author: Daniels, J.

text:
    Margaret Slattery, Resp’t, v. Albert F Schwannecke and George Hewlett, App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Foreclosure—Deed of referee—Recording act—When entitled to-be RECORDED.
    A mortgage was executed by CJara Decker and her husband, in 1877, on property belonging to them, which was foreclosed by the mortgagee in. 1880. Under the judgment in the foreclosure suit, the premises were sold, the mortgagee became their purchaser, and the deed of the referee was recorded December 17, 1880. He held title until February 4, 1881, when he conveyed the property to the defendant Schwannecke, for value. The husband of the said Clara Decker and wife had conveyed the said property to the plaintiff by a deed executed July 25, 1878, but not recorded until March 15, 1881' The aforesaid action of foreclosure was commenced and lis pendens filed July, 1880. The plaintiff was not made°a party to said suit. Held, that the effect of the foreclosure and sale was precisely the same as though the mortgagor had executed and delivered a deed of the premises to the purchaser Code Civ. Pro., § 1632. That it was not necessary that the deed of the property should be executed by Decker himself to entitle it to the protection of the recording act.
    2. Same—-Lis pendens—Code op Pno., § 132.
    Under section 132 of the Code of Procedure, which was in force when the said lis pendens was filed, plaintiff was bound by all the proceedings in the foreclosure action.
    3. Principal and agent—When knowledge of agent—Notice to principal.
    Proof that information was acquired by an agent is not sufficient to prove notice to his principal, unless the agent acquired the information in the business of his principal. Holden v. New York and. Brie Bank, 72 N. Y., 286, distinguished.
    Appeal from an interlocutory judgment recovered at the special term.

      Abner C. Thomas, for app’lts; James C. Be La Mare, for resp’t.
   Daniels, J.

By the judgment which has been recovered the plaintiff is entitled to redeem premises situated on the easterly side of Jackson avenue, in the city of New York, from a mortgage executed by Clara Decker and Peter P. Decker, her nusband, to secure the sum of $2,000, with interest from the 13th of December, 1877. This mortgage was foreclosed by George Hewlett, the mortgagee, in the year 1880. Under the judgment in the foreclosure suit the premises were sold on the 22d of September, 1880, and the plaintiff Hewlett, in the action, became their purchaser, and a deed was executed and delivered to him on the twenty-eighth of the following October, and recorded in the register’s office of the county of New York on the 17th of December, 1880. He held the title under this purchase until the 4th of February, 1881, when he conveyed the property to the defendant Schwannecke for the consideration of $2,500, $2,000 of which was secured by a mortgage on the same premises, executed by the vendee to the vendor. The deed from Decker and wife to the plaintiff was executed on or about the 25th of July, 1878, but it was not recorded until the 15th of March, 1881, while the action of foreclosure of the mortgage held by the defendant Hewlett was commenced on or about the 26th of July, 1880 and a notice of the pendency of the action was filed in the office of the clerk of the city and county of New York on the 16th of July 1880. And it was because of the fact that the deed to the plaintiff was not on record at the time when the foreclosure action was commenced, that she was not made a party to the foreclosure suit. But to remove the effect of the omission to record the deed to the plaintiff, evidence was given from which the court found as a fact that the plaintiff Hewlett in the foreclosure suit had actual and express notice of this deed, at and before the time of the commencement of that action. But if this notice was established as a fact in the case it did not affect the defendant Schwannecke, for there is no pretense that he had any information whatever of this pre-existing deed to the plaintiff in this action. And as it is to be presumed from the recital in the deed to him that the sum of $500 was actually paid as a part consideration for the sale of the property, in addition to the execution and delivery by him of the mortgage to secure the residue of the purchase price, he was so far a purchaser of the property in good faith for value, for this recital in the deed was evidence of the payment by him of so much of the purchase price. Lacustrine Fertilizer Co. v. Lake Guano, etc., Co., 82 N. Y , 476, 483.

This position has however, been denied by the counsel for the plaintiff for the reason that Hewlett did not acquire title by a direct conveyance from Decker. But the effect of the foreclosure and sale was precisely the same as though Decker had executed and delivered a deed of the premises to Hewlett. For it was provided by the statute both preceding, and at the time when the sale was made, and which has become a part of the Code of Civil Procedure, that the deed upon the foreclosure sale should vest m the purchaser the same estate, as if it were executed by the mortgagor or mortgagee of the property. 3 R. S., (6th ed.), 199, sec. 102; Code, § 1632. And neither of the authorities brought to the attention of the court by the counsel for the plaintiff, hold any thing in conflict with the conclusion, For while it has been held that the recording act will affect conveyances founded only on a purchase of the right of the mortgagor, this conveyance was strictly within that principle. To entitle it to the protection of the recording act it was not necessary that the deed of the property should be executed by Decker himself. It was sufficient that the conveyance executed by the referee was equivalent to a deed executed by him, and designed to convey his title which under these provisions of the statute it actually did. What the rule of construction requires which these authorities have stated and settled is, that the conveyance shall be operative and effectual in the way of conveying the title of the person appearing upon the record to be the owner of the property. Raynor v. Wilson, 6 Hill, 469, 473; Wood v Chapin, 3 Kernan, 509, 520; Gillig v. Maass, 28 N. Y., 191, 209. And its application to this conveyance is confirmed by Seward v. Huntington, 94 N. Y., 104, 114. And its force in that respect is in no way diminished by anything that was said in Tarbell v. West, 86 N. Y., 280, 288. As to this defendant therefore, the right of the plaintiff to redeem was not established, and so far the judgment certainly was unwarranted. But it does not follow from this result that the plaintiff would be deprived of her remedy if the action has been legally maintained in other respects, for the defendant Hewlett might still be required to account to her for what he had received upon the sale and conveyance of the property, and in that manner to secure an equitable adjustment of her rights. Meehan v. Forrester, 52 N. Y., 277, 281.

And an equally important inquiry is, therefore, presented whether the action has been maintained against the defendant, Hewlett. At the time when it was commenced, section 132 of the Code of Procedure was applicable to the filing, and the effect of the filing of the notice of lis pendens. For by section 3356 of the Code of Civil Procedure, chapters 14 to 21 inclusive, did not go into effect until the 1st of September, 1880, and the like provisions, which by different sections have been made a part of this Code, are contained in chapter 14. By the preceding section contained in the Code of Procedure, requiring the filing of a notice of the pendency of the action in suits affecting the title to real property, it was provided that this should be done in foreclosure cases twenty days before judgment, and that the notice must contain a description of the property, the date of the mortgage, the parties thereto and the time and place of recording the same. The notice which was filed complied with these requirements, and this section further provided that where that shah appear to be the fact, that “from the time of filing only shall the pendency of the action be constructive notice to a purchaser or encumbrancer of the property affected thereby. And every person whose conveyance or encumbrance is subsequently executed or subsequently recorded, shall be deemed a subsequent purchaser or encumbrancer, and shall be bound by all proceedings taken after the filing of such notice to the same extent as if he were made a party to the action.” And this latter provision has been enforced and carried into effect according to the import of the language used in its enactment. Stern v. O’Connell, 35 N. Y., 104; Lamont v. Cheshire, 65 id., 30; Kindberg v. Freeman, 39 Hun, 466.

And it was to avoid its effect that the evidence was given in this action, from which it has been found that Hewlett, the plaintiff in the foreclosure suit, had notice at or before the time when it was commenced, of the existence of this deed to the plaintiff. And if he had, that would probably defeat the judgment in the foreclosure suit, so far as to-render it imperative against the plaintiff, for it would have-been a fraud on his part to foreclose his mortgage and sell the mortgaged property without making the plaintiff a party to the action, if he in fact knew her to be the owner of the equity of redemption. And it could have been no-part of the design, in the enactment of this statutory provision, to promote or sanction a fraud of this description.

But there was no evidence whatever in the case tending to prove that Hewlett himself had any notice, or information, of the existence of the deed from Decker to the plaintiff. So far, the finding that he had actual and express notice was without foundation in the evidence. But what the court undoubtedly designed to find as a fact was that Hewlett had become affected with notice of the existence of the deed from information given concerning it to his attorneys, O. & N. D. Lawton. They had loaned the money for the plaintiff for which the mortgage was taken from Decker. This loan was made on or about the 13th of December, in the year 1877. And after the making of the loan the bond and mortgage remained in the possession of the attorneys, who collected the interest and looked after the property for the defendant Hewlett. And in September, 1878, the husband of the plaintiff testified that he informed the Lawtons of the fact that the plaintiff had a deed of these premises. Their evidence, as well as the evidence of a clerk in their office, was in conflict with the testimony of this witness. But under the rule laid down in Sherwood v. Hauser (94 N. Y., 626), the finding of the court on this conflict of evidence cannot be interfered with. And it may be added that there are probably few cases under that rule in which the court will not be precluded by a finding of fact, either by a referee or the court, where there is a conflict of evidence, from reviewing the conclusion, although it may strongly preponderate, as it does in this case, in favor of the defendant.

The only point open for consideration, therefore, is whether the evidence, as it may be most favorably construed for the plaintiff, established the fact that notice of this deed was given to the attorneys in such a manner as to become binding upon Hewlett, the mortgagee. The evidence to prove notice was wholly derived from the testimony of her husband, and that was that in September, 1878, he had a conversation with N. D. Lawton, which was afterwards continued and completed in the presence, and with the participation, of Cyrus Lawton. His testimony was:

I went there in regard to the abstract of title.
Q. Abstract of title of what?
A. Of this Jackson Avenue house.
Q. You went where?
A. To Mr. Lawton’s office.
Q. Tell us all that was said?
A. I showed him the contract I had with Mr. Peter Decker, in reference to that house, and other matters. I then stated that my wife had the deed.
Q. What else?
A. He took the contract and brought it out to the elder Mr. Lawton * * * They stated that was Mr. Peter Decker’s writing and signature, and they asked me if I was Mr. John Slattery. I said no, that I was P. H. Slattery. That is all I remember of that interview.
Q. Was there something said about an abstract?
A. Yes, sir. I said I went there for the abstract and they referred me over to a gentleman named Runk, in Broadway; Charles Runk, the name is.
Q. In stating to them that you were after an abstract, what, if anything, did you say about the deed?
A. I told him my wife had a deed of that property. I took the deed from Mr. Peter Decker for my wife.
Q. And your wife is Margaret Slattery, the plaintiff in this case?
A. Yes.
Q. After that did you call there again?
A. Yes. I called sometime after, in regard to the abstract. I saw the elder Mr. Lawton.
Q. Mr. Cyrus Lawton?
A. Yes. That was a month or two after. Then he stated there was some gentleman in the same building with him who had the abstract, and he would get me a copy, he would give me a copy for five dollars.
Q. Did you call there a third time?
A. I did, in 1879.
Q. Who did you see then?
A. I saw the younger Mr. Lawton,
Q. Mr. N. D. Lawton?
A. Yes.
Q. Did you say anything about the deed at that time?
A. I did.
Q. What did you say to him?
A. The first conversation I had with him I told him that my wife was anxious to have the house completed, and as he was acting for Mr. Hewlett, I asked him if it was customary to advance something of the mortgage before the house was completed. I told him my wife was anxious to have the house finished up. He then acted angry, and stated he had commenced a foreclosure. That was the last interview I had with him, except when I tendered the money.
Q, After that did you call with Mr. Brown and make any tender there?
A. Yes, sir.
Q. Whom did you see?
A. I saw the young gentleman.
Q. Mr. IT. D. Lawton?
A. Yes, sir.
Q. What took place?
A. I asked him if he would take the money, if he represented Hewlett He said yes, he was acting for Mr. Hewlett. *. * *
Q. Tell us what took place?
A. He refused to take it. * * *
Q. Can you fix the day?
A. I think it was May 8, 1881, between one and two o’clock, or twelve and one o’clock.

When the foreclosure suit was commenced John Slattery was made a defendant, and there was added to his name in the title, “and —-Slattery, his wife,” but this latter name was stricken out of the case upon the fact being discovered by one of the attorneys, that John Slattery had no wife. This addition to the title accordingly, as it was not intended to include the plaintiff, in no way increased the weight of the evidence given to prove notice of the outstanding deed.

It rather rebutted the fact of information being given to the attorneys of that deed, for it indicated their understanding to be that John Slattery and not the plaintiff was the person who had acquired some interest in the mortgaged property. The important inquiry in the case accordingly is whether this evidence of Patrick H. Slattery assuming it to have accurately stated what had transpired between himself and the attorneys, established such a notice of the deed to his wife as became binding upon Hewlett, the plaintiff in the foreclosure suit. It is evident from the testimony as it has been given from the case, that the witness did not repair to, and was riot present in, the office of the attorneys upon any business of Mr. Hewlett. Neither were the attorneys at the time he was there, on either of the interviews, except the last, engaged in any business, or transaction, for Hewlett. And in the last interview nothing appears to have been said concerning the deed. And if it had been made the subject of conversation it would not have been important as the rights of these Íarties had previous to that time become fixed and settled, n the first two interviews the witness was at the office on his own business to obtain an abstract of the title. In the third his object was equally that of his own business, to make inquiries concerning the completion of the house. And what he stated to the attorneys concerning the deed to his wife was no more than incidental remarks made in the course of the two interviews relating to his effort to obtain the abstract. And that under the rule applicable to notice affecting the principal, by information acquired by his agent, was not sufficient to prove notice to Hewlett himself. For that purpose the law has required that the information, or knowledge, of the agent shall be acquired by him in the business of his principal. This was held in Weisser v. Denison (10 N. Y., 68), where it was said that: “ The principle that notice to an agent is notice to the principal is quite familiar, but is only applicable to cases in which the agent is acting in the course of his employment. Were it otherwise, and did it extend to acts unauthorized and outside of the employment, whether trespasses or even felonies, the master might be made responsible for all acts, where tortious or otherwise, done by his servant while in his employ or acting professedly in his behalf, if he did not act at once by disclaiming the authority. Id., YY. And this was approved in Welsh v. German Bank (73 N. Y. 424, 429), and in Bennett v. Buchan (76 N. Y., 386).

The evidence of this witness tended to prove no such notice, inasmuch as the attorneys were not in either of these interviews acting for, or engaged in, the business of Hewlett, but were responding to inquiries made by the witness in his own business, or that of his wife. Still if the information stated to have been given concerning the existence of the deed had been in the minds of the attorneys as a fact at the time of the commencement, or during the progress of the foreclosure suit, that would have affected Hew" c it, under the authority of the case of Holden v. N. Y. and Erie Bank (72 N. Y., 286), for there it was held when the bank acted by its president having such knowledge it was bound by it, no matter how it might have previously been acquired. And this result was considered to follow, “because when it acted through him as president, in any transaction where that knowledge was material and applicable, it acted through an agent who at that very time had a knowledge of the facts which gave a character to the transaction as fair and justifiable, or the reverse, and whose duty it was to make that knowledge known to his principal.” Id. 294-5. But in the present case there was no further evidence of the fact that this information or knowledge was retained by the attorneys down to the time of the commencement of the foreclosure suit, than the inference arising out of the evidence of this witness, that late in 1878 he had informed the attorneys of the existence of this deed. This, however, is simply an inference, and its existence is not compatible either with the evidence, or the conduct of the attorneys themselves, who very clearly had no reason for omitting to make the plaintiff a party defendant to the foreclosure suit if they understood her to be the owner of any interest in the property affected by the mortgage. Their interest was in fact the other way. It was to bring into the action all persons having or claiming to have an interest in the property mortgaged, and in that manner to secure a complete and effectual title through the foreclosure. The omission of the plaintiff as a party could be attended with no possible advantage to the plaintiff in the foreclosure suit, or to his attorneys, for her deed, even if it had been recorded at the time when it was given, was subsequent and subject to the mortgage. There could have been no reason for omitting to make her a defendant in the action if the attorneys had at the time of its commencement any impression, or knowledge, of the fact that she had acquired the title of the mortgagor. And that they designed to include in the action the grantee of Decker is made to appear by the circumstance that John Slattery was in fact made a defendant in the suit, and it was proved by Patrick H. Slattery, the witness,’ that he was carrying on business in the name of John Slattery and represented him in its transactions. And that may very well have led to the conclusion that John Slattery was the person to whom Decker had conveyed his interest.

The change in the policies of insurance made at their instance indicate the like impression to have existed in the minds of the attorneys, for in January, 18J9, an endorsement was made in the policy stating it to be understood that John Slattery was the owner of the property. And in the insurances afterwards affected a similar statement was repeated, and it was to include and cut off that interest that John Slattery was made a defendant in the action. How the information was acquired that John Slattery had become interested in this property, no otherwise appeared than by the statement of the witness, N. D. Lawton, that they understood from Mr. Decker that he was the owner. But this was stricken from the case on motion of the plaintiff, and to that ruling the defendant excepted, and properly so too, for they had the right in fact to show what information they had acquired before the commencement of the action concerning the ownership of the equity of redemption. But it is quite apparent from the conduct of the attorneys that they did not have the impression that any other person than John Slattery had become interested in the property, after the execution of the mortgage to Hewlett, and for that reason he could not be charged with the information previously given to them by Patrick H. Slattery, disclosing the existence of this deed. The information seems to have passed out of their minds, and that fact distinguishes this case from that of Holden v. N. Y. and Erie Bank (supra). And the positive testimony of the attorneys themselves clearly asserted the absence of this information or knowledge at the time when they commenced the action to foreclose the mortgage As the case was presented, therefore, there was no such evidence adduced upon the trial as charged the defendant, Hewlett, with notice of the existence of the deed to the plaintiff. And without that motive, she was, under this section of the Code of Procedure, bound by all the proceedings taken in the action the same as if she had been made a party to it, and the judgment in this action should be reversed and a new trial ordered, with costs to abide the event.

Van Brunt and Bartlett, JJ., concur.


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    Somerby C. Noyes et al., App’lts, v. George F. Wilson et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Evidence—Of representations—When immaterial—Fraud.
    In an action brought to replevin goods from the assignee of an insolvent on the ground that the assignor had obtained the goods by fraud. Held, that there being no representation or material concealment of facts by the assignor in order to produce the credit, evidence as to what representations he made to other persons in order to obtain credit, was immaterial.
    2. Same—Communication to vendor does not make material.
    The fact that representations made by the assignor to some of his creditors were communicated to the vendors, and that they acted upon the faith of those representations, does not make evidence of them material, where the .assignor had no notice of such communications, and did not make such representations with the intention that they should be communicated.
    3. Same—Fraud—Not presumed—Insolvency of vendee not evidence —Duty to disclose fact of insolvency.
    The mere fact that a person is insolvent at the time he purchases goods does not impose upon him the duty of disclosing his condition, unless his insolvency is of such a character as plainly shows that he will not be able to pay for the goods when due. Where the evidence discloses no such condition of affairs, and the continuance of his business being as consistent with good faith on the part of the purchasee as with a fraudulent intent, no fraudulent intent can be imputed against him. Fraud is not presumed, it must be proved.
    Appeal from a judgment entered upon a verdict directed in favor of defendant.
    Prior to the year 1885 a limited partnership under the firm name of George F. Wilson & Co. was carrying on the business of dealing in buttons, laces, etc., at No. 52 Lispenard street in the city of New York, and at the same time the plaintiffs were engaged in the business of manufacturing combs at West Newbury, Mass., under the firm name of S. C. Noyes & Co. In December, 1884, correspondence between the plaintiffs and the defendant Wilson was opened, and on the twenty-second of that month the defendant Wilson wrote to the plaintiffs acknowledging a letter of theirs of the twentieth, and asking that they should send him on consignment certain merchandise. On the 27th of December, 1884, this letter was acknowledged by the plaintiffs by a letter in which they say “we have your order for combs, which we did not expect to consign. We are willing to sell combs at our lowest prices,” etc. On the twenty-eighth of December the defendant sent a small order, with a request that the bill should be dated on the first of April following. This order was filled by the plaintiffs, and subsequent orders down to the beginning of March. On April 16, 1885, the defendant Wilson made an assignment for the benefit of his creditors to the defendant Chittenden, and on the eighteenth of April the plaintiffs brought this action in replevin, alleging the wrongful taking of the goods by Wilson, and the sheriff took the property under the writ. Upon the trial cf the case the plaintiff attempted to prove that the defendant Wilson had made representations to persons other than the plaintiffs in regard to his financial condition in January, 1885, which representations were false. This evidence was excluded, and to such ruling an exception was taken.
    The court directed a verdict in favor of the defendant, and from the judgment entered upon such verdict this appeal is taken.

      Morris J. Hirsch, for app’lts; James M. Townsend, Jr., forresp’ts.
   Van Brunt, P. J.

The difficulty with the plaintiff’s case in reference to his offer of testimony seems to be that in none of the negotiations connected with the purchase of the goods from the plaintiffs were any false representations resorted to_ by the defendant Wilson in order to obtain credit. It is urged that in the letter of the twenty-eighth of December the defendant, Wilson, made a false representation by stating that the order previously given on December twenty-third was wanted for special order whereas these goods or most of them, were found in his possession in April when the replevin writ was served. It is to be noticed in considering this testimony that the defendant was not an applicant for the purchase of goods but requested that they might be sent him for sale on consignment, and that as far as the goods mentioned in the order of December twenty-third are concerned, the plaintiffs offered to sell them before they had received the letter of December twenty-eighth. By their letter of December twenty-seventh, the plaintiffs say “We did not expect to consign. We are willing to sell combs at our lowest prices, and if you approve of the above, please send for what you require at once.” The defendant Wilson, made no representation as to his condition and there is no evidence of any fraudulent concealment.

The mere fact that he made an assignment in April with assets sufficient to pay seventy-five per 'cent of his liabilities does not raise by implication a fraudulent design in the purchase of the goods in question. There being no representation or material concealment of facts by the defendant Wilson in order to procure the credit in question, the evidence as to what representations he made to other persons in order to obtain credit was entirely immaterial. Indeed there is no evidence that any of the representations made to other parties were made for the purpose of obtaining credit; because it appears from the evidence that, at least in respect to one of the representations the defendant expressly states that the statement is not made with a, view to induce an extension of the hue of credit, but is simply made at the creditors request. The mere fact that the defendant Wilson was insolvent did not impose upon him the duty to disclose his condition unless his insolvency was of such a character as plainly showed that he would be unable to pay for the goods in question when they became due. The evidence disclosed no such condition of affairs, and as fraud is not to be presumed, but proved, and the continuance of his business being as consistent with good faith on the part of the defendant Wilson as with a fraudulent intent no fraudulent intent can be imputed against him. Under these rules the evidence as to representations made in January 1885, in regard to his condition was entirely inadmissible, not being evidence of cotemporaneous frauds which might point the intent with which any fraudulent action connected with this transaction may have been committed. The claim that because some of the representations made by the defendant Wilson, to some of his creditors were communicated to the plaintiffs and that they acted upon the faith of those representations, does not alter the plaintiffs case, as Wilson had no notice of any such communications and do not make such representations with the intention that they should be communicated.

The case therefore seems to fail entirely of proof which would justify the jury in finding that the defendant had been guilty of fraud such as would authorize the plaintiffs to disaffirm the sale and recover back their goods.

The judgment appealed from should therefore be affirmed, with costs.

Daniels and Beady, JJ., concur.


author: Brady, J.

text:
    William Campbell, App’lt, v. Anne L. Campbell, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Practice—Amendment in divorce case—Code Civ. Pro., § 544.
    Notwithstanding the apparently mandatory language of Code Civil Procedure, séction 544, it is the duty of the court upon an application in proceedings for divorce for leave to amend, to consider all the facts and circumstances, and to grant or refuse it, as may he just and proper.
    2. Same—When leave to amend denied—What must appear.
    Leave to amend may he denied where laches or fraud is shown, or it appears that injustice will he done by allowing the application. It should appear that the applicant is free from laches and fraud, that the proposed facts, on which the application for relief is made, are true or reasonably established, and that the amendment contains a good cause of action.

      Appeal from order of special term, denying motion on the part of the plaintiff for leave to file and serve supplemental complaint.

      I). Clark Briggs, for app’lt; F. J. Dupignac, for resp’t.
   Brady, J.

This was an action for divorce which was commenced in 1882. The defendant at first answered by a simple denial, but afterwards filed an amended answer in which she set up recriminatory charges and asked a divorce a vinculo. The issues were referred to the late Henry J. Scudder, who found in favor of the defendant on the charges made by her rejecting those made by the plaintiff, and in January, 1885, an interlocutory decree in her favor was granted, by which the divorce was proclaimed and the custody of her child awarded to her and the amount of alimony referred to Mr. Ledyard, before whom it was proceeding when this appeal was brought. It is now claimed that while the reference was proceeding before Mr. Scudder, and before his report was made, she was guilty of adultery with one Augustus P. Hafner, and if she was guilty it is contended that she is within the express provisions of section 1758 of the Code. It is alleged that this fact was not discovered until October, 1886, and the application is to allow a supplemental complaint setting it up, and it only. The motion was made in December, 1886, at a time when the only question remaining undetermined was as to the amount of permanent alimony and counsel fees.

There are some facts and circumstances marking the relations between these parties which are very striking, if not extraordinary. It appears that several years before this action was brought the plaintiff commenced a similar one against the defendant, in which she set up affirmative charges against him. He attempted to discontinue the action when there was an investigation under way as to his possibility to pay alimony, and having failed to secure an order for discontinuance, he effected a reconciliation with his wife. See Campbell v. Campbell, 12 Hun, 636. It also appears that to defeat an action brought in the state of Georgia, for alimony, he caused an action to be brought which was judicially declared to have been brought in bad faith (see opinion of Hamilton Odell, Campell v. Campbell, 53 Supr. Ct. Rep., 316); and, further, that upon the trial of the present action before Mr. Scudder his efforts were marked by the examination of a witness who was declared by the referee to have confessed to the commission of deliberate perjury.

The application for the supplemental complaint rests on allegations made upon information and belief, but the information and belief thus asserted do not seem to be sustained by facts which warrant both or either. It appears that some of the affiants upon whose statements the application was made, have also made affidavits on behalf of the respondent; and it appears from the affidavits of two of them, namely, the wife and mother-in-law of Hafner, that he said that he had been offered $10,000 by the appellant to swear that he had improper relations with the respondent. And his mother-in-law says further that Hafner asked her whether she would object to his so testifying as he would fix the dates at a period anterior to his marriage, whereat she said that she was shocked and indignant at his proposition, and told him if he renewed it he must leave her house and not enter it again, and further that she'was impressed with the fact that he intended to swear falsely both from his manner and from the fact that even shortly after her daughter’s marriage with him, she had discovered him to be perfectly unreliable, untrustful and dishonest. And his wife said her separation from her husband was not in any degree caused or affected by the letter referred to in her affidavit or her belief that he had been improperly intimate with Mrs. Campbell, but grew out of the fact that shortly after she married him she found him to be untruthful, dishonest and destitute of moral principle.

It is not likely, with such a record as disclosed by the facts and circumstances referred to, in addition to others which might be signalized, that the application of the appellant would find favor with the court. Notwithstanding the apparently mandatory language of section 544, it was the duty of the court upon an application like this to consider all the facts and circumstances and to grant or refuse it as may be just and proper. Fleischmann v. Bennett, 87 N. Y., 231. The relief may be denied where laches or fraud is shown or it appears that injustice will be done by allowing the application. Holyoke v. Adams, 59 N. Y., 233. It should appear, indeed, that the applicant is free from laches, free from fraud, that the proposed facts are true or reasonably established and that the amendment contains a good cause of action. In this case it is not satisfactorily established either that there is no fraud attempted or that the asserted fact is true; while it does appear that the appellant is chargeable with laches, and that to allow him to present the alleged misconduct on the part of the respondent as a reason for interfering with the judgment pronounced herein would be contrary to justice.

For these reasons we think the order appealed from should be affirmed, with ten dollars costs and disbursements.

Van Brunt and Daniels, JJ , concur.


text:
    Thomas Hogan, App’lt, v, George S. Field et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    Negligence—Contributory—Is a bar to an action eor damages.
    A person in the employment of another who, in common with others, participates in the erection of scaffolding for the purposes of his work, and makes no objection to the material used or the manner of construction, cannot maintain an action against his employer to recover damages for injuries sustained by him by reason of a defect in the structure.
    Appeal from a judgment recoyered on the dismissal of the complaint at the circuit.

      William H. Sheppard, for app’lt; Joseph H. Choate, for resp’ts.
   Daniels, J.

The plaintiff was injured in January, 1883, by falling from a scaffold upon which he, and others were working as riveters, in the erection of a bridge near Highland Falls. He and the persons working with him were in the employment of the defendants and under the general direction of their superintendent. The scaffold from which he fell was about twenty-eight feet above the floor beams and near thirty feet in length. It fell in consequence of the breaking of one of the scantlings used in its construction, at a point where it contained a knot, and it was generally described as cross-grained and wind-shaky. The scaffolding had been used by the riveters one day, and then it was moved by them for use at a different place, in the construction of the bridge, and on the second day the timber broke and the plaintiff fell to the ground a distance of about thirty-three feet.

But neither the defendants nor their superintendent took any charge, or direction, of the construction of this scaffold. There were two piles of timber not far from the bridge from which the material was to be obtained for the erection of the scaffold, and the service of erecting the scaffold was committed to the plaintiff and Hutchinson, another riveter, working with him, and McCaulley, who was a holder-on. Hutchinson selected the timber for the scaffold and with the assistance of other men, it was taken to the place where the scaffold was erected. There it was received by the plaintiff and McCaulley. It was hoisted with ropes to its position, where it was received by the plaintiff and McCaulley, who lashed it at the ends with ropes, McCaulley being at one of the posts and the plaintiff on the other, and the scantlings were lashed to the posts. The plaintiff’s testimony was that they fixed it to suit themselves, and lashed it to suit themselves, through the direction of Rockwell, the foreman. No posts, or supports were placed under the middle of the scaffold, but it seems to have rested wholly on the posts to which it was in this manner secured. And while they were rigging it up the plaintiff testified that there was no other person upon it but himself, Mc-Caulley and Hutchinson. It appeared further from the testimony of Hutchinson that they did not consider it important to fasten the scantling in the centre. His statement was: “We did not consider it necessary for this ■ stick; Hogan, McCaulley and I talked about it, and there was something said about tying it up. We looked at the stick and we concluded the stick was good enough. We did not have as much confidence in the one that did not break, and we concluded we would tie it up. We spoke of tying them both up in the centre, and we concluded that the one that broke was the best and soundest-looking one.” It is not clear from the evidence of Hogan on his re-examination, that he intended to deny this statement, but he did say that he heard no conversation between anybody upon the subject of using ropes to suspend the scaffold in the centre. It was further proved that there was other timber which might have been used in the erection of the scaffold, and there was no evidence of inability to obtain entirely sound timber from the piles to which these persons had access for the erection of the scaffold.

Under this evidence it is very clear that the scaffold fell by reason of the inattention and carelessness of the persons employed in its construction, of whom the plaintiff was one, and, as McCaulley testified, was a leader.'

It is true that the construction of the scaffold was no part of the business of the riveters, but, undei the direction of the person in charge of the work, they, without objection, undertook the erection of the scaffold, and had the control and management of the work. It was left so far entirely to themselves. They could have secured it by ropes in the center, or by supporting it from beneath, if they had been disposed to do so, or by using other or a larger amount of timber in its construction, and in that manner have assured themselves against the risk of accidents in the performance of their work while standing upon the scaffold. Their failure to do this was negligence with which the plaintiff equally, at least, with the others, was chargeable, and it waslbecause of that negligence that the scaffold gave way and he fell to the ground and received this injury.

The case is not within the general principle applied in Benzing v. Steinway (101 N Y., 547), for the work was wholly entrusted to the plaintiff and his two associates, and it was their own want of care, skill or attention that produced the injury. And when a person in the employment of another may sustain an injury by reason of such want of care, skill or attention, he has no legal grounds of action against the common employer. Brick v. Rochester, etc., R. R. Co., 98 N. Y., 211.

The injury sustained by the plaintiff was wholly attributable to the inattention or want of skill of himself and his immediate associates who were engaged in this work, and the general legal principle applicable to this class of cases, with these facts established against the plaintiff, will not permit him to maintain an action for damages against the defendants in whose employment each of these persons was engaged.

•The judgment dismissing the complaint at the circuit was right, and it should be affirmed.

Van Brunt, Oh. J., and Bartlett, J., concur.


text:
    Martha Wilson, Resp’t, v. Clarence W Fowler, App’lt

      (Supreme Court, General Term, First Department,

      Filed March, 31, 1887.)

    Practice—Counter-claim—Failure to pile bill op particulars.
    A counter-claim set forth in an answer, may be stricken out for the disobedience by the defendant of an order directing the service of a bill of particulars as to said counter-claim,
    Appeal from an order directing the defendant to serve a further bill of particulars or that the first counter-claim set forth in his answer should be dismissed.

      William H. Van Cott, for app’lt • David McClure, for resp’t.
   Daniels, J.

The order from which the appeal has been taken was preceded by another order made on notice to and after the hearing of counsel for the parties, directing the service on the part of the defendant of a bill of particulars, specifying the nature of the work, labor and services per formed by the defendant in buying and selling stocks and attending to the business of the plaintiff, and the dates of such alleged services, and the kind of stocks purchased, as those facts had been alleged by way of counter-claim in the action. Under this order a very" general statement was. served containing no more than a substantial repetition of the answer itself. It was no such statement as the order required to be made, and the order from which the appeal has been taken has directed no more to be done by the defendant than to comply with this preceding order by giving the name and kind of stocks alleged to have been purchased, by the defendant for the plaintiff. It was fully warranted by the first order which remained in full force at the time when the application was made and heard for the second, order.

But assuming this to have been the effect of the first order, and that it was so far conclusive upon the defendant while it remained in force, it has been urged that the court was without authority to direct as it did by the final order the defendant’s answer containing this counter-claim to be stricken out, if he failed to comply with the direction for the service of a further bill of particulars. The power to make such an order striking out a complaint, was considered in Gross v. Clark (87 N. Y., 272), and it was held by the court of appeals that the court making the order under the practice, which has not been abrogated by the Code of Civil Procedure, had the power to direct it to be stricken out, for the failure to serve a bill of particulars, when that should be ordered to be done by the court, and having that power, it would seem to be as applicable to the case of so much of an answer as contains a counter-claim, as it was there held to be to the complaint. For such an answer is in its legal effect a complaint setting up a cause of action existing in favor of the defendant against the plaintiff.

As the former may be stricken out for the disobedience of an order directing the service of a bill of particulars, it follows that a like disposition may be made under an order relating to a counter-claim.

The order made should, therefore, be affirmed, together with ten dollars costs as well as the disbursements.

Van Brunt and Brady, JJ., concur.


text:
    People ex rel. The Hanover Fire Insurance Company, Resp’ts, v. Michael Coleman et al., Commissioners of Taxes and Assessments, App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887).

    1. Taxes and assessments—National bank shares—How assessed.
    The tax commissioner has the right to assess national bank shares upon separate rolls, but the use of separate rolls cannot be made a means of discrimination against national bank shares.
    2. Same—Unlawful discrimination against national banks.
    It appearing that national bank shares, owned by the relator company, went to make up the value of the capital stock of said company, and were included in its assessed valuation; and that, after the deductions and exemptions allowed by law, the corporation was not liable to taxation upon its personal property, such national bank shares were not liable to taxation and could not be assessed by deducting it from the capital and surplus of said company and putting it upon a separate list, as it would be a discrimination against such shares in contravention of the Federal statute.
    Appeal from an order of the special term, cancelling an assessment of personal property.

      George S. Coleman, for app’lts ; S'. Brownell, for resp’ts.
   Van Brunt, P. J.

The respondent upon this appeal is a corporation doing business in the city of Hew York, and was assessed for the purposes of taxation by the appellants herein.

For the purposes of such taxation the appellants assessed the value of the capital stock and surplus of the company at $1,459,447, made up as follows :

Capital at par................................$1,000,000

Surplus...................................... 459,447

Total..................................$1,459,447

The appellants then found that the respondents were entitled to the following exemptions :

United States bonds..........................$1,570,926

Amount invested in other corporations, taxable on their capital stock........................ 44,500

Ten per cent upon capital...................... 100,000

Value of national bank shares held by company, 19,425

Total ...,...............................$1,734,851

being more than the value of the capital and surplus.

The commissioners also assessed, upon separate assessment rolls relating to national bank stocks, the' national bank stock of the company, and declined to allow any exemptions and deductions. Upon certiorari such assessment was set aside, and from the order thereupon entered, this appeal is taken.

It would seem that the.tax commissioners have the right to assess national bank shares upon separate rolls (McMahon v. Palmer, 102 N. Y., 176); but the use of separate rolls cannot be made a means of discrimination against national bank shares. - - '

The personal property of the respondent is assessable in the manner prescribed by law, and. for the purpose of taxation the law has provided that the value of the capital stock, after making the deductions and exemptions provided "by law, shall be the personal property upon which a corporation shall be assessed.

For the purpose in the case at bar, of ascertaining the value of the respondent’s capital stock, the appellants took the capital stock at par and added thereto the surplus, which two items embraced all the assets of the company, and upon making the deductions and exemptions allowed by law, no residue remained for taxation.

In the capital and surplus this bank stock was included as part of the assets, and thus included there was an excess of deductions and exemptions.

Now by deducting this bank stock from the capital and surplus, and -putting it upon a separate list, it cannot be made under such circumstances the subject of taxation. This would be making a discrimination against national bank shares in contravention of the Federal Statute.

No other class of personal property could be made in this way a subject for taxation, and therefore, national bank stock cannot by any such process be withdrawn from the exemptions and deductions allowed to other personal property.

The appellants having determined the value of the respondent’s capital stock for the purposes of assessment, the court cannot upon this appeal, review that determination, but must ascertain the rights of the parties upon that basis of valuation, the company not being an appellant, or complaining of such valuation.

The only question being, whether that value being given to the capital stock for the purposes of taxation, these bank shares could be taxed in addition.

It appearing as has been stated, that such national bank shares went to make up the value of said capital stock, and were included in its valuation, and that after the deductions and exemptions allowed by law, the corporation was not hable to taxation upon its personal property, such national bank stock was not liable to taxation, and could not be assessed without violation of the Federal Statute.

The order appealed from must be affirmed, with costs.

Brady and Daniels, JJ., concur.


author: Potter, J.

text:
    Mary L. Todd, Resp’t, v. The Union Dime Savings Institution of the City of New York, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Real property—Title to—What is not marketable.
    Where a title to real property is open to a reasonable doubt, or where after the vendor has produced his proofs of title, a reasonable doubt exists as to its validity, the title is not marketable.
    2. Seal—Recital of in attestation clause raises presumption of its existence—Force of—May be rebutted.
    Where in the attestation clause of an instrument purporting to convey the title to land, it is stated to have been sealed and delivered in the presence of witnesses, in the absence of evidence to the contrary, the presumption arises that it was so sealed, but the strength of this presumption varies in inverse ratio to that of the evidence contradictory of it.

      Wm. A. Boyd, for resp’t; Arnoux, Bitch & Woodward, for app’lts; Arnoux & G. N. Boyce, Jr., of counsel.
   Potter, J.

This is an appeal from a judgment upon a trial before the court at special term. The action was brought to recover a portion of the purchase money deposited upon the execution of a contract for the sale of a lot and premises, known as 714 Madison avenue, and situated in the city of New York, together with the expense of a search in relation to the title thereof, upon the ground that the defendant, the vendor, had not such title as was required by the contract and the law to convey to the plaintiff.

The defect complained of arises from the want of a seal to a paper purporting to be a deed signed by Catherine A. Ferris to Griffith Rowe, of the premises in question, through which the defendant claims to have derived the title it contracted to convey to the plaintiff.

The contract was dated on the first day of December, 1885, and bound the defendant to execute, acknowledge and deliver to the plaintiff on the 30th day of December, 1885, a proper deed, etc. No question is made by defendant that the contract required the* defendant to be able to convey to the plaintiff a lawful title to the premises, nor is there any question made by defendant’s counsel that the plaintiff has the legal right to demand a marketable title.

It has been repeatedly held that a title open to a reasonable doubt, or if, after the vendor has produced his proofs of title, a reasonable doubt exists, the title is not marketable. Schriver v. Schriver, 86 N. Y., 575; Fleming v. Beenham, 100 id., 1.

Nor is there contention by defendant that if there was no seal, actual or presumptive, affixed to the paper purporting to be a deed from Mrs. Ferris to Rowe at the time it was delivered that the defendants had not the legal title.

This brings us to the consideration of the main question upon the appeal; whether the findings of the trial court, that the paper purporting to be a deed was not sealed at the time of its delivery to said Rowe.

We have read all the evidence contained in the case upon the question and considered it in connection with all the presumptions arising from the circumstances and are constrained to adopt the conclusion reached by the trial court.

Without referring minutely or in detail to the evidence bearing upon that question we think the testimony of the deputy clerk in the office where the deed was recorded and the making the dash mark in lieu of the indications of a seal are strongly persuasive that it had no seal upon it when left for record or when recorded. The fact that the same paper in every respect except a seal and having the same identical attestation clause and certificate of acknowledgement is presented for record and recorded some three years after the first record, is highly significant.

The time of this second record, is the time when the defendant was contemplating making a loan upon the premises and Hr. Arnold, a very intelligent and careful attorney and a witness called by defendant upon the trial was employed to make a search and an examination and he declined to advise the loan or to pass the title until he had been shown the identical deed with an actual and palpable seal affixed to it and it was again recorded.

This and other evidence satisfy us that the paper when" delivered by Mrs. Ferris to Rowe and when presented in behalf of the grantee for record had no seal upon it and that a seal was not placed upon it until after it was delivered and once recorded, and not until some time after-wards and probably when Mr. Rowe was desirous of obtaining a loan upon it and the loan was refused on account of the suspicious and unsatisfactory evidence in relation to a seal. . We do not think the testimony of Mr. Pinckney or of Mr. Post have much if any bearing upon the question; especially the testimony of the latter, who though he testifies to the remarkable fact that when he took the acknowledgement of the deeds of Mrs. Ferris, which were quite numerous and the practice extended through a number of years, he noticed that there was a seal upon the instrument, although he does not remember whether he wrote the certificate of acknowledgement or not or what premises the deed conveyed or who the grantee was or what his name was, until suggested or where the acknowledgment was taken or who was present and where he does not know or does not testify whether or not Mrs. Ferris signed or sealed the paper in his presence. The learned counsel cites numerous cases where the courts have presumed the paper bore a seal when delivered.

Such presumptions will prevail where there is not proof’ that the paper had no seal. But where there is proof positive and uncontradicted that there was no seal, the force of such presumption is too feeble to be appreciated and the force of the presumption is weak just in the inverse ratio that the proof is strong.

And this is substantially the rule laid down by Sugden on Powers, and cited by the appellant’s counsel, “where the instrument is a deed and on proper stamps, and it is stated in the attestation to have been sealed and delivered in the presence of the witnesses, it will in the absence of evidence to the contrary be presumed to have been sealed.”

We conclude, therefore, that there was no error in the finding from the evidence in the case.

The only remaining question is whether the court erroneously excluded any evidence upon the trial upon the part of defendant which should or could have produced a different finding.

It is contended upon the part of the appellant that an error of that character occurred in excluding the evidence of witness Pinckney as to the declarations of Mrs. Ferris.

We think otherwise. Mr. Pinckney testified that in 1874, whether before or after the deed was recorded the second time in May, 1874, does not appear, he examined the title of Mrs. Ferris’ property on Madison avenue, north Of Sixty-third street, with a view of her making a loan upon it, and which she did. He further testifies : I was - aware of these matters of record that have been given m evidence ; I can’t say as to the seal; at the time that I took that mortgage I thoroughly examined the record put in evidence here ; I think the time was about 1874; I may be mistaken in that.

The question, the answer to which was excluded, was : “What was said in regard to the matter between you and Mrs. Ferris?” We think the ruling was correct. The question was too indefinite for any practicable purpose.

No “matter” was specified or indicated. It might have had relation to any of the matters above detailed.

It is not the business or duty of a court to surmise that the answer would be competent evidence bearing upon some issue in the case and then strike out if it should otherwise turn out. The duty of counsel is to ask a question plain and proper upon its face, and if it is not, then with such explanation as will make it a legitimate inquiry. It was no doubt clear and distinct in the counsel’s mind what he proposed to prove. He should have made it so to the mind of the court.

If we could suppose with any degree of certainty that it related to the seal and if it was competent for her to speak of that, she had already said over her signature in the deed, in witness whereof she had set her hand and seal.

This was not said by her under oath nor was what she said to the witness under oath. Repeating it would not make it any higher or stronger evidence.

But it must be very clear that what she said had no relation to the premises in question. She was having an examination made as to the title of premises on which she was about to make a loan in 1874. She could not be taking a mortgage to secure a loan about to be made by her, on her own property or on what she had sold to Rowe who or whose grantee had procured a loan from the defendant upon the security of these premises in question. What she said was after she had given at least a deed or paper which divested her of all beneficial or substantial interest in the premises and when she was out of the possession of them. We are not aware of any case that goes so far. Sanford v. Ellithorp, 95 N. Y., 48.

The question moreover called for what witness said as well as what Mrs. Ferris said and made no discrimination. We do not think it was erroneous to overrule the question We are therefore constrained to the conclusion that the defendants’ title is not a marketable title, or a title beyond a reasonable doubt and that doubt of the most precarious character as it is dependent upon evidence of an uncertain and contradictory character. In other words, the plaintiff would not be getting what was contracted for,' but in its stead a law suit with the chances against her success in it.

The judgment should be affirmed, with costs.

Lawrence, J., concurs.


text:
    Grace E. Kursheedt, Resp’t, v The Union Dime Savings Institution of New York, Appl’t.
   Potter, J.

This is an appeal from a judgment at special term in favor of plaintiff.

This case presents the same question dependent upon the same evidence as to want of a test upon the paper signed by Mrs. Ferris to Mr. Rowe, and purporting to be a deed of the premises in question, as the case of Todd against same defendant (ante, p. 449), and the two cases were argued at the same time.

Having affirmed the judgment in the Todd case, the judgment in this case must be affirmed for the reasons stated in the opinion in that case.

This conclusion would render it quite unnecessary to examine or express any opinion upon the other question involved in this case, arising upon the alleged insufficiency of the foreclosure proceedings upon the part of the defendant herein, to bar the claims of one Clarke, and especially of Mrs. Sanford, upon said premises. If it were necessary to pass upon that question, I should be of the opinion that the holding of the trial court was Qorrect in that respect.

Lawrence, J., concurs.


text:
    Arthur B. Thomson, Resp’t, v. Joshua C. Sanders, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Contracts—Bonds of indemnity—Counsel fees part of the damages.
    Where, in a bond of indemnity, the obligor contracts to pay the damages and costs which the obligee may suffer on the breach of the condition, the obligee may recover from the obligor as part of his damages the counsel fees which he was compelled to pay in defending an action brought against him, the bringing of which action constituted the breach of the condition of the bond.
    3. Same—Cannot be set aside for fraud while profits are retained.
    A person cannot set aside a contract on the ground of fraud and repudiate its obligations while he retains the benefits derived under it.

      Appeal from judgment entered in favor of plaintiff upon the verdict of a jury and from order denying motion made on the minutes for a new trial.

      Joshua C. Sanders, app’lt, in person; E. B. Convers, for resp’t.
   Van Brunt, P. J.

In 1872, in South Carolina, a judgment was obtained against the plaintiff- and others by one Wagner. Subsequently, in 1872, Wagner brought an action in this court against the said plaintiff and others upon said judgment, of which the defendant herein, Sanders, was the equitable owner. The plaintiff herein appeared and made answer on oath denying that the court had ever obtained^ jurisdiction. Thereupon the defendant herein entered into a compromise with the plaintiff, agreeing to accept $500 in settlement of said judgment, and to execute a bond indemnifying him against all claims set forth in the complaint and supplemental complaint, in said action in this court, and also against all costs and damages which the plaintiff herein might be compelled to pay by reason of such action or claims upon which the same is based. The defendant herein claiming that said settlement was induced by fraud, commenced an action to recover the balance due on the judgment in question and his complaint was dismissed on the trial, with costs and an extra allowance, which costs and extra allowance have been paid. The plaintiff then brought this action for the expenses for legal services alleged to have been incurred by him in said action in addition to the costs recovered and paid herein. The learned judge having charged the jury that the defendant thereby agreed (referring to the bond of indemnity) to protect Thomson from all damages which he might pay or be compelled to pay by reason of a claim growing out of the judgment first taken in South Carolina, and also having charged that the defendant undertook and agreed to protect Thomson from any claim that might be made against him by Sanders himself, it is claimed erroneously instructed the jury.

It is urged in support of this objection that by the language of the bond the plaintiff was indemnified only against all claims set up by Wagner as the owner and claimant of said judgment in the action therein mentioned, and against all costs and damages the plaintiff might be compelled to pay by reason of said action or claims as such owner and judgment creditor. It is to be observed that the bond in question is general in its terms. The condition of the obligation is that the obligor should indemnify and save harmless the plaintiff against all claims arising from the judgment, and also against all costs and damages which the plaintiff might be compelled to pay by reason of such claims. There is no restriction of this condition to any person or persons. At the time that this bond was given the defendant claimed to be the holder of the judgment, and the bond was given to protect the plaintiff in this action against all claims arising upon said judgment. By its terms, being restricted to claims founded upon said judgment presented by no particular person, the condition was as applicable to . the defendant herein as it was to the plaintiff in the suit; and it is impossible for the court to say that it was the intention of the parties to exclude the defendant from its terms. Whatever claim was presented in the action brought by the defendant herein, grew out of the judgment, was founded upon the judgment and was an attempt to enforce the judgment, which was the claim set forth in the complaint and supplemental complaint indemnified against.

The next question is that the counsel fees incurred in the resistance of the action do not come within the condition of the bond, that the words, costs and damages referred to costs strictly and legally speaking; and that the plaintiff has not been “compelled” in the legal sense of the term and as it was used in the bond with reference to the existing action, to pay any costs and damages by reason thereof or of the claim upon which it was based. But this seems to be altogether too limited a construction of the condition of this bond. It does not seem that it was intended to restrict the protection of this bond simply to any recovery which might be had upon the South Carolina judgment but rather to save the plaintiff harmless from any claims which might be asserted having that judgment for a basis. It is well settled that upon an undertaking to pay all costs and damages which might be sustained by reason of the issuing of an attachment, that counsel fees in procuring the discharge of the attachment may be recovered under such an undertaking. The same has been held in reference to undertakings upon injunctions; a part of the damages sustained are the counsel fees which the party is required to pay in defending the injunction. So in the case at bar, the bond of indemnity is against all costs and damages which the party may be compelled to pay by reason of the judgment upon which the action was based. The expenses of defending such an action are certainly part of the damages which the obligee sustained by reason of the breach of the condition of the bond. It is true that in the cases cited by the appellant’s counsel other and different language was used where an indemnity for counsel fees has been upheld; but no case has been presented and no principle has been suggested which would call for a different interpretation of the condition of this bond than that which has been given to similar language in undertakings upon injunctions and attachments. Counsel fees are part of the damage which the party sustains, and is compelled to pay by reason of the breach of the condition of the bond; and the bond indemnifies the obligee against all costs and damages which he might be compelled to pay by reason of the action or the judgment upon which the action was founded.

The only remaining question relates to the offer of the defendant to prove that the bond on which the plaintiff based his claim was procured by misrepresentation and fraud and was therefore void, and the refusal of the court to allow the admission of proof to establish the counterclaim set up in the answer, and for which the defendant asked affirmative relief. It is sufficient to say that both the allegations in the answer and the proof upon the trial showed precisely the same condition of affairs as had existed at the time that the defendant’s suit upon the judgment was dismissed, where the same facts were set up, namely, that the defendant had received $500 upon the settlement of that suit and had never returned or offered to return the same. Under those circumstances it was impossible for the defendant to succeed in setting aside that settlement for the simple reason that he could not retain the fruits of the settlement, and repudiate its obligations.

There does not seem to have been any error committed on the trial and the judgment and order should be affirmed,, with costs.

Brady and Daniels, JJ., concur.


author: Lawrence, J.

text:
    The National Park Bank of New York v. James D. Whitmore.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1887.)

    1. Motions and orders—Party appearing and being heard on motion BOUND BY.
    Any person who is allowed hy the court to appear and be heard on the argument of a motion, is as fully concluded by the disposition which the court makes of it as if he had been named a personal party to it, and received notice of the motion.
    2. Attachment—Motion to vacate—Code Crv. Pro., §§ 682 and 683— Scope of how limited.
    It is provided by Code Civil Procedure, section 682, that the defendant, or a person who has acquired a lien upon or interest in his property after it was attached, is entitled at any time before the application of the attached property or the proceeds thereof to the payment of the judgment recovered in the action, to apply to vacate or modify the warrant of attachment. Further provision is made by section 683 that such application may be founded only upon the papers upon which the warrant was granted * * * or that it may be founded upon proof by affidavit on the part of defendant * * * in which case the plaintiff may show any matter in avoidance thereof which he might show upon the trial. Meld, that if a defendant has elected to move upon affidavits and upon the merits to vacate an attachment, he is not privileged by the section cited to allege, after being defeated on such motion, that the affidavits upon which the attachment was granted, disclosed no grounds for granting the same.
    3. Same—Stipulation—Effect of.
    Pending an appeal from an order vacating an attachment, a stipulation was entered into between the plaintiffs, the defendant and his assignee, by which it was recited, among other things, that the plaintiff having levied upon the defendant’s goods under the attachment prior to the assignment, and also having in a second action between the same parties obtained a judgment and issued an execution subsequent to the assignment, it was stipulated between the plaintiff and the assignee and by and between the parties to the action that the goods in the hands of the sheriff under the aforesaid levies be released therefrom, etc., and that the assignee deposit from the proceeds thereof a stated sum, if such should be realized from the sale, to take the place of the property held under the attachment, subject to the rights of the plaintiff, until the determination of the appeal. This stipulation was signed by the assignee and his attorneys. Held, that the stipulation applied to the appeal and motion before the general term, and that the rights reserved at the end of the stipulation referred to the rights of the parties in relation to that motion, and, further, that the attachment having been sustained by the appellate courts, the assignee was estopped from claiming any further right to question the validity thereof.
    This is an appeal by William Whiting, the assignee of James D. Whitmore & Co., from an order made at special term denying a motion to vacate an attachment granted before the assignment.
    The assignor was not a party to the action, but it appears that on the 8th of January, 1886, the defendants obtained an order upon affidavits requiring the plaintiff to show cause why the attachment should not be vacated. Upon the hearing of the application Messrs. Stewart & Boardman appeared for the defendants, and Mr. Stewart of said firm stated in substance that they also appeared for the assignee as well as for the defendants.
    After hearing the motion the application to vacate the attachment was granted, and the plaintiff appealed to the general term. Upon the argument at the general term Messrs. Stewart & Boardman presented points which were signed by them as attorneys for the defendants, and for William Whiting, assignee, for the benefit of creditors.
    • The general term reversed the decision of the special term and denied the motion to vacate the attachment.
    From this decision an appeal was taken to the court of appeals, which appeal was dismissed, for the reason that as it did not appear that the proofs were not sufficient to give the court below jurisdiction to affirm the attachment, the court of last resort had no jurisdiction to interiore therewith. Subsequently to the decision of the court of appeals, without having obtained leave to renew the motion to vacate the attachment, this motion was made at special term to vacate the same on the ground of the insufficiency of the papers upon which the attachment was granted.

      W. W. Macfarland, for app’lt; Charles W. Wetmore, for resp’t.
   Lawrence, J.

The assignee was not a party to the action, but it is quite apparent that he was fully heard by counsel upon all the arguments, both at special term, general term and in the court of appeals upon the previous motion to vacate the attachment in this case.

In Jay v. De Groot (2 Hun, 205), it was held that where the court allows any person to appear and be heard upon the argument of a motion, in the decision of which he is interested, such hearing is as effectual as though such person had received notice of the motion and had been named as a formal party to it, and he is fully concluded by the disposition which the court may make of such motion. In Schrauth v. The Dry Dock Savings Bank (8 Daly, 109), Chief Justice Daly says: “In Jay v. De Groot (2 Hun, 205) it was held that any person who is allowed by the court to appear and to be heard on the argument of a motion is as rally concluded by the disposition which the court makes of such motion as if he had been named a personal party to it and received notice of the motion.”

These cases would seem to conclusively establish, that as the assignee was heard through counsel, he is as much bound by the decision at the previous general term of this court, that the attachment should stand, as the parties to the action, and that as to him it is res adjudicata that the plaintiff is entitled to an attachment. " It is, however, said that under section 682 of the Code of Civil Procedure the defendant, or a person who has acquired a lien upon or interest in his property after it was attached, is entitled at any time before the application of the attached property or the proceeds thereof to the payment of the judgment recovered in the action, to apply to vacate or modify the warrant of attachment.

Section 683, however, prescribes that such application “maybe founded only upon the papers upon which the warrant was granted * * * or that it may be founded upon proof by affidavit on the part of the defendant * * * in which case the plaintiff may show any matter in avoidance thereof which he might show upon the trial.”

We do not understand that under these two sections, if a defendant has elected to move upon affidavits and upon the merits to vacate an attachment, he can, after being-defeated upon such motion, turn around and allege that the affidavits on which the attachment was granted disclosed no ground for granting the same. Having made his election, he is hound by it, the court having jurisdiction of the person, and the subject matter. This case might, we think, well be disposed of upon these grounds, but it appears from the case that pending the appeal to the general term from the original order vacating the attachment, a stipulation was entered into between the parties by which it was recited, among other things, that the plaintiff having levied upon the defendant’s goods under the attachment prior to the assignment, and also having in a second action between the same parties obtained a judgment and issued an execution subsequent to the assignment, it was stipulated and agreed between the Park Bank and the assignee now maldng this motion, and by and between the parties to the action, that the goods and property now in possession of the sheriff under the aforesaid levies be released therefrom, and the sheriff be discharged from all custody and control thereof, and that upon the sale of the said goods, etc., the assignee deposit from tbe proceeds thereof, in the United States Trust Company, to the credit of the first above entitled action, the sum of $5,500, if such sum be realized upon said sale, which shall take the place of the goods and property now held by the said sheriff under said attachment, and be subject to all the rights that the National Park Bank may now have against the said goods and property, by virtue of said attachment, until the determination of the appeal in said action.

Provision is further made for a deposit to the credit of the second action between the parties. And then it is provided that this stipulation shall not prejudice any of the existing rights of any of the parties thereto. That stipulation is signed by Whiting, assignee, and Stewart & Boardman, attorneys for assignee. We are of the opinion that that stipulation applied to the appeal and motion which was then before the general term of this court, and that the rights which were reserved at the end of the stipulation, referred to the rights of the parties in relation to that motion; and we are further of the opinion that the general term having sustained the attachment, and the court of appeals having dismissed the appeal from the order of the general term, the assignee is now estopped from "claiming that he has any further right to question the validity of the attachment.

For these reasons, we are of the opinion that the order of the court below should be affirmed, with costs.

Van Brunt, Ch. J., and Bartlett, J., concur.