author: Fitzsimons, J.

text:
    William L. Flagler, Resp’t, v. Julius Lipman, App’lt.

      (City Court of New York, General Term,

      Filed November 25, 1892.)

    Statute of frauds—Promise to pat debt of another.
    Under a promise to pay tlie debt of another if the creditor will release the original debtor, the promisor becomes the original obligor, and the promise is not within the statute of frauds and need not be inwriting.
    Appeal from judgment in favor of plaintiff, entered upon a verdict.
    E. A. Jacob, for app’lt; Menken Bros., for resp’t
   Fitzsimons, J.

The plaintiff made a contract with one Bell in October, 1889, to cement sidewalks, cellars, areas, yards, etc., in and about certain houses owned by Bell at Eighty-fourth street and Tenth avenue, which work was completed about June 1,1890.

Said premises were conveyed to one Schmitt, April, 1890.

Schmitt reserved enough money out of the purchase price to pay plaintiff when his work was completed.

During the ownership of Schmitt part of the work, of the value of $873, under said contract was done, and plaintiff had a right to file a lien against the premises for the value of his work done and materials furnished.

The work was completed by plaintiff at Schmitt’s request.

In July the. defendant requested the plaintiff to release Schmitt from the payment of said debt, and also to release said premises from the lien which he had against the same for such work, and verbally promised plaintiff that he would pay said claim, if such release was given.

On July 10th such a release was executed and delivered to Schmitt, the defendant made two payments under his said promise, amounting to $423, leaving a balance due of $450.

The payment of said $873 was tobe made in instalments; $223 was paid when release was signed, and the balance was to be paid when certain work was completed by Bell upon the houses then being built.

The defendant submitted his version of the transaction with plaintiff, which differed with plaintiff’s statement thereof, but the jury elected to believe the plaintiff, and disbelieve the defendant, which they had a right to do, and plaintiff’s version is substantially as above related, and we must draw from the evidence every possible inference favorable to plaintiff’s case.

Work of the value o£ $873 was done at the request of Schmitt, and was done in accordance with the terms of the Bell contract; therefore Schmitt was debtor to plaintiff for said work, and was such debtor when defendant in July agreed to assume the payment of such debt, if the plaintiff would release Schmitt and his premises from all claims for such work, which was done.

The defendant’s contention upon this appeal is that his promise being merely verbal is void, the statute of frauds requiring such promises to be in writing and signed by the person sought to be charged.

It is quite true that the statute of frauds requires an agreement or promise to pay the debt of another to be in writing, and signed by the person sought to be charged therewith, but the promise of defendant was not of that character. He promised to pay Schmitt’s debt, if plaintiff would release Schmitt and rely solely' and only upon him for the payment therefor.

Under such a promise, he becomes the original obligor, and, therefore, it was not within the statute mentioned, and his promise need not be in writing.

The court of appeals, in Brown v. Weber, 38 N. Y., 187, says: “ The test to be applied to every case is whether the party sought to be charged is the principal debtor primarily liable, or whether he is only liable in case of the default of a third person. In other words, whether he is the debtor or whether his relation to the creditor is that of surety for the performance by some other person of the obligation of the latter to the creditor.’’ Again, in Ackley v. Parmenter, 98 N. Y., 425, Rapallo, J., states the rule to be, the verbal undertaking is within the statute unless the defendant before making the promise had so dealt as to make the debt his own or had incurred a duty to pay the amount due to plaintiff.

These two cases, I think, state the doctrines of law applicable to this case. Here the defendant, by inducing the plaintiff to release his claim against Schmitt and his (Schmitt’s) property and promising to pay the debt due, became the principal debtor, he thus made the debt his own, and incurred a duty to pay the amount due plaintiff by Schmitt.

The fact that Bell did not finish his work in the Eighty-eighth street house does not affect the right of plaintiff to recover in this action.

Judgment affirmed, with costs.

Newburger, J., concurs.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    William F. Bailey, Resp’t, v. Nicholas Murphy, App’lt.

      (Court of Appeals,

      Filed November 29, 1892.)

    Attorneys—Settlement ín fraud op attorney’s lien—Counsel pees.
    On a motion to set aside a satisfaction given by a client in fraud of his attorney’s lien, the special term has no right to determine the amount of compensation due the attorney, as the costs are presumptively the measure of the attorney’s right, and if he is entitled to more on some express or-implied agreement, that amount must he first liquidated in some proper action between the attorney and his client.

      Appeal from order of the supreme court, general term, second department, affirming order vacating satisfaction of a judgment and permitting plaintiff's attorney to enforce his lien for costs and counsel fee.

      Irving Brown, for app’lt; Alonzo Wheeler, for resp’t.

       Modifying 32 St. Rep., 102.

   Finch, J.

The affidavits read on this motion sufficiently show that the settlement made by the plaintiff in the judgment was in fraud of his attorney and injuriously affected his rights. The settlement was made for an amount much smaller than the recovery accepted by the plaintiff without the knowledge of his attorney and with no provision for his payment, and the former immediately absconded and left the state, and is alleged to be wholly irresponsible. Under such circumstances the order of the special term vacating and setting aside the satisfaction entered of record as against the claim of the attorney for his compensation was proper, and should be affirmed without modification so far as it awards that relief. But it went further. It assumed to fix a counsel fee of $100 as due from the plaintiff to his attorney beyond the taxed costs to be protected by the lien. On this motion the court was not at liberty to determine the amount of compensation due to the attorney, if any, over and above the amount of the taxed costs. The latter were presumptively the measure of the attorney’s right, and if he was entitled to more, by virtue of some express or implied agreement, that amount must be first liquidated in some proper action between the attorney and his client, and cannot be arbitrarily determined upon a motion to vacate the satisfaction entered. The client has the same right to defend against such an asserted liability as belongs to him when any other claim is alleged, the existence or amount of which he disputes.

The order should be modified by striking out so much of it as awards a counsel fee, and as, modified affirmed, without costs to either party on this appeal.

All concur.


author: Gray, J.

text:
    Flora Jacobs, App’lt, v. David Morrison, Individually and as Trustee, Resp’t.

      (Court of Appeals,

      Filed November 29, 1892.)

      1. Vendor and purchaser — Marketable title — Conveyance by TRUSTEE.
    In an action to recover a deposit made on the purchase of premises offered at public auction by defendant and struck off to plaintiff, on the ground that the title came through an insolvent debtor, it appeared that the title was under a full covenant deed by one M., individually and as executor, to defendant, who on the same day had filed a declaration of trust that he accepted the conveyance for the purpose of selling the property, paying “ certain outstanding liabilities ” enumerated, and finally of depositing the balance to the credit of M.’s children. The proceeds of the sale were devoted to the creditors of the firm of which M. was a member. There was a firm creditor not included. M. was '• personally indebted to sundry persons,” he and his firm were “ financially embarrassed,” and he was an intemperate man, and being pressed by his creditors, had been induced to sign the deed to save something for his children. Held, that the convey-

      anee was perfectly good and operative between the parties to convey the full title, and plaintiff utterly failed to show that any doubt existed in regard thereto.
    2. Same—“ Financially embabbassed.”
    The finding that the grantor was “financially embarrassed” did not affect his conveyance, and was not equivalent to a finding of insolvency.
    Appeal from judgment of the New York superior court, general term, affirming judgment dismissing the complaint.

      Ambrose G. Todd, for app’lt; J. George Flammer, for resp’t.

       Affirming 47 St. Rep., 937.

   Gray, J.

This action was at law, to recover back a deposit made on account of the purchase money for premises in New York city, which had been offered at public auction and were struck down to the plaintiff upon her bid.

By the terms of sale the purchaser was to receive a good title in fee simple, under a conveyance “ by usual trustee’s deed ” and all liens and encumbrances were to be allowed out of the purchase money. Plaintiff refused to complete the purchase; objecting to the defendant’s title as coming through the voluntary conveyance of an insolvent debtor; who was also, either at the time incompetent to make any conveyance, or was induced to> make it by fraud, or duress.

The case on appeal does not contain any of the evidence, and the general facts are given in certain findings of fact proposed by the plaintiff and allowed by the trial court If the facts found by ,the court and embodied in the findings warranted the conclusion of law that the plaintiff had failed to make out a case and that her complaint should be dismissed, that is an end of the case. Also, we may presume that there was sufficient evidence in the case to sustain the finding of fact that “the plaintiff failed to maintain or establish her objection to the title, etc; ” if, when taken in connection with the other findings of specific facts, allowed upon the plaintiff’s request, there shall appear to be no inconsistent finding of a material fact, of which the appellant may claim to be entitled to the advantage, as supporting her objection to the title. Considering the facts detailed in the findings, we discover that the deed to the defendant was by one McAnneny, executing both individually and as executor of another, and conveying the land and buildings thereon, by full covenant deed to the defendant, David Morrison; with no limitation, or other description of person. There was executed on the same day by Morrison a declaration of trust; to the effect that he accepted the conveyance for the purpose of selling the property; of paying out of the proceeds of the sale “ certain outstanding liabilities,” enumerated in a schedule annexed ; and finally, of depositing the balance, less the costs and expenses of administration, to the credit and for the benefit of McAnneny’s, the grantor’s, children.

It appears that at the time of the execution of these instruments McAnneny was a member of a firm, and it was the firm’s creditors to whom the proceeds of the sale of the premises were in the first place devoted. Other facts found were that there was a firm creditor, whose claim was not included in the schedule; that McAnneny was “personally indebted to sundry persons;” that he and his firm were “ financially embarrassed; ” that he was a man suffering from habits of intemperance, and from certain resultant physical consequences, and that plaintiff was informed that McAnneny was wasting his property, and, being pressed by his creditors, had been induced to sign the deed in order to save something for his children.

I have stated all the facts which can be deemed to be at all material to the plaintiff’s contention, and I find nothing which casts any doubt upon, or affects, the title tendered by defendant. This was not a general assignment of McAnneny’s property. The deed to defendant and his declaration of trust, together, made out only a purpose, to transfer the particular property for .realization upon, and for paying thereout certain specified debts. The conveyance was perfectly good, and operative between the parties, to convey the full title. No rights of creditors intervened. There was no finding of fraud in the conveyance, or of insolvency in the grantor.

The finding that the grantor was “ financially embarrassed ” docs not affect his conveyance and certainly is not equivalent to a finding of insolvency. One may be “financially embarrassed” and yet be possessed of abundant property; out of the proceeds of which, when realized upon, his debts could be paid. We have the right to assume that the evidence showed, or that it was the fact, that McAnneny had other property applicable to the claims of creditors; either because the evidence given upon the trial is not here, or because of the absence of a finding to the contrary. If any creditors held claims which were liens upon the property, whether they were enumerated in the schedule attached to the trust declaration or not, they might have been discharged from the purchase moneys. As to creditors not having acquired liens upon the property, they could never attack the plaintiff’s title; for she bought in good faith, at public sale, and, as we may assume, for a full consideration, and it does not appear that she had any knowledge of any facts invalidating the title.

None of the facts exhibited in the findings, and which came to the notice of the plaintiff before her rejection of the title, were of such a nature as to charge the plaintiff with knowledge of any fraud vitiating the title. She was a purchaser for a valuable consideration, and any notice of fraud to be effectual to impair, or avoid, the title must have been actual. R. S., 3d vol., 7th ed,, 2330, § 5. As well under the statute as at common law, circumstances to put the purchaser on inquiry, who pays full value, are insufficient to affect the title, unless they are equivalent to a notice of a fraudulent intent. Stearns v. Gage, 79 N. Y., 102.

In Sugden on Vendors, chap. 10, § 3, 13-21, it is remarked with reference to objections to title, that a purchaser will not be permitted to object on account of a bare possibility, and that a mere suspicion of fraud is not sufficient. The remarks cover this case. The proof rises no higher than the possibility that Mc-Anneny’s habits and health were not such as to render him fit to manage his property. It displays at most an intention on his part, whether inspired by others or not is immaterial, to pay only certain creditors from this piece of property, and to reserve any balance for his children. That is neither proof carrying notice of any fraud nor proof furnishing any ground for an inference of fraudulent intent. Had every fact been known by the plaintiff at the time of the sale which is set forth in the findings, there would have been no reason for refusing to purchase upon grounds relating to the vendor’s capacity to convey a good title.

There is no force in the objection that a proper deed was not tendered by defendant. The title stood in his name, and he executed a deed with the usual covenants against the grantor’s acts. It does not appear from the record that any other conveyance was required.

We think that the plaintiff has utterly failed to show that, upon the facts found, any reasonable doubt existed about the title to the premises, or that it was in any way disputable; and her complaint was properly dismissed. For the trial court to allow the defendant to withdraw his demand for specific performance, upon waiving any rights to costs, was a matter lying within its discretion, and not reviewable here. Besides that, the question is not here, as I can discover, by any exception in the record.

The judgment should be affirmed, with costs.

All concur.


text:
    In the Matter of the Application of The City of Rochester to acquire certain Water rights.

      (Court of Appeals,

      Filed November 29, 1892.)

    1. Condemnation proceedings—Jurisdiction op fund paid over under a stipulation.
    A fund paid into court by the city of Rochester, as compensation for a water right taken from the land owner by condemnation proceedings, was once awarded to A. in a contest between him and the executor of the land owner, to which one B. was not a party. Before the money was paid over, B. intervened and the fund was transferred from the savings bank to A under a stipulation that he would account and pay over any part which rightly belonged to B, the same as if it had remained in the bank. Neld, that the transfer did not take the money out of court or end the judicial control over it, but merely changed the custody of the fund.
    2. Same—Opening judgment.
    A judgment in rem, at least before it is finally executed, is never so conclusive upon the court which rendered it as to prevent it from opening a default or vacating or setting it aside for sufficient reason.
    8. Same—-Lien op mortgages on land'taken by condemnation.
    The paramount right of the city withdrew from the lien of prior mortgages the water right condemned and transferred the entire title to the city, and the right of the mortgagees became merely an equitable lien upon the fund in the hands of the court, to be distributed by it to the extent of any deficiency which the land sold did not pay.
    Appeal from judgment -of the supreme court, general term, fifth department, affirming order on opinion of referee.

      Theodore Bacon, for app’lt Hamilton; Joseph S. Hunn, for app’lt Perkins; William F. Cogswell, for resp’t Holden.

       Affirming 45 St. Rep., 940.

   Finch, J.

The questions involved in this appeal arise from a struggle among creditors for a priority of payment out of a fund paid into court by the city of Eochester as compensation for a water right, taken from the land owner by condemnation proceedings. The fund was once awarded to Hamilton in a contest between him and the executor of the land owner, to which Holden was not a party. Before the money was paid over to Hamilton, Holden intervened, asserting a priority of equitable lien, and pending that litigation and because of it the fund was transferred from the savings bank to Hamilton under and by force of a stipulation which first recites the facts and then proceeds thus: “ How, therefore, it is stipulated and agreed that the said fund so on deposit in the Mechanic’s Savings Bank, or such part thereof as shall be withdrawn by said Hamilton in pursuance of the said order of this court, in case it shall be finally held either in the above entitled proceeding or in the said action that the same or any part thereof rightly belongs to said Holden, and any order or judgment shall finally be made which directs the same or any part thereof to be paid to the said Holden, the said Hamilton will account for the fund so withdrawn by him with interest thereon from the time of his withdrawal thereof to the time of such payment at the rate of four per cent per annum, and will pay over to said Holden such sum of money with the same effect and to the same amount as if the same had actually remained on deposit in the said savings bank at the rate of interest aforesaid.’’ In accordance with this stipulation the fund was transferred to the custody of Hamilton and Holden was allowed to intervene in the original proceeding and set out and assert his claims, which have been recognized as prior and paramount to those of Hamilton.

At. the outset of the argument it is contended on behalf of Hamilton that the fund is no longer in court; that it has been paid over to him in pursuance of a lawful order of the court for its distribution; and has ceased to be subject to control in the original proceeding. It is insisted that such proceeding is at an end, with all its purposes accomplished and all its authority exhausted, and that the sole remedy of Holden is through an action against Hamilton based upon the farmer’s equitable right and the terms of the stipulation. The objection is, of course, formal and outside of the merits of the controversy, but it goes to the jurisdiction, and if sustained is decisive of the appeal. But I am unable tó see that the transfer of the fund to Hamilton under fhe terms of the stipulation was intended to or did take the money out of court and end the judicial control over it flowing from the nature of the condemnation proceeding. The stipulation itself recites the existing situation as the cause and occasion of the agreement. The fund had been adjudged to belong to Hamilton as-between him and the executor of Smith, but nothing had been adjudged as against Holden, unless possibly by a default which, the court was at liberty to excuse and open. Holden intervened to stop and prevent payment of the fund under the existing order, to retain that fund in court and subject to another and different, judicial distribution founded upon claims and equities never as yet presented for consideration. He was endeavoring to lay his hand upon the fund with a view to keep it undistributed until his equities should be determined, and for that purpose had in progress and pending both an action and a motion to open his default, in each of which he had been defeated but had taken an appeal pending, and in aid of which he had moved to stay payment until the appeals should be determined. In this situation of affairs the stipulation was made, and it explicitly provides that if it shall be finally held either in the action or proceeding that the fund in whole or in part belongs to Holden, “the said Hamilton will account for it with the same effect and to the same amount as if the same had remained actually on deposit in the said savings bank.” The stipulation recognizes the pendency of the condemnation proceeding, Holden’s effort to be heard therein, his possible success, and Hamilton’s duty thereupon to pay over the fund; and it is subject to that right, subject to the power of the court in that proceeding to divert the fund to a new ownership, that the consent is given ; not to divest the court of the jurisdiction, but merely to change the custody of the fund. I think it wonld be a manifest perversion of the terms and purpose of the stipulation to hold otherwise.

Several further propositions advanced by the appellant may be considered together, since they admit substantially of one and the same answer. It is argued that Holden is bound by the original order which awarded the fund to Hamilton, because that was a proceeding in rem which bound every possible interest in the fund; because Holden aided and assisted the executor in that proceeding and so was represented by him; and because the order of this court embodied in its remittitur could not be changed or varied in the court below. All these things may be to some extent or in some manner true, without in the least touching the right of the court to open a default or let in to defend one who had omitted to assert his rights in regular and due season. A judgment in rem, at least before it is finally executed, is never so conclusive upon the court which rendered it as to prevent it from opening a default or vacating or setting it aside for sufficient reason. That Holden mistakenly supposed that his interest lay in the success of the executor, and so aided and assisted the latter, did not make him a party to the proceeding or involve his right to the fund as between him and Hamilton, and an order of this court, while conclusive between the parties litigating, does not prevent the opening of the judgment by the court whose judgment it has become for the hearing of a new party and the determination of a new claim.

The appellant further contends that title to this fund passed to the respective purchasers upon the foreclosure sales under the two prior mortgages upon the ground that the fund stood in the place of the land. It was to be so regarded for the purpose of measuring and settling the rights of the parties interested, In Matter of City of Rochester, 110 N. Y., 159 ; 17 St. Rep., 146; Utter v. Richmond, 112 N. Y., 610; 21 St. Rep., 818, but the paramount right of the city withdrew from the lien of the mortgages the water right condemned and transferred it to the city free and discharged from the mortgage liens. That occurred before either sale.

The balance of the land only could be sold and conveyed on the foreclosure; the referee’s deed could convey and did convey only that balance; and the right of the mortgagees became merely an equitable lien upon the fund in the hands of the court to the extent of any deficiency which the land sold did not pay. There was such a deficiency on the sale under the Smith mortgage. There could have been none on the theory that the whole fund was for sale and would pass by the referee’s deed. Application was made to the court for the payment of that deficiency, which was granted, and Hamilton thereupon paid it and has been allowed to retain that payment as against Holden. Pending the proceedings on the motion for distribution Hamilton has acquired the title of the purchaser, but that title covered only the land remaining under the lien of the mortgage. The fund was not sold; it simply remained in the hands of the court for distribution. As to it so much of the purposes of a foreclosure as consists in turning land into money was already accomplished, and the money stood in the place of the land for the purpose of equitable distribution and not as the subject of a needless and superfluous sale. Treating it as land to ascertain and fix rights could not alter the real and existing fact that it was proceeds of land already sold and merely awaited distribution according to the antecedent rights and liens of those interested. Neither foreclosure gave title to the fund, or altered the duty of proper distribution by the court. That fund was the product of a paramount proceeding which cut off every right in the water, both of owners and encumbrancers, so that there could be neither sale nor foreclosure as to that, and instead there remained an equitable lien upon the proceeds to be worked out by the court empowered to distribute.

Two further objections are made to the recovery by Holden; one that he is equitably estopped from setting up his lien by reason of a conversation with Hamilton relating to Smith’s affairs; and the other that Holden’s mortgage was a fraudulent and not a genuine instrument. It seems only necessary to say that none of the essential elements of an estoppel existed in the casual conversation relied on; and that the findings settle upon the evidence the question of fact as to the genuineness of Holden’s mortgage.

That mortgage had priority over Hamilton’s assignments, both as to its execution and its record; and over the Perkins’ mortgage because earlier executed, and, although that instrument was first h’ecorded, it gained no advantage from that priority because given ho secure an antecedent debt.

The order should be affirmed, with costs.

All concur.


text:
    Louisa Doolittle, Resp’t, v. Anna Stone, App’lt.

      (Court of Appeals,

      Filed November 29, 1892.)

    1. Pbincipal and agent—Investments—Accounting.
    In 1855 defendant’s intestate took $25,000 belonging to plaintiff for investment. In 1868 lie had $32,000, partly in bonds and invested in western securities yielding ten per cent. In 1882 he only had $94,000. Plaintiff led a simple life, not expending over $300 a year. On intestate’s death he had $151,000, of which defendant alloted only $64,000 to plaintiff, which left intestate $40,000 more than plaintiff, although he had a very small capital in 1855. The referee in this action found that in 1886 the amount dye plaintiff was $125,000. Held, no error.

      2. Same—Estoppel.
    Plaintiff was not estopped from demanding an account of the manner in which the duties of agent were performed, by her acquiescence in the method adopted by intestate, which consisted simply in a separation and identification of her securities.
    3. Same—Evidence.
    The referee refused to admit a book kept by intestate, making no reference to any other, not bringing down a balance of account and beginning four years later than the one put in by plaintiff,and containing a statement, “ all loans in my name belonging to L. Doolittle have now been paid except B. Mundy and proceeds invested in her name.” Held, no error; as this was an independent declaration in intestate’s own behalf.
    Appeal from judgment of the supreme court, general term, fifth, department, affirming judgment for plaintiff.

      E. A. Nash, for app’lt; M. H. Briggs, for resp’t.

       Affirming 45 St. Rep., 940.

   Finch, J.

The result reached by the learned referee before whom this case was tried seems to have astonished him, and at the outset surprised us. The intestate took the plaintiff’s money to the amount of twenty-five thousand dollars in the year 1855, and a few years thereafter, for the purpose of investment, and' in 1886 that sum is found to have increased in his hands to the amount of one hundred and twenty-five thousand dollars. Y7here interest at seven per cent, is compounded steadily, and without delay, a given sum doubles in about ten years, and during the thirty years of this agency the original twenty-five thousand dollars would have grown to two hundred thousand dollars, if there had been no losses and no delays, but a steady persistence in the process of accumulation. The losses are said to have reached thirty thousand dollars, and undoubtedly for very brief periods portions of the money lay idle and unproductive, and very probably some amounts were paid to and used by the plaintiff herself. Obviously, the possible results indicated were not reached, for in 1868 it is conceded that the amount in Stone’s hands was about thirty-two thousand dollars. Of this, eighteen thousand dollars was in ' United States bonds, drawing comparatively moderate rates of interest, but worth a considerable premium. Stone sold them and began the process of investment in western town and county bonds yielding a net interest of ten per cent. At that rate, compounded, the fund would double in about seven years, and so become in 1875 sixty-four thousand dollars, and in 1882 one hundred and twenty-eight thousand dollars. The referee finds in Stone’s hands at that date only about ninety-four thousand dollars, which leaves a margin of thirty-four thousand dollars for losses and delays, or withdrawals for expenses. It is shown that the plaintiff led a very inexpensive life, dwelling mostly with friends, who took her services in the place of board, and not expending upon herself more than about three hundred dollars a year. So that in a general way we can see that the ultimate result is not only possible, hut, upon the facts, also probable.

We may apply another general test to the situation developed by the evidence with a view of determining whether we ought to be surprised at the referee’s conclusion. At Stone’s death all his securities, held either as owner or agent, were found to amount to about $151,000. Of these about $64,000 in amount were admitted to be plaintiff’s and were placed in her possession, leaving $87,000 claimed to belong to Stone. In addition he had purchased and paid for, during the period of his agency, two farms at a cost of about $18,000, so that his accumulations reached about $105,000, or some forty thousand dollars more than plaintiff’s.

There is no proof that he started the process of accumulation in 1855 with a capital equal to that possessed by her. That he had some money at interest is testified to by his wife, but nothing indicates that it was a large amount. Assuming it to have been equal to that which he received from the plaintiff, it remains to be explained how it happened that his own capital grew to $40,000 more tnan hers, or adding the salt stock and gifts to his wife and children, to fifty or sixty thousand dollars in excess of the capital of the plaintiff.

His farms may have yielded a small interest beyond the support of his family, but it is difficult to see, looking back upon the manner in which the investments were made, why all the losses fell upon the plaintiff and her capital grew so much more slowly than his. These general views, which suggest not accurate but approximate results, lessen our surprise at the amount of the judgment and enable us to rest upon the facts found by the referee without grave anxiety.

nevertheless, we have examined the accounts with such patience and care as time and opportunity permitted, to see that the proof supports the findings and the better to appreciate the argument of the appellants upon their exceptions. That examination has shown not only that the findings have some evidence to support them, but that they scarcely admit of contradiction, and at all events are quite beyond our criticism or review upon this appeal.

It remains to consider the exceptions upon which the defendant relies. It is claimed in her behalf that the burden of proof was erroneously cast upon her. It is not denied that ordinarily she would be required to account and compelled to disclose and explain the manner in which the duties of the agent were performed; but it is argued that the plaintiff is estopped from demanding such an account by her acquiescence in the method adopted by Stone, which consisted simply in a separation and identification of her securities, and that the defendant should be charged only with simple interest and without rests. The burden of showing that Stone received a larger rate of interest than that prescribed in this state and steadily and regularly compounded it, was upon the plaintiff. The referee so held and in no instance ruled to the contrary. The plaintiff successfully lifted that burden. She proved the receipt by him of ten per cent interest down to 1882, and of seven per cent thereafter; that interest received was regularly and steadily invested; and made up the account from Stone’s memoranda and bank account; without reliance upon legal presumptions as such, but resting where direct proof was not available upon satisfactory inferences fairly flowing from established facts. It is not claimed that any erroneous ruling was made upon this branch of the case and we are unable to see that the referee unconsciously shifted the burden to the defendant. The details of the proof justify his conclusions..

The principal exception pressed upon our attention grows out of the refusal of the referee to admit in evidence what is known in the case as exhibit M. The plaintiff had put in evidence a book of accounts and memoranda kept by Stone as evidence against his representative. That began in 1878 and ended in 1878. It was not a regular book of account, admissible in evidence after preliminary proof in and of itself, but stood upon the ground of admissions made by Stone, of which the plaintiff chose to avail herself. She put them all in evidence.

Nothing in the book was rejected or excluded and the defendant had the full benefit of the whole declaration in all its parts. But exhibit M. was another and distinct and separate book, making no reference to any other, not even bringing down a balance of account, and beginning in 1888 or more than four years later than the one put in evidence by plaintiff. It is entitled “ Cash book kept for Louisa Doolittle,” and after entries of interest received and payments made contains, under date of March 10,1885, the following statement: “ All loans in my name belonging to L. Doolittle have now been paid except B. Mundy and proceeds invested in her name.” It is very clear that this was an independent declaration in his own behalf, which constituted no part of any account and did not become such because entered in a book containing accounts. It was no more admissible in defendant’s favor than if it had been an oral declaration by Stone made in 1885 to some third person. The general principle invoked on behalf of the appellant, that the whole of an admission should be taken together, does not reach a separate, distinct and disconnected admission made at a different time from that put in evidence. There was no error in rejecting the offered proof.

A question was raised on the argument over the amount of compensation allowed and credited to the agent, but we are unable to see in it any error of law. It was peculiarly a question of fact for the judgment of the referee based upon all .the circumstances of the case. We cannot say that it was not reasonable and sufficient.

The judgment should be affirmed, with costs.

All concur.


author: Peckham, J.

text:
    Edwin Young, Ex’r, Resp’t, v. James D. Leary, App’lt.

      (Court of Appeals,

      Filed November 29, 1892.)

    1. Charter party—Agreement to insure.
    On the 17th October, 1884, the W. Steamboat Co. let a steam propeller . for twelve months to McKay, for whom defendant became surety, to trade on the Florida coast. McKay agreed to procure a fire and marine insurance policy for $27,0U0 for one year on such boat, and also agreed that on the determination of the charter he would deliver the said steam propeller to the company “in New York harbor in the same good condition as she now is, ordinary wear and tear excepted;” he also “assumes all fire and marine and other risks of damage that may happen to said vessel, and also assumes all liability of every kind and nature, for which said propeller or its owners may be responsible during the term of this charter, which is not covered by fire and marine insurance hereinbefore mentioned.” McKay procured the insurance for the amount for one year, and, when it expired, the vessel still being south, he did not renew it, and the vessel was burned at sea in January, 1888. Held, that McKay’s agreement to respond for losses not covered by the insurance policy spoken of was limited to the period included in the charter party, viz., one year from October 17, 1884, andas said provision for insurance was complied with by McKay, no liability attached by reason of it.
    2. Same—Agreement to deliver safe in port—Waiver.
    Although tlie vessel was not destroyed at the time when by the terms of the original promise McKay had bound himself to deliver it in New York harbor, it was found by the referee that while the vessel was in southern waters negotiations were in progress by McKay’s agent in New York for its purchase, and subsequent to the date for return the terms of sale were substantially agreed upon, and on October 38 a purchase money mortgage was sent to McKay at Tampa in Florida, but the negotiations fell through, and a month later McKay sent the vessel north, and on its voyage it was burned. The referee found that if there was a waiver it was not material and constituted no defense, because defendant, the surety, participated in the negotiations and was a party to the delay. Held, error, entitling defendant to a new trial.
    Appeal from judgment of the supreme court, general term, second department, affirming judgment in favor of plaintiff,

      Esek Cowen, for app’lt; A. T. Clearwater, for resp’t.
   Peckham, J.

The questions in this case arise out of a charter party executed on the 17th of October, 1884, by the Washburn Steamboat Company and one McKay, for whom the defendant became surety. The company on the day mentioned let and McKay hired the steam propeller called the Alicia A. Washburn, of which the company was the owner, for the term of twelve months from October 17, 1884, to be employed in lawful trade between Key West and other points on the West Florida coast, on the terms and conditions mentioned in the charter party. Among other provisions thereof was one by which McKay agreed to procure a fire and marine insurance policy for $27,000 for one year on such boat, in the name of the company, and to pay the premium thereon as an additional consideration of the charter. McKay also agreed to pay a certain rent per month for the use of the boat, commencing on the 17th of October, 1884, and also agreed that on the termination of the charter he would deliver the said steam propeller to the Washburn Steamboat Company, or their legal representatives, in Mew York harbor, in the same good condition as she is now in, ordinary wear and tear excepted.” Another provision in the charter party was as follows: “ That said McKay hereby assumes all fire, marine and other risks of damage that may happen to said vessel, and also assumes all liability of every kind and nature, for which said propeller or its owners may be responsible during the term of this charter, which is not covered by fire and marine insurance hereinbefore mentioned.”

McKay procured in the name of the company a fire and marine policy of insurance upon the vessel for $27,000, for one year from October 17, 1884, and paid the premium' thereof as he had agreed to do in the charter party.

The vessel was burned at sea in January, 1886.

The defendant, subsequent to October 17, 1885, but prior to the time when the vessel was sent north, caused her to be insured against loss by fire for the sum of $17,000, and the vessel when destroyed by fire was insured in favor of defendant for that sum, which he thereafter collected and has since retained for his own use and benefit.

The defendant claims that by reason of certain facts, which will be hereafter adverted to, the plaintiff or his assignor waived die exact fulfilment of the agreement of McKay to deliver the vessel to the company on the 17th of October, 1885.

The company duly demanded of the defendant that he should cause the vessel to be delivered to it or pay the value thereof, which defendant omitted to do. The company then assigned its claim to Thomas Cornell, who commenced this action to recover from the defendant the value of the vessel because of the failure of McKay to deliver it to the company on the 17th of October, 1885, as he had agreed to do. Subsequent to the commencement of the action Cornell died, and it was thereupon duly revived in the name of the plaintiff, as executor of the will of Cornell. The action was tried before a referee, who gave judgment in favor of the plaintiff for the value of the vessel, $22,000, and interest thereon from the 17th of October, 1885, and also the sum of $1,232.34, with interest from same date, being the amount due and unpaid for the use and hire of the vessel. The judgment having been affirmed at the general term, the defendant has appealed here.

Before adverting to the facts which occurred while the vessel was in the possession of McKay, the charterer, it will be convenient to determine the nature and extent of his obligations by virtue of the charter party.

He agreed that he would procure a fire and marine insurance policy for one year in the name of the steamboat company for $27,000, and pay the premium thereon. It is.conceded that he did so., This policy expired by its terms on the 17th of October, 1885, and it was not renewed. There is no provision of the charter party providing for any renewal of such a policy. He also assumed, during the term of the charter, all fire, marine and other-risks of damage that might happen to the vessel, not covered by fire and marine insurance as thereinbefore mentioned. Also all liability, during the same term, of every kind and nature for which the vessel or its owners might be responsible. Thus, during the period of the running of the charter party, the risks of McKay as assumed by him were only such fire, marine or other risks of damage as were not covered by the fire and marine insurance which he had already agreed to, and which in fact he did procure. What such risks were is not very material, although there are risks not covered by such a policy. At any rate, as McKay procured the policy which he agreed to procure, and for the period agreed upon, no liability for the loss of the vessel attaches to him under this clause of the charter party. The cause, of the loss we may assume was from one of the risks which would have been covered by the fire and marine policy had that policy been in force. It had expired by its own limitation, and McKay was under no obligation to renew it. He had never in terms assumed a liability to refund for a loss of this kind. His agreement to respond for losses not covered by the insurance policy spoken of was limited to the period included in the charter party, one year from October 17, 1884. Thus, from whatever cause the loss occurred, the liability of McKay (and consequently of defendant) must be sought from some other clause of the charter party than the one now spoken of.

Another obligation assumed by McKay was to pay the rent as mentioned in the agreement, but there is no materiality in that liability so far as this question is concerned.

The remaining obligation of McKay under this charter party is contained in that provision by which he agreed, in the language already quoted, to deliver the vessel to the company in Hew York harbor.

It has been claimed on the part of the plaintiff in the courts below, and it is now urged here, that .this promise to deliver was on its face an absolute and unconditional one, and a failure to fulfil it would not be excused by the entire destruction of the vessel before breach, and without fault on the part of the charterer. It is true that the vessel was not destroyed at the time when by the terms of the original promise McKay had bound himself to deliver it in Hew York harbor. The question is whether the contract to deliver was absolute, and only to be complied with by an actual delivery within the time agreed upon, or whether a destruction of the thing hired before breach, and without the fault of him who hired it, would not absolve the latter from his contract. If it would, there is the further question whether the facts herein do not show a waiver of the contract to deliver at the specified date, and an implied extension of the time for such delivery and the destruction of the vessel within the time thus extended without the fault of the hirer. Or at least whether the facts proved were not enough to permit a finding of the fact of such waiver and extension.

The case of Harmony v. Bingham,, 12 N. Y., 99, is one of the leading cases of that class which must have controlled the judgment of the courts below in the case at bar. It was there reiterated as a principle well founded in the law of contracts, that inevitable accident- or any unforseen contingency not within the control of the party promising was no defense to an action founded upon the express promise to do the thing and a failure of performance. An act of Gfod, it was said, would excuse a party from performing a duty created by law, but not where such party had unconditionally engaged by express contract to perform. It is argued that here is an express promise to deliver this vessel in the harbor of New York, and as the promise was not fulfilled the promisor is liable and hence the liability of the defendant as his surety. We do not think that the law applicable to the class of cases of which that of Harmony v. Bingham, supra, is a conspicuous example, applies here.

The contract in this case comes, as it seems to us, under another class which relates to the hiring for use of the thing hired and where an express contract is made to redeliver the article hired upon the determination of the term of hiring. Even in such cases of express contract, there is implied a condition of the continued existence of the thing which is the subject of the contract, and if it perish without any fault of the hirer, so that redelivery becomes impossible, the hirer is excused. If a horse be delivered to one under an express promise to redeliver when demanded, and the horse die before demand and without fault on the part of the bailee, he is excused. Williams v. Lloyd, W. Jones, 179; Sparrow v. Sowgate, id., 29. Mr. S. Martin Leake in his digest of the law of Contracts, at page 706, says: “ The authorities establish the principle that where from the nature of the contract it appears that the parties must from the beginning have known that it could not be fulfilled, unless when the time for the fulfilment of the contract arrived some particular specified thing continued to exist, so that when entering into the contract they must have contemplated such continued existence as the foundation of what was to be done; then in the absence of any express or implied warranty that the thing shall exist, the contract is not to be construed as a positive contract, but as subject to an implied condition that the parties shall be excused in case before breach the contract becomes impossible from the perishing of the thing without the default of the contractor."

Several cases are referred to in support of this proposition. Among them are those in the note to Hall v. Wright, 96 Eng. Com. L., 745, at bottom of page 795 ; S. C., El, Bl. & El., 746; Taylor v. Caldwell, 3 Best & Smith, 826; S. C., 113 Eng. C. L, 826. Blackburn, J., says in last case, that the implication m an express contract of this nature that the thing itself shall be in existence when the person is called upon to fulfil his contract tends to further the great object of making the legal construction such as to fulfil the intention of the parties to the contract, for in the course of affairs men, in making such contracts in general, would, if it were brought to their minds, say that there should be such a condition. See also Appleby v. Myers, L. R., 2 Com. PI., 651, per Blackburn, J., 658. There is no question that a party can, if he so please, bind himself to deliver notwithstanding the thing may perish which he contracts to deliver. He does not thus bind himself by the use of the ordinary language as contained in this charter party. The above cases show this to be true.

When language like that found in this agreement is used, the condition of' continued existence is implied, and as thus interpreted it creates nothing more of an obligation than that which the law raises without any such promise. When language is used which does no more than express in terms the same obligation which the law raises from the facts of the transaction itself, the party using the language is no further bound than he would have been without it So it was held in the case of Ames v. Belden, 17 Barb., 513, where the defendant was sued for its value for not returning a steamboat according to the condition of the charter party by which defendant agreed to return the same at the expiration of the term in as good condition as it then was, excepting ordinary use and wear. The court said the language must be held to have reference to .the ordinary obligation of such a bailee to return the article hired, and defendant was exempt if, before the time arrived, the article had been destroyed without his fault This is only another way of saying that an obligation expressed in such language carries with it an implied condition that the article to be returned shall be in existence at the time when the obligation to return arises,- and if in the. meantime it has been destroyed without the default of the promisor, he is not bound by his contract thus expressed. The case is thus entirely supported by the cases above cited.

To the same effect is the case of Hyland v. Paul, 33 Barb., 241.

The same principle has been held operative in covenants or agreements contained in leases of real estate which included buildings and where the lessee has agreed to deliver possession of the same at the expiration of the lease in the same condition as at the date of the lease, natural wear and tear excepted. This obligation is subject to the implied condition that the building shall be in existence at the end of the term, and if before that time it was burned down without the default of the tenant, he is held not liable under his contract. Warner v. Hitchins, 5 Barb., 666; Genl. Term; McIntosh v. Lown, 49 id., 550 at 555; 1 Wood’s Land, & Ten. (2d ed.), 811, 813, notes; 1 Taylor Land. & Ten. (8th ed.), § 360, latter part of section.

It is otherwise if the lessee has covenanted to repair or rebuild. McIntosh v. Lown, supra; Phillips v. Stevens, 16 Mass., 238.

It seems to me as if authorities are not required upon the proposition that in a contract containing the ordinary language providing for re-delivery, an implication of continued existence of the thing to be returned is to be made, for, to again quote the language used by Mr. Justice Blackburn in Taylor v. Caldwell, supra, “in the course of affairs men in making such contracts in general would, if it were brought to their minds, say that such should be the condition.” There is nothing in the other portions of the charter party which affects in any way to the detriment of the defendant this particular question. If there had been no provision for insurance and the vessel had been destroyed by fire before the 17th of October, 1885, and without the fault of McKay, it seems to me plain that neither he nor his surety, the defendant here, would be liable on the promise to deliver the vessel in the harbor of New York. The provision for insurance was complied with by McKay and hence no liability attaches by reason of it.

We are thus brought to the consideration of the question of waiver or of the extension of the time for the fulfilment of the promise of McKay to deliver the vessel. It was not destroyed before the 17th of October, 1885, the time when McKay was bound by his promise to deliver it to the owners in New York harbor, and McKay failed to make such delivery and, consequently, if that failure be not excused, there was a breach of^ his agreement and the subsequent destruction of the vessel without his fault would furnish no excuse for such breach.

The defendant claims this obligation to deliver by October 17, 1885, was waived by the action of the officers of the steamboat company. From the findings and additional findings of the referee, and the evidence which has been returned, it seems that some time before the specified date and while the vessel was in southern waters negotiations were in progress through McKay’s agent or broker in New York with the officers of the company for the purchase of the vessel by McKay, who wanted to continue to use it in the Florida trade, and that during these negotiations the time for the delivery in New York passed.

Subsequent to that lime the terms of sale were substantially agreed upon, the vessel being still, to the knowledge of the company, in southern waters. On the 28th of October one of the officers of the company sent to McKay, who was then at Tampa, in Florida, a mortgage upon the vessel to be executed by him as a security for the payment of the purchase money and to be returned to the company after it was executed. The negotiations .finally fell through and were abandoned, and in the last of December or first part of January McKay sent the vessel north to be delivered, and on its voyage it was totally destroyed by fire.

The question arises whether under all the facts in this case there was a waiver of a punctual delivery of the vessel in the harbor of New York on the 17th of October, 1885, pending the negotiations for a sale, and if so, whether there was not an extension of time for such delivery until McKay had a reasonable opportunity to make it after the negotiations for a sale fell through. If there was such waiver and extension of time, a destruction of the vessel in the meantime without the fault of McKay would be a destruction before any breach of the contract on his part had occurred, and-in such case he would not be liable. See also Lindsey v. Gordon, 1 Shepley (13 Maine), 60.

I have not felt it necessary to mention all the-facts which might be urged as material upon the question of whether there was such waiver or not. I think the referee has come very near to a finding that there was a waiver. He has found a number of facts upon this question, and in his conclusion of law he said that the company, prior to October 17th, 1885, in no manner waived the return of said steamer by McKay to New York on October 17, 1885, other than by the delay occasioned by the negotiations for the purchase of the vessel by McKay, in which the company, McKay and the defendant participated in their efforts to perfect such sale.

The fact of waiver is not here squarely found, it is left somewhat in obscurity. The language seemingly indicates that the referee thought there was a waiver occasioned by the delay in the negotiations for a purchase of the vessel, but that such waiver was not material, because the defendant, although a surety, was a party to the cause which occasioned the delay, and an efficient actor in it with the others. This might be a full answer to a defense based upon defendant’s character of surety where he sought to avail himself of the fact of granting delay to his principal as operating to his discharge as surety. This is not the nature of the defense. If the delivery of the vessel on the 17th of October, 1885, had been waived by reason of these negotiations for its sale, and the time thereby impliedly extended until a reasonable time after their failure in which to make delivery in New York harbor, and if during such extended time the loss occurred by fire, without the default of McKay, such loss would in that event occur before breach of the agreement to deliver, and the liability of McKay would not attach, and defendant would not be liable as his surety. The fact that defendant participated in the negotiations, and thus was a party to the delay, would not be material in this aspect of the case. Although, as I have said, the finding of the referee as to the waiver may be somewhat obscure, yet if there be any obscurity, it is fair to adopt that construction which on its face seems the most natural. It would appear from the language used by the referee that he thought the facts were such as to amount to a delay granted McKay in which to deliver the vessel, but as the delay was consented to, if not brought about by the defendant himself, the delay constituted no defense. The case was not decided upon a correct basis as to the original liability of McKay on his contract to re-deliver. That liability was assumed to be greater than I think it was, and the effect of the waiver as a defense, if it existed at all, was misapprehended and misapplied. It seems proper to grant a new trial for that reason.

Upon the new trial all the facts may be put in evidence regarding this question of waiver or extension of time and with reference to its proper effect upon the question of defendant’s liability, separated from and regardless of the question of his assent to the delay already spoken of.

This is the result to be declared unless the fact that defendant procured $17,000 of insurance on the vessel prior to her being sent north is to have an effect sufficient to maintain the judgment. The referee finds that the defendant caused the vessel to be in-' sured against loss by fire for the sum of $17,000, and it was at the time of its destruction insured in favor of the defendant for that sum, and the defendant collected the insurance moneys and kept and retained the same for his own use and benefit and still keeps and retains the same. It does not appear from this finding that defendant insured the vessel for the benefit of the owners. On the contrary the finding is that he insured it for his own benefit, and, inferentially, on account of some interest which he had or thought he had in it One of .the witnesses for the plaintiff testified to the fact that defendant said he had insured the vessel for whom it might concern for $17,000. The referee alludes in his opinion to the testimony of the defendant as to why he procured tne insurance, but it nowhere appears that he effected it in any degree for the company. Another trial may develop the facts more in detail, and the question for whom the insurance was obtained may be vigorously investigated and its decision may have a most material effect upon the question of the understanding of the defendant as to the effect of the acts which are now claimed to constitute a waiver of delivery of the vessel. And if the insurance was made for the benefit of the owners, or "for whom it might concern, or to indemnify the defendant for any liability of his by reason of the signing of his surety contract, it may be that the plaintiff would have an action to recover from the defendant the amount of the insurance as for money had and received by the defendant to his use, or the complaint might be amended by the insertion of .proper allegations for the trial of that issue under these pleadings. The whole facts would then appear and the question might then be decided intelligently.

It may be that the defendant has collected moneys from the insurance company which in equity and good conscience he ought to pay to the plaintiff. We cannot say how this is upon the facts as now presented. It is safe to say that if it be so and it shall so appear, he will be cast in judgment for the amount he has thus received.

The referee did not base any liability of the defendant upon the fact that he had procured this insurance for $17,000 upon the vessel. There is nothing in his finding of facts which would sustain such theory and the opinion delivered by the learned referee entirely disposes of any such ground. What, if any, liability does exist by reason of this insurance procured by defendant can more fully appear in another trial.

Ño question arises in this record as to where lies the burden of proof as to the loss of the vessel and its cause. The casé was tried and decided upon a different theory and without reference to the question of burden of proof. It is not, therefore, necessary to now discuss it

For the reasons already given, the judgment should be reversed and a new trial granted, with costs to abide the event.

All concur.


author: Andrews, J.

text:
    Charles W. Hughitt, Resp’t, v. Frank M. Hayes, Rec’r, App’lt.

      (Court of Appeals,

      Filed November 29, 1892.)

    Specific performance—Set off.
    Plaintiff, in April, 1887, contracted orally with a hank for the conveyanee to him of certain premises, and in June thereafter took possession under the contract and made valuable improvements. The bank authorized its cashier to execute a conveyance, which plaintiff requested but which was delayed from time to time without his fault. The bank failed, having a balance to plaintiff’s credit of §2,204, accumulated for the purpose of paying for the land. Plaintiff also held as assignee a certificate of deposit for §500, which was purchased with the knowledge of the cashier for the same purpose, and an account for services rendered and materials furnished before the failure for §19.04. Held, that und -r equitable rules plaintiff was entitled to have the several claims held by him against the bank at the time of its failure applied as a credit upon the purchase price of the land.
    Appeal from judgment of the supreme court, general term, fifth department, affirming judgment in favor of plaintiff.

      Frank C. Ferguson, for app’lt; W. E. Hughitt, for resp’t.

       Affirming 46 St. Rep., 964.

   Andrews, J.

The findings by the referee that an oral contract was entered into between the plaintiff and the bank in April, 1887, for the sale by the bank to the plaintiff of the premises in question for the.sum of $3,150 ; that in June thereafter the plaintiff took possession under the contract and made large and valuable improvements upon the land with the knowledge and consent of the bank ; that the bank authorized its cashier to execute a conveyance to the plaintiff pursuant to the contract; that prior to its failure the plaintiff requested the cashier to execute a conveyance, which was delayed from time to time without fault of the plaintiff; that the plaintiff, until the failure of the bank in 1887, was willing and ready to fulfil the contract on his part, and that after such failure he repeatedly requested the receiver to make such conveyance and offered to perform the agreement on his part, with the proviso that the plaintiff’s claims against the bank should be allowed and credited on the purchase price of the land, were not excepted to and must, therefore, be taken as undisputed facts in the case.

The claim of the plaintiff to have the demands held by him against the bank at the time of its failure applied in reduction of the purchase price of the land, presents the only question of any difficulty arising upon the record.

The facts upon which the claim is based are also found and are not challenged by any exception. At the time of the failure of the bank there was a balance in the bank to his credit as depositor upon an open account of $2,204.05, subject to his draft He also held as assignee a certificate of deposit for $500 issued by the bank and payable on demand, and he had an account against the bank for $19.04, for money paid and for services and materials rendered and furnished at its request.

By the judgment these several sums were directed to be credited to the plaintiff on the purchase price of the property. The deposit account of the plaintiff with the bank commenced in 1887, and was drawn upon by the plaintiff from time to time in. the usual course of business. Shortly before the failure of the bank the plaintiff for the third time requested the cashier to convey the land pursuant to the contract, and he promised to make the conveyance without further delay. Thereafter the plaintiff accumulated his deposits in the bank for the purpose and with, the intention of using the balance to his credit in paying lor the land when the deed should be ready for delivery, which purpose .and intention was known to the cashier, but no application was in fact made, nor was any agreement made between the plaintiff and the bank that it should be so applied, or which would have prevented the plaintiff from applying the deposit to any other purpose.

The plaintiff purchased the $500 certificate with the view of applying it towards the payment for the land, and before its purchase the cashier of the bank knew of the proposed purchase and of the purpose of the plaintiff and assented thereto. •

The account of $19.04 was rendered by the plaintiff to the bank before its failure, and it was agreed between the plaintiff and the cashier, acting for the bank, that it should be adjusted on the final settlement for the purchase price of the land. It is not claimed that the plaintiff, at any time prior to its open failure in 1887, knew of the insolvency of the bank, or of any fact affecting its credit •

We are of opinion that under equitable rules the plaintiff is ■entitled to have the several claims held by him against the bank .at the time of its failure applied as a credit on the purchase price of the land. The claim is resisted in behalf of the general creditors. It is not pretended that the general creditors relied in giving credit to the bank upon its ownership of the land in question, or upon the particular fund represented by the purchase price in the contract of sale. It is insisted that equity requires that the plaintiff should pay the purchase price of the land to the receiver and stand with the other creditors in respect to his claim against the bank, sharing ratably with them in the distribution of the assets. But while it is the general rule in the administration of the estate of an insolvent, that equality among creditors is equity, it has never been decided either under the statute of set-off, or by courts of equity in applying the doctrine of equitable set-off, that the rule of equality among creditors requires courts to ignore the principle that only the balance, in case ■of mutual debts, is the real sum owing by or to the insolvent.

In this case both the claims were liquidated or capable of ascertainment by mere computation. It is true that the bank could not have maintained an action to recover the price of the land except upon formal tender of the conveyance, and, technically, its claim had not accrued. If nothing had occurred' except the making of the oral contract, it could have been enforced by neither party. But the part performance had taken the case out of the statute, and the plaintiff was entitled to enforce the contract, and without surrendering possession he could not question the right of the bank upon tendering a deed to recover the purchase price. By taking possession, and bringing the action, he affirms the contract .and admits his liability to perform it. Technically the debt owing by the plaintiff was not due when the bank failed, because the Tank had not conveyed or offered a conveyance pursuant to the contract. So, also, the claim of the plaintiff against the bank on the deposit and certificate could not be enforced without demand before action brought, and no demand had been made. Downes v. Phænix Bank, 6 Hill, 297. But claims in the eye of a court of equity will be regarded as due, notwithstanding the absence' of a technical demand, when equitable considerations require that they shall be applied each to the other. Smith v. Felton, 43 N. Y., 419 ; Richards v. La Tourette, 119 id., 54; 28 St. Rep., 609. The natural equity that cross demands1 shall be applied to the satisfaction of each other is the foundation of the statute of set-olf, but equity adjudges such satisfaction in cases not within the statute, under limitations which are very clearly stated by the chancellor in Holbrook v. Receivers, etc., 6 Paige, 220.

The insolvency of one of the parties is a material circumstance. There must be mutual debts and credits, and although the debt due from the insolvent may not be due, the creditor may waive the credit, and a court of equity will then apply it upon the debt from the insolvent, if that has matured.

In the present case the debts were not extinguished by agreement between the parties, but it is a strong equitable circumstance that it was understood between the plaintiff and the bank that the plaintiff was accumulating his deposit and that he was to purchase the certificate in anticipation of the payment he was to make upon the contract, and, acting upon this purpose, he did permit the deposit to remain and purchased the certificate. It is urged that as the plaintiff is seeking a specific performance, he must tender specific performance on his side. In most cases of set off there is a departure from the exact obligation of the respective parties. In case of set off of mutual debts, neither party performs the specific obligation which he incurred.

The substance of the contract for the sale of the land was, that the bank should convey, and that the vendee should pay the agreed price. It is no departure from its essential character than the bank or its receiver should accept as payment the money already in its hands, or its indebtedness to him on a money demand.

We think the judgment below is justified by the principles of equity and it should, therefore, be affirmed.

All concur.