text:
    James D. Yeomans, Resp’t, v. George H. Bell, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    1. Sale—Corporate stock—False representations.
    Purchaser oí corporate stock may rely upon representations of seller as to the condition of the corporation when ascertainable only on an examination of the books by an experienced bookkeeper.
    2. Vendor and purchaser—Lien—Waiver.
    The rule as to waiver of lien by the vendor dues not apply where he was induced to enter into the contract by fraud.
    Appeal from a judgment in favor of plaintiff.

      Tracy C. Becker, for app’lt; Adelbert Moot, for resp’t.
   Haight, J.

—This action was brought to recover the sum of $5,000, with interest thereon from November 1, 1887, and that the same be adjudged a lien upon certain real estate, etc. On or about the 15th day of October, 1887, the plaintiff sold to defendant a farm, with certain personal property thereon, located in the town of Aurora, county of Brie, for the sum of $20,600, to be paid as follows: $6,500 by assuming a mortgage then existing upon the premises; $100 in cash ; $5,000 on the 1st day of November, 1887; $2,000, with interest, in three months from the 1st day of November ; $2,000 in two years from the 1st day of November, secured by mortgage upon the premises; and the balance by assigning to the plaintiff $5,000, par value, of the capital stock of the R W. Bell Manufacturing Company. The trial court has found : “That to induce the plaintiff to accept such $5,000 in stock of the R W. Bell Manufacturing Company, and to enter into said contract, the defendant did falsely represent to the plaintiff that said stock was worth 1.10; that said R W. Bell Manufacturing Company was in good condition, and ody owed $25,000, which was a mortgage upon its real estate; and that such stock had paid a dividend of six per cent, per annum since said R. W. Bell Manufacturing Company was organized, in 1881, excepting one year, when there was a surplus which was used in improvements. That in fact said R. W. Bell Manufacturing Company was not in good condition ; that it was losing money; that it owed large sums of money, over and above said mortgage of $25,000, and that it had not paid a dividend of six per cent, per annum from its organization, in 1881, excepting one year; that said stock had never paid but one dividend, and that a semiannual dividend, of only three per cent., in the year 1886. That the plaintiff relied upon said false statements of the defendant, and believed them to be true, x » accepted said $5,000 in stock in part payment of said land, and conveyed the premises as aforesaid to the defendant George H. Bell by a good and sufficient deed then made and de livered to said Bell. * * * That, thereafter, and shortly before the commencement of this action (December 9, 1891), the plaintiff discovered that said representations concerning said stock were untrue, and thereupon this plaintiff tendered this defendant said $5,000 in stock, and offered to return to the defendant what he had paid for said land, and requested the defendant to convey said land to the plaintiff for the amount which the plaintiff had paid therefor.”

As a conclusion of law, the court ordered judgment for the plaintiff for the relief prayed for in the complaint, with costs, etc. The findings of the trial court as to the representations made are in accordance with the testimony of the plaintiff and one Ferguson, who was the agent who made the sale. Their testimony in this regard is controverted by the defendant, but the question of credibility was for the trial court, and in this case we must follow the findings.

It appears from the testimony of the bookkeeper of the company that on the first day of October, 1887, the liabilities were $387,054.03, and resources, $357.656.83, and that at that time the loss was $29,397.20 ; that on the first day of January thereafter the loss had increased to $68,713.55; that the loss was distributed through the year 1887, and the great difference appearing between the 1st day of October and the 1st day of January thereafter was in a measure due to the charging to the profit and loss account the claims that were worthless. On the 1st day of October, 1887, it appears that the company was owing, aside from its capital stock, the sum of $137,054.03 ; so that if the representations were made, as testified to by the plaintiff and his witness Ferguson, it is quite apparent that they were untrue.

It. is claimed, however, that the plaintiff had the means at hand of discovering the value of the stock, other than the representations of the defendant, and that in the negotiation he did not use the means of knowledge which a prudent man should have done, under the circumstances. The rule is doubtless well stated .by Justice Field in delivering the opinion of the court in the case of Slaughter's Adm'rs v. Gerson, 13 Wall. 379-383. He says: “ The misrepresentation which will vitiate a contract of sale, and prevent a court of equity aiding its "enforcement, must not only relate to a material matter constituting an inducement to the contract, but it must relate to a matter respecting which the complaining party did not possess at hand the means of knowledge, and it must be a misrepresentation upon which he relied, and by which he was actually misled, to his injury."

To this we will add, where the misrepresentation is the mere expression of an opinion as to the value of the property offered for sale, it will not furnish evidence of fraudulent intent, but if the representation is in regard to an extrinsic fact affecting the condition, quality, or value of the subject of the contract, and the purchaser relies thereon, and the same is false, then an action based upon the fraud may be maintained. Schumaker v. Mather, 133 N. Y. 590; 44 St. Rep. 754; Ellis v. Andrews, 56 N. Y. 83. The representations alleged to have been false were made to the plaintiff by the defendant, who was the president of the company. It was the practice of the bookkeeper to make a monthly statement to the officers of the company, showing its financial condition. It is therefore apparent that the defendant knew the condition of the company at the time the representations were made. The representations had reference to the business and condition of the company, which were of vital importance in determining the value of the stock. The facts in reference to the business and condition doubtless appeared upon the books of the company; but, in order to ascertain the facts from the books, an examination of the accounts by an experienced accountant and bookkeeper, involving time and labor, was required, and it appears to us it cannot be said the plaintiff possessed the means at hand of knowing the facts.

Upon making the sale, the plaintiff accepted, in payment of the purchase price, a mortgage upon the premises for the sum of §2,000, as well as the assignment of the stock in question. It is now claimed that this was a waiver of the vendor’s lien. The rule, as stated in Fish v. Howland, 1 Paige, 20-30, is that the vendor’s lien should be sustained whenever “he has taken the mere personal security of the purchaser only, and to consider any bond, note, or covenant given by the vendee alone as intending only to countervail the receipt of the purchase money contained in the deed, or to show the time and manner in which the payment is to be made, unless there is an express agreement between the parties to waive the equitable lien; and, on the other hand, to consider the lien as waived whenever any security is taken on land, or otherwise, for the whole or any part of the purchase money, unless there is an express agreement that the equitable lien on the land shall be retained.” As we have seen, a mortgage was given for a part of the purchase money, and the stock in question—of a corporation—was assigned for another portion of the considera-; tian. We shall therefor'assume for the purpose of the argument that, under the contract, if valid, the plaintiff’s lien, as vendor, would be deemed waived. But, as we have seen, the plaintiff charges that he was induced to enter into the contract by reason of the false and fraudulent representations made by the defendant,—in other words, that the contract was induced by fraud,— and the trial court has so found. If so, he was induced to waive his lien as vendor by reason of the fraud practiced upon him. We think it apparent, therefore, that the rule of waiver invoked has no application where the contract was so induced. Baker v. Lever, 67 N. Y. 304; Seymour v. McKinstry, 106 N. Y. 230; 8 St. Rep. 580 ; Hammond v. Pennock, 61 N. Y. 145; Krumm v. Beach, 96 N. Y. 398; Bradley v. Bosley, 1 Barb. Ch. 125.

The judgment should be affirmed, with costs.

All concur.


source: Caselaw Access Project

author: Haight, J

license: Public Domain

text:
    Commercial Bank, Resp’t, v. Archie Cameron et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    Usuiiy—When no defense.
    Usury between maker and payee is no defense to the note in the hands of a bank which discounted it before its inception.
    Appeal from a judgment affirming a judgment of the municipal court, of the city of Rochester in favor of plaintiff.

      George M. Williams, for app’lts ; Horace McGuire, for resp’t.
   Haight, J

—This action was brought to recover the amount of two promissory notes executed by the appellants, payable to the order of S. E. McCartney. The defense was usury. Upon the trial a verdict was directed in favor of the plaintiff. The first note was for §125, payable 10 days after date. The transaction in reference to the second note is identical with that of the first, and we shall therefore only refer to the testimony in reference to the first. The defendants are husband and wife. The defendant Archie Cameron testified that he went to McCartney’s office, and asked him to let him have some money, and he said he would. This is all of the evidence given in reference to the agreement All of the other evidence pertains to what was done, and that is to the effect that a promissory note was drawn for §125, payable to the order of McCartney, and was signed by the defendants. A check upon the plaintiff’s bank was then drawn for §125, which was also signed by the defendants. They were then given “to McCartney to go to the bank and get the money.” Thereupon McCartney indorsed the note, and went to the plaintiff’s bank. He presented the note to the bank, and it was discounted for the full amount-thereof for the defendants, and that amount placed to their credit. McCartney then presented the defendants’ check for §125, and the same was paid to him by the bank. He then returned to his office with the §125, and gave the defendants $100, retaining the other $25. The officers of the bank testified that the note was discounted for the defendants in good faith, and without any knowledge of any arrangement in reference thereto between the defendants and McCartney.

Upon these facts, we are of the opinion that the plaintiff was entitled to recover. It will be observed that no money was paid by McCartney to the defendants until after the note was discounted at the bank, and that the note had no inception until such discount. If McCartney had loaned his own money thereon, and had taken $25 therefor before presenting the note to the bank for discount, a different question would have been presented, but he does not appear to have loaned his own money. He indorsed the defendants’ note, took it to the bank, together with their check, procured the note to be discounted for them, and drew the money upon their check. We -think the transaction constituted him their agent to procure the money upon the note, and that the note remains valid in the hands of the bank.

It is claimed that the court erred in not submitting the question to the jury as to whether McCartney became the holder of the notes before they were discounted by the bank, and our attention is called to the case of Chatham Bank v. Betts, 37 N. Y. 356. In that case it was held that the payment of the consideration by the maker of a note for the indorsement of the same, and procuring its discount at the bank, does not render the note usurious; that the bank which discounts the same in good faith may recover the amount thereof from the maker. But Davies, C. J., in delivering the opinion of the court, says : “The only ground of defense set up was that Potter had discounted the note upon a usurious and corrupt agreement before he transferred it to the bank, and, though the testimony failed to establish that, yet there was sufficient in the testimony on the part of the defendant to send the case to the jury. If it had not been discounted by Potter before he transferred it to the bank, there was no pretense of any defense to the note in the hands of the bank. If it had been so discounted by him, then the note was void in the hands of Potter, and he could not have transferred a good title to the bank.”

But here, as we have seen, the facts are different. They appear from the defendants’ own showing. The notes had not been discounted by McCartney before they were taken to the bank. He took them to the bank, together with the defendants’ check, for the purpose of procuring the money thereon. The notes were given to McCartney by the defendants for that purpose. It is therefore apparent that there was no question of fact for the jury.

The judgment appealed from should be affirmed, with costs.

All concur.


author: Follett, J. Parker, J.

text:
    William Ebling, Pl’ff, v. Henry Dreyer, Def't,

      (Supreme Court, General Term, First Department,

      Filed June 15, 1894.)

    Vendor and purchaser—Title.
    Where the legislature authorizes the sale of four separate parcels o£ land, in which four separate families of infants are interested, and that the avails of the sale be brought into a commoii fund, and the liens and the interests of the life tenants be deducted from the entire fund, based on the average of all the life tenants, the title acquired, under a proceeding in conformity with such act, is not marketable.
    Controversy submitted without action on an agreed statement of facts pursuant to § 1279 of the Code.

      Rudolf Dulon, for pl’ff; Edward E. Sprague, for def’t
   Follett, J.

—June 1, 1892, the litigants entered into a written contract by which the plaintiff agreed to sell, and the defendant to purchase, certain real estate for $3,400, the title of which was to be conveyed in fee simple and free from incumbrances. The defendant paid $340 towards the purchase price, and $68 fees of the autioneer and sales room. The contract was to be closed and the premises conveyed July 6, 1892, when the plaintiff tendered a 1 deed sufficient in form, which the defendant refused to accept, on he ground that the plaintiff was unable to vest the defendant with an absolute title to the land in fee simple. The question submitted is whether the plaintiff is able to convey the real estate to the defendant by a good title in fee simple. The plaintiff demands a judgment for the remainder of the purchase-price,— $3,060,—with interest from July 6, 1892, with costs, and the defendant demands a judgment for $408, the amount of the sums paid by him, with interest from July 6, 1892, with costs. August 11, 1863, Joseph Oudlipp died, seized in fee of 9.85 acres of land in the town of Morrisiana, which he devised as follows : “Item. The piece of ground owned by me in Westchester county, on Union avenue and Westchester road, I order and direct to be diAided into 4 equal parts or shares, lengthwise. The part or share fronting on the Westchester road I give, devise and bequeath to son, Joseph; the part next adjoining, to my daughter 'Annie; the part next adjoining, to my daughter Sarah ; and the part next adjoining, to my daughter Elizabeth,—the land so devised to be held by them, respectively, during their natural lives, and upon their deaths, respectively,. to their respective children, forever; subject, however, to the dower interest of my said wife.”

September 22, 1863, the will was duly admitted to probate and recorded. The testator left, him surviving, the four children mentioned in said devise, who were his only heirs, and a widow, who died February 13, 1869. When he died, his daughter Elizabeth was married and had five children. His daughter Sarah had no children when he died or when the land was sold, but now has children. It does not appear whether Joseph or Annie had children, at the testator’s death, but if either had, they died before the land was sold, for it appears by the submission that the children of each living when the land was sold were born since the death of the testator. By the devise, every one of the four children, having children at the testator’s death, took a life estate in a separate parcel of land, and his or her children a vested • remainder in the same parcel, subject to open and let in after-born children. These devises to the four children and to their children, respectively, were as distinct and separate as though the four parcels had been situate in different townships. Elizabeth and her children took the title to the parcel (No. 4) devised to them; but they had no interest, legal or equitable, in any one of the other three parcels, and none of the other three life tenants or their children had any title to or interest in the parcel devised to Elizabeth and to her children. None of the four children or their children, born or unborn, had any vested or contingent interest in more than one parcel. This being the situation of the title, an act was passed May 3, 1872 (chapter 479, Laws 1872), by which the supreme court was authorized, upon the application of the four children and their legal issue in being, to sell in fee simple absolute said lands or any part thereof, at one time or at different times, as might be adjudged to be expedient. The act provides that, if the court should order a sale of the premises, a referee should be appointed, under whose direction it should be made, who should convey the premises sold upon the court’s affirming the sale. The act declared that the conveyances made pursuant to such authority should vest in the purchaser or purchasers the fee simple absolute, against all persons having any interest in the land, under said last will, whether in being or not. The fourth section provides that the referee pay the expenses of the sale, all unpaid taxes, liens and charges on the land, and pay the residue to such trust company as the court may direct, to be invested in the name of the treasurer of the county of Westchester, in bonds secured by mortgages upon real estate in this state, for the benefit of such persons as are or may become interested in such lands. The act provides that the life tenants (they consenting) be paid a gross sum in lieu of their several life interests in the premises, pursuant to § 52 of title 3 of chapter 5 of part 3 of the Revised Statutes.

On the 8th of August, 1872, the petition to the supreme court was verified by the four children of the testator and by all of their children then of the age of fourteen years and upwards, and by Charles A. Flatnmer, the next friend and guardian of all of their children under fourteen years of age, praying that the real estate be sold pursuant to the provisions of said act. The petition contains allegations sufficient to authorize the sale of real estate of infants, pursuant to the general statutes of this state. A guardian ad litem was appointed for the infants, and a referee, to inquire as to the truth of the allegations set forth 'in the petition, who reported that a sale of the lands would be for the benefit of all the parties in interest. Upon this report the court directed the referee to subdivide the tract composed of the four parcels into ordinary city lots, make a map thereof, file it in the office of the register of deeds of Westchester county, and sell the lots. The tract was subdivided into 118 lots, and a map made of it and filed. Nos. 28, 29, 30, 31, 32, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 75, 76, 77, 78, 79, 80, 81, 113, 114, 115, included some of the land devised to Joseph and his children (parcel No. 1) and some of the land devised to Annie and her children (parcel No. 2). Lots Nos. 8, 22, 23, 24, 25, 26, 27, 54,'55, 56, 57, 58. 59. 60, 61, 62, 63, 64, 88, 89, 90, 91, 92, 93, 94, 105,106,107, included some of the laud devised to Annie and to her children (parcel No. 2) and some of the land devised to Sarah and to her children (parcel No. 3). The land which the plaintiff agreed to convey and the defendant to purchase embraces lots 88, 89, 90, and the east half of 91, the greater portions of which were devised to Sarah and to her children, and portions of which were devised to Annie and to her children. The order directed the referee to pay the expenses of the sale, attorney’s fees, and the liens for taxes, and then pay the residue to a trust company, to be invested by it in bonds secured by mortgages on real estate, within this state, for the benefit of such persons as are or may become interested in said lands, premises and real estate. Whether all of the parcels were of equal value, or whether the liens for assessments were of equal amounts on every parcel, does not appear. Take, for example, the parcel devised to Elizabeth and to her children, the title to which vested on the death of the testator. The act does not provide that the value of her life estate, computed with reference to her age, shall be paid to her, and the remainder invested for her children; but in some way the supposed value of the four life estates was deducted from the avails of the sale of the four parcels, after deducting expenses and assessments. It seems that the interests of the life tenants were arrived at by averaging their ages, their average expectation of life being fixed at thirty-one years. The act provides no means for determining the value of the different parcels, and for distributing the value of each parcel to each family, according to its value; but all the values are, by the act, to be mingled in a common fund. By this act of the legislature and the proceedings thereunder, the infant owners of the part of the least value were given part of the values arising from the sale of the parcels of the greatest value, and the infant owners of the parcel of the greatest value have been compelled to give part of their property to the owners of the parcels of the least value. Again, the children of each life tenant had the right to have the gross value of the life estate of their father or mother ascertained with reference to his or her age, which was not done! The children of the oldest life tenant, apparently Elizabeth, had the right to have the value of the life estate of their mother determined according to her age, and not by the average age, of all of the life tenants who were younger; for, by this means, part of the interest of Elizabeth’s children was taken from them, and given to the other life tenants and to their children. The life tenants had no interest in common in these parcels, nor had the children of any one of the life tenants any interest in common with the children of the other life tenants in the parcels. They had no interest which could be partitioned. The fact that the four separate parcels were contiguous is not a controlling or material fact, for the act is open to the same objections that it would have been had the parcels not been contiguous. This act authorizes these four parcels to be sold, not separately, and the avails of every parcel invested for those interested in the particular parcel, after paying the liens thereon; but the assessments on all the parcels are to be deducted from the avails derived from the sale of all of the lands. We have looked to see if this sale, made under this act, can be sustained on the ground that it was necessarily made for the payment of taxes; but such a necessity is not shown to have existed, at least for the sale of the entire tract; and, again, every one of the parcels was not sold or assumed to be sold for taxes, which were a lien on it, but all the parcels were sold, and the amount of the liens on all were paid from the proceeds arising from a sale of the four parcels.

Under the constitution of this state, the legislature may, by a public or private act, authorize the sale of the real estate of infants or of persons not sui juris, and a sale made in pursuance of such an act will divest the title of such persons if it appears that reasons existed justifjung the sale, Cochran v. Van Surlay, 20 Wend. 365; Powers v. Bergen, 6 N. Y. 358; Leggett v. Hunter, 19 id. 446; Brevoort v. Grace, 53 id. 245, provided that contingent interests, if there are any, are protected. Brevoort v. Grace, supra; Monarque v. Monarque, 80 N. Y. 320; Kent v. Church of St. Michael, 136 id. 10; 49 St. Rep. 19. But these cases are no authority for tlie position that the legislature may authorize the sale of four separate parcels of land, in which four separate families of infants are interested, and that the avails of the sale be brought into a common fund, and that the liens and the interests of the life tenants be deducted from the entire fund, based oh the average of all of the life tenants. The effect of such an act would seem to be to give the property of some of the infants, to others, which we are not prepared to hold to be within the power of the legislature. If, by reason of facts existing at the testator’s death and not clearly disclosed by this submission, any one of the four children took the fee of his or her parcel, his or her assent to the mode of sale adopted divested him or her of title; but this question has not been argued, and the facts are not sufficiently presented by the submission to authorize the court to determine it. We do not declare the act of the legislature unconstitutional, and the procedure had thereunder wholly ineffectual to divest the title of all the children of the four life tenants, because this submission relates to a small part of the land, and the owners of the other lots into which the land was subdivided are not before the court, and there may be facts not contained in the submission which might influence the result. The title of the present owners of other lots should not be condemned without being heard, but we are of the opinion that the title tendered by the plaintiff to the defendant is so doubtful that the latter should not be required to perform the contract. A judgment should be ordered in favor of the defendant for $408, with interest from July 6, 1892, with costs.

Van Brunt, P. J., concurs.

Parker, J.

(dissenting).—Plaintiff and defendant entered into a contract for the sale and purchase of certain lands, of which the premises in controversy constitute a part. Defendant refused performance, assigning as a reason that plaintiff was unable to give him a good and marketable title. Plaintiff’s predecessor in title, Joseph Gudlipp, by his will, admitted to probate in the year 1863, devised such lands as follows: “Item. The piece of ground owned by me in Westchester county, on Union avenue and Westchester road, I order and direct to be divided into four equal parts or shares, lengthwise. The part or share fronting on the Westchester road I give, devise, and bequeath to my son, Joseph; the part next adjoining, to my daughter, Annie; the part next adjoining, to m;v daughter, Sarah; and the part next adjoining, to my daughter, Elizabeth—the land so devised to be held by them, respectively, during their natural lives, and upon their deaths, respectively, to their respective children, forever; subject, however, to the dower interest of my said wife.’'

Thereafter the legislature, by chapter 479 of the Laws of 1872, enacted that, on the application of the four life tenants and their lawful issue in being, the supreme court might authorize the sale in fee simple absolute of the lands so devised, or any part or parts thereof, at one time, or from time to time, as might be adjudged to be expedient and calculated to promote the interests of those who would be entitled to the lands upon the deaths of the life tenants, according to the provisions of the will, whether in being or not, or whether having a present or contingent interest in the land. It further provided the practice to be adopted by which such matters as should be passed upon by the court should be properly brought before it, for consideration and determination. At the time of the passage of the act, the only persons having an interest in the premises by virtue of the devise who were of full age were the four life tenants. So the legislature, by requiring that the proceedings for the sale should not be had unless upon the petition of the life tenant, did not come in conflict with the decision in Powers v. Bergen, 6 N. Y. 358, and Brevoort v. Grace, 53 N. Y. 245, in which cases it was held that the legislature is without constitutional authority to authorize by special act the sale of private property belonging to adults. The practice required by the statute obviated the difficulty which was presented in Brevoort’s Case; but while the cases cited supra deny the right of the legislature to authorize the sale of the private property of adults for other than public use without their consent, they determine the law to be that the legislature may, by special statute, authorize a sale of the lands of infants or other incompetents in behalf of whom the legislature acts, because they cannot act for themselves, and this power extends to the future contingent interests of those not in being. The legislature having power to authorize the sale, the manner in which the matter shall be brought to» the attention of and passed upon by the courts in determining whether such a condition exists as the legislature had in contemplation in passing the act—to wit, a condition which requires a sale in order to subserve the best interests of the infant remainder-men, as well as the future contingent interests of those not in being—is a question which the legislature had full authority to determine. Now, after the passage of the act, proceedings were instituted in the supreme court in conformity with its provisions. The petition set forth the facts which the petitioner alleged show the necessity for a sale, a prayer that the property be sold, and was signed by all the adults having an interest of any kind in the premises. The petition, in stating the reasons for the expediency of the sale, among other things, set forth that the land, which consisted of about ten acres, was wholly unproductive; that its assessed value was many times greater than at the testator’s death; that the taxes were exceedingly large, and will greatly increase from year to year; that the means of the four life tenants were small; that their children had no property except the interest in the property devised, and, unless sold, the land would become so incumbered by taxes and assessments and sales thereof as to leave the interest of the remainder-men of little or no value. The result of the proceedings was an adjudication by the court that a sale was expedient and calculated to promote the interests of those who would be entitled to the land under the testator’s will, whether in being or not, or having a present or contingent interest. This question the court was authorized to determine, by the statute providing. that the proceedings should be instituted; and, the necessary steps having been taken to invest it with jurisdiction as to all of the parties, whether in being or not, its determination was final, and cannot be subject to collateral attack. Indeed, it is hardly probable that any objection would have been taken but for the existence of the fact now to be stated.

By the devise the lands were divided into four equal parts, the use of each one of the parts specified being given to one of his children during life, and, upon death, the fee to his or her children. How, after the will was admitted to probate, but before the passage of the act of 1872, supra, the commissioners of taxes and assessments, in pursuance of chapter 841 of the Laws of 1868, laid out streets through such premises, both lengthwise and crosswise, and duly made and filed maps in conformity therewith. The method adopted by the commissioners in laying out these streets did not conform to the line of division as fixed by the testator, and, as a result, the third part, for instance, which was devised to the use of his daughter Sarah, had no frontage whatever upon a street running lengthwise through the property; while the second part, the use of which was given to the daughter Annie during life, had a frontage upon the street upon both sides, but the lots had but little depth. The result of laying out the streets through the lands was to increase the value of one of the devised parts more than others, and it is claimed that, for such reason, the four parcels should have been separately sold, so that the parcels deriving the greater advantage from the said improvement should realize, for the benefit of those interested therein, a proportionately enhanced sum. The first impression suggested by this statement is that defendant’s contention is somewhat plausible, but a moment’s reflection shows it to be without merit, for the reason tersely and clearly stated In re Field, 131 N. Y. 184; 42 St. Rep. 863: “The proceeds, which thus takes the place of the land, are still to be treated as land, for the purpose of measuring all rights therein, and their preservation is secured by requiring them to be paid into court and invested under its direction.” See, also, Kent v. Church of St. Michael, 136 N. Y. 10; 49 St. Rep. 19. The result of the proceedings and the sale had thereunder has been to substitute the money, which represents the value of the land, in its place. Ho attempt was made to determine the rights of the several parties therein as between themselves other than the life tenants, and, when the time comes for the distribution of the proceeds of the property among those entitled to it, the court can and will, if properly requested, inquire concerning it, and determine the rights and interests of the several parties.

It is urged that the determination of the gross value of the several life estates, and their payment out of the fund, in the manner authorized by the statute, constitute a fatal defect. Hot so if the position already asserted be sound,—that the intent and legal effect of the statute was to substitute the proceeds of the sale for the land sold, to be thereafter apportioned according to the rights of the several parties interested.—for the life tenants, in theaggre gate, received no greater sum than would have been awarded to them had a division of the fund been made before computing the value of their respective estates. It may well be that, as between the life tenants, there has not been such a division as should have been made; but, as they are alone interested in such injustice as may have resulted, there is no source from which legal complaint can flow, as they have consented to the basis adopted for distribution, and accepted the payments made thereunder. What proportion of the aggregate amount paid out in satisfaction of the several life estates shall be borne by each of the four separate estates must be determined by the court when it comes'to adjudicate upon the value of the several interests and decree distribution. That which was done cannot be questioned, because the legislature has power to authorize it, to wit, a sale of the property after a determination by the court that there existed a situation which rendered it expedient and necessary that a sale would be had; and the proceeds, having been paid into court, now stand in the place of the land for which it was paid, and it is of no consequence, so far as the title is concerned, when the court shall undertake to determine the rights of the several parties, nor how it shall be determined. The proceedings having been regular, it is to the fund, and not to the land, that those in whose behalf and interests the sale was made will have to turn in order to secure that which of right belongs to them. Not only was the procedure adopted in selling the property regular, but it was wise from a business standpoint, for in no other way could so much money have been realized from it.

I advise that judgment be entered in favor of the plaintiff for a specific performance, as demanded in the submission, with costs.


author: Lewis, J. Haight, J.

text:
    Edwin G. S. Miller, App’lt, v. Solomon Eheinweig et al., Resp’ts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    "Vendor and purchaser—Contract—Construction.
    The contract for the sale of land was held, in this case, to require the purchaser to pay the paving tax in addition to, and not to entitle him to a deduction thereof from, the contract price.
    Appeal from an interlocutory judgment in favor of defendants.

      Frank C. Ferguson, for app’lt; Tracy C. Becker, for resp’ts.
   Lewis, J.

— This action was brought to foreclose a land contract made by one Baptist Kahablca, as the party of the first part, and the defendants, as parties of the second part. The defendants had organized themselves into an unincorporated company or syndicate called the Arthur Avenue Land Company, for the purpose of purchasing the land described in the contract, and subdividing it into lots, and placing them upon the market for sale. There were about 10 acres of it, and it was located in the city of Buffalo. The vendor, Kahabka, transferred his interest in the contract to the plaintiff. The sole question litigated upon the trial was as to which of the two parties was obligated by the contract to pay the paving tax, amounting to $1,542.39, which was a lien upon the land at the time of the execution and delivery of the contract. The trial court held that it was incumbent upon the plaintiff to pay the tax, and from an interlocutory judgment entered upon that decision this appeal was taken.

The contract bears date January 5,1887. The party of the first part agreed to sell to the parties of the second part the land described in the contract “for the sum of $21,252.00, which said parties of the second part hereby agree to pay as follows : Not less than $1,000 on or before the tenth day of January, 1887, and the balance in such weekly sums as shall be derived by said second parties from the sale of lots or parcels of said premises.” The parties of the second part agreed to use their best endeavors to sell lots and parcels of the premises, and pay to the credit of the party of the first part all sums received from such sale, over and above running expenses, and they guaranteed that the payments should not be less than $300 every three months. “Of the quarterly payments specified in this contract, at least 75 per cent, shall be applied on the incumbrances now resting on said premises, until the same are fully paid; and the treasurer of the purchasers is hereby authorized to pay said 75 per cent, upon such incumbrances whenever said 75 per cent, shall amount to the sum of $300.00 and upwards. The party of the first part further agrees to give deeds of subdivision lots of said premises, free and clear of all liens and incumbrances now resting thereon or placed thereon by the party of the first part, whenever said lots shall be sold, and the purchase price applied in full on the contract, provided that the prices so paid and applied shall not be less than $12.00 per foot front on Walden avenue, and $10.00 per foot front of Kahabka avenue, and $10.00 per foot front on Doat street.” Said second parties agreed to pay interest on portions of the principal sum remaining from time to time unpaid, semiannually. “The said parties of the second part agree to pay all taxes and assessments which shall be levied or assessed on said premises after the date hereof, but said party of the first part hereby guarantees that all taxes and assessments heretofore levied or assessed are fully paid, except the paving tax on Walden avenue.” Then follows a provision to the effect that whenever the sum of $5,000 shall be paid upon the contract the vendor will, at the option of the parties of the second part, give a deed of such portions of the premises-not theretofore deeded, and take back a purchase-money mortgage, which mortgage shall contain the same covenants and conditions as are contained in the contract. The vendor agrees to give releases of subdivision lots of said premises from the operation of such mortgage upon the same conditions as are provided in the contract for the giving of deeds. The only remaining part of the contract, material to the question before us, is as follows: ■ “Andi said party of the first part, upon receiving payment at the time and in the manner above mentioned, shall, at his own proper cost, execute and deliver to said second parties, or to their assigns, a warranty deed of said premises, for the portion thereof not theretofore deeded, at the request of said second parties, free and clear of all liens and incumbrances, except taxes and assessments levied or assessed thereon after this date, or incumbrances placed thereon by said second parties, except the aforesaid paving tax on Walden avenue.”

The provisions of the contract upon which the defendants rely to sustain their contentions are, first, that the consideration thejr were to pay for the property is stated in the contract to be $21,252. They insist that if they are held to be liable to pay the tax the amount of the tax will be added to the purchase price, and they further insist that the tax was an incumbrance upon the land, within the meaning of the contract; and they call attention to the provision permitting them to apply 75 per cent, of their payments "upon the incumbrances, and further to the clause providing for the giving of deeds of subdivision lots, free from all liens and incumbrances, upon payment of the prices per foot mentioned, and also the clause in the contract providing for the vendor giving a deed of the property upon payment of $5,000, and talcing back a mortgage for the unpaid purchase price, the mortgage to contain like conditions as to releases as are provided for in the" contract. Were it not for other provisions in the contract, it would be difficult to resist the defendants’ contention. The strength of the defendants’ case must, we think, mainly rest upon the clause mentioning the consideration to be $21,252. If, however, upon a reading of the whole contract, it shall appear that the sale was made subject to the paving tax, the importance of this provision disappears. If, upon reading the entire contract, it fairly appears that the land was sold subject to the paving tax, then there is no ground for the defendants’ contention. While, in a general sense, the word “incumbrances” would be held to include a tax, it is not generally used in "that sense by scriveners, in drawing contracts. When it is desired to provide against the lien of taxes, assessments, and incumbrances, all of those words are used, and the person who drew this contract thought it was necessary to mention them all. What the incumbrances were, the contract fails to state, but we learn from the evidence that there were two mortgages which were liens upon the property. One was held by a Mr. Werner, and was for $12,000. The other was owned by the plaintiff, and was for $5,000. Whether the clause of the contract providing for the deeding of subdivision lots, free and clear of all liens and incumbrances, was intended to cover the tax in question, depends, as before stated, upon the intention of the parties, as expressed by the contract. If the sale was in fact subject to the tax, this clause amounts to nothing. It does not occur to us that the clause giving the defendants the option to apply 75 per cent, upon the incumbrances, strengthens the .defendants’ contention. That clause, manifestly, was inserted for the protection of the defendants. It provided that they might personally make the application of the 75 per cent, upon the incumbrances, and not trust to the responsibility or good faith of the vendor to make such application. It appears from the evidence that the paving tax could have been paid in five equal annual installments, if the first installment had been paid when it was due; but that was not done, and hence the entire tax became due at once. And, while the holders of the mortgages might be willing to accept payments of principal at any time, the paving tax could not be thus paid; and if it were not paid within the time provided by the charter the land was liable to be sold for the tax. That being the situation of the tax, it is not probable that the parties understood that this tax was included in the clause relating to the payments upon incumbrances. We do not see that the clause as to the deeding of the premises upon the vendees paying the sum of $5,000 cuts any particular figure in the case; for, as we have seen, the mortgage given for the unpaid purchase price was to contain the same covenants and conditions as were provided by the contract. If these provisions of the contract upon which the defendants rely were all there are bearing upon the question, we would probably not hesitate to affirm the judgment; but they are not. There are other portions of the contract having a material bearing upon this question, and it is our duty to construe the contract in such a way as to give force and validity to all of its parts, and the language used, if that is possible. Pars. Cont. p. 622.

This paving tax is referred to but twice in the contract, and we have heretofore quoted the provisions in which it is mentioned. In neither instance was it necessary to refer to it, if the construction contended for by the respondents is the correct one. It first appears in the clause where the vendor guarantees that all the taxes and assessments levied or assessed upon the property at the date of the contract are fully paid, “except the paving tax on Walden avenue." If this tax was to be paid by the vendor, there does not seem to have been any necessity or propriety in mentioning the exception. Again, upon the defendants’ theory of the case, it is impossible to give full force and effect to the last clause of the contract heretofore quoted, providing for the vendor giving a deed of the premises upon receiving full payment of the purchase price, free and clear of all liens and incumbrances, “ except taxes and assessments levied or assessed thereon after this date, or incumbrances placed thereon by said second parties, except the aforesaid paving tax on Walden avenue.” Unless the words last quoted are meaningless, they must be construed, we think, in favor of the plaintiff’s contention. The vendor would have fully complied with the requirements of the contract on his part, so far as the form of his deed is concerned, if he had tendered to the vendees a warranty deed containing a covenant against all liens and incumbrances upon the property at the date of the contract, “except the aforesaid paving tax on Walden avenue.” The scrivener who drew the contract failed to express as ■ early as he should have done the obligations of the respective parties touching this tax. The contract is so worded as to leave its construction in some doubt. It was so considered upon the trial, for both parties, without objection, introduced extrinsic evidence as to what was said and done while the contract was being prepared, and what occurred subsequently, with a view of showing the intention of the parties when they made the contract. Its meaning is perhaps so ambiguous and uncertain as to have made

the introduction of extrinsic testimony proper. The facts surrounding the making of a contract, and the practical construction given thereto by the acts of the parties in carrying it out, are frequently important aids in construing it. A careful examination of the extrinsic facts in this case has strengthened our views of the true meaning of the contract. As before stated, there were two mortgages which were liens upon the land at the time of the sale, and there was, in addition, this paving tax. The .defendants, after obtaining the contract, commenced the sale of lots, making payments from time to time to the vendor, and applying upon the mortgages 75 per cent, of their payments. They sold a portion of the land fronting upon the paved street, with an understanding with the purchaser that he should take it subject to its proportion of this paving tax. They fail to explain why they were requiring their vended to assume a portion of a tax they were under no obligations to pay. Kahabka testified'—and in this respect his evidence was not contradicted—that he applied to the defendants, from time to time, to pay this tax; that they replied that they had not the money to pay it, and would be obliged to make an assessment upon their stockholders to raise the money. He says that he thereafter paid the tax, and that the defendants reimbursed him for the whole amount that he paid. The secretary, Chilcott (one of the defendants), testified as follows : “ Our company has paid the tax. We gave Mr. Kahabka money to pay part of it, and part of it I paid direct.” "The defendants, in making their payments to Kahabka while he owned the contract, and to the plaintiff after he became the owner thereof, paid interest upon the balance due, without taking any account of their having paid the tax; paying interest, from their standpoint, upon the amount of this tax, $1,542.39, which they were under no obligation to pay. Two years after the date of the contract, and after a number of payments had been made thereon to Kahabka, he ap plied to the plaintiff to purchase the contract, and the plaintiff required him to obtain a statement from the defendants of the amount there was unpaid thereon ; and Kahabka applied to the secretary of the company, Mr. Chilcott, for such a statement. Chilcott furnished it, and Kahabka used it with the plaintiff, in making the sale. The plaintiff testified that he relied upon it as showing the true amount due from the defendants upon the contract. It showed the amount due upon the contract, over and above the amount unpaid upon the two mortgages, to be $3,736. If the amount of the tax were charged as a payment upon the contract, the amount due was only $2,293.61. The account, as appears from the evidence, was copied from the defendants’ books, and contained some 30-odd items on both the credit and debit side of the account.

The latter sum is made up, as appears from the statement, of eight different items, of which this paving tax of $1,542.39 is the first, and then appear the following :

These sums added, make the amount of the expense item mentioned,—$4,547.52. From this it appears that the paving tax was included with other items which legitimately belong to the expense of carrying the property. Immediately over these expense items in the statement is the entry, ‘‘To amount paid on contract, $4,300.00.” This is significant evidence that the secretary understood that the defendants were obligated to pay the tax. This statement, as we have seen, was taken from the books of the defendants, and there is an absence of any evidence from them showing that they were ignorant o£ the contents of their books. The defendants were all interested in this enterprise, and we must assume that they were familiar with the condition of the account, and of what their books showed as to the amount of their indebtedness ; and it would seem to follow that they must have understood that this paving tax was a part of their expense in connection with the purchase of the land. John F. Smith, one of the defendants, testified that he knew that the account was given to Miller, and that he thereafter, as treasurer, from time to time, paid the plaintiff the interest on the balance due without deducting therefrom the paving tax, and that he had made like payments to Kahabka before he assigned the contract to the plaintiff. There were several witnesses called who testified as to what occurred at the time of the drawing of the contract. The attorney who prepared it testified that the talk, on the part of all the parties, was that the company was to pay this Waldcn avenue paving tax. He says: “There was no controversy about it. It was thoroughly understood, as much as any proposition could be, and the talk was participated in by everybody connected with it.” The testimony of Kahabka and Mi\ Floss, who is one of the defendants, corroborated the testimony of the attorney. Several of the defendants were called as witnesses, and testified that they were present at the time the contract was being prepared; that the question came up as to who was to pay the tax, and that the attorney who was preparing the contract replied that Kahabka was to pay it, and would pay it. In view of the conduct of the defendants in relation to the tax, as heretofore stated, their recollection as to the conversation at the time of the making of the "contract is manifestly incorrect. With a view of breaking the force of the very significant fact that the defendants voluntarily con-tinned to pay interest to the holder of the contract upon" an amount without deducting the tax, the defendants’ counsel became a witness on the trial, and, under objection from the plaintiff’s counsel as to its competency, testified that he was consulted by the defendants as to the subcontract above referred to, which thejhad made with a purchaser for a portion of the property fronting upon the paved street, with a view of ascertaining whether thejr could compel their vendee to pay his proportion of this paving tax, it not having been provided in the written contract that the vendee should pay it. The counsel testified that, after having advised them in reference to that question, they asked his opinion as to which party was obliged to pay the tax in question, and he says he was informed that the defendants had already paid the tax to "Mr. Kahabka He testified that he advised the defendants that the construction of the contract was somewhat doubtful, in that respect, but that in his judgment they were not obliged to pay the tax, and he further testified as follows : “I advised them that the company go on makingthese payments, and, when the time came that there were only so much due on the contract as would be sufficient to meet this paving tax, then they could offset the paving tax, with interest, as a payment on the contract. They wanted to raise the question then. I said: ‘Ho ; you have got to ask these people for releases. You cannot sell that land without releases, and the minute you get into a row about this paving tax this question of releases will come up, and they will shut down on you about giving releases; and therefore I should advise you to go on and pay this as long as you can, and not have any row with these folks, and, when the matter is finally determined, why, you can offset it, or claim it as a payment of so much money advanced on the contract, under the lien and incumbrance clause in the contract.’ ”

It is difficult to resist the conclusion, from all the evidence in the case, that the defendants, up till the time of receiving this advice from their counsel, fully understood that they were obligated to pay the tax. If, as the defendants now claim, their statement of the account furnished Kahabka was incorrect, and the paving tax should have been credited to the defendants, both Kahabka and the plaintiff were misled by the statement furnished, and the plaintiff was induced to pay Kahabka, for the contract, the amount of the paving tax more than was actually due thereon.

In view of all the facts and circumstances of the case, we are persuaded that it was the understanding and intention of the parties, when they made the contract, that the land was sold subject to this tax, and that the defendants were obligated to pay it. It follows 'that the judgment appealed from should be reversed, and a new trial granted, with costs to abide the event.

Dwight, P. J., and Bradley, J., concur.

Haight, J.

(dissenting).'—-This action was brought to foreclose a land contract. The defendants claim credit for the sum of $1,506.40 paid to the city of Buffalo; being the amount of taxes assessed against the premises contracted for, for the paving of Walden avenue. These taxes were duly levied and assessed on the 16th day of August, 1886, and then became a lien and an incumbrance thereon. Under the provisions of the charter then in force, the tax could have been paid in five equal annual installments ; but, upon the failure for two months to pay any installment, the whole assessment became due, by operation of law, and thereafter drew interest at the rate of 1 per cent, a month. The owner of the land had failed to pay the first installment, so that when the contract was executed the whole assessment in question was overdue and payable, and the land was liable to be sold therefor. The contract for the sale of the land was made on the 5th day of January, 1887, and 'the only question to be determined is as to whether this tax is to be paid by the vendor or the vendees.

The contract, after giving the names of the parties—Witnesseth, that said party of the first part has agreed to sell, and does hereby agree to sell, unto said parties of the second part, their heirs and assigns, all that certain piece or parcel of land (particularly describing the same), for the sum of $21,250, which said parties of the second part hereby agree to pay as follows: Not less than $1,000 on or before the 10th day of January, 1887, and the balance in such weekly sums as shall be derived by said second parties from the sale of lots or parcels of said premises. Said second parties hereby agree to use their best endeavors to sell lots and parcels of said premises, and all sums received by them from such sales, over and above necessary running expenses, shall be paid weekly to the credit of said first party hereto, and said second parties hereby guaranty that such payments shall not be less than $300 every three months. Of the quarterly payments specified in this contract, at least 75 per cent, shall be applied on the incumbrances now resting on said premises until the same are fully paid, and the treasurer of the purchasers is hereby authorized to pay said 75 per cent, upon such incumbrances whenever said 75 per cent, shall amount to the sum of $300 and upwards.”

It appears that at the time of the executing of this contract the premises were incumbered by two mortgages—one for $12,000, and the other for $5,000—and the Walden avenue paving tax ($1,506.40). We thus have the covenant on the part of the vendor to sell for $21,250. We have a covenant on the part of the vendees to purchase the premises, and pay therefor that sum, and no covenant or agreement on their part appears in the contract to pay any other or greater sum. It appears that the defendants purchased the premises for the purpose of again selling them in small parcels or building lots, and that the payment of the purchase price was to be made out of the sales so made by the defendants; they guarantying, however, that the payments should not be less than $300 per quarter. But it is provided that 75 per cent, of such payments shall be applied upon the incumbrances resting upon the premises, and that such payments shall be made by the defendants’ treasurer. The word “ incumbrances ” is used, and that word, as ordinarily understood, includes the taxes as well as the mortgages that were at that time a lien on the premises. Again, the contract provides: “ Said parties of the second part also agree to pay all taxes and assessments which shall be laid or assessed on said premises after the date hereof.” Here we have an express provision that, as to the taxes thereafter to be levied or assessed, they are to be paid by the defendants, but nothing in reference to the taxes then a lien, thus leaving the inference that it was not intended to include the taxes theretofore levied. Again, it is provided : “ Said party of the first part hereby guarantees that all taxes and assessments heretofore levied or assessed are fully paid, except the paving tax on Walden avenue.” This clause was doubtless inserted for the protection of the defendants. They are apprised of it by the existence of the Walden avenue tax, and the vendor guarantees that all the other taxes are fully paid. So far, the provisions of the contract seem to be in harmony; and under the well-settled rules of construction, giving to words their ordinary meaning, it would seem to be the intention of the parties to have the Walden avenue tax paid out of the proceeds of the sales of lots, as one of the incumbrances existing upon the premises.

We now approach the consideration of the troublesome provision. It is provided that whenever $5,000 should be paid upon the contract the defendants, at their option, were entitled to have a deed given to them of the premises not theretofore conveyed, and that they should give back a mortgage for the amount of the purchase price unpaid, which mortgage “ shall contain the same covenants and conditions as are contained in this contract,” and then said party of the first part, upon receiving payment at the time and in the manner above mentioned, shall, at his own proper cost, execute and deliver to said second parties, or to their assigns, a warranty deed of said premises, for the portion thereof not theretofore deeded, at the request of said second parties, free and clear of all liens and incumbrances, except taxes and assessments levied or assessed thereon after this date, or in cumbranees placed thereon by said second parties, except the said paving tax on Walden avenue.” Under this provision the argument is made that a warranty deed, free and clear of all liens and incumbrances, was to be given, except the aforesaid paving tax on Walden avenue, from which the inference is drawn that it was the understanding that that tax was to be assumed and paid by the defendants. But such is not the reading of the provision. A warranty deed, free and clear of all liens and incumbrances, is to be given, “except taxes and assessments levied or assessed thereon after this date, or incumbrances placed thereon by said second parties, except the aforesaid paving tax on Walden avenue." Here we have two exceptions. Was it intended that both of the exceptions should be to the covenant contracted to be contained in the deed ? If so, they should have been connected with the copulative conjunction " and.” But the clauses are not so connected. Grammatically construed, the latter exception would be to the exception that precedes it. But the court has the power to supply words and phrases, if necessary, to give effect to the intention of the parties. Should the necessary word be supplied in this case, so as to make both exceptions relate to the covenant ? This intention must be determined from all of the provisions of the contract. As we have seen, upon the payment of $5,000 of the purchase price, the defendants, at their option, were entitled to demand a deed. True, there is a provision that the deed should be a warranty deed, free and clear of all liens; and yet, evidently, it was not the intention of the parties that all the liens should then be discharged, for the payment of $5,000 of the purchase price would not discharge the mortgages. The premises would still be incumbered for a large sum, and it evidently was not intended that the vendor should pay and discharge these mortgages in order to execute a deed. As we have seen, under the provisions of the contract, the incumbrances were to be paid by the treasurer of the defendants, and for that purpose he was authorized to take 75 per cent, of the proceeds of the sales, and to devote it to that purpose, and after the payment of the $5,000, part of the purchase money, and the delivery of the deed provided for, the purchasers were to give back a mortgage upon the premises, which mortgage “shall contain the same, covenants and conditions as are contained in this contract; ” in other words, providing - that 75 per cent, of the money to be paid upon the mortgage shall be devoted to the payment of the incumbrances upon the premises. We think, therefore, that the contract was properly construed by the trial court, and that that court properly disposed of the other questions raised in the case.

The judgment should be affirmed, with costs.


author: Lewis, J.

text:
    Annie M. Keating, Resp’t, v. William B. Hayes, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    Judgment—Default—Opening.
    Where an order, opening a default and permitting the defendant to answer, is based upon a false affidavit, it will be vacated.
    Appeal from an order which vacates and sets aside an order opening defendant’s default and permitting him to serve an answer, and which struck out the answer defendant had served by virture of such order.

      Eugene Van Voorhis, for app’lt; Joseph W. Taylor, for resp’t.
   Lewis, J.

—The plaintiff, as the owner and holder of a promissory note made by the defendant, dated October 27, 1887, payable to the order of the plaintiff, for the sum of $2,000, brought an action thereon against the defendant, by the service upon him of a summons and complaint. Defendant made default, and judgment was entered in favor of the plaintiff, and against him, for the amount of the note. Thereafter the defendant made a motion to vacate and set aside the judgment, upon the ground that the summons and complaint were never in fact served upon him, but were served upon his brother, Joseph J. Hayes The motion was denied, and he then made a motion for an order opening the default, and permitting him to answer, which motion was granted. The order, however, provided that the judgment might stand as security. The latter motion was founded upon what purported to be the affidavits of the defendant and his brother, Joseph J. Hayes, purporting to be verified on the 15th of April, 1891, before a notary public in and for the county of New York. The defendant thereupon served his verified answer, denying all the allegations of the complaint. The defendant was thereafter indicted, tried and convicted in the city of New York of the crime of perjury „in verifying the said affidavit, and was sentenced to imprisonment in state prison for the term of eight years, and is now serving such sentence. After the trial and conviction of the defendant, plaintiff made a motion to vacate and set aside the order aforesaid, opening the default of the defendant, and allowing him to serve his answer. It was made to appear to the courts by the affidavits read upon said motion, and by an inspection and comparison of signatures presented1 to the court, that the said order opening the defendant’s default was procured by the defendant’s practicing fraud and deception upon the court, in the use upon the motion of papers purporting to be affidavits made by the defendant and his brother, which had not in fact been verified. _ It was also made to appear that a paper which purported to be the affidavit of Joseph J. Hayes, and used upon said motion by the defendant, was never in fact signed or verified by him. These fictitious papers formed the basis of the order opening the default. These facts being made to appear to the satisfaction of the court, the order appealed from was granted, vacating and setting aside the order opening said default, and striking out the answer, and directing that the judgment stand as the final judgment in this gction, and that the same be enforced in the usual manner. It would certainly have been a travesty upon the administration of law to have permitted the defendant to retain and enjoy the benefits of an order which he obtained by practicing upon the court fraud and imposition.

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

All concur.


author: Dwight, P. J.

text:
    Ann Curtin, Resp’t, v. Rochester Railway Company, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    Railroads—Street—Extent of grant.
    A grant by an abutting owner of the right to lay tracks in the street does not authorize laying them on his land, where the street is too narrow to accommodate the tracks.
    Appeal from a judgment restraining defendant from operating and maintaining its railroad on premises belonging to plaintiff, and requiring defendant to remove its tracks and trolley poles therefrom.

      Theo. Bacon, for app’lt; T. D. Wilkin, for resp’t.
   Dwight, P. J.

—All the rights of the parties which are at issue in this action depend upon the effect to be given, as against the plaintiff, to an instrument in writing, executed in July, 1890, under their hands and seals, by a large number of property owners on both sides of Plymouth avenue, among whom was the plaintiff, of which this is a copy: “For value received, I hereby grant to the Rochester Railway Company the right to construct, maintain, and operate a double-track railroad upon Plymouth avenue, from the bridge over the abandoned Genesee canal to the southerly end of Plymouth avenue; such railroad to consist of a single track upon each side of the roadway, and to be operated by electricity as motive power.”

All the other facts making up the narrative which follows are of importance only as descriptive of the situation in which the parties and the premises stood at the time the instrument was executed by the plaintiff. Her premises, consisting of about three-fourths of an acre of land, are included in the southwesterly angle of what was formerly two highways in the town of Gates, one of which, known as the “River Road,” ran along the west bank of the Genesee river, in a direction nearly north and south, and the other, beginning at the west line of the first, ran therefrom in a direction nearly west, the two inclosing the angle above mentioned. Both were duly laid out, and recorded in the town clerk’s office as four rods in width. Several years before 1890, the limits of Rochester being extended in a southerly direction, both of these highways were adopted as streets of the city,—the River road as an extension of Plymouth avenue, and the other highway under the name of “ Brooks Avenue; ” but this was done without any proceedings on the part of the city to acquire the right to appropriate any land of the plaintiff used for that purpose, or the payment to her of any compensation for such use. Opposite the premises of the plaintiff the river makes a bend to the eastward, and the effect of its current—strong and rapid in seasons of high water—had been gradually to encroach upon its left or west bank, until it had worn away the entire width of the River road, as originally laid out, and pushed the track of the highway, as used by the public, more and more onto the premises of the plaintiff, until, before the year 1890, it had come to be wholly on those premises, throughout their entire frontage on the river road. Some time before 1890 the state built a retaining wall, covering the whole of that frontage, along the west bank of the river, which put a stop to the encroachments of the stream. This wall fixed permanently the extreme eastern boundary of the land available for use as a highway, and at that time the western edge of the traveled track in actual use was within about 20 feet of the buildings on the plaintiff’s lot. Some time before 1890 the city surveyor undertook to “ establish” the lines of the two streets—Plymouth and Brooks avenues-—at the corner of the plaintiff’s premises ; and he indicated what he chose to regard as the intersection of the west line of the former with the south line of the latter by a stone monument planted in the ground four feet outside of each line, as so located by him. All this was done without the consent, and,_ so far as appears, without the knowledge, of the plaintiff; and no phange in the use, as a highway, of either of the streets, followed such location. But the west line of the traveled track of Plymouth avenue continued to be, as before, 20 feet easterly from the plaintiff’s buildings. No sidewalk was ever laid out on the Plymouth avenue side of the lot. In the year 1890 a movement was made by the defendant to extend one of the lines of its electric railroad through the southerly part of Plymouth avenue, and the consent of a sufficient number of the property owners on that street was obtained for that purpose, in the form of grants as given above, and this was the purpose of the instrument signed by the plaintiff.

It is very apparent that this instrument was not to be taken literally, in respect to the plaintiff and her premises. There could be no double track railroad on Plymouth avenue, along her premises, with a single track on eacli side of the roadway. There was barely room on the street, west of the retaining wall, as occupied by the public, for the meeting and passage of teams. It is evident that the form was devised for use in obtaining the consent of property owners where there were such on both sides of the street, and where the street was of something like the regular width.

One other fact, or series of facts, is found by the trial judge, which, though of later date than the execution of the grant, seems to be regarded by the defendant as of importance, as bearing upon the construction to be given to that instrument, as executed by the plaintiff. It appears that in September, 1891, the plaintiff joined with other property owners on Plymouth avenue in a petition to the common council for an improvement of that portion of the street which included the plaintiff’s frontage by the laying of an asphalt pavement on its roadway. An ordinance was ac.cordingly passed for the improvement of that portion of the street described “by the construction of an asphalt pavement therein, with a line of Medina stone curb on each side thereof, * * * the width of main roadway between curb lines to be, generally, twenty-five feet,” and the pavement was laid accordingly. When the curb line was first located on the west side of the roadway, it was placed on a line nearly four feet further to the west than the westerly line of the roadway as it had been used by the public; but upon the objection of the plaintiff that location was changed, and the curb was finally set, substantially, on the westerly limit of the public use. The defendant laid its track and set its trolley poles west of the curb, as finally located, and wholly outside of what had ever been used by the public, as a street; thus occupying substantially the whole of the small remainder of the plaintiff’s land, which the action of the river and the user of the public had left to her on the east side of her buildings. This is the continuous trespass of which the plaintiff complains in this action, and which the judgment appealed from restrains. We are unable to see that the facts embodied in the foregoing narrative constitute a defense to the action, or indicate any error in the conclusions of law found by the court at special term, substantially as follows: That the action of the city authorities, in assuming to locate a west boundary of Plymouth avenue, did not have the effect of a practical location, and did not affect the rights of the plaintiff; that the land laying between the west curb of the roadway and the plaintiff’s buildings is no part of the highway, or of the street known as '‘Plymouth Avenue;” that the poles and track of the defendant are on the premises of the plaintiff; and that she is entitled to the judgment of the court restraining their use in that place, and requiring their removal therefrom. The defendant relies upon the grant executed by the plaintiff. But there is no room to contend that this grant gave any ^ight to lay and operate a railroad outside the limits of the street. The language is “upon Plymouth avenue. * * * upon each side of the roadway ;” so that it really became the only question for the court, “Where was the westerly limit of Plymouth avenue at this time ?” Originally, it was east of where the retaining wall is now; and, as the street was washed and worn away, it was moved, by the necessary use of the public, further and further to the westward, but was never moved beyond the limit of the actual use. Walker v. Caywood, 31 N. Y. 51-63; Wakeman v. Wilbur, 21 St. Rep. 556; 4 N. Y. Supp. 938. Here, the finding is, and the evidence shows, that the actual use by the public never extended beyond a line 20 feet from the buildings. Indeed, the evidence shows that this space, of 20 feet in width, was occupied by a bank with a rise of about 2 feet from the edge of the roadway to the buildings, and that the defendant cut away and leveled down this bank to make room for its tracks. Clearly, this space has not become a part of the street by user.

Equally unfounded is the contention that it had become so by practical location, namely, by the action of the city surveyor or other city authorities in assuming to locate the boundaries of the two streets at their intersection. So far as appears, this action was wholly arbitrary and gratuitous. The surveyor seems to have planted his monument at a point where he thought it would be well to have it, without the sanction either of record, monument, or tradition. Of course, no effect is to be claimed for such a location, except by the aid of an estoppel, and there is no evidence whatever in this case upon which to base the claim of an estoppel. It is not even made to appear that the plaintiff knew that the stone was planted, and, if she did, she was not taken into the counsels of the city surveyor, nor informed of the purpose or significance of the act.

Neither is there any room in this case for the argument ex necessitate. As we have said, it is plain that the form of this grant was not devised for this particular case. It was never intended to lay two tracks, one on each side of the roadway, in this part of Plymouth avenue. It is evident that a general form made use of in procuring the consent of the property owners on both sides of the street, where it was of ordinary width, was also used in the case of the plaintiff ; and it must have, in her case, such practical operation as the case permits. If there cannot be two tracks at this point, the defendant must be content with one ; and, if that one cannot be laid outside the traveled track of the highway, it must be laid on the traveled track, or the defendant must forego the advantage of laying a track at all over this portion of the road. The grant received from the plaintiff was not a grant of land, nor of an easement in lands, outside the limits of Plymouth avenue. It was in her case, as in that of all the other property owners, the grant of an easement in the street additional to that involved in its use as a highway,—-in other words, their consent to impose an additional burden upon the easement in the street already existing in favor of the public.

We think the judgment was entirely correct, and must be affirmed.

All concur.

Judgment appealed from affirmed, with costs.


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    In the Matter of the Estate of Margaret J. Anderson. Seymour Boughton, App’lt, v. James T. Garlock, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    Tax—Sale—Purchases.
    Unless the petition shows that the grantee has the entire interest of the purchaser at the tax sale, he is not entitled to an order declaring him the owner of the land in fee.
    Appeal from an order dismissing the petition for an order to show cause why petitioner should not have possession of and title to lands which had been sold for taxes to one Lyman Johnson, who had agreed to convey his interest to petitioner.

      H. H. Woodward, for app’lt; James T. Garlock, in pro. per.
   Lewis, J.

—The proceeding in which this appeal was taken was commenced under chapter 107 of the Laws of 1884, which provides a system for the collection of unpaid taxes upon lands in Monroe county for state and county purposes. The treasurer of the county is authorized to sell lands for unpaid taxes; and, if the owner fails to redeem the same within two years from the last day of the sale, the treasurer is required to execute to the purchaser, his heirs or assigns, in the name of the people of the state, a conveyance of the real estate so sold, which, when perfected in the manner provided by the act, vests in the grantee an absolute estate in fee in the premises, subject to all the claims which the people of the state may have thereon for taxes, or other liens or incumbrances. If, at the expiration of the two years after the sale, the land be in the actual occupancy of any person, the grantee to whom the same shall have been conveyed, or the person claiming under him, may cause a notice to be served upon the person so occupying the land, notifying him that if he does not redeem within a time specified in the act the conveyance will become absolute, and the occupant, and all others interested, will be forever barred from all right and title thereto. It is provided by section 16 of the act that, within one year after the expiration of the time for the redemption, the grantee, his heirs and assigns, shall make application to the county court of Monroe county for an order requiring the parties interested to show cause why he should not have possession of, and title to, such property, and that unless the consideration money, together with 35 per centum on the tax and other expenses, be paid into the treasury of the county within three months from the service of the order, the court will declare the title vested in the grantee. It is provided by section 17 that, if the premises are not redeemed according to the conditions of the order, the county judge may, by a final order, declare the absolute title in fee to the said premises vested in the grantee, and that all persons having any lien or interest in said premises shall be, from the date thereof, forever barred and cut off from any and all right, title, or interest in said property.

The appellant’s petition alleged the sale of the lands by the treasurer, for unpaid taxes (described in the petition), to one Lyman Johnson, and that a certificate of sale was made by said treasurer in due form, and delivered to said Johnson, and that said treasurer duly delivered to said Johnson a deed of said premises in due form, which recites that said sale had been made, and that said lands had not been redeemed within the time prescribed by said act for the redemption thereof, and then follow allegations as to the due service of the required notices. The only allegations in the petition showing what interest the petitioner had in the premises are the following: “And your petitioner further states that the said Lyman Johnson has contracted with your petitioner to convey all his right, title, and interest in said premises under and by virtue of said deed from said treasurer to your petitioner, who' is now the owner of the rights conveyed to said Johnson as aforesaid.”

The petition concluded with the prayer that an “ order be made by the county court, pursuant to § 16 of said act, requiring the said owner, and other persons interested in said premises, to show cause why the petitioner should not have possession of and title to said premises, and for such further and other relief to which he may be entitled under the provisions of said act."

The respondent, Grarlock, having a lien upon the premises in question, appeared on the return day of the order, and opposed the granting thereof. The county court denied the application for the order upon the ground that the petitioner had failed to show by his petition that he had such an interest in the premises as entitled him to the order.

It was incumbent upon the petitioner, before he was entitled to the order, to show that the purchaser at the sale had parted with title, and that the petitioner was the grantee, and that he was entitled to an absolute title in fee to the premises, as grantee thereof. It was not enough for him to show that he had an equitable interest in the premises. 'IJ’rue, it is alleged in the petition that the petitioner is now the owner of the rights conveyed to said Johnson as aforesaid, but that statement is qualified by what precedes it. The interest that he possessed, he got by virtue of a contract from Johnson, agreeing that he would convey to the petitioner all his right, title, and interest in the premises which he obtained under and by virtue of said deed from the treasurer. The petition failed to allege that any conveyance of the title had in fact been made to him. The substance of the statement in the petition is that the interest which the petitioner had in the premises was what he derived from the contract mentioned, it being a mere equitable title. Holding such a title, he was not entitled, under the provisions of the act, to the order asked for. As the petitioner was seeking to avail himself of a statutory proceeding to divest others of their interest in real estate, he was required to bring himself clearly within the provisions of the statute. This, wo think, he failed to do. His petition was, therefore, properly dismissed. The order appealed from should be affirmed, with $10 costs and disbursements.

All concur.


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    In the Matter of Proceedings for the Probate of the Will of Sarah R. Torkington, Deceased.

      (Supreme Court, General Term, Fifth Department,

      Filed June 20, 1894.)

    Release—Validity.
    A release of an Interest in an estate, without naming a releasee, is invalid.
    Appeal from a decree admitting will to probate.

      John R. Fanning, for app’lt; George A. Carnahan, for resp’t.
   Lewis, J.

—The will of Mrs. Torkington was offered for probate by the executrix, Laura M. Wackerman. Emma J. Chapman, a daughter of the testatrix, contested the probate of the will, upon the grounds that the testatrix was at the time of executing the will of unsound mind, memory, and understanding, and was not competent to make the will; that it was not her free, unconstrained, voluntary act; and that it was not executed in conformity with the requirements of the statute. The proof in favor of probating the will was so clear and satisfactory as to leave scarcely a doubt as to its being the will of the testatrix, and that the formalities of the statute were fully complied with in its execution. The contestant called her brother, George W. Bumble, as a witness for the defense. He was a son and heir at law of the testatrix. The contestant offered to show by the witness that he was present on the morning of the day the will was executed, and saw the person who was in attendence upon the testatrix administer to her an opiate, called upon the trial a “suppository.” The testimony was objected to by the proponent, upon the ground that the witness was not competent to testify to the transaction, under § 829 of the Code of Civil Procedure. The objection was sustained. The contestant duly excepted. Her counsel thereupon produced an instrument in the words and figures following: “To the Hon. Joseph A. Adlington, Surrogate of Monroe County: I, George W. Bumble, one of the legatees, heirs at law, and next of kin of Sarah B. Torkington, deceased, do hereby renounce and release all my interest, of whatsoever name and nature, in and to the estate of said deceased as legatee or otherwise. Witness my hand and seal, this 27th day of December, 1892.

“George W. Bumble. [Seal.]”

Rumble testified that he executed this instrument. No releasee is named in the instrument, and there was no proof that it had ever been delivered to any one. The surrogate held that the instrument did not qualify the witness to give the testimony. The contest being made upon the ground of the incapacity of the testatrix to make the will, and there being, as we think, no valid release proven, the testimony was properly rejected. Fighmie v. Taglor, 68 Hun, 573 ; 52 St. Rep. 569. But if it should be held that the evidence was competent, and that its exclusion was error, it was, we think, under the circumstances of the case, a harmless error; for an examination of the evidence satisfies us that, had it been admitted, the result of the contest would have been the same; for, the due execution of the instrument having been so clearly and satisfactorily proven, this evidence, had it been admitted, would not probably have affected the result. The appellant was not, therefore, prejudiced by the exclusion of the evidence offered. It is provided by § 2545 of the Code of Civil Procedure that a decree of a surrogate admitting a will to probate shall not be reversed for an error in admitting or rejecting evidence, unless it appears to the appellate court that the exceptant was necessarily prejudiced thereby.

The decree appealed from should be affirmed, with costs of this appeal to be paid by the contestant personally.

All concur.