author: Martin, J.

text:
    John B. Bowen, as Assignee, etc., App’lt, v. Delaware, Lackawanna and Western Railroad Company, Resp’t.

      {Supreme Court, Genernl Term, Fourth Department,

      Filed December 7, 1894.)

    Limitation—Bankruptcy.
    An action by asignes in bankruptcy to recover possession of real pro- • perty, on which defendant entered under an adverse claim after plaintiff’s appointment as assignee, must be brought within two years from the time when the cause of action accrued.
    Appeal from a judgment in favor of defendant.

      Millard & Stewart, for app’lt; D. S. & R. R. Richards, for resp’t
   Martin, J.

This action was brought to recover the possession of certain real property described in the complaint. Among other matters set up in the answer, the defendant alleged as a defense that the cause of action herein accrued more than two-years prior to the commencement of the suit, and that it was-barred by § 5057 of the United States Revised Statutes, which declares: “ Ho suit, either at law or in equity, shall be maintainable in any court between an assignee in bankruptcy and a person claiming an adverse interest, touching any property or rights of property transferable to or vested in such assignee, unless-brought within two years from the time when the cause of action accrued for or against such assignee.”

Whether this statute was a bar to the plaintiffs action is the only question we need consider on this appeal. The language of' the statute is broad, and seems to be sufficiently comprehensive to constitute a defense to this action. Whatever interests Anna H. Dwight, the bankrupt, had in the premise's in question, passed to-the plaintiff as her assignee on the 10th of December, 1878. In September, 1880, the Hew York, Lackawanna & Western Railway Company claimed to have acquired title and entered into the possession of the premises, and during that month commenced the work of erecting a bridge and embankment thereon. On the 2d of October, 1882, the defendant leased the Hew York, Lackawanna & Western Railroad, and since that time has been in possession thereof, claiming a right to the premises in question. At the request of the plaintiff, the court, among other things, found: “ That in the year 1880 the Hew York, Lackawanna & Western Railway Company, unlawfully and without the permission of the plaintiff, entered into the possession of the premises described in the complaint, and constructed a high railroad embankment and built railroad abutments and piers thereon, and upon said embankment and piers placed their railroad tracks ; that on or about the 2d day of October, 1882, the above named defendants, without the permission of the plaintiff, took possession of the premises described in the complaint, since which time they have been in the actual possession of the said premises, claiming title thereto.”

As a conclusion of law the court held that the plaintiff’s cause of action accrued to him in September, 1880, and as this action was commenced July 23, 1888, it was bared by § 5057. The-plaintiff contends that that statute is not applicable to this case, because the cause of action for which it was brought never "vested in the bankrupt, but arose out of a wrong to the plaintiff asassignee, or to the property vested in him. To sustain this contention he cites the case of Stevens v. Hauser, 39 N. Y. 302. The question in that case arose under the bankrupt law of 1841, which provided: “Ho suit at law or in equity shall, in any case, be maintainable by or against such assignee or by or against any person claiming an adverse interest touching the property and rights of property aforesaid, in any court whatsoever, unless the-same shall be brought within two years after the declaration and decree of bankruptcy, or after the cause of suit shall first have-accrued."

That was an action of ejectment brought by the plaintiff, who-obtained his title through a conveyance from an assignee in bankruptcy. The defendant set up the foregoing statute as a bar.. His possession did not commence until four years after the title was vested in the assignee. In that case it was said, following the opinion of Mr. Justice Nelson in re Conant, 5 Blatchf. 54, that the act of congress (Laws 1841) limiting the assignee in bankruptcy to two years within which to bring the action had no application to a cause of action arising in his own favor for injury to property, or a disseisin of lands vested in him by the proceeding. In the Stevens Case it appears in the opinion of Mason, J., that the case failed to show that the defendant or any one else claimed to hold the premises adversely, or under a title adverse to that of the assignee or the plaintiff, to whom the title was transferred. The judge, in delivering the opinion, said: “ This eighth section of the bankrupt act, prescribing this two-years statute of limitations, never was to bar the right of entry as against a purchaser from the assignee in bankruptcy, where the bankrupt actually had the title, and the assignee sold and conveyed it by order of the court. It was never intended to limit this action of ejectment, in such a case, to two years.”

It will be perceived that the Stevens Case is unlike the one at bar, in that the action was there brought by a purchaser from the assignee in bankruptcy under a sale and conveyance made by an order of court. While it may be that congress had authority and intended to provide that no action should be brought by or against an assignee unless commenced within two years, yet it might not have power or have intended to provide that a purchaser of the property of a bankrupt should not maintain an action after two years where the bankrupt had actual title, and the assignee sold and conveyed it by an order of court. In Banks v. Ogden, 2 Wall. 69, 70, it was doubted if the limitation of that statute could be applied to sales of real estate made by an assignee under the order of the district court having general jurisdiction of proceedings in bankruptcy. The appellant, as sustaining his contention, also cites the cases of Davis v. Anderson, 6 N. B. R. 145; Sedgwick v. Casey, 4 N. B. R. 496; Smith v. Crawford, 9 N. B. R. 38; In re Krogman, 5 N. B. R. 116, and Bachman v. Packard, 7 N. B. R. 353. In the Davis Case it was held that the limitation of two years in § 2 of the bankrupt act of 1867 applied only to property held adversely to the bankrupt and his assignee, and that, where the bankrupt fraudulently conveyed his lands to avoid a judgment, a purchaser under the judgment and a sale made under execution after proceedings in bankruptcy could not defend on the ground that the assignee did not commence suit to set aside the execution, sale, and deed within two years , after the assignment, as no cause of action accrued to the assignee against the purchaser until he acquired his title under the judgment and execution sale. The Sedgwick Case, in effect, held that the statute of limitations contained in § 2 of the bankrupt law of 1867 was not applicable to a suit to collect a- debt or to enforce the payment of money due upon a contract. The Smith Case was to the same effect, holding that § 2 did not apply to the collection of ordinary debts due the bankrupt prior to the adjudication. In Re Krogman, where the defendant simply disputed the amount of the assignee’s claim, and not the assignee’s interest and rights touching the property, it was held that § 2 did not apply. The decision in the Bachman Case was to the effect that the concurrent jurisdiction conferred upon the circuit court by § 2 of the bankrupt act of 1867 was limited to cases where there was a controversy concerning the right to, or some interest in, some specific thing between the assignee and a third person, and did not include an action to collect a debt. These cases do not, we think, aid the appellant; and the only ones to which our attention has been called which even tend to uphold his contention are the Conant and Stevens Cases, to which we have already referred.

” On the other hand, the respondent claims that § 5057 is, by its terms, applicable, and a bar to this action. As an original question, independent of any authority, it would seem that the plain reading of the statute upholds this claim. The respondent also insists that the authorities cited by the appellants, so far as they tend to sustain a contrary doctrine, having been overruled, or are against the weight of authority upon that question, and refers to the following cases as sustaining its insistence: Cleveland v. Boerum, 24 N. Y. 613; Banks v. Ogden, supra; Bailey v. Grover, 21 Wall. 342, 346; Gifford v. Helms, 98 U. S. 248, 252; Jenkins v. Bank, 106 id. 571; Phelan v. O'Brien, 13 Fed. 657; Harvey v. Gage, 31 id. 275; Avery v. Cleary, 132 U. S. 604; Cleveland v. Boerum was an action for the redemption of 'land from a mortgage after offer to pay the amount secured thereby. The defendant was a purchaser under the mortgage sale. The plaintiff claimed to have acquired the interest of one of the owners of the equity of redemption under a transfer by his assignee in bankrutcy. In that case the question arose whether § 8 of the bankrupt act of 1841 was applicable, and it was held that the two years limitation provided by that’statute applied, and was a bar to the action. In Banks v. Ogden it was said: “The eighth section of the bankrupt act of 1841 limited suits concerning the estate of the bankrupt by assignees against persons claiming adversely, and by such persons against assignees, to two years after decree of bankruptcy or first accrual of cause of suit. There is no express limitation upon sales, nor any limitation upon any action other than suits, by the assignee, except.”

And then follows a provision which is not applicable in this case. From this case it is to be plainly inferred that after the expiration of two years an action for the recovery of real estate is barred by the statute. In Bailey v. Glover, Miller, J., in examining § 2 of the bankrupt law of 1867, said: “ There is a statute of limitation. It is precisely like other statute of limitation, and applies to all judicial contests between the assignee and other persons touching the property or rights of property of the bankrupt transferable to or vested in the assignee, where the interests are adverse, and have so existed for more than two years from the time when the cause of action accrued for or against the assignee. Such is almost the language in which the provision is expressed in § 5057 of the Revised Statutes.”

In Gifford v. Helms, Mr. Justice Clifford, discussing § 5057, said: Beyond doubt it applies to all judicial contests between the assignee and other persons touching the property or rights of property of the bankrupt, transferable to or vested in the assignee,, where the interests are adverse, and have so existed for more than two years from the time when the cause of action accrued for or against the assignee,”—citing Bailey v. Glover, supra.

In Jenlcins v. Bank it was held that, where a judgment in a state court was rendered against one shortly thereafter declared to be-a bankrupt, a writ of error to that judgment, brought by his assignee, is a suit, within the meaning of § 5057 of the United States Revised Statutes, and that the limitation of time in that section applies to a suit by the assignee to recover a debt or other moneyed obligation, as well as to a controversy concerning property or rights of property to which there are adverse claims. In Phelan v. O'Brien, which was an action to set aside a sale under a deed of trust which was foreclosed by an assignee in bankruptcy who purchased the property for the benefit of the estate, it was held that proceedings, instituted more than two years after the sale, to set it aside, were barred by the limitations of the bankrupt act. The case of In re Conant, 5 Blatchf. 54, was there considered, and regarded as practically overruled by Banks v. Ogden, 2 Wall. 57, and Norton v. De La Villebeuve, 13 N. B. R. 304. In Harvey v. Gage, where the defendant obtained two tax deeds, made and recorded in 1877 and 1880, to property of which the plaintiff, as assignee in bankruptcy, had become seized in 1873, it was held that a suit to set aside such deeds, commenced by the plaintiff as such assignee in 1886, was not maintainable, it not having been brought within two years from the time the cause of action accrued ; in other words, that it was barred by § 5057. In Avery v. Cleary one Ellis had three policies of insurance upon his life, which in May, 1877, he transferred to one Morse, in trust to pay the income to his two daughters. In July, 1878, he filed a petition in bankruptcy, and having been adjudged a bankrupt, his estate was transferred to an assignee, who acted until he was succeeded by the defendant in error. The bankrupt died in November, 1879, and in the following December the insurance company paid to the plaintiff in error, his administrator', who was also the guardian of the children, the amount due upon said policies. In September, 1882, the plaintiff, as assignee in bankruptcy, brought an action to recover from the administrator of the bankrupt the amount received upon such policies. It was held that the suit was one between an assignee in bankruptcy and one claiming an adverse interest touching the property which was the subject of controversy, and within the meaning of § 5057, prescribing a limitation for the commencement of such an action. It was also held that mere ignorance of the existence of a cause of action by an assignee in bankruptcy does not remove the bar against siich an action prescribed by this statute of limitation. This review of the authorities touching the question, while, perhaps, disclosing that they are not in all respects in harmony, yet, we think, renders it quite manifest that the weight of the authorities tends to sustain the conclusion reached by the learned trial judge. What would have been the result if the plaintiff, as such assignee, had transferred the land to another in pursuance of an order of the bankrupt court, and the purchaser had brought this action, it is unnecessary to decide ; but as there was no such transfer, and this action was brought by the assignee, we think it falls within the bar of the statute, and the court properly so held.

It follows, therefore, that the judgment should be affirmed.

Judgment affirmed, with costs.

All concur.


source: Caselaw Access Project

author: Pee Curiam.

license: Public Domain

text:
    David E. Barrows, App’lt, v. Henry N. Webster, Resp't.

      (Court of Appeals,

      Mled January 15, 1895.)

    Deed—Description.
    Where the owner of lands, lying on the west side of a certain street, conveyed to plaintiff a lot bounded by the west line of said street, and thereafter conveyed to defendant land lying westerly of and adjoining plaintiff’s lot, without any reference to the village map in either deed, on which map the westerly line of said street was laid down as twelve feet west of the line of the street as actually opened and worked, the plaintiff and his grantor had, at the time he took his deed, the right to determine which line should be taken as the boundary line of the street, and the question as to what was that determination was one of fact; and the evidence was held to justify a finding that the intention was to bound the lot by the line as it actually appeared.
    Appeal from judgment of the general term of the supreme court in the fifth judicial department, entered upon an order, which affirmed a judgment 'in favor of defendant entered upon the report of a referee.

      J. Arthur Corbin, for app’lt; J. H. Waring, for resp’t.

      Affirming, 53 St. Rep. 937.

   Pee Curiam.

This is an action of ejectment to recover a strip of land twelve feet wide in the village of Olean. Both parties claim title under the same grantor, the deed of the plaintiff being prior to that of the defendant. The land conveyed to the plaintiff was a lot on the west side of Union street, bounded by the west line thereof, and being 125 feet deep from that line. The land subsequently conveyed to the defendant lies westerly of and adjoining plaintiff’s lot. The dispute grows out of the uncertainty of the location of the westerly line of Union street. The plaintiff claims that that line is twelve feet further west than the defendant admits it to be, and if his claim is well founded the westerly line of his lot incloses the land in dispute and he should recover in this action.

In 1836 a map of the village of Olean, called the Grosseline map, was made, in which the streets and village lots' were designated, and that map has since been generally recognized as the official map of the village. It does not appear to have been made by any person who owned the lands conveyed to these parties. The plaintiff claims that the westerly line of Union street in front of his lot is where it was laid down upon that map. The defendant claims that he is not bound by that map, and that that line is twelve feet further east.

There is no reference to the Grosseline map in either of the deeds to these parties, and there is nothing on the face of the deeds showing that the grantor intended to convey by that map.

Union street had been an open, traveled street for more than fifty years before the trial of this action, and it was in existence before the making of the map. It had never been opened to the width laid down upon the map, and the westerly line, thereof had always been in fact where the defendant claims it to be. The fences, sidewalks and trees indicated the line to be as claimed by him, and the twelve feet between the line as claimed by the plaintiff and that claimed by the defendant had never been in fact opened, used and worked as a part of the street. To a person knowing nothing about the map the westerly line of the street would appear to be where the defendant claims it to be. Both parties, when they took their conveyances, were familiar with the location and condition of the actual visible street, and there was some evidence upon the trial tending to show that when the plaintiff took his deed the measurements were made from the westerly side of the street, as it was then actually opened and used.

No one will dispute that at the" time the plaintiff took his deed he and his grantor could determine whether they would, take the line of the street as it appeared upon the Grosseline map or as it appeared upon the ground, and whether they took the one line or the other, we think was a question of fact. If they had intended to take the map line as a boundarjq some reference would probably have been made to the map in the "deed.

Upon the facts to which we have alluded and others appearing in the record, the referee found that in making the conveyance to the plaintiff it was the intention of the parties thereto to make the easterly boundary of said land coincide"with the visible westerly boundary of Union street, as it then appeared and was actually used by the public.” We think there was evidence warranting this finding, and that it was legally competent for the referee, taking the description in the deed and all the other facts proved by oral evidence, to make the finding.

We have carefully considered all the exceptions taken upon the trial and do not find that they point out any error, and for the reasons we have given and those found in the opinion of the general term, printed in the record, the judgment should be affirmed, with costs.

All concur. Judgment affirmed.


author: Peckham, J.

text:
    Amelia Bernstein, Resp’t, v. James Nealis, App’lt.

      {Court of Appeals,

      Filed January 15, 1895.)

    1. Judgment—Merger.
    A judgment of foreclosure does not so far merge the mortgage in the judgment as to blot the record of the mortgage out of existence, or relieve any one, looking at the decree and deed in foreclosure from the effect of that mortgage record as notice of what the mortgage contains.

      2. Mortgage—Foreclosure—Description.
    Though the description by metes and hounds in the mortgage does not cover the whole premises, a statement therein that the mortgaged premises were the same as were conveyed hy a certain deed, giving its date and place of record, cures the defect, and the whole description is sufficient to> convey the premises.
    3. Same.
    The mortgagee, in foreclosing, had a right to rely upon the statement in the mortgage and to assume that the particular description included the whole premises.
    4. Same.
    Though such statement was omitted in the complaint, judgment and re- ' feree’s deed, the mortgagor and all claiming under any conveyance by him subsequent to the mortgage are estopped from asserting title to any portion to the premises.
    Appeal from judgment of the general term of the supreme court in the first judicial department, entered upon an order, which affirmed a judgment in favor of plaintiff entered upon a verdict directed by the court.

      William R. Page, for app’lt; A. Stern, for resp’t.

       Reversing 47 St. Rep. 239.

   Peckham, J.

We think the defendant proved a good title to the premises which he contracted to sell to the plaintiff. They consisted of a house and lot stated in the contract as being No. 237 Elizabeth street in the city of New York. There was no doubt as to where those premises were or as to their actual width upon that street. The question arises out of the description of them by metes and bounds as contained in some of the conveyances through which the defendant derives title. The deed of 1869 from Rosamond Floyd to Stutzman is the first one which it will be material to consider.

It described a dwelling house and lot on the west side of Elizabeth street between Prince and Houston streets in the city of New York, and being 23 feet and 3 inches wide on Elizabeth street. This was a correct description of and conveyed the premises which the defendant contracted to sell to the plaintiff. Stutzman subsequently mortgaged the premises by a description which commenced “at a point on the westerly side of Elizabeth street distant 123 feet 2 inches northerly from the corner of Prince and Elizabeth streets; running thence northerly along the said westerly line of Elizabeth street 20 feet 3 1-2 inches.” The other boundaries are immaterial. The mortgage closed by a statement that the mortgaged premises were “the same premises which were conveyed by deed bearing date the 26th of November, 1869, to the party of the first part by Rosamond Floyd, and recorded in the office of the register in liber 1112 of conveyances, page 549, on the 1st day of December, 1869.”

It is stated and we assume that the premises described in the deed from Rosamond Floyd to Stutzman actually commence at a point 121 feet and 2 inches north from the corner of Prince and Elizabeth streets instead of 123 feet and 2 inches as stated in the description contained in the mortgage from Stutzman, and that they are 23 feet 3 inches instead of but 20 feet 3 1-2 inches wide. The mortgage was foreclosed, and one Maria Venter, a subsequent .grantee of the fee subject to the mortgage, was made a party to the foreclosure. The complaint in the foreclosure action followed the description in the mortgage in the same terms as are therein set forth, with the exception that it" left out the allegation contained in the mortgage that the premises mortgaged were the same premises conveyed to the mortgagor by the Floyd deed. The deoree of foreclosure follows the description contained in the complaint, and the deed executed by the referee in the foreclosure sale also follows the same description. The defendant takes title through mesne conveyances from the purchaser at the foreclosure sale. No criticism is made in regard to the sufficiency of those descriptions,' except that they cannot convey more than was conveyed by the foreclosure deed.

It was admitted on the trial that the premises were a house and lot, the house having stood there more than twenty years, and the deed to Rosamond Floyd dated in 1845 describes the property as a dwelling house and lot and by the same description as is contained in the deed from Rosamond Floyd to Stutzman.

The plaintiff, after the execution of the contract, made an examination of the'title, and upon such examination the above facts appeared. The plaintiff thereupon refused to take a deed, insisting that by reason of such facts the mortgage did not cover and the defendant had no title to the southerly two feet of the premises plaintiff contracted to buy, but that the title to those two feet was then vested in Maria Venter, the subsequent grantee of Stutzman, the mortgagor. The plaintiff demanded back the money she had paid, and upon refusal she commenced this action to recover it together with fees for legal services in searching the title, the amount of which is agreed upon. The plaintiff has thus far succeeded in her contention.

Although the description by metes and bounds as set forth in the mortgage does not cover the two feet in question, yet the mortgage also contains the statement that the premises are the same which were conveyed to the mortgagor by the Floyd deed which was on record. This statement, taken with the description in the mortgage, would, upon the facts appearing herein, make it a sufficient description to convey such premises. It is not disputed that the Floyd deed covers the whole of the premises contracted to be purchased. They consisted of a lot upon which a house had been built and was then standing. ■ It is scarcely conceivable that the mortgagor intended to cut off two feet in width from his house and mortgage the balance, and it is equally improbable that any one would take such a mortgage. It is clear, therefore, that the statement in the mortgage, that the bouh'dary commenced 123 feet 2 inches from the north corner of Elizabeth and Prince streets, and ran thence north 20 feet 3£ inches, was only a mistaken description of the premises intended to be conveyed. A mistake, however, does not aid the defendant unless it be cured by the subsequent description or statement in the instrument. I think it is cured by that statement. It is there asserted that the premises mortgaged are the same as those conveyed to the mortgagor by the Floyd deed which is of record. Considering the character of the premises, being a house and lot in a city, with houses on each side, and remembering that those very premises .are in fact covered by the Floyd deed to the mortgagor, it must be that this statement, when used by him, is as against him equivalent to a conveyance, which includes those premises by metes and bounds. Nothing else will satisfy the statement. It is in substance and effect an assertion by the mortgagor that those premises are included in and pass by the particular description just given. Such a case is wholly unlike that of Thayer v. Finton, 108 N. Y. 394; 13 St. Rep. 778. There the description by metes and bounds, in the deed from Thayer to Eggleston, was apt and perfect for the purpose of describing two lots of land. It did not describe a third lot, separated and at some distance from them both. And it was held that the statement following the description, and that the premises conveyed were the same premises then in possessiom of tlie grantor and conveyed to him by C. and wife, did not have the effect of including the third lot, although it had been conveyed by 0. and wife, and the grantee in that deed was then in possession of such third lot. It was said the boundailes in the Eggleston deed were capable of exact ascertainment, ■and described precisely and exactly two specific pieces of property which had been conveyed to the grantor in that deed, and that there was no ' indication in the Eggleston deed that the ■grantor therein intended to convey three pieces, or any land ■other than that which was therein particularly described. The land particularly described was in possession of the grantor, and had been deeded to him by 0. and wife, and the statement in the Eggleston deed did not- assume that such deed conveyed all the land that had been granted to the grantor, or all that he-was in possession of. The language was held entirely too loose and indefinite under the facts of that case to include land not described.

In this case the specific description is slightly inaccurate, and in fact it cuts off "two feet from a house and lot the whole of which, beyond all possible controversy, was intended to be conveyed. By reason of this inaccuracy in the description by metes ■and bounds, if unaided by the added statement, the clear intention of the mortgagor to mortgage the whole might fail. But when such, added statement is referred to all doubt is removed, and by combining the two, the special and particular description with the statement as to what it actually conveys, all the land described in the Floyd deed must be held to pass under the description in .the mortgage. The statement, in the light of the character of the property, means all the premises contained in the Floyd deed and not a part only.

The doubt in this case arises from the fact that, in proceeding to foreclose the mortgage the complaint, decree and referee’s deed described the premises by the particular description contained in the mortgage, and did not refer to the statement in the mortgage beginning, “ being the same premises,” etc. As to the mortgagor, however, and his grantees subsequent to the mortgage, the particular description was sufficient to convey the premises as they actually existed, because they passed by the deed from Rosamond Floyd to the mortgagor, and he, in effect, has stated in his mortgage that the description therein contained does convey all those premises, and that he intends to convey them by that description.

When the mortgagee comes to foreclose the mortgage, therefore, lie may take the .mortgagor at his word, and may rely upon it and assume that the particular description used in the mortgage does convey the same premises conveyed to the mortgagor by the Floyd deed, and the added statement in the mortgage need not be inserted in the complaint or in the decree, or ip the deed of the referee, in order to convey as against the mortgagor the same premises that were conveyed to the mortgagor by the Floyd deed.

The mortgagor and those claiming under ’ him would be, under these circumstances, estopped from setting up or asserting any title to any portion of those premises passing under the Floyd deed founded upon any alleged insufficiency of description actually set forth in the complaint or decree, or deed in foreclosure. The mortgagor has asserted the description contained in the referee’s deed to be sufficient, and that when used in the mortgage it did in fact convey the premises described in the Floyd deed, and it would be an inequitable proposition to permit the mortgagor to now deny his own solemn statement.

Those claiming under or through the mortgagor would be es-topped the same as the mortgagor, because they would take under the mortgage and subject to the mortgage, which, being on record, would be notice to them of the fact that the description therein by metes and bounds covered the premises conveyed by the Floyd deed, because the mortgagor so stated in the mortgage itself. The judgment of foreclosure does not so far merge the mortgage in the judgment as to blot the record of the mortgage out of existence or relieve any one looking at the decree and deed in foreclosure from the effect of that mortgage record as notice of what the mortgage contains. It seems to me therefore,0 that the title of defendant was good beyond any attack from Maria Yen ter or her grantees. The defendant, by his tendered deed, assumes by an apt description to convey the very premises which are described in the deed from Rosamond Floyd, and which were mortgaged by her grantee.

Our conclusion is that the judgment should be reversed and a new trial granted, with costs to abide the event.

All concur (Gray, J., in result), except Haight, J., not sitting.

Judgment reversed.


author: O’Brien, J.

text:
    Macgrane Coxe, as Receiver, etc., App’lt, v. The State of New York, Resp’t.

      (Court of Appeals,

      Mled January 15, 1895.

    1. State—Title.
    The title of the state to the seacoast and .the shores of tidal rivers is an incident and part of its sovereignty, which cannot he surrendered, alienated or delegated, except for some public purpose or some reasonable use which can fairly be said to be for the public benefit,

      3. Same.
    Such a grant can never constitute a contract between the state and the grantee, which is beyond the power of revocation.
    3. Constitutional law—Act op 1868.
    The provisions of chap. 844 of 1868, as amended by chap. 383 of 1869, so far as it attempts to confer upon the company the right of property and the dominion over the waters designated, is obnoxious to the provision of the Federal Constituí ion, which confers upon Congress the exclusive power to regulate foreign and inter-state commerce.
    4. Same.
    Such act is also violative of §16, art. 3 of the Constitution.
    5. State—Title.
    Such act did not, therefore, divest the state of its ownership of the lands under water or vest any right in, or title to, the same in the corporation organized under it.
    6. Corporation—JDe pacto.
    Such corporation, by organizing, assuming and exercising corporate powers under said act, became a corporation de facto if not de jure, and it required the judgment of a competent court, or an express act of the legislature, to terminate its existence.
    7. Same.
    As the powers and franchises sought to be conferred upon it by this act were taken away by chap. 357 of 1875, the company had a just claim for the amount fixed by the commissioners as the value of such lands, and paid by it into the state treasury.
    8. Same.
    The receiver of the corporation, appointed by the court, had a sufficient, standing to enforce the claim.
    9. State—Claim.
    Such claim is not barred by § 14, art. 7 of the Constitution.
    10. Same.
    The legislature had power to create some tribunal for the purpose of auditing the claim, and to appropriate money for the payment of the award.
    11. Same.
    The jurisdiction of the commissioners was not lost by failure to comply with the direction in the act requiring them to report to the next legislature, nor was their power repealed or in any way affected by the passage of chap. 444 of 1876.
    13. Same.
    Power,,conferred by statute for a special purpose and applicable to a particular case, is not taken away by the passage of a subsequent statute, general in its language and in its scope and application.
    13. Same.
    The company is entitled to interest on the sum paid into the state treasury.
    Appeal from an award of the board of claims, which directed an award of nothing to be entered.

      Julien T. Davies, H. B. Hinsdale and Byron Traver, for app’lt ; O. D. B. Hasbrouch, for resp’t.
   O’Brien, J.

The claimant, as receiver of a corporation known as the Marsh Land Company, sought to recover from the state the sum of $25,000, with interest from April 13, 1876. On the trial before the board of claims it has been decided that this claim is not a valid one, and an- award was accordingly made in favor of the state. The most important question in the case is whether the claimant, or the corporation which he represents, etfer had a just claim for the recovery of this sum, or any part of it, in law or equity. This question depends upon the validity and effect of certain statutes enacted by the legislature.

The Marsh Land Company was incorporated by force of chapter 864 of the Laws of 1868, as amended by chapter 282 of the Laws of 1869. Those statutes conferred powers, in addition to those usually possessed by corporations, of the most important and extensive character. The act was entitled “ An act to authorize the drainage of marsh lands.” After providing that certain persons named, and their successors, should become a corporation, with the usual powers, and providing for its government and management and the amount of its capital stock, it was enacted that the corporation should have power to re-claim and drain, from time to time, as should appear expedient, all or any portion of the wet or overflowed lands and tide-water marshes on or-adjacent to Staten Island and Long Island, except such portions of the same as were included within the corporate limits of any city, and to construct, maintain and use all dykes, dams, ditches, drains, sluices, engines, pumps and other works necessary or convenient for that purpose. Power was also given to enter upon all lands and waters for the purpose of making surveys and locating the dykes and other works, and, when the same was determined upon, to deposit in the office of the secretary of state a map and survey of such route and locations, and then “ to use and own the right and title of the state in and to all the lands under water that may lie within or between said dykes and the present shore line,” upon the payment into the treasury of the state of such sum of money as should be determined, by a commission to be appointed by the governor, to be the fair value of such lands under water, belonging to the state. The corporation accepted the powers and franchises conferred by the act and complied with all of its provisions necessary in order to become vested with the title to the lands contemplated by the grant. It filed the maps and surveys locating the dykes and applied to the governor for the appointment of the commissioners to determine the amount to be paid to the state, and they reported to the secretary of state that they had valued the lands under water belonging to the state, included between the dykes and the established line of riparian owners, as shown by the maps, at $25,000.

The corporation paid this amount into the state treasury on the 16th of December, 1871, and received from the treasurer the certificate provided for by the act, which was recorded in the several counties in which the lands were situated. The boundaries of the lands under water thus granted were not defined in the act, but the corporation had power to locate the dykes at pleasure and' indicate the location upon the map, and, thereupon, whatever lands were included between the dykes and the shore line vested in the corporation.

The act, if valid, thus empowered the corporation to become vested with the title to such portions of the land under the waters of the sea and the sound as it chose to designate upon the maps, within the limits of the counties of Kings, Queens, Richmond and Suffolk, except the city of Brooklyn, which was then the only incorporated city in those four counties. The full history of this legislation and the causes which led to its enactment does not, of course, appear in the record, and it is quite impossible to conjecture either from the language of the act itself, or from any light that we now have, what real purpose or what latent project was in view." All we know is, that soon after it had been passed its full scope and effect was seen, probably by some of the property owners on the shore, and it became the subject of investigation by the legislature. The judiciary committee of the senate, to whom the matter had been referred, reported in regard to its passage and to its effect upon the rights of the state and the owners of lands upon the shore, and expressing in strong language a very unfavorable opinion with respect to the validity and propriety of the legislation. The matter was finally referred to the attorney-general, who responded in an elaborate opinion, containing views equally unfavorable, but declining to' interfere for reasons which lie stated, and among them the fact that the validity of the act could be tested in the courts by the private parties whose property was affected.

It should also be observed that this statute, in addition to the powers already referred to, authorized the- corporation to cause assessments to be made upon private property claimed to be benefited, without any provision for notice to the owners, and to exercise the right of eminent domain in such way as to leave the sections conferring these powers open to very grave objections. By chapter 257 of the Laws of 1875, the legislature repealed all those sections of the act which conferred the power to carry on its operations of draining and re-claiming, and to acquire the title to the lands under water, or to levy assessments, or exercise the power of eminent domain, together with the amendatory act of 1869. This legislation did not in terms extinguish the corporation, but it was completely shorn of all its- powers and franchises, and nothing was left but a mere skeleton with corporate life. The title of this repealing act, after referring to the provisions repealed, states that it was also for the repayment of moneys paid into the state treasury, but the only direct provision on that subject which appears in the body of the act, is one which empowered the commissioners of the land office “to examine any claim for damages of said company founded on amounts actually expended and liabilities actually incurred under said act and to report thereon to the next legislature.” This legislation evidently put an end to all the operations of the company. The officers and managers themselves seemed to have been appalled at the extravagant magnitude of the grant under the acts which had been repealed, as they made no question in the courts as to the right to recall it.

On the contrary, they acquiesced and accepted the provisions made for compensation by filing with the commissioners of the land office, on the 13th of April, 1876, a claim for upwards of $350,000, including the item of $25,000 in question. At a meeting of the commissioners, held about a month afterwards, the claim was laid upon the table, and no further action was ever after taken upon it by that body with a view to its adjustment or payment, although from time to time it was the subject of application to the legislature for relief. The subsequent history of the claim, however, belongs to another part of this discussion. What has thus far been stated is quite sufficient to enable us to get a clear view of the merits of the claim, so far as this item is concerned, as between the corporation and the state at the time when it was filed. The learned trial court has held that under the act of 1868 the company became vested with the title and ownership of the lands under water, outside the shore line of these four counties, as designated upon the maps; that the title thus acquired was not affected by the repealing act of 1875, and, still holding the title to the lands, the company or its representative has no claim against the state for the money paid into the treasury as the consideration for the grant. Of course, if the premises from which the reasoning of the court proceeded are accepted as correct, the conclusion is so obviously sound and just as scarcely to admit of any discussion. It is plain that the claimant ought to have either the money or the land, and if the validity of the grant could be confirmed by the judgment of this court, it would, doubtless, be of immensely more value than any mere money claim involved. But we think that so far as the statutes referred to attempted to confer title to such a vast domain which the state held for the benefit of the public, they were absolutely void as in conflict with the Constitution of the state and of the United States. The objections to the legislation are many and grave, but I will not attempt to elaborate them all.

There is nothing in the enactments to indicate that the grant was for any public purpose and none has been suggested ; and if it could be upheld, it is obvious that such a result would establish the principle that a majority in the legislature is competent to convey to a private corporation, for private purposes, the land under all the tide waters within the jurisdiction of the state. The nature of the title and the power of .the sovereign to alienate lands under tide waters have been a prolific source of judicial discussion from the earliest times, and, judging from the numerous recent decisions, the subject is still almost as fresh as ever. This is due mainly to the circumstance that the courts have never yet attemped to fix the precise limits of legislative power in that regard. It is very difficult and perhaps wholly impracticable to do so. The courts have been satisfied to develop and apply principles, from time to time, sufficient for the purposes of the particular case. It is quite sufficient now to say that wherever the line may be drawn between grants of this character which the legislature may and may not make, such a grant as this has never yet been upheld. The question is governed in this state by the rules of the common law, modified in some respects by statute, and adapted by the courts to such changes of conditions as exist here. That the dominion and ownership of such lands is in the sovereign for the benefit of the public has long been settled. Such dominion and ownership of property generally implies the power of absolute disposition, but with respect to the land under navigable or tide waters an important limitation has been engrafted upon this power from the nature of the title. The title of the state to the seacoast and the shores of tidal rivers is different from the fee simple which an individual holds to an estate in lands. It is not a proprietary, but a sovereign right, and it has been frequently said that a trust is engrafted upon this title for the benefit of the public of which the state is powerless to divest itself. 3 Kent. Com. 545 (9th ed.); 3 Wash. Real Prop. 418 (4th ed.); Gould Law of Waters, §§ 18, 44; Angell on Tide Waters, 158; Smith v. City of Rochester, 92 N. Y. 463; Gann v. Free Fishers, etc., 16 H. L. 192; Illinois Central R. R. Co. v. Illinois, 146 U. S. 387; Hardin v. Jordan, 140 id. 371; Shively v. Bowlby, 152 id. 1; Saunders v. N. Y. C. & H. R. R. R. Co., 144 N. Y. 75; 63 St. Rep. 53.

It would, no doubt, be difficult to reconcile all the uurnerous expressions of opinion to be found in the decisions on this question. In many of them general language is used which would seem to sanction the doctrine of absolute ownership and the unrestrained power of disposition by the sovereign, but this language must be read and understood with reference to the special facts of each case, and when thus read and interpreted, much of the apparent conflict disappears. It has often been said that the legislature of this state is clothed with all the powers of the British Parliament, except as restrained by the express or implied provisions of the Constitution. When the general doctrines of the English courts on this subject are given full scope, the conclusion is inevitable that the Parliament and the Crown together were not competent to grant to a private corporation, for private purposes, the seacoast around the island below the shore line, without violating established principles of law. Martin v. Waddell, 16 Peters, 367. While I am not aware of any such restriction to be found in the Constitution of this state, in terms, yet, from the very nature of the question, it must be deemed to be inherent in the title and power of disposition. The title which the state holds and the power of disposition is an incident and part of its sovereignty that cannot be surrendered, alienated or delegated, except for some public purpose, or some reasonable use which can fairly be said to be for the public benefit. Illinois Central R. R. Co., v. Illinois, supra; Shively v. Bowlby, supra; People ex rel. N. Y. El. Lines Co. v. Squire, 107 N. Y. 593; 12 St. Rep. 832; Buffalo East Side R. R. Co. v. Buff. St. R. R. Co., 111 N. Y. 132, 140; 19 St. Rep. 574; Harden v. Jordan, surpra.

Such a grant, therefore, can never constitute a contract, between the state and the grantee which is beyond the power of revocation by a subsequent legislature. For every purpose which may be useful, convenient or necessary to the public, the state has the unquestionable right to make grants in fee or conditionally for the beneficial use of the grantee, or to promote commerce according to their terms. The extensive grant to the city of New York of the lands under water below the shore line around Manhattan island clearly comes within this principle, since it was a grant to-a municipality, constituting a political division of the state, for the promotion of the commercial prosperity of the city, and consequently of the people of the state. Langdon v. Mayor, etc., 93 N. Y. 129. So, also, grants to railroads for rights of way and other facilities for the transaction of their business, made under the authority of the state, have been held valid upon the same principle, Saunders' Case, supra, as well as to corporations and private persons engaged in commerce or navigation for their-necessary or reasonable use. Grants to the owners of the adjoining uplands, either for beneficial enjoyment or for commercial purposes, have long been authorized and recognized as one of the uses to which the state may lawfully apply such lands. But it was never supposed that the state could grant away any of this portion of its domain for mere speculative purposes, or that it could traffic in it like an individual who owned property which he had the right to sell at such price and for such purposes as his immediate wants and interests seemed to require. It is quite conceivable, however, that such grants have been made under-such circumstances and for such purposes that, when recalled or revoked, there may arise, in favor of the grantee and .against the state, an obligation to restore the consideration paid, or to make good losses incurred in consequence of improvements or expenditures upon the faith of the grant, which the state is bound to discharge in honor and good faith.

It may be that the provisions of- the act, so far as they affected. . the rights of riparian owners, as well as those which authorized, the imposition of assessments and the sale of private property in-case of non-payment, and the exercise .of the right of eminent domain for private purposes, constituting, as I think they did, unconstitutional invasions of private rights, must ordinarily be-assailed by the parties affected, still they were reasons which justified the legislature in passing the repealing act.

The act, so far as it attempted to confer upon the company the-right of property in the lands and the dominion over the waters, designated on the maps, and the power to inclose such parts of the same as it elected to take with dykes and other obstructions-to navigation, was obnoxious to that provision of the Federal Constitution which confers upon congress the exclusive power to-regulate foreign and inter-state commerce. Gibbons v. Ogden, 9 Wheat. 1; Hannon v. City of Chicago, 147 U. S. 396; Smith v. Alabama, 124 id. 465.

The statute must be viewed with reference to what could have been done under it and not what actually was done. Stuart v. Palmer, 74 N. Y. 183, 188. And when we consider that the locality where the operations of the company were to. be carried on is the great highway of commerce which should be'open and common to all, it is not difficult to see that such power, if upheld,, might seriously interfere with the navigation upon the waters,, and consequently with the freedom of commerce.

The act of 1868 was also violative of § 16, art. 3 of the Constitution, which provides that no local or private bill shall be passed embracing more than one subject, and that shall be expressed in the title. The bill was clearly both private and local. People v. O'Brien, 38 N. Y. 193. It created a private corporation, and its operations affected four counties in the state. The subjects embraced in it were the creation of the corporation; the authority to drain and re-claim tide-water marsh lands; to levy and collect assessments; to exercise the power of eminent domain and the grant of lands belonging to the state. We have seen that the purpose of the act, as expressed in-the title, was the authority to “drain marsh lands.” Without inquiring whether any of these subjects are germane to, or so connected with the one expressed in the title as to escape .the objection, it is quite clear that no citizen or member of the legislature would expect to find such an extraordinary grant from the state of lands under water in the body of a bill with such a title, and that is a fair test of the question. Astor v. Arcade R. Co., 113 N. Y. 93; 22 St. Rep. 1; Johnston v. Spicer, 107 N. Y. 185; 11 St. Rep. 436; Matter of Paul, 94 N. Y. 497; Matter of Blodgett, 89 id. 392; Matter of Mayor, 99 id. 569.

The various provisions of the act are so mingled together and dependent upon each other that it is not clear that any of them can stand, except, possibly, the sections creating and providing for the management of the corporation. It is not important to decide what provisions, if any, of the act can be upheld, since, even if the section creating the corporation should fall with the rest, it is undisputed that it organized, assumed and exercised corporate powers under an act of the legislature, and thus it was a corporation de facto, if not de jure, and it required the judgment of a competent court or an express act of the legislature to terminate its existence. The claimant, having been appointed receiver by the judgment of the court, has in any view a sufficient standing to enforce this claim. It follows that the legislation referred to was, for the reasons stated, wholly ineffectual to divest the state of its ownership of the lands under water or to vest any right or title to the same in the corporation, and, consequently, that the claim presented for repayment to the corporation of the consideration money was just.

The remaining question is whether the claim is barred by § 14, art. 7 of the Constitution, which prohibits the audit and payment of any claim, which, as between citizens of the state, would be barred by lapse of time. It is not necessary to refer to the subsequent clauses of the section, because it has been held that they apply only to claims existing at the time the section went into effect, on January 1,1875, and such is evidently the correct meaning of the provision. O'Hara v. State, 112 N. Y. 146; 20 St. Rep. 647. The repealing act having been passed, and this claim having accrued subsequent to that date, the only question is whether, upon the facts found, it would have been barred as between private litigants.

Reference has already been made to the provisions of the repealing act which empowered the commissioners of the land office to examine the claim and report thereon, and to the filing of the claim. The power to audit the claim had then been taken from the legislature by a new provision of the Constitution (§ 19, art. 3), but it had still the power to create some tribunal for that purpose and to appropriate money for the payment of the award. Cole v. State, 102 N. Y. 48, 52. The legislature had the power to constitute the commissioners of the land office, composed of the state officers and the presiding officers of the senate and assembly, a tribunal for that purpose, and there is no reason to doubt that such was the intention. The power to examine the claim was broad enough to authorize the commissioners to take testimony as to the facts and determine the amount justly due so far as any tribunal of its own creation ever can determine that question as against the state. Having abrogated the grant, the obligation to make the grantee good for what had been taken from it was recognized, at least to the extent of the sum which the state had received as the consideration, and for the purpose of determining that question judicial powers were conferred upon the commissioners. People v. Supervisors of Dutchess, 9 Wend. 508; People v. Hicks, 15 Barb. 153; Groenreet v. Burwell, 1 Salk. 200.

The direction to report to the next legislature was not a limitation upon the power of the commissioners, but was merely directory. The jurisdiction to examine and report was not lost by failure to comply with the direction. The power conferred imposed a duty which rested upon them until performed.” People v. Schermerhorn, 19 Barb. 540, 558; Matter of Broadway Widening, 63 id. 572; Rawson v. Van Riper, 1 T. & C. 370.

Nor was the power to examine and report thus conferred upon the commissioners repealed or in any way affected by the passage of chapter 444 of the Laws of 1876, creating the board of audit with power to hear and determine all private claims against the state. The latter was a general law applicable to all claims of a private nature against the state, except such as were then pending before the canal appraisers. The act of 1875, referring this claim to the commissioners, was special, and applicable to a single claim only. There was no express repeal of the latter, and there is no such repugnancy in the terms or objects of the two statutes as to work a repeal by implication. Both statutes can stand, each answering all the purposes and performing all the functions which were intended. Power conferred by statute for a special purpose and applicable to a particular case is not taken away by the passage of a subsequent statute general in its language and in its scope and application.

The power is deemed to be repealed only when the language of the latter clearly discloses such an intention, or when the two enactments are so repugnant to each other that both cannot stand. Wood v. Supervisors, 136 N. Y. 403; 49 St. Rep. 685; Menks v. State, 97 N. Y. 572; McKenna v. Edmundstone, 91 id. 231; Van Denburgh v. Village of Greenbush, 66 id. 1; People v. Quigg, 59 id. 83.

Thus it appears that within a year after the claim accrued it was presented to the tribunal constituted by the state to hear and examine into its merits. This was equivalent to the commencement of an action between citizens, which suspended the operation of the statute of limitations upon the claim, and unless something occurred afterwards to set the statute running the cause of action is not barred.

The next step in the history of the claim was an application by one of the creditors of the corporation to the legislature for relief and the passage of chapter 317 of the Laws of 1884.

This act recited the preceding legislation in regard to the company; the repeal of the grant; the payment of the $25,000 .which still remained in the treasury; the reference of the claim to the commissioners of the land office; the failure to report; the fact that one Collins held judgments against the company amounting to $9,033.39, recovered before the passage of the repealing act, and then appropriated money for the satisfaction of the judgments.

This was, doubtless, as the court below remarked, a singular piece of legislation. But, while it diminished to the extent of the sum paid by the state to this creditor, the claim of the company, it certainly did not prejudice it in any other respect. On the contrary, it was a recognition in a very solemn form of the obligations of the state and the justice of the claim.

Application to the legislature for payment of the balance, or some disposition of the matter, followed during the subsequent years. In 1872 the commissioners of the land office referred the matter to the attorney-general, who expressed the opinion that the claim had been transferred by operation of law to the board of claims. How it got there we are not informed, since the opinion of the learned attorney-general is not in the record. His view probably was that it came there through the board of audit and the operation of the act (chap. 205, Laws of 1883) creating the board of claims. If so, that question has been already considered. But in any view it is difficult to see that the transfer of an action from one tribunal to another by force of a statute could have any effect upon the operation of the statute of limitations. The commissioners of the land office, however, by resolution in April, 1892, transferred the claim to the board of claims, and, in January following, the present claimant amended the claim by an abandonment of all of it, as originally filed, except the item of $25,000, subject to reduction by the application of the sum paid upon the judgment in 1884. Subsequently all the other items of the claim were dismissed by the board, with the consent of the claimant, without prejudice to the item retained. In February, 1893, the case was moved for trial before the board, and upon an expression of opinion by the court, which implied great doubt as to its jurisdiction, the trial was suspended, though the claim was not dismissed. By chapter 425 of the Laws of 1893 the claims pending before the commissioners of the land office were transferred to the board of claims. We think that the claim was, at the time of the passage of the act, pending before the commissioners of the land office, and that enactment transferred the case to the board of claims, and conferred jurisdiction upon that court to hear and determine it. The question of loches, as before observed, has no application to claims arising subsequently to January, 1875, nor to any cause of action between citizens alter the commencement of the action. The claim, therefore,, was not barred by the statute of limitations.

All the other items having been withdrawn and expressly abandoned by the claimant through his counsel in open court and dismissed at his request, must be regarded as finally disposed of by a judgment in favor of the state. There is not, I think, any good ground for refusing interest on the sum which the state received. It is true that prior to the amendment of the claim in 1893 this item was part of a large claim which was unliquidated. But the sum of money paid into the treasury -was always a liquidated demand. There is no rule of law that Í am aware of which suspends the running of interest upon such a demand merely because it is united with other claims not liquidated. For all purposes this item must now be treated in the same way as if no other claims had been made or as if it had been filed separately. These views lead to the conclusion that the claimant is entitled to recover the $25,000, with interest from April 13, 1876, after crediting upon the claim the amount paid under the appropriation of 1884. If the company aliened or incumbered any of the lands for a consideration, that fact should be considered in diminution of the claim. The trial court has found that it had not, prior to the passage of the repealing act. I am not prepared to say that it was impossible for the company, if it continued to exist, to receive some benefit afterwards upon the faith of a colorable title. While it is not likely that it did, still the state ought not to be concluded, but the question ought be left open for such investigation as the attorney-general may consider necessary.

The award of the board of claims should be reversed and a new trial granted, costs to abide the event.

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

Award reversed.


author: Per Curiam.

text:
    Charles M. Drake, App’lt, v. The State of New York, Resp’t.

      (Court of Appeals,

      Filed January 15, 1895.)

    State—Wages.
    Section 1, chap. 380 of 1889, does not apply to laborers in the penal, reformatory, eleemosynary or educational institutions of the state.
    Appeal from an award of the board of claims, made April 12, 1893.

      J. F. Parkhurst, for app’lt; T. F. Hancock, for resp’t.
   Per Curiam.

The plaintiff was employed as a fireman at the New York State Soldiers and Sailors’ Home at Bath, from May 1, 1888, to March 27, 1889, for wages at the rate of $30 per month. At the end of each month he received his pay and signed a receipt acknowledging full payment for the month’s wages. He now claims a residue of his wages at the rate of two dollars per day, and bases his claim, mainly, upon the act, chapter 380 of the Laws of 1889. This act is entitled, “ An act to regulate the rate of wages on all public works in this state, and to define what laborers shall be employed thereon.”

Section 1 provides that: “From and after the passage of this act the wages of day laborers employed by the state, or any officer thereof, shall not be less than two dollars per day, and for all such employed otherwise than day laborers, at a rate of not less than twenty-five cents per hour.”

Section 2 provides that: “In all cases where laborers are employed on any public work in this state, preference shall be given to citizens of the state of New York.”

He claims that this act, from and after its passage, secured to Mm compensation at the rate of two dollars per day. The board of claims decided against him on the ground that he was not one of the laborers “employed -by the state, or any officer thereof” within the meaning of the act. The act was under consideration in the case of Clark v. The State, 142 N. Y. 101; 58 St. Rep. 444, and our general views in reference thereto were there expressed, and it is not needful to repeat them here. The legislation embodied in the act conferred special privileges upon a certain class of laborers within the state, and sound policy requires that it should be strictly construed so that it will not be extended to cases not plainly within the legislative intent.

It must be noticed first that the purpose of the act as embraced ■in the title was to regulate the rate of wages “.on all public works” in this state, and in construing the statute the .title may be considered. People v. Molyneux, 40 N. Y. 116; Jones v. Sheldon, 50 id. 477; People v. Wood, 71 id. 371; People ex rel. Westchester F. Ins. Co. v. Davenport, 91 id. 574. If this first section of the act stood alone, unexplained by any other provision contained therein, or by the title, such a laborer as the claimant was would clearly be within its provisions. But in section 2 there is a further indication that the laborers the legislature had in mind were those employed on public works in this state, and we think the board of claims was right, considering the whole act with its title, in holding that it applied only to laborers -upon such public works, and that it did not apply to laborers in the penal, reformatory, eleemosynary or educational institutions of the state.

The canals of the state aré referred to in section 3 of aricle 5 of the Constitution as “the public works” of the state, and we believe that the main, if not the exclusive, purpose of the legislature was to provide for employment and wages upon such public works, and in the absence of a plain manifestation of the legislative intent we are unwilling to give the act broader scope.

The act, chapter 385 of the Laws of 1870, has no application to this case. McCarthy v. Mayor, etc., 96 N. Y. 1.

The aw’ard should, therefore, be affirmed, with costs.

All concur.

Award affirmed.


author: Bartlett, J.

text:
    Nellie House, Resp’t, v. Frederick Walch, App’lt.

      {Court of Appeals,

      Filed January 15,1895.)

    Evidence—Pabol.
    Parol evidence is inadmissible to vary or contradict a written contract, clear as to its terms and complete on its face.
    Appeal from a judgment of the general term of the supreme court in the fourth judicial department, entered upon an order, which affirmed a judgment in favor of plaintiff entered upon a verdict.
    The nature of the action and the facts, so far as material, are stated in the opinion.

      Wm. Lincoln Barnum, for app’lt; P. J. Ryan, for resp’t.

      Reversing 53 St. Rep. 935.

   Bartlett, J.

This is an appeal from a judgment of the general term of the fourth department affirming a judgment for plaintiff on the verdict of a jury.

The plaintiff seeks to recover damages from the defendant for an alleged breach of a contract, in writing, for the exchange of real estate.

The original complaint set forth the written contract and its breach and asked for damages.

An amended complaint was served setting up the written contract, and also' alleging that at the time of its execution and also subsequent thereto, a further and different agreement was made.

Notwithstanding the allegations of the amended complaint both parties at the trial stood upon the written contract. The plaintiff insisted that it was ambiguous and paroi evidence was admissible to explain it, while the defendant objected to the evidence on the ground that no ambiguity existed.

The written contract is very brief, and provides for an exchange of real estate, the plaintiff to convey to defendant Nos. 244 and 246 Tallman street in the city of Syracuse, cleared of its incumbrance of $5,800 at time of delivery of deed, and the defendant to convey to plaintiff a from of fifty acres in Cortland county subject to an incumbrance of $900.

We have here a contract complete on its face, and but for certain extraneous facts there would seem to be no difficulty in adjusting the rights of the parties.

At the trial both parties practically admitted that the written contract did not express the real agreement, as it was undisputed that the defendant was to pay plaintiff $5,000 in addition to conveying his farm. The plaintiff also insisted that it was agreed that she was to allow her property to be sold on a mortgage foreclosure for the purpose of making a better title, some two weeks before the law day under the written contract, and that the defendant was to bid the same in and then convey his farm to plaintiff subject to a mortgage of $900, the latter amount being practically a loan from defendant to plaintiff in order to enable her to clear the incumbrance from her city property. This agreement the defendant denied as to some of its details. It also appeared that plaintiff’s city property was worth from $5,500 to $6,000, while the defendant’s farm was valued at about $1,200. Confronted by this situation the plaintiff should have brought an action to reform the contract and to enforce it as reformed. This she failed to do, and, as already stated, stood on the written contract at the trial, seeking to show the real agreement by reason of the alleged ambiguousness of the writing. The ambiguity is said to be found in the following clause of the contract which refers to plaintiff’s city property, viz.: “ Said property shall be free and clear from all incumbrances and right of dower except an incumbrance of $5,800, tb be cleared at time of delivery of deed." The learned trial judge held this to be ambiguous, and admitted paroi evidence of the alleged real agreement of the parties in order to explain the ambiguity. We are unable to discover any ambiguity in the clause referred to; it seems to us clear that, under the strict terms of thé contract, it was the duty of plaintiff to free her property of incumbrance at the time the deed was to be delivered; it is impossible to give any other reasonable construction to the language employed. It certainly cannot be properly claimed that this clause imposed any duty upon the defendant in regard to clearing the title of plaintiff’s property. We have here a contract clear as to its terms, complete on its face, and paroi evidence was inadmissible to vary or contradict the writing. It is a general rule that evidence of what was said between the parties to a valid instrument in writing, either prior to or at the time of its execution, cannot be received to contradict or vary its terms. Wilson v. Deen, 74 N. Y. 534; Eighmie v. Taylor, 98 id. 288; Marsh v. McNair, 99 id. 174; Engelhorn v. Reitlinger, 122 id. 76; 33 St. Rep. 275; Thomas v. Scutt, 127 N. Y. 133; 38 St. Rep. 692.

While there are certain well-established exceptions to this general rule the case at bar does not come within any of them. This is not a case where the written contract is obviously incomplete and where paroi evidence is essential to make clear its terms. Chapin v. Dobson 78 N. Y. 74. The two essentials in such a case are lacking here, viz., incompleteness on the face of the contract and the fact that the paroi evidence offered is consistent with and not contradictory of tbe written instrument.

Evidence to explain an ambiguity or show the meaning. of technical terms, is not an exception to the general rule, but is allowed to enable the court to understand the contract as written and not to contradict or vary the instrument in any particular. Dana v. Fiedler, 12 N. Y. 40; Collender v. Dinsmore, 55 id. 300; Newhall v. Appleton, 114 id. 140; 22 St. Rep. 670; Smith v. Clews, 114 N. Y. 190; 23 St. Rep. 166.

In the case at bar the paroi evidence received tended to establish a different contract from that expressed in the written instrument, and was, therefore, incompetent.

The judgment and order appealed from should be reversed and a new trial ordered, with costs to abide the event.

All concur. Judgment accordingly.


text:
    Robert K. Dow, App’lt, v. Iowa Central Railway Company et al., Resp’ts.

      {Oourt of Appeals,

      Filed January 15, 1895.)

    1. Railroads—Bondholders’ agreement.
    Where a stockholder of a railroad company, who was not a party to the bondholders’ agreement but was accorded the privilege of. exchanging stock on the payment of an assessment solely as an act of grace on their part, elected to accept the benefit conferred upon him by this agreement, subject to the burden of the assessment, and paid the first installment, his legal representative, upon deciding, with a full knowledge of all the facts, not to avail himself of the provisions of the agreement and deliberately suffering the time to pass, within which the assessment could be paid, lost his right of redemption, and the privilege to exchange stock under the agreement was at an end.

      2. Same.
    A subsequent purchaser of such stock, cannot, upon making a tender of the amount due for unpaid installments and interest, compel the exchange of his stock.
    Appeal from judgment of the general term of the supreme court in the first judicial department, entered upon an order, which affirmed a judgment in favor of defendants entered upon an order dismissing the amended complaint on trial at special term.

      Leopold Wallaah, for app’lt; David Thomson, for resp’ts.

      Affirming, 53 St. Rep. 898.

   Bartlett, J.

The plaintiff seeks to compel the delivery to him by the individual defendants, constituting the bondholders’ committee of the defendant, the Central Iowa Eailway Company, one thousand shares of the common stock and one hundred and fifty of the preferred stock of the defendant, the Iowa Central Eailway Company, the successor under a re-organization of the Central Iowa Eailway Company.

In 1887, the Central Iowa Eailway Company defaulted in the payment of interest on its mortgage indebtedness, and foreclosure and 're-organization followed.

After the default the bondholders and car trust certificate holders entered into an agreement for their mutual protection, and constituted the individual defendants a committee to represent them.

This agreement empowered the committee to give the holders of each share of common stock one share of the common stock of the re-organized company on payment of an assessment of fifteen dollars per share.

It further provided that if any holder of the common stock declined or failed to pay the assessment, the privilege of receiving such common stock of the re-organized company should vest in other persons named.

The committee were authorized to fix the time and the place when the assessment should be paid, and thereupon made it payable in seven installments. At the time this agreement was executed one John M. Eickins was the owner of one thousand shares of the common stock of the Central Iowa Eailway Company, and he paid the first installment of the assessment of two dollars a share. In November, 1887, Eickins died and his estate passed into the hands of the public administrator of the city of New York before the second installment was due.

The stock was held by the public administrator for more than a year after the time fixed for the payment of the final installment, and it was then sold at public auction and purchased by the plaintiff for the nominal sum of $276.

At the time of this purchase the public administrator, with full knowledge of the assessments and the dates they were payable, had made default in the payment of all the assessments falling due after the first one paid by Eickins.

The plaintiff, at the time he purchased this stock, was a holder of other stock and securities of the Central Iowa Eailway Company, on which he had paid to the committee the amounts provided in the agreement and received the stock to which he was entitled.

There is nothing in the position of the plaintiff that commends him to the consideration or protection of a court of equity; he does not stand in the attitude of one seeking to be relieved from a forfeiture; he has no other rights than those of the legal representative of the Eickins’ estate, from whom he purchased for a nominal consideration, with full knowledge of the situation.

It, therefore, becomes important to ascertain the rights of the Eickins estate, respecting this stock at the time it was- sold at public auction.

The stockholders of the Central Iowa Eailway Company were not parties to the bondholders’ agreement, and the privilege to exchange stock on the payment of an assessment was an act of grace on the part of the bondholders, as the latter might have permitted the foreclosure sale to have proceeded, thereby cutting off- all the rights of stockholders.

It follows that the privilege of Eickins to exchange his stock did not spring from his original rights as a stockholder, but depended wholly upon the provisions of the agreement to which he was not a party, and under which he was a mere beneficiary.

Eickins elected to accept the benefit conferred upon him by this agreement, subject to the burden of the assessment and paid the first installment; before the second installment was due he died; his legal representative, standing in his place and vested with his rights and privileges, declined and failed to pay the remaining installments.

By reason of this default, and under the terms of the agreement, the rights of third parties supervened, and the stock to which the Eickins estate would have been entitled, had the assessment been paid, was held thenceforth subject to the rights of other beneficiaries named. The legal representative of Eickins having decided, with a full knowledge of all the facts, not to avail himself of the provisions of the agreement, and having deliberately suffered the time to pass under which the assessment could be paid, no right of redemption remained in him, and the privilege to exchange stock under the agreement was at an end.

More than a year after the Rickins estate had lost all right to exchange this stock, the plaintiff purchased it, the par value being $100,000, for $276, made a subsequent tender oi the amoúnt due for'unpaid installments and interest, and now comes into a court of equity and asks its aid to compel the exchange of his stock.

We,are of the opinion that the claim of the plaintiff is speculative, wholly without merit, and has no foundation in law or equity.

The amended complaints was properly dismissed.

The judgment appealed from is affirmed, with costs.

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

Judgment affirmed.


author: Finch, J.

text:
    The First National Bank of Sing Sing, Resp’t, v. Thomas H. Chalmers et al., App’lts.

      (Court of Appeals,

      Filed January 15, 1895.)

    1. Cohtract—Statute op frauds.
    Where a debtor transfers or delivers to the promisor, for his own use and benefit, money or property in consideration of the latter’s agreement to assume and pay an outstanding debt, and he, thereupon, promises the creditor to pay, such promise is original and not within the provision of the statute of frauds.
    2. Same.
    The fact that the confession of judgment, taken by the promisor as a guard and protection against other creditors, and as a defense of the transfer made to him, is set aside on the motion of a junior creditor, is immaterial.
    3. Same.
    The doctrine of Lawrence v. Fox has no proper application where a privity of contract exists, and a direct promise has been made upon which-the action may rest.
    Appeal from judgment of the general term of the supreme court in the second judicial department, entered upon an order, which affirmed a judgment in favor of plaintiff, entered upon a decision of the court on trial at circuit without a jury.
    This action was brought upon an alleged agreement made by-defendants for a valuable consideration to pay to plaintiff the-amount of an indebtedness of the firm of Charles Spruce & Co. to it.
    On October 30, 1882, said firm,, being financially embarrassed, confessed judgment to defendants for various sums due them and for amounts owing to other parties. The statement on which the judgment was entered, under the head of “ Liabilities assumed,” set forth, among other items, the. following: “Money due by Charles Spruce & Co. to First National Bank of Sing Sing on overdrawn account, $1,556.47.”
    The court found that defendant made an absolute, unconditional promise to pay plaintiff’s debt.

      Calvin Frost, for app’lts; Francis Larkin, for resp’t.

      Affirming 52 St. Rep. 932.

   Finch, J.

What constitutes an original promise, upon which the statute of frauds does not operate, and which, therefore, may be valid and effectual without a writing, is fairly settled in one direction at least. Wherever the facts show that the debtor has transferred or delivered to the promisor, for his own use and benefit, money or property in consideration of the latter’s agreement to assume and pay the outstanding debt, and he, thereupon, has promised the creditor to pay, that promise is original, upon the ground that by the acceptance of the fund or property under an agreement to assume and pay the debt the promisor has made that debt his own, has become primarily liable for its discharge, and has assumed an independent duty of payment irrespective of the liability of the principal debtor. Ackley v. Parmenter, 98 N. Y. 425; White v. Rintoul, 108 id. 223; 13 St. Rep. 495. In such a case the debt has become that of the new party promising ; his promise is not to pay the debt of another, but his own; as between him and the primary debtor the latter has become practically a surety entitled to require the payment to be made by his transferee. The consideration of the primary debt, by the transfer of the money or property into which that consideration had been, in effect, merged, may be said to have been shifted over to the new promisor, who thereby comes under a duty of payment as obvious as if such original consideration had passed directly to him.

■ The question before us, therefore, is whether the promise of the defendants, made to the bank, to pay the debt due it from Leary and Spruce, was founded upon such a transfer of property as I have above described, and thus was original, or whether it was not so founded and must for that reason be deemed collateral.

We are bound to assume upon the findings that the promise to pay was absolute, and clean of condition or contingency. The question whether it was made at all was severely litigated, and depended upon the conclusion to be drawn from testimony full of violent contradictions; and we are not at liberty to review the determination of fact which affirms that the promise to pay was in truth made, and was absolute in its terms as sworn to by the witnesses on the part of the plaintiff. As to the substance of the agreement between the defendants and ’the primary debtors there is also contradiction. The former assert that their assumption of the debt went no further than a consent to pay it out of the proceeds of the debtor’s property after the discharge of their own debt; or, in other words, that their agreed liability was to pay plaintiff only out of proceeds when realized, and even then out of any possible excess remaining over and above their own debt If that is true they were under no present duty to pay the bank when the promise was made; the debt had not become theirs; might never become theirs, and so their verbal promise to the bank was purely collateral and to answer for the debt of another. That proposition was quite distinctly held in Ackley v. Parmenter, supra, and upon the authority of Belknap v. Bender, 75 N. Y. 446, which disclosed an agreement simply to pay out of proceeds when realized, and so far as suffici* ent. On this branch of the case the inquiry turns upon the facts, and the findings fail to disclose any such agreement, but establish the contrary. They determine that for a valuable consideration, and by an agreement with Leary and Spruce, the defendants agreed to pay the plaintiff the debt due to it. This finding is free of any condition, and imports an absolute agreement to pay at once and in full, and so negatives the defendants’ version of the facts. It is sustained by the testimony of the plaintiff’s witfiesses, and is strongly corroborated by the form of the confession of judgment which the defendants’ attorney drew,' which they accepted, upon which they issued an execution, and which provides for an assumption of the bank debt absolutely and without condition. All the requisites of an original promise, unaffected by the statute of frauds, were thus explicitly embraced in the findings, except one. It is not in terms or expressly found that the consideration, described simply as valuable, was, beyond that, such a consideration as would avoid the statute because it consisted of a transfer to the defendants for their own use and benefit of the debtors’ property. That fact is involved in the findings, since it is essential to the legal conclusion, which cannot stand without it. We may look into the evidence, therefore, to see whether it would have sustained such a finding if it had been explicitly made, and thereupon assume the fact in support of the judgment. Ogden v. Alexander, 140 N. Y. 356; 55 St. Rep. 744.

I can find in the proof no express agreement in words transferring the real and personal estate of the firm to the defendants, but that there was such a transfer in fact is abundantly established and beyond any reasonable doubt. The situation appears to have been this. Leary and Spruce were manufacturers of files. The defendants in New York were the regular purchasers, at established rates, of their whole product. The manufacturers became seriously indebted to their vendees in the progress of the business, and, as security therefor, had given to them a mortgage on their real estate for $2,500, dated in 1876, and payable in one year; a second mortgage on the same land for $5,000, dated in April, 1882, and payable in one year; and, as collateral to the last named security, a chattel mortgage for $5,000 covering all the machinery and personal property used in the manufacture of files. The stock on hand and the equity of the mortgagors still remained to them. There was due, or to become due, .on these securities about the sum of $7,400 at the date of the final arrangement of October, 1882, assuming that all the debt created prior to their dates was protected by the mortgages. But an added indebtedness, no't covered by the securities, had later accrued in the form of two notes and one indorsement, amounting to about $4,200, no part of which had matured on October 30th, 1882. On that day the debtors announced to the defendants their inability to pay. Of course the statement created alarm. None of the mortgages secured future advances, and the defendants found themselves unsecured creditors to the amount of over $4,000. The chattel mortgage was not due and contained no danger clause permitting an immediate seizure, The whole stock on hand, manufactured and unmanufactured, was incumbered by no lien, and that and the equity under the mortgages belonged to the debtors, was open to attack, and could be disposed of by the firm. They estimated the entire value of their property at $16,000, which was the footing of their last preceding inventory, and claimed it to be sufficient, not only to pay the defendants in full, but also the bank and certain other creditors whom they wished to protect. They were talking of an assignment, but assured the defendants that they were ready to give them a bill of sale of all their property, or any other security, provided that the bank and other named creditors were protected. The defendants agreed to assume and pay those debts, and chose instead of a bill of. sale to take a-confession of judgment. In that the debtors swore that they were justly indebted to the defendants in a sum made, up of the total debt to the latter, and-of the debts to other named creditors, which the defendants had assumed and agreed to pay. Had the transaction stopped at this point it would be difficult to support the promise to the bank, unless upon the ground of an intended purchase by the defendants of the debtors’ assets, the price of which was secured by the confession of judgment. But it did not stop there. The defendants could at once have levied upon the whole personal property, and advertised a sale of the real estate, but all that was needless, because the debtors at once'turned over the whole property to the defendants, and put them in entire and complete possession for their own use and benefit. Leary abandoned it utterly and went away. Spruce remained as the hired servant of the defendants, working for wages which they cut down at their pleasure, -obeying their orders, shipping the whole manufactured product to them in New York, drawing on them for the pay roll, and treating the property in-all respects as theirs. Not a vestige of it ever came back to the debtors. The latter were willing to transfer it, as their offer of a bill of sale proves; they did transfer it, and, in the light of the confession of judgment and the promise to the bank, it is impossible not to see that it was in consideration of an agreement by the defendants to pay the specified debts.

I have not failed to consider the attempted explanation of Chalmers and the argument about it of his counsel. The former sought to put himself in the attitude of a tenant under Spruce as landlord, to .claim that his wages of twenty dollars a week were in part for rent, and to show that the goods were sold to him by Spruce as before the failure. But the latter, though unwillingly, controverted the theory, and Chalmers9 own version of the facts does not harmonize with the explanation made. The claim that Spruce was to remain owner and work out the debts does not account for Leary’s abandonment of the possession, nor Spruce’s service for wages, still less for the instant assumption and payment of all expenses and exercise of complete control by the defendants. They took all the products, and if they continued to keep the accounts in the old way it was but a natural measure of convenience in order to separate the factory business from their own, and be able to ascertain its ultimate results. They took the confession of judgment as a guard and protection against other creditors, and as a defense of the transfer made to them. They issued no execution at once because that was needless to attain possession, but did issue it later when their title was threatened. That all this was done upon an understanding and agreement in accord with the facts seems to me a natural and necessary inference.

Nor have I overlooked the fact that the confession of judgment was set aside on the motion of a junior creditor. The defendants’ attorney, after a consultation with his clients, accepted short notice of the motion, and then suffered it to be granted by default. The probabilities are that the proceeding was collusive, but if not, it was one of the risks which the defendants assumed and is immaterial to the result.

>• I have reached my conclusion without reliance upon the previous decision of this court on the first appeal, (120 N. Y. 650), and without any reference to the doctrine of Lawrence v. Fox, which has played some part in the discussion. The opinions of the second division on the former appeal indicate that a'majority of the court did not agree upon any one proposition discussed. I should treat that judgment as decisive if it had decided, but the only authoritative determination was the order for a new trial. I do not deem the doctrine of Lawrance v. Fox involved in this controversy. That doctrine applies where no express promise has been made to the party suing, but he claims the right to rest upon a promise between other parties having respect to the debt due to him and as having been made for his benefit. It struggles to obviate a lack of privity upon equitable principles, but is needless and has no proper application where the privity exists, and a direct promise has been made upon which the action may rest Here we have the promise and if it is valid the whole problem is solved.

I think the promise proved and found rested not only upon a valuable consideration, but one of such character as to make the promise original and save it from the condemnation of the statute of frauds.

The judgment should be affirmed, with costs.

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

Judgment affirmed.