text:
    Margaret Coyle, Resp’t, v. Charles Nies, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January, 1887.)

    1. Fraud—Pleading—Complaint— —Sufficiency of ALLEGATIONS.
    Where the complaint neither charged that the false representations were fraudulently made, or that they were made with intent to defraud or deceive the plaintiff; nor alleged that the defendant knew them to he false or untrue, but it simply charged that they were made, that they were untrue, and that they were made to, and did induce the plaintiff to make the purchase and take the conveyance from him of the premises in question. Held, that from aught that appeared by the allegations of the complaint the representations were made in good faith, and that it wholly failed to allege a cause of action in fraud.
    2. Same—Intent to deceive must be alleged.
    The inference arising on evidence (that when a party assumes knowledge of a material fact, and makes a statement of it in such a manner as to import knowledge of its existence, by which another is i ml need to rely and act upon it, he may be chargeable with fraud although ignorant of the fact so represented, because the intent to deceive and defraud is imputable to him), docs not qualify the necessity of alleging in some form such intent in pleading or iu finding of facts in support of a conclusion to that effect.
    8. Same—Action for damages on sale of land must be for fraud— Covenants not implied—1 Rev, Stat., 788, § 140.

      Held, that the complaint failing to show a cause of action iu fraud alleged no cause of action. That an action at law for damages arising out of the transaction of sale and conveyance of real estate when there is no covenant can be supported on the ground of fraud only. That in the conveyance of land no covenant is implied. 1 R. S., 788, § 140.
    4. Practice—When complaint must be dismissed.
    The court is not required to dismiss a complaint upon the ground that it fails to state a particular cause of action claimed for it in the counsel’s opening. It is only when it alleges no cause of action that the motion must be granted.
    5. Same—When error in ruling effectual on review.
    The attention of the court must be specifically called to the exact question as to the sufficiency of the pleading, and an objection on the exact point must be distinctly made on the trial to be effectual on review.
    6. Same—When party concluded by statement of counsel as to character OF CAUSE OF ACTION.
    Where the defendants motion to dismiss is granted on the statement of plaintiffs counsel of the character of his cause of action alleged in the complaint. Held, that plaintiff is concluded by the statement, although his complaint may have contained another good "cause of action.
    7. Same—When objection that cause of action is not stated in the COMPLAINT IS TAKEN AT TIIE TRIAL.
    When the objection that a complaint does not state facts sufficient to constitute a cause of action is not taken until the trial, the complaint though not subjected to so close a criticism as upon a demurrer, must contain the elements essential to the cause of action.
    Appeal by the defendant from judgment entered on a verdict of Cattaraugus circuit and from order denying motion for new trial.
    The complaint alleges that the defendant applied to the plaintiff to purchase of him a certain piece of land with a house upon it, and to induce her to purchase it, he represented and stated to her that the house was lathed and plastered inside throughout, and double sheeted; that the lot had a frontage of ninety-one feet on the street named; and was pointed out and its lines described to her by the defendant; that she, relying upon his statements and representations so made, and believing them to be true, did purchase the premises and pay $1,200; that the house was not so lathed and plastered, nor was it double boarded, and that the defendant did not own the land so pointed out, except a strip thirty-five feet in width on such street; that the defendant made to the plaintiff a deed purporting to convey the land so pointed out, having ninety-one feet front on the street, etc.; and that by reason of the premises the plaintiff sustained $1,000 damages, for which she demanded judgment.
    The plaintiff’s counsel, in his opening to the jury, represented the cause as for fraud; and repeated, on inquiry made, that he claimed the cause of action alleged was fraud. Thereupon the counsel lor the defendant moved that the complaint be dismissed, on the ground that no fraud was alleged in the complaint.
    The motion was denied by the court and exception taken. The trial proceeded and resulted in a verdict for the plaintiff. The case is here on the defendant’s appeal.

      P. B. Coxe, for appl’t; James G. Johnson, for resp’t.
   Bradley, J.

The objection that a complaint does not state facts sufficient to constitute a cause of action is not waived by omission to demur, but the question may be raised after answer upon the trial. Code Civ. Pro., § 499. And although the allegations of the complaint in such case may not upon the trial be subjected to so close a criticism in that respect as they would be upon demurrer, the complaint must in some form contain the elements essential to the cause of action. Zabriskie v. Smith, 13 N. Y., 322.

The Code has in no substantial respect changed this requirement, and causes of action are distinguished by the facts which constitute them as effectually as they were prior to the Code, so that judgments must be rendered secundum allegata et probata, as formerly. Ross v. Mather, 51 N. Y., 108; Dudley v. Scranton, 57 id., 424; Neudecker v. Kohlberg, 81 id., 296; Clark v. Dillon, 97 id., 370. Intent to deceive is the important fact which characterizes a cause of action as that for fraud. The complaint in this case neither charges that the representations were fraudulently made, or that they were made with any intent to defraud or deceive the plaintiff, nor does it allege that the defendant knew them to be false or untrue. It simply charges that they were made, that they were untrue, and that they were made to, and did induce the plaintiff to make the purchase and take the conveyance from him of the premises in question. From aught that appears by the allegations of the complaint, the representations were made in good faith. It wholly fails to allege a cause of action in fraud. Addington v. Allen, 11 Wend., 374; Zabriskie v. Smith, 13 N. Y., 330; Lindsay v. Mulqueen, 26 Hun, 485; Lawrence v. Foxwell, 17 J. & S., 273; Meyer v. Amiclon, 45 N. Y., 169; Overlander v. Spiess, id., 175.

It is contended on the part of the plaintiff, that the allegations of the complaint are sufficient, because the alleged representations may be treated as purporting to be statements upon the assumed knowledge of the defendant as distinguished from matter of opinion; and therefore, without reference to the fact of actual knowledge of their falsity, he was guilty of fraud, as they were untrue. And reference is made to the doctrine of Bennett v. Judson (21 N. Y., 238) and kindred cases. That rule is applicable to the question of the sufficiency of evidence to establish alleged fraud, that when a party assumes knowledge of a material fact, and makes a statement of it in such manner as to import knowledge of its existence by which another is induced to rely ana act upon it, he may be chargeable with fraud, although ignorant of the fact so represented, because the intent to deceive and defraud is imputable to him. This rests in inference as matter of fact, and goes in support of a charge to that effect. But such inference arising on the evidence does not go in qualification of the necessity to allege in some form such intent in pleading, or in finding of facts in support of a conclusion to that effect. See Meyer and Overlander cases, supra.

Our attention is also called to Sharp v. Mayor, etc. (40 Barb., 256), where reference is made to the rule of Bennett v. Judson, and the court remarks, that upon those facts the law adjudges fraud as the result of such alleged state of facts. And adds that if material, the complaint could have been amended at the trial by inserting an allegation of fraud as material to the cause of action mapped out in the complaint, and that “in such case a judgment will not be reversed, although the amendment was not made.”

If this proposition can be supported this case may, for that reason alone, be relieved from the difficulty presented by the question now under consideration, for the complaint was amendable at the trial, and very likely an amendment would have been allowed if asked for. But the contrary of that question has since been declared in Tooker v. Arnoux (76 N. Y., 397), where it is held that upon motion to that effect the defendant is entitled, as matter of right, to dismissal of the complaint, if it does not state facts sufficient to constitute a cause of action, unless the objection is obviated by amendment. And if not waived, and no such amendment asked for at the trial, the question must be determined on appeal as the complaint was when the objection was so taken, and if the ruling is erroneous, it is fatal to the recovery. And that seems to be the rule now, and it is not apparent that the view in that respect expressed in Sharp v. Mayor, etc., can be approved.

The complaint failing to state a cause of action in fraud, alleged no cause of action. A right to recover upon contract did not arise out of the facts alleged, because in the conveyance of land no covenant is implied (1 R S., 738, § 140), and none is alleged in this case. And an action at law for damages arising out of the transaction of sale and conveyance of real estate, when there is no covenant, can be supported on the ground of fraud only. 2 Kent’s Com., 473; Thorp v. Keokuk Coal Co., 48 N. Y., 253; Tallman v. Green, 3 Sandf., 437; Whittemore v. Farrington, 7 Hun, 392; S. C., 12 Hun, 349; affirmed, 76 N. Y., 452.

If therefore the motion had been made to dismiss the complaint on the ground that it did not state facts sufficient to constitute a cause of action, the defendant would have been entitled to that result. But that was not the objection taken by the terms of his motion. He asked for a dismissal on the ground that it did not state facts sufficient to constitute a cause of action for fraud, and “ that the complaint at most was only upon a breach of contract of warranty. ”

The court is not required to dismiss a complaint upon the ground that it fails to state a particular cause of* action claimed for it in the counsel’s opening. It is only when it alleges no cause of action that the motion must be granted. The attention of the court was not specifically called to the question that the facts alleged constituted no cause of action, but on the contrary, it was suggested to the effect that it might present an alleged case upon contract for breach of warranty.

And so far as appears the court was not required to determine whether or not, the allegations were sufficient to support a recovery other than for fraud. When a party asserts error, he must make it clearly appear, and an objection of this character must be distinctly made on the trial to be effectual on review. The defendant was advised and evidently understood the purpose of the action, and that the plaintiff sought to recover on the ground of fraud. And this is somewhat indicated by the clause in the answer that the deed describing the premises was prepared 1 ‘ without any intent to cheat or defraud the plaintiff,” and that she was not in any way “cheated or defrauded by the said transaction. ” If the defendants motion to dismiss had been granted the plaintiff would in support of the ruling have been concluded by the statement made by his counsel of the character of the cause ©f action alleged in his complaint although it may have contained another good one, because all reasonable intendments will be permitted in support of a ruling of the court; but the overruling the defendant’s motion rests upon the ground specifically taken by it, and it will not be assumed in support of error that the court denied the motion upon any other than that specified; or that it was done upon the assumption that the facts alleged failed to state any cause of action other than fraud.

Nor can it now be said that the objection, if made, that the complaint did not state facts sufficient to constitute any cause of action, may not have been obviated by amendment. The situation is that no motion to dismiss the complaint on the ground that it did not state facts sufficient to constitute a cause of action was made or denied. Nor was the motion for non-suit after the close of the plaintiff’s evidence made on the ground that no cause of action in fraud was alleged. And we fail to find any objection to the reception of evidence on that or any ground having relation to the character of the complaint. When the motion as before suggested is not made at the trial, and no objection to the sufficiency or reception of evidence is made necessarily involving the consideration of the character of the complaint or the cause of acdon alleged by it, such objection is treated as waived, and, if necessary, the complaint may be deemed amended to conform it to the facts proved in support of the verdict if warranted by them. While the evidence is by no means conclusive to that effect, it was sufficient to permit the conclusion reached by the jury. There was a decided conflict in the evidence given by the parties, and the questions of credibility and of fact presented by it was for the jury, and their finding is not so against the weight of the evidence as to justify disturbance of the verdict.

The exclusion of the evidence offered to prove what the premises conveyed by the plaintiff to the defendant were worth, was not error. The conveyance of the premises in question to the plaintiff was in part the consideration for tile conveyance of land by her to him. The value of the premises she conveyed to him was not material. It had no legitimate bearing on the question of damages.

We think no error was presented by the exception to the charge of the court, and that the case was by it fairly submitted to the jury. None of the exceptions seem to have been well taken.

The judgment and order should be affirmed.

Haight, J., concurs._


source: Caselaw Access Project

author: Bradley, J.

license: Public Domain

text:
    Philena Reid, Resp’t, v. Melville Farrar, App’lt.

      Supreme Court, General Term, Fifth Department,

      Filed January, 1887.)

    1. Master and servant—When that relation will not be presumed to exist.
    Where the plaintiff, who was the mother-in-law of defendant, remained seven years with defendant after his wife’s death, as housekeeper, and took care of his children, then aged five and three. II Id, that no implied obligation on the part of the defendant to pay the plaintiff for her services arose out ■ f that fact alone; that without some evidence o the contrary it would be presumed that she was there as a member of the family, making the defendant’s house her home, and rendering services incident to that situation and relation.
    3. Same—When it will be implied.

      Held, that his liability must rest upen a promise to pay, which might be implied from an understanding between them, but that the understanding must be his as -wall °as hers, and that it is upon his understanding that his liability depends.
    3. Same—What facts show such an understanding.
    The fact that she kept an account of what she received, and gave him credit for it from time to time, and advised him frequently that she could i form him of what lie had paid her, may reasonably have led him to understand that she expected paymet t; and his remark to the plaintiff when she left his service, that he could pay her what he owed her, may go in aid of the infrence of such understanding on his part.'
    4. Same—Statute of limitations.
    Held, that the services would be deemed performed as from year to-year, and that the amounts received would be applied upon the services first earned, although over six years before the suit was commenced. And that tlie statute of limitations did not apply to the services rendered w thin six years.
    Appeal from judgment of the Cattaragus county court, entered upon report of referee. The action is for services alleged to have been rendered by ■ the plaintiff for the defendant. The plaintiff recovered $616.40. The defendant-appeals.

      A. & G. E. Spring, for app’lt; W. G. Laidlaw, for resp’t.
   Bradley, J.

The plaintiff was a widow, and mother of the defendant’s wife. The latter was in feeble health, and, at the request of the wife, the plaintiff, in April, 1875, went to thé defendant’s to assist her.

The defendant’s wife died, May 20, 1875, leaving surviving her the. husband and two children, aged five and three years. The plaintiff remained there as housekeeper for the defendant, and performed the services required of that relation, until October 1, 1882. The conclusion is fairly justified that she faithfully and well took charge of the household affairs, and rendered valuable services for the defendant during that time. No implied obligation on the part of the defendant to pay the plaintiff for her services-arose out of that fact alone, because her relation to the defendant and his family was such that without some evidence to the contrary it would be presumed that she was there as a member of the family, making the defendant’s house her home, and rendering services incident to that situation and relation. Sharp v. Cropsey, 11 Barb., 224; Green v. Roberts, 47 id., 521; Wilcox v. Wilcox, 48 id., 327; Cooper v. Turner, 2 Hun, 515: Van Kuren v. Saxton, 3 id., 547; Carpenter v. Weller, 15 id., 134; Williams v. Hutchinson, 3 N. Y., 312; affirming S. C., 5 Barb., 122; Hall v. Finch, 29 Wis., 278; S. C., 9 Am. R., 559. The referee has found ‘ that there was a mutual expectation that the plaintiff should and would be paid for said services other and beyond her having a home and living for the-time being.” The main question on the merits is whether or not this finding of fact is supported by the evidence. If it is, the plaintiff had cause to ask for payment of the defendant for her services. There is no evidence of any express agreement on the part of the defendant to pay her, nor does it appear that anything was said by either to the other at the time she went to live with the defendant and into service there, which indicated any purpose to ask or make payment, and many circumstances tend quite forcibly to show that there was no mutual understanding, or expectation of charge and payment for the services. The defendant, although a business man, kept no account of the money she had or of the things for herself she purchased with his money or on his account; and she was at full liberty to purchase for the family, and for herself, what she deemed necessary or desired. And for that purpose had at times access to the defendant’s money in the house. She kept no account of services performed, nor was any account rendered to him during the seven years that she was there, of what she received from his means and credit for her own benefit, as distinguished from that for the purposes of the family. And when purchases were made by her on the credit of the defendant no such distinction in the accounts at the stores was required by her, or observed.

And the evidence on the part of the defendant is to the effect, and tended to prove that she was deemed a member of his family and that there was no expectation on his part, and no occasion for any on her part of liability of the defendant for her services rendered there, or that she would receive any compensation for them other than the home, support, and the supplies for herself, which she was permitted in her discretion to obtain from his means and credit. The defendant cannot be charged with liability under the circumstances and in view of the relation before mentioned, without having retained the plaintiff in his service with some understanding on his part, that she expected or claimed that payment should be made to her, and intended to charge him for the services she performed.. His liability must rest upon a promise to pay, which might arise and be implied from that supposed situation. He cannot be charged upon her expectation alone.

The understanding must be his, as well as hers, and it is upon his undertaking that his liability depends. Dye v. Kerr, 15 Barb., 444; Green v. Roberts, 47 id., 521; Robinson v. Raynor, 28 N. Y., 494.

There is some evidence on the part of the plaintiff beaiv ing in some degree on that question. She says that she expected to receive pay, and that she kept an account of what she had from time to time for herself, and she pro ¡Sliced an itemized statement purporting to be an account with the defendant, containing items with their respective ¡Sates extending through the period of time she was at the ¡defendant’s, of things obtained for herself, and it was put In evidence. And she says, “I frequently told' the defendant I could tell every cent he had paid me.” And she adds that, “ when I left he told me he could pay me every mat he owed me. ”

__ The evidence of another witness is that, at or about the Sme the plaintiff left the defendant’s house in October, 1882, the defendant said to him that he was going to settle with plaintiff and pay her. And that on a subsequent occasion, the defendant said to the same witness that he wanted to have the thing settled up, as it was bothering Mm; and then he also said that “he did not consider he owed her anything.”

While this evidence was, by no means, conclusive, it, if believed by the referee against that given by the defendant, and the circumstances tending to the contrary conclusion, may have been, and we think it was sufficient to permit the inference that the defendant was advised, and understood that the plaintiff intended to charge him with, and expected payment for her services performed for him, and that the relation of master and servant existed between them.

The fact that she kept an account of what she received, and gave him credit for it from time to time,- and advised liim frequently that she could inform him of what he had paid her, may reasonably have led him to understand that she expected payment, and his remark to the plaintiff when sheloft his service that he could pay her what he owed her, may go in aid of tho inference of such understanding on Ms part. This is the only evidence that bears with any directness in support of the charge of liability, and without that evidence there would have been no legal opportunity for the referee to direct judgment for the plaintiff, but in connection with that as bearing upon the question, the character and extent of the services performed by the plaintiff was a proper subject of consideration, in view of the fact that she was a person in good health, having-habits of industry, and not destitute of a home elsewhere, or other than with the defendant; in respect to all which some evidence was given on the part of the plaintiff.

The question of credibility of the plaintiff as a witness, and of the truth of that having materiality to which she testified, was with the referee, and in view of his opportunity furnished at the trial, was for him to determine. And while there may be some doubt upon all the evidence we cannot say that the conclusion of the referee was so against the weight of evidence as to justify a contrary conclusion on this review. The question was one of fact for the trial court, and must be deemed as there determined.

There was no error in the exclusion of the evidence of the witness, Sarah Bulton, to prove what, from her observation, and what she saw of the plaintiff’s clothing from year to year, was the value of the clothing furnished plaintiff by the defendant while she lived with him. It did not appear that she had any means upon which to intelligently base an opinion covering the inquiry; and inasmuch as the ejection that it was incompetent was sustained, the ruling was not error if it can be supported upon any existing tenable ground of objection to the evidence offered. Tooley v. Bacon, 70 N. Y., 34.

The account books of the merchant, Adams, were properly excluded. While it may not have been improper to show what goods she had purchased at the store, by competent evidence, with a view to. test, so far as it might, the correctness of her statement of account put in evidence, the books did not appear to be competent for that purpose.

The statute of limitations was not in the way of the re • covery of the amount for which judgment was directed.

The services would be deemed performed as from .year to year. Davis v. Gorton, 16 N. Y., 255. The action was commenced November 25, 1382, seven years and six months after the plaintiff went into the defendant’s service.

The amount of the statement of the account of credits to the defendant presented by the plaintiff and allowed by way of abatement of or payment upon the claim for services was §143. This exceeded at the rate allowed, the amount of the value of the plaintiff’s services for the year and six months; and that sum of credits was properly applicable upon and in payment of the moneys for services first earned by her. So that those for which recovery was had may be deemed to have been wholly performed within six years next preceding the time of the commencement of the action. No other question requires consideration.

The judgment should be affirmed.

Haight and Lewis, JJ., concur.


author: Smith, P. J.

text:
    Hiram P. Benton, Resp't, v. Edward W. Hatch, impleaded, etc., App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January, 1887.)

    1. Judgment—Sale of real estate on execution—Redemption from sale—Right of senior judgment creditor previous to Code Civ. Pro.
    In a case which arose before the chanter of the Code of Civil Procedure, relating to the redemption of mil estate ; old on execution, took effect. Held, that a senior judgment creditor cannot redeem lands sold under a junior judgment without such redemption operating as payment of the senior judgment, provided the lands are of sufficient value to pay the amount of the bid and his own judgment.
    2. Same—When a purchaser—Evidence oe value oe land, when ADMISSIBLE.
    Held, that the senior judgment creditor, having used Ms prior judgment to redeem, and having taken a sheriff’s deed under the junior sale, he is to he regarded as a purchaser, the consideration of his purchase being the amount of his bid and of his senior lien, provided the value of the property was equal to that amount. That evidence of the value of the land was material and admissible when offered as a defense in a suit by the redeeming senior judgment creditor to recover on his senior judgment.
    Appeal from a judgment entered on the report of a referee.

      Charles E. Forsyth, for appl’t; M. H. Peck, of counsel; W. H. Sanford, for resp’t; H. Bemis, of counsel.
   Smith, P. J.

Ejectment. Plaintiff claims title by virtue of a sheriff’s deed given pursuant to a sale under an execution issued upon a judgment recovered in this court by George S. Jones against George W. Stephans. Defendant alleges, by way of defense, that the judgment was paid and extinguished before execution issued, and he also sets up an alleged adverse possession.

Stephans owned a large tract of land in Allegany county. Judgments were recovered against him in the following order: On the 9th of February, 1875, the judgment above mentioned, in favor of Jones, which amounted to $404.13, and was the first lien; on the eleventh of the same month, a judgment . in favor of the Cuba National Bank for $1,376.80; one in favor of Benjamin Colerich for $374.61; one in favor of Isaac Miles for $3,145.17, and one in favor of the First National Bank of Angelica for $529.22. Other judgments were recovered at a later date, which need not be more particularly mentioned.

Portions of the land were sold under each of the junior judgments above particularly mentioned, and were successively redeemed by Jones, under his senior judgment, and deeds thereof wrere executed by the sheriff to Jones, or his assignees, of the certificates of redemption. More than five years afterwards, Jones issued an execution on his judgment, he having first obtained an order of the court authorizing it, by virtue of which the land in controversy was sold and conveyed to the plaintiff, and that constitutes the plaintiff’s title.

At the trial, the defendant offered to prove that the parcels of land redeemed by Jones were worth much more than the amount of his judgment and the sums paid by him to redeem, but the offer was rejected and the defendant’s counsel excepted.

The appellant’s counsel contends that, assuming the value of the parcels redeemed to be as offered to be shown, the Jones judgment was paid or extinguished by the use made of it in each or all of said redemptions. The position of the counsel is understood to be that while a junior judgment creditor may redeem lands sold under a senior judgment, without in any way affecting such junior judgment, either at law or in equity, a senior judgment creditor cannot redeem lands sold under a junior judgment without such redemption operating as payment of the senior judgment, provided the lands are of sufficient value to pay the amount of the bid and of his own judgment.

The right of redemption is created by statute. As this case arose before the chapter of the Code of Civil Procedure relating to the redemption of real estate sold on execution took effect, it is controlled by the provisions of the ¡Revised Statutes. Under those provisions it was held that a senior, as well as a junior, judgment creditor, may redeem. People v. Fleming, 4 Den., 137; S. C., on appeal, 2 N. Y., 484. The same was held under the act of 1820, (ch. 184), the substance of which was incorporated into the Devised Statutes. Ex parte Peru. Iron Co., 7 Cow., 540. But the statute has not declared what shall be the effect upon a senior judgment, of a redemption under it, nor has the research of counsel discovered any adjudication upon the question. We are therefore to consider it upon principle, in the light of analogous cases.

In The People v. Fleming (supra), Bronson, Ch. J., said that the end of the statute was, “to make the land bring its utmost value, by means of an auction among the creditors, preserving to each one his right according to the seniority of his lien. The mode of conducting the auction, so far as it has been plainly prescribed, must be followed, whether it be reasonable or unreasonable, unless the party who has the right to insist upon performance chooses to dispense with it. When the meaning of the statute is doubtful, that construction should be adopted which will secure the rights of all the creditors, according to the seniority of their respective liens, and keep up the auction until the best price has been obtained. And the same great end should be steadily kept in view, in disposing of all questions upon which the statute is silent.”

Let us look at the case in the light of these comments upon the statute. A senior judgment creditor may put up the land at auction by selling under his own judgment, or he may waive that right and become a non-bidding purchaser by redeeming from a sale made under a junior judgment. Amy junior creditor may do the same, but with this difference, that he takes subject to all prior liem, while the senior creditor, if be redeems from a sale under the lien next below him, as Jones did in this case, takes free from all other liens except that of his own judgment. If the senior creditor takes the former course above pointed out, and becomes the purchaser at a sale under his own lien, his bid, or so much of it as is necessary for the purpose, is applied to the extinguishment of his judgment. Why should not the same result follow when he acquires the title, or the right to a deed, by redeeming from a sale under a junior lien, instead of continuing the auction and subjecting himself to the chances of competition at a sale under his own judgment ? The sale from which he redeems was made subject to his lien, and he comes in upon the same terms. He takes the place of the purchaser at the sale, and his position is the same, in legal effect, as if he had been such purchaser and had bid off the property, subject, in terms, to his own lien. In other words, the payment of his own debt is a part of the consideration of his purchase.

Although the lien of the judgment held by Jones extended, to all the real estate of the judgment debtor, it was specific as to each portion, and, in that respect, analogous to a lien created by mortgage. It was said in Spencer v. Halsted (4 Wend., 381) that if a mortgagee of real estate foreclose without sale and enter into possession, his debt is paid, if the property is of sufficient value at the time to satisfy it, (per Savage, Ch. J., 385), and it was held in that case, that the same result follows, if the mortgagee obtains a release of the equity of redemption, the property being then equal in value to the debt for which it was mortgaged. So, when the mortagee enters into possession of the mortgaged premises by virtue of a foreclosure, and his title thereto becomes absolute, provided the mortgaged premises are equal to the value of the debt. Morgan v. Plumb, 9 Wend., 287. The same principle is applicable to mortgages of chattels, and it was held in Case v. Boughton (11 Wend., 106) that taking possession of the chattel after default, is a satisfaction of the debt, provided the chattel be of sufficient value for the purpose. See, also, Charter v. Stevens (3 Den., 35); Alcott v. Tioga R. R. Co. (27 N. Y., 546, per Seeder, J., p. 565).

Why does not the same rule apply to a senior creditor whose lien is by judgment instead of mortgage, and who-obtains absolute title and possession through the process of redemption? His hold of the property is as complete as if he had derived it through a sale upon his judgment. Why should he not account for its value to the extent of his debt? Of course his accountability is not lessened by the-fact that he sells the property to a third person for less than its. value. Having used his prior judgment to redeem and having taken a sheriff’s deed under the junior sale, he is to-be regarded as a purchaser, as already suggested, the consideration of his purchase being the amount of the bid ans-of his senior lien, provided the value of the property was equal to that amount. In that view of the case Jones' judgment was satisfied and extinguished.

It follows that the evidence of value offered by the defendant and excluded by the referee was material. That it was admissible under the pleadings, we do not doubt Under a general denial of all the allegations in the complaint, the defendant may controvert by evidence any anti every fact by which the plaintiff seeks to establish his cause of action. Andrews v. Bond, 16 Barb., 633; Raynor v. Timerson, 46 id., 518, 525. He may also show that the plaintiff never had a cause of action against him. Creque v. Sears, 17 Hun, 123, 125; Schwarz v. Oppold, 74 N. Y., 307. The exclusion of the evidence was error, and for that reason there must be a new trial.

These views render it unnecessary to consider whether the defense of adverse possession was made out; as that depended upon questions of fact in regard to which the evidence may be different on another trial.

The judgment should be reversed and a new ial. ordered before another referee, costs to abide event.

Barker, Haight and Bradley, JJ., concur.


author: Daly, J.

text:
    Justin Wohlfarth, Resp’t, v. Ward B. Chamberlain, App’lt.
    (New York Common Pleas, General Term,

      Filed February 7, 1887.)

    Contract—To sell real estate—Defective title—When purchaser, NOT BOUND TO TAKE DEED —WHAT DAMAGES RECOVERABLE BY VENDEE.
    In an action brought by a vendee to recover damages for a breach of a contract to sell real estate, it appeared that previous to the date of the contract the vendor, as trustee, lmd sold the premises in question at public auction, and had i directly himself become the purchaser, and had procured the title to be: alien in the name cf bis w fe; and then individually contracted, as owner and in his own name, with plaintiff to sell the same premises at an increased price; and that on the day appoi ted for closing of the purchase, the defendant tendered a deed executed by his wife, as grantor, he joining therein as her husband. This the plaintiff declined to accept, <on the ground that the defendant had violated h.s trust in dealing with flics trust estate for his own benefit, and that the wife’s tide so obtained was voidable at the instance of any creditor of the trust estate, and that the title was, therefore, not a marketable one; of all which dealing by the trustee the purchaser had notice at the time the wife’s deed was tendered to him. Held, that the purchaser was justified in refusing to accept the. title, and that the damages recovered on the trial, including loss of bargain, were justified, in view of the fact that defendant knew of the defects In. his own title at the time he contracted to convey, and could have remedied them, hut refused.
    Appeal from judgment in favor of plaintiff for $1,500 damages, besides costs, entered on verdict of jury, in an action to recover damage;, for breach of a contract for the sale of real estate, brought by the vendee against the vendor.

      Peter Condon, for resp’t; C. A. Seixas and Oratz Nathan, of counsel; Whaley <$$ Caldwell, for app’lt; Cephas Brainard, of counsel.
   Daly, J.

The defendant, by agreement under seal dated December 18, 1884, contracted to sell to plaintiff, for $10,075, the house and lot 207 East 109th street, the consideration to be paid by the plaintiff’s assuming a mortgage of $4,500 then on the premises, and paying $500 cash on the execution of the contract and $4,575 on the delivery of the deed. The deed tendered to the plaintiff was executed by the defendant’s wife, Elizabeth F. Chamberlain, as grantor, defendant joining therein as her husband. Mrs. Chamberlain held the title at that time, and at the time the contract of sale was executed. The history of her title (of which the plaintiff had full notice whén the deed was tendered to and refused by him) was as follows: “In April, 1884, the premises were owned by one John H. Deane, thé partner of defendant. They were then subject to mortgages for $8,000 and $1,000 respectively, the latter held by defendant, who, on April 19, 1884, assigned it to one Baumgarten, a clerk in his office, who, on the same day, assigned it to defendant’s wife. Both assignments were recorded on April 22d. The next day, April 23, 1884, Deane made to defendant a general assignment of all his property for the benefit of his creditors. On July 16, 1884, the premises in question, with a large amount of real estate belonging to the assigned estate, was sold at public auction by defendant as assignee of Deane. The parcel in question was knocked down to George F. Chamberlain, a nephew of defendant, who thereupon, at defendant’s request, assigned his bid without consideration, to one Henry F. Anderson, and defendant, as Deane’s assignee, executed his deed to Anderson, dated August 4, 1884, recorded September 5, 1884, consideration, $9,200. Anderson immediately conveyed the premises to defendant’s wife by deed, dated August 5, 1884. All this was done by direction of defendant, who was agent therein for his wife. Anderson took the nominal title from defendant, as assignee of Deane, for the sole purpose of conveying the property to defendant’s wife. The defendant, in December following, made the contract with plaintiff to sell him the premises for $10,075.

The defendant claims that the conveyances were bona fide, the purchase at the auction sale being made on his wife’s behalf to protect her interests as holder of the $1,000 second mortgage. • It will be observed, however, that that mortgage was originally held by the defendant, and was transferred by him to his wife (through his clerk, Mr. Baumgarten,) the day before the assignment to him from his partner was executed, and that such transfer was evidently made in contemplation of the assignment.

The undisputed facts of the case cast suspicion upon the title of Mrs. Chamberlain, and show that there is ground for the apprehension that its validity may be questioned or attacked by the creditors of Deane, the assignor. Upon the face of the transactions by the assignee Chamberlain, the defendant, it would seem that his wife is the mere nominal owner of the premises for his benefit and to enable him to deal with the trust property for his own profit. A prima facie case against the title is thus made out. The trustee after selling the property at public auction to a nominal bidder, procures the title to be transferred to his wife, and then makes a contract in his own name with a purchaser at private sale for an increased price. Of all this, and of facts not recited above, but tending to strengthen suspicion, the contracting purchaser has the fullest notice, and could only preserve his purchase, if attacked by the creditors, by showing the good faith of the trustee; an undertaking of some difficulty, I should think, and the issue of which is at least doubtful. Under these circumstances the purchaser is not bound to take the deed. People v. Open Board, etc., 92 N. Y., 98; Fulton v. Whitney, 66 id., 548; Schriver v. Schriver, 86 id., 575; Dodge v. Stevens, 94 id., 209.

The vendee in this case was entitled to recover as damages, for the failure of the vendor to give a good title, the loss of his bargain. The defendant knowingly contracted to convey property, the title to which was so doubtful, by reason of his own unauthorized dealings with the property as trustee, that no purchaser could be compelled to take it. When the facts were discovered, the vendee offered to take the property if the trustee would have it transferred again to himself and would then give his own deed as such trustee. ' This he refused to do, presumably because he did not wish the trust estate to benefit by the enhanced price at which he was selling it, but desired to retain that benefit for himself. This was clear evidence of bad faith, and of a refusal to give a good .title when it was in his power to do so, and entitles the vendee to such damages as he has sustained by such refusal. Pumpelly v. Phelps 40 N. Y., 59; Tinley v. Kinsey, 18 Hun, 255; Margraf v. Muir, 57 N. Y., 159; see Cockcoft v. N. Y. and H. R. R. R. Co., 69 id., 204. The amount of the verdict cannot be questioned under these authorities.

Appellant claims the right to a new trial, on the ground that the court allowed evidence of his declarations, made after his" conveyance of the property, impeaching his wife’s title. Such declarations and the several acts of defendant which constituted notice to the plaintiff of the defects in. Mrs. Chamberlain’s title were admissible. They would be competent in a suit by a creditor of the assignor against the plaintiff, to show notice to him of the dealings of the trustee with the trust estate; and he is permitted in this action to show the same state of facts in order to prove that he could not defeat the creditor’s suit on the ground that he was a bona fide purchaser without notice. He was also entitled to show defendant’s own acts and statements to prove the bad faith of the latter in order t,o make out a proper case for full damages. This is an action for damages against the party making the admissions, and it is difficult to understand how his declarations and acts could be excluded.

There was no error in the other rulings on the trial. Proof was offered to show that the contract of sale, as originally prepared by defendant, contained a clause exempting him from liability from damages, incase of his inability to make a good title. This proof was offered as introductory to a conversation with defendant on the subject of the clause tending to show his probable knowledge at the time that his title might be questioned.

It was not error to exclude proof that in other contracts with other parties for other property, he protected himself by similar provisions. His declarations as to this property were alone material. There was no error in proving by a legal expert that certain recitals in the defendant’s deed to" Anderson showed that there was an unusual condition upon the sale of this property by defendant at public auction, viz., a sale, “subject to all encumbrances;” in order to argue therefrom that such a condition would be apt to deter bona fide bidders, and thus inferentially to question 'the bona fides of the purchaser, Mrs. Chamberlain; who took through the bid of George F. Chamberlain, assigned ; to Anderson, the two latter acting under her, or her husband’s instructions.

There 'was no error in the charge. The case was properly-tried at a trial term, being an action for damages.

The judgment should be affirmed, with costs.

Allen and Bookstaver, JJ., concur.


author: Larremore, C. J.

text:
    In the Matter of the Assignment of Frederick Link to David C. Link for the Benefit of Creditors. The New York Life Ins. and Trust Company, as Executors and Trustees of Richard Ray, dec’d, Claimant, App’lt, v. David C. Link, Assignee, Resp’t.

      (New York Common Pleas, General Term,

      Filed February 7, 1887)
    Assignment—For the benefit of creditors—Claim for rent accruing SUBSEQUENT TO, NOT PROVABLE.
    A lessee of property having made an assignment for the benefit of creditors, and having during the same month notified the lessor of the assignment, and that he was ready and willing to deliver possession of the premises, though he did not remove for several months, and there being no evidence that the assignee has ever taken possession of the leasehold property, the claim for rent accruing subsequent to the assignment is not a provable claim.

      Emmet & Robinson, for app’lt; Paddock & Cannon, for resp’t.
   Larremore, C. J.

On February 12, 1885, a lease was made by the New York Life Insurance and Trust Company (as trustee), to Frederick Link, demising certain premises ■for the term of one year at the rent of $1,140, payable monthly. The tenant paid the rent reserved up to and including November, 1885.

In the month of December following, the tenant and the firm of which he was then a member, made a general assignment of his individual and co-partnership property, for the benefit of creditors. During the month of December, 1885, he notified the landlord that he had made such assignment and was ready and willing to deliver the possession of the premises in question, from which he removed in the month of April, 1886.

It is conceded that the rent of the premises was paid up to December 1, 1885, and the only question presented for adjudication is: Whether or not, the rent accruing subsequent to that date, was a provable claim under the general assignment act.

There is no proof to show that the assignee under the assignment ever took possession of the lease-hold property, or in any way intermeddled therewith; and rulings in Matter of Risley (10 Daly, 44); Matter of Adams (15 Abb. N. C., 61); Matter of May v. Brown (47 How. Pr., 37); Johnson v. Merritt (10 Daly, 308), clearly show that the assignee is not liable for the rent sought to be recovered, and point out no distinction between his liability as such, or of the assigned estate in his hands.

In the Case of The People v. National Trust Company (82 N. Y., 283,)-it appeared that the receiver had in his hands sufficient funds for the payment of all debts of the dissolved corporation. It further appeared that after such payment there was a large surplus for distribution among the stockholders. In this case, whatever surplus there may be after the payment of the individual debts of the assignor, such surplus is properly applicable in payment of the firm debts of F. Link & Son, of which the assignor was a member; and it does not appear that after such payments there would be any surplus to be returned to the assignor.

The appellant has not lost its remedy for a breach of the contract for damages against its lessee.

The order appealed from should be affirmed, with costs.

Daly and Bookstaver, JJ., concur.


author: Bookstaver, J. Larremore, C. J.

text:
    Thomas Hagan, Resp’t, v The American Baptist Home Mission Society, Erasmus D. Garnsey and William S. Warren, App’lts.

      (New York Common Pleas, General Term,

      Filed February 7, 1887.)

    1. Mechanics’ lien—When lien not acquired.
    A party furnishing materials or doing work relying upon the lien given by statute for security, must examine the contract with the owner, for it is only to the extent of what is due or to become due upon this contract that his lien can attach If he furnishes the material, or does the work for a sub-contractor, in like reliance, he should not only examine the contract with the owner, but also that of the sub contractor, for if the sub-con tractor fails to perform his contract so that nothing becomes payable thereon, or is paid in full according to its terms, in case of performance, there can be no lien.
    8. Same—Contract with sub-contractor—Effect of settlement between CONTRACTOR AND SUB-CONTRACTOR AS TO LIEN
    A mechanic having entered into a contract with a sub-contractor, after the original agreement between the sub contractor and the principal contractor has been modified, cannot file and enforce a lien for his work, when there has been a settlement and payment in good faith between the contractor and the sub contractor, of all that is due to the latter, according to the terms of the modified contract
    8, Same—When lien cannot be maintained
    The defendant society on 7th February. 1885, entered into a contract with defendant Garnsey, by which the latter agreed to complete six uniin ished buildings, for the sum of $16,000, to be paid in installments as the work progressed. One day before this contract was made, the defendant - Warren entered into a contract with defendant Garnsey, to do the plumbing and gas fitting work, and to furnish and set the ranges in the mission houses for the sum of $4,200 in all On March 5th, Warren ; nd Garnsey entered into a contract, by which the latter agreed to do certain work and furnish materials for the completion of a house belonging to the wife of Warren for the sum of $1,600, to be paid for *'in suitable installments of, or proportionable amount of plumbing work, etc., to be done by Warren on the mission houses under the contract of February 11,1885. On April 1, 1885, Warren and plaintiff entered into a contract, by which plaintiff agreed to furnish and set the ranges in the six mission houses for $540. Plaintiff fully performed his contract April 15, 1885, and then there became due him the sum of $540, from defendant Warren. The contracts. between Warren and Garnsey were fully completed April 18.1885, and then there became due between Warren and Garnsey, the sum of $4,200 less the payment in cash made to Warren before that time; and less the work, labor and materials supplied by Garnsey to Warren under the second contract. On that day Garnsey and Warren made a settlement, and a receipt in full was taken from Warren by Garnsey. Twelve days after this settlement and final payments, and fifteen days after the plaintiff had finally completed his work on the mission houses, he filed a notice of claim of lien for the amount due under his contract with Warren for the ranges, and subsequently commenced this action to foreclose it. At the time of tiling notice of lien, there was due or to become due from mission society to Garnsey, a sum much larger than the amount claimed by plaintiff. Held, that the two contracts between Garnsey and Warren were not entirely separate and distinct from each other; the second contract became a part of the first, and that they had a right at any time after the completion of both contracts to make a settlement and payment in good faith of the amounts due under them, and having done so before the plaintiff filed his lien, and there being nothing due from Garnsey to Warren when_plaintiff filed his notice of claim there was nothing to which plaintiff’s claim could attach. Larremoke, J., dissenting.
    4. Same—Extra allowance.
    The mechanics’ lien act does not authorize the granting of an extra allowance.
    Appeal from an order made at special term confirming a referee’s report, and the judgment entered thereon.
    The facts are sufficiently stated in the opinion.
   Bookstaver, J.

This is a proceeding to foreclose a mechanic’s lien on premises belonging to the defendant’s society, situate on the east side of Lexington avenue, between One hundred and seventh and One hundred and eighth streets, and on the southerly side of One hundred and eighth street, east of Lexington avenue.

The defendant society is a domestic corporation, having its place of business in the city of New York.

On the 7th of February, 1885, this society entered into a contract with the defendant Erasmus D. Garnsey, by which the latter agreed to complete six unfinished buildings on the above mentioned premises for the sum of $16,000, to be paid in installments, as the work progresses, $200, however, to be retained for ten days after the buildings were entirely finished.

One day before this contract was made, the defendant William S. Warren proposed to Garnsey to do the plumbing and gas-fitting work, and to furnish and set the ranges in the six Mission Society houses, for the sum of $700 for each house, or for $4,200 in all. This proposal was accepted, in writing, by Garnsey, on the 11th of February, 1885.

On the 5th of March, 1885, Warren and Garnsey entered into a written contract, by which the latter agreed to do certain work and furnish material for the completion of the house belonging to the wife of Warren, and entirely distinct from the six houses before mentioned, being known as 177 East One hundred and seventh street, for the sum of $1,600, to be paid for “in suitable installments of, or proportionable amount of plumbing work,” etc., to be done by Warren on the six Mission Society houses, under the contract of the 11th of February, 1885.

Afterwards and on the first day of April, 1885, Warren and the plaintiff Hagan entered into a verbal contract, by which Hagan agreed to furnish and set the ranges in the six Mission Society houses, called for by the contract of the 11th of February, 1885, for $90 each, or $540 in all.

> The plaintiff fully performed his contract to set the ranges, about the 15th day of April, 1885, and there then became due to the plaintiff, the sum of $540 from the defendant Warren.

Both of the contracts between Warren and Garnsey, were fully completed on or before the 18th day of said April, and there then became due said Warren from Garnsey, the sum of $4,200, less the payments in cash, made to Warren, before that time; and less the work, labor and material supplied by Garnsey to Warren, under the second contract, if that should be deducted from the total amount ¿greed to be paid under the first contract.

On that day, Garnsey and Warren made a settlement and adjustment of their accounts, under these contracts, and it was found that Garnsey had theretofore paid to Warren on account of the first contract $2,448.52. That Garnsey had fully performed the work-and furnished the materials called for, under the second contract, amounting to $1,600, which was then credited on Warren’s contract for the work on the Mission Society houses, and that was due from Garnsey to Warren, the sum of $151.48, which was then and there paid, making the total payments, including the amount allowed for material and work, under the second Garnsey and Warren contract, $4,200; the full amount to be paid by Garnsey to Warren, under the contract of February 11, 1885.

When this settlement was made, a receipt in full was taken from Warren by Garnsey.

Twelve days after this settlement and final payment, and fifteen days after the plaintiff had finally completed his work on the Mission Society houses, he filed a notice of a claim of a lien, for the amount due under his contract with Warren, for the ranges; and subsequently commenced an action to foreclose it.

At the time of filing the notice of lien, there was due or to become due from the Mission Society to Garnsey, a sum much larger than the amount claimed by plaintiff.

All of the foregoing facts are found by the referee, or stated in his opinion, and are clearly established by the' evidence.

The referee held that the contractor Garnsey and the sub-contractor Warren could not defeat the hen of a workman by setting off against the contract first entered into between them, the second contract, for- the completion of the building known as 177 East One hundred and seventh street, and disallowed the item of $1,600 for the work done, and materials furnished on that building, and this seems to have been the only question litigated before him. But upon this appeal, the plaintiff, in addition to supporting the ruling of the referee, claimed that the settlement between Garnsey and Warren was collusive and fraudulent as against him; and it is proper that this question should be first disposed of.

The referee has not found, nor was he. requested, by the plaintiff, to find that there was any collusion or fraud, in the settlement.

We have examined the evidence, and perhaps Warren has so given his testimony, that an inference of collusion might be drawn therefrom, if it were implicitly relied upon. But the defendant Garnsey directly contradicts the testimony of Warren on this subject, and we think is corroborated by the facts in the case, while Warren is not.

Mr. Warren testifies that before the receipts were exchanged between him and Garnsey, the latter told him his contract with the Home Mission Society was such that if any hen was placed on the buildings he could not get his money, and if Hagan should put a lien on the buildings, as he had spoken of doing, he could not get that payment; ■and that the best way out was to exchange receipts, which would stop Hagan from putting on the lien, and, in that way, he could get the money, and would give it to him, so that he could pay Hagan the amount due him for his ranges.

It is apparent that this version of the matter cannot be correct, for, at that time, Garnsey paid Warren the full amount due him, under contract of February 11, 1885, less the $1,600 for work and material under the second contract. This included the $540 due from Warren to Hogan, under the contract between them, and in no other way could the I full amount have been made up, and Warren does not ¡claim he has not been paid the full amount due him under the contracts.

The settlement was made after all the work under both contracts had been done, and in strict conformity with the terms of these contracts, and, as we think, in entire good faith, and without collusion.

The only question remaining is, whether or not the learned referee was right in disallowing,the item of $1,600 for the work done by Garnsey on the house, 177 East One hundred and seventh street.

He held that this was in the nature of a set-off, and that-the amount due Garnsey on the contract could not be applied in the discharge of Garnsey’s obligation, under the contract with Warren, for the work on the Mission Society houses, and regarded the two contracts between Garnsey and Warren as entirely separate and independent building-contracts.

It is conceded that a general indebtedness cannot be set off as against a mechanic by parties standing between him and the owner. Hoyt v. Miner, 7 Hill, 525; Develin v. Mack, 2 Daly, 94; Bullock v. Horn, 5 West. Rep., 198. And that if the two contracts between Garnsey and Warren are entirely separate and independent of each other, the claim one of the parties might have against the other, arising out of one contract, would be a general indebtedness, as far as the rights of laborers and material men would be concerned, under the other contract.

But are these two contracts entirely separate and independent of each other? The first contract -was made between Garnsey and Warren, by the acceptance of the former, on the 11th of February, 1885, of a proposal made by the latter, before that time. To this acceptance Garnsey says: “About payments, I will arrange to give you according as the work shall proceed, satisfactory installments.” The second contract between the same parties was entered into on the 5th of March, 1885, by the acceptance of Warren, of a proposition, therefore made by Garnsey, to do certain work on the house 177 East 107th street for the sum of $1,600 “to be paid for, in suitable installments of, or proportionate amount of plumbing work, etc., to be performed by Warren, on the Mission Society •houses.

This provision, as to payment in work contained in the second contract, by its very terms refers, to the first contract; and we think, therefore, that the two contracts must be read together; or at least, that the second contract must be regarded as having added thereto, or inserted therein, that part payment was to be made in work and material upon another building, and the remainder to be paid in cash, especially as the provision for payments contained in the acceptance of the first contract was indefinite and left for future arrangement.

The last of these contracts was made nearly a month before the contract between the plaintiff and Warren, and the referee has so found; although, in his opinion, he seems to have lost sight of this fact; and states that the plaintiff’s contract was made before the second contract between Garnsey and Warren, and constructs his argument and draws his conclusions on this error of fact.

It is not necessary for us to determine whether or not a. building contract can be modified after sub-contracts have-been made under it with mechanics, as that question does not arise in this case.

The question, in this case, is whether a mechanic having entered into a contract with a sub-contractor, after Ihe original agreement between the sub-contractor and the principal contractor has been modified, can file and enforce a lien for his work when there has been a settlement and payment in good faith between the contractor and subcontractor, of all that is due the latter, according to the terms of the modified contract.

From the evidence, we infer that the plaintiff neither saw nor asked to see either of the contracts between Garnsey and Warren. Nor is it certain, from the evidence, what Warren told him about the contracts he had with Garnsey, although he says he thinks he explained the contract to the plaintiff.

A party furnishing materials, or doing work relying upon the lien given by statute for security, must examine the contract with the owner, for it is only to the extent of what is due or to become due upon this contract, that his lien can attach. If he furnishes the material, or does the work for a sub-contractor in like reliance, he should not only examine the contract with the owner, but also that of the sub-contractor; for if the sub-contractor fails to perform his contract so that nothing becomes payable thereon, or is paid in full, according to its terms, in case of performance, there can be no lien within the principle of Carman v. McIncrow, 13 N. Y., 70; Lumbard v. Syracuse B. and N. Y. R. R. Co., 55 id., 491; Cranes. Genin, 60 id., 127.

Had he made this examination the first contract would have shown that the terms of payment were indefinites which would have led to further inquiry, and this would have revealed the execution of the second contract by which he would have discovered that part payment of the first contract was to be made in labor and material furnished on another building. Indeed, it was the duty of Warren, when inquired of by the plaintiff, to have informed him of the terms of both contracts, for, at that time, the one modified the other as we have before shown.

This being the case, Garnsey and Warren had the right, at any time after the completion of both contracts, to make a settlement and payment, in good faith, of the amounts due under them. This they did on the 18th of April, 1885, twelve days before plaintiff filed his lien. He acquired a, • specific lien, if ever, when he filed his notice and not before. "Up to that time he was a general creditor, with no greater equities than other general creditors. Payne v. Wilson, 74 N. Y, 355.

When he did file his notice of lien, it could only attach to the extent of what was due or to become due to the subcontractor upon his contract. Lombard v. B. and N. Y. R. R. (supra).

The plaintiff could not claim more, nor was he entitled to more than a subrogation to the rights of Warren; and as there was nothing due from Garnsey to Warren when he filed his notice of claim on the 30th day of April, 1885, there was nothing to which plaintiff’s claim"could attach.

The right to the enforcement of the lien may be defeated by the payment in good faith before the notice is filed. Carroll v. Caughlin, 7 Abb. (N. S.), 72; Schneider v. Hobein, 41 How., 232.

The foundation of a lien is an indebtedness existing upon a contract by the person sought to be charged, and as no such indebtedness from Warren to Garnsey existed at the time of filing the notice, there was no basis for the claim of the plaintiff to rest upon. Muldoon v. Pitt, 54 N. Y., 269; Meyers v. Bennett, 7 Daly, 471; Gibson v. Lenane, 94 N. Y., 183. We are, therefore, of the opinion that the plaintiff acquired no lien which he could enforce against either of the appellants herein, unless it can be established that it is unlawful as against material men and laborers for a subcontractor to make a contract by which he agrees to receive payment in anything but money.

That such a contract between the owner and principal contractor is not unlawful is clear, for § 1819 of the consolidation act, under which these proceedings were begun, contemplates the making of just such contracts, and Dowdney v. McCullom (59 N. Y., 367), we think, establishes the validity of such a contract between the principal contractor and a sub-contractor, and we can see no difference in principle between these cases and the one under consideration, and we think the original contract between Garnsey and Warren, as modified by the agreement of March 5, was entirely legal and valid, as against the plaintiff.

But it is argued that if we affirm the validity of such a contract, as against material men and laborers, we would thereby deprive material men and laborers of their lien upon any of the buildings erected under such contracts.

We fail to see the force of this argument, for, if payments were to be made in money instead of work and material, and such payments were actually made before the material men filed their notice of lien, such notice would attach nothing, just as in this case.

If, on the other hand, Garnsey had made default in doing the work, or furnishing the material, which he was to do, in part payment of Warren’s work, then, to the extent of the value of such work and materials not furnished, the plaintiff’s lien would have attached, and could have been enforced.

These proceedings were equitable in their nature, and the statutes on which they are founded are to be construed liberally, in order to carry out their intent, but not at the expense of justice.

If the defendant, the Mission Society, were compelled to pay plaintiff’s claim, it would be entitled to deduct the amount so paid from the total sum to be paid Garnsey for the entire work upon its houses, for in no event could it be required to pay more than the contract price agreed to be given him.

This would work injustice to Garnsey, for he performed, in good faith, his contract with Warren, by supplying work and material on the house, 177 East One hundred and seventh street, under an agreement which provided that the value of such work and material should be allowed as a payment on the contract, for the work on the Mission Society’s houses, to be done by Warren, and if the plaintiff could now compel Garnsey to pay him for the material and work furnished by him, under his contract with Warren, Garnsey would have to pay for the same work twice; once in material and work, and the second time in money.

We do not think the law was intended to work such an injustice.

The judgment and order appealed from should be reversed, and a new trial ordered, with costs to the appellants of this appeal.

Having arrived at this conclusion, it is unnecessary to notice the question of the extra allowance granted upon the confirmation of the report, further than to say that this court has decided that the mechanics’ lien act does not authorize the granting of extra allowances. Ruth v. Jones, N. Y. Mo. Law Bul., til.

Allen, J., concurs.

Larremore, C. J.

There seems to be no dispute that the indebtedness to the plaintiff was incurred for labor and materials, which entered into the construction of the houses described in the complaint. But his-claim is sought to be defeated upon the ground that Garnsey and Warren having a contract in relation to property other than that described in the complaint, had balanced their accounts, passed mutual receipts and that there was nothing due from the original contractor, upon which plaintiff’s lien could attach.

The plaintiff contracted with reference to the statute, which was intended to give him a specific lien upon the property in question. Against such a lien a general indebtedness cannot be offset as against a mechanic. If this were not so, any contractor and sub contractor could defeat the lien of a workman by setting up an independent contract between themselves for the erection of a building upon other premises.

The defendant corporation, on February 7, 1885, contracted with the defendant Garnsey to complete the unfinished buildings upon premises owned by it. In February, 1885, the contractor sublet a portion of the work for the agreed sum of forty two hundred dollars. The plaintiff furnished work and materials for the sub-contractor for the six houses embraced in the contract, and for which he has not been paid.

The main question presented is: whether a contractor and sub-contractor can, upon other independent building contracts, so adjust their claims and balance their accounts as to deprive the material men of their liens.

It seems to me that this was not the intention of the statute, intended for the protection of parties who furnish materials and render services in the erection of buildings. Hoyt v. Minor, 7 Hill, 525.

It seems to be well settled that the lien of a person for an indebtedness, incurred m reliance upon statutory security, should not be defeated except by payments made agreeably to the terms of the contract. Crane v. Genin, 60 N. Y., 127; Payne v. Wilson, 74 id., 348; Gibson v. Lenane, 94 id., 187. _

_ It is true that a lienor can recover only the amount due him from the person against whom he brings his action, but we cannot assent to the proposition that a general debt can be offset against the mechanic between the parties who stand between him and the owner.

The findings of fact and conclusions of law by the referee were authorized by the evidence, and the judgment appealed from should be affirmed with costs.


text:
    William Lockwood et al, Resp’ts, v. William I. Nichols et al., App’lts.

      (New York Common Pleas, General Term,

      Filed February 7, 1887.)

    Contract—Covenant as to incumbrances and to save harmless— Breach of—Amount entitled to recover under.
    The defendants the directors and officers of a company entered into an agreement with plaintiffs that the indebtedness of the company • ‘ shall not and will not,” exceed $55,800, and that if it exceed said sum, they, the defendants, would pay the excess and save plaintiffs harmless thereon Meld, 1. A covenant as to incumbrances on the property so sold, and the covenant being broken, the recovery upon it shall be for the excess of incum brances over the agreed amount. 2. That the agreement to pay excess and save plaintiffs harmless, must be construed as an agreement to pay plaintiffs. 3. Plaintiffs are entitled to recover the whole excess which defendants agreed to pay. 4. That it was not a contract of indemnity, and the covenantors cannot ask that the covenantees be remitted to a remedy against the company.
    Appeal by the defendants from a judgment of $25,560.22 in favor of plaintiffs entered on January 17, 1884, on the report of a referee.
    The defendants on and prior to September 22, 1880 were directors and officers of the Manhattan Chemical Company, and in order to induce the plaintiffs to come in and take the charge and management of the company, and to contribute moneys to relieve its embarrassments, they transferred 800 shares of its capital stock held by them, to plaintiffs and entered into a written agreement with plaintiffs that the indebtedness of the company at the date of the agreement (September 22, 1880) “shall and will not exceed” $55,800 and that if it exceeded said sum they, the defendants, would pay the excess and save the plaintiffs harmless thereon. The plaintiffs on their part agreed to take entire charge of the company and carry on its business in as economical manner as practicable, and to endeavor to the best of their ability to make said company a success and its capital stock valuable; and to advance and loan to the company from time to time, as necessity required, sufficient moneys to liquidate and discharge the indebtedness mentioned and pay current expenses, and not to call in or demand the return of said loan or any part thereof until all of said indebtedness was paid.
    This action was brought in February, 1881, alleging that the indebtedness of the company exceeded the sum of $55,800 agreed upon and was in fact $75,843.61 and demanded judgment for the excess, with other demands arising out of the said contract not necessary to mention here.
    The answers of defendants denied that it was the intention of the parties by their agreement to pay to plaintiffs any excess over the stipulated amount of indebtedness; denied that the indebtedness exceeded the agreed sum; and counter-claimed damages for alleged breach by plaintiffs of their agreement in not carrying on the business of the company in as economical manner as practicable, in not loaning or advancing moneys as required by the agreement, and in having wasted and destroyed the property of the company.

      Defendant Nichols, retained no stock of the company-after the agreement, and Barrows had but a small amount, seventeen shares.
    The referee gave judgment for plaintiffs for amount of the excess of indebtedness over the agreed sum of $55,800, and found that plaintiffs had not committed any breach of the agreement on their part.
    The defendant Nichols, appeals on the ground that the agreement did not require defendants to make payment to plaintiffs; that their contract was a contract of idemnity only; that plaintiffs had not paid the excess of indebtedness and had sustained no damage.
    The defendant Barrows appeals on substantially the same grounds and also upon the ground that a breach of plaintiffs covenants was proved which precludes a recovery by them in any event.

      Kelly & MacRae, for resp’ts; N. F. Averill, for app’lts.
   Daly, J.

There was a sale by defendants to plaintiffs of the 800 shares of stock transferred to the latter, and the covenant entered into by defendants that the indebtedness of the company did not and should not exceed $55,800 was, in effect, a covenant as to incumbrances on the property so sold, and, the covenant being broken, the recovery upon it should be for the excess of incumbrances over the agreed amount.

The agreement of defendants to pay the excess and save the plaintiffs harmless therefrom must be construed as an agreement to pay the plaintiffs, because if there were no such promise in addition to the covenant a promise to pay the plaintiffs would be inferred from the covenant itself; otherwise there could be no enforcement of the obligation by the parties with whom and for whose benefit it was made.

The objections that the contract is one of indemnity, and that the plaintiffs must show that they have paid the excess of indebtedness, and that the company is unable to respond to them, are not well founded. It was not contemplated by the parties to the agreement that the company should pay, or be liable to pay, the excess of indebtedness. The object of the agreement was to relieve the treasury of the company from the burden. The covenantors cannot, therefore, ask that the covenantees be remitted to a remedy against the company, nor contend that if the company be found able to pay there is no liability upon the covenant. Their agreement was to discharge the debt of the company.

As the plaintiffs have the right to enforce the covenant, and their recovery does not depend upon the ability of the company tp pay any part of the amount of the excess of indebtedness, then there can be no question as to the measure of damages. Plaintiffs are entitled to recover the whole excess which defendants agreed to pay.

The question that is presented is not' a new one, for we find in adjudged cases, as well as in elementary works, precedents for the disposition that we shall make of this case.

Without a review of the authorities we shall content ourselves with citing from Sutherland on Damages (vol. 2, p. 610, et seq.), a statement of the rule that we think applicable to the facts before us. “Contracts are often made the general purpose of which is indemnity, but which are not merely to save harmless or to indemnify against damages, but provide against the causes of damage; they are contracts for the prevention of damage.” Of this nature are contracts against the existence of debts or liabilities.

Where the contract is for more than indemnity against damages—where a party stipulates against the existence of certain conditions or for payment or performance of any kind, then damages are not the gist of the action, but the measure of the damages recoverable for the breach is the value of the performance of the contract. For example, a contract to pay a debt, no time being specified, is a promise to pay it when due, or in a reasonable time if already due. The promisee for breach of such a contract is entitled to recover the amount of the debt and interest, or any part of it, if it is a debt the discharge of which would be beneficial to him. Gilbert v. Wiman, 1 N. Y., 550. The author adds: Courts of law are not adapted, like courts of equity, to do complete justice to all parties interested in such cases; that is, to protect the defaulting party by requiring the money so recovered to be applied to tlie debt, though the payment may be important to him. That, however, has been done in some cases.

The defendant, Barrows, contends that the evidence shows a breach of plaintiffs’ agreement to advance moneys, carry on the business in as economical manner as possible, etc., and that plaintiff’s right to recover upon the defendants’ covenant is thereby barred.

The finding of the referee that the plaintiffs fully kept and performed the agreement on their part is supported by the evidence, and we cannot say that we disagree with his conclusions. The evidence as to alleged improvident management may produce different opinions in different minds; but we are influenced in reaching the conclusion that the plaintiffs acted according to their best judgment and always in good faith by the consideration that the very large share which plaintiffs acquired in the company.and the large _ outlays they made and liabilities they assumed under their agreement, make it most improbable that they would act counter to the best interests of the company. We are warranted in assuming that their own interests could be subserved only by endeavoring to make the company successful.

None of the exceptions taken call for the reversal of the judgment.

The judgment should be affirmed, with costs. Larremore, 0. J., and Van Hoesen, J., concur.


author: Bookstaver, J. Daly, J.

text:
    Henry Maurer v. Charles H. Bliss.

      (New York Common Pleas, General Term,

      Filed February 7, 1887)

    3. Contract—Warranty—Breach oe—Duty of manufacturer.
    Defendant purchased of plaintiff three lots of Are brick—the third lot of 20,000—for use between wooden beams as an experiment. Plaintiff claimed an absolute purchase, but defendant claimed he was to take the bricks only if experiment proved successful. Plaintiff’s version was sustained on the tr al. The experiment failed because of the varying in the size of the beams and the spaces between them, the plaintiff not supplying a sufficient variety of keys of different sizes. Plaintiff had taken measurements from the plans, and had furnished at least Ave different sizes of keys, presumably enough had the beams been uniformly laid. Defendant claimed an implied warranty that the bricks should be reasonably At to use between wooden beams. There was no contention but that the bricks furnished were reasonably good of their kind, and without latent defects. Defendant did not notify plaintiff that a greater variety of sizes of keys was needed. Held, that when a manufacturer agrees to make a thing for a particular known purpose, there is an implied warranty that it shall be reasonably At for that purpose—that is, it must be free from defects produced by the manufacturing process itself, and from latent defects not visible to the vendee. 2. That when a well known article is to be manufactured for experimental purposes, the utmost that can be claimed is that it shall be reasonably good of its kind, free from latent defects and defects in the manufacture, of proper material, etc. 3. That as the condition of the beams was under the control of the defendant, and over which the plaintiff had no control, the plaintiff had a right to assume that the beams would be of a uniform thickness, and laid with the same uniformity as iron beams, and that he was not required to furnish a greater variety of keys until requested to do so. That under such an agreement all that the manufacturer could be required to furnish was reasonably good Are brick; that is, brick made of proper material, properly manufactured, with proper Aanges and reasonably uniform in. shape and size, and free from latent defects and defects in manufacture.
    3. Mechanics’ men—Notice cannot be amended.
    The notice must contain “the nature and amount of * * * the material furnished," if the lien is for material, and such notice cannot be amended. The amount must be stated, and judgment cannot be rendered for more than the amount claimed in the notice.
    Appeal from a judgment entered in favor of the plaintiff, upon the findings of the court, on the trial of a proceeding to foreclose a mechanics’ lien for material furnished.

      John A. Foster, forresp’t; Olin, Revis and Montgomery. for app’lt.
   Bookstaver, J.

The material consisted of three varieties of fire proof brick. One kind was to be used for partitions, another for ceilings between iron beams, and the third for ceilings between wooden beams.

There is no dispute, either as to the price or quantity, of the first and second kinds furnished. The difference arises on the third kind, or those to be used between wooden beams.

The sole contention is, as to what the contract between the parties, in reference to these bricks, really was. Plaintiff claims that the defendant gave an absolute order for 20,000 feet of brick, to be used between wooden beams, in the same way he did for the other ■ brick, and defendant denies that he gave the order absolutely; but claims that the agreement was, that the plaintiff should manufacture some for experimental purposes, and that he should try them, and then use them, if he found the experiment successful; but that he was not bound to take any specific quantity, if the experiment did not succeed.

This presented a pure question of fact, to be determined on the evidence presented. The learned judge, having all the witnesses before him, had a better opportunity to determine what weight should be attached to the evidence of each, and what inferences should be drawn from their testimony, based on their character and manner of giving evidence, as observed by him, than we can possibly have. On all the testimony, he came to the conclusion that plaintiff’s version of the agreement was correct.

We have examined the -testimony with care and find it very conflicting, but there is undoubtedly abundant evidence to support the findings; indeed, we think the weight of evidence is with the plaintiff. Having arrived at this conclusion, we do not think it necessary to give our reasons at length, as we would, if we felt constrained to reverse the judgment.

But defendant claims there was an implied warranty by the plaintiff, that the brick should be reasonably fit to use, between wooden beams; that the implied warranty was broken, and that the plaintiff cannot recover for the fire bricks'delivered for such purpose.

When a manufacturer agrees to make a thing for a particular known, purpose, there, is an implied- warranty that it shall be reasonably fit for that purpose. Benjamin on Sales, 657; Gautier v. Douglass Mfg. Co., 13 Hun, 514; Gurney et al. v. At. and G. W. R. Co., 58 N. Y., 358; Jones v. Just, L. R., 3 Q. B., 197.

That is, it must be free from defects produced by the manufacturing process itself. Hoe v. Sanborn, 21 N. Y., 552. And free from latent defects, not visible to the vendee. Leopold v. Van Kirk, 27 Wis., 152; Brenton v. Davis, 8 Blackf., 317-318; Kellogg Bridge Co. v. Hamilton, 110 U. S., 108. Where the law on this subject is carefully reviewed.. But when a well known article is to be manufactured for experimental purposes, we think that the-utmost that can be claimed is, that it shall be reasonably good of its kind.

At time of making the agreement to manufacture the-brick in question, none had ever been used between wooden beams, so far as the parties knew; but bricks for use between iron beams had been manufactured before that time, and their shape, quality, etc., were well known.

The defendant determined to try the experiment of using similar brick between wooden beams, and the learned judge has found that he ordered .unconditionally 20,000 feet of fire brick for that purpose. Under such an agreement, all that the manufacturer could be required to furnish was reasonably good fire bricks; that is, bricks made of proper material, properly manufactured with proper flanges, and reasonably uniform in shape and size, and free from latent-defects and defects in manufacture.

The defendant does not contend that the bricks delivered; were not reasonably good in any of these respects, but-that there were latent defects which he could not discover on inspection; but that the experiment failed because plaintiff did not supply with the bricks a sufficient variety of keys, of different sizes. Different sized keys were rendered necessary by the varying sizes of the beams and the spaces; between them.

Defendant furnished plaintiff with the plans; he took measurements for the bricks, and made and furnished at least five different sizes of keys, presumably enough to fit between the beams had they been uniformly laid.

Defendant testified that he laid the beams at as uniform a distance from centre to centre as possible, but admitted that the beams were not uniform in depth and thickness, and that the spaces between them varied from one to two-inches.

It also appeared from the evidence that in order to lay the brick properly between these beams, it was necessary to nail a strip of wood to the beam at a uniform distance, and that defendant should have had this strip beveled, and was so informed by plaintiff’s agent. Over these conditions the plaintiff had no control, but the defendant had.

The want of uniformity in the thickness of the beams, the varying spaces’between them, and defendant’s omission to bevel the wooden strips, were the chief causes of the failure of the experiment;-and involved so much labor in adjusting the brick that the cost became too great to admit of their use for the purpose intended.

Defendant did not notify the plaintiff that a greater variety in the sizes of the keys was needed, nor did he request him to furnish them, as he should have done, under this state of facts. We think the plaintiff had a right to assume that the beams would be of uniform thickness, and laid with the same uniformity that iron beams were, and that he was not required to furnish a greater variety of keys until requested to do so.

Under the circumstances, to relieve the defendant from paying the agreed price of the bricks furnished, we would have to hold, not only that the plaintiff warranted their quality, but also the success of the experiment; which would be unreasonable.

As stated at the outset, this proceeding is brought to foreclose a mechanic’s lien. The lien is acquired by filing the notice prescribed by sec. 4, of the Mechanics’ Lien Law (chap. 342, Laws of 1885), and dates from the filing of the notice.. This must contain “the nature and amount of * * * the material furnished,” if tlie lien is for material.

Under a similar provision of the former law, this court has held that such a notice cannot be amended. Conklin v. Wood, 3 E. D. Smith, 662.

Also that the amount must be stated, and judgment cannot be rendered for more than the amount claimed. Protection Union v. Nixon, 1 E. D. Smith, 671; Lutz v. Ely, 3 id., 621.

The notice filed in this proceeding states the amount claimed to be $2,024.75, so did the bill of particulars, and the complaint also demanded judgment for that sum.

Through some oversight or error in the calculation, the judgment rendered was for $2,248.25, or $223.50 more than the amount stated in the lien.

Even if we had the power to amend the notice and the pleadings, we have looked in vain for evidence to support this excess over the amount claimed in the lien. .

The judgment must, therefore, be reduced by $223.50 as of the date of its entry, together with any interest that may have been computed on that sum; and as thus reduced, should be affirmed without costs of this appeal to either party as against the other.

Larremore, C. J., concurs.

Daly, J.

(dissenting)—The plaintiff, among other claims, sued for fire-brick or fire-proof material furnished to defendant Bliss to be used between wooden beams in a certain structure which defendant was building.

The use of- fire-brick between wooden beams was a new use of such material and was experimental. The main question of fact was, whether defendant ordered outright a certain quantity, viz., 20,000 brick from plaintiff, which he was to pay for whether he could use it or not, or only agreed to give the material a trial and to pay for what was actually used.

There was a conflict of evidence on this point between the defendant Bliss on the one part and two witnesses for plaintiff on the other part. It was conceded by plaintiff’s witnesses, that the brick was ordered for the purpose of making a trial of its adaptability to the novel use contemplated, but plaintiff’s claim is that defendant was to take and pay for all that was furnished by plaintiff within the figure above stated.

Corroboration is sought in two memoranda of quantities made by plaintiff’s son and shown to defendant at the time of the alleged agreement. One memoiandum shows 20,000 feet for wooden beams, 8,000 feet for arches and 10,000 feet for partition. The other memorandum shows “about” 8.000 feet floors, about 50,000 .feet wood floors and about 45.000 feet partitiops.

As no such quantities "were actually furnished, it would seem that their figures were mere estimates and that the papers (unsigned by defendant) ought not to be regarded as strengthening the plaintiff’s evidence of an order; and considering the case as resting upon the memory or the creditability of witnesses and as to be determined by the probabilities, it seems to me that the plaintiff’s claim is not proved.

The defendant Bliss knew nothing of the proposed new use of the material and consented to try it upon the solicitation of the plaintiff’s agents, who were confident of success. It is hardly likely that defendant, under, such circumstances, would assume all the risk, expense and burden of the experiment. i

There is another view of the case which, however, requires a judgment for defendant. The brick or fire-proof material furnished by plaintiff was to be. suitable for use between wooden beams and the brick he delivered was not suitable because an assortment of keys of sizes required for the distances between beams was not furnished.

The plaintiff’s agents undertook to see to this for they got the plans of the building from defendant and made the measurements. While plaintiff cannot be held to have

fuaranteed the success of the experiment of laying the rick with wooden beams, he was at least bound to furnish brick with keys of the required weight and size to make a fair experiment. This he did not do. The defendant’s masons and his expert were positive on this point and the evidence to contradict it did not squarely meet that issue.

It appears that in order to lay the brick properly between wooden beams, it is necessary to nail a strip of wood to the beam; and plaintiff contended that defendant should have had such strip beveled, and was informed of the fact, but failed to do it, hence the failure of the experiment. But it appears, from the testimony of plaintiff’s witness, Weidner, that, even with the proper strip, keys of the right size are still indispensable.

The judgment should be modified by disallowing the claim for fire brick not actually used by the defendant Bliss; also for the amount of the judgment which is in excess of the lien claimed. If plaintiff consents to such modification, judgment for the residue should be affirmed without costs. If plaintiff does not consent, then judgment should be reversed without costs and a new trial ordered.