text:
    Lewis H. Carpenter et al., Resp’ts, v. Coles A. Carpenter et al., Appl’ts.

      (Court of Appeals,

      Filed February 9, 1892.)

    1. Fraud—By persons sustaining trust relations.
    The ancestor of the parties hereto died, leaving real estate, which he devised, after a life estate, to them. Some of the farms were mortgaged, and one of the executors, an uncle of plaintiffs, induced the mortgagees to foreclose, and procured the property to be.bid inbyone of the defendants, who then conveyed undivided parts to all the other defendants, thus depriving plaintiffs, the children of two deceased brothers, of their shares in the inheritance. Held, that defendants had violated their duty toward plaintiffs, their co-tenants, as not only could the rents and profits of the realty have been used to pay the interest, but the executors had loaned the tunas of the estate to pay one of the mortgages, and defendants were liable as trustees to pay plaintiffs their share in the property.
    3. Same.
    A year after the foreclosure, the executors brought a partition of a certain property belonging to the estate, but as this was regularly prosecuted, all parties in interest being joined and served, no legal duty was violated, by the defendants in instituting the partition, and they could not be-charged as trustees in respect to that property.
    Appeal from judgment of the supreme court, general term, second department, affirming judgment of special term in favor of plaintiffs and reversing judgment dismissing their complaint as to the dock property.

      Josiah T. Marean, for app’lts; Óscar Frisbie and N. G. Moak, for resp’ts.

       Reversing in part 35 St. Rep., 512.

   Andrews, J.

James S. Carpenter died April 19, 1880, leaving surviving him a widow and seven children, and also the children of a son, Smith S. Carpenter, who had died before him, all of whom were minors. Jesse L. Carpenter, another son of James S. Carpenter, died a few days after his father, leaving a. widow and six children, two of full age and the others minors. James S. Carpenter left, real estate of the value of $65,000 and Over, and personal property of the value of about $74,000. His-real estate consisted of three parcels, viz: the “ Homestead ” farm, of about forty-one acres, of the value of $25,000, subject to a mortgage long past due, known as the Duryea mortgage, on which was unpaid $4,000, with interest from November 1, 1879; the “ Downing ” farm, of about seventy-nine acres, of the value of $40,000, subject to a mortgage, past due, known as the Downing mortgage, on which was unpaid $5,000, with interest from November 1, 1879, and certain other real estate known as the “ Dock ” property.

He left a will under which his real estate went to his children and their issue, one-eighth to each child and one-eighth to the issue of his deceased child, subject to a provision for the occupation of the house and lot on the “ Homestead ” farm by certain members of his family. The use of his personal property was given to his widow for life, and after her death it was distributable among his children and their issue as in the case of the real estate. He appointed executors, among whom were his sons' Coles A. Carpenter and Charles W. Carpenter, two of the defendants,who alone qualified. The executors managed and controlled the real estate from the time of the testator’s death up to the time-of the foreclosures to be mentioned.

The plaintiffs are the children of the testator’s two sons, Smith. S. Carpenter and Jesse L. Carpenter, and the widow of the latter, and the defendants are the widow and the six children of the testator, who survived him, and are still living. The evidence clearly shows that soon after the death of the testator the defendants entered into a scheme to obtain, through a foreclosure of the “Duryea ” and “Downing” mortgages, title to the property covered thereby for the purpose of cutting off the interest of the children of the deceased brothers therein. To this end, in September, 1880, they procured the holders of the mortgages to commence foreclosures, and under judgments obtained in the, foreclosure actions the property was sold in March and April, 1881, and was bid in by one of the sisters for the amount due on the mortgages respectively, and costs, and immediately after the execution of the referee’s deeds the purchaser conveyed to the mother (now deceased) a life estate in the “ Homestead ” farm, and to each of her five brothers and sisters one-fifth part of the “ Homestead ” farm and of the “ Downing ” farm in fee.

Before conveying to her brothers and sisters, Sarah J. Osborn, the purchaser on the foreclosure sales, executed to the holder of the “ Downing ” mortgage a new mortgage on the lands covered by that mortgage in payment of the mortgage foreclosed, and to her brothers, Coles A. Carpenter and Charles W. Carpenter, as executors, a mortgage for $5,000 on the “ Homestead ” farm to secure them for money advanced by them out of the estate of James S. Carpenter to pay the holder of the Duryea mortgage the sum due on that mortgage and the costs. It is unnecessary to state more particularly the facts tending to show that the foreclosure of the two mortgages mentioned was contrived by the defendants for the purpose of accomplishing the scheme for depriving the children of the two deceased brothers of their share in the inheritance.

The holders of the mortgages had made no demand of principal or interest on their securities. They had allowed them to stand for many years after they became due, without seeking to enforce collection. The interest had been paid up to November 1, 1879, and the foreclosures were commenced in September, 1880. The mortgages were amply secured upoii property worth many times their amount, and there is not the slightest reason to suppose that any measures would have been taken at the time by the mortgagees to foreclose the mortgages if they had not been prompted to do so by the defendants. The holder of the Duryea mortgage testified that he was approached by the defendant Coles A. Carpenter, one of the executors, who said " he would like to have me foreclose the mortgage; that it would be a favor to them all, in order to settle up the affairs of the estate.” The proof is less explicit as to how the foreclosure of the Downing mortgage was brought about, but the circumstances surrounding the transaction preclude any doubt that it was by the active intervention of the defendants.

The judgment in this case adjudges that the title to the “ Homestead ” farm and to the “Downing” farm, acquired by the defendants under the foreclosures and the deeds in severalty subsequently made, is held subject to a trust in favor of the plaintiffs to the extent of a one-fourth interest in the property, and we are asked to reverse the judgment on the ground that the defendants did nothing more than they had a legal right to do, for the purpose of disencumbering their shares of their father’s estate of the mortgages and separating their interests in the property.

It would be a matter to be regretted if we should be compelled by any principle of law to uphold a transaction so repugnant to every sentiment of honor, and which is instinctively condemned in the forum of conscience. We assent to the claim of the learned counsel for the defendants, that before a plaintiff can invoke the action of a court to give him redress of any sort he must show that at some point in the history of his grievance a right, not ethical merely, but cognizable in the domain, of law, has been violated, or that some trust duty owed toward him by some one has been actively or passively disregarded. But that a duty •cognizable by the law has been violated in this case by the defendants cannot, we think, admit of doubt. It is probably true that neither the principal nor interest of the mortgages was a charge upon, or payable out of, the personal estate of James S. Carpenter in the hands of his executors, 1 B. S., 749, § 4, and the general direction in the will to his executors, “To pay all just and legal demands against his estate,” is insufficient to charge the personal estate with mortgage debts.

But the executors and the other defendants, together with the children of the two brothers, deceased, were tenants in common of the real estate. The issue of the deceased brothers were also interested in the personal property of the testator, the extent of which interest could not be ascertained until an accounting by the executors. The executors took possession of and controlled the ¡real estate from the death of the testator, and received the rents and profits from that time and held them for the common benefit of all the parties interested. It appears that there were several tenement houses on the “ Homestead ” lot; that the executors continued to work a clay bed on the premises, selling material therefrom. It is claimed by the defendants that no rents or profits had been received up to the foreclosure, out of which the interest on the mortgages could have been paid. The trial judge refused to find this to be true. The executors kept no accounts of the rents and profits. They seem to have been handed over to the mother. In the absence of clear proof on the subject, a court, in view of the circumstances, is justified in assuming that the rents and profits of the realty were available and sufficient to have paid the comparatively small amount due for interest on the mortgages, and this clearly is all that the mortgagees, upon the facts shown, would in any event, have required. The executors not only omitted to use the rents and profits for this purpose, or to pay their own share of the interest, but they also loaned the funds of the estate to pay one of the mortgages, for this was the substance of the arrangement in respect to the Duryea mortgage.

The transaction by which some of the tenants in common ■claim to have acquired the whole estate to the exclusion of their ■co-tenants, cannot be upheld within the principle of many cases. Van Horne v. Fonda, 5 Johns. Ch., 388; Knolls v. Barnhart, 71 N. Y., 474; Rothwell v. Dewees, 2 Black (U. S.), 613; Dubois v. Campau, 24 Mich., 361.

The defendants and the plaintiffs had a community of interest in a common title, arising under the devise. The defendants, or some of them, were in the actual possession and control of the common property. They were bound to do nothing with a view to prejudice the interests of the plaintiffs. They could not buy in an outstanding title, to defeat the right of their co-tenants. If the foreclosure of the mortgages was a proceeding hostile to the el ef end ants, and they not been in default, and their purchase was-made of necessity to protect their own rights, with full knowledge of the situation on the part of the plaintiffs, the moral and perhaps the legal aspect of the case would be altered. But to-permit the plaintiffs, all but two of whom were infants, to be cut. off by a proceeding instigated by the defendants for that very purpose, and in the absence of any effort on their part to avert the danger, and when they were in actual possession of the common property, receiving the rents and profits, is not a mere ethical grievance, but one which the law will recognize and redress.

We think the judgment below, so far as it respects the “Homestead ” and the “ Downing ” property, stands upon a firm, equitable and legal foundation. The subordinate points as to the principle of the accounting are not, we think, well taken. Nor do we think that the widow of the testator took the “ Homestead under the will, but that that passed with the other “ landed property” to the children and their issue, subject only to the right of occupancy of the house lot under the provision before referred to.

We are of opinion, however, that the general term erred in reversing the judgment of the special term as to the “Dock ” property. The action for the partition of that property was brought a year later than the foreclosures. It was regularly prosecuted, all parties in interest having been joined in the action and servedi with process, and a sale- made under the judgment. We think the evidence does not show that any legal duty was violated by the defendants in instituting the partition, dr that they can be charged as trustees for the plaintiffs in respect of that property-

The result is that the judgment of the general term, so far as it reverses the judgment of the special term, should be reversed, and that the judgment of the special term should in all things be affirmed, without costs, to either party in this court.

All concur.


source: Caselaw Access Project

author: Gray, J. Earl, Ch. J.

license: Public Domain

text:
    The People, Resp’ts, v. Henry E. Kane et al., App’lts.

      (Court of Appeals,

      Filed February 9, 1892.)

    1. Malicious mischief—Penal Code, § 654.
    Defendant was indicted for destroying a boat placed upon his father’s.pond .by one Davis, which had several times been replaced thereon by Davis after being removed. Defendant acted under advice of his lawyer in breaking up the boat. Upon the trial the judge, after charging that the destruction of the boat was unlawful, refused to charge, as requested by defendant, that “ if Davis persisted inputting his boat upon the pond, against the wishes of Kane, he had a right to destroy the boat, if necessary, in defense of his possession.” Held, error.
    2. Same.
    In order to establish the offense charged, the elements of an unlawful and of a willful destruction of property must exist and be proved. Though a destruction of property may have been willful, whether it was unlawful may be a question which should be decided by the jury upon the evidence, showing the cause or motive.
    (Earl, Oh. J., and O’Brien, J., dissent.)
    Appeal from judgment of the supreme court, general term,, second department, affirming judgment of general sessions of Suffolk county, convicting defendant of the crime of malicious mischief.

      Livingston Smith, for app’lts; Benjamin H. Reeve, dist. atty., for resp’ts.

       Reversing 39 St. Rep., 751.

   Gray, J.

The defendants were indicted and convicted under § 654 of the Penal Code, for the unlawful and willful destruction of property. The property destroyed was a row boat belonging to one Davis. There was no dispute as to the willful destruction of the property and it occurred under these circumstances. Its owner had placed it upon the waters of a mill pond, which was indisputably part of the property of one Edward Kane. Davis had been more than once notified by Kane that he must remove the boat; but he refused to do so. Kane then caused it to be removed from the waters of his pond and to be placed upon Davis’ land, which bordered upon this pond. Davis then put it back in the water. Kane again removed it and placed it on Davis’ land; but Davis put it back and this time chained it to a tree to prevent its further removal by Kane. Kane having gone to Europe, about the time, had placed his son, one of these defendants, in the possession and care of his property, informing him of his efforts to keep Davis from putting his boat on the pond and instructing him to see to it that Davis did not further trespass on their property. When Davis persisted in using the pond and put his boat. back on its waters, the defendant Kane, as he testified, believing in his right and advised thereto by his lawyer, with the aid of the other defendant broke up the boat. It was done openly and without any conflict or riotous disturbance. Thereupon this indictment followed. The trial judge having charged the jury, as a proposition of law, that the destruction of the boat was unlawful, upon the conclusion of his charge the defendants requested of him to charge that “ if Lewis S. Davis persisted in putting his boat-upon the pond, against the wishes of H. E. Kane, he had a right to destroy the boat, if necessary, in defense of his possession.”

“ The Court: I decline to charge that as applicable to this case, because I have already charged you, gentlemen, that under the circumstances of this case there was nothing justifying the defendant in destroying this boat as he did. Of course, as a general proposition in the defense of property, if a horse or any animal is trespassing upon your property, you have a right to use such force as may be necessary. So, if a man attacks you upon your property, you have a right to defend your possession, and use such means as are necessary to its defense. But I instruct you upon the evidence existing in this case, that the boat being there in the pond, even conceding the title of the pond to have been in Kane, that he had no right to actually break up and destroy the boat, and no right of property applicable to him justified him in so doing.”

To this charge, and to the refusal to charge as requested, the defendants excepted, and their exception presents the one question for our consideration upon this appeal.

I presume that the trial judge, in so charging, must have interpreted the provisions of § 654 of the Penal Code to exclude airy-excusable cause for the destruction of property. I think he erred in his ruling, and in charging as he did. Under this section, in order to establish the offense charged, the elements of an unlawful and of a willful destruction of property must exist and beprovéd. Though a destruction of property may have been willful, whether it was unlawful may be a question which should be decided by the jury upon the evidence showing the cause or motive. If it was intended that the act alone should constitute the crime, irrespective of the motive, then I do not think the legislature would, in enacting the section, have used the expression “ unlawfully.” It would have been sufficient to have said “willfully.” To the presence of the word “unlawfully ” in the section I think we must give some importance and significance.

It may be conceded that the intention with which the offense charged in the indictment was committed is not material to be proved by the People. They may rest upon giving proof of the destruction by the defendant of the property as constituting an offense; but it is perfectly competent for the accused to give evidence in proof of a justification for his act, and then it becomes a question for the jury to decide upon the evidence, whether there was excusable cause for the destruction of the property or not. The intent to destroy undoubtedly existed; but if the jury should believe it to be shown by the evidence that the act was in defense of the possession of property, the criminality was lacking which constitutes the punishable offense against the People. That is claimed by the appellants to have been the case here and there certainly was evidence upon which the jury might have found that they did the act in defense of the possession of their property.

I cannot think that there is such a difference in principle between a case of assault and battery in defense of one’s property and that of a destruction of property in the same cause, as that in the latter case it is always unlawful and therefore punishable by the statute, while in the former it may be justifiable.

It has been frequently held that one who is owner and in possession of premises has a right to defend their possession and that defense may justify an assault and battery. Harrington v. The People, 6 Barb., 607, 612; Filkins v. People, 69 N. Y., 101, 106.

In this case it was shown by the evidence that Kane’s efforts to prevent Davis from using his property by placing his boat upon it had been persistently opposed and defied. If it had been so flagrant a case as actually to obstruct a proper and rightful enjoyment and use of his property, was Kane bound to submit to it, or 'to litigate the matter in the courts? I cannot think so. That, in the particular case, the trespass or obstruction may not have been such as to occasion the greatest inconvenience to the property owner, is not a consideration which affects the question of the right. The ownership and possession of property confer a certain right to defend that possession, and I am unable to perceive wherein lies the essential difference in principle between a defense of it which results in an assault and battery and that which results in the destruction of the means used to invade and interfere with that possession. Whether the act done, in either case, was really in defense of one’s possession, its character and motive present a question which should be submitted to the jury.

In refusing to allow the jury to take into consideration the circumstances of this case and in instructing them that upon the evidence the defendant had no right to destroy the boat and that no right of property justified him in so doing, I think the trial judge seriously erred and that, therefore, there should be a reversal of the judgment below and a new trial ordered.

Earl, Ch. J.

(dissenting).—The defendants were indicted under § 654 of the Penal Code for unlawfully and willfully destroying a small boat which belonged to Lewis S. Davis. They pleaded not guilty, and the indictment was brought to trial in the court of sessions of Suffolk county.

The proof showed, without any dispute, that Davis had placed the boat upon a pond of water belonging to the father of one of the defendants; that the owner of the pond had repeatedly requested Davis to keep the. boat therefrom; that he persisted in placing it there, and after the owner of the pond had several times removed it therefrom, he gave instructions to- the defendants to destroy it, and they did destroy it by knocking it to pieces with an axe, in the absence of Davis. The defendants were found guilty and fined, and they now claim that the facts found did not show them to be guilty of any crime.

The main contention of the defendants is that they acted under the advice of counsel that they had a right to destroy the boat and to protect the pond by its removal therefrom in that way, and that they believed they had a right to destroy the boat, and therefore had no guilty intent and could not be convicted of any crime.

The indictment describes the alleged crime in the language of the statute. The offense is precisely defined in the statute, and all it was necessary for the People to prove was that the defendants had unlawfully and willfully destroyed the boat. It was shown that they did it unlawfully, as they did it without any right or any authority of law. It was shown that they did it willfully, as they did it intentionally and purposely. A guilty or wicked intention,-which is the essence of many crimes, although' not of all, was not made an element of this crime, and it cannot be implied as a necessary ingredient of the crime from the words “ unlawfully and willfully ” used in the statute. Anderson v. How, 116 N. Y., 336; 26 St. Rep., 787. We think the statute was intended for precisely such a case as this, to protect property against the willful and unlawful destruction thereof- by any person, and to secure the peace and good order of society by compelling individuals to resort to the law in disputes about property rights and trespasses, and to have such disputes adjusted by peaceful methods in the appropriate judicial tribunals.

In this case if Davis persisted in unlawfully putting his boat upon this pond the owner of the pond could have sued him for trespass and recovered whatever damage was caused thereby, and such suits he could have repeated from time to time, and when it became apparent that they would not be adequate to protect his pond from the repeated trespasses, he could have commenced an action in equity to restrain Davis from placing his boat upon the pond, and in such a case an equity court would have jurisdiction for the purpose of preventing a multiplicity of suits. So the owner of the pond was not without an adequate remedy, and there was no necessity for the destruction of the boat in order to protect his pond.

There was no error in the rulings of the trial judge, during the trial, or in his charge to the jury, and the judgment should be affirmed.

Judgment reversed and new trial ordered.

Andrews, Finch and Peckham, JJ., concur; Earl, Ch. J., reads dissenting opinion, and O’Brien, J., concurs; Maynard, J., takes no part.


author: Vann, J.

text:
    In the Matter of the Application for Removal from Office of Thomas S. King as Police Justice of the City of Buffalo.

      (Court of Appeals, Second Division,

      Filed February 9, 1892.)

    1. Costs—Proceedings to remove justice —Counsel fee not allowed —Laws 1847, chap. 280, § 25—Laws 1880, chap. 354, § 1.
    There is no authority for the allowance of costs to counsel in proceedings to remove justices of the peace from office, instituted after the amendment of 1880, chap. 354, § 1, was passed.
    2. Same—Appeal.
    This court has jurisdiction to review an order directing the payment of such counsel fees, upon appeal by the city, as it is a final order affecting a substantial right made in a special proceeding.
    Appeal by the city of Buffalo from an order of the general term of the supreme court in the fifth judicial department, certifying and taxing the expenses of a reference under chapter 854 of the Laws of 1880. Also a motion by Calvin S. Grosser, the complainant, for leave to withdraw his appeal from that part of said order which dismissed the proceeding to remove said King as police justice.
    In 1888, Calvin S. Grosser presented to the general term charges of official misconduct against Thomas S. King, as police justice of the' city of Buffalo, who appeared and denied the same. An order was thereupon made appointing a referee to take the proofs, and upon the report of the referee, including the evidence taken, the court found that the respondent was not guilty of the charges preferred and dismissed the proceedings. 25 St. Rep.,. 792. In the same order, upon the application of both the complainant and respondent, the court certified and taxed “ the reasonable expenses of such reference * * * at the sum of $4,057.85,” and directed that the same be paid as follows, viz.: to the.referee, $408.35.; to the stenographer, $499; to the counsel for the respondent, Thomas S. King, “ for counsel fees and disbursements,” $1,550; to the counsel for the complainant, Calvin S. Grosser* “ for counsel fees and disbursements upon such reference” $1,600. All of said sums, except the last, were subsequently paid by direction of the common council of the city of Buffalo, but, notwithstanding, this appeal was taken by the city from the order allowing all of the items, without distinction.
    The motion by Mr. Grosser for leave to withdraw his appeal from that part of said order which dismissed the proceeding, is based upon the fact that since the appeal was taken, said Thomas S. King has been re-elected to the office of police justice of said city.

      L. L. Sears, Jr., and Adelbert Moot, for complainant; Philip A. Jbaing, for the Gity of Buffalo.

       See 25 St. Rep., 792.

   Vann, J.

While the constitution authorizes the removal from •office of “ justices of the peace and judges or justices of inferior ■courts not of record ” by such courts as may be prescribed by law, it contains no provision for the allowance of the costs or expenses •of the proceeding. Const, of N. Y., Art. 6, § 18. We have been referred to no statute that is claimed to authorize the action of "the learned general term in taxing and certifying the amount allowed to compensate counsel, except the following section of the judiciary act of 1847, as subsequently amended.

Justices of the peace and judges and justices of inferior courts, not of record, and their clerks, may be removed, as provided by 4he constitution, by the supreme court at any general term thereof, .and such general term shall have power to order the proofs upon •any proceedings hereunder to be taken before a referee to be appointed by such general term, and to certify the reasonable expenses of such referee, which amount, so certified, and also the reasonable expenses of any reference as heretofore or hereafter taxed by •any general term of said court, under proceedings heretofore taken •under the act hereby amended, and remaining unpaid, is hereby ■declared to be a charge against the city, town or village within which such justice of the peace, judge, or justice of inferior court, ■not of record, or clerk, exercises the duties of his office. Such general term may also in its discretion require the person or persons instituting proceedings for the removal of either of the officials above named to give security, to be approved by such general term, for the expenses incident to the hearing and determination thereof, in case the charges against such official are not sustained.” Laws 1847, chap. 280, S 25, as amended by Laws 1880, chap. 354, § 1.

The part in italics is the original section, the rest having been added by the amendment. An analysis of the section shows that the supreme court, at any general term, has power to appoint a referee to take the proofs in a proceeding to remove one of the officers named and “ to certify the reasonable expenses of such referee, which amount, so certified,” is made a charge against the city, town or village within which such officer exercised the duties of his office. It is further provided that “ the reasonable expenses of any reference, as heretofore or hereafter taxed by any general ¡term of said court, under proceedings heretofore taken under the act hereby amended,” shall also be a charge upon the city, town or village in question. Until the section was amended, it gave the court no power to appoint a referee or to allow his expenses. By the amendment that power was conferred upon the court and the practice thus regulated as to all proceedings that should be instituted after the amendment went into effect

But the legislature was doubtless aware that for a long time it had been the practice of the court, under its general powers, to appoint referees in such proceedings ; so it went a step farther and authorized the court to tax the reasonable expenses of any reference “ under proceedings heretofore taken under the act hereby amended.” Thus provision was made for the taxation of the expenses of any reference that should be ordered in the future, as well as for any that had been ordered in the past As this would have required a retaxation of the expenses of references previously had, when they had already been taxed, the legislature dispensed with that formality by providing that the expenses theretofore taxed, as well as those thereafter to be taxed,, should be a charge upon the municipality interested. The statute, as thus read, provides for the payment of the expenses, (1) of such references as should be ordered in the future; (2) of such as had been ordered, but the expenses had not been taxed ; and (8) of such as had been ordered and the expenses had already been taxed. We think that it was the design of the legislature to limit the expenses to be allowed, whether in past or future references, to the compensation and disbursements of the referee,, and that the phrase “ reasonable expenses of any reference,” when the context is considered, means the same as the “ reasonable expenses of .the referee.” In the absence of express language, it would be unreasonable to suppose that .the legislature intended to-allow counsel fees in references previously ordered, without its express authority, and to withhold them in case of references to-be ordered, pursuant to its direct authorization. But, however this may be, “ the reasonable expenses of any reference,” whether heretofore or hereafter taxed,” are expressly confined to proceedings taken before the act was amended. The words “ under proceedings heretofore taken under the act hereby amended,” necessarily refer to references previously had, because they would be-inconsistent and absurd if they referred to references not yet ordered, or even authorized. “ Proceedings heretofore taken n mean such as were instituted before the amendment was passed, while “ proceedings hereunder to be taken ” mean such as should be instituted after the amendment was passed. The proceeding in question comes within the latter class, because it was not commenced until some years after the amendment went into effect. It is controlled, therefore, by that part of the section •which empowers the general term to certify “ the reasonable expenses of the referee.”

Even if the subsequent provision as to “the reasonable expenses of any reference ” has a more extended meaning, it has no-application to the case in hand. We think, therefore, that the learned general term inadvertently exceeded its power when it certified and taxed the counsel fees and disbursements of the parties to the proceeding and directed the payment of the same.

We also think that we have jurisdiction to review that part of the order appealed from by the city of Buffalo, at least, because it was a final order, affecting a substantial right, made in a special proceeding. Code Civ. Pro., §§ 190, 3333 and 3334; Re. N. Y., W. S. & B. R. R. Co., 94 N. Y., 287; Bergen v. Carman, 79 id., 146; Sturgis v. Spofford, 58 id., 103; McGregor v. Comstock, 19 id., 581.

The appeal involves the power of the general term to make any allowance for the compensation of counsel, not its discretion as to the amount that should be allowed, provided it had jurisdiction to allow anything for that purpose. ISTo question as to the allowance of costs, as such, to be paid by one party to another, is presented, but simply the power to certify and tax certain sums for the benefit of counsel, which sums, when thus certified and taxed, are declared by statute a charge against the municipal corporation where the officer sought to be removed discharged the functions of his office. The statute regards the complainant as a party to the proceeding, because it authorizes the general term to require-him to give security for the expenses incident to the hearing and determination of the charges. The proceeding was, therefore, a prosecution by a party within the meaning of § 3334 of the Code, although, as public interests were involved, he would not be allowed to discontinue the same without leave of the court.

We think that the order appealed from should be modified by striking out that part which taxes and certifies the sum of $1,600 as counsel fees and disbursements for the complainant, but without costs, because the notice of appeal was too broad, inasmuch as it was “ from the whole and every part of said order certifying and taxing the expenses of the reference herein.”

The motion of the complainant for leave to withdraw his appeal from the adjudication of the general term upon the merits of the controversy should be granted, because the points involved have become abstract questions by reason of events transpiring since the appeal was taken. As this motion is not opposed, it is granted without costs. Ordered accordingly.

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


author: Haight, J.

text:
    Ellis H. Roberts & Co., Resp’ts, v. John Buckley et al., Resp’ts, George F. Vietor et al., App’lts.

      (Court of Appeals, Second Division,

      Filed February 9, 1892.)

    ' 1. Assignment fob creditors—Description of preferred claim.
    The firm of B. & Co. made an assignment and directed the payment in full of certain debts, among them accounts and notes to Major, a brother-in-law of B., which were stated to amount to about $12,000, with interest from dates named. The inventory as filed made the claims and interest amount to $13,500. The referee in this action found that one item of' $1,500 had been paid before the assignment, and that items $1,000 and $5,000 had no existence in fact, nor did they appear in B. & Co.’s books,. but also found that the assignment was made in good faith and that there was a balance of $12,656 due Major and directed that a judgment of $13,-500 confessed to Major by B. & Co. the day after the assignment be reduced to that amount. Held, error; the inventory being part of the assignment the assignee had no discretion, but was required to pay Major the amount therein stated and the creditors would thus be defrauded in the amount that such preference was in excess of the amount 'in fact owing, and the referee had no power to change the assignment as to the amount directed to be paid to Major.
    2. Same—Appeal—Pasties.
    An appeal from such a decision is properly brought by attaching creditors whose claim was admitted by the assignor in the inventory filed, as the action was brought on behalf of all creditors who desired to join in it.
    (Follett, Oh. J., and VAirar, J., dissent.)
    Appeal by Yietor and Achilles from a judgment of the general term of the supreme court, fourth department, affirming a judgment entered upon the report of a referee.

      George F. Danforth, James Dunne and William Fernán, for upp’lts; William A. Matteson, for judgment creditors, resp’ts; William Quin, for resp’t Bulger as assignee.

       Reversing 28 St. Rep., 100.

   Haight, J.

This action was brought by the plaintiff, a domestic corporation, as a judgment creditor in behalf of itself and all other creditors of the firm of Buckley & Co. who might desire to join in the action, to set aside as fraudulent a general assignment for the benefit of creditors, made by the members of the firm of Buckley & Co. as such, and as individuals, to Patrick F. Bulger; and also to set aside as fraudulent certain judgments entered in favor of Thomas Wheeler, Daniel Gr. Major and Chloe Spencer against Buckley & Co.

The firm of Buckley & Co., and the members thereof, were insolvent. The assignment was executed and delivered on the 17th day of March, 1886. In it the assignee is described as the party of the second part.

It provides that: “ Fifth. After the payment in full of all of the co-partnership debts designated in schedules A and B as above directed, the said party of the second part shall pay all and singular the co-partnership debts set forth and enumerated in the schedule hereto annexed marked C in full with interest.”

“ Sixth. After the payment in full of the co-partnership debts set forth in schedules A, B and C as above directed, the said party of the second part shall pay all and singular the co-partnership debts set forth in a schedule hereto annexed marked D, with interest.”

Schedule C referred to and forming a part of the attached assignment contains a statement of the names of the creditors, third named, as preferred in the assignment, the general nature of such indebtedness and the amount thereof. In it appears the following:

“Name of creditor..:.....Daniel Gr. Major;
Besidence..............Washington,. D. C.;
Consideration......i. .. .Money loaned;
Form of debt...........Accounts and notes which assign-
ors are unable to describe;
Amount about.......... $12,000,00;
Date for interest......... 1,000.00 Jan. 12, 1883,
“ “ 1,500.00 Aug. 8, 1883,
“ “ 500.00 Oct. 4, 1883,
“ “ .„....... 1,000.00 Feb. 4, 1884,
“ ' “ ......... 3,000.00 Feb. 10, 1884,
“ “ ......... 5,000.00 May 23, 1884,

as near as assignors are able to state.”

On the 7th day of April, 1886, John Buckley and William E. Shirley, as such assignors, filed their inventory and schedules, duly verified as required by law, and amongst the firm debts set out by them in the schedule so filed is an indebtedness to Daniel ■Gr. Major, which is described as follows:

“ Daniel Gr. Major, Washington, D. C.............. $12,000 00
Accounts and Motes.
Jan. 12, 1883...................... $1,000 00
Aug. 8, 1883...................... 1,500 00
Oct. 4, 1883....................... 500 00 money loaned.
Feb. 1,1884....................... 1,000 00
Feb. 10,1884...................... 3,000 00
May 23,1884...................... 5,000 00 ”

Major was a brother-in-law of the assignor John Buckley, and the amount of his claim so preferred, with interest, was the sum of $13,501.70.

The referee has found the following facts:

“Fifteenth. That at the date of the making, execution and delivery of said assignment the item of $1,500, August 8, 1883, so preferred in said assignment and set out in said schedules had been paid off and discharged, the same having been paid by Buckley & Co. to Daniel Gr. Major by check of Buckley & Co. on the Oneida County Bank to the order of Daniel Gr. Major, dated December 11, 1883, for $1,530.75, which check was duly paid Daniel Gr. Major by said Oneida County Bank, and said check being given for $1,500 as the principal, and 30.75 as the interest due on said loan of August 8, 1888.”
“ Sixteenth. That at the time of the making, executing and delivery of said assignment the following items so preferred therein on behalf of Daniel Gr. Major, viz.: $1,000, January 12, 1883; $5,000, May 23, 1884, formed no part of the items of indebtedness then due or owing by Buckley & Co. to Daniel Gr. Major, nor do the said items, or either of them, appear upon the books of Buckley & Co. as amounts due by their firm to Daniel Gr. Major.”

The referee further found as facts that “ The indebtedness of Buckley & Co. to Daniel Gr. Major on the 17th day of March, 1886, including interest, to be as follows:

Mote date Feb. 26, 1883, on demand, with interest,
for....................................... 00
Interest on same.............................. 183 50
Note dated June 1, 1883, on demand, with interest,
for...-.................................... 1,000 00
Interest on same.............................. 167 67
Note dated Oct. 4, 1883, on demand, with interest,
for....................................... 500 00'
Interest on same.............................. 73 58
Note dated January 31, 1884, on demand, with interest, for................................. 1,000 00
Interest on same............................. 127 67
Note dated February 12, 1884, in one year, with
interest, for................................ 3,000 00
Interest on same............................. 377 50
Note dated May 6, 1884, on demand, with interest,
for....................................... 3,000 00
Interest on same............................. 335 50
Cash advanced by check, May 6, 1884 .......... 500 00
Interest on same.............................. 55 91
Cash advanced to pay note given for accommodation
of Buckley & Co., May 17, 1884 ............. 2,538 75
Interest on same.............................. 279 27
Making a total of......................... $14,139 85
“As against this claim there are credits of money paid to Major from time to time by Buckley & Co., as follows, viz.:
June 6, 1884, by check....................... $1,000 00
Interest to March 17, 1886..................... 106 83
October, 1884, by cash........................ 100 00
Interest thereon.............................. 8 50
December 18, 1884, by check.................. 50 00
Interest..................................... 3 74
November 15, 1884, by check.................. 50 00
Interest..................................... 4 02
February 5, 1885, by two checks............... 100 00
Interest..................................... 6 70
February 25, 1885, by check................... 50 00
Interest..................................... 3 18
Making a total credit..................... $1,482 97
Leaving a total debit...................... 12,656 38

He further found that the assignment was made in good faith,, with no intent to hinder, delay or defraud creditors; and, as a conclusion of law, that the preference in the assignment of the debt of Major was a valid preference to the amount of $12,656.88.

It also appears, in the facts found by the referee, that Major brought action against Buckley and Shirley upon his claim for money loaned, etc., and that on the 18th day of March, the day after the assignment, the defendants appeared by M. W. Yan Auken, their attorney, and made an offer of judgment, and that such .offer was accepted, and thereupon judgment was entered for $13,501.70 damages and $19.39 costs, being for the same items and amount for which he was preferred in the assignment.

The referee found that the recovery should only have been for the sum of $12,658.24 ; that for that amount with costs it was .a good and valid judgment and might be enforced.

It will be observed that of the items of the claim so preferred that of $1,500.00 August 8, 1883, was fully paid and satisfied on the 11th of December thereafter, and that of $1,000.00, January 12, 1883, and $5,000.00 May 23, 1884, had no existence in fact, making a total of $7,500.00 that was fictitious at the time the assignment was made.

It is contended however that it was the indebtedness of Major that was preferred and not the items making up such indebtedness, and that a mistake in giving the items should not avoid the assignment provided that other items of indebtedness in fact existed. This view would deprive the other creditors of the advantage given them by the statute of knowing “ the true cause and consideration ” of the claim; but without assenting to the correctness of the proposition we may for the purposes of this argument assume it to be sound. The fact still remains that the amount actually owing Major falls short of the amount preferred in the sum of $845.32.

The statute provides that, “ A debtor making an assignment shall at the date thereof, or within twenty days thereafter, cause to be made and delivered to the clerk of the county where such assignment is recorded an inventory or schedule containing * * * 3. A full and true account of all the creditors of such debtor, stating the last known place of residence of each, the sum' owing to each, with the true cause and consideration therefor, and a full statement of any existing security for the payment of the same.” 4 B. S., 8th ed.; 2537, § 3.

Pursuant to this provision the assignors made and filed their inventory or schedule in which the same items were described as accounts and notes as then owing to Major without any qualifying words. _ The inventory must be regarded as part of'the transaction, and is to be read in connection with the assignment in respect to the matters which it is required by law to contain. Bur-rill on Assignments, § 151; Terry v. Butler, 43 Barb., 395; Kanavagh v. Beckwith, 44 id., 192-197.

The assignment in describing the form of the debt states that it is accounts and notes which assignors are unable to describe, and amount due about $12,000, and after giving the items is added, “as near as assignors are able to state.”

As we have seen, the inventory was filed twenty days thereafter, and in it the amount and items are stated without qualifying words, thus indicating that at that time the assignors were possessed of the requisite information.to correctly describe them. This inventory we are to read in connection with the assignment, and so reading the instruments we think that it is apparent that the assignors not only have, but intended to absolutely and unqualifiedly prefer the claim of Major to the amount stated. This view is strengthened from the provisions of the assignment referred to, for they require the payment of “ all and singular the co-partnership debts set forth and enumerated in the schedule hereto annexed marked 0 ’ in full with interest,” and that is to-be done before any payment can be made of the claims enumerated in schedule “ D ” or other subsequent schedules, for it is-only after the payment in full of the debts set forth in schedule “ 0 ” that the assignee is directed to pay those in schedule “ D.”’ We thus have the positive and unqualified direction to pay Major's debt in full with interest as set forth and enumerated in the schedule. As to this payment the assignee is given no discretion.

In the Matter of the Assignment of Lewis, 81 N. Y., 421, 424, Finch, J., in delivering the opinion of the court, says: “The assignee derives all his power from the assignment, which is both the guide and measure of his duty. Beyond that, or outside of its terms, he is powerless and without authority. The control of the court over his actions is limited- the same way, and can only be éxercised to compel his performance of a stipulated and defined trust, and protect the rights which flow from it He distributes the proceeds of the estate placed in his care according to the dictation and under the sole guidance of the assignment, and the statutory provisions merely regulate and guard his exercise of an authority derived from the will of the assignor. The courts, therefore, cannot direct him to pay a debt of the assignor, or give, it preference, in violation of the terms of the same and the right of creditors under it. To hold the contrary would be to put the court in the place of the assignor, and assert a right to modify the terms of the assignment, after it had taken effect, against the will of its maker, and to the injury of those protected by it. We agree that the assignee is merely the representative of the debtor and must be governed by the express terms of his trust.”

In the case of Chapin v. Thompson, 89 N. Y., 270, it was held that the assignee could not modify or change the provisions of the assignment, or prevent the payment of a debt provided for in the assignment, even if it was usurious.

. In the Matter of the Assignment of Ward, 10 Daly, 66, it was held that the duty of the assignee for the benefit of creditors is to uphold his trust, not to impeach it; that he cannot object to the payment of a creditor preferred in the assignment, even upon the ground that the claim is fraudulent.

Bishop on Insolvent Debtors, § 359, says: “ A general assignment for the benefit of creditors, by its own terms, devotes the-debtor’s property to the payment of some or all of the assignor’s debts, and the debts provided for may be specified in the instrument itself, or they may be left to be otherwise determined.. When the assignment provides for the payment of specific debts, neither the assignee nor any creditor claiming under the assignment can dispute their validity. Pratt v. Adams, 7 Paige, 615; Jewett v. Woodward, 1 Edw. Ch., 195; Green v. Morse, 4 Barb., 332; Maynard v. Maynard, 4 Edw. Oh., 711. The question is one of intent, to be gathered from a fair construction of the deed of assignment. If the assignee is directed to pay certain persons upon certain specified amounts, either with priorities or proportionately, the assignee who accepts the trust and all the creditors who come in and share under it are bound by the provisions of the deed and cannot dispute them. This proposition, which rests, on the doctrine of election, that he who accepts a benefit under an instrument cannot dispute the validity of its provisions, is abundantly sustained by the authorities. * * * If the claims so provided for are fictitious or fraudulent, or such as for any reason ought not to be paid, that will be a ground for setting the assignment aside as fraudulent and void, but it will not furnish a ground, upon which a creditor claiming under the assignment as a valid instrument can dispute the claim of another creditor provided for in the same manner in the same instrument.” Nicholson v. Leavitt, 6 N. Y., 519; Green v. Morse, 4 Barb., 332, 342; Knower v. The Central National Bank, 124 N. Y., 552-558; 37 St. Rep., 89; Maack v. Maack, 49 Hun, 507; 18 St. Rep., 721; Pratt v. Adams, 7 Paige, 615, 641.

In the case of Kavanagh v. Beckwith, supra, it was held in the general term that the assignee was not bound to pay the debts at. the amount stated in the assignment. The assignment in that case-required the assignee to pay “ the debts due or to grow due from the assignor for which he is liable.” The amount in the assignment was overstated, but the true amount was stated by the assignor in the inventory subsequently filed by him. Reading the inventory in connection with the assignment, which required the assignee to only pay the amount for which the assignor was liable, and that true amount appearing in the inventory, presented a very different question from that in the case under consideration.

The rule to which we have referred may have no application to the general and unpreferred creditors, especially when, as in this-case, the assignment provided that in case there shall be any remainder after paying the preferred creditors in full that the other creditors may be paid the amount that may be owing to them respectively. The amount of their claims is not specified and the assignee is left to determine the same, but as we have seen it is very different with the favored creditors.

If, therefore, the assignee was required to pay the amount of Major’s claim as stated and described, it would of necessity follow that the general creditors would be defrauded in the amount that such preference was in excess of that which was, in fact, owing.

The referee has said that the assignment was made in good faith and without intent to hinder, delay or defraud the creditors, but the provisions of the assignment carried out deprives the general creditors of this sum, and the rule is that every party must be deemed to have intended the natural and inevitable consequences of his acts and where his acts are voluntary and necessarily operate to defraud others he must be deemed to have intended the fraud. ,

In the case of Coleman v. Burr, 93 N. Y. 17-31, the referee found that the transaction was fair and honest. He, however, found facts from which the inference of fraud was inevitable. It was held on review that his characterizing the transaction as fair and honest did not make them innocent or change their essential character in the eye of the law ; that he must be deemed to have iintended to hinder, delay and defraud his creditors. Cunningham, v. Freeborn, 11 Wend., 240-252; Ford v. Williams, 24 N. Y., 359; Edgell v. Hart, 9 id., 213; Wilson v. Robertson, 21 id., 587-593.

It may be said that the excessive preference was small in amount. Undoubtedly innocent errors of small amounts, resulting in no material loss to the creditors, may be disregarded, but in this case the excess is of a substantial amount, and if paid over to Major would result in a material loss to the unfavored creditors. _ If the assignment is fraudulent in part, the whole instrument is void. Mackie v. Cairns, 5 Cow., 547; Grover Wakeman, 11 Wend., 187—225; Simons v. Goldbach, 56 Hun, 204; 31 St. Rep., 118; affirmed, 123 N. Y., 657; 33 St. Rep., 1028; Russell v. Winne, 37 N. Y., 591.

No relief by way of a reformation of the assignment v as asked for in the pleadings, and we are consequently not- jailed upon to determine whether a court of equity would entertain such an action.

The appeal was properly brought by Vietor and Achilles. They were attaching creditors, and the amount of their claim is admitted by the inventory filed. The action was brought by the plaintiff on behalf of itself and all other creditors of the firm who desired to join with it in the action. Vietor and Achilles were made defendants, and answered, admitting the allegations of the complaint as to charges of fraud by Buckley & Co., and joined with the plaintiff in the action. The judgment took from them the benefit they claim through their attachment on the property of the assignors, and required them to turn it over to the assignee. They consequently had the right to appeal.

We have not thought it advisable to consider or discuss at this time the questions that arise upon the modification of the Major judgment, for upon a new trial evidence may be produced materially changing the facts.

We think the evidence supports the findings of the referee as to the claims of Adelia J. Sparks and Chloe Spencer, but are unable to find authority permitting him to change the assignment as to the amount directed to be paid to Daniel C. Major.

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

All concur, except Follett, Ch. J., and Vann, J., dissenting.


author: Vann, J. Follett, Ch. J.

text:
    John H. Van Clief et al., Resp’ts, v. Hannah R. Van Vechten, Impl’d, App’lt.

      (Court of Appeals, Second Division,

      Filed February 9, 1892.)

    1. Mechanics’ lien.
    If nothing is due to the contractor, pursuant to the contract, when a, mechanic’s lien is filed and he abandons the undertaking without jus-''cause, but the owner completes the building according to the contract and under a provision thereof permitting it, the lien attaches to the extent of the difference between the cost of completion and the amount unpaid when, the lien was filed.

      2. Same.
    Where there is a willful refusal by a contractor to perform his contract and he wholly abandons it and after due notice refuses to have anything more to do with it, his right to recover depends upon performance of his contract, without any omission so substantial in its character as to call for an allowance of damages, if he had acted in good faith. Where three coats of plastering are required to entitle a contractor to a payment, two held not sufficient.
    •3. Same.
    The contractor would have been entitled, upon finishing the plastering, to $800, and the balance when the entire work was completed. After putting on two coats of plaster, and the^laintiffs having filed a lien, the contractor abandoned the work and the owner notified him to go on or she “would cancel and forfeit said contract and make other arrangements to complete the building.” She did so at an expense of $1,905. Reid, that there was nothing due on the contract when the lien was filed, but as the owner completed the building under the contract, the difference between the sum expended by her and the aggregate amount unpaid upon the completion of the entire work, became due to the contractor, and the lienors would be entitled to a foreclosure to that amount.
    4. Same—County court—Jurisdiction.
    The action was brought to foreclose a lien for $1,670. Reid, that the county court had jurisdiction to the extent that i.t was exercised to grant a judgment of $800 and interest, as there was nothing in the summons to show what the action was brought for, and had power to amend the complaint if it demanded judgment for too large an amount.
    (Follett, Ch. J., dissents.)
    Appeal from, a judgment of the general term of the supreme court in the second judicial department, affirming a judgment ■entered upon the report of a referee.
    This action was brought in the county court of Richmond ■county for the foreclosure of a mechanic’s lien.
    On the 31st of March, 1886, the defendant Smalle agreed to furnish the materials and erect a building for the defendant Van Vechten for the sum of $4,298, less $275, for a fireplace, heater and furnace, making the net price $4,023, payable $1,000 when the building was sheathed, $1,000 when the exterior was finished, $800 when the plastering was finished and the balance when the entire work was completed, such payments to be made upon the certificate of the architect in charge. The work was to be completed by the 15th of October, 1886, and if incomplete at ■■that time, said contractor was to forfeit $10 a day for every day that the building continued unfinished. The contract also provided that if the contractor at any time during the progress of the work should refuse, or neglect to supply a sufficiency of materials ■or workmen, the owner should have power after three days notice in writing to provide materials and workmen and finish the work and that the expense should be deducted from the contract price. Smalle entered upon the performance of his contract and was paid by Mrs. Van Vechten $1,000 June 1, 1886, and $1,000 July '27, 1886.
    The plaintiffs furnished materials worth $1,264.35 to Smalle, that were used in the building, and other materials worth $405.75* to the defendants, Newman, who were sub-contractors with Smalle, that were also used in the building. On the 17th of September, 1886, and within ninety days after such materials had been so furnished and used, the plaintiffs filed a notice of lien in. the usual form, under the General Mechanic’s Lien Act of 1885. September 22, 1886, Smalle abandoned his contract^ leaving the building incomplete, and refused further performance although notified by Mrs. Van Vechten to go on with the work and that in default thereof she “ would cancel and forfeit said contract and make other arrangements to complete the building.” After such refusal Mrs. Van Vechten furnished materials and employed workmen to finish the building at an expense of $1,905.20. The work was thus completed February 15, 1887, and the same was done under the direction of the architect mentioned in the original contract and according to the plans and specifications named therein. Smalle demanded no payment of the owner after July-27, 1886, and served no answer in this action.
    The. referee found that when the lien was filed “ Smalle had earned and there was remaining unpaid to him on account of said contract the sum of $900, and at that time the- plastering-upon said building was substantially finished and there was due; and unpaid Smalle under said contract the sum of $800 over and above all payments theretofore made to him thereon by defendant. Van Vechten.” . He refused upon due request to allow anything to Mrs. Van Vechten on account of the sum paid by her to complete the building after its abandonment by Smalle, although she-had demanded in her answer to be allowed that sum as a set-off. Judgment of foreclosure was rendered for the sum of $800, with interest thereon from September 17, 1886. Upon the trial the complaint was amended so. as to conform to the proof and to demand only $800, besides interest, and thus bring the claim within* the conceded jurisdiction of the county court.
    The general term held that, although nothing- was due under the contract, as between contractor and owner, still as the property of the lienors had been used in the building and the owner had received value therefor over and above her payments, to the extent of $800 and interest, the judgment should be affirmed.

      Ezekiel Eixman, for app’lt; David Thornton, for resp’ts.

       Reversing 29 St. Rep., 378.

   Vann, J.

The statute applicable to the subject of this action* is chapter 342 of the Laws of 1885, as it stood before it was-amended by chapter 316 of the Laws of 1888. As we construe-that statute and read the decisions made thereunder, as well as those made under similar statutes, we think that the following-rules determine the extent to which a mechanic’s lien,' filed by a. sub-contractor, or a material man, attaches to the locus in quo:

1. If anything is due to the contractor, pursuant to the terms of the contract, when the lien is filed, it attaches to that extent

2. If nothing is due to the contractor, according to the contract,, when the lien is filed, but a certain amount subsequently becomes-due thereunder, the lien attaches to the extent of that sum.

3. If nothing is due to the contractor, ■ pursuant to the contract, when the lien is filed, and he abandons the undertaking without just cause, but the owner completes the building according to the contract and under a provision thereof permitting it, the lien attaches to the extent of the difference between the cost of completion and the amount unpaid when the lien was filed. Larkin v. McMullin, 120 N. Y., 206; 30 St. Rep., 902; Powers v. The City of Yonkers, 114 N. Y., 145; 22 St. Rep., 768; The Mayor, etc., v. Crawford, 111 N. Y., 638; 20 St. Rep., 507; Graf v. Cunningham, 109 N. Y., 369; 15 St. Rep., 524; Taylor v. The Mayor, 83 N. Y., 625; Heckmann v. Pinkney, 81 id., 211; Gibson v. Lenane, 94 id., 183; Rodbourn v. The Seneca Lake Grape & Wine Co., 67 id., 215; Lumbard v. Syracuse, B. & N. Y. R. R. Co., 55 id., 491; 15 Am. & Eng. Encyc., 78, 84.

The first question presented for decision is vhether there was anything due from the owner to the contractor, according to the terms of the contract, when the lien was filed. This depends on whether there is any evidence to support the finding of the referee that the plastering had been substantially finished at the time of the filing of the lien, for according to the contract the third payment of §800 was to become due when the work had progressed to that extent;. Evidence was given in behalf of the owner tending to show that it was worth §200 to complete the plastering, and that the mason who did it was paid that amount. The witnesses for the plaintiffs, however, testified that it was worth much less. As the conflict in the evidence raised a question of fact, the version most favorable to the plaintiffs and most strongly tending to sustain the finding of the referee must be accepted as that upon which he acted.

The only witnesses for the plaintiffs, as to the quantity or value of the unfinished plastering, were the defendants Rewman, who, as sub-contractors with Smalle, were engaged in doing the mason work when the lien was filed, and they stopped work on that account. One of these gentlemen testified in substance that the ■cornice had not been run nor the last coat put on the main hall; that the stairs were not up, “ so it was not plastered under the stairs; ” that he could not say that the plastering was all done in the second story hall; that “ it was not finished, that is, it had not the last coat,” and that it would cost from twenty to twenty-five dollars to complete the plastering in the hall. The other subcontractor testified that the last coat on the side walls of the parlor and the last coat in the entrance hall was not on, and about forty feet of cornice had not been run; that the stairs were not wholly, up and not plastered; that the plastering was not done in the second story hall, “ and of course the plastering was not on all the stairs; ” “I have said four times there was no plastering done under the staircases and in the hall; ” that it was worth about thirty dollars to finish the plastering.

All of the witnesses for the defendant testified that there was more plastering to be done, and that it would cost more than the sub-contractors stated in their testimony.

Although the referee found that the sum of §200 was paid for completing the plastering, he refused to find that it was fairly and reasonably worth that amount. The learned general term apparently held that the plastering was not finished, because they , say in their opinion, that “as between contractor and owner nothing was due under the contract.” The third payment of $800 was not simply for the plastering, but for the plastering and all other work that necessarily preceded it, after the completion, of the exterior, which made the second payment due. The cost of completing the stairs must be added to the cost of completing the plastering, for the latter could not be done until the lormer had been done. The question of substantial performance depends, somewhat on the good faith of the contractor. If he has intended and tried to comply with the contract, and has succeeded except, as to some slight things omitted by inadvertence, he will be allowed to recover the contract price, less the amount necessary to-fully compensate the owner for the damages sustained bj; the; omission. Woodward v. Fuller, 80 N. Y., 312; Nolan v. Whitneyt 88 id., 648; Phillip v. Gallant, 62 id., 256, 264; Glacius v. Black, 50 id., 145; S. C., 67 id., 563, 566; Johnson v. DePeyster, 50 id., 666; Sinclair v. Tallmadge, 35 Barb., 602.

But when, as in this case, there is a willful refusal by the contractor to perform his contract, and he wholly abandons it, andi after due notice refuses to have anything more to do with it, his right to recover depends upon performance of his contract, without any omission so substantial in its character as to call for an allowance of damages, if he had acted in good faith. ' While slight and insignificant imperfections or deviations may be overlooked,, on the principle of de minimis non curat lex, the contract in other respects must be performed according to its terms. When the refusal to proceed is willful, the differencebetween substantia] and literal performance is bounded by the line of de minimis. Smith v. Brady, 17 N. Y., 173; Cunningham v. Jones, 20 id., 486; Bonesteel v. The Mayor, 22 id., 162; Walker v. Millard, 29 id., 375; Glacius v. Black, 50 id., 145; Catlin v. Tobias, 26 id., 217; Husted v. Craig, 36 id., 221; Flaherty v. Miner, 123 id., 382; 33 St. Rep., 681; Hare on Contracts, 569; Leake on Contracts, 821.

In this sense the plastering was not substantially finished, and. there is no evidence to support the finding of the referee in that, regard, for when three coats are required two will not suffice. That is not substantially finished which requires a substantial sum to-finish it. The referee found that the contractor wholly abandoned work upon said building, and left it incomplete and exposed to the elements, and that he refused, after due notice from the owner to perform his contract, to goon with the work or finish the building. . The abandonment was willful, and the omission to perform intentional, and under those circumstances, according to the-authorities, substantial performance is not sufficient, except when it is understood as excluding only such unsubstantial differences; as the parties are presumed not to have had in contemplation when they made the contract.

The plaintiffs claim through the contractor, and if the third payment was not due as to him it was not due as to them. They are under the same obligation to prove performance, and to the same extent that he would be. Their rights as lienors are measured by his rights under the contract. We do not think that there was anything due upon the contract when the lien was filed, and that the judgment cannot be supported on that ground.

The owner, however, although under no obligation to do so, completed the building herself according to the contract, which thus continued operative through her action. After the contractor refused to proceed, she performed the contract for him, as it expressly permitted her to do. As her action was according to the contract, it will be presumed, under all the circumstances and in support of the judgment, that it was under the contract. While she threatened to cancel it, there is neither finding nor request to find that .she did cancel it, and instead of pleading a cancellation or rescission in her answer, she asked to have the amount expended by her to complete the building “ allowed as a set-off or counterclaim to any claim of the said defendant Smalle or the plaintiffs herein, or of any of the other defendants herein, in case the court should eventually determine that the said defendant Smalle is entitled to any sum whatsoever under the said contract.” Upon the trial her counsel said: “We claim that we completed this building after the contractor had abandoned his work and have a right to set off what we paid for the completion of this building. That is claimed as a set-off against this claim and as a counterclaim.” She testified that after Smalle stopped work she had a conversation with one McDowell about taking the contract to complete the house; that McDowell’s firm made a written proposition “ to finish the incomplete workthat when Mr. McDowell handed her this paper she had a talk with him “ in regard to his taking up the contract to complete the house,” and that subsequently she accepted said proposition to complete the house in accordance with the plans and specifications, and paid the new contractors accordingly. The amount paid by her for this purpose, in legal effect, was paid for the original contractor. The difference between the sum thus expended and the aggregate amount unpaid on the contract with Smalle upon the completion of the entire work, became due under the contract. Graf v. Cunningham, supra.

To the extent of that sum, being the difference between $2,023 and $1,905.20, the lien of the plaintiffs attached, and they are entitled to a foreclosure for that amount, provided the county court had jurisdiction of the action.

As the action was brought to foreclose a lien for the sum of $1,670.10, the appellant claims that the county court had no jurisdiction. Laws 1885, chap 342, § 7. The respondents defend the jurisdiction of the court under chap. 480 of the Laws of 1880. They insist that although that act purported to amend an act that had already been repealed, it has the effect of an original enactment Laws 1870, chap. 467; Laws 1877, chap. 417; Laws 1880, chap. 245 ; Laws 1880, chap. 480. They further insist that the legislature has express constitutional power to thus increase the jurisdiction of the county courts. Const. N. Y., art. 6, § 15; Sweet v. Flannagan, 61 How., 327.

While we have considered, we do not decide this question, as the jurisdiction of the court, to the extent that it was exercised, can be justified on another ground.

A civil action is commenced by the service of a summons, which, under the present practice is of the same form in all cases. Code Civ. Pro., §§ 416, 418, As there was nothing in the summons to show what the action was brought for, the court acquired jurisdiction when it was served and hence had power to amend the complaint, if it demanded ■ judgment for too large an amount.

In McIntyre v. Carriere, 17 Hun, 64, the summons was in the old form of a summons for money and showed upon its face that ■the amount claimed exceeded the jurisdiction of the court. It was held that as the summons itself showed a want of jurisdiction, the court had no power to amend. But in McDonald v. Truesdail, id., 65, the summons was for relief, under the former'practice, and it was held that the court acquired jurisdiction by the service of a summons, free from objections, and bad power to amend the complaint by reducing the demand for judgment to one thousand dollars.

In Gilbert v. York, 41 Hun, 594; 5 St. Rep., 278, the complaint failed to allege the residence of the parties and it was held demurrable for that reason, but the general term allowed an amendment upon terms. See also Dwyer v. Rathbone, 17 St. Rep., 443, and Yager v. Hannah, 6 Hill, 631, 634.

The judgment should be reversed and a new trial granted, with costs to abide the event, uidess the plaintiffs within thirty days stipulate to reduce the amount due and unpaid upon their lien to the sum of $117.80, with interest thereon from September 17, 1886, in which event the judgment as thus modified should be affirmed, without costs in this court to either party.

Follett, Ch. J.

(dissenting).—The result reached by the prevailing opinion is based on this provision in the contract.

“ Should the contractor, at any time during the progress of the said work, refuse or neglect to supply a sufficiency of materials or workmen, the owner shall have the power to provide materials and workmen after three days notice in writing being given, to finish the said work, and the expense shall be deducted from the amount of the contract.”

At the request of the defendant the following facts were found:

(6) “ That the said defendant Smalle never performed the conditions or covenants in the said contract between him and the defendant Yan Yechten contracted, covenanted and agreed to be performed by him, nor did the said defendant ever complete or finish the said work on said building, nor comply with the terms of said contract, but that on the 22d day of September, 1886, the said defendant Smalle wholly abandoned work in and upon said building and left the said building in an incomplete and unfinished state, and exposed to the elements, and refused and neglected to complete and. finish said building and to perform the conditions and agreements of said contract on his part, although he was duly notified by the said defendant Yan Yechten to perform his said contract with her.”
(7) “ That the said defendant Smalle having so abandoned the work on said building and having so refused and neglected to perform and carry out his said contract with the defendant Yan Yechten, the said defendant Yan Yechten duly notified the said Smalle to perform his said contract, and that in default thereof the defendant Yan Yechten would cancel and forfeit said contract, and make other arrangements to complete the building, and the said Smalle having failed and neglected to proceed with the erection of said building the said defendant Yan Yechten, after giving such notice and after such default on the part of said Smalle, employed other workmen to finish and complete the.said building, and also furnished the materials necessary to finish and complete the said building.”
(13) “ That the work in completing and finishing said building was done and performed under the direction of said E. A. Sergeant (the architect) and according to the plans and specifications mentioned in said contract.”

The prevailing opinion assumes that the thirteenth finding is to the effect 'that the owner had not rescinded the contract, but completed the building under it. I am unable to give this finding such a construction, because the three findings must be construed together, and so read the result of the facts found is that the contract had been abandoned by the contractor and rescinded, and declared at an end by the owner, who went on and completed the building according to the specifications mentioned in the contract. It cannot be that in case an owner contracts to have a building erected according to plans and specifications forming a part of the contract, and the contractor half completes the structure and then abandons it and declares that he is unable, as he did in this case, to perform his contract, and the owner rescinds it and goes on and completes the building according to the original plans, that it is proof that the work was done in performance of and under the original contract.

Such a construction would compel the owner to change the plans upon which the structure had been partially built in order to escape the inference that he was proceeding under a contract which had been voluntarily abandoned by the contractor and declared to be at an end by the owner.

I am unable to concur in the third proposition in the prevailing opinion. “ (3) If nothing is due to the contractor, pursuant "to the contract, when the lien is filed, and he abandons the undertaking without just cause, but the owner completes the building according to the contract and under a provision thereof permitting it, the lien attaches to the extent of the difference between the cost of completion and the amount unpaid when the lien was filed.”

Graf v. Cunningham, 109 N. Y., 369; 15 St. Rep., 524, which is principally relied upon to support the proposition, does not seem to be in point. In that case the contractor had not, but the owner had, failed to perform the contract, and the latter completed the building for $170 less than she would have been compelled to pay had the contractor been permitted to complete the building under the contract. Under these circumstances, a material-man, who had furnished material to the contractor and duly filed a lien, was held entitled to recover that sum. In that case the contractor had a cause of action against the owner under the contract, and the damages which he was entitled to recover were subject to the liens of persons performing the work or furnishing materials for him.

In the present case the contractor had no claim against the owner, and there being nothing due or to become due the contractor, there was nothing to which a lien could attach. Rodbourn v. The S. L. G. & Wine Co., 67 N. Y., 215. In the absence of fraud or collusion a lienor cannot recover from the owner more than is unpaid, due and to become due on the contract, and it being conceded that the contractor could not have recovered any sum under this contract, I am unable to see how the lienor, whose lien could only attach to the contractor’s interest, has established a cause of action.

The words of the statute are: “But in no case shall such owner be liable to pay, by reason of all the liens filed pursuant to this act, a greater sum than the price stipulated and agreed to be paid in such contract, and remaining unpaid at the time of filing such lien, or in case there is no contract than the amount of the value of such labor and material then remaining unpaid except as hereinafter provided.” Section 1, chap. 342, Laws of 1885.

The judgment should be reversed.

Judgment reversed and a new trial granted, with costs to abide event, unless the plaintiff within thirty days stipulate to reduce the amount due and unpaid upon the lien to the sum of $117,80, with interest thereon from September 17, 1886, in which event the judgment as thus modified is affirmed, without costs in this court to either party.

All concur, except Follett, Oh., J., dissenting.


author: Peckham, J.

text:
    Margaret Devlin, App’lt, v. The Mayor, etc., of New York, Resp’t.

      (Court of Appeals,

      Filed February 9, 1892.)
    1. Eminent domain—Award—Interest—Laws 1888, chap. 191, § 4.
    Under chap. 191, Laws 1888, where property is taken for school purposes Ihere is no way to prevent the running of interest as part of the . award during the four momhs provided for by the statute except by paying or tendering the award and interest to the time of payment or tender. After the expiration of the four months the interest depends upon demand.
    2. Same—Mortgagees.
    Where there are mortgages upon the land taken the commissioners may make their awards to mortgagees for the amount due on their mortgages, and to the owner for the balance, or they should tender the owner the amount of the award and interest upon condition of receiving a satisfaction of the mortgages.

      Appeal from judgment of the supreme court, general term, first department, reversing judgment for plaintiff entered after trial at circuit.

      Charles Edward Souther, for app’lt; D. J. Dean, for resp’t.

       Reversing 37 St. Rep., 951.

   Peckham, J.

The award made by the commissioners to estimate the damages to the ¡fiaintiff as owner for land taken, was confirmed on the 5th of "Juty, 1889, and on the 20th of the following September the city comptroller paid to the owner of the land the amount of such award, without interest. The owner received the same under protest and claimed interest from the date of confirmation to the date of payment. The question is whether the plaintiff is entitled to such interest.

The provisions regarding interest, which are found in the 4th section of chap. 191, of the Laws of 1888, providing for the acquisition of sites for school purposes in New York city, are somewhat ambiguous and confusing, yet upon a careful reading we think they can be reconciled. As soon as the report of the commissioners to estimate damages is confirmed by the court, § 3 of the act enacts that the Mayor, etc., shall become and be seized in fee of the lands included in the report, the same to be used for the purposes already stated in the act. From that moment therefore the city becomes the owner of the lands and the former owner becomes at once entitled to his just compensation for the Lands thus taken. That compensation by this statute consists in the amount allowed by the commissioners with interest from the date of the confirmation of the report. This interest is part of the compensation which the statute itself provides shall be paid to the owners for their lands, and is not in any sense damages for the failure to pay. In this respect the statute differs from that referred to in Cutter v. The Mayor, etc., 92 N. Y., 166, for in the case cited the statute provided for tíre payment to the owners, within four months from the confirmation of the report, of the amount of the sum reported by the commissioners, or in case of neglect or default for such time, the owner after application for payment might sue for and recover the sum reported, “withlawful interest from and after the said application therefor.” The statute referred to does not provide for the payment of interest as any part of the compensation for the land taken, because it allows the city four months in which it has the right to pay the sum awarded simply, and without any interest whatever. The interest which is given thereafter is allowed by way of damages for the default and runs only from the time of a demand.

Under this statute of 1888, if the money be paid within the four months, the owner need not particularly demand interest on the award in order to entitle him to it. It is due from the city as much as any part of the award, for, in substance, the interest is part thereof.

The statute, however, makes provision for a possible default of the city, and a neglect on its part to pay during the four months, and in that case we construe the statute as meaning that upon such expiration of four months the owner may sue for and recover the amount of the award, with lawful interest added thereto for the four months during which the city should have paid, and interest on that total sum from the time of a demand therefor. The interest on the award for four months after the confirmation is added to the sum of the award, because the statute, in effect, makes it part thereof, and the total becomes the amount of the award then due. The owner, at any time after the expiration of the four months, may make a demand and then commence his action to recover the amount due, and he can recover the same, with interest from the time of the demand. We think this recom ciles the seemingly contradictory features of the statute as to the payment of interest from the time of the confirmation of the report and interest from the time of the demand. There is no way to prevent the running of interest as part of the award during the four months provided for by the statute, excepting to pay or tender the award and the interest to the time of- payment or tender. If the owner do not present himself during these four months, the city authorities, if they desire to stop the interest, must seek the owner and pay or tender him the amount and interest up to that time. After the expiration of the four months the interest depends upon demand.

The payment of the amount awarded by the commissioners within the four months, and without interest, does not, therefore, prevent the plaintiff from claiming the interest for that time. The plaintiff did not receive the amount paid as in full of her claim, but, on the contrary, claimed the interest and protested against its non-payment.

It is said the city was not in default for not paying while the owner allowed the mortgages to exist unsatisfied upon the premises. It is not a question of default during these four months. The statute is express and clear; the interest must be ¿paid on the amount of the award from the time of confirmation.

• The commissioners might have made their awards to the mortgagees for the amounts due on their mortgages, and to the owner for the balance. As it was, the city should at least have tendered the owner the amount of the award and interest upon condition of receiving a satisfaction of the mortgages. This was not done, and we think when the money was paid in September, and within the four months, the city should have included in such payment the interest on the award up to that time.

Whether interest upon this unpaid interest could be recovered between the time of the payment of the amount awarded by the commissioners and the nineteenth of December following, when a demand was made, is somewhat doubtful, but that question was not argued and the amount is but trifling.

We think the special term was right, and for that reason the order of the general term must be reversed and the judgment of the special term affirmed, with costs in all courts.

All concur.


author: Gray, J.

text:
    Henry A. Rice, Assignee, Resp’t, v. James Grange, App’lt.

      (Court of Appeals,

      Filed February 9, 1892.)

    1. Bills and notes—Consideration.
    Defendant made his note to Chace & Co., plaintiff’s assignor, and received in return a note of the same amount and date made by a third party and endorsed by Chace & Co. Held, that upon the exchange of the notes the particular transaction was fully consummated, and was in no sense executory, and each party became the holder for a good consideration of the note delivered.
    2. Same—Pleading counterclaim.
    A party having an affirmative defense to an action by way of counterclaim is bound to plea l it in explicit terms and not leave it to inference. Pleading failure of consideration and offer to re-exchange notes does not amount to a counterclaim.
    3. Pleading—Amendment discretionary.
    The granting of a motion to amend the answer is discretionary with the court, and an exception to a ruling denying the same is not available here.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment entered on verdict directed by the court.

      Samuel JET. Dreiu, for app’lt; Alfred B. Oruikshank, for resp’t.

       Affirming 39 St. Rep., 163.

   Gray, J.

This action was upon the promissory note of the defendant, made to the order of Earl B. Chace & Co., and the plaintiff is the assignee of the payees, under an assignment for the benefit of their creditors, executed at a time subsequent to the maturity of the note. The defense set up in the answer was a failure of consideration. The facts as developed upon the trial of the action were precisely these: that in December, 1889, Chace placed in the hands of a broker a promissory note made by Hawkins & Co., to the order of Chace’s firm and not yet due.

This broker called upon the defendant and offered to give Chace’s note in exchange for one of defendant’s and this proposition was accepted. Subsequently the broker took the Hawkins note, with Chace & Co.’s endorsement upon it, to the defendant and received from him the note in suit, which was for the same amount as the Hawkins note. When the Hawkins note fell due, it was not paid and was protested. Upon the maturity thereafter of the defendant’s note payment thereof was refused by him. Some three months later Chace & Co., made their general assignment to plaintiff. The defendant, in support of his appeal from the judgment recovered against him, insists that the defense of failure of consideration was established and that it was, therefore, error for the trial judge to direct a verdict for the plaintiff. His counsel argues that the defendant’s agreement to pay Chace was executory merely and was dependent upon the payment of the Hawkins note. In other words, he considers that there was to be implied in this transaction a promise by Chace that the Hawkins note would be paid at maturity and that this promise formed the consideration for his promise to pay the same sum to Chace in his note. But the defendant has misapprehended the legal effect of the transaction. Upon the exchange of these notes the particular transaction between the parties was fully consummated, and was in no sense executory. Bach party became the holder for a good consideration of the note delivered.

The consideration for the defendant’s note was the transfer and delivery to him of the Hawkins note, and was as good and absolute as it would be in any case of an exchange of property. This was a business transaction, and whether the consideration was in an exchange of notes, or was paid in money, is quite the same thing. In an exchange of notes each note is a valid consideration for the other and is fully available in the hands of its holder. Cobb v. Titus, 10 N. Y., 198. The undertaking by Chace & Co. upou their endorsement and transfer of the Hawkins note, was a legal consideration for the defendant’s promise, and no agreement is to be implied which is not expressed upon the papers.

Nor is the defendant entitled in this action to off-set a claim upon the Hawkins note. If the defendant had set up an equitable counterclaim to the plaintiff's cause of action, he might then have been in a position to show that no equities or rights of others had intervened, and that the transaction between him and Chace was such as to justify off-setting one note against the other. But such a defense is wholly unavailable to him, for the want of any allegations in his answer making such a counterclaim. His sole defense was a failure of consideration, and there was nothing in the answer which amounted to a plea of an equitable set-off. Under our practice a party having an affirmative defense to the action by way of a counterclaim is bound to plead it in explicit terms and not leave it to inference. Here the defendant pleads a “ defense to the cause of action alleged in the complaint,” and, after setting it out, avers that it establishes an entire failure of consideration and makes offer to re-exchange the notes. This did not amount to a counterclaim, and he seems to have recognized the fact, when, at the close of the trial, he moved to amend the answer by setting up a counterclaim.” The denial of the motion was not excepted to, and an exception would have been unavailing here ; as it was discretionary with the court to grant or deny such a motion.

The judgment appealed from should be affirmed, with costs.

All concur, except Maynard, J., taking no pari