author:
Gilbert, J.: Mullin, P. J.,
      E. Darwin Smith, J.

text:
    HENRY P. GREEN, Appellant, v. WILLIAM H. GREEN, Respondent.

      Infancy — right of infants to avoid contracts — Gnan'dian and wan'd — contracts between.

    An infant cannot properly bind himself to his prejudice; but whenever the act done may be for his benefit it will not be void, but he has an election, when he comes of age, to affirm or avoid it. Mere acquiescence, without acts, does not amount to an affirmance.
    Where the infant has consumed the consideration given him for his deed of certain land, restitution of the amount cannot be required as a condition of his disaffirmance of his conveyance. (Per Gilbert, J.)
    It is illegal for a guardian to purchase land of his ward and pay him the consideration; and restitution of money so paid should not be required when the infant on coming of age seeks a disaffirmance of his contract.
    This is an appeal from a judgment, in favor of the defendant, in an action for trespass. The plaintiff is the father of the defendant.
    On the 8th day of March, 1866, the defendant, in consideration of the sum of $400 in money paid to him by the plaintiff, executed and delivered to the plaintiff a deed of the premises upon which the alleged trespass was committed.
    The defendant became twenty-one years of age on the 26th day of April, 1869.
    The defendant removed to Michigan soon after such conveyance, and before he became of the age of twenty-one years had spent, used up, wasted and lost the $400 paid him by his father, the plaintiff, and had no means or property whatever.
    The defendant returned in 1869 or 1870, and about May 1st, 1873, entered upon the premises conveyed as aforesaid, and then and there demanded of the plaintiff the possession thereof, and gave notice that he would not be bound by the deed he had given, and publicly proclaimed his re-entry and disaffirmance and avoidance of his said deed given during infancy.
    The plaintiff, thereupon, brought this action for the acts aforesaid, alleging them to be trespasses.

      James Noxon, for the appellant.
    A parol avoidance of a deed has no effect to restore the title. (1 Am. Lead. Cas., 320, 321; 5 Humph. [Tenn.], 70; 15 Mass., 359; 1 N. H., 73; 7 Cow., 179; 6 N. II., 337; 5 Miss., 224; 8 Texas, 398.) In asking equity he must do equity, (2 Kent [11th ed.], 241; 1 Pars. Con., 268; Bartholomew v. Finnemore, 17 Barb., 430, and cases cited; Hoof v. Stafford, 7 Cow., 182.) Same rule as to real estate. {Hillyer v. Bennett, 3 Edw. Ch., 239; Kitchen v. Lee, 11 Paige, 107; 1 Am. Lead. Cas., 320.) When an infant becomes of age and goes into a Court of Chancery to set aside Iris conveyance he must offer, in his bill, to return the purchase money. (1 Gray, 455; 6 Poster, 280; 41 N. H., 346, 353; Bynde v. Budd, 2 Paige, 193; Badger y. Phinney, 15 Mass., 359; 54 Barb., 554; Maltby v. Harwood,, 12 Barb., 480.) The same rule applies when an infant makes a purchase as when he sells. {Henry v. Boot, 33 N. Y., 553; Gray v. Lessington, 2 Bosw., 263; Medbury v. Watrous, 7 Hill, 111.)

      Frank Hiscock, for the respondent.
    A deed made during infancy may be avoided by the infant after coming of age, at any time within the term of twenty years limited by statute, by entry and demand of possession of the premises conveyed, or notice that he would not be bound by his former deed; {Bool v. Mix, 17 Wend., 119-134; Yoorhees v. Yoorhees, 24 Barb., 151; 1 Wash, on Real Prop. [3d ed.], 401; 1 Pars, on Con. [6th ed.], 322; Jackson v. Carpenter, 11 Johns., 540; Jackson v. jBurchin, 14 id., 124; Sherman v. Garfield, 1 Denio, 329.) Mere acquiescence or failure to disaffirm does not affirm the conveyance (1 Pars, on Con. [6th ed.], 325; Voorhees v. Yoorhees, 24 Barb., 151-153), and disaffirmance must be pleaded. {Bool v. Mix, 19 Wend., 119, 132; Yoorhees v. Yoorhees, 24 Barb., 150; Moak’s Yan Santvoord’s Plead., 564.) Whether the infant is bound to restore the consideration, received on conveyance of his lands, depends upon his having that consideration in his possession, or within his control upon coming of age. (Tyler on Infancy, § 37, p. 77; Jenkins v. Jenkins, 12 Iowa, 195-199; Boody v. McK&nney, 23 Maine, 525; Fitts v. Hall, 9 N. H., 446; Mustard v. Wohlford, 15 Grat., 329-340; 1 Pars, on Con. [6th ed.], 321; Browner v. Franklin, 4 Gills, 463-470; Pitcher v. Taycock, 7 Ind., 398-403; Price v. Furman, 1 Wms. [Yt.], 268-271; Manning v. Johnson, 26 Ala., 451.) By 1 Revised Statutes (Edm. ed.), 667, the father is the guardian of an infant and a conveyance between them is void. (2 R. S. [Edm. ed.], 159; White v. Parker, 8 Barb., 48; Thomas v. Bennei, 56 id., 197; Hassard v. Rowe, 11 id., 22.)
   Gilbert, J.:

The plaintiff has brought this action against his son, to recover damages for trespasses alleged to have been committed by the latter, upon land conveyed by him while an infant to his father. The trespasses alleged consist of acts done after the infant became of age, in making a formal entry upon the land for the purpose of disaffirming his conveyance thereof to the plaintiff. The court below we think properly gave judgment for the defendant. An infant cannot properly bind himself to his prejudice, but whenever the act done may be for his benefit, it will not be void, but he has an election when he comes of age to affirm or avoid it. (2 Kent Com., 233, et seq., and cases cited.) Mere acquiescence, without acts, does not amount to an affirmance. Many cases hold that the infant’s right of entry continues until barred by the statute of limitations: (Drake v. Ramsay, 8 Ohio, 151; Prout v. Miley, 28 Mich., 164; Irvine v. Irvine, 9 Wall., 627; Voorhies v. Voorhies, 24 Barb., 153.) Other cases hold that the lapse of a shorter period of time, taken in connection with other circumstances, may amount to an affirmance by way of estoppel. In this case the infant came of age on the 2d of April, 1869. On the 1st of May, 1873, he entered upon the land.. Meantime nothing more than silent acquiescence on his part in his father’s possession was shown. I can find no case which holds that such conduct alone bars a right of entry. On the contrary in Jackson v. Burchin (14 J. R., 124), eleven years, and in Jackson v. Carpenter (11 id., 539), twelve years were held insufficient for that purpose. We must therefore hold, that there was no affirmance of the deed by the infant in this case.

It is insisted on behalf of the plaintiff, however, that the infant could not disaffirm his deed without restoring the consideration which he received therefor. If such consideration or any part of it still remained in the hands of the defendant, we think that argument might deserve attention. But it appears that such consideration was received by the infant in money, and that he liad wasted the whole of it before he arrived at full age. The court below found those facts, and also found that he possessed no part of the said money, and no property whatever except the land conveyed to the plaintiff. The defendant is, therefore, entitled to disaffirm without restoring or offering.to restore the consideration received by him. (Mustard v. Wohlfardf's Heirs, 15 Grat., 329; Price v. Furman, 27 Vt., 268; Bartlett v. Drake, 100 Mass., 176; Walsh v. Young, 110 id., 399; Gibson v. Soper, 6 Gray, 282.) The principle on which this exception to the general rule governing the rescission of contracts rests is, that the incapacity of the infant is his shield. It holds the adult to the bargain which the infant may avoid, and affords protection to the infant by avoiding his deed, if after becoming of age he elects that it shall be avoided. If restitution should be required after the infant had squandered the consideration which he received, it is obvious that the policy of the law in respect to infants would in many eases be defeated. Such a rule would enable an adult to strip an infant of his estate without incurring any risk, and the necessary tendency of it would be to withdraw the protection of the law alluded to from infants, and transfer it to adults who had impoverished them.

The taking of the deed by the plaintiff from his son was in violation of his duty toward him. He was his son’s guardian, and, as such, had the control and management of his son’s personal estate, and of the rents and profits of his real estate, and was charged with the liabilities of a guardian in socage. (1 R. S., 718, § 5; 2 id., 153, § 20.) He was, therefore, liable for any loss suffered by him. Purchasing of his ward and paying him the consideration of the purchase were illegal acts. The loss of the money which he so paid is attributable to his own misconduct. On this ground, if on no other, restitution should not be required.

The judgment must be affirmed.

Mullin, P. J.,

did not concur with Gilbert, J.,in holding that an infant is not bound to restore the purchase money of land sold by him in order to entitle him to rescind the conveyance. He, however, does concur in holding that the acts of the father in taking the deed and paying the money were a breach of duty, and the infant is not bound to repay the purchase money received by him.

E. Darwin Smith, J.

(dissenting) :

The- contracts of an infant are not void, but voidable at his election on his arrival at full age. If he would rescind his executed contract on coming of age, on the ground of infancy, he must restore the consideration received by him. (2 Kent, 241; 1 American Leading Oases [Hare & Wallace ed.], 318; Tyler on Infancy, 78, § 38, and the cases there cited; Roof v. Stafford, 7 Cowen, 182.) The rescission of the contract is not complete till the consideration is restored. The acts in revocation of the contract, otherwise effectual for that purpose, are merely provisional, sufficient, perhaps, to convert the grantee from an infant into a trustee or mortgagee in possession, until such consideration is fully paid. Such is the equitable rule, I think, which should be applied in such cases, not only where the court is applied to, to give effect to the demand or claim of the infant for its aid, as in Killers v. Bennett (3 Edw. Ch., 222), or when applied to to restrain the unjust claim of the infant, to enforce a rescission at law without the restoration of the consideration.

But it is found in this case, by the learned judge who tried this cause at Special Term, that prior to the defendant’s obtaining his majority he had wasted or otherwise ceased to possess the sum of $400 by him received as the purchase-price of said premises; and at the time of his attaining such majority was possessed of no part of said purchase-price, and was possessed of no property, except said land, and upon this ground the decision was put that the defendant could disaffirm such deed without repayment of the consideration. To this conclusion I cannot assent. It seems to me that it converts this claim of infancy to annul all contracts into a weapon of offense and an’ engine of fraud, instead of being a shield against imposture and wrong. This proposition is so asserted in Tyler on Infancy (p. 70, § 37), but no authority or adjudged case is cited in its support, but dieta to that effect are contained in several cases in other States. In the American Leading Cases (vol. 1, 319, Hare & Wallace ed.), some cases are cited in support of it, in respect to the sale and exchange of personal property by or with infants, to the effect that if, during infancy, the property is wasted, sold or deteriorated, those acts done or allowed during infancy cannot be a conversion of the property, so that upon demand therefor and a refusal; after a rescission by the infant, trover would lie against him ; but it is not there held that the inability for such reason to restore the property in its state at the time of the sale or exchange, or its equivalent, would not defeat the claim, on the part of the infant, to rescind the contract.

This was, in effect, held in Bartholmew v. Finnemore (17 Barb., 428), and many cases cited, to show that the infant in such case must restore the consideration or its equivalent, and no judge of any court in this State has held to the contrary, or in conformity with the decision at Special Term, in any case to which we have been referred, or which I have been able to find.

The rule is universally stated in the cases in our courts in the unqualified terms used in 2 Kent (supra), that the infant can only rescind on the repayment of the purchase money. The doctrine that the infant may rescind without restoring the consideration, it seems to me is repugnant to every sound principle of law, justice and equity, and particularly adapted to provoke and reward extravagance, prodigality and rascality in young men approaching their majority. Infancy and fraud, in respect to the right of rescission of the contract, stand, or should stand, I think, substantially upon the same ground. The party seeking to rescind for infancy or fraud should act with reasonable promptness, and restore the other party to the same condition he was in when the contract was made.

I cannot agree with my brethren in the opinion that the acts of the plaintiff, in taking the deed and paying the money to his son, was such misconduct or violation of duty on the part of'the father to his son, as to discharge the infant son from the obligation to repay such money. For fraud, deception, or imposition practiced on his son the father, like all other guardians or parties, is liable in equity to restore the property received or purchased by him. But the rule is universal in cases of fraud, that the party seeking to avoid the contract must restore the consideration received. But the infant may revoke his contract, without showing fraud or deception, simply on the ground of infancy.

The consideration in respect to the misconduct of the father, in purchasing the property of his son, has nothing to do, as I conceive, with the question whether the latter may rescind without payment of the purchase-price received by him, when he has wasted the same before he comes to rescind.

That consideration relates solely to the question of fraud or imposition, practiced by-the father or guardian in his intercourse with his ward, in making a contract with him.

It does not appear that the consideration paid by the plaintiff for the land was not fully adequate and all that the same was worth; or that any advantage was taken by him to overreach the defendant. The latter had just married a wife, most probably without the knowledge or approval of his father; and being thus •charged with the responsibility for her support, wished to go west and set up for himself, and where he doubtless supposed wdth his and his wife’s industry, labor and care, they could support a family. The plaintiff acquiesced in the wishes of his son in this respect, paid him $400 for his little lot of land and relinquished his right to the labor and services of his son till his majority.

In nothing shown in the evidence does the plaintiff appear to have been a hard, unjust or unkind father, and there is nothing shown in the evidence, to justify any reproach upon him in this connection or to change the legal rights of the parties.

The judgment should be reversed and a new-trial granted.

Present — Mullin, P. J., Smith and Gilbert, JJ.

Judgment affirmed.


source: Caselaw Access Project

author: Mullin, P. J.: E. Darwin Smith, J.: Gilbert, J.

license: Public Domain

text:
    PATRICK FALCONER and others, Appellants, v. THE BUFFALO AND JAMESTOWN RAILROAD COMPANY AND OTHERS, RESPONDENTS. THE BUFFALO AND JAMESTOWN RAILROAD COMPANY v. WALTER JUDSON, W. BREED and EDWARD P. JONES, Commissioners to issue Bonds for the Town of Ellicott, and ROBERT NEWLAND.

      Town bonding act— Commissioners appointed under — Powers and duties of — Bffect of constitutional amendment, article 8, § 11.

      Town bonds issued in aid of railroad — right of railroad company to compel delivery of— chapter 507 of 1870.
    Commissioners appointed under the town bonding act, to issue bonds in aid of a railroad, are estopped from questioning the validity of the proceedings under which they were appointed. Commissioners so appointed can issue bonds only in accordance with the conditions of the petition asking for their appointment. Having executed such bonds at an earlier period and placed them in the hands of a third party, to be delivered when the proper time arrived, and having entered into an agreement with the railroad -company that said bonds should be delivered upon the performance of a certain condition, which condition was afterward complied with by the railroad company, and the constitutional amendment (§ 11, art. 8) having meanwhile gone into effect, held, that the bonds thereby became nuil and void and the commissioners could not deliver them to the railroad company.
    The legislature has not, by chapter 507 of 1870, authorized the commissioners to agree with the railroad company to issue the bonds which the tax-payers have consented maybe issued to the railroad company; that duty is left to rest solelyupon the consent of the tax-payers. That act merely regulates the action of the commissioners and prescribes the purposes to which the railroad company shall apply the bonds or their proceeds.
    The consent of a majority, in number and amount, of the tax-payers of a town that the bonds of the town may be issued, in aid of the construction of a railroad within this State, in the way provided for, by what is properly known as the bonding act, gives no right to the railroad company that a court of law or equity will enforce against the town because:
    1st. The company is not bound to receive the bonds, or to apply them or their proceeds in the construction of the road.
    2d. It cannot compel the persons appointed to issue the bonds, to, sign and deliver them for the same reason.
    3d. Because they owe no duty, at that stage of the proceedings, to the railroad company.

      The first case came before the General Term, upon appeals from two orders dissolving an injunction and sustaining a demurrer to the plaintiffs’ complaint.
    The action was brought to prevent the issuing and delivery of $200,000 of the bonds of the town of Ellicott to the Buffalo and Jamestown Railroad Company. The plaintiffs were tax-payers of the town, and the defendants were the railroad company, the commissioners previously appointed to execute and deliver the bonds, and Robert Newland, who had the bonds in his possession, in escrow, or upon a trust, to deliver them to the railroad company upon the performance of certain conditions.
    The complaint alleges, among other things, that the plaintiffs are each freeholders, residents and tax-payers of the town of Ellicott. That a petition was presented to the county judge of Chautauqua county, asking for the bonding of the town upon the conditions that the line of the railroad of said company, to be constructed from the city of Buffalo to the line of the State of Pennsylvania, in said county, should be located and constructed through the village of Jamestown, in said town of Ellicott, before said bonds should be delivered to said company, and such proceedings were thereupon had upon such petition, before the county judge of said county of Chautauqua, on or about the 20th day of May, 1872, that he adjudged and determined that said petitioners, signing said petition, represented a majority of the tax-payers, etc. That in the month of June, 1872, an agreement or contract was made between said railroad company and said commissioners of the town of Ellicott, providing, among other things, that “such commissioners aforesaid, for themselves, as such commissioners, and their successors in office and assigns, do agree to and with the said party of the second part, that when the said party of the second part shall have located and constructed through the village of Jamestown, in the said town of Ellicott, the proposed railroad of the said company, running from the city of Buffalo to the Pennsylvania State line, in the said county of Chautauqua, the said party of the first part, as such commissioners, or their successors in office, will thereupon immediately subscribe in the name of the said town of Ellicott to the capital stock of the said “ The Buffalo and Jamestown Railroad Company,” to the amount of $200,000, and will pay for the said stock by delivering to the said company the bonds of the said town of Ellieott in the amount of $200,000, which bonds shall be made and executed by the said party of the first part, or their successors in office, in due form of law, and by them duly signed, sealed and certified.” * * * “And in consideration of the premises, the said party of the second part, for itself, its successors and assigns, does hereby agree to and with the party of the first part, and their successors in office, that the party of the second part will, in manner and form hereinbefore specified, receive the subscriptions aforesaid, of the said party of the first part, to the said capital stock in the sum of $200,000, and will receive in payment therefor the said bonds of the town of Ellieott to the amount of $200,000, created and issued by the said commissioners, in manner and form aforesaid, in due form of law, and will thereupon issue and deliver to the party of the first part, in due form, the certificates representing the amount of the capital stock so subscribed and paid for as aforesaid.
    “ The parties of the first part refer to the petition and proceedings under which they were appointed such commissioners, as aforesaid, and do not undertake or agree to perform the conditions of this contract, except as they are empowered and authorized so to do by said petition, and proceedings and the statute in such case made and provided.”
    That at some time prior to the 28th day of August, 1874, said commissioners did sign bonds of said town of Ellieott for the aggregate amount of $200,000; and did, on the 28th day of August, 1S74, put said bonds into the hands of Augustus E. Allen and Robert Newland, the said Allen and Newland, at the same time, signing a paper containing the following, among other provisions, stating that said Allen and Newland held the bonds for the following uses and purposes : “If the said Buffalo and Jamestown Railroad Company shall, on or before the 1st day of January, 1876, have constructed its railroad to and through the village of Jamestown, in said town of Ellieott, upon a right of way and road-bed in which they have the title in fee simple, * * * and upon such commissioners having subscribed $200,000 to the capital stock of said company and received the certificate of said company therefor, to deliver to said company the said $200,000 in bonds of said town in payment of such subscription ; and in ease said company shall not construct its said railroad, in manner and form and to the extent aforesaid, on or before January 1st, 1876, then we are to return said bonds to said commissioners.”
    That said bonds are now in the hands of said Newland.
    The plaintiffs asked that any bonds that may have been signed by such commissioners shall not be sold or delivered to any person or corporation but shall be canceled or destroyed ; and that they shall not execute or deliver any other bonds of said town of Ellicott, as such commissioners aforesaid, and shall not subscribe to the stock of the Buffalo and Jamestown Railroad Company or purchase the same.
    The plaintiffs obtained a preliminary injunction prohibiting the issuing and delivery of the bonds. The defendants demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action The court at Special Term sustained the demurrer and dissolved the preliminary injunction, and from such orders the plaintiffs appealed.
    The second case came before the General Term upon a case agreed upon by the parties, without action, for submission to the court. The plaintiff seeks to compel the defendants to deliver certain bonds of the town of Ellicott, in the county of Chautauqua, to or for the benefit of the plaintiff corporation, for an equal amount of stock in the same corporation.
    A petition of tax-payers of the town was presented to the county judge, in March, 1872, with a condition that the company should build its road through the village of Jamestown, in the town, before the bonds should be delivered. Subsequent proceedings were thereupon had, in accordance with the statutes, and the defendants Weeks, Breed and Jones were appointed commissioners in May, 1872. The commissioners executed the bonds, and in August, 1874, delivered them to the defendant Newland and one Allen, deceased, in escrow, to be delivered to the railroad company if it should finish its road through the village of Jamestown before the 1st of January, 1876. The road was so built and finished in October, 1875, but the commissioners and Newland refused to deliver the bonds, upon the ground that they were prohibited from so doing by section 11, article 8 of the amended Constitution of the State of New York, which took effect 1st January, 1875.

      R. P. Marvin, for the appellants in first action.

      George F. Comstock, for the respondents in first action.

      George F. Comstock, for the plaintiff in second case.

      Porter Sheldon, for the defendants in second case.
   Mullin, P. J.:

The consent of a majority, in number and amount, of the taxpayers of a town, that the bonds of the town may be issued in aid of the construction of a railroad within this State, in the way provided for by what is popularly known as the bonding act, gives no right to the railroad company that a court of law or equity will enforce against the town, because: 1st. The company is not bound to receive the bonds, or to apply them or their proceeds in the construction of the road. 2d. It cannot compel the persons appointed to issue the bonds, to sign and deliver them for that same reason. 3d. Because they owe no duty at that stage of the proceedings to the railroad company.

Whether the tax-payers could compel the persons appointed to execute and deliver the bonds is a question not before ns, and need not be considered.

It was, doubtless, a defect in the bonding act, that it did not provide some way to secure the application of the bonds, or their proceeds, to the construction of the railroad; and to enable it, before the subscription for the stock in the name of the town, to compel the officers of the town to issue the bonds, and that defect led to the adoption of chapter 907 of the Laws of 1869.

That act provided that a majority, in number and amount, of the tax-payers, whose names appeared on the last assessment roll of the town, might apply to the county judge, by petition, setting forth that they desired that the town might issue bonds to the amount named, and invest the same, or their proceeds, in the stock or bonds of a railroad company in this State, named in the petition.

The duties of the county judge upon receipt of the petition are prescribed, and he is required to take proof of the matters alleged in the petition, and, if they are proved to his satisfaction, he is then to adjudge that the facts so alleged are true, and cause such finding to be entered of record.

After this adjudication is made, the county judge is then to appoint commissioners who are to execute bonds in the name of the town ; and they are to subscribe in the name of the town for stock of such railroad company to the amount named in the petition of the tax-payers, and to pay for the same with the bonds or their proceeds.

By these provisions of the statute, a duty is doubtless, imposed upon the commissioners to subscribe for stock of the railroad company, to issue bonds with which, or their proceeds, to pay for the stock, which the courts may compel them to perform. But there is no contract between the town or its commissioners and the railroad company that the latter can in any way enforce.

While the proceedings remained in this way, the legislature might repeal the bonding act, without violating the provision of the Constitution of the United States which forbids the States to pass any law impairing the obligation of contracts.

In 1870 the legislature passed an act (chapter 507 of the laws of that year), which declared that it should be competent for any corporation, to aid whose construction bonds shall have been authorized to be issued by any municipal corporation, to enter into an agreement with the commissioners appointed to issue bonds, limiting and defining the times when, and the proportions in which said bonds or their proceeds shall be delivered to said corporations, and the place or places where, and the purposes for which such bonds or their proceeds shall be applied or used, and such agreement shall be valid in all courts and places. And the commissioners shall not be compelled by any court to deliver such bonds or their proceeds to such railroad company, until such agreement shall be executed if required by them.

It will be seen that the legislature has not, by the act referred to, authorized the commissioners to agree with the railroad company, to issue the bonds which the tax-payers have consented may be issued to the railroad company; that duty is left to rest solely upon the consent of the tax-payers, so that there has been at no time any contract by which the railroad company became entitled to the bonds.

The contract provided for by the section of the chapter (507) above cited, merely regulates the action of the commissioners and prescribes the purposes to which the railroad company shall apply the bonds or their proceeds.

The duty of the commissioners to issue bonds rests on the statute of 1869, and not upon the agreement authorized to be made by chapter 507.

When the section of the State Constitution took effect that prohibits towns from issuing bonds in aid of railroad companies, the right of the railroad company to enforce the delivery of the bonds was taken away. It rested purely on the act of 1869, and not upon the contract between it and the town or its agent.

The commissioners, therefore, had no power to agree, in and by the contract between them and the railroad company, dated the 14th of June, 1872, that, when the company had located and constructed its road through the village of Jamestown, they would subscribe for stock and issue bonds to pay for the same. The right of the railroad company to these bonds did not, and could not rest on the agreement of the commissioners, but upon the statute of 1869 and the consent of the tax-payers.

When these were swept away by the constitutional provision the rest of the provisions of the agreement of the seventeenth of June became inoperative. There being no bonds that could be issued, they were released from the obligation to issue them.

E. Darwin Smith, J.:

The questions presented in these cases depend primarily, upon the construction of the petition of the persons claiming to be a majority of the tax-payers of the town of Ellicott.

In that petition is the following clause: “ Your petitioners desire that the said town of Ellicott shall create and issue its bonds to the amount of $200,000, and invest the same, or the proceeds thereof, in the stock of the Buffalo and Jamestown Railroad Company, upon the condition that the line of the said railroad of said company, to be constructed from the city of Buffalo to the line of the State of Pennsylvania, in said county, shall be located and constructed through the village of Jamestown, in said town of Ellicott, before said bonds shall be delivered to said company or sold.”

The object which the petitioners intended to secure by this condition, I think, was two-fold: first, to secure the location of said railroad through the village of Jamestown ; and, secondly, to secure its construction and completion upon such line to and through the said village, before the said bonds were to be issued or sold.

The objection, that it does not appear from the said petition that the Buffalo and Jamestown Railroad Company is a railroad company in this State, I think, is-waived by the provisions of the contract hereinafter mentioned, wherein the Buffalo and Jamestown Railroad Company, the party of the second part to said contract, is described as a railroad corporation created and existing under and by virtue of the laws of this State.”

The question upon the form of the petition in The People ex rel. Rogers v. Spencer (55 N. Y., 1), was presented upon certiorari, and in the opinion of Judge Andrews, who delivered the opinion of the court, it is stated that the rights of third persons are not in question, and the court could, without injustice to any one, affirm the conclusions they had reached.”

Any person acting under and in affirmance of such proceeding as valid, would be estopped, I think, from questioning their validity afterward.

The town of Ellicott, through its commissioners, have, in the contract referred to, clearly recognized the proceedings before and adjudication of the county judge as valid, and are estopped from questioning them for defects in the said petition.

The railroad company was authorized, under the act of the legislature of 1870 (chap. 507), to contract with the railroad commissioners of the town of Ellicott, to fix and define the time and terms upon which they would subscribe to the stock of said company, and issue the bonds of said town in payment therefor ; and the said act declares that contracts so made shall be valid. This provision makes valid the contract so made against the commissioners, or the town they represent, so far as such contracts are not in violation of law, or exceed the powers of the commissioners. The commissioners could not contract to subscribe for the stock of said railroad, in violation of the condition of the petition subscribed by the tax-payers and addressed to the county judge, nor could such commissioners, by contract, enlarge their own powers. They could contract provisionally, to issue such bonds and subscribe for such stock, when said railroad should have been located through, and completed to the village of Jamestown.

This would simply define the time and terms for the issue of such bonds. They could not provide for the issue of such bonds at any earlier period, by executing them and delivering them conditionally, in trust or otherwise. The subscription of said stock and the issue of said bonds could not lawfully take place until said railroad was completed to the village of Jamestown. Before said railroad was so completed, the power of the said commissioners, and the power of the said town to subscribe for said stock and to issue said bonds, was entirely taken away by the amendment of the Constitution, which went into effect on the 1st day of January, 1875. These commissioners were public officers, acting under the authority of law, which was thus repealed before any vested right had accrued under it binding upon said town of Ellieott. The execution and delivery of said bonds to Augustus Allen and Robert Newland in trust for said parties, as stated in complaint and case, could not in any degree affect the question nor change the rights of the town. These bonds in the hands of the said trustees cannot lawfully be delivered to the said railroad company, and are absolutely null and void in the hands of the said trustees.

It follows, therefore, from these views, that the order dissolving the injunction in the suit of Ealconer against said commissioners and other defendants, was improperly dissolved, and the demurrer in said action erroneously sustained, and should be reversed and said injunction restored. The cause of action in said suit was clearly maintainable, upon the merits, within the case of Ayers v. Lawrence (59 N. Y., 192), and in the case of The Buffalo and Jamestown Railroad Company v. Walter J. Weeks and others. Judgment should be given for defendants, according to the prayer of said defendants in the said submitted case, with costs.

Mullin, J., concurred.

Gilbert, J.

(dissenting):

The commissioners were authorized to subscribe in behalf of the town of Ellieott, for $200,000 of the stock of-the railroad company, and to pay for the same by issuing the bonds of said town, whenever that company should have performed the condition upon which the authority to make such subscription was granted, namely: “ That the line of the railroad should be located and constructed through the village of Jamestown in said town of Ellicott.” (Laws 1869, chap. 907; Laws 1871, chap. 925.) The commissioners made no formal subscription to the stock of the railroad company, but on the 14th of June, 1872, a written contract was entered into between the commissioners and the company, whereby the commissioners agreed that when the railroad company should have performed the conditions aforesaid, they as such commissioners or their successors in office, would thereupon immediately subscribe in the name-of the said town of Ellicott to the capital stock of said company to the amount of $200,000, and pay for the same by delivering the bonds of said town in the same amount; and the railroad company agreed to receive said subscription and to receive said bonds in payment thereof. The company did not perform the condition aforesaid until October, 1875. Meantime and on the 1st of January, 1875, the amendment to article 8 of the Constitution of this State, prohibiting any town from becoming directly or indirectly the owner of stock in any association or corporation, went into operation. (Const., art. 8, § 11.) The said railroad company seeks a performance of the contract of June 14th, 1872, but the commissioners insist that their power to perform it has been taken away by this amendment of the Constitution.

By section 5 of the act of 1869 (chap. 9Ó7), the commissioners were not only expressly empowered, hut directed to subscribe for the stock and to exchange the bonds of the town therefor at par upon the condition stated.

By chapter 507 of the Laws of 1870, the railroad company was empowered to enter into any agreement with the commissioners appointed to issue said bonds, limiting and defining the times when and the proportions in which said bonds or their proceeds should be applied or used; and the act declared that any such agreement, in writing, duly executed by such corporation and a majority of said commissioners, should in all courts and places he valid and effectual. It is urged on behalf of the commissioners, that said act did not confer upon them power to enter into the agreement, because the act limited their authority to issue bonds to a company, in aid of whose railroad, bonds had been authorized to be issued, and that the plaintiff was not such a company, for the reason that, at the date of the agreement, the condition on which the authority to issue the bonds depended had not been performed. Putting this objection in plain English, it is that a conditional authority is no authority. I think such a construction is obviously erroneous. The language of the statute of 1870 justifies no discrimination between an authority granted upon condition, or an unconditional one. All that it requires is that the railroad company shall be one in aid of the construction of whose railroad proceedings had been taken, which authorized bonds to be issued at any time. Before the act of 1870 referred to was passed, the ouly authority on this subject was contained in the aforesaid act of 1869, which authorized the commissioners to subscribe for the stock and issue the bonds simultaneously. That statute did not, in terms, authorize a condition to be imposed upon the power or duty of the commissioners to issue the bonds; but, in 1871, the legislature amended the act of 1869 by providing that the petition of the taxpayers, which is the foundation of the authority to issue the bonds, might be absolute or conditional, and binding the railroad company, in case of its acceptance of a subscription founded upon a conditional petition, to the observance of the conditions therein specified. (Laws of 1871, chap. 925, § 1.) I can find no limitation of the authority of the commissioners, whereby they are required to withhold the issuing of the bonds until after the condition shall have been performed, and none has been pointed out. The only' effect of making the petition conditional appears to be to impose a liability on the railroad company, in case of an acceptance of the subscription. The authority of the commissioners, to make the subscription and to issue the bonds, remains as it existed under the act of 1869, qualified only by the power of making the agreement respecting the issue of the bonds conferred by the act of 1870. In other words, taking the statutes together, the meaning of them is that the commissioners may withhold a sale or delivery to the railroad company of the bonds, until the condition specified in the petition shall have been performed, or an agreement shall have beqn made which is compatible with the terms of the condition. It is evident that the legislature did not intend, by the act of 1871, to take away the power of tlie commissioners, in case of a conditional petition, to make the agreement, because by the same act they amended the act of 1870 without making any change of the language whereby the power to make the agreement was conferred.

The authority to deliver the bonds being dependent upon the subscription for the stock, a power to make an agreement to deliver the bonds necessarily implies a power to agree to make the subscription at the same time the bonds are delivered. What is implied in a statute is as much a part of it, as what is expressed:

Nor do I perceive any difference in legal effect between a subscription to the stock of a corporation conditional in its terms, and a present agreement to subscribe upon the performance of the same condition. Jn each case the contract is executory in its nature, and the party making it is not bound to take the stock, unless the condition is performed. That being so, I think the commissioners had authority either to wait until the condition had been-performed, before making the subscription, or to make a present agreement to subscribe upon the performance of the condition.

The only remaining questions arise upon the effect of the amendment of the Constitution before referred to. A construction cannot be given to this provision which would make it operate retroactively, so as to destroy or impair antecedent rights and interests which had become vested. That proposition is too well settled to need discussion.

I think, also, that the language of the amendment admits of a construction, which would limit it to transactions occurring after its adoption, and exclude such previous acts as were authorized by existing laws. Such is the most natural and honest construction, and we are inclined to think it should be applied in a case like this. The question, however, must be decided, namely, whether the obligations assumed by or imposed upon the commissioners were subject to abrogation by legislative act or by constitutional amendment. Upon this subject it is contended: 1. That the railroad company acquired no right to the bonds, and the commissioners no right to subscribe for the stock, until after the amendment of the Constitution took effect. And, 2. That the power reserved by the legislature to alter or repeal the acts incorporating the town and the railroad company, includes the power to abrogate contracts made between them. The answer to the first ground has been already intimated, namely, that the statute itself created the right and imposed the duty of subscribing for the stock, and of issuing the bonds upon the performance of the conditions imposed by the petition of the tax-payers, and that by the agreement the assent of the town, through its agents the commissioners, to the fulfillment of that obligation and duty, and of the railroad company to the performance of the condition, were manifested. A perfect contract was thus formed on the part of the town to deliver the bonds in payment for the stock, on performance of the condition, and on the part of the railroad company to receive such subscription on those terms, and issue the stock to the town. Unless, therefore, the amendment of the Constitution), referred to was an exercise of the power reserved to alter and repeal charters, the inviolability of that contract is secured by the provision of the Constitution of the United States, that “no State shall pass any law impairing the obligation of contracts.” (Art. 1, § 10.) No doubt the power reserved may be exercised by the people, notwithstanding it has been reserved to the legislature. (Re Oliver Lee's Bank, 21 N. Y., 9.) That the amendment was not an exercise of that power, however, I think, is clear. The contract formed no part of the charter of either the town or the railroad company. It was outside of and collateral to both. The charters are contracts with the State, and the reserved power alluded to is limited to those contracts, and does not embrace contracts authorized by laws, in force at the time of the making thereof, made by corporations with each other or with third persons. A repeal of a charter would not discharge debts or obligations due to the corporation. They would form part of the assets of the defunct body, and would be administered for the benefit of the creditors (if any) and stockholders of the corporation at the time of its dissolution. How then can such repeal discharge debts or obligations due from the corporation? A dissolved corporation, it is true, cannot-be sued, for the same reason that a dead man cannot. But its debts and obligations are not extinguished. Payment thereof will be enforced out of its assets, or by means of the personal liability^ of its members or officers, if the charter created such liability. An announcement of the doctrine that the repeal of the charter of a bank at once annuls its obligations to other banks, would create no little alarm as well as surprise. I am satisfied that such an interpretation of the language of the reserved power under consideration would not be correct. While the State may alter or resume its own grant of corporate powers and franchises, it cannot impair the obligation of a contract between the corporation and a third party, whether the latter be an individual or a corporation. (Fletcher v. Peck, 6 Crunch, 133; Green v. Biddle, 8 Wheat., 1; Aspinwall et al. v. Comrs. of Daviess, 22 How., 364; Cooley Const. Lim., 290.) In the case in 22 Howard, it was made the duty of county commissioners, by statute, to subscribe for the stock of a railroad company, if the majority of the qualified voters at an election determined in faijor of the subscription. The election took place in March, 1849. In November, 1851, a new State Constitution took effect containing the prohibition that: “No county shall subscribe for stock in any incorjiorated company, unless the same be paid for at the time of such subscription.” The commissioners made the subscription and issued bonds for it after the last mentioned date. It was insisted that the subscription became complete when, at the election, a majority of the votes was cast in its favor, and did not require the form of a subscription on the books of the company. The Supreme Court of the United States held otherwise, but also held that if there had been a subscription, obligatory upon -the parties, the contract thus created would have been protected by the Constitution of the United States, as it would then have been complete before the constitutional prohibition. In that case the power remained wholly unexercised, until after the new Constitution took effect, and for their failure to perform the duty enjoined upon them the commissioners might be personally liable, although no liability attached to the county. In the case before ns there was an authorized agreement to execute the power. I think that fact makes a well defined and just distinction between the two cases. It has been said that the amendment of the Constitution operated as a revocation of the authority vested in the commissioners. But that merely begs the question. While it is true as a general proposition, that a derivative authority does not survive the original authority, yet that principle could not be applied in a case like this without producing manifest- injustice. Here the railroad company have made large expenditures in constructing their road, in reliance upon the powers of the commissioners under a valid agreement madé with them, while such powers were in full force. They thus acquired an interest in the execution of the power, which a revocation of it ivould not divest. The power became one coupled with an interest, which is not revocable at the will of the grantor. (Bell Com. [5th ed.], 488, 490; Story Ag., § 477; Sunt v. Rousmanier,. Admr., 8 Wheat., 174.) In the last case cited, Ch. J. Marshall. remarked, “We know that a power to sell for the benefit of B.,.. engrafted on an estate conveyed to A., may be exercised at any time,, and is not affected by the death of the person who created it. It is then a power coupled with an interest, although the person to whom it is given has no interest in its exercise.”, (See, also, Franklin v. Osgood, 14 J. R., 553; Jackson v. Ferris, 15 id., 346.)

I am of opinion, for the reasons stated, that, in this case, the agreement to subscribe was in judgment of law equivalent to an actual subscription, and that thereby the contract which the commissioners were authorized to make became complete before the amendment of the Constitution took effect. My conclusion, therefore, is that the railroad company is entitled to a delivery of the bonds on tendering the stock, notwithstanding the condition on which such right accrued was not performed until after the constitutional amendment took effect, and that it is the duty of the defendant Newland to deliver the bonds to the railroad company upon the receipt of the certificates for an equal amount of stock; no further subscription to the stock is necessary. And I am of opinion that, as the formal act of subscribing on the book of the company may possibly be now prohibited, it is not the duty of the commissioners to make any further subscription.

Judgment in Buffalo and Jamestown Railroad Co. v. Weeks should be entered in favor of the railroad company accordingly.

The orders appealed from in Falconer and others v. Buffalo and Jamestown Railroad Company should be affirmed, with ten dollars costs and disbursements.

Present — Mullin, P. J., Smith and Gilbert, JJ.

Judgment in Falconer v. Buffalo and Jamestown Railroad Co. as follows : Order sustaining demurrer to complaint reversed, and order dissolving injunction reversed, with ten dollars cost of appeal and disbursements.

Judgment in the Buffalo and Jamestown Railroad Co. v. Weeks and others as follows: Judgment for the defendants, declaring that they are not authorized in law to make any subscription to the stock of the plaintiff’s company for the towm of Ellicott, or to deliver or issue any bonds of said town of Ellicott to the plaintiffs, and that-the plaintiffs pay their costs in this action.

       In confirmation of the views expressed in the dissenting opinion in this case, see Moultrie v. Rockingham Ten Gent Savings Bank (Albany Law Journal, vol. 13, p. 869).— [Rep.


author: Mullin, P. J.:

text:
    JAMES P. O’DOUGHERTY, Respondent, v. ILLUSTRIOUS REMINGTON and others, Appellants.

      Lease — surrender of— Contract of sale —Principal and agent — Estoppel.
    A. leased certain premises to the defendants, and died intestate, leaving B., his only son and heir at law. Before his death he conveyed the premises to the wife of B. The deed was not recorded. B. was the agent of his wife, acting under a power of attorney, and collected the rents and managed the estate. The lease was transferred by the defendants to the R. P. Co., which took possession of the premises, and B., assuming to be the owner, subsequently contracted to sell the premises to the R. P. Co. In an action to recover rent under the lease,'accruing subsequent to the contract of sale, held, that third persons had the right to treat with B. as the owner, and the wife was estopped from disputing her husband’s act; and the premises and possession thereof having been transferred to the R. P. Co., under the contract of sale, the lease to the defendants must be deemed to be surrendered.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee, in an action to recover rent under a lease.
    On the 10th day of April, 1855, John O’Dougherty leased to the •defendants, Illustrious, Hiram and Alfred Remington, certain premises in the village of Juhelville, now part of the city of Water-town, for the term of twelve years, at an annual rent of $600, payable semi-annually.
    By the agreement of the parties the rent was increased to $900, payable semi-annually.

      John O’Dougherty before his death in 1862, made a deed by which he conveyed the premises so leased to AnnaM. O’Dougherty, wife of his son Patrick O’Dougherty, and gave the same to his son to be delivered to said Anna after his (John’s) decease.
    This deed was delivered after John’s death, but was not put on record until December, 1868.
    On the 13th of June, 1862, the said Anna executed and delivered to her husband, Patrick O’Dougherty, a power of attorney to lease or sell any of her real estate, upon such terms as he saw fit, and agreeing to adopt and ratify the same.
    In March, 1863, Alfred Remington purchased of his copartners, the other defendants in this cause, all their interest in the business earned on upon said leased premises, and also their interest in said lease, and paid the rent from the time of the purchase to Patrick O’Dougherty, up to September, 1865.
    In September, 1865, a company called the Remington Paper Company was duly organized, and it became owner of the property-leased of Anna O’Dougherty. Remington continued in the business of paper making, and assumed the payment of the rent upon the lease hereinbefore mentioned, and paid the same thereafter, and until July 1st, 1866, to Patrick O’Dougherty.
    On the 28th of April, 1866, Patrick O’Dougherty entered into a contract in writing, in his own name, for the sale of the paper mill and other real estate in Juhelville aforesaid, to the Remington Paper Mill Company, for the sum of $20,000. The purchase money to be paid and the ■ deed given during the month of May, 1866. This contract contained a clause by which said paper company agreed to pay to Patrick O’Dougherty rent on the paper mill to July 1st, 1866, of $500.
    This contract was not under seal, and has not been performed by either party.
    This action is brought to recover the rent ($150), due by the terms of the lease on the 1st of January, 1867, which rent was assigned by Anna O’Dougherty to the plaintiff. The conveyance to Anna O’Dougherty from John was without any consideration, other than love and affection, and the existence of this conveyance was not known to the defendants or the paper company, until after this suit was brought.

      After the contract to sell' the paper mill to the paper company, that company went into possession, paid taxes and insurance, made repairs and collected rent from tenants living thereon, with the knowledge of Patrick O’Dougherty. The contract itself, and deed afterward executed to convey such real estate to the paper mill company, pursuant to said written contract, was in the handwriting of Anna O’Dougherty. The company paid to Patrick O’Dougherty $1,000 on the purchase-price of the property, and remained in possession until about the 17th of September, 1867, when said Patrick O’Dougherty served upon the company a notice that said contract was rescinded. Anna O’Dougherty was cognizant of, and assenting to, the various transactions between her husband and said paper mill company.

      L. J. Dorwin, for the appellants.

      Starbuek c& Savnjer, for the respondent.
   Mullin, P. J.:

John O’Dougherty, at the time of his death, was the owner in fee of the paper mill premises. Patrick O’Dougherty was his only heir; he managed and controlled the property left by his father. There was no will nor any thing on record to show that John O’Dougherty had conveyed the property- to any person. Third persons had the right to treat with Patrick O’Dougherty as the owner, especially as the real owner concealed her title, and not only acquiesced in but ratified the acts of her husband in the management and disposition of said property, she having appointed him agent for that purpose.

As between her and the paper mill company, she was estopped from disputing her husband’s acts, done in good faith under the power, and in equity if not in law, she was bound, or rather the property was bound, by his acts and contracts. (Bodine v. Killeen, 53 N. Y., 93; Paley’s Ag., 247, and notes; Story’s Ag., §§ 444, 446; Wendell v. Van Rensselaer, 1 Johns. Ch., 344; Town v. Needham, 3 Paige, 545; Tilton v. Nelson, 27 Barb., 595; Storrs v. Barker, 6 Johns. Ch., 166.)

It is not necessary to inquire whether the acceptance by Patrick O’Dougherty of the paper company as tenant, and the receipt of the rent therefor, after it went into possession of the mill, operated as a surrender or abandonment of the lease to the defendants from John O’Dongherty. (Taylor’s Landlord and Tenant, 398, 399; Smith v. Niver, 2 Barb., 180.) As there can be no doubt as to the effect of the contract between Patrick O’Dougherty and the paper company to sell to the latter said mill property, such a transfer followed by occupation under the contract, and performance of some of the conditions by the purchaser, was wholly inconsistent with the continuance of the relation of landlord and tenant.

Por the purposes of this question, Mrs. O’Dougherty must be treated as the party contracting to sell, and it cannot, it seems to me, be doubted but that, if the contract had been been made by her, the lease would be deemed surrendered. (Peter v. Kendal, 13 E. C. L., 316.)

After the sale to the company, and giving it possession, it was legally impossible for the. defendants to be in possession as tenants of Mrs. O’Dougherty. She had parted with the right of possession, and could not, while the contract was in life, give the defendants a right of-possession.

If not, then she could not recover of the defendants for rent when she had deprived them of the capacity to enter and occupy.

The judgment must be reversed and a new trial granted,'costs to abide event, before another referee.

Present — Multjn, P. J., Smith and Noxon, JJ.

Judgment reversed and new trial gx-anted before another referee, costs to abide event.


text:
    ALEXANDER WHITTEMORE, Respondent, v. ROBERT C. ELLIOTT, JOHN J. TROWBRIDGE and WILLIAM JENNINGS, Appellants. WILLIAM JENNINGS and others, Appellants, v. ROBERT C. ELLIOTT and others, Respondents.

      Infancy — Partnership—assets of — marshalling of.

    In an action against copartners for a partnership debt, where judgment is rendered in favor of two of the members of the firm, on the ground that the debt was contracted during their infancy, and against the remaining adult member, held, that the judgment against the adult member of the firm was a partnership liability so far as to make the moneys and property of the firm applicable toward its payment.
    Partnership creditors have a lien in equity on the partnership property, but where there is not enough to pay all in full each must, whether he is a judgment creditor or creditor at large, take his pro rata share of it so far as relates to the personally.
    Appeal from an order of the Special Term, providing for the disposition of partnership property in the hands of a receiver.

      J). Baldwin, for the appellants.

      J. A. IJathway, for the respondents.
   Mullin, P. J.:

Robert O. Elliott, John J. Trowbridge and William Jennings, were copartners at the city of Oswego, under the name of Robert O. Elliott & Co.

The firm became indebted to Alexander Whittemore and divers other persons, for money lent and goods, etc., sold to said firm.

The said creditors brought actions against the partners to recover such- indebtedness. The defendants Trowbridge and Jennings defended several of said actions, setting up their infancy as a defense.

On the trial of said actions verdicts were given in favor of the plaintiffs against Elliott, and in favor of the other defendants, on the ground that they were minors when the debt was contracted.

In several other cases Trowbridge and Jennings did not plead infancy, and judgment passed against them and Elliott, for said several debts.

J. M. Casey was appointed receiver of the property and effects of said firm. He was required by an order of the court to report the result of the proceedings before him, with a statement of the debts of the said firm which in his opinion had been legally established, and the amount each individual creditor is entitled to receive from the funds in his hands, subject to the expenses of the receivership and such other charges as might be directed by the court to be paid.

The receiver in obedience to said order reported that the counsel for the several judgment creditors appeared before him, and proved the recovery of judgments against all of the partners by the production of the judgment rolls, but no documentary evidence was offered as to the other judgments.

The recovery of the other judgments in the other cases was coneeded on the hearing.

The receiver reported that he had received from the county treasurer $875.41, out of which he paid to the attorney for Sanford and others, on their judgment against Elliott and in favor of Trowbridge and Jennings, by order of the court, $200.18. He further reported that he had no other assets in his hands.

He further reported that, although four of the judgments recovered against Elliott alone were for goods, etc., sold to the firm, or for money lent to it, yet, as Trowbridge and Jenniugs had judgments in their favor in said actions, they could not be allowed as debts legally established against the firm. That, however meritorious the consideration of the said judgment might be, having been disaffirmed by Jennings and Trowbridge, two of said firm, and tlieir non-liability established by judgment in their favor, on the ground of infancy, they were to be treated as judgments against Elliott and not against the firm. He further held that the plaintiff, in the judgment against all of the partners, was alone entitled to share in the funds in his hands.

On the'coming in of said report a motion was made, I infer from the papers, to confirm it, which was opposed by the counsel for the creditors having judgment against Elliott alone. The court made an order that the said report be sent back to the receiver, with directions to distribute the assets in his hands as follows: First, to pay firm creditors, in the order in which said creditors obtained their liens; afterward, to other partnership creditors, in the order of their dates; afterward, among the individual creditors,pro rata, and in the order in which they obtained their liens. And that, in making such distribution, the judgments in the report of the receiver, against the individual members of the firm, in the cases in which infancy was pleaded and sustained, be considered as firm debts; and that the judgment in favor of Whittemore against Elliott, in which there was judgment in favor of Trowbridge and Jennings, on the ground of infancy, be considered the individual debt of Elliott. This judgment was recovered upon a note made by Elliott in the firm name. From this order the creditors who have judgment against all the members of the firm appealed to this court.

Although I dó not think the order appealed from is appealable, as it refers the report back to the receiver for further hearing, and to take further proof, yet, as the question whether the plaintiffs, in the judgments against Elliott alone, in which the other defendants had judgment in their favor on the ground of infancy, are entitled to share in the funds in the hands of the receiver as firm creditors, is distinctly presented, it may as well be disposed of on this appeal as after the report of the receiver comes in, giving effect to the instructions contained in the order now before us.

Trowbridge and Jennings, the minors, have never repudiated, nor been in any way relieved from the contract between them and Elliott to form a copartnership, by virtue of which they became entitled each to one-third of the copartnership property, and to one-third of the profits if any made in the business.

While that contract is in force Elliott had the right to demand that the property of the firm shall be applied to the payment of the partnership liabilities, and that each partner shall contribute his pro rata share to the payment of any indebtedness remaining after applying the partnership property.

When the minors succeeded in establishing that they were under the age of twenty-one years when the debts were contracted, for the recovery of which actions were brought against them, they relieved themselves and their individual property from liability foi such debts, but the adult partner and the partnership property remained liable for such debts. Until they were released from the partnership agreement, their interest in the property was, in equity, chargeable with the partnership debts.

Elliott has the right, if the copartnership creditors have not, to require the appropriation of the joint property to the payment of the joint liabilities, as the moneys in the receiver’s hands are the avails of the sales of the partnership property, on which the creditors have acquired no legal lien. Partnership creditors are only entitled to share pro rata in such avails, and are not entitled to payment in the order in which their judgments were recovered.

Had the moneys been the proceeds of real estate, on which the creditors had acquired liens by judgment, a different rule would be applied.

The partnership, creditors have a lien in equity on the partnership property, but when there is not enough to pay all in full, each must take his pro rata share of it.

The order appealed from does not carry into effect the equitable rule, but, on the contrary, manifestly violates it.

The order of the Special Term must be reversed, and an order entered directing the receiver to pay all the partnership debts pro rata, including those cases in which judgment passed against defendant Elliott alone, and excepting the debt which the order appealed from declares to be the debt of Elliott alone. That part of the order not being appealed from, is not reversed.

The receiver will pay to the appellant, out of the moneys in his hand, ten dollars as costs of this appeal.

Present — Mullin, P. J., Smith and Noxon, JJ.

Order reversed, and order directed requiring receiver to pay partnership debts, as per opinion of Mullin, P. J., and to pay appellant’s counsel ten dollars costs of the appeal and his disbursements.


text:
    CLARISSA DINGS, Respondent, v. DE WITT PARSHALL, and WILLIAM WILLIAMS, Appellants.

      Mortgage — right of second moi'tgagee to redeem — Subrogation — Injunction.
    A junior mortgagee lias tlie right to redeem premises from the lien of a senior mortgage, either by payment or tender of the amount due. There is no distinction between the effect of a tender by a mortgagor and one by a subsequent incumbrancer.

    Where a junior incumbrancer has paid the debt of the prior incumbrancer he is entitled to be subrogated to the prior liens, and is also entitled to all securities held by the prior incumbrancer.
    This is an appeal by defendants from an order made at the Onondaga Special Term, denying a motion to dissolve an injunction.
    In June, 1870, Mrs. Wolverton and her husband gave to Lewis and Reuben Harper a bond and mortgage on certain land in Galen, Wayne county, to secure the payment of $2,397.53. This mortgage was recorded December 22, 1870. The bond and mortgage came through mesne assignments to the plaintiff, who is the owner.
    In March, 1870, Mrs. Wolverton and her husband gave a bond, and to secure the payment of the same, gave also a mortgage, on the same lands that are described in the mortgage above mentioned, to the Mutual Life Insurance Company, to secure the payment of the sum of $1,000 and interest. This mortgage was recorded March 18,1870.
    The bond and mortgage came by assignment to the defendant Parshall, who proceeded to foreclose the same by action in this court, making plaintiff and her husband, as subsequent mortgagees, parties defendants.
    A judgment of foreclosure was taken by default in June, 1875. Said premises were advertised to be sold, by virtue of said judgment of foreclosure, on the 31st July, 1875.
    It is alleged by the plaintiff that she attended at the time and place of sale to bid upon said premises, and requested the referee to proceed and sell said premises, which he refused to do, acting under the directions of said Parshall.
    She then tendered to said Parshall and his attorney the full amount due on the judgment, together with the costs of the action, and requested an assignment of his interest under said judgment, which offer and request were refused.
    The plaintiff then requested Parshall and his attorney to proceed and sell said premises, she offering to bid the amount due on the judgment and costs of the action. This also was refused, and the referee appointed to make the sale announced that said P. would let the sale go down, and it was permitted to go down. The tender made as aforesaid has been kept good; the said P. and his attorney were notified that the money would be placed in the bank for said P., and it was so left.
    When the premises were advertised for sale there were crops growing thereon of the value of several hundred dollars. The premises and the crops were not an adequate security for the amount due on both the judgments and the plaintiff’s mortgage, by several hundred dollars, and without the crops, not security by a much larger sum.
    By reason of the refusal of P. to sell, when requested, the crops have been lost, and plaintiff has sustained damage to the amount of $1,000.
    After the tender, Parshall claims to have transferred said judgment to William Williams, who claims to own the same.
    The plaintiff has brought an action against said Parshall and Williams, and in her complaint sets out the matters aforesaid, and demanded judgment that the 'transfer to Williams be declared fraudulent and void, and that she be permitted to redeem and be declared the owner of said bond, mortgage and judgment, and that she recover of Parshall the damages she has sustained, to the amount of $1,000.
    Parshall, in his answer, admits most of the facts alleged in the complaint; denies, among other things, fraud, and alleges that he assigned the judgment, etc., to Williams on the 31st July, 1875.
    Williams denies nearly all the allegations in the complaint, and sets up the assignment to him by Parshall, and claims it was made without any fraudulent intent, and alleges that although plaintiff knew of the assignment, no tender to him has been made.
    The plaintiff procured an injunction restraining, the defendants, from selling, transferring, or in any manner disposing of or interfering with the judgment of foreclosure and sale hereinbefore mentioned, and also the bond and mortgage on which the judgment is founded, and from selling said premises until further order.
    The defendant made a motion, upon the affidavits of both defendants, to dissolve said injunction. Parshall, in his affidavit, alleges his sale of the judgment to Williams to have been in good faith, and that he has had no interest in it since it was assigned in July, 1875; and that the charges in the complaint, of fraud, are untrue.
    Williams, in his affidavit, alleges the purchase of the judgment, as stated in his answer to have been in good faith, and without any notice of the facts alleged in plaintiff’s complaint; that he made the purchase to get a higher rate of interest for his money than he could get from a bank; that he had no intention to cheat any person in respect to said judgment.
    The motion to dissolve the injunction was denied without costs.

      T. W. Gollins, for the appellants.

      George K. Gollins, for the respondent.

       See case of Bloomingdale v. Barnard, ante, p. 460. — [Rep.

   Mullin, P. J.:

The plaintiff being a junior mortgagee of the premises in question, had the right to redeem them from the lien of the senior mortgage held by Parshall. (2 Story Eq. Jur., 291; 1 Hilliard on Mortgages, 323.)

To entitle a subsequent mortgagee to redeem from a senior mortgage, he must pay the amount due on such prior mortgage and the costs of the foreclosure. (1 Hilliard on Mortgages, 397.)

The tender of the amount due on a mortgage before sale by a junior incumbrancer for the purposes of redemption, is equivalent to actual payment if properly made, and the money tendered is set apart, and kept for the prior mortgagee. (Edwards v. Farmers’ Fire Insurance and L. Co., 21 Wend., 467; Stoddard v. Hart, 23 N. Y., 556.) No distinction is perceived as to the effect of a tender, between that of a mortgagor to a mortgagee, and of a subsequent incumbrancer to the same party to redeem. In each case the effect is to discharge the lien of the mortgage on the mortgaged premises, and if tender discharges the lien in one case, it ought to have the same effect in another.

Where the junior incumbrancer has paid the debt of’the prior incumbrancer, he is entitled to be subrogated to the prior lions and all securities held by the prior incumbrancer, as security for his debt. (Ellsworth v. Lockwood, 42 N. Y., 89-96.)

He is subrogated by law. A surety who pays the debt of his principal is entitled to subrogation in equity, and to an assignment of the securities held by the creditor.

When, therefore, a second mortgagee pays to the first mortgagee his debt, although the first mortgage is thereby satisfied, the second mortgagee is entitled to hold the premises as security for the amount paid on the first mortgage. (Ellsworth v. Lockwood, supra, 96.)

If I am right in holding that the tender to Parshall, before his assignment to Williams, put an end to his lien on the premises, then nothing passed by his assignment to Williams; he had nothing to assign.

The plaintiff had the right to protect her interest in the property by injunction, as a sale upon the judgment might east a cloud upon her title and subject her to litigation to remove’it.

The order must be affirmed with ten dollars costs, to be paid by defendant Williams.

Present — Mullin, P. J., Surra and Noxon, JJ.

Order of Special Term affirmed, with ten dollars costs and disbursements.


text:
    DANIEL J. CUSHMAN, Appellant, v. ELI B. JEWELL, Respondent.

      Conditional sale — when tide vests — Payment hy installments — Action for conversion —Waiving tort — Amendment of pleadings — Waiver of tort.

    In case of a conditional sale, wliere tlie title is to Test in the purchaser upon payment of the price, the purchaser may perfect his title to the property at any time hy a tender of the price, although it is payable by installments, and they are not all due. If the debt was payable with interest, the purchaser must pay interest up to the time of the maturity of the debt.
    If the seller claims that the amount already paid is forfeited by the failure of the purchaser to pay one of the installments when due, it is his duty to inform the purchaser of such claim, in order that he may pay or tender such amount.
    Where a complaint for unlawful conversion of personal property contains an allegation waiving the tort, it is not proper to allow an amendment, on the trial, striking out the waiver of the tort.
    A plaintiff can waive the tort and sue on the contract, only where the wrongdoer has sold or otherwise disposed of the property.
    Appeal from a judgment of the Oneida County Court, reversing a judgment of the Justice’s Court in favor of the plaintiff, in an action for the price and value of a sewing machine, alleged to have been unlawfully taken by the defendant and converted to his own use, aud giving the defendant judgment for costs.
    The following oral pleadings were made before the justice: Plaintiff complains against the defendant for the price and value of one Davis sewing machine, worth sixty dollars, taken and converted to his own use by defendant on or about August 1st, 1874, without any right thereto, and plaintiff demands judgment against defendant, waiving the tort, for forty-nine dollars and seventy-five cents, and costs.
    Defendant denies the complaint. Defendant says if he took away such machine, it was his own, and he had a l’ight -to take it. 'Demands judgment of dismissal, with costs.
    At the close of the evidence the plaintiff’s attorney asked to have the complaint amended to comply with his case by striking out words “ waiving the tort.” The amendment was allowed under objection and exception.

      S. J. Barrows, for the appellant.
    That Mrs. Knowles was entitled to the machine until the payments became due. {Herring v. Hoppoclc, 15 N. Y., 409; Strong v. Taylor, 2 Hill, 326; nail v. Carnley, 11 N. Y., 501; 17 id., 202; Hasbrouclt v. Lounsbury, 26 id., 598-601.) As to waiver of right by defendant to take advantage of non-payment. {Lawrence v. Doll, 3 Johns. Ch., 23; Hutchings v. Munger, 41 N. Y., 155, 158; Fairbanks v. Phelps, 22 Pick., 535; Fry on Spec. Perf., 409; 1 Pars, on Cont., 427; 25 Wend., 640; Lupin v. Matul, 6 Wend., 77; 6 Cow., 110; Smith v. Lyons, 1 Selden, 41, 44.) The tender discharged the lien. {Kortright v. Cady, 21 N. Y., 34; Hutchings v. Munger, 41 Uarb., 396; affirmed, 41 N. Y., 155; 1 Wait’s Law and Practice, 483;. Vincent v. Cornell, 13 Pick., 292, 294; Kemble v. TThife’s, 10 Wend., 374; Day v. Bassett, 102 Mass., 445; 3 Gray, 548 ; 10 Pick., 522; 19 Maine, 427.) Mrs. Knowles had a right to dispose of property till she refused payment. (41 Barb., 396; 41 N. Y., 155.) Justice was right in allowing the amendment waiving the tort. (Tyng v. Commercial Warehouse Co., 58 N. Y., 308-313, and cases cited; Moran v. Mc-Clearns, 63 Barb., 185, opinion by Johnson, J.; 4 id., 36-42, and cases cited.) The defendant did not sell the property or convert it, but had it in his possession; hence, assumpsit would not lie. (Osborn v. Bell, 5 Denio, 370, 373-376; Rarpending v. Shoemalcer, 37 Barb., 270, 291, and cases cited; Try on v. Baker, 7 Bans., 511, 514, opinion by Mullin, J.; 3 E. D. Smith, 71-75; Rawlcs v. Thorn, 54 Barb., 168.) The cause of action may be changed at any time, provided the claim remains the same. (Chapman v. Webb, 6 How. Pr., 390; Thompson v. Mimford, 11 id., 273; Wood v. Shults, 4 Hun, 309-311, opinion by Gilbert, J.; Code, § 64, subs. 10, 11, and §§ 169, 173; Aclcerly v. Tarbox, 31 N. Y., 564; Lapham v. Rice, 55 id., 472; Conaughty v. Nichols, 42 id., 583; Veeder v. Cooley, 2 Hun, 74; 4 N. Y. S. O., 254; 44 N. Y., 63.)

      Charles R. Searle, for the respondent.
    That Mrs. Knowles could convey no title to the plaintiff. (Strong v. Taylor, 2 Hill, 326; Rerring v. Roppock, 15 N. Y., 409; Rasbrouck v. Lounsbury, 26 id., 598; Rawls v. Deshler, 28 How., 66; Rerring v. Willard, 2 Sandf., 418.) She had forfeited the contract, and evidence of tender was inadmissible. (Rerring v. Roppock, 15 N. Y., 409; Ballard v. Burgett, 40 id. [1 Hand], 314; Covell v. Rill, 2 Seld., 374; Clement v. Cash, 21 N. Y., 253, 256; Cotheal v. Talmadge, 5 Seld., 551; Walter v. Bennett, 16 N. Y., 250; Andrews v. Bond, 16 Barb., 633, see p. 642.) The amendment was not admissible. (2 Wait’s L. and P., 760; Ransom v. Wetmore, 39 Barb., 104; 21 How., 289; 36 id., 540, 543.)
   Mullin, P. J.:

This action was brought by the plaintiff, before a justice of the peace of Oneida county, to recover from the defendant the value of a sewing machine which defendant had taken and converted to his own use. The facts, as proved on the trial, were substantially as follows, viz.: On the 4th March, 1874, the defendant sold to Mrs. Esther Gr. Knowles a Davis sewing machine for twenty-five dollars, payable in monthly installments, with interest, and took from her a note and a receipt signed by her, containing the following clauses and conditions, viz.: It is expressly understood that the said E. B. Jewell neither parts with, nor do I acquire any title to said machine until said note is fully paid, and it is expressly understood that I am not to remove said machine from my present place of residence, Borne, Oneida county, N. Y., without the consent of the said E. B. Jewell. In case of default of payment defendant was authorized to enter on the premises of Mrs. Knowles and take and remove said machine and collect all reasonable charges for the use of the same.

Underneath the signature of Mrs. K. is the following: I herein further agree that if I violate any part of the within I forfeit all that has been paid on the within, or may have been paid on the same.

On the 7th of May, 1874, Mrs. K. paid -on said notes five dollars; on the-first of June, five dollars; ón the first of Jidy, five dollars. On or about the 25th of July, 1874, plaintiff, by his agent, bought of Mrs. Knowles the said machine, and, on the next day, took it from her shop and carried it to Williams’ Hotel, in Borne, from which place it was taken in a few days, and about the first of August, by the defendant. Plaintiff demanded the machine of defendant, who refused to deliver it. On the first of August Mrs. K. went to defendant’s house and tendered to defendant five dollars, being the installment falling due in August, and also five dollars and fifty-six cents, being the installment not paid in April, and interest thereon. The defendant refused to receive it, and Mrs. K. retained the money for the defendant.

The justice rendered judgment in favor of the plaintiff for thirty-seven dollars and fifty cents, the value of the machine, and five dollars costs.

On appeal to the county court the judgment of the justice was reversed. The plaintiff appeals to this court.

Under the contract between Mrs. Knowles and the defendant, evidenced by the paper called a receipt, Mrs. K had no title to the machine when she sold to, or exchanged with, plaintiff’s agent, and could not, for that reason, convey any to him. The removal of the machine by the plaintiff from Mrs. K.’s house forfeited her right to the possession of the machine, but it did not necessarily annul the sale to her. If she paid the balance due on the machine before defendant took possession her title became perfect, and the plaintiff acquired a valid title to it under his agreement with Mrs. K. The note made by Mrs. K. is not before us, nor are its contents set out in the case. The receipt is dated fourth of March, and if that was the date of the note, the whole money became due on the fourth of August, the price being twenty-five dollars, and payable in monthly payments of five dollars each. The installments would become due on the fourth of each month if, as we must assume, the note bore date the fourth of March.

It may be that the installments were payable on the first of each month, but the only evidence that they were payable on that day is the fact that two of the three installments indorsed were paid on the first day of the month.

The defendant took possession of the machine on the first day of August. On the same day Mrs. K. tendered to the defendant the whole amount remaining unpaid on the note.

When possession was taken, the installment payable on the first of August was not due, but it and the installment due in April were tendered to the defendant, and, for the purposes of this case, the tender was equivalent to payment.

There was a default of payment of the installment due in April, but the defendant permitted Mrs. K. to retain and use the machine for several months thereafter, and thereby waived sircli forfeiture. (Hutchings v. Munger, 41 N. Y., 155.) In case of a conditional sale, when the title is to vest in the purchaser upon payment of the price, the purchaser may perfect his title to the property at any time by a tender of the price, although it is payable by installments, and they are not all due. If the debt was payable with interest, the purchaser must pay interest until the maturity of the debt.

Mrs. K., when she made the tender, was not informed that the defendant claimed that the payments theretofore made were forfeited, and that she must'pay or tender such amount in addi tion to the amount remaining due. It was the duty of the defendant, if he insisted on such forfeiture, to have informed Mrs. El thereof, in order that she might pay or tender it. Failing to make such claim, he could not afterward object to the amount of the tender. If the foregoing views are correct, it follows that the defendant was liable in trover for converting the machine. But having inserted in the complaint a waiver of the tort, he could not arrest the defendant upon an execution on the judgment, as he may now do, if the amendment striking out the waiver was permitted to stand. Such an amendment cannot be allowed. It changed the nature of the action, and subjected the defendant to imprisonment on the execution. The evidence does not make a case, allowing plaintiff to waive the tort and sue on contract. That can only be done when the wrong-doer has sold or otherwise disposed of his property, so that it may be assumed he received the value of it in money or its equivalent.

The judgment of County Court should be reversed and that of justice affirmed.

Present — r Mullin, P. J., Smith and Noxon, JX

Judgment of County Court reversed, and that of justice affirmed.