author: DALY, P. J.

text:
    Franklin Bien v. John M. Bixby.
    (Supreme Court, Appellate Term, First Department.
    November 12, 1896.)
    1. Landlord and tenant—Dispossession—Redemption.
    Section 2256 of tlie Code, which gives a dispossessed tenant the right to redeem the demised premises upon paying or tendering to the landlord the rent in arrears, and the costs and charges incurred, includes under the term “rent ” only the rent proper, and not taxes and other expenditures imposed by the lease upon the tenant, and under the term “ costs and charges” only the costs and charges of regaining possession.
    2. Same—Tender of rent and costs.
    The tender so made need not be kept good, if refused, as its effect is not to deprive the landlord of any right, but only to give the tenant a standing in court to institute redemption proceedings.
    8. Same—Jurisdiction of district court.
    On a proceeding instituted after tender, the justice of a district court has the power, and" it is his duty, to make a final order which shall fully adjust all the rights and liabilities between the parties, and which should be of such a character that the tenant cannot recover possession until he has fully complied with every covenant under which he has been in default.
    4. Same—Temporary receiver.
    A temporary receiver has power to maintain such proceedings, and acts therein both for the corporation and its creditors, and the corporation is not an indispensable party.
    (Syllabus by Daly, P. J.)
    Appeal from eighth district court.
    Proceedings by Franklin Bien, as receiver of the Casino Company, against Bobert E. Bixby, individually, and as trustee of Grace S. Mankowsld under the will of John M. Bixby, to redeem from summary proceedings. From an order of dismissal, plaintiff appeals.
    Samuel Untermeyer, Moses Weinman, and Julius J. & A. Lyons, for appellant; Samson Lachman and George Freifeld, for respondent.
   DALY, P. J.

—Thé plaintiff is the receiver of the Casino Company, which was dispossessed from the theater and premises known as the “ Casino,” in the city of .Mew York, for non-payment of a quarter’s rent, due May 1, 1895, amounting to $3,000. The rent accrued under a lease made to the Mew York Concert Company, Limited, the assignor of the Casino Company, on December 1, 1891, by the defendant, Robert F. Bixby, individually, and as trustee, for 10 years, from May 1, 1892, at the annual rental of $12,000 ; the tenant to pay the taxes and Croton water rents, and make all repairs upon the building. The Casino Company was dispossessed on May 17, 1895, and the plaintiff, as receiver, was subsequently empowered to conduct, institute, and prosecute any and all proceedings that might be necessary to redeem and recover possession of the property from which the company was dispossessed on account of non-payment of rent; and accordingly this proceeding was commenced, pursuant to section 2256 of the' Code, within a year after the execution of the warrant, the unexpired term of the lease exceeding five years at the time that the warrant was issued. The plaintiff having tendered to the defendant the sum of $13,500 in cash for rent in arrear at the time of the tender, with interest thereon, and the costs and charges incurred by the petitioner, pursuant to the last-named section, an order was thereupon made by the justice who issued the original warrant, in accordance with section 2259, requiring the defendant to show cause why the petition of the plaintiff should not be granted. The petition prayed for an order establishing the rights of the parties' upon the redemption, and directing that the petitioner should be- entitled to the possession of the demised premises under the lease, and that he may hold and enjoy the same according to its terms. On the return of the order to show cause the parties appeared before the justice, and were heard upon their proofs; and he made a final order dismissing the petition, with costs and expenses to be paid by the petitioner. An appeal from such final order is now taken, under section 2260 of the Code ; and the objections taken to the proceedings, and argued upon this appeal, will be briefly considered.

The first question presented is whether the tender of $13,500 was sufficient, under the statute. The defendant claimed it was not, because it did not cover, among other things, the taxes in arrear, which had become a lien upon the property, and which the tenant had covenanted to pay, and certain expenses incurred by the landlord subsequent to the proceedings to dispossess, in making necessary alterations upon the premises required by the building department. The provision of the Code as to tender is as follows:

“ Seo. 2256. Where the special proceeding is founded upon an allegation that a. lessee holds over, after a default in the payment of rent, and the unexpired term of the lease, under which the premises are held, exceeds five years, at the time when the warrant is issued; the lessee, his executor, administrator, assignee, may, at any time within one year after the execution of the warrant, pay or tender to the petitioner, his heir, executor, administrator, or assignee, or if, within five days before the expiration of the year, he cannot with reasonable diligence, be found within the city or town wherein the property, or a portion thereof, is situated, then to the judge or justice who issued the warrant, or his successor in office, all rent in arrear at the time of the payment or tender, with interest thereupon, and the costs and charges incurred by the petitioner. Thereupon the person, making the payment or tender, shall be entitled to the possession of the demised premises, under the lease, and may hold and enjoy the same, according to the terms of the original demise, except as otherwise prescribed in the next section but one.”

The claim of the defendant is that “ the costs and charges incurred by the petitioner ” refer to all outlays which the landlord had inade, or would have to make, by reason of the failure of the tenant to perform his covenant. In Waters v. Crawford, 2 Thomp. & C. 602, in construing chapter 240 of the Laws of 1842, the language of which was, “ all rent in arrears at the time of such payment or tender, and all costs and charges incurred by the landlord,” it was said that this meant the costs and charges of obtaining possession; and substantially to this effect is Pursell v. Insurance Co., 42 N. Y. Super. Ct. 383. In using the term petitioner ” instead of “ landlord,” the statute refers, of course, to the petitioner in the proceedings to dispossess, and his costs and charges ” obviously refer to his expenses incurred in that capacity; in other words, to the “ costs and charges ” of the proceedings to dispossess, and not to his outlays incurred generally in his capacity as landlord, such as unpaid taxes, expenses of repairs, etc. These were not incurred by the petitioner as such. Hor can the term rent ” be deemed to include taxes, insurance, and costs of repairs, although the covenants of the lease require the tenant to pay them. The term rent,” when used in relation to summary proceedings, has a limited meaning, and does not import the entire consideration which the tenant pays to the landlord for the use of the demised premises, whether directly, as rent proper, or indirectly for his benefit, in the form of taxes and assessments. Bixby v. Casino Co., 14 Misc. Rep. 346 ; 35 N. Y. Supp. 677 ; People v. Swayze, 15 Abb. Prac. 432; Witty v. Acton, 58 Hun, 552; 35 S. R. 949. In the last named case it was held that, when the tenant had been dispossessed for non-payment of taxes or assessments which he had agreed to pay (section 2231, subd. 3, of the Code), he is not entitled to the benefit of the redemption ' proceedings, as there is no provision for a tender of the amount due for taxes and assessments, but only for a tender of rent. In this view of the section, the amount tendered ($13,500) was ample. The Casino Company we^s dispossessed on May 17, 1895, for non-payment of $3,000, the rent for the preceding quarter, which was payable on the 1st day of May. The tender was made April 24, 1896, at which time rent for four quarters was in arrears, viz., for May 1, August 1, and November 1, 1895, and February 1, 1896. The next rent was not due until the following May 1st, and, of course, could not be rent in arrears before that date. Twelve thousand dollars, therefore, was properly tendered for rent in arrears, leaving $1,500 for interest on such rent, and for the costs and charges of the summary proceedings. The interest would be less than $450 ; the costs of the marshal in the summary proceedings were only $459.10; and the tender, therefore, wasin excess of the amount actually required. This construction will give no undue advantage to the tenant, because the effect of the tender will not be to reinstate him in possession of the demised premises if he is still in default in payment of taxes, or any other expenditure under the covenants of his lease. The landlord is1 fully protected by the Code, which provides, after prescribing the tender to be made on redemption, as follows :

Seo. 2259. The person redeeming, as prescribed in the last three sections, or the owner of the property so redeemed, may present to the judge or justice who issued the warrant, or to his successor in office, a petition, duly verified, setting forth the facts of the redemption, and praying for an order, establishing the rights and liabilities of the parties upon the redemption. Whereupon the judge or justice must make an order requiring the other party to the redemption to show cause before him, at the time and place therein specified, why the prayer of the petitioner should not be granted. The order to show canse must be made returnable, not less than two nor more than ten days after it is granted ; and it must be served at least two days before it is returnable. Upon the return thereof the judge or justice must hear the allegations and proofs of the parties, and must make such a final order as justice requires. The costs and expenses must be paid by the petitioner. The final order, or a certified copy thereof, may be recorded in like manner as a deed. A person, other than the lessee, who redeems as prescribed in the last three sections, succeeds to all the duties and liabilities of the lessee, accruing after the redemption, as if he was named as lessee in the lease.”

The tenant desiring to redeem the premises is required to apply to the court for an order, and the court is required to make an order which shall establish the rights and' liabilities of the parties upon the redemption,” and it must be such a final order as justice requires.” This clearly confers upon the justice the broad powers formerly vested in chancellors to make a complete adjustment of ail the equities between parties. On the one hand, for instance, arrears of taxes unpaid, and premiums of insurance, and the cost of complying with provisions of public departments concerning repairs and alterations, and the expenditures for the repairs, all as required by the lease, can be allowed the landlord, and, as an offset, any excess of rent that the landlord has, or ought to have, received in the interim, over and above the rent reserved in the lease, can be allowed to the tenant,—in this case an important item, as the rent reserved was evidently ground rent; and, if the ■difference between these allowances is in favor of the landlord, the tenant may be required to pay the difference whether more or less than his tender, as a condition of being admitted to possession. Such powers are, it is true, most extensive and important, and the conferring of them upon the justices of district courts is somewhat of an advance upon the general legislative policy of withholding equitable jurisdiction from those courts, but the language of the statute is too plain to be mistaken. While some of the expressions in the section in question might indicate that the redemption is accomplished by the tender alone, and that the tenant is entitled to possession upon making the tender, such an inference is inconsistent with the main purpose of the section, in requiring the parties to the redemption to submit their rights and equities to a court, and providing for a final order “ establishing their rights and liabilities upon the redemption.” This provision indicates that the order is to be deemed contemporaneous with the redemption itself. It would, moreover, be incompatible with the ■character of the order which the justice is to make, viz, “establishing the rights and liabilities of the parties,” and “ such as justice requires,” if it could be inferred that the tenant was entitled to possession upon simply making the tender. Were an insolvent tenant, in arrears for large amounts,—taxes and other expenses, which he ought to have discharged, and distinguished from rent proper,—to be reinstated in possession upon his payment of rent alone, the order of the justice establishing the rights and liabilities of the parties would be wholly without effect. This would be especially true in the present instance. The tenant could not be removed again by summary proceedings for non-payment of taxes and assessments, owing to a provision in his lease providing for summary proceedings for non-payment of rent, which provision was held to exclude dispossession for other defaults. Bixby v. Casino Co., supra. The tenant, after a temporary dispossession, would go back to the enjoyment of property largely enhanced in value by the addition of fire escapes, fireproof curtains, partitions, and the like ‘improvements, made by and at the expense of the landlord, in compliance with requirements of municipal departments. Justice manifestly requires some order which would fix the rights and liabilities of the parties in a way to-prevent injustice to either; for in any case it would be inequitable, to permit a tenant to re-enter without full performance of the covenants which he had broken, even if further summary proceedings were available to the landlord. In considering whether compliance with the order to be made by the justice is a condition precedent to repossession by the tenant, it must be remembered that the district courts are without general equitable powers or machinery for the enforcement of their decrees. This consideration had much weight with the courts, in reaching the decision made in Rodgers v. Earle, 5 Misc. Rep. 164; 24 N. Y. Supp. 913; Richards v. Littell, 16 Misc. Rep. 339 ; 38 N. Y. Supp. 73; Constant v. Barrett, 13 Misc. Rep. 249; 63 S. R. 210 ; Bank v. Wood, 1 Misc. Rep. 249 ; 48 S. R. 775,—-that the provision in section 2244 permitting the answer of the tenant in summary proceedings to set up equitable defenses did not contemplate any affirmative equitable relief, such as in a court of full equitable power and equipment might be granted and enforced upon the equitable defense set up. In other words, equitable defenses are available in such proceedings as a shield, but not as. a SAVord. And so, Avith respect to the order provided for in these redemption proceedings, it must be presumed that the legislature, having in vieAv the limited power of district courts, intended that the order, Avhen made, should be self-executing, and this can only be if compliance with it is held to be a condition of reinstatement of the delinquent tenant.

The next question is Avhether it was necessary for the receiver to keep good the tender he had made, by paying the money into court, or otherwise. Where the effect of a tender is to discharge a debt, the money must be deposited so as to be at all times Avithin reach of the creditor whose debt has been thereby discharged; but where the effect of the tender is not to discharge a debt, but only to change in some manner the rights or remedies of the parties against each other,—as, for instance, extinguishing a lien upon some specific thing,— the money need not be deposited. Kortright v. Cady, 21 N0. Y. 343 ; Cass v. Higenbotam, 100 N. Y. 253; 3 N. E. 189. The. effect of the tender in a redemption proceeding is not to discharge the landlord’s claim for any part of the rent, but only to enable the tenant to obtain a standing in court -in order to. have his rights and liabilities and those of his landlord adjusted Avith a vieAv to compliance with a final order to be made as justice requires. The tender 'does not give the absolute right to possession of the property. Much less does it discharge the debt. It has no substantial effect, to be measured in dollars and cents, to stop interest or prevent costs, as in the cases cited in Halpin v. Insurance Co., 118 N. Y. 165-178; 28 S. R. 788. It is to be distinguished from tenders made as a basis of affirmative relief sought in equity, where, by reason of the tender, a lien is treated as extinguished, and where a decree to that effect is demanded without any further payment or tender of payment. Tuthill v. Morris, 81 N. Y. 94; Halpin y. Insurance Co., supra. It is not governed by the rules in equity, being purely statutory, and having a formal effect only. Notwithstanding the tender, the landlord still has the right of insisting that the order of restoration be conditioned upon the tenant’s performance of certain acts, which shall be a compliance with the requirements of his lease, and the subject of a final order adjusting the rights and liabilities of all the parties. So far from the tender changing the position of the parties, the landlord might accept it without prejudicing any of his rights to a judicial determination of the tenant’s liability; for the statute provides that the owner, as well as the person dispossessed, may institute the proceedings before the justice. Upon this vieiv, therefore, of the office and effect of the tender, it would seem unnecessary that it should be deposited. The tenant can get no advantage without actually paying it into the landlord’s hands whenever' required.

The objection that the receiver has not power to maintain this proceeding is not well taken. This receiver was appointed under section 1784 of the Code, in an action for sequestration of the property of the corporation. He was a temporary receiver, and by section 1788 of the Code it is declared that such" a receiver “ has power to collect and receive the debts, demands, and other property of the corporation; to preserve the property, and the proceeds of the debts and demands collected.” This general authority would seem to be enough for the purpose of the present proceeding, but, in addition, special authority was conferred upon him, under section 1789, by an order of the supreme court, to conduct, institute, and prosecute any and all proceedings that may be necessary to redeem, the property from which the Casino Company was dispossessed.

"Finally, it is objected that the Casino Company should have been joined as petitioner with the receiver, as it is still in existence. No authority is cited to sustain this objection, and there seems no reason why a corporation whose functions are suspended during the continuance of a temporary receivership should be deemed an indispensable party. If the assets should prove more than sufficient to liquidate the liabilities, the excess would go to the corporation ; and so the receiver acts for both the corporation and the creditors, and, as the representative of both, he may maintain this proceeding alone.

The final order should be reversed, and the proceeding remitted to the justice for his further action, under section 2259 of the Code.

All concur.


source: Caselaw Access Project

license: Public Domain

text:
    Simon Uhlfelder et al. v. Edward J. H. Tamsen.
    (Supreme Court, Appellate Term, First Department.
    October 29, 1896.)
    1. Parties—Intervention.
    An execution debtor has an “ interest in the subject ” of an action by a claimant to recover from the sheriff the goods levied on (Code Civ. Proc. § 451), so as to entitle him to intervene.
    :2. Same—Imposing Conditions.
    Under Code Civ. Proc. § 452, providing that the court “must,” on application, direct the bringing in of any party interested in the subject of the action, the court may impose conditions on granting the right to intervene. Lawton v. Lawton ; 7 if. T. Supp. 556 ; 54 Hun, 415, disapproved.
    Appeal from city court of New York, general term.
    Action by Simon TJklfelder and another against Edward J. H. Tamsen. From an order of the city court (40 N. Y. Supp. 372) modifying an order of the special term by striking therefrom a provision requiring the giving of an undertaking as a condition to allowing certain persons to intervene as defendants under Code Civ. Proc. § 452, plaintiffs appeal.
    Burritt S. Stone, for the sheriff; Arthur Furber, for appellants ; Jacob Barnett, for respondent.
   DALY, P. J.

—The plaintiffs commenced this action to recover from the sheriff certain goods levied upon under execution, claiming such goods to be their property, and thereupon! the debtors in the execution applied to the court to intervene as parties defendant under the provision of the Code (section 452):

, Where a person not a party to the action has an interest in the subject thereof, or in real property, the title to which may in any manner be affected by the judgment, and makes application to the court to be made a party, it must direct him to be brought in by the proper amendment.”

The application of the judgment debtors was properly granted by the court, as they have an interest in the subject of the action brought by third parties, claiming title to the property which had been levied upon by the sheriff. They have an interest, first to have their property go in discharge of their own debt, and next to save and retain any possible surplus beyond; and it is their title which is involved. Rosenberg v. Salomon, 144 N. Y. 92; 63 S. R. 62. But the court at •special term required the applicants to give an undertaking to pay all costs, not exceeding §250, which might be ultimately .awarded to the plaintiff against the sheriff, the present defendant. In default thereof the motion to intervene was denied. The city court at general term held that it had no power to impose such a condition.

' It has been held in several cases that where a person having an interest which entitles him to be made a party applies to-be brought in the court has no power to impose conditions, Lawton v. Lawton, 54 Hun, 415; 27 S. R. 302; Earle v. Hart, 20 Hun, 75 ; Haas v. Craighead, 19 Hun, 396. This was so-decided on the ground that the Code was peremptory, and the right absolute. The court of appeals has not directly passed upon the question, but the language of the opinion in the case of Rosenberg v. Salomon, supra, is significant. The affirmance by the court of the order of the general term granting the application to intervene is placed upon the “ permission ” of section 452, and on the ground “ that the power to make the order was given by the Code.” In view of the construction placed by the supreme court in the three cases cited upon the imperative language of the section, these are very guarded expressions. It would seem that the court of last resort was-not ready to approve the rule which would tie the hands of the court in every case where a party claimed the right to intervene as a defendant. Cases may arise showing the necessity of reserving the power to impose reasonable conditions. In' general, the necessity of application to the court for an order supposes the existence of some discretion in granting or refusing it, otherwise the application is a mere formality. Insurance Soc. v. Stevens, 63 N. Y. 341. I apprehend that an application to the court was required by the legislature in order that proper provisions might be made for the protection of the parties already before it. What stronger case would be presented than an application by an insolvent judgment debtor to litigation with a solvent plaintiff, while the execution creditor takes no step to protect his levy, and might be suspected of taking this means of defending the lawsuit without incurring liability for costs. There is nothing in the use of the imperative words “ must direct him to be brought in ” which deprives the court of the power to impose terms. The legislature has not declared that terms shall not be imposed. In construing this section regard must be had to the meaning given the word “must” in other enactments. Although in Eaton v. Alger, 57 Barb. 179, 190, in speaking of the requirements of the Old Code (1848), § 111 (New Code [1888] § 449), that “ every action must be prosecuted in the name of the real party in interest ” the court said: “ The act is emphatic. It uses the Saxon word ‘ must ’ (a verb which has not been twisted by judicial construction, like the words ‘ may ’ and 1 shall,’ into meaning something else) to place beyond doubt or cavil what it intended,”—yet what the learned judge apparently feared has come to pass. The court of appeals, in speaking of the same word, has used this language: “ While it is said in section 873 that the judge must ’ grant an order [for an examination before trial] when an affidavit conforming to the requirements of the previous section is presented to him, yet we do not think that the language is absolutely mandatory; and that it was intended to deprive the judge of discretion.” Jenkins v. Putnam, 106 N. Y. 272-275 ; 6 S. R. 425. So in Wallace v. Feely, 61 How. Prac. 225, affirmed in 88 N. Y. 646, in construing section 1678 of the present .Code, relating to judicial sales, which then read, If the property consists of two or more distinct buildings, farms or lots, they must be sold separately,” it is said:

The question is whether this provision is directory merely, as the provisions of the former statute regulating judicial sales (2 Rev. St. p. 326) were held to be. Cunningham v. Cassidy, 17 N. Y. 276. That statute enacted that if the premises consist of distinct buildings they shall be sold separately. The reason of the codifiers for substituting £ must ’ for £ shall ’ is not apparent; they give no explanation in their note to the section. The substituted word is more imperative than that which it replaces. As verbal alterations occur frequently .in the New Code without apparent reason, the change in question loses much of its significance. The reasons for holding the former enactment to be directory merely are applicable in every respect to the new. No different construction could be adopted without doing in certain cases great injury. Here it is conclusively shown that if the separate buildings on this lot had been separately sold the aggregate price brought would be from $5,000 to' $7,000 less than what was actually obtained at the sale in one parcel.”

This decision of the special term of the common pleas was affirmed in the court of appeals, as above stated; and it is interesting to' observe that within a short time after that decision was rendered the legislature restored the word “ shall,” thus reverting to the former language of the statute in that respect, and moreover adding the clause unless otherwise ordered by the court; ” thereby showing unmistakably an acquiescence in the view that too rigid a rule was undesirable, that it might work injury in many cases. The true principle seems to be that the mere use of the word “ must ” in the statute does not necessarily render the statute mandatory and deprive the courts of all discretion in applying it. For, in the nature of things, the circumstances of different cases may so vary that it would be desirable that some latitude be allowed to the court in acting under the statute, and it should be presumed that such was the intention of the legislature, notwithstanding the words employed. As the conclusion reached is not in accordance with the rule heretofore prevailing in the supreme court, we shall direct that an appeal may be taken from this decision to the appellate division of this district, if desired by any of the parties, in order that the question may be finally determined. So much of the order of .the general term as modifies the order of the special term is reversed, and this cause is remitted to the general term of the city court for the exercise of its discretion with respect to the imposition of terms upon granting the application to intervene. No costs to any party of this-appeal.

Order of the general term so far as it modifies the order •of the special term reversed, and cause remitted to the general term of the city court for the exercise of its discretion upon the question of terms. No costs. An appeal to the appellate division will be allowed upon the application of any of the parties.

All concur..


author: McADAM, J.

text:
    Sheridan v. Presas.
    (Supreme Court, Appellate Term, First Department.
    October 29, 1896.)
    1. Pledges—Conversion by pledgee.
    It is a conversion for a pledgee to change the settings and make an absolute gift of .the pledged jewels, and therefore the pledgor is entitled to possession without being required to pay the amount of the debt.
    3. Same—Gift of pledge by pledgee—Effect.
    A gift by a pledgee of the pledged chattels does not carry with it an assignment of the debt.
    Appeal from first district court.
    Action by Alexander P. Sheridan against Salvador Presas, impleaded, etc. There was a judgment in favor of plaintiff, and defendant appeals.
    Olcott, Mestre & Gonzalez, for appellant; Howe & Hummel, for respondent.
   McADAM, J.

—The action, which is in form for replevin, was originally instituted against the property clerk of the police department of the city of New York, for the possession of two diamond rings and a scarf pin. The property clerk deposited the articles in court, and Salvador Presas and Manuel Plaza were substituted as defendants. The last named did not appear, and the suit was defended by Presas alone. On the trial, Presas made no claim to the pin,' but contended and proved that the rings were his property, and that he brought them from Caracas, Venezuela; that, when he came to this country, he pawned one of the rings in a place on Thirty-Eighth Street, and the other at Simpson’s, on the Bowery; that afterwards he proposed to Plaza that the latter take the rings out of pawn, and keep them until Presas should be able to give him back the money. The sum for which the rings were originally pledged, with pawnbrokers’ interest added, was about $250. Plaza took the goods out of pawn ; but how much he advanced does not distinctly appear, except from the above circumstance, and from the admission contained in the following paper, which was given to him by Presas:

For $450, I promise to pay Mr. Manuel Plaza, on the 8th day of July next coming the sum of $450, which I have received to my satisfaction; and, as guaranty for the performance of this obligation, I deposit in the hands of Mr. Plaza three diamonds owned by me, weighing more or less, 9^- to 10 carats. It is to be understood that if, on the maturity of this-obligation, I shall not be able to repay the sum already hereinbefore expressed, such term shall be extended for two-months more on my paying the interest at 2% monthly. It is.stipulated between Mr. Plaza and myself that the value of my said diamonds is $800, more or less.”

This was signed by Presas. Plaza, on his part, gave Presasthe following paper:

“ I have received from Mr. Salvador Presas, three diamonds, as set forth in the promissory note of this date made by him to me.
“New York, May 8th, 1896.”

It was proved that Presas had not liquidated the indebtedness to Plaza, and that no tender was made by him of the amount of the loan. The plaintiff claimed title to the rings-as assignee of one Rebecca Israel, to whom, it was contended, Plaza had given the property. The plaintiff maintains that,, even if the property was pledged by Presas to Plaza, the latter acquired a special property in the diamonds, and that this-right of property passed by gift to Israel, and from Israel to himself by the assignment. While the appellant concedes that this result, under certain circumstances, might have followed in regard to certain kinds of property, such as marketable commodities, or negotiable securities generally, which are ■ easily replaced, he contends that the rule does not apply wheró the property is gems or valuable works of art and thepledgee makes an absolute disposition of them, in hostility to-the title of the pledgor; that such act is the assertion of a. dominion over the property by the pledgee, in defiance of the-rights of the pledgor, which amounts in law to a conversion; and that trover will lie by the pledgor against the pledgee- and his assigns therefor.

It is undoubtedly true that the pledgee acquires merely a limited property in the pledge, the real title remaining in the owner. 2 Kent, Comm. 581; Wheeler v. Newbould, 16 N. Y. 396, 398. The purpose of the pledge is to put it in the power-of the pledgee to reimburse himself for the money advanced when it becomes due and remains unpaid. Markham v. Jaudon, 41 N. Y. 241; Mitchell v. Roberts, 17 Fed. 778; 2 Kent, Comm. 577; Story, Bailm. § 286.

The nature of the disposition of the property by Plaza must-next be considered in order to determine its legality. It appears that he and Rebecca Israel boarded in the house No. 23-3 West Fourteenth Street, this city; that they first met on Friday, May 1, 1896; that he at once professed love to her,, and made her a series of gifts, consisting of a steamer chair, a. shaxvl pin, two Spanish books, Presas’ two diamond rings, and. a gold band bearing the initials “ M. P.” In presenting the rings to Miss Israel, Plaza put them on her fingers, and said he hoped she would wear them with good health, to which she replied, “Thanks.” The rings were in settings adapted to men’s wear. She spoke of this, and Plaza said, “ Very well; I will have them reset for you.” The next morning they went, by appointment, to Tiffany’s, for the purpose of having the settings changed, so as to make them suitable for her. They looked at different settings, and picked out one for §15, $5 being allowed for the old settings. The rings were to be ready on the following Thursday. Miss Israel and Plaza had a “ few words ” that day, after which he said, “ To show you that there’s no hard feeling between us, I will bring you home the rings to-morrow night, and give them to you.” He brought them home as promised, and put them on her hand. They were then in ladies’ settings, and fitted to her fingers. Plaza continued his protestations of love, and wanted her to give up her business as a saleswoman, saying that he would 'take care of her, and give her all she desired; that he thought n great deal of her; that she was the only person since he came to America that he cared for. He finally proposed that she should live with him, but omitted any reference to the •marriage state. Miss Israel declined these propositions and Plaza became angry, and demanded the rings back, saying they belonged to a woman in Cuba. She refused to return them, and, in consequence, he went to the Second district police court, on May 28, 1896, and made the criminal charge that on the 12th day of May, 1896, the said Rebecca Israel feloniously took, stole, and carried away from his possession “ two diamond rings of the value of $500, the property of Salvador Presas, and in the care and custody of deponent.” The rings were, by order of the magistrate, placed in the hands of the property clerk, and the criminal proceedings were suspended pending the determination of civil proceedings to be brought to test the title to the property.

The question presented by these facts is whether, taking the story of Miss Israel to be true, as found by the justice, the use made of the property by Plaza was authorized by the nature of the pledge. A pledge has been defined to be “ a bailment of goods by a debtor to his creditor to be kept till the debt is discharged.” If the pawn is of such a nature that its due preservation requires some use, such use is permissible, if not indispensable ; as if it is a cow or a horse. There the pawnee may milk the cow, and use the milk, or ride the horse, by way of recompense for the keeping. But if the pawn is of such a nature that it will be the worse for use, such, for instance, as the wearing of clothes or jewels, there the use is prohibited. These just principles are founded upon the presumed intention of the parties. Story, Bailm. § 329. Another reason is that, the use not being the object of such a pledge, the pledgee has no implied permission to use it, or, as Story expresses it:

“ Unless the contrary is expressly agreed, it may fairly be presumed that the owner * * * would not assent to the jewels being worn as a personal ornament, and thereby exposed, to unnecessary and extraordinary perils.”

And Chief Justice Cockburn, in Donald v. Suckling, L. R. 1 Q. B., at page 618, said:

“ I think it unnecessary to the decision in the present caseto determine whether a party with whom an article has been placed as a security for the payment of money has a right to transfer his interest in the thing pledged (subject to the right of redemption in the pawnor) to a third party. I should certainly hesitate to lay down the affirmative of that proposition. Such a right in the pawnee seems quite inconsistent with the undoubted right of the pawnor to have the thing pledged returned to him immediately on the tender of the amount for which the pledge was given. In some instances it may well be inferred from the nature of the thing pledged—as in the case of a valuable work of art—that the pawnor, though perfectly willing that the article shoul be intrusted to the custody of the pawnee, would not have parted with it on the terms that it should be passed to others, and committed to the custody of strangers.”

Jones, in his work on Pledges (section 391), says that jewels held in pawn may be worn if the pawnee takes care not to lose or injure them, the pawnee being liable for any loss, through theft or otherwise, which might happen in the wearing; for the pawn is so far in the nature of a depositum that it cannot be used but at the peril of the pawnee.

In Tyler on Usury (page 563), the author says that the position of Justice Story, that the pawnee has no right to use-jewels pledged, is undoubtedly correct, but adds:

“ It may be suggested, perhaps, that if the article pawned was a watch, in running order, that the pledgee would be justified in keeping it wound up and in use; and, possibly, he might carry it about his person, especially if the article was not thereby more exposed to injury or loss than though it was kept in ordinary deposit.”

This is placed upon the ground that it is better to use the watch than to allow it to remain run down and idle; hence within the rule where the use is justifiable. •

But no decision or text-book writer has gone to the extent of holding that a pledge of jewels or works of art can substantially change the setting of rings, alter a watch, or interfere with a work of art in any material part, without being guilty of an unauthorized use, and making himself liable in consequence for conversion.

The court of appeals, in Lawrence v. Maxwell, 53 N. Y., at page 22, said:

“ Ordinarily, and in the absence of any agreement or assent by the pledgor, the pledgee would have no right to use the thing pledged,and a use of it would be illegal. But, under special circumstances, depending somewhat upon the nature of the pledge* and in all cases, with the assent of the pledgor, express or implied, the property pledged may he used by the pledgee in any way consistent with the general ownership and the ultimate rights of the pledgor. An authority to sell the pledge would be inconsistent with the very essence of a bailment by way of pledge, as that recognizes the general property of the bailor, and his right to redeem and have the thing pledged.”

Wherever the true intendment of the transaction was to restrain the pledge security to the pledgee personally, that intendment must prevail (Schouler, Bailm. § 218); and to make a transfer as if the pledgee were the absolute owner, is regarded as a breach of trust and a fraud upon the pledgor (Story, Bailm. § 326; Lawson, Bailm.g 57). Or, as stated by another writer, “if a bailee does any act wholly inconsistent with his duty in relation to the goods, as by destroying or selling them, etc., the bailor’s right of immediate possession revives, and he may maintain trespass or trover against the bailee himself.” Chase, B1. 518, note, citing Dicey, Parties, pp. 345-380.

The pledgee did not undertake to rehypothecate the goods in recognition of the original pledge; nor did he make a special transfer of his limited interest therein, or deliver possession to another, subject to the rights of the pledgor. He dealt with the property as if it were exclusively his own, by making an absolute gift of the two rings, altering them to suit the fancy of the donee ; and all this before any default on the part of the pledgor, not in recognition of, but in hostility to, his title. These acts of themselves constitute a conversion. Cooley, Torts (2d ed.), 524,527, 528 ; 2 Hill. Torts (4th ed.), 32; 5 Wait, Act. & Def. 179 ; 4 Am. & Eng. Enc. Law, 108; 7 Lawson, Rights, Rem. & Prac. § 3667; Lamb v. O’Reilly, 13 Misc. Rep. 212 ; 68 S. R. 114; Reynolds v. Shuler, 5 Cow. 323; Vincent v. Conklin, 1 E. D. Smith, 203; Kilpatrick v. Dean (City Ct. N. Y.), 3 N. Y. Supp. 60; affirmed, Id. (Com. Pl.) 4 N. Y. Supp. 708 ; Moore v. Supply Co., 133 N. Y. 144;, 44 S. R. 68 ; Gregg v. Wittemann, 12 Misc. R*ep., at page 92; 32 N. Y. Supp. 1131; Swift v. Moseley, 33 Am. Dec. 197. Even if the pledgee had waited until the pledgor was in default, he could not have extinguished his title except by a sale of the pledge after due notice. See cases collated in 2 Am. & Eng. Enc. Law, 47; Lewis v. Graham, 4 Abb. Prac. 106 ; Wheeler v. Newbould, supra; Bryan v. Baldwin, 52 N. Y. 232; Wilson v. Little, 2 N. Y. 443 ; Bowman v. Hoffman (Com. Pl.), 20 N. Y. Supp. 415. Kor could the pledgee under any circumstances obtain any benefit from the unauthorized alterations. 3 Lawson, Bights, Bern. & Prac. § 1319. While an assignment of a debt carries with it all collaterals, even though not expressly named (Parmelee v. Dann, 23 Barb. 461; Craig v. Parkis, 40 N. Y. 181; Barlow v. Myers, 64 N. Y., at page 45), a transfer of collateral does not generally carry the debt (Merritt V. Bartholick, 36 N. Y. 44; Battle v. Coit, 26 N. Y. 404; Wanzer v. Gary, 76 N. Y. 526 ; Cooper v. Newland, 17 Abb. Prac. 342, 344). Plaza never undertook to pass the debt • owing by Presas (Bank v. Baldwin, 43 Hun, at page 140); never mentioned it, but assumed the power of disposition as if no debt existed. Possession of the collateral security alone furnishes no conclusive evidence of the ownership of the debt secured thereby, as it is the mere incident; and non constat the debt may have been transferred to another party, who in that event would be entitled to the possession of the collateral security. Munoz v. Wilson, 111 N. Y., at page 301; 19 S. R. 372.

The plaintiff’s assignor paid nothing for the property, never consented to succeed to -Plaza’s rights as pledgee, but all the way through asserted a general ownership over the property, in defiance of any right or title on the part of Presas to its possession. She clearly became a toft feasor with Plaza. No tender to her was necessary. Plaza, by his acts, voluntarily disabled himself from returning the things pledged, so that a tender to him would have been-unavailing. It was therefore unnecessary. Read v. Lambert, 10 Abb. Prac. (N. S.) 428 ; Wilson v. Little, 2 N. Y. 443 ; 7 Wait, Act. & Def. 593; Stokes v. Mackay, 147 N. Y. -223, 235 ; 69 8. R. 515. The law does not require vain and nugatory acts. Clark v. Crandall, 3 Barb. 612; Karker v. Haverly, 50 Barb. 79. Where a pledgee tortiously sells his pledge, or repledges it for a greater sum than the debt for which it is security, the pledgor has an immediate right to bring an action in trover, without tendering the amount of his indebtedness. Waring v. Gaskill (Ga.), 22 S. R. 659; Richardson v. Ashby (Mo. Sup.), 33 8. W. 806. There are cases holding that, to maintain trover, it is not necessary that the right of possession should have existed one moment prior to the conversion, but may be given or spring out of the conversion itself; as where a bailee wrongfully repudiates, and terminates the bailment, under an agreement giving him the right to possession or the use of property for a certain time, which contract he has violated by the destruction or sale of the property, or its diversion to some use or purpose not allowed by the terms of the bailment. Such wrongful act restores t.o the bailor the right of possession and the right to sustain an action in trover for the conversion. The right of possession in such cases is given by the very act of conversion. 2 Am. & Eng. Enc. Law, 58; Johnston v. Whittemore, 27 Mich. 469 ; Grant v. King, 14 Vt. 367 ; Bryant v. Wardell, 2 Exch. 479; Cooper v. Willomatt, 1 C. B. 672; Sanborn v. Colman, 6 N. H. 14; Swift v. Moseley, 10 Vt. 208; Fenn v. Bittleston, 7 Exch. 152.

Under the circumstances, the plaintiff’s assignor acquired no right of possession to the two diamond rings as against Presas by reason of the gift; and the debt they were given to secure did not pass to her, but remained in the pledgee. As she was without title, nothing passed by the assignment from her to the plaintiff; and the court below should have awarded possession, of the property to Presas, the appellant, and not to the plaintiff.

The judgment must therefore be reversed, and a new trial ordered, with costs to the appellant to abide the event.

All concur.


author: PATTERSON, J.

text:
    William Guichard v. Jacob New.
    (Supreme Court, Appellate Division, First Department.
    October 23, 1896.)
    Injury to child—Contributory negligence.
    For a child eight years old, who attends public school, and is in the habit of playing in the city streets, to put his head over an elevator gate, after being told two or three times that he would get hurt if he did, is negligence.
    Appeal from circuit court, New York County.
    Action by William Guichard, an infant, by Augustine L. Guichard, his guardian ad litem, against Jacob New. From a judgment on a verdict -for plaintiff, and an order denying a new trial, defendant appeals.
    Herbert C. Smythe, for appellant: G. E. Waldo, for respondent.
   PATTERSON, J.

—Whenthis case was before the general term on a former appeal (84 Hun, 55, 31 N. Y. Snpp. 1080), it was held that the plaintiff was not a trespasser upon the premises, and also that there was evidence which should have been submitted to the jury respecting the negligence imputed to the defendant in consequence of the construction and operation of the elevator. The attention of the court was more particularly directed to those two questions, although it also considered the subject of the degree of care required from an infant of the plaintiff’s age and understanding. But, upon the record that is now presented to us, it is made.to appear that the plaintiff, at the time the accident happened, was a boy eight years of age, who regularly attended public school in the city of New York, who studied arithmetic, reading, writing, anil spelling, and who was in the habit of playing in the city streets every day. It also appeared by the testimony of Ernest Eeich, the plaintiff’s own witness, who operated the elevator, that he was acquainted with the plaintiff, had seen him outside the premises prior to tho day of the accident, and that he had warned the boy of the consequence of putting his head over the elevator gate. His testimony upon that subject is emphatic, and is as follows:

“ Q. How many times did you tell the boy that ? A. About two or three- times. Q. Before the accident? A. Yes. Q. Did you ever tell him not to put his head over the gate ? A. Yes, I told him; I told him he would get hurt if he did.” The case is therefore presented of a boy attending school, playing in the streets, distinctly warned not to do a particular act, and that, if he does, injury will ensue, doing that act, with full knowledge, and despite the warning he has received. We think the case is one which did not require the submission to the jury of any question as to the ability of the plaintiff to exercise ordinary care and prudence under, the circumstances, for he was old enough and intelligent enough to understand that the act he was warned against was one which would involve him in a peril; and, having done that which he was distinctly warned not to do, the consequences of his folly must be visited upon him, precisely as in any other case.

We think, upon the facts, the verdict was wrong, and that the judgment must be reversed, and the motion for a new trial granted, with costs to the appellant to abide the event.

All concur:


author: BARRETT, J.

text:
    Holland Trust Co. v. Thomson-Houston Electric Co. of New York et al.

    (Supreme Court, Appellate Division, First Department,
    October 23, 1896.)
    1. Mortgages—Foreclosure—Payment by bond surrender.
    A mortgage provided that the accrued interest on the mortgage bonds should be first paid from the proceeds of the property. The terms of the foreclosure sale required a certain cash payment, and the balance “ not required to be paid in cash,” by surrendering bonds, to be received at “such value as shall be equivalent to the amount the holder thereof would be entitled to receive in case the entire price was paid in cash.” Before the sale, the holders of accrued interest coupons moved, to vacate the judgment of foreclosure, and for a reference to ascertain their interest. The purchaser, who was acting for a reorganization committee appointed by the bondholders, was made a ■ party to the motion. After the sale the vacation of the judgment was denied, but a reference was ordered as to the interest of the coupon holders, the order providing for a further amendment of the judgment as to the distribution of the proceeds. The purchaser in the meantime surrendered bonds for the balance of the price, after the specifically required cash payment, and afterwards, on the organization of another corporation, the property was transferred to it, and its securities distributed among the bondholders. The referee decided that the coupons were entitled to priority over the bonds. Held, that the purchaser would be required to pay in cash sufficient of the price for the payment of the coupons.
    2. Same—Confirming sale—Effect.
    The confirmation of the report of sale pending the motion to ascertain the interest of the coupon holders, made Without notice to them, does not preclude them, on their coupons being given priority, from enforcing payment by the purchaser of sufficient cash for the payment of the coupons.
    3. Same—Priority—Estoppel.
    The coupon holders, by accepting the securities of the new company to whom the property was conveyed in place of their bonds, are not estopped to assert their preferential lien as to the coupons.
    4. Same—Laches.
    The fact that the reference to ascertain the coupon holders’ interests was not diligently proceeded with will not preclude the holders, on the decision being in their favor, from compelling the payment by the purchaser of "the necessary cash for payment of the coupons.
    Appeal from special term, New York County.
    Action by the Holland Trust Company against the Thomson-Houston Electric Company of New York and others to foreclose a mortgage. From an order denying the motion of one Hayward and others to compel the purchaser at foreclosure sale to pay a portion of the price in cash, they appeal.
    In September, 1889, the Thomson-Houston Electric Company mortgaged all of its property and franchises to the plaintiff to .secure an issue of $600,000 of bonds bearing interest at 6 per cent. The mortgage provided for the distribution of surplus moneys arising upon tire • sale as follows: “ To the payment of the whole amount of principal and interest which shall then be owing or unpaid upon said bonds and coupons; and, in case such proceeds shall not suffice to pay all the said principal and interest, they shall be paid ratably in proportion to the amounts ■owing and unpaid upon said bonds and coupons, respectively, without preference, except that the accrued interest shall first be paid in the order of maturity of the coupons representing the sum.” On account of a default in the payment of coupons maturing September 1,1893, foreclosure was commenced, which resulted in a decree of sale on October 30, 1891. The appellants are holders of coupons maturing prior to the date of September 1, 1893. The sale of the mortgaged property was advertised by the referee for Hovember 23, 1894. On Hovember 22d, the appellants Hayward and Coleman obtained an order to show cause why the judgment of foreclosure should not be vacated, and the report of the referee sent back to him for further proof as to the amounts due to the appellants and other coupon holders. The motion came on to be heard on Hovember 27th, and was dismissed so far as it sought to vacate the judgment. It was, however, ordered “ that Francis P. Lowrey, Esq., the referee, be, and he is hereby, authorized and directed, before -making distribution of the proceeds of the sale, to take proof and report whether the coupons of the said Hayward and Coleman and other outstanding coupons not heretofore presented to the referee are valid, and entitled to priority, and whether said coupons are entitled to share at all, and, if so, in what proportion, in the said proceeds of sale; and the said decree, so far as it applies to the distribution of said proceeds .and the confirmation of the report herein provided, may hereafter be amended nunc pro tunc.” In the meantime, on Hovember 23d, the property was sold to the respondent Maslin. On September 25, 1894, a reorganization agreement had been drawn up and signed by all the bondholders, and a committee appointed. Maslin iir buying, was acting for this committee, which was authorized to purchase and hold the property in trust for the subscribers to the agreement. The purchase was made in accordance with terms of sale which had been approved, by the court on November 7th. They provided for the payment of $1,000 in cash, and that “ the balance of the purchase price not required' to be paid in cash may either be paid in cash, or the purchaser may. satisfy and make good said balance óf his bid in whole or in part by paying over or surrendering outside bonds secured by the mortgage now being foreclosed; said bonds being received at such pnce and value as shall be equivalent to the amount that the holder thereof would be entitled to receive, thereon in case the entire price was paid in cash.” Maslin, as trustee, paid the $1,000 in cash, and made the rest of the payment by the surrender of bonds. The purchasers thereupon organized the Madison Square Light. Company, and transferred the property to it. The securities, of this company were then distributed among the bondholders, pro rata. The ¡proceedings before the referee to determine as to the coupons to be paid continued for some months. On December 28, 1895, he reported “ that all of said coupons [the- . appellants’] are ■ entitled to priority in the order of the dates, upon which the said coupons are expressed to become due and payable respectively, and that said coupons are entitled to share-in the proceeds of the sale heretofore had in this action to the full amount of their face value.” The application under review-was then made.
    A. J. Dittenhoefer, for appellants; Eustace Conway, for respondent Maslin; George L. Nichols, for respondents Edison Light & Power Installation Co. et al.
   BARRETT, J.

—The application for a resale was. properly denied. There was no infirmity in the sale itself, nor in the judicial proceedings which preceded it. The purchaser, Maslin,. undoubtedly obtained a good and valid title from the referee, and he has given a good and valid title to his grantee. The practical question, therefore, is whether Mr. Maslin paid the referee for the property in accordance with his agreement. At the sale he bid $50,000, and it is conceded that of this sum he has paid but $1,000 in cash. For the balance, he says ini his affidavit, that he gave the referee “sufficient bonds.of the Thomson-Houston Electric Company of New York to meet . the requirements of the terms of sale.” What, then, were these requirements? We find "that they called for the payment of $1,000 in cash at the time of bidding. They also called for the payment in cash of such further portion of the purchase' price as the court might direct in order to meet the expenses of the suit. But no such direction seems to have been necessary, and none such was here made. The balance of the purchase money “ not required to be paid in cash”—so read the terms of sale— was either to be paid in cash or by the surrender of outstanding bonds secured by the mortgage under foreclosure. In case of the payment of such balance by the surrender of these bonds* it was further provided that the latter should be received by the referee “ at such price and value as shall be equivalent to the amount that the holder thereof would be entitled to receive thereon in case the entire price was paid in cash.” In closing the sale, the referee and purchaser acted upon the assumption that no part of the §49,000—the balance of the purchase money then remaining unpaid—was required to be paid in cash, and consequently the referee accepted bonds for the entire balance. It must be conceded that these bonds were taken at a pi'ice equivalent to the amount that Mr. Maslin would have been entitled .to receive had he paid the §49,000 in cash. Such were the requirements of the terms of sale, and Mr. Maslin says that he surrendered to the referee sufficient of these bonds to meet these requirements. The assumption upon which the sale was thus closed was, however, inaccurate, as the holders of the unpaid coupons in question—the appellants —were clearly entitled to payment in cash. Under the terms of the mortgage, it was expressly provided that upon a sale thereunder the accrued interest “ shall first be paid in the-order of maturity of the coupons representing the same.” . The coupons held by the appellants represent this accrued interest, and consequently the purchaser could not escape the payment of a sufficient sum to satisfy them. The right of these coupon holders to priority in payment has since been judicially determined by the referee to whom the subject was referred, and his decision has not been excepted to or appealed from. It is, therefore, conclusive upon the parties now before the court, for the purchaser was also a party to this reference. It is quite clear, therefore, that the referee originally erred in accepting bonds for the "whole balance of the purchase money, namely, for the entire §49,000. The terms of sale only authorized the surrender of bonds for such part of the purchase-money as was not required to be paid. in cash; that is, for which cash was not needed. In other words, for that part of the purchase money left for pro rata distribution among the bondholders after the payment of the “ accrued interest ” represented by the coupons in question. There could have been no mistake or misunderstanding on this head. The purchaser knew, or should have known, precisely how he stood ; and he must have acted deliberately in closing the sale as he did. He cannot justly complain if he is now required to do what he was then bound to do. In truth, he took his, chances, and surrendered bonds for that part of the purchase money which he-knew would be required of him in cash, in case the applicants should be successful upon the subsequent hearing which was-provided for. A brief reference to the facts will render this quite clear. The sale took place on the 23d of November, 1894. The day before (the 22d) the appellants procured and served an order to show cause why the judgment should not. be vacated, and the report sent back to the referee to take evidence with regard to these coupons. Mr. Maslin represented a reorganization committee of the bondholders, and he says that the service of these motion papers was the first notice he or the committee had of the existence of these outstanding •coupons. The important fact, however, is that he then had notice of their existence and df the appellants’claim. With that notice he bid $50,000 at the sale the next day. To quote' his own words : The arrangements being all completed, and there being no stay, the referee went on with the sale, and deponent purchased as heretofore set ’forth.” Upon the 27th of the same month (September), and before Mr. Maslin took his deed, the appellants motion came on to be heard. All parties, including the purchaser, were represented. Affidavits were read upon behalf of Mr. Maslin as well as upon behalf of the plaintiff in the foreclosure suit. Thereupon an order was made dismissing the motion to set aside the judgment, but •directing the referee, before making distribution of the proceeds •of the sale, to take proof, and report whether these coupons were valid, and entitled to priority, and whether they were entitled to share at all, and, if so, in what proportion, in the proceeds of the sale. And it was further directed that the •decree, so far as it applied to the distribution of the proceeds •of sale and the confirmation of the report, might thereafter be amended nunc pro tunc. It appears that this order, notwithstanding its form, was really made upon consent of all parties, including the purchaser. Thus, upon the 27th of November, 1894, and prior to the closing of the sale, Mr. Maslin substantially agreed that the rights of the coupon holders, whatever they really were, should be embodied in the judgment •as of its original date. Necessarily, he proceeded thereafter to •complete his purchase precisely as though those rights had ■already been so embodied in the judgment. If those rights turned out to be none other than the rights of the bondholders generally, as represented by the committee, well and good. He would then be safe, under the terms of sale, in turning in bonds alone. If, however, those rights turned out to be the night to priority of payment of these coupons in cash, then he knew that that adjudication would relate back, under the order "to which he was a party, and become part of the original decree of foreclosure ; and, consequently, that cash to the extent of those coupons would “ be required ” of him. He tells us that the reorganization agreement made no provision for these coupons, and that the committee had and has no funds to meet the claim made thereunder. But he knew that just as well when he took his deed as he does now. He bid $50,000 for the property with notice of the appellants’ claim. If he made the bid under misapprehension, he should have asked to be relieved from his purchase. He was not compelled-to take the deed. He did so voluntarily. He did so after full and adequate provision had been made, with his knowledge and consent, 'for the protection of these coupon holders. Due effect must now be given to the order granting this protection. The purchaser should now do what he would have had to do upon the closing of the sale if the rights of the coupon holders had originally been embodied in the decree of foreclosure, that is, he should pay in cash the full amount of these coupons. This is in precise accord with the principle laid down in the well-considered case of Moran v. Hagerman, 12 C. C. A. 239, 64 Fed. 499, where a similar order to that now asked was made some six years after the sale, and where similar procedure was fully sanctioned.

There are several minor points which should be briefly noticed.

First. As to the confirmation of the report of sale. That confirmation ivas not upon notice to these coupon holders. They only learned of the terms of sale after the order of confirmation had been made; in fact, while the hearing under the order of November 27, 1894, with regard to the validity of these coupons, was pending. At that time they could have done nothing to alter the existing status. All they could then do was to proceed with the reference, and await its result. But, .as we have seen, the appellants do not really quarrel with the sale. What they insist upon is that the terms of sale, as such judgment should be amended nunc pro tunc, shall be complied with.

Second. As to the alleged estoppel. It seems that under the reorganization agreement the property has been transferred to a new company, and the securities of this new company have been distributed among „ the bondholders. The claim is now made that, by accepting the securities of this new company, the coupon holders have put it out of their power to enforce the preferential lien in question. This claim cannot be sustained. The rights of the accrued interest ” coupon holders and the same persons as general bondholders were distinct and independent. They were entitled to preferential payment so far as the coupons in question were concerned, and they were also entitled to their fair share of the securities of the new company under the reorganization agreement. The whole trouble seems to have resulted from the fact that these coupons were overlooked in the scheme of reorganization. But, as we have already seen, the time to rectify this omission was when the appellants’ claim was made. The committee could then have sought a modification of the reorganization agreement with respect to these coupons, and, if that failed, they could have abandoned the scheme. Unfortunately, they insisted upon completing the transaction without protecting themselves with regard to the new obligation which ivas then sprung upon them. It is quite clear that those Avho were pressing for payment of the old coupons in cash' waii^ed none of their rights in that regard bv the acceptance of AAdiat they were also entitled to under tie reorganization agreement. There, is nothing inconsistent between their position as independent coupon holders and their position as bondholders under the reorganization agreement. These observations, however, apply only to the appellants Hayward and Durlcee. As to the other appellant, Coleman, no such question can arise, as he was not a bondholder, nor a party to the reorganization agreement.

Third. The claim of laches. This is entirely without merit. There was, in truth, no laches. The appellants acted promptly in making their claim before the sale. They, in fact, secured that claim by the order of November 27,1894, which, as already observed, was made before Mr. Maslin took title. It was quite immaterial thereafter whether or not the reference proceeded diligently. The only effect of subsequent delay was that which pertains in any ordinary litigation, namely, delay in ascertaining whether or not the purchaser should pay cash for these coupons, or whether they should be thrown out, and his payment in bonds sustained. This delay had no relation to the closing of the sale or to the acceptance of bonds. Nor did it cause any change in the existing status. Mr. Maslin took his deed, and subsequently gave his deed, with full knowledge of the situation, and with a clear understanding that, if the referee decided against him,—for he was a party to the reference and to the contest there, as well as to the order which directed the reference,—he would have, to-pay these coupons in cash. Having taken the risk, he must abide the consequences of the coupon holders’ success.

It follows that the order appealed from should be reversed, with $10 costs and disbursements of the appeal, and the a¡3pellants’ application granted, with $1"0 costs and the expenses of the reference, so far as to require the purchaser, George W. Maslin, to pay to the referee, to the use of the appellants, the amounts found due to them respectively, with interest, as. prayed for.

Á11 concur.


text:
    George W. Chesley v. William Morton.
    (Supreme Court, Appellate Division, First Department.
    October 23, 1896.)
    Summons—Service by publication.
    Defendant, a non-resident, may be summoned by publication under Code Civ. Proc. § 438. subd. 5, authorizing an order of publication where the complaint demands that a lien on property within the state be enforced, and section 439, requiring the order to be founded on a complaint showing “a sufficient cause of action against defendant,” the complaint alleging a partnership between plaintiff’s intestate and defendant, which was dissolved by mutual agreement, failure of defendant to surrender an account of the firm’s affairs demanded by plaintiff, indebtedness of defendant to the partnership, and existence-of assets of it within the state ; and the prayer being for an account of the partnership transactions, payment by defendant to plaintiff of the sum found due on the account, appointment of a receiver of the assets, and an injunction ; and it is immaterial that the prayer is not only for enforcement of the lien on partnership assets, but for personal judgment, which the court cannot give without personal service of the defendant.
    Appeal from special term, New York County.
    Action by George W. Chesley, administrator of William P. Chesley, deceased. From an order vacating an order directing service of summons by publication, plaintiff! appeals.
    The complaint alleges the existence of a co-partnership between the defendant, a resident of Massachusetts, and the Elaintiff’s intestate, William P. Chesley, which was dissolved y mutual consent on April 4, 1892; that said firm did business in the cities of New York and Boston; that William P. Chesley died on October 12, 1895, and plaintiff-was thereafter appointed his administrator by the surrogate’s court of the county of New York; that on December 17, 1895, plaintiff demanded an accounting as to the affairs of the firm, wdiich the defendant has failed to .render; that the defendant is largely indebted to the co-partnership; and that there are assets of the co-partnership within the state of New York. The judgment demanded is, that an account be taken as to all the transactions of the co-partnership, and that the defendant pay to the plaintiff the sum found due upon such accounting ; also that a receiver be appointed of the assets of the co-partnership, “ with the usual powers and duties and under the usual directions,” and that the defendant be restrained from interfering with or disposing of the same.
    John W. Fiske, for appellant; John N. Blair, for respondent.
   BARRETT, J.

—Section 438 of the Code of Civil Procedure authorizes the granting of an order, of publication, among other cases : “ (1) Where the defendant to be served, * * * being a natural person, is not a resident of the state. "x" * * (5) Where the complaint demands judgment that the defendant be excluded from a vested or contingent interest in, or lien upon, specific real or personal property within the state; or that such an interest or lien in favor of either party be enforced, regulated, defined or limited; or otherwise affecting the title to such property.” Section 439 limits section 438 by providing that the order must be founded upon a verified complaint, showing a sufficient cause of action against the defendant to be served.” This latter section, it has been held, requires not only that the facts alleged shall show a cause of action, but also that such cause of action shall be one of which the court where suit is brought may take cognizance. Bryan v. Publishing Co., 112 N. Y. 382; 19 N.E. 825 ; Paget v. Stevens, 143 N. Y. 172; 62 S. R. 193. The court may lack jurisdiction either, as in the Paget Case, through statutory limitations placed upon its power; or, as in the Bryan Case, by reason of the absence from this state of the person sued or the subject-matter of the action. Where suit is brought against a non-resident by substituted service, it must partake of the nature of an action in rem, or jurisdiction will not be acquired to render a valid judgment. Pennoyer v. Neff, 95 U. S. 714. In that case Mr. Justice Field observed:

It is true that, in a strict sense, a proceeding in rem is one taken directly against property, without reference to .the title of individual claimants; but in a larger and more general sense the terms are applied to actions between parties, where the direct object is to reach and dispose of property owned by them, or some interest therein. Such are cases commenced by attachment against the property of debtors, or instituted to partition real estate, foreclose a mortgage, or enforce a lien.”

It will be seen that the learned justice mentions only attachment suits, and such suits as would come within the purview of subdivision 5 of section 438 of our Code. We think the plaintiff in the present action was entitled to an order • of publication under this 5th subdivision of section 438.

The complaint, when scrutinized, will be seen to have two-aspects. It seeks to obtain a judgment against the defendant for the amount claimed to be due by him to the firm of Morton & Ohesley. In this aspect it is purely personal in its-nature. But the demand for a receiver of the partnership effects, with power to sell, shows that more is sought than a merely personal judgment. There can be no doubt that a. member of a dissolved partnership has a lien upon its assets. He is not compelled to rely upon the solvency of his co-partner, but is entitled to the specific application of the joint assets to the payment of the sum due him upon the dissolution. Lindl. Partn. (6th Eng. ed.) pp. 385, 542; Story, Partn. §§ 97, 347; Taylor" v. Neate, 39 Oh. Div. 538. Tlie demand of the receivership and injunctipn is here made in order to effectuate this lien, and the relief prayed for is justified by the allegations of the complaint. Regarding the plaintiff’s suit in this aspect,—that is, as one brought to enforce a lien upon the. partnership assets in this state,—it comes precisely within the provisions of subdivision 5 of section 438 of the Code; and there can be no doubt that it is an action of the class which, may be begun through service by publication. Specific property within the limits and jurisdiction of this state is sought to be subjected to a lien in favor of the plaintiff,—one of the actions particularly mentioned in Pennoyer v. Neff.

But one further question remains to be considered. The plaintiff demands a greater measure of relief than could be given him in .an action begun without personal service of the summons. Is it essential to the granting of the order that the action, in all its aspects, be maintainable here ? We think not. Section 439 of the Code requires the complaint to show “a sufficient cause of action against the defendant to be served.” This'the present complaint does. It demands a measure of relief which the court is competent to grant, together with more which it is not. It frequently happens,. however, especially in equity suits, that more is asked than the facts proved permit the court to grant. This, however, is no obstacle to the rendering of the decree to which the plaintiff is entitled. The plaintiff, if he proves his case, is entitled, “ secundum allegata et probata,” to the application of the Hew York assets to the payment of his claim; and this right is “ a sufficient cause of action against the defendant,” within the meaning of section 439. Water Co. v. Baskin, 43 Fed. 323, decided under the California Civil Code, is an authority “on this point. The defendant denies that there are Hew York assets, but this is not the time to try that issue. ' It is the complaint (section 439) which must determine whether a sufficient cause of action exists. If the plaintiff has stated in his complaint what he will be unable to prove at the trial, he will pay the usual penalty.

The order appealed from should be reversed, with $10 costs and disbursements of appeal, and the order of publication reinstated, with $10 costs.

All concur.


author: BROWN, P. J.

text:
    Charles N. Morgan v. Stephen W. Fullerton et al.

    (Supreme Court, Appellate Division, Second Department.
    October 27, 1896.)
    Municipal corporations—Assessments—Payment on mortgage foreclosure.
    The provision of Code Civ. Proc. § 1676, that the officer making the sale under a mortgage foreclosure shall pay all assessments on the mortgaged premises, is for the exclusive benefit of the purchaser at such sale, and therefore cannot be enforced by the municipality which levied the assessment.
    Appeal from special term, Orange County.
    Action by Charles H. Morgan against Stephen W. Fullerton and others. From an order directing the payment of an assessment from the proceeds of the property, plaintiff and defendant Margaret P. Humphrey appeal.
    George E. Blackwell, for appellants; William D. Mills, for respondents.
   BROWN, P. J.

—This action was brought for the foreclosure of a mortgage upon real estate in the village of Goshen, in Orange County, and the usual judgment of foreclosure and sale was entered, which directed the referee to pay the taxes and assessments which were liens upon the property at the time of the sale. Subsequent to the judgment, and before the sale of the property, an assessment for certain improvements upon the sidewalk in front of the mortgaged premises was laid upon said premises by the trustees of said village. At the sale the defendant, Humphrey, became the purchaser, and thereafter the plaintiff and the said purchaser (no other parties having appeared in said action) entered into a stipulation which, recited, inter alia, (1) that a dispute had arisen as to the validity of said assessment; (2) that the said Humphrey had agreed to take title to the said premises subject to the lien, if any, of said assessment; (3) that the parties had agreed that judgment for deficiency should be entered as if no such assessment existed. Thereupon an order was entered 'on June 25, 1896, at the special term held by Mr. Justice Smith, directing the referee to make no deduction out of the money arising from said sale for any alleged lien existing upon said premises for assessments of any kind. The order appealed from was granted at special term on July 25, 1896, and was made upon the application of the trustees of the village of Goshen, and directed the referee to pay said assessment from the purchase money in his hands to the trustees of said village, and perpetually stayed compliance with the order of Mr. Justice Smith. Section 1676 of the Code of Civil Procedure is cited to sustain this order, the argument being that this section was intended for the protection of municipalities to which taxes or assessments which should be liens upon the property adjudged to be sold should be due and payable. The section is as follows :

“Where a judgment, rendered in an action for partition, for dower, or to foreclose a mortgage upon real property, directs a sale of the real property, the officer making the sale must, out of the proceeds, unless the judgment otherwise directs, pay all taxes, assessments and water rates, which are liens upon the property sold and redeem the property sold from any sales for unpaid taxes, assessments, or water rates, which have not apparently become absolute. The sums, necessary to make those payments and redemptions, are deemed expenses of the sale, within the meaning of that expression, as used in any provision of article second, third or fourth of this title.”

We are of the opinion that this section was intended solely for the benefit of the purchaser. It is not the design of the Code that the state or municipal corporations to whom taxes or assessments should be due should be made parties to actions for the sale of real estate. The force and effect of liens of this character are regulated by the tax and assessment laws of the state, and those statutes make full and ample provision for the collection of the tax and the enforcement of the lien against the property. But justice to the purchaser of the land requires that the title convejmd to him should be free and clear from all such incumbrances, and to that end, and for his protection, it is provided in the section of the Code cited that the liens shall be discharged out of the purchase money by the officer making the sale. It is entirely within the province of the court, however, to direct otherwise; and in such a case as the one before us, where the validity of the assessment is in dispute, and vdiere the purchaser is -willing to take the title subject to the assessment, and the plaintiff waives its payment with reference to ascertaining the judgment for deficiency to which he would be entitled, it was eminently proper that it should direct otherwise, as was done by the order of Mr. Justice Smith. The trustees of the village of Goshen had no standing in court which entitled it to complain of that order. It was not a party to the action, and the order does not curtail or affect any remedy which the village has to enforce payment of the assessment. The matter was one affecting only the parties to the suit. The suggestion of the learned counsel for the village that there was no other way by which the village could collect the assessment, except by a sale or lease of the premises in pursuance to the provisions of the statute under which it is incorporated, would be more properly addressed to the legislature than to the court. The validity of the assessment was disputed, and the parties interested in the land were entitled to have its validity tried and determined in a proceeding where the question would be directly presented. It could not be determined upon a motion made in this action.

We think it was entirely competent for the parties to make the stipulation upon which Justice Smith’s order was based, and that the' order appealed from should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs against the village of Goshen.

All concur.


author: WARD, J.

text:
    Frank P. Boechat v. Martin Brown.
    (Supreme Court, Appellate Division, Fourth Department.
    October 16, 1896.)
    1. Appeal from superior court of buffalo—election by appellant.
    A recital in a notice" of appeal from the municipal court of Buffalo, that appellant elects to appeal to the special term of the supreme court instead of the appellate division (Laws 1895, c. 805, § 33), precludes him from afterwards appealing from the special term to the appellate division.
    2. Same—Special term as appellate court. .
    Code Civ. Proc. § 1347, providing for appeals from the special term of the supreme court, does not apply to orders of the special term on appeals to it from an inferior court.
    3. Same—Constitutional law.
    Laws 1895, c. 805, § 33, which gives the right to appeal from the municipal court of Buffalo to the special term of the supreme court or-to the appellate division, instead of the superior court of Buffalo, which was abolished by Const. 1895, art.6, § 5, is not in conflict with section 2 of said article, giving the appellate division of the supreme court the jurisdiction formerly exercised by the superior court of Buffalo.
    Appeal from special term, Erie County.
    Action by Frank P. Boechat against Martin Brown for the value of certain stone wrongfully taken by defendant. From a decision affirming a judgment for plaintiff, defendant appeals.

      Edward E. Tanner, for appellant; A. J. Hibbard, for respondent.
   WARD, J.

—The plaintiff (the respondent here) instituted an action in the municipal court of Buffalo in the month of September, 1895, to recover the value of certain stone which the complaint alleged were wrongfully taken by the defendant from the plaintiff, and converted by the defendant. The answer was a general denial of the plaintiff’s title and of the wrongful taking. On the 7th of November the plaintiff recovered a judgment of $62, and on the 18th of that month the defendant (the appellant here) served a notice of appeal, stating that the defendant appealed to the special term of the supreme court from the judgment, describing it. From the order of the special term affirming this judgment the defendant appeals to this court, where he is met with the objection of the respondent that the appeal cannot be entertained by this court, as, the defendant having elected to appeal to the • special term instead of to the general term in the first instance, he is concluded by the statute from making the appeal to this court.

Prior to the enactment of chapter 805 of the Laws of 1895, which took effect May 27, 1895, an appeal from the municipal court of the city of Buffalo was required by the charter of the city to be taken to the superior court of that city, but by section 33 of that act it was provided that appeals could be taken from the judgment of the municipal court “ to the supreme court, Erie county, in the same cases, in the same manner, and with like effect as appeals are now had by law to the county court from judgments obtained in justices’ courts, except that ■in case of an appeal where a new trial is not demanded, the appellant shall have the right to appeal to the special or general term of such supreme court upon complying with the rules of said court, relating to said terms, but ^hall specify his election in the notice of appeal. But the appellate court may, in its discretion, set aside the judgment appealed from, or stay proceedings thereunder, and by order direct a new trial before said municipal court at such a time specified in said order, and upon such terms as it deems proper.” A new trial was not demanded upon the appeal in this case. The appellant contends, however, that the legislature has absolutely provided for the right to appeal to the general term in such a case under the general provisions of the Code. Section 1347 of the Code provides for appeals from orders of the special term, and is a general provision for appeals in the supreme court, and has no application to an appeal from an inferior court where the special term is constituted an appellate court. The appellant’s contention would secure to him the benefit of two appeals in the supreme court,—a thing unknown to our jurisprudence. The statute authorizing the appeal to the supreme court, and the onljr authority for such an appeal, gives the party aggrieved the option to appeal either to a special,term or to the general term (now the appellate division), but confers no authority to appeal to the appellate division if defeated at the special term. Section 1340 of the Code (as amended by Laws 1895, p. 840) provides that, “ except appeals from inferior and local courts heretofore heard * * * in the superior court of Buffalo, an appeal may be taken to the appellate division of the supreme court. * * * Appeals from inferior and local courts heretofore heard * * * in the superior court of Buffalo may be taken to the supreme court. This section does not conflict with the provisions of the Buffalo city charter as to appeals above referred to. And if this section of the Code may be regarded as in conflict with section 33 of the Buffalo charter, the latter, being a special or local law, is not repealed by the former, for the reason that a general statute will not be regarded as repealing or modifying a special or local one unless the intention so to do is clearly expressed, or such repeal must follow by necessary implication, which is not the case here. The amended constitution of this state took effect January 1, 1895, except as therein otherwise provided. By section 5 of article 6 of the constitution the superior court of the city of Buffalo was swept out of existence after the 1st day of January, 1896, and the conclusion of the section is as follows, so far as it relates to the matter before us : “ The jurisdiction now exercised by * * * the superior court of Buffalo shall be heard in the supreme court in such manner and by such justice or justices as the appellate division which includes Buffalo shall direct unless otherwise provided by the legislature.” As we have seen, the legislature, has otherwise provided in the amendment to the Buffalo charter above quoted. It is true that by section 2 of article 6 of the constitution it is provided that from and after the last day of December, 1895, the appellate division “ shall have the jurisdiction now exercised by the supreme court at its general terms and by the general terms of * * * the superior court of Buffalo, * * * and such additional jurisdiction as may be conferred by the legislature,” etc. This court would not hesitate to entertain this appeal had it been made to this court in the first instance, as the statute permitting any appeal in the premises authorizes. We do not think the provision of the constitution last quoted conflicts with the authority given to the legislature by section 5 of the same article. The- constitution itself does not define the cases that may be taken by appeal to this court, but leaves that duty with the legislature.

The appeal herein should be dismissed, with costs. This conclusion renders it unnecessary to consider the merits of the appeal.

All concur.


text:
    Conrad R. Schmitt et al. v. Joseph A. Hoffman et al.

    (Supreme Court, Appellate Term, First Department.
    October 29, 1896.)
    Payment—Accepting note—Tender.
    Where creditor accepts the debtor’s note, payable at a particular place, and retains it until maturity, he assumes the duty of presenting it for payment ; and it is equivalent to a tender for the debtor to have the money ready at the place of payment on maturity of the note.
    Appeal from fourth district court.
    Action by Conrad R. Schmitt and others against Joseph A. Hoffmann and others to recover for'professional services. There was a judgment in favor of plaintiffs, and defendants appeal.
    George A. Baker, for appellants; George Hass, for respondents.
   McADAM, J.

—The action is by the plaintiffs to recover for professional services rendered for the defendants in examining a title to certain real estate. The bill was $128.12, on account of which the defendants paid $60, and for the balance remaining unpaid, $68.12, gave a note made by the defendant, Joseph A. Hoffmann, and indorsed by the defendant, Emma Hoffmann, dated May 5, 1896, and payable one month after date at No. 39 ’Avenue A. The plaintiffs accejited the note, and on the 10th of July, 1896, brought this action to recover the balance due on their bill. The note was not presented for payment, but a letter was written to the defendant, Joseph A. Hoffmann, calling his attention to the note. Hpon the trial the plaintiffs claimed the right to surrender the note, and recover the balance due upon their bill. The justice decided that they had this right, and rendered judgment in favor of the plaintiffs for the balance due $68.12, with $3.06 interest, making $71.18, with costs. The plaintiffs seek to sustain this ruling upon the familiar rule that a note does not operate as a discharge of a precedent debt in the absence of an express agreement to that effect, and that the only result is to extend the time of payment (Fitch v. McDowell, 80 Hun, 207; 61 S. R. 776, affirmed 145 N. Y. 498 ; 65 S. R. 369); that the claim survived the taking of the note, as the original consideration remained ; that the note was nothing but a written promise to pay the indebtedness ; that, though the enforcement of the collection of the original claim was postponed, the plaintiffs, after the maturity of the note, had a right to surrender it, and sue upon the original cause of action (Iron Co. v. Walker, 76 N. Y. 521).

The propositions advanced by the plaintiffs are undoubtedly correct, but do not reach the point involved here. Allowing that the plaintiffs, as they received no new consideration for taking the note, might have returned it to the defendants at anytime before its dishonor,(and brought action on the original consideration (Graham v. Negus, 55 Hun, 440 ; 29 S. R. 114 ; Cary v. White, 52 N. Y. 138; Halliday v. Hart, 30 N. Y. 474; Parmelee v. Thompson, 45 N. Y. 58 ; Bank v. Frankhn, 55 N. Y. 235), they did not elect to pursue that course, but retained the note as an available negotiable security, and the defendants had a right to assume that it would be presented as such securities are, in due course. The plaintiffs having accepted the note, though not technically and unconditionally in payment, assumed the duty of presenting it at maturity. Insurance Co. v. Allen, 11 Mich. 501 ; Carroll v. Sweet, 128 N. Y. 19 ; 37 S. R. 868 ; s. o. on subsequent trial, 9 Misc. Rep. 382 ; 61 S. R. 673; Cow. Treat. § 470. The note in this instance was payable at a particular place, namely, 39 Avenue A, and the uncontradicted evidence shows that at its maturity the money was at that place, sealed in an envelope, and set aside expressly for its payment when presented. While presentment at the place named was not necessary to give a right of recovery, it relieved the parties to the note from damages if they were ready at the time and place named to pay it, and there was no one to receive payment. Such readiness is equivalent to a tender before suit brought, and an answer pleading that fact and payment of the money due into court will be a bar to the recovery of interest and costs, but not to the cause of action. Hills v. Place, 48 N. Y. 520 ; Riley v. Cheesman, 75 Hun, 387; 57 S. R. 699. Tender is an attempted performance, frustrated by the act of the party to whom it is offered. Though it does not discharge the debt, it will, if kept good, prevent the creditor from recovering interest or costs. In other words, “ if the plea is sustained, the creditor gets nothing but Avhat Avas originally tendered him, and the debtor gets judgment for his costs, so that he is placed, as nearly as can be, in as good a position as he held at the time of the tender.” Clarke, Cont. (Hornbook ed.) 639, 640. Tender, to be a valid performance to this extent, must observe exactly any special terms Avhich the contract may contain, as to time, place, and mode of payment. Id. The rule is that, “ if a contract fixes the place, the tender must be made at that place, and the party to whom tender is to be made must attend there for the purpose of receiving the money.” 25 Am. & Eng. Ene. Law, 920 ; 7 Wait, Act. & Def. 582. In cases of contract, a tender must be made at the place designated in the contract, and Avill not be valid at any other place.” 2 Wait, Prac. p. 581. In Locklin v.. Moore, 57 N. Y., at page 362, the court said: “ The only benefit the defendant could get from the specification of payment at a particular place is that, if he was ready there to pay, and kept ready, he could set that -fact up in his answer, and then pay the money into court, and allege such payment in his answer, and thus relieve himself from all liability for interest and costs.” The defendants, upon being sued, kept the tender good by paying into court not only the amount of the note, but all interest up to the time of suit brought, and relied upon the plea of tender above suggested to protect themselves from interest and costs ; but, under the erroneous ruling of the court below, it failed to effect this result. The tender having been kept good by deposit in court, such payment completely discharged whatever cause of action the plaintiffs had, and, as the money deposited became absolutely the money of the plaintiffs as soon as deposited, the defendants were entitled to judgment in their favor. Dakin v. Danning, 7 Hill, 30; Becker v. Boon, 61 N. Y. 317; Taylor v. Railroad Co., 119 N. Y. 561; 30 S. R. 141; Cow. Treat. §1152 ; Kelly v. West, 36 N. Y. Super. Ct. 304 ; Wright v. John A. Robinson & Co., 84 Hun, 172 ; 65 S. R. 649 ; Pars. Cont. (6th ed.) pp. 638,639.

The judgment must be reversed, and, as a new trial would be of no possible avail to the plaintiffs, there must be judgment, absolute in favor of the defendants, with costs.

All concur.