author: Potter, J.

text:
    Charles H. Adams, App’lt, v. The City of Cohoes, Resp't.

      (Court of Appeals, Second Division,

      Filed June 2, 1891.)

    Landlord and tenant—Tenancy prom year to year—How created— Notice.
    Defendant occupied certain premises belonging to plaintiff, paying a stated rent therefor semi-annually, for five years. By a resolution of the common council the mayor was authorized to rent the premises at an increased rental from May 1, 1875, for three years. There was no lease executed, but defendant continued in possession, paying the increased rental on the first days of November and May in each year, until August 1, 1885, when it vacated the premises and tendered the key to plaintiff's agent. Defendant paid the rent to May 1, 1886, after judgment had been recovered for it. Held, that a tenancy from year to year "was created; that the defendant had the right to quit the premises at the end of any year from the first day of May without giving the plaintiff any notice of its intention to do so; that if any notice was required the acts of defendant in tendering the premises, quitting possession, hiring other premises, refusing to pay and interposing a verified answer in the action for rent by defendant that it had been evicted by a nuisance allowed to exist by the landlord, etc., was sufficient.
    Appeal from a judgment of the general term in the third department, affirming a judgment entered upon a verdict rendered at the Albany circuit by direction of the court in favor of defendant, with costs.
    This action was brought to recover rent of rooms on the second floor in plaintiffs building occupied by the officers and agents of defendant.
    The occupation was under these circumstance: The defendant had prior to March 1, 1875, occupied certain rooms in plaintiff’s buildings at the agreed annual rent of $700, payable semi-annually on May 1 and November 1 in each year.
    In April, 1875, plaintiff gave defendantnotice that after May 1, 1875, he should require a rent of $1,200 a year, and the defendant’s common council passed a resolution as follows:
    “Resolved, That the mayor be and hereby is authorized to rent for the use of the city the premises in Egbert’s Hall, now occupied as common council chamber and offices for justices and city officials, for a period of three years from May 1st prox. at an annual rental of twelve hundred dollars ($1,200).”
    There was no written lease or other writing in relation to the matter. The defendant continued to occupy for the three years succeeding May 1, 1885, and paid the annual rent of $1,200 on the first days of May and November, and continued to occupy until August, 1885, when the defendant removed its goods and furniture to another building called Larkin’s Hall and vacated the premises.

      This removal was known to plaintiff’s agent, who was engaged in renting and collecting the rents of these rooms and other properties of plaintiff, and some ten days afterwards a verbal notice was given to such agent of the plaintiff of such removal by defendant, and at the same time a key was tendered to him which he declined to take, and it with the keys to other doors was left in the doors. July 21, 1885, plaintiff sent a communication to defendant’s common council proposing to sell Egbert’s Hall or lease the second and third floors to defendant. The plaintiff was informed by his agent of defendant’s removal within two or three weeks after it took place. Defendant did not pay the rent which fell due November 1, 1885. Plaintiff brought an action, which was defended, and a recovery was had for the rent.

    The plaintiff alleged in the complaint in that action that “ on th q first day of May, 1885, the defendant hired from the plaintiff,” describing the premises, “at the yearly rent of $1,200, payable in half year installments,” and “that the defendant took possession of and occupied said premises under said agreement,” and “ that the sum of $600, being the part of said rent due on first day of November, 1885, is still unpaid." The answer of defendant in that action admitted the hiring as alleged in the complaint, and set up the defense that on the first day of August, 1885, the ¡fiaintiff permitted the existence of a nuisance from the odor of offensive water closets, and also from noises created by stamping of feet, beating of drums and tambourines by a band of the Salvation Army, by reason of which defendant was evicted.
    The defendant did not pay the rent which fell due, or was claimed to have fallen due, on May 1, the succeeding year, viz.: 1886, and the plaintiff recovered a judgment therefor by default, and the defendant paid the judgments.
    This action was brought to recover the half year’s rent, which fell due (as alleged) on the first day of November, 1886.

      Earl L. Stimson and E. Countryman, for app’lt; George H. Fitts and N. C. Moak, for resp’t.

       Affirming 35 N. Y. State Rep., 523.

   Potter, J.

There are two questions involved in the consideration of this appeal. The one is whether the defendant was bound to give the plaintiff notice of its intention to quit the premises before it could successfully maintain a defense to the claim for rent set forth in the complaint in this action, and if it was so bound, whether the undisputed facts established upon the trial of the action do not constitute such notice.

If such notice was not required, or if required and was sufficiently given, the direction of the trial court to the jury to render a verdict for the defendant was proper.

From the examination I have given the record in this case, I entertain a clear conviction that the defendant was not bound to give the plaintiff such notice and if it was bound to, sufficient notice was given.

The plaintiff’s contention is to the effect that the tenancy of the defendant to the plaintiff formerly existing, had not been legally terminated prior to May 1, 1886, and that the defendant continued liable to pay the plaintiff the rent of the premises from that date to the first day of November, 1886. It is undisputed that the occupation of the premises by defendant ceased upon the 1st day of August, 1885, and I am of the opinion that the legal tenacy ceased on the 1st day of May following that date.

The defendant had prior to May, 1875, occupied the premises with the consent of the plaintiff for some years and paid the plaintiff as annual rent for the same, the sum of $700 in half yearly payments upon the first days of May and November in each year.

In the month of April 1875, the plaintiff gave the defendant notice that from May 1, 1875, the rent of the premises occupied by defendant would be $1,200 a year. Thereupon the common council of the defendant passed a resolution authorizing its mayor to lease the premises of the plaintiff for the period of. three years from May 1, 1875, at a rent of $1,200 a year. There was no specification either in the requirement of the plaintiff or in the resolution of defendant when or in what instalments the rent should be payable. But that is not at all important for the defendant paid the increased rent half yearly as -it had paid the former rent.

No written lease was executed between the parties and as a parol lease for a period beyond one year is void, the relation that resulted between the parties was a lease for a year, if the tenant occupied the premises during that period; and if the tenant continued in the occupancy of the premises beyond the year, he thereby became a tenant from year to year at the same rate of rent. Reeder v. Sayre, 70 N. Y., 180-184; Laughran v. Smith, 75 icb, 209; Coudert v. Cohn, 118 id., 309-311; 28 N. Y. State Rep., 684; Talamo v. Spitzmiller, 120 N. Y., 37-43 ; 30 N. Y. State Rep., 186.

The language of the court in Reeder v. Sayre, supra, is: “ The agreement, though by parol, and void as to the term and the interest in lands sought to be created, regulates the relations of the parties to it in other respects upon which the tenancy exists, and may be resorted to to determine their rights and duties in all things consistent with, and not inapplicable to a yearly tenancy, such as the amount of rent to be paid, the time of year when the tenant could be compelled by the landlord to quit, and any covenants adapted to a letting for a year. Doe v. Bell, 8 T. R., 579; 8 Cow., supra; Arden v. Sullivan, 14 Q. B., Ad. & El. N. S., 832 ; Doe v. Amy, 12 Ad. & EL, 476; Berrey v. Lindley, 3 M. & G., 498; Edwards v. Clemons, 24 Wend., 480.”

And the" court through Justice Bradley, in the above cited case, Talamo v. Spitzmiller, says: “While there may appear to have been some confusion in the cases in this state upon the subject, this doctrine has been more recently recognized. Reeder v. Sayre, 70 N. Y., 184; Laughran v. Smith, 75 id., 209. In the cases last cited the tenants had been in possession more than a year when the question arose, but having gone into occupancy under an invalid lease, their yearly tenancy was held dependent upon a new contract, which might be implied from the payment and acceptance of rent, and when once created could be terminated by neither party, without the consent of the other, only at the end of the year.”

The plaintiff contends that until the tenancy was terminated by a notice from the defendant that he intended at some definite future period to quit the premises, the tenancy and defendant’s liability to pay the rent continued. How what are the relations between landlord and tenant in a tenancy for a year, or from year to year, in respect to the amount of rent and the duration of the term or of the cessation of tenant’s liability to pay rent? The rate of rent is that specified in the lease for a year, or in the void lease. When the term expires in a valid lease, at a fixed and defined period, or when the term is for one year by reason of the lease being void under the statute of frauds, and occupation for that period, no notice to quit is necessary. When the parties have agreed in the lease, or the law has fixed the period of the termination of the tenancy, it would be a work of simple supererogation to give such notice. Hence, where the duration of the term is fixed, there is no rule, nor any reason for a rule, requiring any notice to quit to be given. Sec. 107 McAdam on Landlord and Tenant, and cases cited.

In tenancies for a term fixed by the lease or by law for the want of a valid lease as to the term, the rights of the parties are determinate. The landlord in such lease has the right of an election. He may, if the tenant does not vacate the premises at the end of the term, treat him as a wrongdoer and bring ejectment or take summary proceedings under the statute to remove him from the premises, and he is not required before doing so to serve the tenant with any notice to quit. Park v. Castle, 19 How. Pr., 29, and the . cases there cited. Or the landlord may waive his right to the immediate possession and the wrong of the tenant in remaining beyond the expiration of the term, and recover of him the rent for another year; for the tenant, by remaining over, has by implication become a tenant for another year from the expiration of his term. Sec. 21, McAdam L. & T , citing Schuyler v. Smith, 51 N. Y., 309 ; Mack v. Burt, 5 Hun, 28; Conway v. Starkweather, 1 Denio, 113.

So absolute is the implication from holding over for a few days only, of a hiring for another year, that the tenant will not be excused from the payment of rent, even where he gave the landlord notice before the end of the term that he did not intend to hire for another year and had hired other premises which would be ready for his occupancy in a few days. Schuyler v. Smith, supra.

A good illustration of this rule is to be found in the judgments put in evidence in this case, where the plaintiff herein recovered the rent of the entire year, although the defendants had removed from the premises, with the knowledge of the plaintiff, nine months before the end of the year for which the plaintiff recovered the rent. . At the end of the year thus hired by implication, the rights and the remedies which existed at the end of the former term are again revived. Those rights are, as we have seen, that the landlord may remove the tenant without notice and the tenant may quit the possession without giving the landlord any notice of his intention to do so. Sec. 110, McAdam L. & T.; Park v. Castle, and the other cases above cited.

In Ludington v. Garlock, 29 N. Y. State Rep., 600, it was held in a case of a lease from month to month, and the tenant held over, that the tenant who vacated the premises at the end of a subsequent month, and gave the agent of the landlord notice of that fact and left the keys with him, that the tenant was no longer liable for the rent of the premises. That case is analogous to this in all respects except that was a tenancy from month to month and this is a tenancy from year to year. In that case the tenant paid during the time of the occupancy and quit at the end of the month. In the case at bar the defendant did not quit the possession at the end of the year as it had the right to do, and was therefore compelled to pay for nine months after it quit the premises because it did not quit the premises at the end of the year, but occupied three months beyond the end of a year.

It is quite apparent from the cases above cited that the necessity or occasion for the service of a notice to quit upon the part of the landlord or tenant has no application to a tenancy which terminates at a fixed period. It is only in cases where the end of the term is not fixed as in tenancies at will or at sufferance, that the landlord is required by law before bringing ejectment or summary proceedings to recover possession from a tenant, to give notice to quit. 2 R. S., 513, § 28 ; 1 R. S., 745, § 7. Those statutes are evidently based upon that theory. Park v. Castle, supra.

I find no case, and upon principle I should not expect to find a case, holding that it was not the right of the tenant to leave the premises at the end of the term or requiring him to give the landlord in such case a notice of his intention to quit the premises.

We have before seen in Park v. Castle, supra, and the other-cases cited, that in such case the landlord is not bound to give-the tenant notice to leave even for the purpose of instituting summary proceedings to recover possession of the premises.

If such is the case in respect of the landlord, why should it not be so as to the tenant ? Their rights and duties are correlative or reciprocal.

My conclusion is that the defendant in this case had the right to quit the premises at the end of any year from the 1st day of May without giving the plaintiff any notice of his intention to do so

The only object of such notice must be to inform the landlord that the relation of landlord and tenant was to cease and thereafter the landlord would be at liberty to repossess the premises and to lease them to another. If the law requires any notice it has prescribed no form for it. 70 N. Y., 187, supra. Any notice, therefore, which, in a reasonable manner, conveyed information to the landlord that the tenant would cease to be such, would suffice for that purpose.

Assuming, without deciding, that the landlord was entitled to six months or any other period of notice of an intention to terminate the tenancy at the end of the then current year, viz., May 1, 1886, .would not the tender of the premises, the quitting of the possession on the 1st day of August, 1885, the hiring and actual occupation of other premises and without any re-entry and a flat refusal to pay rent subsequent to that date and the interposition of a verified answer in an action to recover such rent by the defendant, and that he had been evicted from the premises by the conduct and permission of the landlord, answer the purposes and objects of such notice? He must be a very dull landlord indeed, that could not derive from such facts some degree of knowledge, or, at least, a very suggestive hint, that the defendant intended to terminate its tenancy, and at the earliest practicable moment.

The conclusion we have reached renders any special reference to the effect of the judgments recovered by plaintiff against the defendant for the rent of the year ending May 1, 1886, unnecessary. Those judgments simply accord with the result we have reached, aside from their consideration, and that is, that the defendant was liable for the rent for the year ending May 1, 1886, at which time the lease terminated, and the defendant had the right to quit the premises.

It certainly cannot, in the view we have taken, be reasonably contended that the judgments not only determined the liability of defendant to pay the rent for the year specified in the complaint, but also for subsequent years in an indefinite future.

Judgment should be affirmed, with costs.

All concur, except Parker, J., not sitting.


source: Caselaw Access Project

author: Bradley, J.

license: Public Domain

text:
    Mary R. Stoddard et al., Resp’ts, v. The Village of Saratoga Springs, App’lt.

      (Court of Appeals, Second Division,

      Filed June 2, 1891.)

    Municipal corporations—Sewer—Injunction against construction of.
    Defendant, by its board of trustees, upon the petition of certain street owners, constructed a sewer through several streets in the village of Sara-toga, then through the private grounds of the United States Hotel, and certain lots to Waterbury brook, which ran through the plaintiffs’ premises, thus emptying the sewerage upon plaintiffs’ premises. Held, that it was a public sewer, and that defendant was chargeable with its construction and liable to plaintiffs for so improperly providing or locating the outlet as to causé the sewage to pass from it on to their premises.
    Appeal from judgment entered upon order of the general term of the supreme court in the third judicial department, affirming a judgment entered on the report of a referee in favor of the plaintiffs.
    The purpose of the action was to perpetually enjoin the defendant from casting the sewage from what was known as the Harrison street sewer on to the premises of the plaintiffs; and to recover damages for the injury alleged to have resulted to them from such cause.
    The referee found, that in 1876, the defendant through its board of trustees, constructed a public sewer in the village from the intersection of Walton and Lawrence streets, along the latter street to and across Church street, to and along Harrison street, a distance of about fifteen hundred feet to Division street; thence through private grounds of the United States Hotel and Marvin and Benedict lot to Waterbury brook, which ran through the plaintiffs’ premises; that along the line of the sewer, connection with it was from houses, and street basins were provided to take into it surface water and street washings; these connections and basins resulted in taking into and which passed through the sewer filthy water and obnoxious substances from streets, houses, etc, on to the plaintiffs’ premises, there producing a nuisance and. the injurious consequences complained of by them.
    By chapter 673, Laws 1871, provision was made by which a.' main sewer could be constructed in the village of Saratoga Springs, the expense of which to be eventually paid by assessment upon the taxable property of the village; also for putting in lateral sewers connecting with it to be charged by assessment upon those benefited by them; and for permission to owners of adjacent real estate to connect private sewers or drains with them.' By chapter 271, Laws 1874, after, by the first and second sections, repealing and amending the first section of the previous act, further provision was made relative to the construction of, and relating to, sewers in the village, by §§ 3, 4, 5 and 6, as follows:
    “ Sec. 3. Whenever a majority of the owners or occupants of premises upon any street or streets, or any section or portion of any street or streets in said village, shall petition the board of trustees of said village to lay a sewer along said street or streets, or any section or portion of said street or streets, clearly designating by maps or other proper description accompanying said petition, the portion of said street or streets and the distance thereon, and the desired course of such sewer, and that said sewer be connected with the creek or main sewer at a point to be designated in said petition, then the board of trustees of said village are hereby authorized and empowered to grant the request, of said petitioners, and to cause a sewer to be laid along such street or streets, or section of street or streets, as set forth in said petition, and connect the same with the creek or main sewer. Said board of trustees may cause the proper surveys, maps, plans- and profiles to be made of said proposed sewér and filed with said board.”
    “ Sec. 4. Whenever any petition, as herein specified, shall be granted by said board of trustees, said board shall cause such sewer to be constructed of such material and dimensions as they may adopt after proper consideration. Said board shall cause-plans and specifications of such sewer to be prepared, and shall give at least one week’s notice, daily, in a daily newspaper published in said village, where such plans and specifications can be seen and examined, and shall in such notice invite sealed proposals for the construction of such sewer, to be presented to the clerk of the board. At the end of the time specified in said notice, the board of trustees shall convene and open said proposals, and shall award the contract for the construction of said sewer to the lowest responsible bidder. Before awarding any contract for the construction of such sewer, the contractor shall execute to the village of Saratoga Springs, in such form and manner as such board shall prescribe, an undertaking or bond in the sum of at least twice the amount of the aggregate of such contract price, with two sureties, who shall duly justify, conditioned for the faithful performance of the contract and the proper construction of such sewer, in conformity with the plans and specifications adopted by said board of trustees.
    “ Sec. 5. The cost of constructing such sewer shall be assessed by the board of trustees upon the property adjoining said sewer, and such other property which said board may deem to be benefitted by said sewer, or may at any time enjoy the use of said sewer, said board being guided in making such assessment by the valuation of the property assessed as the same shall appear upon the village assessment roll at the time of such assessment, and said board of trustees shall have power to enforce collection of such assessments in the same manner as other taxes are collected in said village. But in no case shall the property known as  Congress Spring Park,’ be assessed for lateral sewers so long as such property shall remain a park, and does not use, and is not benefitted by such sewer.
    “ Sec. 6. Said trustees shall prescribe rules for the use of such sewers, and shall have power to prevent any excavations in streets, or otherwise, which shall injure or interfere with the use of such sewers ; and in case any such sewer shall require repairs, said trustees-shall make the same, and charge and assess the cost thereof upon the property enjoying the use of the same, in like manner as the cost of constructing the same was assessed and collected.”
    The referee determined that the plaintiffs were entitled to both injunctive relief and damages, which he assessed.

      Edgar T. Brackett, for app’lt; John L. Henning, for resp’ts.

       Affirming 33 N. Y. State Rep., 315.

   Bradley, J.

The leading proposition urged on the part of the defendant is that the sewer in question is not a public one; and that the defendant is neither chargeable with its construction nor liable for its consequences.

The defendant has for many years been a municipal corporation. And by reference to Laws 1874, chap. 271, it will be seen that upon the granting by the board of trustees of a petition, etc., made in conformity with the provisions of the act, it is made its duty to cause the sewer asked for to be constructed, and, after taking the requisite preliminary proceedings, to award the contract for the work and take security for its performance. Id., §§ 8,4. The construction of a sewer is not only to be in accordance with the plans, etc., prepared by the direction of the board, but the trustees are to prescribe rules for its use, and when repairs are required, to make them, id., § 6; and the cost of construction is to be realized by assessment upon the property benefited, enforced in the manner other taxes are collected in the village. Id., § 5. This could not lawfully be done for work of a mere private nature. The purpose of sewers so constructed is thus necessarily characterized as public, and the power is legitimately vested in the corporation to accomplish it in the manner authorized by the statute. It appears by the petition and proceedings following it that the design was to construct the sewer in question pursuant to the provisions of the act of 1874. It is, however, urged that it was not authorized by or constructed in conformity with the provisions of that act, because within the proposed line of it as described in the petition, and on which it was located, was embraced private lands. It is true that the distance of about five hundred of the 2,000 feet of the line of sewer as given by the petition and as constructed was not in any street, but through private grounds, with the consent of the owners. The statute provides only for laying sewers along the streets of the village; and there is no provision in the last mentioned act to appropriate lands elsewhere other than for the purposes of the main sewer mentioned in the second section. It may be that the board of trustees exceeded its authority in granting the petition and in departing from the lines of the streets after laying the sewer 1,500 feet in them, and constructing it through private grounds the other 500 feet to its outlet in Walworth street. In the view taken that question is not necessarily here for determination. For the purpose of enforcing assessménts to pay the cost of the work, it was essential that the proceedings should have been had in substantial conformity with the provisions of the statute from which was derived the municipal authority to do that which was sought to be accomplished.

The present case in not dependent for its support upon the regularity of the proceedings of the village authorities but is to charge the corporation with liability for the consequences of a work alleged to have been performed in a negligent and improper manner. If it were ultra vires in such sense as not to be within the scope of the corporate powers of the defendant, the latter would not be answerable for the consequences resulting from it, although the persons causing the work to be done were its officers or agents, and assumed to act as such in doing it. Mayor v. Cunliff, 2 N. Y., 165; Smith v. City of Rochester, 76 id., 506. But that is not' the situation presented here. It was legitimately within the corporate power of the defendant to construct sewers ; and it may be that in attempting to execute it the constituted authorities went to some extent beyond the authority conferred upon the corporation and them as its officers. The referee has found that the trustees were not chargeable with mala fides. It may, therefore, be assumed that the general purpose was to execute the power vested in the municipal corporation which they represented in causing the work to be done; and thus acting the defendant may be chargeable with the injury to others resulting from their failure to properly perform the duty which they assumed to discharge, although it may have been occasioned by irregularity or acts on their part in excess of authority. 2 Dillon’s Mun. Corp., § 769 (4th ed.), § 971; Lee v. Village of Sandy Hill, 40 N. Y., 442 ; Buffalo, etc., Turnpike Co. v. City of Buffalo, 58 id,, 639 ; Thayer v. City of Boston, 19 Pick., 511; Hawks v. Charlemoni, 107 Mass., 414.

It may be observed that the sewer was constructed three-quarters of its length along certain streets in the village; and the referee has awarded such damages only as he found was occasioned by sewage which entered the sewer along the streets. This evidently was done upon the theory that the portion of it not laid along the streets was not necessarily under the control of the corporation. This portion through the private lands had the effect to convey the sewage from the other parts of it in the streets to its outlet, thus causing the injury produced by it.

It is unnecessary for the purpose of this review to consider the corporate relation, other than in that aspect, to such portion of the sewer. The sewer within the streets was certainly under the control of the defendant And one of its purposes was to take into it and thence to its outlet whatever was conducted into it by means of lateral drains and sewers from houses, etc., along its ine; and the defendant was liable to the plaintiffs for so improperly providing or locating the outlet as to cause the sewage to pass from it on to their premises. Noonan v. City of Albany, 79 N. Y., 470; Chapman v. City of Rochester, 110 id., 273 ; 18 N. Y. State Rep., 133.

Reference is made by counsel to Searing v. Village of Saratoga Springs, 39 Hun, 307 ; 110 N. Y, 643 ; 16 N. Y. State Rep., 998, but that case has no necessary application to the one at bar.

There the pipe which conducted the sewage into the plaintiff’s lot was laid on her own land by her consent or request, and she-was at liberty to take it up, and thus remove the cause of her complaint.

Whatever view may be taken of the relation of the corporation to the lower portion of the sewer, the defendant is using it as a conduit to carry the sewage from the sewer laid along its streets to the outlet, and the only outlet provided for its discharge. Ho other question seems to require the expression of consideration.

The judgment should be affirmed.

All concur, except Potter, J., not voting.


author: Parker, J.

text:
    Anson Heath, Resp’t, v. Jefferson S. Hewitt, App’lt.

      (Court of Appeals, Second Division,

      Filed June 2, 1891.)

    Deed—To “ heirs ” of living person, when valid.
    Benj. Heath, by deed conveyed certain real estate to the “ heirs of Warren Heath,” reserving a life estate to himself and wife, and after their death to Warren Heath during his natural life. At the time of the grant- or’s death Warren had eight children, and three were thereafter born to him. Held, that the deed was not void for uncertainty, the word heirs was used as synonymous with the word children, and the grant was by its terms immediate with a life estate reserved to himself and to others for their lives.
    Appeal from an order of the general term of the supreme court, fifth department, reversing a judgment entered upon the report of a referee, dismissing plaintiff’s complaint.
    This action was brought to recover one equal undivided eleventh part of certain lands described in the complaint.

      The plaintiff asserted title by virtue of the following instrument :
    “This indenture, made this twenty-eighth day of April, one thousand eight hundred and forty-six, between Benjamin Heath, of Locke, Cayuga county, H. Y., of the first part, and the heirs of Warren Heath, of the same place, to be equally divided among them, of the second part.
    “Witnesseth, that the said party of the first part, for and in consideration of two hundred and fifty dollars, does grant, bargain, sell, confirm, unto the said party of the second part and to their heirs and assigns forever, all that certain piece or parcel of land situate on lot Ho. 33, in the township of Locke, bounded as follows: On the north and west by lands owned by the heirs of Salmon Heath, deceased, on the south and southwest by the centre of the highway and on the east by lands owned by the said Benjamin Heath, containing about thirteen acres of land, being the same premises deeded to the said party of the first part by Harvey Heath and wife, as by reference to said deed (Book 77, p. 619) will more fully appear, excepting and reserving to myself the whole use and absolute control of the said premises during my natural life, and in case my wife, Haamah, should outlive me, to her during her natural life, and after her decease to my son, Warren, during his natural life. And, further, this conveyance is made subject to a certain judgment rendered in favor of Jonas Rude, of two hundred and fifty dollars, the amount of which judgment the said Warren hereby agrees to-pay, together with all and singular the hereditaments and appurtenances thereunto belonging or in any wise appertaining, excepting the reserves above mentioned, to have and to hold the said premises above described to the said party of the second part, their heirs and assigns forever, and the said party of the first part, for. his heirs, does covenant, grant, promise and agree, to and with the said party of the second part, his heirs and assigns, the above bargained premises against all and every person or persons whatsoever lawfully and equitably claiming, or to claim, the whole or any part thereof forever to warrant and defend
    “ In witness whereof, the said party of the first part has hereunto set his hand and seal, the day and year first abbve written.”
    “ Nota bene, 2d space from top the words ‘ the heirs,’ interlined before signing, also 5th space from bottom the words ‘ excepting the reserves above mentioned.’
    his
    “Benjamin X Heath, [l. &]’
    mark
    Warren Heath was a son of Benjamin Heath the grantor, and at the date of the instrument had eight children among whom was the plaintiff; thereafter'three children were born to him; and at the time of the commencement of this action all of his children were living.
    After the death of Benjamin Heath and his widow, Warren Heath entered into possession of the land described in the deed, and so continued until January 22, 1868, under claim of title as life tenant under the instrument granted. On the day last named Warren Heath and his wife for a valuable consideration quit-claimed all their right, title and interest in and to such premises to Harvey Heath. March 1,1871, Harvey Heath and wife by a warranty deed conveyed said lands to Jefferson S. Hewitt, the defendant in this action, who subsequently went into _ possession thereof under said deed, and so continued up to the time of the trial of this action.
    The referee found as a conclusion of law, that the deed from Benjamin Heath to “ the heirs-at-law of Warren Heath ” who was living, was void for uncertainty as to who were the grantees, and directed judgment to be entered dismissing the complaint, with costs.

      H. Greenfield and S. Edwin Day, for app’t; W. W. Hare and W. E. Hughitt, for resp’t.

       Affirming 17 N. Y. State Rep., 270.

   Parker, J.

Appellant’s contention is that inasmuch as Warren Heath was living, a grant to his heirs was void for uncertainty, as there were no persons in being who could take under that description. It is essential to the validity of a grant that the parties be named in the deed, or so plainly designated as to distinguish them with certainty, and it is asserted that as there were no heirs of Warren Heath at the date of the deed “ because no one can be heir during the life of his ancestor,” Broom’s Legal Maxims, § 522, the grantees were neither'named nor designated. Our attention is called to the rule laid down in Cruise’s Digest, title 29, chap. 8, where it is said to be “ a rule of the common law that no inheritance can vest nor any person be the actual complete heir of another till the ancestor is previously dead; nemo est haeres viventis.”

In Hall v. Leonard, 1 Pick., 27, a grant of land to the heirs of A. B. was held to be void, and in a discussion of the question the court said, “ no case has been found to support a grant to a man's heirs, he being living at the time of the grant.”

So in Morris v. Stephens, 46 Pa. St., 200, a conveyance by a grantor to “ the heirs of his son Andrew,” who was then living, was held to be void for uncertainty.

In Huss v. Stephens, 51 Pa. St., 282, the grantor of the deed under consideration was also the grantor in the instrument before the court in Morris v. Stephens, supra.

In the Morris case the deed described the grantees as heirs of Andrew Lantz, Jun., and the consideration expressed was one dollar in money and “the natural love and affection which the grantor hath for said heirs.” While in the Huss case the grantees were described in the same manner, but the consideration expressed was one dollar and “ the natural love and affection he hath for his grandchildren.” The difference in the two cases being that in the latter the word grandchildren in the consideration clause appears in place of the word heirs in the former.

In the first case the deed was held to be void for uncertainty But the second was declared to constitute a valid grant, because-the word grandchildren defined what he meant by- the use of the word heirs in describing the grantees. It enabled the court to ascertain that the word “ heirs ” was not used in its technical sense, but that by it the grantor intended to describe the children of Andrew Lantz, Jun.

In Rivard v. Gisenhof 35 Hun, 247, the court asserted the general rule that a grant “to the heirs ” of a living person is void for uncertainty.

And in Umfreville v. Keeler, 1 T. & C., 486, the court recognizes the doctrine of the cases cited, but held that a deed to “E. U., wife of A. U., and her, heirs, the children of said A. U.,” was-valid and operated to pass title to the children, because it was manifestly the intention of the grantor to confine the interest conveyed to the children of the parties named, notwithstanding the-use of the word heirs.

The legal and well understood meaning of the word heir is the one upon whom is cast an estate of inheritance upon the death of the owner, and it follows that this person is uncertain until death occurs; for until that event it can never be known to whom the estate will fall. Hence the doctrine of the cases referred to, and which, so far as we have observed, stand unquestioned.

If then the word heirs in this instrument be held to have been employed in its technical sense, it would follow that the deed should be declared void for uncertainty.

The courts of this state do not appear to have been called upon in the case of a deed to determine whether in the light of other facts-appearing in the deed, and the circumstances surrounding its execution, the word heirs may not be construed as meaning children of such living person, if it appears that such was manifestly the intention of the grantor. But in the construction of wills the-question has been considered.

In Heard v. Horton, 1 Denio, 165, the testator after making-sundry bequests and devises, and among others to his son J. B. H., devised the residue of his real estate without words of perpetuity to his son J. H., on condition that he should pay Ms debts; and added that if J.-H. should die without issue at his decease, the real estate should be equally divided amongst the heirs of his son, J. B. H; it was held that the words “heirs of J. B. H,” he having children living at the time of making the will sufficiently designated these children as the executory devisees, though J. B„ H., was himself then living, he being referred to in the will as a, Eving person. Judge Beardsley, in delivering the opinion of the-court said, “ where the will recognizes the ancestor as Eving, and makes a devise to his heir, eo nomine, this shows that the term was not used in the strictest sense, but as meaning the heir apparent of the ancestor named.”

Now in this case Warren Heath was Eving at the time of the-making of the deed, which fact sufficiently appears in the deed because the grantor reserved to him a life estate in the lands sought to be conveyed, and he had children Eving among whom was the plaintiff in this action.

In Vannorsdall v. Van Deventer, 51 Barb., 137, the devise was to the legal heirs of his (testator’s) brother A., deceased, and to the legal heirs of his sister M., deceased, and to the heirs of his brother-in-law W. Y. At testator’s death W. Y. was still living. It was held that the word heirs, in so far as it related to the heirs of his brother-in-law, W. Y., was used as synonymous with the word children, for the will assumes that he was then living; that the children of W. Y. were entitled to take, and that the estate became vested in them immediately upon the death of the testator.

These cases were cited with approval in Cushman v. Horton, 59 N. Y., 149, in which the rule is laid down that to the word heirs must be given the ordinary legal meaning unless it appears that the testator used the word in other than the primary legal sense, in which event courts should give effect to the intention of the testator.

If it be said that both in England and in this country the courts have more generally supported indefinite forms of transmissions by will than by grant, because in the ease of wills they are intended to go into effect at a future time, and to provide for future and uncertain events, not only for individuals named, but, also, for described classes of donees to be ascertained by evidence of the death of the testator or afterwards, while in the case of the present conveyance the very nature of the act excludes the necessity of indefiniteness, it may be answered that this difference is not of moment, in determining whether the particular rule .of construction adopted in the cases cited is applicable here. The determinination made was that if from the whole will it was manifest that in using the word heirs the testator meant children the court should so construe it, and thus give effect to the intention of the testator.

But the statute, also, requires the court to give effect to the intent of the grantor in making the conveyance before us, if it may be done consistently with the rules of law. It provides that “In the construction of every instrument creating or conveying, or authorizing the creation or conveyance of any estate, or interest in lands, it shall be the duty of courts of justice to carry into effect the intent of the parties so far as such intent can be collected from the whole instrument, and is consistent with the rules of law.” 1 E.S, 699, § 2, Edmund’s ed. As the intent of the parties is to govern in grants as well as wills there seems to be no basis on which to found a distinction between them as to the interpretation to be given to the word “heirs,” if in the one case as in the other it appears that it was not the intention of the grantor, or testator, to use it in its ordinary legal sense.

We are then to ascertain whether the grantor intended by the words, “the heirs of Warren Heath,” to designate and describe the children of Warren Heath as his grantees.

It has been determined in many cases that the word heirs, notwithstanding its primary and well understood meaning, is susceptible of more than one interpretation. Heard v. Horton ; Vannorsdall v. Van Deventer; Cushman v. Horton, supra. And in determining which must be here given, we may look at the surrounding circumstances existing when the contract was entered into, the situation of the parties and the subject matter of the-instrument. French v. Carhart, 1 N. Y., 96; Coleman v. Beach, 97 id., 545-553.

At the date of the instrument Warren Heath had eight children, who were also the grandchildren of Benjamin Heath, the grantor. Warren Heath was not only living, but the deed distinctly recognizes that fact, in that first it recites that the “ conveyance is made subject to a certain judgment rendered in favor of Jonas Rude of $250, the anaouut of which judgment the said Warren hereby agrees to pay; ” and, second, the instrument undertakes to reserve- “ the whole use and absolute control of the said premises * * * to my son Warren during his life.”

These facts bring the question before us within the rule laid: down in Heard v. Horton, and. other cases cited, supra, that when a will recognizes the ancestor as living, and makes a devise to his-heir in that name, it shows that the term was used as meaning the heir apparent of the ancestor named; or, as stated in the Vannorsdall case, that the word heirs -was used as synonymous with, the word children.

That he intended to describe the children of his son Warren as-his grantees is further supported by the fact that the grant is. by its terms immediate, the grantor undertaking to reserve a life estate in the premises to. himself and to others for their lives. The conveyance was not to Warren Heath for life, and after his death to his heirs, but it constituted a present grant to persons, whom the grantor designated as the heirs of Warren Heath, with an attempted reservation for the benefit of Warren, and the only persons answering that description in any sense in which the word! is employed, whether technically or popularly, would be the-, children of Warren.

The order should be affirmed, and judgment absolute rendered' against the appellant, with costs.

All concur, except Bradley and Haight, JJ., not sitting.


author: Vann, J.

text:
    John Thomas, Resp’t, v. Milo Scutt, App’lt.

      (Court of Appeals, Second Division,

      Filed June 2, 1891.)

    1. Evidence—Written contract not to be varied by parol.
    Evidence of what was said between the parties to a valid instrument nr writing, either prior to or at the time of its execution, cannot be received to contradict or vary its terms, where it appears upon its face to be complete, with mutual obligations to be performed by the parties.
    2. Same.
    An agreement by which plaintiffs transfer to defendant a raft of hemlock lumber lying at a place named, followed by the statement that such lumber is covered by the chattel mortgage annexed, enumerating three-different kinds of lumber, with the quantity in feet, the price and the amount each kind comes to, and an agreement that defendant will apply the amount on the chattel mortgage, any mistake to_ be corrected,_ is complete upon its face, and parol testimony is not admissible to contradict or vary it.

      Appeal from a judgment of the general term of the supreme court, in the fourth judicial department, affirming a judgment entered on the report of a referee.
    Action to recover the sum of $800 alleged by the plaintiffs to be due them from the defendant upon the sale of a quantity of lumber.
    The defendant denied the purchase and alleged that all the lumber that he had of the plaintiffs’ was turned out to him to secure advances that he had previously made to them, under the express agreement that it should be rafted to market and sold as his lumber and that he should account to them for the proceeds thereof when received, after deducting all expenses and the amount of their indebtedness to him. The defendant further alleged that owing to low water in the Delaware river the lumber could not be got to market without great expense, necessarily incurred in taking it out of the river and re-rafting it, and that the proceeds received by him were much less than the actual expenses and the amount of his claim against the plaintiffs.
    The action was tried before a referee, who found that June 11, 1888, the lumber in question was sold by the plaintiffs to the defendant for the sum of $728, which was to be applied by him upon a chattel mortgage given by them upon said lumber and other property to secure a debt of $1,600, and that soon after the balance of the mortgage was paid in cash.
    It appeared that the defendant at about the date of the alleged sale took possession of the lumber and, after some delay, sold it, but owing to the unusual difficulty of getting it to market, little or nothing was realized above expenses.

      W. J. Welsh, for app’lt; A. Taylor and John B. Gleason, for resp’t.

       Affirming 33 N. Y. State Rep., 433.

   Vann, J.

Upon the trial the plaintiffs put in evidence a written instrument, dated June 11, 1883, duly signed by them, of which the following is a copy, viz:

“ For the consideration hereinafter named, we hereby sell, assign, transfer and deliver to Milo Scutt one raft of hemlock toggle timber and loading thereon, now lying at Equinunk Eddy, just below the rock, in Buckingham township, Pa., the said lumber being covered by a chattel mortgage, of which the mortgage hereto attached is a copy, viz:
“4,000 feet cherry boards, at $12.................... $48 00
35.000 maple plank about, at $10................... 350 00
11.000 feet of toggle timber, at 3c................... 330 00
“$728 00
“ The same to apply on the amount due on said chattel mortgage, and if any mistake in amount of lumber, same to be corrected.”

A chattel mortgage was annexed to this writing, dated March 29, 1883, given by the plaintiffs to defendant to secure the payment of $1,600 on the first of May, following. It covered a large quantity of lumber in addition to that mentioned in the written agreement, and stated that it was all at Peas Eddy, a place within the state of New York. The indebtedness of the plaintiffs to the defendant on the 11th of June, 1883, amounted to the sum of $2,100, including that secured by the chattel mortgage. The plaintiffs also showed that shortly after the written instrument was given they paid to the defendant enough money to fully equal the amount unpaid upon the mortgage, provided said sum of $728 had first been applied.

Thereupon the defendant, in due form, offered to show “ what was said between the parties in reference to the bill of sale,” but the offer was excluded upon the ground that the writing was the best evidence and that it could not be contradicted or avoided by parol. The defendant further sought to prove “ that prior to and at the time of the drawing of the bill of sale the plaintiffs refused to make an absolute disposition of the lumber; that they were informed that such was not intended, but that the raft was in Pennsylvania and that the chattel mortgage did not protect defendant against a levy upon or disposition of the lumber by the plaintiffs in that state; that plaintiffs should have the full benefit of the lumber and what it brought on the sale when marketed, after paying the plaintiffs’ claim and the expense of running and marketing it; that plaintiffs said they were satisfied with that and would make the bill of sale on this basis and thereupon did sign the bill of sale.” This evidence was also objected to and excluded upon the same ground. At a later stage of the trial the defendant, under the same objection, was permitted to testify in reference to what was said between himself and one of the plaintiffs just before the written instrument, called for convenience a bill of sale, was executed, but it was subsequently stricken out on motion of the plaintiffs and against the objection of the' defendant upon the same ground that had governed the prior rulings. Exceptions to these decisions of the referee present the only question that the learned counsel for the defendant has asked us to decide.

It is a general rule that evidence of what was said between the parties to a valid instrument in writing, either prior to or at the time of its execution, cannot be received to contradict or vary its terms.

This rule is not universal in its application, because the courts, in their effort to prevent fraud and injustice, have laid down certain exceptions, which, though correct in principle, are sometimes so' loosely applied in practice as to threaten the integrity of the rule itself. 1 Greenleaf on Ev., § 284 a. The real exceptions may be grouped iu two classes, the first of which includes those cases in which parol evidence has been received to show that that which purports to be a written contract is in fact no contract at all. Thus, fraud, illegality, want of consideration, delivery upon an unperformed condition and the like may be shown by parol not to contradict or vary, but to destroy a written instrument. Such proof does not recognize the contract as ever existing as a valid agreement and is received from the necessity of the case to show that that which appears to be is not, and never was, a contract. Illustrations of this class may be found in the following citations: Beecker v. Vrooman, 13 Johns., 301; Hammond v. Hopping, 13 Wend., 505; Johnson v. Miln, 14 id., 195 ; Benton v. Martin, 52 N. Y., 570; Grierson v. Mason, 60 id., 394; 1 Greenleaf’s Ev., § 284; 2 Gowen & Hill’s notes, 665, note 494.

The second class embraces those cases which recognize the written instrument as existing and valid, but regard it as incomplete, either obviously or at least possibly, and admit parol evidence, not to contradict or vary, but to complete the entire agreement of which the writing is only a part. Receipts, bills of parcels and writings that evidently express only some parts of the agreement are examples of this class which leaves the written contract unchanged, but treats it as part of an entire oral agreement, the remainder of which was not reduced to writing. Two things, however, are essential to bring a case within this class:

First. The writing must not appear, upon inspection, to be a complete contract, embracing all the particulars necessary to make a perfect agreement and designed to express the whole arrangement between the parties, for in such a case it is conclusively presumed to embrace the entire contract.

Second. The parol evidence must be consistent with, and not contradictory of, the written instrument.

Chapin v. Dobson, 78 N. Y., 74, is an instance of this class, and, although near the border line, illustrates the two requirements just mentioned. In that case it was held competent to show by parol evidence that a written contract to furnish machinery of a specified kind, at a definite price, within a certain time, and to deliver it in a particular way, was part of an entire verbal contract which provided that the machines should be so made that they would do the work of the person who ordered them to his satisfaction. The ground of the decision was that there was nothing on the face of the instrument to show that it was the whole agreement between the parties and that the oral guaranty did not contradict and was not inconsistent with the written contract.

In Eighmie v. Taylor, 98 N. Y., 288, the court had under consideration a written instrument that was regarded as, upon inspection, appearing to be a full, definite and complete agreement of bargain and sale, and therefore held that evidence of a verbal warranty in that case was inadmissible. In the course of the opinion comment was made upon Chapin v. Dobson, supra, in this way *.

“ It was said of the instrument then in question that there was nothing upon its face to show that it was intended to express the whole contract between the parties, the inference being, as was declared in an earlier case, that where a contract does indicate such intention and design, and is one consummated by the writing, the presumption of law arises that the written instrument contains the whole of the agreement and that where there is such formal contract of bargain and sale executed in writing there can be no question but that the parties intended the writing as a repository of the agreement itself,”'citing Filkins v. Whyland, 24 N. Y., 838.

A further illustration, of the inflexibility of the first of the two requirements mentioned, may be seen in the still later case of Marsh v. McNair, 99 N. Y., 174, where the written instrument was in these words:

“ This is to certify that in consideration of crediting C. H. Marsh at the Exchange Bank of Lima, $353.72, paying mortgage (on property formerly* deeded by J. R. Marsh, in Avon, to G. W. Gibson), given by William F. Russell to C. H. Marsh, $110.46, and indorsing $35.82 upon a note made by G. H. Marsh, June 8, 1871, for $300, we jointly and severally «sell, assign and transfer all our right, title and interest in two policies Nos. 4277 and 4287, upon the lives of Charles H. Marsh and John R Marsh, issued by the National Life Insurance Company of the United States of America, to Chauncey W. Gibson, of Lima, N. Y.”

It was held that in the absence of any claim of fraud or mutual mistake as to the contents of the assignment it was conclusive and that oral evidence was incompetent to show that it was executed as collateral security only. The opinion recognizes, as well settled, that an instrument assigning or conveying real or personal property in absolute terms may by parol evidence be shown to have been intended as security merely ; states the history of the exception and its theory, but declares, in words applicable to the case in hand, that “this instrument is more than an assignment. \ It contains what both parties agreed to do. It shows that the assignment was made for the purpose mentioned and precisely what Gibson was to do in consideration thereof. He became bound to do precisely what was specified for him to do, and he could have been sued by the assignors for damages if he had failed to perform. Hence the instrument is not a mere assignment or transfer of the policy. It is a contract in writing within the rule which prohibits parol evidence to explain, vary, or contradict such contracts.” The authorities cited in the opinion apply with equal force to the case now under consideration.

The principle upon which parol evidence is held admissible to show that a simple assignment, although absolute in terms, was intended as security merely is the supposed incompleteness of the instrument, and it is not regarded as contradicting the writing, but as showing its purpose. Truscott v. King, 6 N. Y., 147, 161; Chester v. The Bank of Kingston, 16 id., 336, 343 ; Horn v. Keteltas, 46 id., 605, 610.

Where, however, instead of a mere transfer or assignment, there is a contract, appearing on its face to be complete, with mutual obligations to be performed, “ you can no more add to or contradict its legal effect by parol stipulations preceding or accompanying its execution than you can alter it through the same means in any other respect.” 2 Cowen & Hill’s Notes, 668; Renard v. Sampson, 12 N. Y, 561; Shaw v. Republic Life Ins. Co., 69 id; 286; Long v. The Millerton Iron Co., 101 id., 638; 1 N. Y. State Rep., 38 ; Snowden v. Guion, 101 N. Y., 458 ; Gordon v. Niemann, 118 id., 153; 28 N. Y. State Rep., 616; Hum phreys v. N. Y, L. E. & W. R. R. Co., 121 R. Y., 435; 31 R. Y. State Rep., 299 ; Engelhorn v. Reitlinger, 122 R. Y., 76; 33 R. Y„ State Eep., 275.

In the foregoing classification collateral agreements are not included, because they are separate, independent and complete contracts, although relating to the same subject. They are allowed to be proved by parol because they were made by parol, and no part thereof committed to writing.

Evidence to explain an ambiguity, establish a custom, or show the meaning of technical terms and the like is not regarded as an exception to the general rule, because it does not contradict or vary the written instrument, but simply places the court in the position of the parties when they made the contract, and enables it to appreciate the force of the words they used in reducing it to writing. It is received where doubt arises upon the face of the instrument as to its meaning, not to enable the court to hear what the parties said, but to enable it to understand what they wrote, as they understood it at the time. Such evidence is explanatory, and must be consistent with the terms of the contract. Dana v. Fiedler, 12 N. Y., 40; Collender v. Dinsmore, 55 id., 200; Newhall v. Appleton, 114 id., 140; 22 N. Y. State Rep., 670; Smith v. Clews, 114 N. Y., 190; 23 R. Y. State Rep., 166.

Eeturning now to the written instrument executed by the plaintiffs in this case, and it appears, upon analyzing its provisions, to be an agreement of a complete and comprehensive character. There is first a transfer in formal terms by the plaintiffs to the defendant of a raft of hemlock lumber lying at a place named, followed by the statement that such lumber is covered by the chattel mortgage annexed. Three different kinds of lumber are then enumerated, with the quantity in feet of each, the price per foot or per thousand, and the amount that each kind comes to at the price named. Those sums are added, and the amount thereof, constituting the purchase price, the defendant expressly agrees to apply on his chattel mortgage, and both parties agree to correct any mistake there may be in the amount of the lumber.

The method of correcting mistakes is not provided, but it is clear that if the lumber overran the amount stated, the plaintiffs were to have the benefit of it, while if it fell short, the defendant was to have the deficiency made good to him in some way. We regard this contract as complete upon its face. What element is wanting ? If such a writing can be undermined by parol evidence, what written instrument is safe ? How can a man, however prudent, protect himself against perjury, infirmity of memory or the death of witnesses? What stipulation was omitted that should have been inserted in order to bring the instrument within the general rule ? What will be left of the rule if it is established that it does not control such a -contract? Will anything of value be left, if it is held that a writing which contains the full and definite terms of a contract, apparently complete, may be shown by oral evidence to be simply part performance of an entire verbal agreement previously made? We think that the writing in question is governed by the rule, not by the exception. As was said by this court in Eighmie v. Taylor, supra, p. 296, it contains a definite agreement of bargain and sale, specifies the consideration, describes the subject, contains mutual covenants for the protection of each party and leaves nothing of a complete, perfect and consummated agreement to be supplied. On its face “ no element is wanting of an entire contract, exhausting the final intentions of both parties. It is, therefore, áuch a paper as falls within the protection of the rule and must be conclusively presumed to contain the whole contract as made."

Moreover, aside from the presumption arising from an inspection of the paper, such a parol arrangement as the defendant tried to prove would be inconsistent with the written instrument, because the purchase price was not according to the former, to be applied as provided in the latter. Indeed it would be taken bodily out of the writing and an arrangement of a different and inconsistent character substituted. Besides, the agreement that any mistake in the amount of the lumber should be corrected, while consistent with an absolute sale, is inconsistent with a transfer for the purpose of securing a debt.

We think that the writing in question imports on its face a complete expression of what the parties agreed to, and hence that it is conclusively presumed to contain all that they agreed to.

We are further of the opinion that the parol evidence sought to be introduced was inconsistent with and contradictory of the written agreement, and was hence inadmissible on that ground also. It follows that the rulings of the referee were correct, and that the judgment should be affirmed.

All concur.


author: Van Brunt, P. J.

text:
    John Colvill et al., App’lts, v. Percy Chubb, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    Stay—An action at law in which an equitable issue is raised.
    An action at law having been brought upon a policy of marine insurance, the defendant, by way of counterclaim, alleged error in the contract and asked a reformation. The plaintiff replied to the counterclaim. Held, that an equitable issue was thereby raised, triable at special term, and that until it was decided the action at law should be stayed.
    Appeal from order of special term, staying the trial of certain issues in the action at circuit until after the trial and determination at special term of issues raised by the reply to the counterclaim, setting up an equitable cause of action.

      Anson B. Stewart, for app’lts; J. L. Ward, for resp’t.
   Van Brunt, P. J.

This action was brought to recover damages for an alleged breach of a written contract of marine insurance.

The defendant served his answer admitting the issuance of a policy of insurance. He denied that in and by the policy they insured against the risk alleged in the complaint, and denied generally the other allegations in the complaint.

The defendant further. answered, by way of counterclaim, alleging a mistake in the terms of the policy of insurance, of which the plaintiff was duly notified and refused to return the policy for correction, and prayed that the policy might be reformed so as to make the same express truly the contract according to the .intention of the parties thereto, and that the plaintiffs might be restrained from bringing, or causing to be brought, any suit upon said policy until so reformed, and also for a dismissal of the complaint. No reply or demurrer to this counterclaim being served within the time limited by law, the plaintiffs noticed the case for trial at the circuit court. In December, 1890, while the case was on the day calendar in said circuit court, the defendant moved at special term for judgment by default. This motion was granted, with leave, however, to the plaintiff, on payment of ten dollars cost of motion, to serve a reply or demurrer to the counterclaim within ten days after service of the order, to be entered upon said motion. The order further provided that the same case was to remain on the calendar as of its former date of issue, and the order to be without prejudice to any proceedings theretofore had in the action. The plaintiffs took the benefit of the order by paying ten dollars costs of motion and serving a reply, which contained a denial of the allegations of the counterclaim and set up a further and separate defense thereto. The defendant thereupon filed a note of issue for the issues raised by the reply, and served notice of trial thereof at the ensuing general term.

After this decision upon the motion for judgment upon the counterclaim, the plaintiff made a motion on two days’ notice that the case be placed on the day calendar of the circuit court. This motion was granted. The case standing upon the calendar marked “ Deserved generally ” the plaintiff had the right to have it restored upon two days’ notice to the day calendar under the rules of the court. Thereupon the defendant moved for an order that the trial at circuit be stayed until after the trial and determination of the special term issues raised by the reply to the equitable counterclaim contained in the answer.

The motion was granted, and from the order thereupon entered this appeal is taken. *

We think no error was committed. In fact the plaintiff was not in a condition to try the issues raised by the complaint and answer, which were properly triable at circuit, until after he had disposed of the issues raised by the affirmative equitable cause of action set up in the counterclaim.

The Code provides that where a defendant interposes a counterclaim and thereupon demands an affirmative judgment against the plaintiff, the mode of trial of an issue of fact arising thereon is the same as if it arose in an action brought by the defendant against the plaintiff for the cause of action stated in the counterclaim and demanding the same judgment

There is no question but that if the cause of action- set up in this counterclaim had been contained in a complaint in an action brought by the defendant against the plaintiff, and for the same relief, that it would have been properly triable at special term as being an equitable cause of action. Such being the case when the defense is set up as a counterclaim, it must be tried in precisely the same form as though it arose in an action brought by the defendant against the plaintiff.

It is undoubtedly true that the plaintiff cannot be deprived of the right to a trial by jury upon the cause of action set out in his complaint; but it is equally true that it would be idle to try his cause of action until the equitable cause of action set up in the answer had been disposed of.

Under the old practice the proceeding would have been to file a bill in the court of chancery to reform this policy; and a stay of the trial of the action at law would have been granted until the equitable cause of action was disposed of.

In the case of Born v. Schrenkeisen, 110 N. Y., 55; 16 N. Y. State Rep., 412, this view is expressly recognized. The plaintiff sought on a written contract to recover royalties for the use of his patent, and the defense was that the written instrument did not express the true contract between the parties. The issues were tried before a judge at special term who ordered judgment that the complaint be dismissed upon the merits and that defendants recover their costs. The plaintiff appealed to the general term who affirmed the judgment. An appeal was taken to the court of appeals where the point being taken that there was no finding that the parties acted under a mutual mistake, the court held that sufficient facts for a reformation were alleged and found, the omission to make the reformation by the j udgment was a technical error which might be corrected on appeal and the court therefore modified the judgment so as to reform the agreement in accordance with the findings of fact, and affirmed the judgment as modified. If it had not been necessary to have obtained á judgment of reformatio'n, the judgment as rendered by the court below would have been amply sufficient.

Applying the principle of the case in question to the case at bar if this whole issue was tried at the circuit and resulted simply in a dismissal of the complaint upon the ground, if you please, that the contract should be reformed and when so reformed there was no cause of action, yet under the decision of the court of appeals in question such judgment would be irregular, because there must be a judgment first reforming the contract and then dismissing the complaint. No such judgment could be rendered at circuit, because in that court affirmative equitable relief cannot be granted.

The objection that the orders previously made were an adjudication upon this question and should have been appealed from, is not well taken because no such question arose.

The order should be affirmed, with ten dollars costs and disbursements;

Daniels, and Lawrence, JJ., concur.


author: Lawrence, J.

text:
    William S. Williams, App’lt, v. The United States Trust Co. of New York, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed May 15, 1891.)

    1. Pledge—Securities.
    The plaintiff borrowed money of the defendant upon his note and certain securities pledged as collateral. It was agreed that the defendant might sell the securities without notice upon the non-performance of plaintiff’s promise; and further that if the securities fell so that the margin on the loan was less than twenty per cent., the difference should be made good, and upon a failure to do so that the note should become due forthwith, and the defendant be at liberty immediately to sell the securities. The margin, by depreciation of the securities, fell below twenty per cent; the defendant elected that the note should become due, and sold the securities. Held, that the sale was authorized by the terms of the agreement.
    2. Same—Waiter.
    A statement by the defendant’s president that it would not sell the securities below the price of eighty, nothing being said by said president as to notice to the plaintiff in case a sale should be determined upon, was not a waiver of defendant’s rights under the agreement.
    Appeal from a judgment dismissing the complaint and directing a judgment in favor of the defendant upon a counterclaim.

      John R. Dos Passos, for app’lt; Joseph H. Choate and Edward W. Sheldon, for resp’t.
   Lawrence, J.

Originally there were two actions pending between these parties, one brought by the plaintiff, in the superior court, to recover $105,000 as damages for the alleged conversion by the defendant of certain stocks, bonds and securities, belonging to the plaintiff; the other being an action in this court, brought by the defendant against the plaintiff to recover a balance alleged to be due by the latter to the former, upon the closing of the loan and the sale of the securities pledged as collateral therefor.

When the action in this court was reached for trial, by consent of the parties, an order was entered removing the action in the superior court into this court, and consolidating the two actions into one, the result of which was that the cause of action alleged by the Trust Company, in the action in this court, was pleaded as a counterclaim. The transaction out of which the controversy between these parties arose, occurred on the 1st of March, 1884, when the plaintiff obtained a loan from the defendant of $300,000, for which he gave his note, as follows:

“ $300,000. New York, March 1, 1884.
“ Six months after date, without grace, I promise to pay to the United States Trust Company of New York, at the office of said company, in the city of New York, three hundred thousand dollars, for value received, with interest at the rate' of four per cent per annum, having pledged to the said company (as security, with authority to sell the same or any securities that may be substituted in lieu thereof on the non-performance of the promise, in such manner as they, in their discretion, may deem proper, without notice, either at the New York Stock Exchange or at public or private sale,, and to apply the proceeds thereon), four hundred thousand dollars Louisville and Nashville E. E. Co. first mortgage bonds, N. 0. and Mobile division. In case of depreciation in the market value of the security hereby pledged or which may hereafter be pledged for the loan, a payment is to be made on acount or additional approved security given so that the said market value shall always be at least twenty per cent more than the amount unpaid of this note.
“In case of failure to do so this note shall be deemed to be due and payable forthwith, anything hereinbefore expressed to the contrary notwithstanding, and the company may immediately reimburse itself by sale of the security.
“ W. S. Williams,
“82 Broad Street, Office Y. S. & Co.”

At the time of giving the note the plaintiff pledged and transferred to the defendant first mortgage bonds of the Louisville & Nashville Railroad Company (New Orleans & Nashville division), of the par value of $400,000. It is admitted that on or about the 1st of July, 1884, the defendant collected and received the sum of $3,500 for interest coupons, maturing on that day, and that on or about the 7th day of July, 1884, the plaintiff paid to the defendant the sum of $1,500, which sums the' defendant applied on account of said note. The note, by its terms, became due on the 1st of September, 1884, and unless the defendant waived, or consented to some alteration of those terms, the defendant would have been entitled, in the event of the failure of the plaintiff to pay it, to sell the securities pledged as collateral, without notice to the plaintiff, either at the New York Stock Exchange or at a public or private sale, and apply the proceeds to «the payment of the note.

Prior to August 5, 1884, the margin fell below the twenty per cent prescribed in the note, and on that day the defendant served upon the plaintiff the following demand :

“United States Trust Company of New York, )
“ 49 Wall Street, N. Y., August 5, 1884. j “ W. S. Williams, Esq. :
“ Dear Sir.—That there may be no misapprehension in regard to your time loan of March 1, 1884, we beg you to understand that we have made a demand for the payment of the loan, on the ground that the margin is below the twenty per cent conditioned for in your note, and request that you confirm the above by letter and return same by bearer, and oblige,
“Yours, very truly,
“L. G. H. A.,
Secretary."

On the same or the next day, the plaintiff sent to the defendant, this reply:

“ 82 Broad Street, August 5, 1884.
“ Dear Sir—I beg to confirm the facts as stated in yours of even date in regard to my loan of March 1, 1884, and to state in. reply that I shall very soon hope to make the margin good and trust no sales will be made of the securities for the present.
“ Yours truly,
“ W. S. Williams.
“ L. Gr. Hampton, as Secretary.”

It is claimed by the plaintiff that the defendant had waived its right to sell the bonds, by reason of the failure of the plaintiff to furnish more margin. That contention is based upon the evidence of the plaintiff, who testifies that at an interview between him and Mr. Stewart, the president of the company, either on the 1st or the 4th of August, the following conversation occurred:

“ Q. State all that was said on that occasion, whether it was the 1st or the 4th, when he said as you say, that he would not sell any bonds below eighty ? A. I went into the office of Mr. Stewart with the note in my hand notifying me of the sale of twenty-two bonds out of the call loan, out of the lot of fifty at the price of eighty; I said to Mr. Stewart, with this note in my hand, What does this mean ? you have been selling my bonds here; ’ he said: ‘ Then you must pay your loan; ’ said I: ‘ Certainly I will pay my loan, I did not know that you wanted it; ’ this was in reference to the small loan; he said : ‘ When will you pay it? ’ I said: ‘ I will pay it to-day, or it would suit me better on Monday; ’ this was Friday, August 1, 1884; Monday will do,’ was his reply; I said: ‘ I will bring you a check on Monday, you must not sell my bonds, they cost me a great deal more money, and I cannot afford to have them sold ; ’ he said, as he walked along the side of the railing, ' won’t sell any more of your bonds below eighty,’ leaving me to infer that I would have notice before he sold them.

The witness continued:

“ I do not know as there was any one else present; I think gentlemen were in the room; the market was then at about eighty, and since the 1st of March it had declined from about ninety or ninety-four; it didn’t decline any more after that, I believe ; during the time from the 1st of March down to the 1st of August it had declined; I do not think it had been all the time declining; it had declined from ninety to eighty-four and down to eighty; it would be in Mr. Stewart's discretion when the bonds would have got below eighty, and declining, as to whether he would need to sell to make his loan ; if he let them drop below seventy, relating to that loan, he would not get his loan out of the securities; he did not fix any limit below eighty at which he would not sell; I understood him to promise me that even though these securities would drop to fifty, still he would not sell without notice to me ; that was my understanding; I stated what he said, that he would not sell any of my bonds below eighty; he didn’t fix any limit of time that this promise of his would cover, any further than he said he would sell no bonds below eighty.
“ Q. Forever ? A. That was the way it was left, and I went out of that office, understanding that there was an agreement with him that he held these bonds at eighty, and not a dollar less in any event, and that there would he no change without notice to me; that was the way I understood it; nothing was said about notice, I was led to infer that; certainly he could revoke it by notice to me; from your reading of this stock-note, this promise of his as I swear to it, is evidently directly contrary to the provisions of the note that the company was always to be entitled to call for margin to the extent of twenty per cent above what was necessary to cover the loan; I understood Mr. Stewart’s agreement as I have stated; that was the understanding between Mr. Stewart and myself, and I left the office on the 1st or 4th of August with that impression or belief; I offered no inducement to Mr. Stewart for giving such an extraordinary change of this agreement; I paid him nothing except-to pay up the loan and take my securities away; I gave him no consideration on the 1st or 4th of August on the $300,000 loan; Mr. Stewart, the president of this company, made this promise, destroying the effect of the agreement in the note without any inducement or consideration, as a purely voluntary offer on his part; this is my positive assertion ; I did not think he was a fool for doing it; I think he knew of my responsibility; if my counsel, in his opening, stated that my whole fortune was involved in this $300,000 loan, and the bonds that secured it, he was mistaken, because I' was the owner at that time of over $1,200,000 of these bonds; I left the office that day understanding that Mr. Stewart would take- no action against me in the sacrifice of my securities without my being notified of it; I did not understand he gave up any agreement; I did not say that this promise was entirely contrary to the terms of this agreement, for twenty per cent; I do not know that it was; while he remained under a promise not to sell them at eighty, he, if he assumed the responsibility, could sell them, if he called for margin and I did not give it; I did not question his right to revoke it, but I went out of the office supposing that I should not be troubled without notice; I do not know whether I received the letter of August 5th (letter shown witness); I do not say I did not receive it; I have no recollection of having received it.”

It will be observed that this interview, if it took place on the 4th of August, happened only one day before the date of the letters above set forth.

In regard to the letters of August 5th, the witness testified as follows:

“ I say I have no recollection of having received that letter; I have not denied the receipt of it; you can bring it to my notice, however; that is my signature, but not my writing; unquestionably it was in reply to this letter which Mr. Hampton has proven ; I guess the trust company drew that for me to sign, and then I signed it; when I received this letter on August 5th, which I answered the next day, I saw at once that it was entirely inconsistent with the promise that I have testified that Mr. Stewart had made with me on the day before, and that letter is confirmatory to me that he did make the promise on the day before;' I regarded this letter as revocation of the promise, and I understood when I left on the 1st that he had the right to revoke it, of course; I do not think I went to Mr. Stewart after giving him a reply; I think I did not go to him and say, Mr. Stewart, your letter is inconsistent with the promise you made me yesterday; ’ I do not know as I gave it any consideration at that time; I do not remember that I did.
I was absent the greater part of the time between the 5th day of August, when I wrote that last letter, and the 1st day of September, when the loan fell due according to the terms of the note; I did not carry him any further margin as I promised by the letter of the 5th of August, or any security whatever; I knew he was refraining or holding the loan as it was, as a matter of pure indulgence to me, but not on the strength of that letter; I do not know that the letter had anything to do with it; I knew that by the terms of the contract he had a right to sell; the promise of the 1st of August had been revoked by this previous letter.”

It seems to us that the evidence of the plaintiff is entirely inconsistent with the theory that the defendant had waived any of its rights under the note.

He admits that the letter from the defendant was inconsistent with the alleged promise of Mr. Stewart; that he regarded it as a revocation of the promise, and that when he left after the promise was made, he understood that the defendant, had a right to revoke it of course. If there was no waiver of the rights of the trust company, as expressed in the note, we find no difficulty in affirming this judgment.

However stringent or harsh the provisions of the contract between the parties may seem to be, when viewed in the light of subsequent events, it was one which they were perfectly competent to make, and one which the plaintiff as a banker and financier in this city, since 1858, thoroughly understood. It is claimed however that the provision of the note, which permits the defendant to sell without demand and without notice, only applies to a sale necessitated by the failure of the plaintiff to keep his margin good.

This construction of the note we cannot assent to. It would be anomalous that a power to sell without demand and without notice, should be given for a failure to keep the margin good, and should not be agreed to, when the whole of the principal sum should become due.

Such a contract might be made, but it is not, in our opinion, made in this instance.

We have examined the exceptions taken by the plaintiff’s counsel during the trial, but do not regard them as well founded.

Our examination of the record in this case leads us to the conclusion that no error was made by the learned justice before whom the case was tried in dismissing the complaint, and as the evidence clearly showed that after the sale of the securities there still remained due to the defendant the sum of $2,465.87, a verdict was properly directed in favor of the defendant for that amount.

The judgment below must, therefore, be affirmed, with costs and disbursements to the respondent.

Van Brunt, P. J., and Daniels, J., concur.