author: Learned, P. J. :

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. HENRY D. DENISON, JAMES J. BELDEN, A. CADWELL BELDEN AND THOMAS GALE, Appellants.

      Action in tort — recovery not allowed on contract— action of an equitable nature to recover back money paid — when State not allowed to recover• money paid for unauthorized work accepted by it.

    The complaint in this action alleged that the defendants entered into a contract with the plaintiff to perform certain work upon the canal and furnish material therefor; that the amount to be received by them thereunder was §74,183.40; that no change or alteration in the plan, or the work to be done, had been lawfully made. It then alleged that the defendants “ under color of said contract» without right, obtained and received moneys owned and belonging, and which now belong, to this State, amounting in the aggregate to the sum of §417,571. That the said moneys were so obtained and received by the defendants by means of frauds, devices, false pretences and vouchers, and corrupt combinations and collusions with State officers,” and then set forth certain alleged frauds. The referees, before whom the action was tried, found that the contract was let as alleged in the complaint; that the same was unlawfully, and without authority, thereafter changed, and the cost of the work largely increased by the removal of a quantity of the slope wall of the canal and the substitution therefor of vertical wall, and that the money paid for such unauthorized work so performed, and the materials furnished therefor, could be recovered back. The report contained no finding, nor was any evidence given, showing fraud on the part of any person, or any imperfection in the work done, or that the work and materials were not worth the amounts paid therefor. The payments had been made as the work progressed upon certificates and estimates of officers of the State.

      Held, that the action was in tort, and that as no fraud had been proved, a recovery could not be had on contract.
    That as the work was done on the property -of the State, and as it hadl received and still retained the benefits thereof, an action would not lie to recover the money paid therefor by officers to whom it had entrusted the supervision and management of the work.
    Appeal from a judgment in favor of the plaintiff, entered upon, the report of three referees.
    The complaint alleged that the defendant Henry D. Denison entered into a contract with the plaintiff to do certain work on the-canal; that though the contract was made in the name of said Denison, yet that said Denison was, in fact, in the making thereof and the subsequent doing of the work, acting as a partner with the other defendants, who were jointly interested with him therein; that before the signing of the contract an estimate of the expense of doing the work mentioned therein had been made by the division, engineer, who had estimated the same at the siim of $86,645 ;. “that by the terms of said contract it was agreed that the said. Denison should perform the work embraced therein, and that-the canal commissioners in charge should pay out of the moneys-appropriated therefor in full compensation for the same, at the rates specified in said contract, provided always that the total amomit paid by said commissioner to said Denison should not exceed, in the aggregate, the estimated amomit of the said work, including the expenses of engineering; that the amount which, under said contract, said Denison was to receive from the canal commissioner in charge, at the rates and for the quantities stated in said contract — said quantities being the same as estimated by the division engineer as aforesaid — was the sum of $74,183.40; that under the law of the State no alteration could be made in the l>lan of the work mentioned in said contract, except by the consent and approval of the commissioner and the division engineer, nor unless the description of such alteration and the approval thereof was reduced to writing and signed by the parties making the same, and a copy thereof filed in the office of the State engineer and surveyor, nor could any change of plan that should increase tho expense of the work be made, unless a written statement, setting, forth the objects to be attained by such change, and the expense thereof, was' submitted to the canal board, and them ascent, at a meeting in which the State engineer and surveyor was present,, be obtained, nor could any moneys be expended or paid for new work or work on change of plan, nor any contract involving such, expenditme and payment be made on behalf of the State, until the maps, plans and estimates for such work should have been submitted to and approved by the -canal board, and the work advertised and let to the lowest bidder.; that no consent and approval of any alteration in the plan of this work was, in fact, made by the commissioner and division engineer, nor was any description of any alteration and the approval thereof reduced to-writing and signed by the parties making the same, and a copy thereof filed in the office of the State engineer and surveyor, nor was any written statement, setting forth the objects to bo attained by any change of plan of this work, and the expense thereof, submitted to the canal board, and their assent thereto obtained at. any meeting thereof, nor was any new work or work on change of plan, nor maps, plans or estimates thereof submitted to or approved by the canal board ; that the defendants have, through the defendant. Denison, under color of the said contract, without right, obtained and received moneys owned and belonging, and which, now belong, to this State, amounting, in the aggregate, to the’sum. .of $417,571; that the said moneys were so obtained and received by the defendants by means of frauds, devices, false pretences and vouchers, and corrupt combinations and collusions with State officers, among which are the following.” The complaint then set. out in detail certain changes and alterations alleged to have been made in the contract, and then alleged “that the moneys, received and obtained by defendants from the treasury of the. State, as hereinbefore alleged and set forth, were paid out by the State, treasurer, on drafts drawn therefor by the canal commissioners upon the auditor of the canal department, and warrants, by the auditor of the canal department on the State treasurer, in. ignorance of the fact, and under the belief and mistake on his part that the defendants were entitled thereto, and that they were for work and materials performed and furnished, legally, under a contract with the State ; that the false certificates and vouchers presented by the defendants, which were procured by them from the assistant engineers and resident engineers, officers of the State, plaintiffs say, upon information and belief, were procured and obtained by the exercise of corrupt influences upon the said ■officers, and, among other influences, by inducing the said officers "to believe that, through the great political power and influence •of the defendants and their friends, the said engineers would be ■dismissed if they refused to sign such certificates and vouchers, .and would be rewarded if they assented so to do.”

      Wm. G. Ruger, for the appellants,
    Denison and A. C. Belden. No recovery Can be had under the pleadings in this action, except upon proof of fraud on the part of the defendants. (Ross v. Mathers, 51 N. Y., 108; Dudley y. Farnham, 57 id., 424; Barnes "v. Quigley, 59 id., 268; De Grawr. Elmore, 50 id., 1; Mathews v. Cady, 61 id., 651; Walter v. Bennett, 16 id., 250; Belknap v. Sealey, 14 id., 147.) Its character is determined by the form of the summons, which demands a judgment for relief alone. {Miller v. Barber, 66 N. Y., 564.) Moneys voluntarily paid by a party •can be recovered back by him only when the • payment has been induced by fraud or mistake of fact. {Mowatt v. Wright, 1 Wend., 355; Wyman v. Farnsworth, 3 Barb., 370; Clock v. .Butcher, 9 Cow., 574; Briggs v. Supervisors, 2Denio, 26; Flower v. Lance, 59 N. Y.', 603; Reed v. Hicks, 25 id., 389.) When, the party paying has the moans of knowledge he cannot allege a mistake. (Clock v. Butcher, 9 Cow., 674; Reed v. Hicks, 25 N. Y.,’389; Wyman v. Farnsworth, 3 Barb., 370.) The Canal Commissioners, State Engineer, and Canal Board, are within the sphere •of their official duties the lawfully constituted agents of the State. {People v. Stephens, 71 N. Y., 550; §§ 3, 4 and 5, chap. 877, Daws of 1869; Chapman’s Manual, §§ 178, 277, 308, 309, 310, 311, 312, 313, 323, 850, 852, 865; 13 Barb., 86.) The knowledge of the agent is the knowledge of the principal, especially so when acquired in the transaction of the business of the principal. ■{Bk. of U. S. v. Davis, 2 Hill, 451; Hawley v. Keeler, 53 N. Y., 114; Ingalls v. Morgan, 10 id., 184; Distilled Spirits, 11 Wal., .356; Bennett v. Buchan, Ct. of App., Mch., 1879.) Notice to one of a number of joint agents is notice to all other agents as well as to the principal.) Ble. of U. 8. v. Davis, 2 Hill, 451.) The Legislature is presumed to have knowledge of facts upon which its official action proceeds. (De Camp v. Eveland, Í9 Barb., 81; Brown v. Mayor, 63 N. Y., 242.) The State is a corporation and of necessity continues the same being, although its officers, trustees and agents may be frequently or even annually changed, and knowledge once legally imputable to it, always continues, in contemplation of law. (Commissioners of Chenango v. Birdsall, 4 Wend., 460; Dillon on Corporation, §§ 9, 14; Bank v. Seton, 1 Peters, 299; Scadding v. Lovant, 5 Eng. Law & Eq., 16.) Official duties enjoined upon public officers will be presumed to have been performed. (Hartwell v. Boot, 19 Johns., 345; Leland v. Cameron, 31 N. Y., 115.) An act of the Legislature cannot be subverted upon the ground that it is hostile to public policy, or that its passage was secured by fraud, misrepresentations or suppression of facts. (People v. Draper, 15 N. Y., 545; People v. Shepard, 36 id., 289; 7 New York Legal Obs., 186.)

      Eranle Hiscoclc, for the appellants,
    James J. Belden and Thomas: Gale. It is submitted that the acts of the Legislature, the information, knowledge and acts of the officers of the State, and its. appropriation of appellants’ material, etc., conclusively show a ratification of all appellants’ work, etc.; especially in the absence of any proof of subsequent disapproval, because where a principal is informed by his agent, or has knowledge of what he has done outside of his authority, he must dissent and give notice thereof in a reasonable time, otherwise his assent to what has been done shall be presumed, especially where he has received the fruits of the agency. (Cairns v. Bleecleer, 12 Johns., 300, 305; Sage v. Sherman, 2 N. Y., 417, 435; Birdenbecleer v. Lowell, 32 Barb., 9, 19; D da field, v. Illinois, 26 Wend., 192, 228; Bank of XI. 8. v. Davis, 2 Hill, 451, 461; Dresser v. Norwood, 17 C. B. [N. S.], 466, and note 482; The Distilled Spirits, 11 Wal., 356, 367, 368; Adams v. Mills, 60 N. Y., 533, 539; Hart v. Farmers and Mechanics' Bank, 33 Vt., 253; Bennett v. Buchan, decided in Ct. of App., Mch. 18, 1879; A. L. J., No. 13, vol. 19, page 260; Angel & Ames on Corporations, § 305, and cases cited; Hoyt v. Thompson's Bxr., 19 N. Y., 208, 218; Olcott v. Tioga li. H. Co., 27 id., 546, 560; Walworth Company Bank v; Farmers' Loan and Trust Company, 16 Wis., 629; Murray v. Bin■ninger, 3 Keyes, 107, and Lester v. Vieley, 47 N. Y, 648; ■see, also, Smith v. Tracy, Bxr., 36 N. Y., 79, 83; Bramen v. Mayor, 63 id., 239, 244; People v. Stevens, 71 id., 527, 550; Lewis v. Trickery, 20 Barb., 390; Nelson v. Mayor, 63 N. Y., 535, 544; Tumow v. Hockstadter, 14 N. Y., S. C., Reports 80.) The ■contractor had a right to presume that the State officers had complied with all requirements before purchasing materials and labor •or paying, and if the officers did their duty carelessly the remedy is not by depriving the contractors of the value of their labor and materials, long after they have been paid for, so far as they are of value to and are enjoyed by the State. (People v. Stephens, 71 N. Y., 560; County of Daviess v. Ilindekoper, Alb. L. J., March 8, 1879, p. 201; see 1 Bissell Cir. Ct. Rep., 299, and note thereunder ; see Munson v. Town of Lyons, not reported; Town of Venice v. Murdock, 92 U. S. Sup. Ct., 497; Smith v. Town of Yates, MSS. opinion of Judge Wallace ; Miller v. Town ■of Berliro, 13 Blatchford,- 245; Moore v. Mayor, etc., 73 N. Y., 238.)

      B. W. Paige, for the respondent.^
    The money transmitted to the defendants for all work, except of the quantities and kinds shown in the preliminary estimate, and which, at the defendants’ bids, amounted to $74,183.40, and to which the contract was -expressly limited, were illegally paid and without right. This being so, it is now settled that, although paid without fraud or mistake, it can be recovered back. (Donahue v. The Mayor, 10 Hun, 37; Laws 1875, chap. 49; Supervisors of Richmond Co. v. Bilis, 59 N. Y., 620.) The contract expressly “provides always that the total amount paid by the canal commissioner to the said party of the first part (the defendants) shall not exceed, in the ■aggregate, the estimated amount of the aforesaid work, including the expense of engineering.” Although, therefore, the contractor should do more work and furnish more materials than this ■estimate and this contract, it would be wholly voluntary and ■unauthorized, and compensation therefor irrecoverable, and consequently, under the Richmond Oounty Case, cited above, money '.of the plaintiff obtained by the defendants under pretence thereof man be recovered back. (Dickinson v. Poughkeepsie ; McDonald v. Oily of H Y., 68 N. Y., 23; Brady v. Mayor of H. Y., 2 'Bosw., 173; S. O., affirmed, 20 N. Y., 312; Halsied v. Mayor, etc., 3 Comst., 430; Hogan v. City of Brooklyn, 52 N. Y., 282; .Fox v. City of New Orleans, 12 La. Ann., 154; Johnson v. Com. .Council, 16 Ind., 227; Butler v. Charleston, 7 Gray, 12; Swift ■v. Williamsburgh, 24 Barb., 427.) It is now settled that the mere making of an appropriation by the Legislature applicable to .a particular work, over and above the amount contracted for, does not enlarge that contract or the powers of officers with regard to ut. (People ex rel. Sage v. Schuyler ; People ex rel. Wasson v. .Schuyler, Auditor, 69 N. Y., 242.) There is no presumption of . knowledge in the Legislature of papers on file in the State offices. (People ex rel. Wasson v. Auditor, 69 N. Y., 243; Lancey v. .Bryant, 30 Main, 466; People v. Batchelder, 22 N. Y., 128.) .
   Learned, P. J. :

The complaint in this action alleges that the defendants, through Denison, without right, by means of frauds, devices, false pretences . and vouchers, and corrupt combinations with the State officers, have obtained moneys owned by and belonging to the State, to the sum of $417,571. It sets out the alleged frauds, and avers .that the defendants falsely pretended and procured false certificates from engineers on the canal that they had performed work and furnished materials to the amount of $150,337.02; while 'in fact no part of the work had been done or the materials furnished, but the claim was wholly fictitious. It avers that the .defendants, under pretence of the authority of their contract, constructed certain vertical wall, falsely pretending it was under the contract and received pay therefor; that they pretended that they had excavated rock to a large amount; that they received pay therefor which was more than the value of such work and more than the amount bid therefor by bidders who competed for -.the contract.

The complaint further avers in detail that by the contract only a certain amount of excavation, and a certain amount of embankment, were called for; that the defendant Denison was not the lowest of the bidders ; that the defendants received payment for more than was called for by the contract; that said moneys were received mider the false pretence that they were duo mider the contract. There are similar charges as to pine docking and chestnut timber ; and there is an averment that the defendants pretended to-have furnished, mider the contract, wrought and cast iron, etc., and have received- pay therefor without right.

The complaint further avers that the vertical wall built by the defendants was not properly built in certain specified particulars ; that the defendants falsely pretended that the wall was properly built, and corruptly procured the engineers to certify to the work, and by such fraudulent vouchers obtained from the State large sums, which are specified.

And it finally avers that the moneys paid to the defendants were paid by the State treasurer, in ignorance of the fact, and under the belief, that the defendants were entitled thereto ; and that the false vouchers were procured by corrupt influence.

It will thus be seen that -the. complaint is throughout based on general allegations of fraudulent and corrupt practice, by which the defendants are alleged to have induced the officers of the State to make false vouchers, and on alleged fraudulent construction of certain work ; and upon alleged fraudulent pretences as to the doing of certain work and furnishing certain materials.

The report of the referees does not find that the defendants were guilty of any fraud whatever; it does not -find that any false certificates of work were ever given; it does not find that the defendants made any false statements as to any work done or material furnished; it does not find that there have been any corrupt combinations with any State officers. In a word, the report is silent as to any fraud on the part of any person, and'is silent as to any imperfection in the work done by the defendants.

And, so far as we can see, from examination of the case, there is no evidence of any fraud or imperfect work. Nor does the opinion of the referees suggest, or the argument of the plaintiff’s indicate, anything of the kind.

The report of the referees finds that the engineer of a division of the canal submitted to the board a certain estimate “for removing wall benches and constructing slope pavement and vertical and retaining walls, and straightening the Erie canal from. Port Schuyler to the lower Mohawk aqueduct. Chapter 877, Laws of 1869.) Estimated cost, $84,645.” This estimate was adopted and the work advertised in pursuance of section 4, chapter 877, Laws of 1869. Denison was declared to be the lowest bidder; and that result was arrived at by multiplying the prices in the bids by the quantities in the estimate, and thereupon he executed a contract. The other defendants became interested with him.

Afterwards, and between September 9, 1869, and August 1, 1875, the defendants did work and furnished materials on the canal at the section named in the contract and certain places adjacent. And the resident and division engineers, from time to time, swore to estimates of such work and materials. These estimates amounted in the total to $491,245.05 ; and that amount, less fifteen per cent retained, was paid by the auditor of the canal department ; such payments amounting to $417,571.

Of this sum of $491,245.05 so estimated, $276,449 was estimated for work done and materials furnished in removing the slope pavement wall between locks Nos. 3 and 18, and constructing vertical wall in its place.

The amount of slope wall and of vertical wall, estimated in the aforesaid estimate, was sufficient in quantity to build slope and vertical wall on all that part of the canal between Port Schuyler and the Lower Mohawk aqueduct, where there were wall benches; and there were no wall benches between locks 3 and 18.

No written statement, description or direction that vertical wall should be substituted for slope wall, on any portion of the distances embraced within the contract,, was ever made or signed by the State officers.

The finding of the referees on the questions of law, explained by their opinion, shows that they hold that the contract made by the defendants with the State was a contract for doing the amount of work of each description described in the estimate; that the public officers had no right to change it so as to direct the removal of slope wall instead of the removal of wall benches ; or the construction of a much larger quantity of vertical wall than the original estimate: that the removal of the original slope wall was unauthorized,, either by law or by the contract: that the change of slope wall into vertical wall was unauthorized, either by law or by the contract : that, therefore, the money paid therefor can be recovered back ; unless the Legislature have subsequently ratified the act of the defendants, and that the Legislature have not done so.

There are three important questions presented.

First. Can there be a recovery under this complaint without proof of fraud ?

Second. Can money paid under such circumstances be recovered back ?

Third. Has there been a ratification by the State ?

1st. At the close of the trial the defendants requested the referees to find, among other things, that the complaint described and claims a right to recover upon a cause of action arising out of tort, and that a recovery cannot be had upon a cause of action arising on contract.

It can hardly bo questioned that this complaint is based on fraud. 'There is but one general cause of action, which is that the defondants under the color of the contract, “ by means of frauds, devices, false pretences and vouchers and corrupt combinations and collusions with State officers” obtained $417,571. The rest of the complaint, except the conclusion, contains a specification of the various frauds, alleging false pretences, imperfective building and the like} and the conclusion is that the false vouchers and certificates were procured by corrupt influences, partly political. Is there any doubt that under such a complaint the plaintiffs were :at liberty to prove actual fraud and corrupt combinations ? Or that on a judgment hi their favor the execution might issue against the person ? The form of the sfimmons also shows that the :action is not on contract, as it was issued under subd. 2, section 129, Old Code. (Miller v. Barber, 66 N. Y., 564.)

On the other hand it is equally plain that no proof of fraud was given (to judge from the case), and that the referees have found no fraud, but have rendered a report for the plaintiffs, on the ground that (as they find) certain work done and materials furnished by the defendants, for which they have been paid by the plaintiffs, were done and furnished without authority of law, and therefore that the plaintiffs are entitled to recover back what they have thus paid. '

Now this action to recover back money paid has always been an action of an equitable nature. It was formerly brought in assumpsit for money had and received to the use of the plaintiff. It was an action on implied contract growing out of the duty of the defendant to refund money, which it was inequitable to retain. It was not in any respect based on fraud.

Can then a plaintiff sue in fraud and recover on contract ? The contrary has been distinctly held. (Barnes v. Quigley, 59 N. Y., 265; Dudley v. Scranton, 57 id., 428; Ross v. Mather, 51 id., 110; DeGraw v. Elmore, 50 id., 1.) No case is cited by the plaintiffs holding any other view. The complaint is not that the defendants procured the execution of the contract by fraud; and the plaintiffs do not repudiate the contract. The complaint is that, under that contract, the defendants by fraud obtained money from the plaintiffs. So that the gravamen of the complaint is the fraud. For these reasons, as we think, the plaintiffs were not entitled under this complaint to recover where they utterly failed to prove any fraud.

But second, passing this question of pleading, can this money be recovered back ?

The act -of 1869, chapter 877 at page 2144 provided for the removing wall benches, constructing slope, pavement and vertical walls and straightening the Erie canal on the eastern division. No moneys were to be expended, or contract to be made, until plans had been submitted. By the terms of the contract for removing wall benches, etc., from Port Schuyler to the lower Mohawk aqueduct, entered into between the State and Denison, the total amount paid was not to exceed the estimated amount of the work ; which was $84,645.

After the making of this contract and under the same (as assumed) the defendants removed slope wall and constructed vertical wall in its place, instead of only removing wall benches ; and they constructed a much larger amount of vertical wall than the original estimate. And for this they have been paid largely heyond the original, specified estimate. Assuming then, for the present, that the work was beyond the terms of the contract, and even that it was outside of the work authorized by the act of 1869, we have these facts; that the defendants have done the work on the property of the State; that the State has received and still retains the benefit of the work; that through the State officers, within whose general duty the matter came, the State has-paid for the work ; and, in the absence of proof to the contrary, that the work was worth what was paid for it, and that it was; done in good faith.

It is not the peculiar privilege of the State to be dishonest and unjust. And if this were a question between individuals, it would seem that there could be little doubt that no recovery could be had. This action to recover back money which has been paid is, as already stated, of an equitable character. (Buel v. Boughton, 2 Den., 92 ; Barber v. Cary, 11 Barb., 549.) It is based on the ground that it is inequitable to retain the money. And hence the question of what is equitable on both sides is open. Is it equitable for a party to retain the possession and benefit of work, done in good faith on his property and paid for from time to time by those who were his agents (even though they exceeded their authority), and to recover back from the person who did the work all the money paid therefor ? Certainly not; in the absence of actual fraud.

The plaintiffs rest their right to recover principally on the case of Supervisors v. Ellis (59 N. Y., 620). But that case is entirely different. Ellis, while supervisor, had charged and received a per diem allowance and mileage while serving on committees when the board was not in session ; and also his costs and counsel fees in an action to establish his light to the office of police commissioner. The former claim was directly contrary to express statute. The latter was one with which the county had nothing to do. Neither legally nor equitably was he entitled to the money. The county had received nothing therefor. The payment to him was a mere gratuity. It was not a payment for some valuable property- actually parted with by him, received by the county and still retained by it. If the present defendants had presented to the State officers a claim, and had received payment for their costs and counsel fees in some litigation, or for their personal services in superintending this work done on the canal, then this case would be more nearly analogous to the case of Ellis. But in this present case the State, the plaintiff, retains the title to the material, and accepts the benefit of the work, for which the defendants have been paid ; and then asks that the defendants shall pay back the money they have received. This is not honest.

Denahoe v. The Mayor (17 N. Y. S. C. [10 Hun], 37), cited by plaintiffs, is a case where the defendant set up a counter-claim. The counter-claim was an over payment, viz., a payment at seventy-five cents per yard instead of fifty cents per yard, the contract price. The extra twenty-five cents was, of course, without consideration. And that case is not like the present.

The case of McDonald v. The Mayor (68 N. Y, 23) was not an action to recover back money which had been paid. It was an acfjon to recover the value of materials alleged to have been delivered. It was therefore an action based on a strictly legal right, and not upon any equitable principles; and it was held that the city was not liable on an implied promise to pay for such materials when no contract had been made therefor according to the charter. Because there was “ an express legislative inhibition on the city that it may not incur liability unless by writing and by record.” Is there any express legislative inhibition, or constitutional provision forbidding the State to pay for work done and materials furnished for it ? And the opinion in that case is carefully limited at the end by this remark : “This opinion goes no further than to hold that where a person makes a contract with the city of New York for supplies to it, without the requirements of the charter being observed, he may not recover the value thereof upon an implied liability.” Would the court have held, if an official of the city, taking some of the money of the city, had bought and paid for a load of stone, that the city could have retained the stone and recovered back the money ?

In the case of Nelson v. Mayor (63 N. Y., 535) it is said of the city that “if it obtains property under a void contract, and actually uses the property and collects the value of it from property owners by means of assessments, the plainest principles of justice require that it should make compensation for the value of such property to the person from whom it was obtained.” To apply that remark to the present case, the State has obtained this property ; it has collected the value of it by its taxation and other means of raising money; and it has gone further and has even paid for the property. The plainest principles of justice require that it should not get the money back again from the persons from whom it obtained the property. And see Brady v. Mayor (20 N. Y., 319).

We may admit the general principle that different rules prevail in respect to the acts and declarations of public agents from those which ordinarily govern in the case of mere private agents. (Whiteside v. United States, 3 Otto, 247.) But that principle is one intended rather to protect a State against improper claims than to enable a State itself to do injustice. And so it was held in the case of The People v. Stephens (71 N. Y., 527), where it was laid down that the State in its contracts with individuals must be judged, and must abide, by the same rules which govern similar cases among individuals. And see pages 540, 559, 560 for a full statement of this doctrine and for the effect of the acts of officers in binding the State. “ The payments were voluntary and with knowledge of the fraud, and within well settled principles cannot be recovered back.” “ Parties dealing with State officers may regard their action as a finality.” “ Even were the' controversy between individuals, it cannot be seriously claimed that payments voluntarily made, with full knowledge of the facts, could be recovered back in any form of action.” These remarks become still more forcible in their application to a case like the present where no fraud is shown.

The plaintiffs claim that because the defendant built vertical wall where there was before slope wall, and not simply where there were wall benches, the money paid therefor can be recovered back.

To illustrate the result of such a doctrine, we may take another case. The Session Laws of 1877, chapter 275, page 303, require the new capítol commissioners to “ build and complete the exterior of ¡the new capitol building in Italian renaissance style of architecture adopted in the original design.” If, at some future time, it should be thought that the commissioners had violated this requirement, would the State be authorized to recover back from a builder, or contractor, money paid to him, upon proving that this exterior had not been built according to the style expressly required by the statute, or even that a style much more expensive had been adopted ? Yet such builder or contractor might be said to be bound to know the statute law, and to be bound to take notice that (in the supposed case) the commissioners were violating the express provisions of the statute and were having work done which was unauthorized by law.

The defendants expressly raised before the referees the point that the State could only recover such moneys as might remain in the defendants hands, after deducting the value of the work and materials which now remain in the possession and enjoyment of the State. And no question appears to be made on the case as presented but that the work and materials were, in fact, worth all that was paid therefor. The referees must therefore have based their report on the ground that, whatever the value of the work and materials, the State was entitled to receive back all it had paid.

The views which are above expressed render it unnecessary to examine expressly the third point, that of ratification through subsequent appropriations. So far as the fact of actual payment, from time to time, through the proper State officers, may be called a ratification, the matter has been considered already.

We think, for these reasons, that the judgment should be reversed, a new trial granted, and the reference discharged. Costs to abide the event.

Present — Learned, P. J., Bockes and Boardman, JJ.

Judgment reversed, reference discharged, new trial granted, costs to abide event.


source: Caselaw Access Project

author: Learned, P. J.:

license: Public Domain

text:
    PETER E. N. DECKER, Respondent, v. CHARLES BOICE and other, Appellants.

      Agreement that mortgages shall be equal liens — how far assignees bound by — Rights of pwchasers at foi'eclosu/re by advertisement — who entitled to notice in such proceedings.

    On July 4, 1872, certain land was owned by the nine children of "W. Boice, as tenants in common. On that day six of them conveyed their interest to a brother Charles, who, at the same time, executed five mortgages each covering the six-ninths so conveyed to him. One to Catharine Decker, a sister, recorded December 27,1872, was subsequently sold to one Crandall, his assignment being dated and recorded June 26, 1876 ; one to a brother William was recorded December 27, 1872, and was thereafter sold to one Kellogg, by an assignment recorded June 29, 1877. One of the other mortgages was subsequently paid. Of the two remaining mortgages, one was recorded July 24, and the other August 4, 1877.
    At the time of executing the mortgages it was mutually agreed by parol that all should be equal liens. The purchasers of the two first mentioned mortgages gave full value therefor, and took without notice of the parol agreement, and without notice of the existence of the mortgages then unrecorded. The two first mentioned mortgages were foreclosed by advertisement under the statute, the first publication in such proceedings being made in June, 1877, and the property was, on Sejitember 21, 1877, purchased by the plaintiff. Notices were served in the foreclosure proceeding on the mortgagor and the persons holding the unrecorded mortgages. „

      3eld, that whether or not the mortgages were to be treated as equal liens, as between the mortgagees and their assignees, yet the plaintiff, as the purchaser at the sales, on the foreclosures of the two first mentioned mortgages, acquired the property free and clear from the liens of the other mortgages.
    On a foreclosure, by advertisement, only those mortgagees or assignees, whose mortgages or assignments are recorded, are entitled to notice.
    Semble, that a purchaser in good faith, and for value, from the mortgagee, who first recorded his mortgage, would take the same free from any parol agreement between the mortgagees of which he was ignorant.
    Appeal from a judgment, entered upon the trial of this action, by the court, without a jury.
    The action was brought for the partition of certain land formerly owned by one William Boice. It was not disputed that the premises were subject to the dower right of Betsey Boice, widow of William, who died intestate and the owner of the whole land. The plaintiff claimed to own six-ninths, being the shares of six of the nine children of William, viz., of William H. Boice, Abram Boice, Mary J. Clark, Catharine Decker, Sally Ann Rockefeller and Louisa Talbot. On the 4th of July, 1872, these six children conveyed all their interest in the property to Charles Boice, another child, and one of the defendants.
    Peggy Knickerbocker was another child; and it was not disputed but that she still owned one-ninth.
    Jacob Boice was the remaining child, and it was not disputed but that David W. Talbot owned Jacob’s one-ninth.
    On the 4th of July, 1872, Charles Boice executed a mortgage, upon the six-ninths thus conveyed to him (not including his own ninth), to Catharine Decker, to secure $188.88, recorded December 27, 1872. Catharine Decker assigned this to Peter E. N. Decker Juke 24, 1876, which assignment was recorded June 26, 1876. June 26, 1876, Peter E. N. Decker assigned this to Hiram Crandall ; which assignment was recorded June 26, 1876.
    On the 4th day of July, 1872, said Charles Boice executed another mortgage on the same six-ninths to William H. Boice to secure $464.88, which was recorded December 27, 1872. William H.' assigned this to John Crossett November 6, 1873; which assignment was recorded January 3, 1874. Crossett assigned it to Alvah Kellogg March 30, 1874; which assignment was recorded June 29, 1877.
    These two mortgages were foreclosed by advertisement, under the statute, by their respective owners ; the first publication in ■one proceeding being made June 2, 1877, and in the other June 29, 1877. And on the 21st of September, 1877, the plaintiff purchased at each of said sales, at the first for $338.42; at the second, for $601.58 the six-ninths of the premises in question.
    No question is made as to the regularity of these statutory foreclosures.
    The statutory notices were served, among other persons, on Charles Boice, Sally Ann Rockefeller and Lansing E. Hay, the administrator of Lansing Hay, and Mary J. Clark.
    It was held by the court on the trial that the plaintiff thus became the owner of six-ninths ; and that Charles Boice, Peggy Knickerbocker and David W. Talbot each owned one-ninth.
    The defendants insist that the plaintiff owns two-ninths ; that Charles Boice owns three-ninths, and Lansing Hay, one-ninth; and Peggy Knickerbocker and David W. Talbot, each one-ninth.
    The ground of their claim is as follows : At the time when Charles Boice executed his mortgages to William H. Boice and to Catharine Decker, respectively,' he also executed a mortgage of the same date, on the same six-ninths, to Louisa Talbot to secure $188.88, which was recorded December 27, 1872; and which said Charles afterwards fully paid before the commencement of this action.
    And, at the same time, he also executed a mortgage of the same date to Mary J. Clark, on the same six-ninths, to secure $188.88, which was recorded July 24, 1877; and said Mary J. Clark assigned this mortgage to Lansing Hay December 20, 1876, which assignment was recorded July 24, 1877.
    And, at the same time, he also executed a mortgage of the same date to Sally Ann Rockefeller, on the same six-ninths, to secure $188.88, which was recorded August 4, 1877.
    At the time of the execution of these five mortgages it was mutually agreed by parol between all the mortgagees that neither mortgage should have a preference over the other; but all should be equal liens ; to which agreement the mortgagor was a party.
    Decker and Crandall, when they severally purchased the Decker mortgage, gave full value therefor in cash; and had no knowledge of this parol agreement. They had no notice, actual or constructive, of the existence of the Mary J. Clark mortgage or of the Rockefeller mortgage ; and they had no actual notice of the existence of the Talbot mortgage, or of the William H. Boice mortgage.
    Crossett and Kellogg, when they severally purchased the William II. Boice mortgage, paid full value therefor in cash, and had no knowledge of this parol agreement. They had no actual or constructive notice of the Mary J. Clark mortgage, or of the Rockefeller mortgage ; and no actual notice of the Talbot mortgage and the Decker mortgage.
    No bond or covenant to pay was given by Charles Boice to accompany any of these mortgages.

      McDowell <& Lewis, for the appellants.

      Waters & Knox, for the respondent.
   Learned, P. J.:

If two deeds, of the same date, and of the same property, were executed by the same grantor to two different grantees, at the same time, and one should be recorded and the other not.; if the grantee in the recorded deed were a purchaser in good faith, and for a valuable consideration, we suppose he would be protected against the unrecorded deed; although, as the deeds were executed at. the same time, the other grantee would not be, in strictness, a. subsequent purchaser. It would hardly be an equitable construction of 1 Revised Statutes [m. p.], 756, section 1, to hold that a purchaser in good faith, and for a valuable consideration, who purchased, an hour after the execution of an unrecorded deed,, and who recorded his conveyance first, should be protected while a purchaser in good faith, and for a valuable consideration, who purchased at the same time with the execution of an unrecorded deed should not be protected by such prior recording.

And as the word “conveyance” expressly includes mortgages- (§ 38), it would seem that the mere fact that mortgages were executed at the same time would not prevent the operation of there cording act.

Decker and Crandall, Crossett and Kellogg were, all of them, “purchasers.” (1 R. S. [m. p.], 762, § 37.) Each was a purchaser in good faith and for a valuable consideration. The-respective assignments to them were “ conveyances.” (§ 38.), They were “purchasers” of the “same real estate”, with that of which Mary J. Clark and Sally Ann Roekerfeller had conveyances. And the “ conveyances ” of Decker and Crandall, of Crossett and Kellogg, were “ first duly recorded; ” that is, were, recorded before the conveyances of Clark and of Roekerfeller. This seems to be within the express language of section 1.

But the question here involved does not depend on the rights: of Crandall and Kellogg, as assignees of the mortgages of Catharine Decker and of William H. Boice, respectively, in regard to the other mortgages which had not been recorded. Decker, the plaintiff', is not the assignee of a mortgage. He is the purchaser-under powers of sale, given by the owner, Charles Boice, which powers have been executed according to the provisions of the statute. The affidavits of publication and sale stand in the place. of a deed, executed by virtue of the power of sale. It is uot claimed that the proceedings were imperfect. The title to seven-ninths was unquestionably in Charles Boice when the mortgages were executed. These two mortgages, held by Crandall and Kellogg, covered six-ninths. If they were properly foreclosed, the purchaser at the sale went back to the execution of the mortgages mid to the authority there given for his title. And Charles Boice, in each of these mortgages, authorized the holder thereof to sell .six-ninths of the property to pay the mortgage.

Notice of the sale is to be served on the mortgagor, and on subsequent grantees and mortgagees, whose conveyances and mortgages shall be on record at the time of the first publication. (2 R. S., 5th ed. [m. p.], 546, § 3, sub. 3.) The first publication in one foreclosure was June 2, 1877; in the other, June 29, 1877. The Clark mortgage was not recorded until July 24, 1877 ; and the Rocker-feller mortgage not until August 4, 1877. The Talbot mortgage has been paid by the mortgagor, and therefore has ceased to be a lien.

The purchaser at such a sale has a right to look to the statute for his guidance and protection. He has only to see that notice was served on those grantees and mortgagees whose conveyances wore on record at the time of first publication ; and on judgment creditors. And, to understand the effect of the sale under the .statute, we must compare sections 3 and 8. Section 3 points out who are the persons to be served with the notice ; and section 8 declares them, when they have been served, to be barred by the .sale. The persons to be served are those whose conveyances are on record. The assignees of mortgages are entitled to notice. (Wetmore v. Roberts, 10 How. Pr., 51.)

Furthermore, the notices were, in fact, served on Sally Ann Rockerfeller, on Mary J. Clark, and on Lansing E. Hay, the administrator of Lansing Hay, assignee of the Clark mortgage, as well as on the mortgagor himself. And, with the exception of Peggy Knickerbocker and Jacob Boice, who make no claim, every one of the heirs of William Boice was present at the sale; and it is not claimed that they objected.

Even, then, supposing that Sally Ann Rockerfeller and Mary J. Clark, or her assignee, by virtue of the original parol agreement, had equal liens with Crandall and Kellogg, still these foreclosures, to which, they were parties, like a foreclosure in equity,, cut off their claims. Whatever rights they have in this respect, must be sought against Crandall and Kellogg, who have received the whole avails of the sale. If, by reason of the parol agreement, these four liens are on equal footing, then it may be that Rocker-feller and Hay, assignee of Clark, are entitled to recover their pro rata share of the avails from Crandall and Kellogg. But, however that may be; the title of the bona fide purchaser is good. To liken the statutory proceeding to an action, Crandall and Kellogg made Rockerfeller and Hay parties defendant; although their title did not appear at the time of beginning the action and of filing the notice of lis pendens. The purchaser at the sale gets a good title ; whatever equitable rights in the distribution of the avails Rockerfeller and Hay may have.

As to the Talbot mortgage, we do not see that Charles Boice has any claim in respect thereto. It has been paid; and has ceased to have any validity whatever.

We think, therefore, that the decision was correct, and that the judgment should be affirmed, with costs against appellants.

Present — Learned, P. J., Bockes and Boardman, JJ.

Judgment affirmed, with costs.


text:
    MARY ANN BACON, Respondent, v. J. LANSING VAN SCHOONHOVEN, Appellant, Impleaded with others.

      Recording acts — who protected by — satisfaction of mortgage, a conveyance within — distñbution of swrplus.

      G. Smith, on October 10, 1866, mortgaged certain premises to one Owens, who, on July 5, 1867, assigned the mortgage to W. Smith, who, on October 1, 1868, assigned it to the plaintiff. The mortgage was recorded October 15,1866, and the two assignments February 9, 1877. In February, 1876, Smith applied to one Van Schoonhoven for a loan on the premises; Van Schoonhoven, having searched the records, refused to make the loan unless the -Owens mortgage was satisfied, he having no knowledge of its having been assigned. Smith procured a satisfaction piece from Owens, paying nothing therefor, and delivered it to Van Schoonhoven, who recorded it and his mortgage at the same time February 9th, 1876.
    -In an action by the plaintiff to foreclose her mortgage, held, that Van Schoonhoven was protected by the recording act, and that his mortgage was entitled to priority over that of the plaintiff.
    A satisfaction piece of a mortgage is a conveyance, within the meaning of that term, as used in the recording act, 1 Revised Statutes, 762.
    After the execution of the Owens mortgage, and before the execution of the one to Van Schoonhoven, and on November 4, 1871, Smith gave a mortgage on the same premises to one Carpenter, which was duly recorded January 3, 1872.

      .Held, that in distributing the proceeds arising under the sale, there should first be set apart the amount due on the Owens mortgage, and that that amount, or so much thereof as might be necessary, be applied on the mortgage to Van Schoonhoven, and the balance, if any, on the Owens mortgage. The residue of the proceeds of the sale should be first applied on the Carpenter mortgage, and next on the balance remaining due on the Van Schoonhoven mortgage, and lastly, any remaining surplus should be applied on the Owens mortgage.
    Appeal from a judgment entered upon the trial of tbis action by the court, without a jury.
    Grodus D. Smith and Samuel W. Smith mortgaged to Matthew Owens, the premises described in th'c complaint, for $3,500. 'The mortgage was dated the 10th day of October, 1866, and was recorded in the office of the clerk of the county of Saratoga, on the 15th day of October, 1866. Matthew Owens, by written assignment, dated July 5, 1867, assigned the bond and mortgage to William C. Smith, and William C. Smith, by written assignment, dated. October 1, 1868, assigned the same bond and mortgage to the plaintiff. Neither of these assignments was recorded until the 9th day of February, 1877.

      At the time of the commencement of this action there was due and -unpaid on this bond and mortgage $1,000, with interest from the 1st of October, 1877.
    November 4, 1871, Grrodus D. Smith, being still the owner of •the mortgaged premises, executed another mortgage to Amanda W. Carpenter, for $1,200, which was recorded in said clerk’s office January 3, 1872, and on -which there was due February 4, 1876, :$700, and interest from November 4, 1875.
    A short time prior to the 4th of February, 1876, Grrodus D. Smith, being still the owner of the mortgaged premises, applied to the defendant, Van Schoonhoven, for a loan of $3,800, to be secured by a mortgage on the premises in question and other premises. Van Schoonhoven caused an examination of the records in Saratoga county to be made by the county clerk, and from this search it appeared that said mortgages to Matthew Owens and Amanda M. Carpenter were the only incumbrances on the premises.
    Van Schoonhoven had no knowledge or information that any other person than Matthew Owens was or claimed to be the owner of or interested in the Owens mortgage. Ho refused to make the loan, unless Smith would procure a satisfaction of said mortgage to Owens, showing that it was fully paid. Smith thereupon procured Matthew Owens to execute a satisfaction of his said mortgage. No payment was made to Owens when he executed this satisfaction. Van Schoonhoven thereupon loaned to ■Smith $3,800; and, as security therefor, received from him a mortgage on said premises, together with the satisfaction piece executed by Owens, and this mortgage and satisfaction piece Van Schoonhoven recorded at the same time, viz. on the 9th day of February, 1876.
    In December, 1877, Van Schoonhoven bought the Carpenter 'mortgage, being forced to do so in order to prevent a foreclosure of the same, and at that time supposed that was the only lion on the premises prior to his $3,800 mortgage.
    The plaintiff brought this action in the usual form for the foreclosure of her mortgage, making the usual allegation that the defendant,. Van Schoonhoven, had an interest or lien in the premises subsequent and subject to the lien of her mortgage. The defendant, Van Schoonhoven, answered, setting forth the above facts, and claiming priority over the plaintiff’s mortgage.
    The court held that the lien of the plaintiff’s mortgage was prior to that of both the mortgages owned by Van Schoonhoven, and directed judgment to that effect and for the usual foreclosure sale.

      Charles E. Patterson, for the appellant.
    Under the provisions of the recording acts of this State the mortgage of the plaintiff is clearly subject to the mortgage for $3,800 made to the defendant, Van Schoonhoven. (2 It. S. [6th ed.], 1138, § 1; 1 id., 756, § 1;, 2 id. [6th ed.], 1151, §§ 71, 72; 1 id., 762, §§ 37, 38; Vanderkemp v. Shelton, 11 Paige, 28, 37, 38; Belden v. 'Meeker, 2 Lans., 170, 175; S. C., 17 N. Y., 307.

      W. L. Graham and John B. Putnam, for the respondent.
    It is submitted that where a recorded mortgage has been assigned by the mortgagee, and the assignments are not on record, that said mortgage cannot be satisfied by the mortgagee as against the assignee in favor of a subsequent purchaser or mortgagee of the mortgaged premises without actual payment. (Green v. Warrick, 61 N. V., 226-227; Crane v. Turner, 67 id., 110-111; Campbell v. Veeder, 3 Keyes, 178; Purdy v. Huntington, 12 N. Y., 338— 339; Vanderkemp v. Shelton, 11 Paige, 29; Brown v. Blydenburg, 7N.Y, 11.)
   Learned, P. J.:

A mortgagee may discharge the land from the lien of the mortgage by executing a quit claim deed to the mortgagor. That is the usual course, when a part only of the land is to be released. Let us suppose then that Owens, under circumstances similar to those stated in this case, had executed, to Gxadus D. Smith, a release of a part of the land, which release was recorded; and that, thereupon, Van Schoonhoven had lent Smith money, and had taken and recorded a mortgage, in good faith, on the land so released. Van Schoonhoven would have been a “purchaser,” under the recording act, because he would have been a person to whom an interest in real estate would have been conveyed for a valuable consideration. (1 R. S., 762, § 37.) The assignments of the mortgage from Owens to William C. Smith, and from William C. Smith to the plaintiff, were “ conveyances,” under the recording act, because they were instruments by which an interest in real estate was aliened, or by which the title to real estate was affected. (§ 38.) These conveyances were not recorded until February 9, 1877. While, in the supposed case, Van Schoonhoven’s mortgage wordd have been recorded February 9, 1876. Van Schoonhoven, therefore, would have been a subsequent purchaser of the land, whose conveyance would have been first duly recorded. And the assignments of the Owens mortgage would have been void as to him. (1 R. S., 756, § 1.)

In the present case, however, instead of executing a quit claim of the whole, or a part, of the mortgaged premises, the mortgagee executed to the mortgagor a “ satisfaction piece ” of the mortgage. (1 R. S., 761, §§ 28, 29.) This is a simple mode of reconveying, or releasing, the land from the lien of the mortgage. It is a “conveyance” under the recording act; for by it an interest in real estate is aliened, and the title to real estate is affected in law and in equity. (§ 38, ut supra.) It operates to transfer back to the mortgagor the mortgage interest held by the mortgagee.

And, therefore, the “ satisfaction piece ” must be treated like a quit claim or release to the mortgagor. Then we have, in the present case, a conveyance from Owens to Gradus D. Smith, of an interest in real estate ; a subsequent conveyance, by Gradus D. Smith to Van Schoonhoven, of an interest in the same real estate for a valuable consideration. And Van Schoonhoven is a purchaser in good faith, and records his conveyance at once, February 9, 1876. We have the further fact that Owens had, however, previously conveyed his interest in the real estate to William C. Smith, who had also previously conveyed to the plaintiff. - But neither of these conveyances had been recorded when Van Schoonhoven recorded his. As to him, therefore, they were void. (Vanderkemp v. Shelton, 11 Paige, 28; Belden v. Meeker, 2 Lans., 470; S. C., 47 N. Y., 307.)

Unless this view is correct, it is impossible that a mortgage should ever be discharged of record, so that a person could safely deal with the original mortgagor. If a satisfaction, executed by the mortgagee, who, so far as the record shows, is still the holder of the mortgage, does not relieve the land from the lien, as regards 'subsequent bona fide purchasers for value, how can the land ever be relieved from the apparent lien ? . The mortgage may even be in fact paid, but it will be impossible to put on the record any evidence of this fact, on which a purchaser can rely, ilq can never be certain that the person who executed the satisfaction had not previously assigned the mortgage.

But again, suppose Gradus Smith had executed, not a mortgage, but a deed to Owens ; and Owens had conveyed to William C. Smith, and William C. Smith to the plaintiff; and that these last two conveyances had not been recorded. Then if Owens had conveyed back to Gradus Smith, and Gradus Smith had mortgaged to Van Schoonhoven, in good faith, and for a valuable consideration ; and Van Schoonhoven had recorded his mortgage, is there any doubt that it would have had priority over the unrecorded titles of the plaintiff ? And where is the essential difference in the cases ?

The plaintiff insists, however, on another point. Van Schoonhoven, when about to make the loan, examined the records and found the mortgage to Owens. He told Gradus Smith that he would not loan him the money, unless the Owens mortgage were .satisfied. Gradus Smith procured the satisfaction piece, and delivered it, with his bond and mortgage, to Van Schoonhoven ; .and Van Schoonhoven had both satisfaction piece and mortgage recorded together. The plaintiff, therefore, insists that, when Van Schoonhoven took his mortgage, the Owens mortgage was not, in fact, canceled of record. But there is no doubt that Van Schoonhoven was a purchaser in good faith. Ho believed that the Owens mortgage was paid, having agreed to loan, only on condition that the Owens mortgage was paid. And then, receiving satisfactory evidence that it had been paid, before he parted with his money, he was a purchaser in good faith and for a valuable consideration under section 1, above cited. For he had in his possession what was, in effect, a reconveyance to Gradus Smith from the only person who, on the record, had the incumbrance. Being, therefore, such a purchaser, and having recorded his conveyance, he is protected against the unrecorded conveyanees from Owens to William C. Smith, and from William C. Smith to the plaintiff. (§ 1, ut supra.)

On principles of equity Van Schoonhoven should be protected. He did everything in his power to ascertain whether, or not, the mortgage was paid. While, on the contrary, the neglect of the plaintiff to record the two assignments was that which enabled Owens to give the satisfaction piece, and thus to defraud Van Schoonhoven ; if his mortgage is to be postponed to hers. The plaintiff objects that the bond and mortgage was not produced to Van Schoonhoven. There was no reason for their production. A bond and mortgage, which have been paid, need not be returned to the mortgagor. They are of no value. And Van Schoonhoven had reason to believe that these were paid.

There is a further complication arising from the Carpenter mort.gage, executed and recorded after the Owens mortgage, and before that of Van Schoonhoven, known by Van Schoonhoven to be a lien, and since purchased by him. In the view above taken, the Owens mortgage .is prior to the Carpenter mortgage; the Carpenter mortgage is prior to the Van Schoonhoven mortgage ; and the Van Schoonhoven mortgage is prior to the Owens mortgage.

The equitable rule, in such a case, is this. From the avails of the sale there must be set apart the amount of the Owens mort.gage. That amount, or so much thereof as may be necessary therefor, is to be applied on the Van Schoonhoven mortgage, and the balance thereof, if any, on the Owens mortgage. The residue of the avails, after thus setting apart the amount of the Owens mortgage, is to be applied, first on the Carpenter mortgage, and next on the balance remaining on the Van Schoonhoven mortgage; .and, lastly, the surplus is to' be applied on the Owens mortgage.

In the present case this rule is equivalent to paying the Carpenter and the Van Schoonhoven mortgages before that of Owens. If, however, the Owens mortgage had been larger than the Van Schoonhoven mortgage, the importance of those special provisions would have appeared, j

Van Schoonhoven would be entitled to his costs of the action, and of this appeal, to be paid first after the referee’s fees and expenses. The plaintiff would be entitled to her costs of the action, not of the appeal, to be paid after the payment of the Carpenter and Van Schoonhoven mortgages.

This appeal is from the decision, without the making of any ease. ^ We should be disposed to modify the judgment in accordance with these views, without granting a new trial, if it were not for one fact. The mortgage of Van Schoonhoven covers other property .J The plaintiff may 'perhaps have a right to insist that this other property shall be first applied to the payment of the Van Schoonhoven mortgage ; or may even have a right of subrogation against such other property, since, in our view of the case,, the plaintiff, as to the Van Schoonhoven mortgage, is a subsequent incumbrancer on one parcel of land, while he has a lien on the other land also. ;~What equities there may be in respect to that other land, who is the owner and the like, we cannot here determine. 'ft,.

And, therefore, we think that there should be a new trial, and that the costs of the appeal should abide the final judgment of the court. '

Present — Learned, P. J., and Boardman, J.

Bocees, J., taking no part.

Judgment reversed, new trial granted*, costs of appeal to abide final judgment of court.


text:
    GEORGE H. POWER, Respondent, v. THE VILLAGE OF ATHENS, Impleaded with others Appellants.

      Injunction pendente lite — not granted unless absolutely necessary— General Buie 21 — applicable to orden• to slum cause — what not a reasonable time within which to show cause why a party should not be punishable fc/t' contempt— Appeal from an injunction does not suspend it — costs of proceedings.

    Plaintiff and the defendant, the village of Athens, each claimed to have the exclusive right to run a ferry between the city of Hudson and the village of Athens. In this action, brought by the plaintiff to restrain the defendant from running the said ferry, the complaint alleged that the defendant had diverted business from the plaintiff, to his great loss and damage, but gave no special •details thereof: The defendant alleged that no material or irreparable damage was being done to the plaintiff, and that the defendant was abundantly responsible for any probable sum that plaintiff could recover.

      Meld, that the action was not one in which an injunction pendente lite should be granted.
    ■On July seventh an order was granted restraining the defendants, The Village of Athens, and the trustees thereof, from running a ferry from Athens to Hudson. On July eighth the court granted an order, returnable on the tenth, at 10 A. M., at Kingston, requiring the defendants to show cause why they should not be punished for a «ontempt in violating the injunction. The order was served on the defendants, at Athens, at about noon of July ninth.

      Meld, that the order did not give the defendants “ a reasonable time ” witmn . which to show cause, and that the discretion of the justice fixing such time was reviewable at General Term.
    General Rule No. 21, requiring a non-enumerated motion to be noticed for the first day of the term, unless sufficient cause be shown (and contained in the affidavits served) for noticing it for a later day, is applicable to an order requiring a defendant to show cause why he should not be punished for a contempt in violating an injunction.
    An appeal from an order granting a temporaiy injunction does not supersede or authorize the defendants to disobey it.
    Where, however, defendants, in disobeying the injunction, act under the advice of counsel that it is superseded by an appeal taken therefrom, the fine imposed should not exceed the actual damage sustained by the plaintiff, together with his costs and expenses to be taxed under section three of chapter 270 of 1854-
    No counsel fee or extra allowance can be granted ■ as part of such costs and expenses.
    Appeal by the village of Athens from an order made at a Special Term, granting an injunction restraining the defendants from running a ferry from the village of Athens to the city of Hudson, and also an appeal by the other defendants, the trustees: of the said village, from an order punishing them for contempt in disobeying the same. The latter order after adjudging the defendants to be in contempt, provided, among other things, as follows: And it is further ordered that a fine of twenty-five dollars bo and. the same hereby is imposed upon each of the said defendants, the-Village of Athens, Lewis Wolfe, Harmon F. Dernell, Nathaniel W. Howland, and Israel R. Porter, for the misconduct of such defendants, respectively.
    And it is further ordered that the said defendants, the Village of Athens, Lewis Wolfe, Harmon F. Dernell, Nathaniel W. Howland, and Israel R. Porter, pay to said plaintiff, or to New-kirk & Chace, his said attorneys, the plaintiff’s costs and expenses, of these proceedings, amounting to the sum of $100, and also the further sum of seventy-five dollars for damages, which the parties-agree the plaintiff has sustained by reason of the violation of the injunction ordered by the defendants.
    And it is further ordered that the said defendants, Lewis Wolfe, Harmon F. Dernell, Nathaniel W. Howland, and Israel R. Porter, be and each of them is hereby directed to stand committed to the common jail of the county of Greene, there to remain charged upon said contempt until the said fine, so imposed upon him as. aforesaid, together with the said costs and expenses and the-damages of the plaintiff, shall be fully paid, unless he shall be sooner discharged by the court, and that a warrant issue to carry this order into effect.
    And it is further ordered that the defendants, the Village of Athens, pay the said fine so imposed upon it as aforesaid to New-kirk & Chaco, the attorneys for the plaintiff, within ten days after service upon John Sanderson, Esq., defendant’s attorney, of'a copy of this order, and, if not so paid, that the plaintiff be at liberty to apply to this court for further order, process or proceedings to enforce the same.

      Samuel Hand and John Sanderson, for the appellants.

      Newkirk & Chace, for the respondent.
   Learned, P. J.:

Two appeals are before us ; the one from the order granting an injunction pendente lite; the other from the order' punishing a contempt.

1st. In regard to the order granting an injunction. We have had occasion to remark more than once that an injunction pendente lite should not be granted, unless the court could clearly see it was needed to prevent irreparable injury — that is, injury which could not be compensated in damages ; or that the injunction itself could do no serious- harm to the party enjoined. The merits of the case should be heard at a regular trial. And if the plaintiff be there successful, and a permanent injunction is needed to protect him, he should have it. But, generally, the merits of the case should not, if possible, be disposed of on an application for an injunction pendente lite.

In the present case the plaintiff, as lessee from the city of Hudson, claims the exclusive right to run a ferry between Hudson and Athens. The defendants deny the exclusive right, and claim the right, under Legislative grant, also to run a ferry between the two places. The question is important, and involves the construction of several statutes, which, at first, appear to be somewhat conflicting. And both of the parties to the controversy seem to be acting in good faith on their respective claims. There have been at times some arrangements between the parties, in respect to the controversy, which have, however, terminated. And, on the 19th of May, 1879, the defendants began to run a steam ferry between the two places, and have continued to do so.

The plaintiff’s complaint avers that thereby the defendants have diverted business travel, and that the plaintiff has suffered great loss and damage; but no special details or particulars of such loss are shown. No affidavit, on the part of the plaintiff, is served, showing any loss, except the ordinary verification of the complaint.

The defendants, in their affidavit, say that no material or irreparable injury is being done to the plaintiff by the defendants, in running said ferry ; and that the defendants are abundantly responsible for any probable sum which the plaintiff can recover against them, and that they have incurred great expense in putting the boat on the ferry. The village of Athens, and its president and trustees individually, are the defendants.

There are no facts given, on either side, showing the amount of travel over the said ferries, or either of them. There is no suggestion that the public is injured by the existence of two ferries.

Supposing then that the plaintiff is right in his claim, the only damage which he will suffer during the pendency of this action is the loss of some money by the diversion of travel to the defendant’s boat. This damage is not irreparable. It may be recovered from the defendant. Nor is it a loss which camiot be computed. The amount of travel will be susceptible of proof. It will be easy to prove the amount which the defendants shall have received for ferriage during the action.

On the other hand, the damage done to the defendants by the injunction, if, upon a trial, the case should be decided in their favor, is much more difficult to be ascertained. How many persons would have traveled on the defendant’s boat, if it had run, would be conjectural. And the damage to them, if they should be prevented from running their boat, it would be difficult to ascertain.

This, then, is decidedly a case in which no injunction should be granted pendente lite. The parties should proceed to the trial, and there it should be decided which has the better claim, and then, if necessary, an injunction may be granted.

. Perhaps it may be urged that all the facts are matters of record and can come before the court now, as well as on a trial. That may be so. Still, we are of opinion that we ought to do nothing to encourage the practice, far too common, of applying for an injunction pendente lite, merely because the plaintiff may be entitled to a final injunction. Such a course has the disadvantage of making the plaintiff successful, before he has tried his case, and of making it the interest of the plaintiff to postpone the trial. We think it best, therefore, to avoid expressing any opinion upon the merits of this case, and simply to say that we do not see that the facts showed any necessity for an injunction pending the action.

Second. As to the order punishing for contempt.

The injunction order was entered July seventh, and was served on the several defendants, at between half past four and six p. m. of that day. The boat of the defendants made trips after half past four until seven p. m., and the next day. The individual defendants say that, after the service of the injunction, they gave no orders for the boat to run; that a majority of the trustees met as a board that evening and directed that the boat should discontinuo running, until an appeal should be perfected. The appeal from the order was served the seventh of July, at twenty minutes past seven, p. m. On the eighth of July the court granted an order to show cause on tho tenth why the defendants should not be punished. The order was served at Athens, about noon on the ninth, and was returnable at Kingston, on Thursday, the tenth, at fen a. m., and on the tenth an order punishing the defendants was made.

In this practice the plaintiff’s attorneys have not followed the rules of the court. Rule 21 requires non-enumerated motions to be noticed for the first day of term, unless sufficient cause be shown (and contained in the affidavits served), for not giving notice for the first day. No cause, whatever, is shown in the affidavits for not giving notice for the first day of term. By tho appointments of the judges there was a term at Troy on the seventh of July, and there was to be a term at Kingston, the twelfth. But the tenth was not the first day of any term. Nor does it make this irregularity any the less, that there was an order to show cause. Such an order is but a means of shortening the ordinary timo required for a notice of motion. It does not affect the requirement of this rule. And tho rulo is important. Attorneys should not bo liable to be called off to attend a motion at any time, which the opposing party may choose. There are five Special Terms for non-enumerated motions, within this district, in every month, except August, unless the judges are, by business, prevented from holding them. It can seldom be necessary to notice .a motion for any day other than one of those on which a Special Term is to be held. And the propriety of observing this rule is still more apparent, when not only attorneys, but parties, personally, are required to appear.

Nor are we able to find in the affidavits any grounds stated why .a less time than eight days should have been authorized for the service. (New Code, § 780.) If we turn to the provisions of the Revised Statutes we find that the accused party is to show cause “ at some reasonable time.” (2 R. S. [m. p.], 536, § 5.) Undoubtedly, this time is generally within the discretion of the court to which the application is made. But this discretion is not always free from review by the appellate court. And when a village corporation and its trustees, personally, are required to answer for alleged contempt, we do not think it gives a reasonable time to serve them at noon on one day at Athens, and to require their appearance the next at ten a. m. at Kingston.

There are, however, other important questions to be considered. We think that the appeal did not authorize the defendants to disobey the injunction. (Sixth Avenue R. R. v. Gilbert Elevated R. R., 71 N. Y., 430.) The language of section 1310 (New Code) is not to be so construed. And it is reasonable to say that the action of the trustees at their meeting on the 7th of July, when they resolved to discontinue running the boat until the president was informed that the appeal was perfected, coupled with the fact that the boat did run on the eighth, is evidence of a violation of the injunction, on the part of those who thus acted. But all the individual defendants say that they gave no orders for the boat to run ; and Mr. Porter is not shown to have been present at the meeting. We cannot see, then, that Mr. Porter, in any way, violated the injunction.

As to the others, they acted under advice of counsel, which should protect them from any fine ; except so much as is necessary to compensate the plaintiffs for actual loss. (Erie Co. v. Ramsey, 45 N. Y., 654.) The present is especially a case where nothing in the way of punishment, as distinct from compensation, should be imposed. For botfy parties are plainly acting in good faith. And, on the question of the effect of the appeal, counsel might well have had an opinion contrary to that above expressed.

It appears by the order that the parties agreed on seventy-five dollars as the sum which the plaintiff had sustained by reason of the violation of the injunction order. The only amount, therefore, which could be imposed was a fine of seventy-five dollars,, and sufficient to satisfy the plaintiffs costs and expenses. (2 R. S [m. p.], 538, § 21.) The costs and expenses are regulated by Session Laws 1854, chapter 270, section 3, and are to be at the rate allowed for similar services in civil actions. We know of no authority to grant anything by way of extra allowance, or of counsel fee. (Sudlow v. Knox, 7 Abb. [N. S.], 411.)

There is no bill of costs or of items of expenses produced. The only taxable costs which we can discover would be the ten dollars costs of motion. The expense of serving papers is not proved. Possibly, also, there might be ten dollars costs of the order of July eighth.

We have some doubt whether we ought not to reverse the order altogether for the irregularities and the short time of notice-above stated. But, on the whole, as the parties stipulated the amount of damage, we think that we can do justice better by a modification. ,

The order punishing for violation of injunction must be reversed as to Porter. The fines of twenty-five dollars on each defendant must be stricken out; the costs and expenses must be reduced to twenty dollars. So that there will be imppsed in all, on the village and on Wolfe, Dernell and Howland, a fine of seventy-five dollars for damages actually agreed upon, and twenty dollars costs. No costs of this appeal to either party, Porter having-appealed jointly with the other defendants.

• The order granting injunction is reversed, with ten dollars costs, and printing disbursements.

Present — Learned, P. J., Bocees and Boardman, JJ.

Ordered accordingly.


text:
    PETER MASTEN AND WILLIAM M. HAYES, Plaintiffs, v. WILLIAM B. WEBB, Sheriff of Ulster County, Defendant.

      JStatute rendering a sale of chattels, unaccompanied try a change of possession, fraud/ulmt as to creditors, is applicable to judicial sales — 2 M. 8., 136, § 5.
    Section 5 of 2 R. S., 136, providing that every sale made by a vendor of chattels in his possession, unless accompanied by an immediate delivery, or followed by an actual and continued change of possession, shall be presumed to be fraudulent and void, as against creditors, is applicable to a sale under an execution issued on a judgment.
    Motion for a new trial, on exceptions ordered to be heard, in the first instance at the General Term, after a verdict in favor of the plaintiffs.
    The action was in replevin, to recover certain articles of personal property levied en by the defendant under an execution against one Townsend.

      J. Newton Fiero, for the plaintiffs.

      F. L. Westbrooh and George Van Ftten, for the defendant.
   Learned, P. J.:

The defendant levied on the personal property in question, by virtue of an execution against Townsend, on the 13th of April, 1878. The plaintiffs claim title to the property, by virtue of a judgment and execution against the same Townsend. Under this execution they claim to have caused a levy to be made on the 12th of January, 1877, and to have purchased the property at a sale, thereunder, on the twenty-third of the same month. It .appeared, or at least there was some evidence, that Townsend remained in the possession of the property, from the time of the levy and sale in January, 1877, to the levy by the defendant in April, 1878.

The court, after stating that there was a statute that every sale •of property, unless accompanied by an actual change of possession, etc., should bo presumed fraudulent, added that the property was sold at a judicial sale, and that this section of the statute did not apply. To this the defendant excepted. And the defendant also requested the court to charge that the statute, as to a presumption of fraud, did apply, and the court declined and the defendant excepted.

The statute in question is 2 R. S. (m. p.), 136, § 5. It is true, as said in Fonda v. Gross (15 Wend., 628), that the literal language of the statute would not apply. For it speaks of a sale made by a vendor, and declares it, under certain circumstances, to be fraudulent as against the creditors of the vendor. And it may be that, in a sale under execution, the debtor is not literally the vendor. But there is no reason why the statute should not apply to such a sale ; and so, the court practically held in the case just cited.

It was formerly held that every sale of goods was void, unless a change of possession followed. Twenty-four exceptions were gradually made. (Bissell v. Hopkins, 3 Cow., 190, n.) Finally the rule came to be, as stated in the Eevised Statutes, that possession by the vendor was prima fade evidence of fraud; conclusive, unless the purchase was shown to be in good faith, etc. The purchaser is only required- to prove good faith; not necessarily to give an excuse for the absence- of change of possession. (Mitchell v. West, 55 N. Y., 107.)

But there must be a presumption of fraud when the purchaser at an execution sale leaves the property in possession of the debtor. And that presumption must throw upon the purchaser the burden of proving that his purchase was in good faith, and without intent to defraud.

We think, therefore, that the defendant was entitled to more than the charge that “the fact that the possession of this property did not change is a proper matter to consider,” etc. Fraud can be practiced as well by means of a judgment and sale under execution as by a direct sale from the debtor. And, in either case, where there is no “immediate delivery” and “actual and continued change of possession,” the presumption is, that the transaction is fraudulent as against creditors. The principle, if not the literal language, of the statute applies. The verdict must be set aside and a new trial granted, costs to abide the event.

Present — Learned, P. J., Bocees and Boardman, JJ.

Verdict set aside, new trial granted, costs to abide event.


author: Learned, P. J.: Boardman, J.:

text:
    THOMAS LANDERS, Respondent, v. THE WATERTOWN FIRE INSURANCE COMPANY, Appellant.

      PdlAmj of insurance — application made by agent — when insured not bound by — condition against further inswrance — when an old policy invalidated by taking a new one.

    A'policy of insurance, issued by the defendant to the plaintiff, referred to “an application or survey, bearing even date herewith, and which is hereby referred to as forming part of tho policy.” The agent of the company had, without authority from, or the knowledge of, the plaintiff, forwarded to the company what purported to be an application, in which the risk was erroneously described, the company knowing that the plaintiff’s name thereto was in the handwriting of their agent.

      Eeld, that such application formed no part of the policy, and that the plaintiff was not bound thereby.
    'The policy issued by the defendant provided that if the insured should have any other insurance on the premises, not indorsed thereon or consented to by it, the policy should be void. At the time of the issuing of the policy the same premises were insured under a policy issued by another company, which provided that “if the insured shall hereafter make any other insurance on the property * * ,* without the consent of the company written hereon * * * then this policy shall be void,”

      Eeld, that upon the issuing of the policy by the defendant, the first policy hecame void, but that the defendant’s policy was valid. (Learned, P. J., dissenting.)

      .Semble, that where by the provisions of an insurance policy it is made void by tho existence of other insurance on the premises, unless it be noted on the policy, the deliver’y of such policy by the agent of the company, he having at the time knowledge of such other insurance, constitutes a waiver of the right on the part of the company to take advantage of such provision.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the .action was tiled.

      This is an action on a policy of fire insurance upon the plaintiff’s two story frame dwelling-house.” The policy refera to an application. But no application was ever signed by the plaintiff. One Cannon, however, an agent, having possession of the “ expiration book ” of the Glen’s Falls Company, which he had received from :a former agent, went to the plaintiff’s house and made inquiries .as to a house on which a policy was about to expire. From the .memoranda thus obtained, he made out and sent to the defendants :an application in August, 1873. Cannon was commissioned as agent for the defendants in 1869, and so continued until 1874. 'This application described the risk to be insured as a'two story wood building, 16x24 with wing 16x24, and showed it on the diagram as sixty feet from the dwelling-house of plaintiff. In fact, the house which answered in size and position with the diagram was a story and a-half tenant-house, so called. The plaintiff’ in addition to this tenant-house, and in addition to the house where he lived, had a two story frame dwelling near his mill, which was burned, and which plaintiff claims to have been the house insured.
    The plaintiff know nothing of this application, and the company knew that the plaintiff’s name thereto was in the handwriting of them agent.
    At the time of the issuing of the defendant’s policy the plaintiff had an insurance on the premises represented by a policy in the Glen’s Falls Insurance Company, both policies contained the usual clause that if the insured should have any other insurance on the premises, not indorsed thereon or consented to by the company, the policy should be void.
    The court, on the trial, refused to nonsuit or to direct a verdict for the defendant; and left it to the jury to determine whether it was the two story mill-house, or the story and a-half tenant-house which was, in fact, insured. The jury found for the plaintiff’ and the defendant appeals.
    The court charged that, if Cannon was the agent of the plaintiff, the plaintiff could not recover ; but declined to charge that Cannon was such agent, and the defendant excepted.

      Bradley Winslow, for the appellant.

      Benrie & Wales, for the respondent.
   Learned, P. J.:

We think it is plain that the paper called an application was not, in any respect, the plaintiff's act. It was not signed by him, nor authorized by him. So the jury must have found; and, indeed, they could not find otherwise. (Sprague v. Holland Purchase Ins. Co., 69 N. Y., 128; Vilas v. N. Y. Central Ins. Co. 72 id,, 590.)

And, therefore, we do not see that this application constituted any part of the contract. It is true that the formal part of the policy refers to “ an application or survey bearing even date herewith, .and which is hereby referred to as forming a part of the-policy.”

But the policy would be valid if there were no such application. (Clinton v. Hope Insurance Co., 45 N. Y., 463.) And this reference must, in the nature of the case, apply only to some paper-signed or authorized by the insured.

It would be unjust to say that the company might make out and file away in their office something called an application, and hold the insurer bound by it, although he had never signed or authorized it.

The insured had, therefore, a right to look upon the policy as-the contract. So far as that goes the only description of the property is, that it was “ his two story frame dwelling-house, Afton, N. Y.” This description would apply either to the building which was burned, the so called mill-house, or to the house where the plaintiff lived. It would not apply to the (so called) tenant-house.

In fact, however, on the trial, the defendant was allowed to give evidence tending to show that it was the so called tenant-house which was insured; and the plaintiff also gave evidence tending to show that it was the so called mill-house. And the question was submitted to the jury to determine from the evidence which house was insured. We think, therefore, that the judge was right of refusing to nonsuit. And the jury have found for the plaintiff.

The judge also submitted to the jury the question, whether Cannon was the plaintiff’s agent, and the jury must have found that he was not.

The defendants insist further that the court erred in deciding that the previous policy in the Glen’s Falls Insurance Company had become void, and, therefore, that there was no double insurance. The policy in question contains the usual clause that if the insured should have any other insurance on the premises, not indorsed thereon, or consented to by the company, the policy should be void. And it was issued August 1, 1873. About May 1, 1871, the plaintiff had procured a policy on the mill-house from the Glen’s Falls Company to run for three years. In 1872, he put an engine and boiler in the mill-house, and subsequently made an addition to the mill, bringing it sqme thirteen feet nearer the house. The house had also remained vacant for several months. All of these matters were without the consent of the Glen’s Falls Company. The policy in the Glen’s’Falls Company contained the usual provision that, if the premises should become vacant, or the risk be increased by the erection of neighboring buildings, or by any means whatever, the policy should be void. We may then assume, for the present, that these acts of the plaintiff had rendered that policy void. The question then is, whether the plaintiff was bound to give notice of it to the defendants.

In Bigler v. N. Y. C. Ins. Co. (22 N. Y., 402), this question is examined. In that case it was claimed that where a condition in a policy required notice of subsequent insurance, the policy was avoided by failure to give notice of a subsequent policy, although such subsequent policy was void; its invalidity, however, not appearing on its face. That case follows Carpenter v. Providence W. I. Co. (16 Pet., 495), in which the court intimate very, strongly that the stipulations in a policy, “as to notice of any prior and subsequent policies, were designed to apply to all cases of policies then existing in point of fact, without any inquiry as to their original validity and effect, or whether they might be void or voidable.”

The Court of Appeals, in the case cited, reviews some cases in Massachusetts and other States which hold a different doctrine.

In that case, the insurance claimed to operate as an avoidance, was a subsequent insurance. In the present, it is a prior insurance. But that circumstance can make no difference. The fact, however, did exist in that case that the insured had brought an action against the subsequent insurer, and the liability of that company had been acknowledged. So that the subsequent policy had been treated as valid. That circumstance does not exist in this case; but it is evident that the plaintiff considered the policy in force and valid.

In the case in 16 Peters, the ground on which the other insurance was claimed to be void was, that it was obtained by misrepresentation. If this were so, then it was void ab initio, and was not merely rendered void by a subsequent act of the insured.

But we see no reason to distinguish the present case from the case in the 16th of Peters, which was approved, as above, by the Court of Appeals.

The plaintiff, when he received his policy from the defendants, had a policy, not expired, in the Glen’s Falls Company. If, by his acts, he had furnished that company with a good defence, it was not certain that they would avail themselves thereof. If the plaintiff had surrendered up his policy to the Glen’s Falls Company, the case would be different. But nothing of this kind appears. In fact, the plaintiff testified that, when Cannon first came to him to see about insuring, Cannon told him that his policy on the mill-house was about expired; and he said he believed the policy was in the Glen’s Falls, and he thought the company a good one, and thought it would be as well to put it there again. Evidently, therefore, the plaintiff did not suppose that his policy in the Glen’s Falls had become void. There was a mistake as to its having nearly expired. But there was no thought that it was not in force.

This condition, that other insurance not consented to, shall make a policy void, must have a reasonable construction. The company has a light to know of the existence of other policies, if any are in existence. A company may well be unwilling to insure where other policies exist, on the . same property, to. an amount, perhaps, in excess of the value. And the company, when sued, is not to be required to try the defences which might be set up in the other policies.

For these reasons, I think, the judgment should be reversed and a new trial granted, costs to abide event; but a majority of the court clo not agree with the latter part of this opinion, and the judgment is, therefore, affirmed, with costs.

Boardman, J.:

I must dissent from the view of brother Learned as to the effect of the old policy in Glen’s Falls company. By the terms of that policy ( §§ 75, 78), “if the insured shall hereafter make any other insurance on the property * * * without the consent of the company written hereon * * * then this policy shall be void.”

When the policy in defendant’s company was taken out, the Glen’s Falls policy became void, but defendant’s policy was valid. (Mussey v. Allas Ins. Co., 14 N. Y., 79.)

I am not clear that the principle established in Rowley v. Empire Insurance Company (4 Abb. Ct. of App. Dec., 131), does not also apply. The agent, Cannon, had full knowledge of the former insurance, and he was the duly authorized agent of the defendant to consent to it. Why should a company take advantage of a fact, known to its agent, to avoid its liability. The knowledge of the agent is its knowledge, and the consent of the agent to take the new policy, with such knowledge, ought, in fairness, to bind the company, the more so since the taking of the new policy is a legal abandonment of any claim under the old.

I think the judgment should be affirmed, with costs.

Present — Learned, P. J., Bocees and Boardman, JJ.

Judgment and order affirmed, with costs.