had conveyed the property during the pendency of the action and there was no longer any basis for the maintenance of an action in equity by the plaintiff for an injunction, as that right had passed to his grantee. That the only claim that the plaintiff had, after the conveyance, was for past damages, and as to that there was an adequate remedy at law. The referee was also requested to send the case to a jury for trial. These several motions were denied, and the defendants excepted. The referee in his report held and decided that at the time of the commencement of the action, and down to the time of the conveyance, the plaintiff was entitled to the injunction prayed for in the complaint, but that right was lost by the conveyance while the suit was pending. He held, however, that the plaintiff was entitled to recover his damages from a date six years prior to the commencement of the action to the time of the conveyance, which he found to be $2,5*00, for which sum he directed judgment to be entered. To this finding and conclusion the defendants’ counsel excepted. It was assumed by the judgment below that the plaintiff’s right to prosecute the action for an injunction did not surVive the conveyance, but passed to his grantee, and could thereafter be prosecuted only in his name. Counsel on both sides in the argument in this court have also assumed that this proposition is correct. So far as this case is concerned we are relieved from any further examination of that question. McGean v. Met. El. R. Co. et al., 133 N. Y. 9; 44 St. Rep. 75; Code, § 756. The only point to be determined is whether the plaintiff had still the right to prosecute the action for the recovery of his damages. It is contended in behalf of the defendants that the right to the injunction was the only feature of the case that conferred jurisdiction originally upon a court of equity, and, since that element of the controversy has disappeared, in consequence of the conveyance, the referee should have dismissed the complaint. The facts showing the right to the injunction are undoubtedly the basis for equitable relief in such cases, and the claim for damages is an incident which equity draws into the litigation in order to prevent a multiplicity of suits and to completely adjust all the rights of the parties.

Of course it is not meant by this to assert that a claim for damages to real property is not in itself a complete and substantial cause of action. When united in the complaint with a cause of action which entitles the party to equitable relief by enjoining a trespass, or continuing injury to the same property, it then becomes an incident to the main relief not in itself sufficient to appeal to the peculiar jurisdiction pertaining to courts of equity. Lynch v. Met. El. R. Co., 129 N. Y. 274; 41 St. Rep. 541; Shepard v. Man. R. Co , 131 N. Y. 215; 43 St. Rep. 117; McGean v. Met. El. R. Co., supra; Hunter v. Man. R. Co., 141 N. Y. 281; 57 St. Rep. 400.

The order of reference conferred power upon the referee to determine all the questions in the case, and this power was not affected by the fact which appeared upon the trial, that the right to the injunction, upon which alone the jurisdiction of equity depended, had been eliminated from the case by the conveyance. He could still go on and dispose of every claim which the plaintiff had and which was embraced within the allegations of the complaint, whether the claim was of a legal or equitable nature. The defendants were not entitled to a jury trial, for the reason that they had waived it by consenting that the claim for damages should be referred with the claim for an injunction, and the fact that the latter had been transferred to another by the conveyance, at the trial or during the pendency of the action, did not deprive the referee of jurisdiction so long as any cause of action remained. The right of trial by jury having been waived, there was no longer any question except whether the trial should be had in a court of law or a court of equity, and, since both remedies are now administered by the same court and under the same procedure, the defendants’ contention related to forms and not to mattei’s of substance, and was not material.

But, as the referee awarded damages that had accrued subsequent to the commencement of the action, it must be assumed that he treated the case ns still equitable in its nature, and his decisión is to tlie effect that the plaintiff was entitled, notwithstanding the conveyance, to relief in equity.

I think that his conclusion, in this respect, was correct and in accordance with the usual practice in equity, since the plaintiff would have been entitled to the same relief under the same circumstances had the trial taken place before the court at special term.

The plaintiff had the legal title to the premises at the time of the commencement of the action, and that the jurisdiction of equity then attached cannot be and is not questioned. The jurisdiction of equity depends upon the position of the plaintiff and the relief to which he is entitled at the time the suit is brought. The measure" of the relief is adapted to the situation at the time of the decree. When the jurisdiction has once attached it is not affected by changes which occur subsequently, so long as any cause of action survives, upon the facts alleged, though such changes may affect the nature and extent of the relief to which the party may be entitled. No principle is better established or more frequently asserted than that when a court of equity has once acquired jurisdiction over a cause for any purpose, it may retain the cause for all purposes, and proceed to a final determination of all the matters at issue. McGean v. Met. El. R. Co., supra, p. 16; Valentine v. Richard, 126 N. Y. 272; 37 St. Rep. 12. This feature of equity jurisdiction is well illustrated in actions for the specific performance of contracts for the sale of lands, where it appears upon the .trial that the defendant has, for some reason, always been unable to perform, but that fact was not known to the plaintiff at the time of the commencement of the action. In such cases the court will grant a decree for simple damages, because the plaintiff came into equity in good faith. Holland v. Wooley, 26 Ch. Div. 578; Cotton v. Wyld, 32 Beav. 266; Betts v. Nielson, L. R., 3 Ch. 429; Pratt v. Law, 9 Cranch, 456, 494; Mobile v. Kimball, 102 U. S. 691; Milkman v. Ordway, 106 Mass. 232; Tainter v. Cole, 120 id. 162; Wonson v. Fenno, 129 id. 405; Ostrander v. Webber, 114 N. Y. 95; 22 St. Rep. 979; Beck v. Allison, 56 N. Y. 366; N. Y. Ice Co. v. North Western Ins. Co., 23 N. Y. 357. The sole ground upon which the plaintiff was permitted to invoke the jurisdiction of equity may no longer exist in consequence of events which have transpired subsequent to the commencement of the action, but that fact alone will not deprive the court of the jurisdiction which has once attached, so long as there still remains any injury to be redressed, though as to that there may be an adequate remedy at law. The court in such cases will not send' the party to another tribunal for relief, but, as in cases where the jurisdiction rests solely upon a demand to restrain the infringement of a patent which expired pendente lite, damages will be awarded. Beedle v. Bennett, 122 U. S. 71, 75; and see McRae v. B. & S. C. R. R., 37 Law Jour. 267, cited in Henderson v. N. Y. C. R. R., 78 N. Y. 423. But some of my brethren are of the opinion that the principle does not apply where the party by his own voluntary act withdraws from the case the main fact which originally was the ground upon which equity jurisdiction attached, and they prefer to rest the judgment upon the defendants’ stipulation to refer, which was so drawn, apparently, as to give consent to a trial before the referee of either the legal or equitable cause of action, or both. I have already said that the stipulation was sufficient to authorize the referee to try a cause of action, purely legal in its nature, but in order to authorize an award of damages, coming down to the time of the conveyance, it is necessary to show that he possessed equity jurisdiction also, and I think he did. The nature and character of the action is determined by the pleadings, and the complaint before the referee stamped this action indelibly as one in equity. The conveyance did not change the pleadings but only the nature and extent of the relief to which the plaintiff was entitled. The referee had the power to try whatever remained of the action upon the principles governing courts of equity, though nothing remained but a claim which of itself was originally one at law. I am unable to see any good reason for turning a party over to another court to recover a comparatively small portion of his claim, simply because he exercised the right of disposing of his property while he was in a court of equity seeking redress for an invasion of rights pertaining to that property. It is more in accordance with the general doctrines and practice of equity to grant relief as to all claims in the suit which the party still retained, and which had accrued to him at any time before the trial or the decree, than to require him to commence another action for that purpose. It appeared at the trial that the plaintiff had a valid claim for damages at the time of the conveyance which did not pass by it. That claim was embraced within the issues which the referee was appointed to determine, and the circumstance that the sole ground upon which the plaintiff was permitted to bring the action in equity had disappeared, did not affect his jurisdiction to render judgment according to the nature of the case, so long as the order of reference was in force. It follows that the defendants’ motion for a dismissal of the complaint was properly denied, and that the judgment should be affirmed, with costs.

All concur (Andrews, Ch. J., Peckham and Gray, JJ., in result), except Earl, J., who votes to modify the judgment by striking out so much of the damages as were allowed for the time subsequent to the commencement of the action, and to affirm the judgment as thus modified. Judgment affirmed.


author: Peck.ham, J.

text:
    Dennis Maloney, App’lt, v. Samuel Nelson et al., Resp’ts.

      (Court of Appeals,

      Filed December 18, 1894.)

    Mobt&a&e—Indemnity.
    Where the real purpose of an undertaking is indemnity against loss or damage to be sustained from a payment, by the obligee, of an obligation into which he has entered, he can proceed against, and recover from, the obligor only upon proof that he has paid the money, or some portion of it, which he was obligated to pay.
    Appeal from order of the general term of the supreme court in the first judicial department, which reversed a judgment in favor of plaintiff entered upon a decision of the court on trial at special term and ordered a new trial.

      Abram J. Rose, for app’lt; Roger W. Sherman, for resp’ts.

       Affirming, 54 St. Rep. 98.

   Peck.ham, J.

We think the court at general term was right in its construction of the bond and mortgage. The true question is, what was the intention of the parties to the .mortgage ? The circumstances appearing from the recitals both in the mortgage and in the bond accompanying it, would seem to show beyond controversy that the intention of the parties was to obtain and to give indemnity to the plaintiff against any loss or damage which he might sustain by reason of being compelled to pay the amount or any part thereof named in the bail bond which he had signed. The plaintiff was under no obligation other than that contained in his bail bond, and if the party for whom he went bail did not appear there would then arise a liability to pay by reason of that bond, but the amount that he would "finally be compelled to pay would under the circumstances be uncertain. Of course it might be that he would be compelled to pay the full amount named in the bond; but it is also well known that the payment by bail in such cases is very much governed by the circumstances which happen after the forfeiture of the recognizance. If the bail subsequent to the forfeiture secure the attendance of the party it is almost a thing of course to remit a large portion of the bond. So that the forfeiting of the recognizance, while it rendered certain the fact that the condition had been broken, and that the party to the bond might be called on to pay it all, yet still in reality the amount which he would have to pay would very probably be much less than the full sum named in the bond, provided he procured the attendance of his principal at some other term. Obviously the purpose of this mortgage was to secure the bail against loss or damage which he would be compelled to suffer by reason of these circumstances. And although the strict condition of the mortgage made it become due upon the failure of the party bailed to appear, yet that language must be construed in connection with the other language of the instrument showing the end and purpose for which it was given. It will be observed that the defendant has not by his bond or mortgage entered into any contract to do anything in discharge of the obligation which had been assumed by. and existed against the plaintiff. There is no promise on the part of the defendant either in the bond or in the mortgage that he will, in discharge of plaintiff’s obligation, procure the attendance of O’Brien at the time named in the bail bond. The plaintiff, by his bail bond, agreed that O’Brien should appear, and he further agreed that in case O’Brien did not appear the plaintiff would pay the $10,000. The defendant, herein has not undertaken either in the bond or mortgage given to plaintiff to do anything in discharge of that obligation of the plaintiff. He has not agreed to produce O’Brien, and so far as this bond and mortgage are concerned, he has made no promise to the plaintiff to pay to the People, in discharge of the plaintiff, the amount of the bail bond or any portion of it. He has not, therefore, made the liability or the debt of the plaintiff his own. In this respect the case differs from those cases where an individual agrees to do a particular thing, such as to pay money to a third party in exoneration and discharge of the original liability of his principal to such third party. In such case it may be conceded that the right of action becomes complete on the defendant’s failure to do the particular thing he agreed to do, Thus, if A entered into a bond to pay money to B at a certain time, and 0 thereupon entered into another bond to A to himself pay that money to B, in such case C becomes liable to pay the money, and the condition of the bond is broken by his»failure to pay, and A has a right of action against 0 to recover the money, without proof that A has paid his bond to B. But where the real purpose of the undertaking is indemnity against loss or damage to be sustained from a payment by A of the obligation which he has entered into, there the surety to A can be proceeded against and a recovery had -from him only upon proof that A has paid the money or some portion of it which he was obligated to pay. Herein lies the difference .between this case and that of Rector, etc., of Trinity Church v. Higgins, 48 N. Y. 532. The defendant in that case was the lessee of the plaintiff, and in the lease he covenanted to pay and discharge all the taxes and assessments which should be imposed upon or grow due or payable out of or by reason of the demised premises. The defendant failed to pay the amount of two assessments, and the action was brought by the plaintiff without its having paid the assessments imposed upon the premises, and no evidence was offered to show that any proceedings had been taken by the corporation of the city of Hew York to enforce the collection of such assessments upon such premises. The defendant, upon .the trial, moved for a non-suit on the ground that the plaintiffs failed to show that they had paid the assessments, and that, therefore, they failed to show that they had sustained any damage. The motion was denied, and judgment was ordered for the plaintiffs for the amount of the assessments. Upon appeal to the general term of the superior court of the city of Hew York, the verdict was set aside and an order made granting a new trial, from which the plaintiff appealed to this court. It was held here that the covenant of the defendant was an affirmative and not a collateral or secondary one in its terms, and that there was no language contained in it which would convey the idea that the plaintiffs were first to pay the assessments before a cause of action arose against the defendant on account of the non-payment thereof; that the covenant was broken when the defendant neglected to pay assessments or taxes duly imposed, and that the defendant was not at liberty to say it was a debt of the plaintiffs, and that the latter must first pay it, and that then defendant would pay them; that it was his own debt, made so by the terms of the covenant. Various cases were cited, in the course of the opinion of Judge Leonard, showing the distinction which I have above stated, and holding that in case of mere indemnity damage m.ust be proved by showing payment of some kind before the cause of action accrues.

It is urged that, assuming this to be an indemnity, the meaning of the mortgage is that the plaintiff was to be supplied by the defendant with the funds with which to pay his liability as soon as such liability was incurred, and that the liability was incurred by the failure of the person bailed to appear in accordance with the condition of the bail bond. But I do not think that is the reasonable and natural construction to be given to the instrument upon a review of all the language used therein. What amount the plaintiff will have to pay by reason of the default in the bail bond is not made certain by the mere default of the principal in the bail bond. The utmost limit of it is rendered certain of course, but that was certain before default was made. It could not exceed the amount named in the recognizance. How much less it might be would depend upon circumstances happening thereafter. I think it clear that the parties had in contemplation, not the payment of the amount named in' this bond to the plaintiff upon the mere failure of the principal in the bail bond to appear, but it was given “ as security ” to repay to the plaintiff the amount which he might be called upon to pay and which he did pay consequent upon such default. Upon the whole we think that without proof that the plaintiff had paid all or some portion of the amount named in the bail bond, the action to foreclose this mortgage cannot be sustained. The amount that plaintiff may be called upon to pay, and which he does pay, may be recovered back by a future action to foreclose this mortgage.

This leaves-it unnecessary to consider the other defenses set up in the answer of the defendant Nelson, although we must say that the claim that the defendant’s contract was void as against public policy, does not impress us as being a good defense, at least in this state.

For the reasons already given we think the order of the general term reversing the judgment for plaintiff and granting a new trial should be affirmed, and judgment absolute rendered against the plaintiff herein, with costs. All concur, except O’Brien, J., dissenting. Judgment accordingly.


author: Gray, J.

text:
    Frank B. Reynolds et al., App’lts, v. James F. Everett et al., Resp’ts.

      (Court of Appeals,

      Filed December 18, 1894).

    1. Injunction—-When not quanted.
    The mere apprehension of some future acts of a wrongful nature, which might be injurious to the plaintiff, is not a sufficient basis for a final injunction.
    3. Same.
    Such a remedy becomes -a necessity only when it is perfectly clear upon the facts that, unless granted, “the complainant may be irreparably injured and that he can have no adequate remedy at law for the mischief occasioned.
    3. Same.
    The denial of such relief is within the discretion of the court below,. and with the proper exercise of that discretion the court of appeals will not interfere.
    Appeal from judgment of the general term of the supreme court, in the fourth judicial department, entered upon an order, which affirmed a judgment in favor of the defendants entered upon an order dismissing the complaint on trial at special term.

      A. D. Wales, for app’lts; Tracy C. Becker and George B. Curtiss, for resp’ts.

      Affirming, 50 St. Rep. 889.

   Gray, J.

It is our opinion that, under the state of facts as they were found to be at the time of the trial, the refusal of the prayer for the permanent injunction was a discretionary matter. The ■only relief demanded was that of a perpetual injunction and there was neither a finding, nor a request to find, or to award, damages. The finding of the trial justice was, and it appeared upon the trial as an uncontroverted fact, that the so-called “strike” began on a certain day and was then over and there no longer existed that condition of things, in which the complainants had sought the aid of a court of equity. The facts established at the trial did not entitle the plaintiffs as of strict right to the remedy of a final injunction ; for there was no imminent peril to their rights apparent; whatever the injury from the acts in the past. The refusal to grant the relief prayed for could rest upon the general view taken of the merits of the case, or it could rest upon the cessation of the acts complained of. The trial judge decided upon the merits and the general term justices have declined to overrule the discretion used by the court at special term. Whether the reasons assigned by the trial justice be deemed to be correct, or not, the refusal to adjudge the equitable relief was a matter which rested with the court of original jurisdiction, acting upon all the facts as ■established at the time of the hearing. The plaintiffs could not be said to have been refused any protection, required by the facts of the case. The mere apprehension of some future acts of a wrongful nature, which might be injurious to the plaintiffs, was not a sufficient basis for insisting upon the preventive remedy of ■a final injunction. Such a remedy becomes a necessity only when it is perfectly clear upon the facts that, unless granted, the complainant may be irreparably injured and that he can have no adequate remedy at law for the mischief occasioned.

How can it be be asserted, in the present case, that there was any such necessity ? There were absent the elements of intimidation ; or, as the trial judge observed, of such circumstances surrounding the acts of persuasion and entreaty as would characterize them as intimidation. The discritionary exercise of the court’s authority in dismissing the complaint, could very well rest upon the failure to make out a case sufficiently strong to move the court to exercise its extraordinary equitable powers and be, in addition, justified by the discontinuance of the acts complained of. With this proper exercise of the discretion, witli which the court below was invested, this court will not interfere. The judgment should be affirmed, with costs.

All concur. Judgment affirmed.


author: Bartlett, J.

text:
    The Germania Fire Insurance Company, App’lt, v. The Home Insurance Company, Resp’t.

      (Court of Appeals,

      Filed December 18, 1894.)

    Insurance—Pike—Change of title.
    Where individual property is insured, the taking of a partner is a “change of title,” which avoids the policy.
    Appeal from judgment of the general term of the superior court of the city of New York, entered upon an order, which affirmed a judgment in favor of defendant entered upon an order dismissing the complaint on trial at special term.

      G. W. Cotterill, for.app’lt; George Richards, for resp’t.

      Affirming, 53 St. Rep. 563.

   Bartlett, J.

This is an appeal from the judgment of the superior court of the city of New York affirming a judgment dismissing the complaint after trial on an agreed written statement of facts. X

The material facts are ais follows, viz.: The defendant insured Yerdier on his stock of hardware, and during the life of the policy Yerdier took in a co-partner, Brown, transferring to him a three-tenths interest in the insured property, shortly after this transfer the fire occurred.

The policy contained this provision, viz.: “ Or if the property be sold or transferred, or any change takes place in title or possession, * * * this policy shall be void.”

The question presented by this appeal is whether the fact of the insured having taken in a partner rendered the policy void.

It was stated on the argument that this precise point had never been presented to this court, but it is insisted that the trend of some of our decisions is in favor of plaintiff’s contention that the policy is not avoided by taking in a new partner.

The first case is Hoffman v. Ætna Fire Ins. Co., 32 N. Y. 405. It was there held that the effect of the usual proviso against sales in policies of insurance is not to interdict sales by the owners as between themselves; that the design of the provision was to prevent sales to parties not insured.

The second case is Walton and Wife v. Agricultural Ins. Co., 116 N. Y. 326; 26 St. Rep. 780. This was a case in the second division. The policy contained the clause against transfer.

While the policy was in force Walton, through a third person, conveyed the insured property to his wife, and. subsequently the fire occurred.

■ The plaintiffs sought to relieve themselves from the effect of this transfer by showing that Walton informed the defendant’s solicitor of his intention to convey to his wife after a few months, and requested that the policy be so drawn as to cover his interest before conveyance and that of his wife afterwards, and that the solicitor informed him that the result could be accomplished by naming him and his wife as the parties insured.

The trial court admitted the evidence, and this court reversed the judgment on the ground that it was error to admit paroi evidence to vary or contradict one of the provisions of the policy.

While the decision of this case went off on a question of evidence, it is clear that the wife of Walton had no insurable interest at the time the policy was issued, and that the subsequent transfer to her was not a transaction between the insured, but was a sale by the insured to a stranger to the policy. As the case was properly disposed of on the question of evidence the court did not pass on this point.

The third case is Walradt v. Phænix Ins. Co., 136 N. Y. 375; 49 St. Rep. 666, where it was decided that the issuing of an execution, and a levy thereunder, did not work a change of title or interest within the meaning of the policy.

None of these cases deals with the question now under consideration.

We think it perfectly clear on principle that the sale of an interest in the insured property by Verdier to Brown and the formation of a co-partnership between the/two rendered the policy void. f

The contract of insurance is peculiarly personal in its nature, and the success of the business of underwriting depends largely upon what is known as the moral hazard.

It is a well-established principle of the common lawr that every man has the right to determine with whom he will enter into contract obligations.

An insurance company is induced to issue or withhold its policy after carefully scrutinizing the character of the applicant for insurance.

It is of the utmost importance to the company to ascertain who is to be vested with the title aud possession of the property sought to be insured.

It would be a harsh and indefensible rule that required the underwriter, who had insured an individual on a stock of goods in a store, to continue the insurance after the insured had taken in two partners and formed a firm wherein each partner was vested with an undivided - third interest in the property covered by the policy, without having been afforded the opportunity to examine into the moral and business characters of two strangers to the original contract.

This right of the insurance company was in nowise invaded when this court held that a sale by one partner to another of his interest, where both were insured, did not avoid the policy.

It is only when a stranger is to be brought into contractual relations with the insurance company that the consent of the latter is essential.

This right of the company has been upheld in other jurisdictions. Drennan v. London Assurance Corporation, 20 Fed. Rep. 657; Card v. Phænix Ins. Co., 4 Mo. App. 424; Malley v. Atlantic Fire and Marine Ins. Co., 51 Conn. 222, 250, 251.

The appellant urges that the protection of the policy should be extended to the new partner by virtue of the following words contained therein, viz.: “And the said Home Insurance Company hereby agree to make good unto'the said assured, his executors, administrators and assigns, all such immediate loss,” etc. It is argued that the word “assigns” extends the insurance to the new partner’s interest.

The policy is capable of no such construction; the clause in question. is merely a covenant on the part of the company with the insured to pay to him or his legal representatives or assigns, the amount of the loss that may become due to him under the terms of the policy.

The judgment and order appealed from should be affirmed, with costs.

All concur.

Judgment accordingly.


author: Per Curiam.

text:
    William S. Williams, App’lt, v. Robert Lindblom et al. Resp’ts.

      (Court of Appeals,

      Filed November 2, 1894.)

    Appeal—Cotjbt op Appeals.
    After filing a stipulation for judgment absolute on an appeal to the court of appeals, the appellant cannot, on the rendition of an adverse decision, be relieved from such stipulation.
    Motion to be relieved from a stipulation.

      J. Murray Mitchell, for motion; L. A. Gould, opposed.
   Per Curiam.

Upon the facts presented to us, we are satisfied that the plaintiff was fully informed of the purpose and effect of the stipulation for judgment absolute upon his appeal to this court. Upon the argument here the attention of his counsel was pointedly called to the danger to which the plaintiff was exposed by the stipulation, and opportunity was then given him to withdraw the stipulation, and go to a new trial under the order of the general term. But he declined, and, for reasons now stated in his affidavit, he preferred to argue the appeal, and take his chances of a favorable decision. Now, after the case has been decided adversely to him, the plaintiff asks to be relieved from his stipulation, so that he may take the new trial. We do not think that we ought, upon the facts now appearing, to grant the relief now asked. Appellants cannot be permitted to experiment in this way, by taking the chances of success upon their appeals, and, in .the case of failure, ask to be relieved from their stipulatation. The chances are, upon the facts appearing, that the plaintiff will suffer no great harm by being held to his stipulation. While, in consequence of the stipulation, he can obtain no affirmative relief or judgment against the defendants, the only relief they can have* against him is a partnership accounting, and a judgment for such sum, if any, as may be found due upon such accounting.

The motion must be denied.

All concur.

Motion denied.


author: Earl, J.

text:
    James Shaw, as Trustee, etc., Resp’t, v. The Saranac Horse Nail Company et al., App’lts.

      (Court of Appeals,

      Filed December 18, 1894.)

    Corporation—Bonds.
    Where the directors of a manufacturing corporation authorized the issuing of coupon bonds, secured by mortgage on its real estate, “for the purpose of raising money to pay off the floating debts of the company,” and some of the bonds were sold in precise accordance with such authority and others were pledged as collateral security for prior debts, the holders of the bonds so sold were held to be, and the holders of the bonds so pledged wore held not to be, entitled to share in the proceeds upon the foreclosure of the mortgage, in case the corporation became insolvent.
    Appeal from order of the general term of the supreme court in the third judicial department, which affirmed an order of special term modifying an order of special term which modified the report of a referee and confirmed the same as modified.
    In January, 1883, the Saranac Horse Nail Company owed a large amount of debts, and its board of directors duly resolved to issue coupon bonds of the company to the amount of $30,000, of the denomination of $500 each, secured by mortgage upon its real estate, “for the purpose of raising money to pay the floating debts of the company,” and Andrew Williams was authorized to negotiate the bonds at a price not less than par and accrued interest. In pursuance of this authority, Williams, in May, 1883, sold to Parker, Foote, Ryan and Purdy, the respondents upon this appeal, bonds amounting in the aggregate to $6,500, and received the full amount thereof; and no question is made in this proceeding that those bonds are valid and legal obligations for the full amount due thereon against the company. In the same year he sold to Town, Farrell, Moffett and Ellis bonds to the aggregate amount of $7,000, and received full value for such bonds, and no question is made that the bonds were, in the hands of the persons to whom they were sold, valid obligations against the company. In 1885 the company was indebted to the Keeseville National Bank to the amount of $5,000, winch indebtedness had been contracted for money actually received from the bank by the company between one and two years before, and the bank was pressing for payment of the indebtedness and for additional security. Whereupon the note of the company was given, indorsed by Williams, and he delivered to the bank, as collateral security for the note, bonds amounting to $5,000. In the same year the company was indebted to the Iron National Bank of Plattsburgh, in the sum of $3,850, for money had by the company some time before, and a note was made by the company for that sum, and as collateral security thereto Williams delivered to the bank bonds of the company amounting to $4,000. About the same time the company' was indebted to the Yilas National Bank of Plattsburgh for money had by the company some considerable time before, and to secure that*indebtedness a note was given to it by the company for $7,250, and bonds of the company of the par value of $7,500 were delivered to the bank by Williams as collateral security to that note.
    The company became insolvent in 1886, and afterwards the mortgage upon its real estate, given to secure its bonds, was foreclosed and the real estate sold, and the proceeds of the sale amounted to about $10,000. There was a reference to a referee to determine how many bonds had been issued and were outstanding which were entitled to share in such proceeds. The referee, after hearing the parties interested, reported that all the bonds above mentioned, except those held by the respondents, belonged to the estate of S. F. Vilas, deceased, which is represented by his administrators, the appellants, and that all such bonds, to the extent of the interest of that estate in them, were entitled to share pro rata in such proceeds. Upon the presentation of his report for confirmation at the special term, it was held that the only bonds entitled to share in the proceeds of the sale were those held by the respondents, and an order was there entered to that effect. From that order the administrators of Vilas appealed to the general term, where it was affirmed, and then they appealed to this court.

      G. H. JBeclcwiih,, for app’lts; I F. Conway, for resp’t.

       Modifying and affirming 60 St. Rep. 804.

   Earl, J.

We are of opinion that the referee was right in holding that the bonds sold and delivered to Town, Farrell, Moffett and Ellis, and subsequently transferred to Vilas, or his administrators, were entitled to share pro rata in the proceeds of the sale of the real estate. Those bonds were issued in precise accordance with the authority conferred upon' Williams, and the company received the full amount thereof in cash. They have never been paid or discharged by the company, and in the hands of the administrators of Vilas, .to the extent of their interest therein, they were valid obligations against the company, and we can perceive no reason, legal or equitable, why they should not share in the proceeds of the real estate.

As to the bonds delivered to the banks for collateral security, a different question is presented. Those bonds were pledged to the banks to secure prior debts of the company. Williams had no authority to pledge the bonds. His sole authority was to negotiate them at a price not less than par and accrued interest, for the purpose of raising money to pay the floating debts of the company. He was bound to sell the "bonds for money, or at least so to dispose of them as to pay the debts of the company. If he pledged them they paid no debts of the company, but rather increased than diminished such debts. It has been frequently held that an authority to sell does not authorize a pledge or mortgage. Cummings v. Williamson, 1 Sand. Ch. 17; Waldron v. McComb, 1 Hill, 111; Bloomer v. Waldron, 3 id. 361; Albany Fire Ins. Co. v. Bay, 4 N. Y. 9; Merchants’ National Bank v. Livingston, 74 id. 223; Wright on Agency, 79; Meacham on Agency, § 356; Story on Agency, 78. Therefore, if the banks as pledgees were claiming to share in the proceeds bf the mortgage sale, their claim could be successfully resisted on the ground that the bonds had not become legal obligations against the company. Nothing has happened since the bonds were pledged to render them valid and legal. The pledge has never been ratified by the company, and the debts have never been paid, and the bonds have not accomplished the purpose for whicli they were authorized to be issued. Williams and the administrators of Vilas, by an arrangement between them and for their own protection as stockholders of the company, purchased and took an assignment of these debts from the banks, and with the debts took a delivery of the bonds held by the banks as collateral security. Williams afterwards assigned his interest in the debts and bonds to the administrators, and they, therefore, hold the debts as assignees, and hold the bonds as the banks held them, as collateral security to the debts. The bonds are invalid in their hands as they were invalid when held by the banks, and we see no ground whatever upon which they can legally claim to share in the proceeds of the mortgaged real estate.

Our conclusion, therefore, is that the orders of the general and special terms should be so modified as to divide the funds held for distribution pro rata between the respondents and the appellants, so far as the appellants represent bonds sold, as found and determined in the report of the referee, and as thus modified the report of the referee should be confirmed, and the orders affirmed, without costs to any of the parties in any of the courts.

All concur. Ordered accordingly.


text:
    The People ex rel. Henry J. Warren, App’lt, v. August Beck, as Sheriff, etc., Resp’t.

      (Court of Appeals,

      Filed December 18, 1894.)

    Criminal law—Day’s labor.
    The provision of § 504, chap. 105, of 1891, is not penal in its character, and cannot be the basis for a criminal indictment of any person0 for a misdemeanor;
    Appeal from order of the general term of the superior court of the city of Buffalo, which affirmed an order of the special term vacating a writ of habeas corpus issued on behalf of the relator.

      John G. Milburn, Frank R Perkins and A. S. Worthington, for app’lt; Daniel J. Keneflck, for resp’t.

      Reversing, 62 St. Rep. 396.

   Bartlett, J.

The relator was covicted in the police court of the city of Buffalo of a misdemeanor for violating § 504, ch. 105, L. 1891, entitled “ An act to revise the charter of the city of Buffalo.” That section is as follows: “In contracting for any work required to be done by the city a clause shall be inserted that the 'contractor submitting proposals shall bind himself in the performance of such work not to discriminate either as to workmen or wages against members of labor organizations, or to accept any more than eight hours as a day’s work, to be performed within nine consecutive hours. Nor shall any man or set of men be employed for more than eight hours in twenty-four consecutive hours except in case of necessity, in which case pay for such labor shall be at the rate of time and one-half for all time in excess of such eight hours.”

After the passage of this act the Barber Asphalt Company, a corporation organized under the laws of West Virginia, entered into a contract with the city of Buffalo to pave a portion of Delaware avenue.

The relator was the superintendent of the company. In carrying out this' contract men were employed at agreed wages“for a day’s work' of ten hours.

For this employment the relator was tried and convicted.

The conviction was affirmed by the general term of the supreme court.

As this court could not review upon appeal the judgment of the general term a writ of habeas corpus was sued out for the avowed purpose of testing the constitutionality of the provision in the charter of the city of Buffalo already quoted.

The special term of the superior court of the city of Buffalo dismissed the writ and the general term affirmed that decision. From the latter order an'appeal was taken to this court.

In the courts below elaborate opinions were delivered in which the alleged unconstitutionality of the clause in question was discussed at length. In the view we take of this appeal it is unnecessary to consider the constitutional question sought to be presented.

The clause in the charter of the city of Buffalo now under ex: amination is found near the close of a lengthy act under the heading of “.General Provisions,” and is wholly administrative in its nature, and directs in detail the manner in which contracts shall be drawn relating to any work required to be done by the city; it is not penal in character, nor does it impose upon any one entering into a contract with the city any duty or obligation wliatsoaver; it simply deals with the general subject of contracts and prescribes certain provisions to be inserted by the city in any contract.

When the city of Buffalo entered into the contract with the Barber Asphalt Company, which is the basis of this proceeding, it inserted therein the provisions required by this clause of the charter. We are not called upon at this time to decide the legal effect of the alleged violations of these provisions by the Barber Asphalt Company.

We do hold, however, that this clause does not in any way apply to the relator, and that his arrest, trial and conviction were without jurisdiction, and void.

We are also of opinion that this clause cannot be the basis for the criminal indictment of any person for a misdemeanor.

The order appealed from vacating the writ of habeas corpus should be reversed, and the discharge of the relator granted.

All concur. Ordered accordingly.


text:
    In the Matter of the Application of The Buffalo Mutual Gas Light Company, Resp’t, for an Order Directing The Board of Supervisors of Erie County, App’lt, to Correct the Assessment Roll of the Third Ward in the City of Buffalo for 1893.

      (Court of Appeals,

      Filed December 18, 1894.)

    Taxes—Assessments—County coubt.
    The county court, under § 16, chap. 686 of 1892, has no power to can-cc¿ a tax before payment or to restrain its collection.
    Appeal from order of the general term of the supreme court in the fifth judicial department, which affirmed an order of the county court of Bide county.

      Charles F. Tabor, for app’lt; Ansley Wilcox, for resp’t.
   O’Brien, J.

The county judge of the county of Brie made an order in this proceeding on the 14th of April, 1894, directing the board of supervisors of that county to cancel a tax for the year 1893, levied by them at their regular session for that year, against the petitioner, The Buffalo Mutual Gas Light Company, and restraining the officer empowered to collect the taxes in that county from collecting this tax. The order was not made until after the board had completed its business and finally adjourned. The action of the county judge was based upon the following facts, which are not disputed : The property of the company was assesed at $350,000, upon which the board levied a tax, for state and local purposes, of $1,776.25, but of this amount $903 was levied for state purposes. The company is one of the corporations which is taxable for state purposes under chapter 361 of the Laws of 1881, and for the year 1883 it paid that tax to the state, amounting to $1,500. It is admitted that the company was exempt from any further taxation for state purposes, but still remained liable to taxation for all other purposes. Since the corporation was liable to taxation for local purposes, the assessment was properly made by the assessors and returned to the'board, and the only error committed was in extending a tax upon the assessment for state purposes. This was the act of the board itself, which they could have corrected while in session, and probably would have done so had the company made application to them for that purpose. No such application was made, however, but application was first made after they had adjourned, and that to the county judge. While the order seeks to do nothing more than exact justice in this particular case, yet it cannot be sustained for the reason that there was no power to make it. The legislature has conferred power in some cases upon the courts and upon judicial officers to control or review the action of assessors and -other local bodies empowered to make assessments and to levy and impose taxes, but this power has always been cautiously granted and carefully guarded. Any general or extensive power of that kind, or even to permit those bodies or officers themselves to change their decisions or their official action after their work had once been completed, would obviously be productive of great confusion and mischief. The county judge in this case had no general common law or equity power over the subject, and no such power is claimed. • He had no power whatever except that conferred by § 16 of chapter 686 of the Laws of 1892. This statute is a revision of Statutes previously existing on the same subject, and which had frequently been amended and changed by the legislature. Laws of 1869, ch. 855, § 5; Laws of 1871, ch. 695; Laws of 1884, ch. 141; Laws of 1885, ch. 326. The meaning and application of these several acts has been, from time to time, the subject of much contention in the courts, and the decisions are not entirely harmonious. People ex rel. Pells v. Supervisors of Ulster Co.,65 N. Y. 300; Matter of Hermance, 71 id. 484; Matter of the N. Y. Catholic Protectory, 77 id. 342; Williams v. Supervisors of Wayne Co., 78 id. 561.

The present statute of 1892, above referred to, reads as follows:

“ Any such board may correct any manifest clerical or other error in any assessment or returns made by any one or more town officers to such board, or which may or shall properly come before such board for its action, confirmation or review, and cause to be refunded to any person the amount collected from him of any tax illegally or improperly assessed or levied and upon the order of the county court it shall refund any such tax.”

When this enactment is read in connection with the previous statutes and the decisions referred to, its true meaning and application is not difficult to ascertain.

1. It conferred power upon boards of supervisors, while in session, to correct any manifest clerical or other errors in the assessment rolls. But they were given no power over jurisdictional or other legal questions arising upon the work of the assessors. They could'correct only such errors as were manifest from an inspection of the rolls themselves, without argument or evidence. In this case there was no error apparent" in the work of the assessors, and, hence, that part of the section did not apply.

2. But they were also empowered to. correct like errors which appeared in their own work in levying or extending the taxes upon the rolls, since it must have come before them for their action or review before signing the warrants for the collection of the taxes in the several towns and wards. This would have authorized the board to cancel the tax in question, and had they refused to do so, the company would have had a remedy by mandamus to compel a performance of a plain duty, or if not then, doubtless, some other appropriate legal remedy.

3. A still more extensive power is also conferred, as the board may cause to be refunded to any person the amoun*" collected from him of any illegal tax levied upon his property. This was an illegal tax, so far as it was levied for state purposes, but the power to direct it to be refunded does not come into action until it has been, paid. The power to refund taxes illegally or improperly assessed must necessarily carry with it power to inquire into the grounds upon which it is claimed they are illegal, and to determine for themselves whether they are illegal or not, at least in the first instance, so that it will be seen • that thus far no power whatever has been conferred upon the county judge. The board is to act for itself according to its own rules of procedure.

4. But the legislature anticipated the possibility that the board might neglect or refuse to refund an illegal tax to the person who had paid it. In such cases the board is required by the statute to cause it to be refunded upon the order of the county judge, and this is the only power which the statute has conferred upon that officer. It is quite clear that he had no power to make the order in question. The power to refund a tax once paid conferred by statute upon a board or officer of special and limited jurisdiction, does not carry with it by implication the power to cancel the tax before payment or to restrain its collection. Such a construction in matters concerning the imposition, correction and payment of taxes, however convenient or just it might be in this case, would be' dangerous, and might be productive of mischief if sanctioned as a general principle, and, moreover, would be very difficult to defend in any case.

The board could have corrected the error before signing the warrant for the collection of the tax; but not having done so, and not having been requested to do so, the power of the board over the matter ended and cannot be called into action again until the tax is paid, and not until an application for the purpose of having it refunded -has been made to them, can the county judge make any order on the subject.

The order of the general term, and that of the county judge, must be reversed, with costs in all courts.

All concur. Ordered accordingly. •


author: Peb Cubiam.

text:
    The People ex rel. William Witte, App’lt, v. James A. Roberts, as Comptroller, etc., Resp’t.

      (Court of Appeals,

      Mled December 18, 1894.)

    Taxes—Redemption.
    An application, under the provisions of the Act of 1893, cannot be made by the owner of the land, at the time of the sale, but only by the purchaser at the sale.
    Appeal from order of the general term of the supreme court in the third judicial department, which affirmed an order of the special term denying an application for a writ of mandamus against the comptroller of the state.
    The relator was in 1874 the owner of a lot of land situate in the town of Flatbush, Kings county, and as such owner on the 12th day of December, 1874, duly paid the tax thereon for that year to the collector of the town. Notwithstanding such payment the tax was returned as unpaid by the collector through mistake, and at the tax sale in November, 1881, the lot was sold by the comptroller for the non-payment of that tax to the People of the state, who continued to hold the tax title until November 24th, 1891, when it was sold by the commissioners of the land office to Henrv Patten. The relator was ignorant of the return of the tax of 1874 as unpaid, and of the tax sale of his lot until recently, when on examination of the title preparatory to a proposed conveyance by him these facts were disclosed through the records of the comptroller’s office. The relator then applied to the comptroller for a cancellation of the tax sale on the ground that the tax of 1874 had been legally paid. The comptroller denied the application, and then the relator applied at a special term of the supreme court for a peremptory writ of mandamus directed to the comptroller to compel him to cancel the tax, and the special term denied his application. . He then appealed to the general term, and from affirmance there to this court.

      James F. Tracy, for app’lt; W. F. Kisselburgh, Jr., for resp’t.
   Peb Cubiam.

Prior to 1891 various statutes in this state authorized the comptroller to cancel tax sales upon discovery that they were for any reason illegal or invalid. Those statutes did not specify the persons who could apply to the comptroller for such cancellations and invoke his action; Laws of 1828, chap. 26; 1 R. S. 413, §§ 89, 91; Laws of 1851, chap. 98, §§ 102, 104; Laws of 1855, chap. 427, §§ 83, 85. In People ex rel. Wright v. Chapin, 104 N. Y. 369; 6 St. Rep. 837, we held that under the statutes then in force the application to the comptroller for the cancellation of the tax sale could only be made by the purchaser at the sale. Thereafter, by chapter 217 of the Laws of 1891, the previous statutes were amended by the following provision: “All applications heretofore or hereafter made to the comptroller for the cancellation of any tax sale, by any person interested in the event thereof, shall be heard and determined by him, and his determination shall be subject to review by certiorari or otherwise.” notwithstanding that amendment we again held in People ex rel. Hamilton Park Co. v. Wemple, 139 N. Y. 240; 54 St. Rep. 623, that the application for cancellation could be made only by the purchaser, and that the owner had no standing whatever for that purpose. Before that decision was announced, and after the action of the comptroller there under review had been taken, the act chapter 711 of the Laws of 1893 had been passed, and in that act the language pertaining to the present inquiry is as follows: “ If he (the comptroller) shall not discover that the sale was invalid until after a conveyance of the lands sold shall have been _ executed, he shall, on application of any person having any interest therein at the time of the sale, on receiving proof thereof, cancel the sale, refund out of the state treasury to the purchaser, his representatives or assigns, the purchase money and interest thereon, and re-charge the county from which the tax was returned with the amount of purchase money and interest from the time of sale, which the county shall cause to be levied and paid into the state treasury ; .on any such application the comptroller may appoint a commissioner with like powers and duties as in case of amapplication for redemption,”

The present application is made under that act, and the claim of the relator is that under its phraseology, he, as owner of the lot at the time of the sale, can make the application.

It is very clear that if, under the act, he, as owner, can make the application on the ground that he was interested in the land at the time of the sale, the purchaser at the sale cannot make the application, and that thus the entire policy of the state as to such applications which had existed l'or seventy years has been radically changed. If the legislature had intended to provide that the owner could make the application, we think in view of the prior decisions of this court that it wo'uld have so provided in plain terms. With the language as it now appears in the act we are quite unwilling to hold that the policy of the state has been changed, and that the effect of our prior decision has been subverted, We must adhere to those decisions until by satisfactory language the legislative intent to change the law so as to authorize the application for cancellation by the owner has been more plainly manifested.

The order of the general term should be affirmed, with costs.

All concur, except Earl, J., dissenting.

Order affirmed.


text:
    Clara M. Jacobie, App’lt, v. Henry Mickle, Impleaded, etc., Resp’t.

      (iCourt of Appeals,

      Filed December 21, 1894.)
    Mortgages—Foreclosure—Rights op mortgagees.
    . Where the complaint, in a foreclosure action, alleges the prior incumbrance and prays for relief that the amount due thereon be ascertained and first paid out of the proceeds of sale, and the judgment follows tile prayer of the complaint, such prior incumbrancer, upon suffering default, is concluded by the judgment therein.
    Appeal from judgment of the general term of the supreme' court in the third, judicial department, entered upon an order, which affirmed a judgment in favor of defendant entered upon an order dismissing the complaint on trial at circuit without a jury.

      3. P. King, for app’lt; J. 3, Bain, for resp’t.

      Affirming, 53 St. Rep. 620.

   Earl, J.

The plaintiff and the defendant Guilford each had a mortgage upon real estate in Warren county, her mortgage being prior to his. He commenced an action to foreclose his mortgage in July, 1891, making her a defendant therein. The ■ complaint in that action alleged her mortgage, and that it was prior to his mortgage, and, among other things, demanded that the amount due upon her mortgage should be ascertained and paid before the amount due upon his. She suffered default in the action and judgment was rendered therein which provided that out of the proceeds of the sale of the premises her mortgage should be first paid. In September, 1891, she commenced this action to foreclose her mortgage, making him a defendant, and by a supplemental answer served by him in Hovember, 1892, he alleged, as a defense to the action, that, before the commencement thereof, he commenced the action for the foreclosure of his mortgage, making her one of the defendants therein as the holder of the prior mortgage, and that that action had been prosecuted to judgment, and that final judgment of foreclosure and sale had been rendered therein, providing for the prior payment of her mortgage.

The court below held that the prior action and judgment therein were a bar to the maintenance of this action, and dismissed the complaint; and the sole question for our determination is whether the judgment of foreclosure and sale in the junior mortgagee’s action is a bar to the maintenance of the action brought by the plaintiff as prior mortgagee.

It is undoubtedly the general rule that the only proper parties to an action of mortgage foreclosure are the mortgagee and mortgagor and those who have acquired rights under them subsequent to the mortgage. It has been held that where the prior incumbrancer has been made a party defendant in the foreclosure action, under a complaint in the usual form, alleging that such incumbrancer’s interest is subordinate to the mortgage, and containing the usual prayer for judgment, and the usual judgment in foreclosure is rendered, the interest of the incumbrancer is not cut off by the sale under such a judgment. McReynolds v. Munns, 2 Keyes, 214; Lewis v. Smith, 9 N. Y. 502; Emigrants' Industrial Savings Bank v. Goldman, 75 id. 127; Smith v. Roberts, 91 id. 470; Holcomb v. Holcomb, 2 Barb. 20. But where the complaint in the foreclosure action alleges the prior incumbrance, and prays for relief that the amount due thereon be ascertained, and that such amount be first paid out of the proceeds of the sale in foreclosure, and the judgment follows the prayer of the complaint, it has never been doubted in any case that the prior incumbrancer suffering default in such an action is concluded by the judgment therein. In such an action the court has jurisdim tian of the subject of the action and the parties, and it cannot be doubted that it can render judgment against a defaulting defendant in precise accordance with the prayer for relief.

If Mrs. Jacobie did not desire to have her rights, as prior mortgagee, adjudicated in the action brought by Guilford, she should have appeared and demurred or answered in that action, and thus have raised the question that she was not a proper party thereto, and had it adjudicated therein. But having, by her default, consented that judgment comprehended within the prayer for relief might be rendered against her, she cannot attack that judgment collaterally, or successfully object that it does not conclude her as to everything therein contained and adjudicated. ' If she omitted, by any inadvertence or excusable neglect, to answer or demur in that action, her only relief was by an application to the court to open her default and to permit her to come in and defend the action. If she is now in anywise embarrassed by that adjudication in consequence of something that has happened since it was made, her relief must be obtained from the court in which the judgment was rendered. A prior mortgagee may be prejudiced by being made a party defendant in an action commenced by the junior mortgagee. Some person- made a party defendant in such an action may defend against the junior mortgagee, and thus there may be prolonged litigation, and the prior mortgagee may be delayed in the enforcement of his mortgage, or in other ways embarrassed ; but his relief in all such cases must be by application to the court in which the action is pending, and it has ample power to mould its relief to the exigencies of the case so as to protect the prior incumbrancer from all unnecessary loss and damage.

We are, therefore, of opinion that this judgment was right, and should be affirmed, with costs.

All concur. Judgment affirmed.


text:
    The City of Schenectady, Resp’t, v. The Trustees of Union College, etc., App’lt.

      (Court of Appeals,

      Filed December 21, 1894.)

    1. Municipal cobbobation—Local improvements—Assessments.
    The word "lot” cannot be held to designate land in an open, public street.
    2. Same.
    The charter of the city of Schenectady contains no provision, conferring authority to imp ise the expense of paving a street, in front of an open intersecting street, upon the owner of the fee of the land in such street.
    3. Sam:e.
    Under the city charter, the paving in front of such open streets can, it seems, be done at the expense of the city, and, in equity and justice, it should be so done.
    Appeal from judgment of the general term of the supreme court in the third judicial department, entered upon an Order which affirmed a judgment in favor of plaintiff entered upon a report of a referee.

      Robert J. Landon, for app’lt; Alonzo P. Strong and Everett Smith, for resp’t.

       Reversing, 49 St. Rep. 161.

   Earl, J.

This action was brought under the charter of the city of Schenectady, chapter 385 of the Laws of 1862, as subsequently amended, to recover the expense of paving Union street in front of two lots alleged to have been owned by Union College. The plaintiff recovered and this appeal brings that recovery under review.

The paving was in Union street in front of two streets which ran into it and in which streets Union College owned the fee of the land subject to all street servitudes. The claim of the defendant is that under the city charter, the ordinance and proceedings for paving the street, and the allegations contained in the complaint, it cannot be made liable for the expense of paving in front'of the two streets, simply because it owned the fee of the land therein. Section 8 of the city charter provides that “ the common council shall have power under the restrictions and limitations hereinafter provided to lay out, open, widen, alter, construct and make any street, avenue, highway, lane, alley, public ground, square, park, sewer, drain, culvert, arch, bridge, well or reservoir in said city, and to cleanse and remove obstructions from sewers and drains. The expense and costs of all such improvements shall be borne by the owners or occupants of the lots or parcels of land benefited thereby, and shall be apportioned, assessed and collected according to the provisions hereinafter contained, and shall be a lien upon such property from and after the time of the confirmation of the apportionment and assessment thereof.”

For the improvements mentioned in that section it cannot well be contended that the land in an open public street would be liable to assessment. Section 42 provides that the common council shall have power from time to time to adopt ordinances directing any of the streets of - the city, or any part of them, to be graded, paved, etc.. “ at the expense of the owners or occupants of the lots and buildings lying upon ” them, etc. The land lying in an open public street is in no proper sense a city lot, and the owner of the fee in such street is in no proper sense the owner of city lots lying upon the street to be paved. Other provisions of the charter make this more plain. Section 44 provides that Immediately after the adoption of any such ordinance, and at least thirty-days prior to the expiration of the time therein limited for the doing of such work, the superintendent of streets shall serve, or cause to be served, a written or printed copy of such ordinance on each of the owners or occupants of the lots and buildings affected thereby, either personally or by leaving the same, directed to such owner or occupant, or both of them, with some person of suitable age and discretion upon such lot or lots.” Section 45 provides that “ In case any of the buildings or lots shall be vacant or unoccupied, or no person of suitable age and discretion shall be found, thereon, and the owner or owners thereof shall not reside in said city, or shall be unknown, or an infant or infants, in addition to publishing such ordinance as above directed, it shall'be sufficient service of notice thereof to affix a copy of the same on some conspicuous part of said vacant or unoccupied premises, directed to the owner generally, if not known, or by name if known.”

These sections show that the lots spoken of are such that notices may be affixed upon them, and that certainly cannot be done upon an open, public traveled street. Section 48 provides that the expense of paving in front df a lot may be recovered by suit against the owners thereof; and under § 49, instead of suing the owner, the common council may assess the expense upon such lot, and the assessment may be enforced by a sale of the lot, and in case of a sale “ the same notice of sale shall be given and the same proceedings had, and the sale of such lot shall be conducted and effected in the same manner and with the like effect as above provided in reference to the sale of lands for unpaid assessments for the laying out, opening and constructing streets, el cetera, and the purchaser shall be entitled to the same remedies to obtain possession of the premises sold.” Certainly an open, public street cannot'be a lot within the meaning of that section whereof the purchaser of the tax sale can obtain title and possession.

We have carefully examined the city charter, and we find in none of its provisions any authority to impose the expense of paving a street in front of an open intersecting street upon the .owner of the fee of the land in such street.

In all the proceedings of the common- council relating to the paving of Union street, the persons to be made liable for the expense thereof were spoken of as the owners of the lots of land abutting and-fronting upon Union street; and in the contract made in pursuance of the ordinance for the paving of the street, the work in front of each lot was separately provided for, and a distinct price was stipulated for paving in front of each lot upon the street. The whole number of lots was upwards of fifty, and for the paving in front of the two alleged lots now in question the stipulations in the contract were as follows:

“ Upon that portion of said street lying in front of the lot on the north side thereof and abutting thereon, reputed to be owned by the trustees of Union College, etc., aforesaid (which lot is bounded easterly by the easterly line of Gillespie street, and westerly by the center line thereof), and lying between said lot and the center line of Union street, and between the extensions of the easterly and westerly lines of said lot to’the center line of Union street, the sum of $134.64.”
“ Upon that portion of said street lying in front of the lot on the north side thereof and abutting thereon, reputed tó be owned "by the trustees of Union College, in the town of Schenectady, in the state of New York (which lot is bounded on Union street easterly by the center line of Union avenue, and westerly by the westerly line of Union avenue), and lying between said lot and the center line of Union street, and between the extensions of the east and west lines of said lot to the center line of Union street, -the sum of $346.92.”

This action is to recover the sums thus stipulated; and it is thus seen that what the plaintiff seeks to recover is not for paving in front of any other lots owned by the defendant, but for paving in front of the open streets which the common council assumed to designate as lots.

In the complaint the action is based solely upon the claim to recover for paving in front of these open streets. There is no allegation as to the ownership 'by the college of any other lots bounded on Union street, and its liability is in no way based upon its ownership of any other lots.

It is argued on behalf of the city that the college should be treated as the owner of a lot in front of this paving done in Union street, because it owned the corner lots on Union street and the intersecting streets. But it has paid, as we must assume, for the paving in front of the corner lots, and the sums sought to be collected in this action have been treated in all the proceedings of the city, and in the complaint in this action, as due from the defendant solely on account of its ownership of the fee of the land in the intersecting streets.

It is further argued that it must have been the intention of the legislature that the owners of the fee of the land in the intersecting streets should be liable for the paving in front of such streets, so that the streets to be improved may be continuously paved and the expense thereof provided for. But there can be no doubt that under the city charter the paving in front of these open streets could be doné at the expense of the city, and equitably and justly it should be so done.

According to the common, ordinary use of the word lot it cannot be held to designate land in an open, public street. The fee of a street is of such inconsiderable value that the owner thereof is rarely, if ever, spoken of as the owner of the street. The public, represented by the city, has the paramount right in the streets, and may, with greater propriety, be called the owner of the streets.

Without, therefore, considering the other defenses in this action, which have been much relied on by the defendant, we have reached the conclusion that the paving here in question was not in front of any lot owned by it, within the meaning of the charter, and that it was not. therefore, liable for this paving.

The judgment should, therefore, be reversed, and as a recovery upon a new trial is not possible the complaint should be dismissed, with costs.

All concur. Judgment accordingly.