author: Peckham, J.

text:
    George G. Williams et al., as Executors, etc., Resp’ts, v. Katharine Van Wyck Haddock, an Infant, Impleaded, etc., App’lt.

      (Court of Appeals,

      Filed February 26, 1895.)

    1. Vendors and purchasers—Rights.
    The general rule in regard to contracts for the sale of land is that the owner of the real estate, from the time of the execution of a valid contract for such sale, is to be treated as the owner of the purchase money, and the purchaser of the land is to be treated as the equitable owner thereof.

      2. Same.
    A provision in the contract that the vendee should also agree thereafter with the vendor for the purchase of the materials and fixtures, etc., upon the premises, with liberty to the vendor to refuse to consummate the sale of the real estate, if the latter contract was not performed, does not alter such rule.
    3. Same.
    After a default in the performance of these conditions precedent, the rule, it seems, may not apply.
    4. Same.
    But prior to a default on the part of the vendee, even where by the terms of the contract time is of the essence thereof, there is an equitable conversion within this rule, though subject to be reconverted upon the happening of the default.
    5. Same.
    In such case, the executors of the vendor, acting in good faith, have the right, prior to default, to extend the time of performance, and, in the absence of a default, the next of kin take the avails as personal property to the exclusion of those who were only heirs at law.
    Appeal from judgment of the general term of the supreme court in the first judicial department, entered upon an order, which affirmed a judgment in favor of plaintiffs entered upon a decision of the court on trial at special term.
    This action was brought by the plaintiffs, who are executors of the will of Catharine M. McCoskry, deceased, against the defendants, some of whom were heirs at law and others next of kin of the testatrix, for the purpose of obtaining judgment directing the conveyance by the defendants, who are the heirs at law and next of kin of such testatrix, of certain real estate owned by her in her lifetime, to the Langdon and Granger Brewing Company, Limited, and also for the purpose of determining what, if any, substantial or beneficial interest the infant defendant had or has in the proceeds of the sale of the premises, and what are the respective rights and interest of the other defendants in the premises and in the proceeds of the sale thereof; also to obtain a construction and interpretation of the provisions of the will,of the testatrix in so far as they bear upon the questions involved in the action. It appears that on the 18th day of March, 1886, Catharine M. McCoskry of the city of New York was the owner of premises known as Bead’s Ale Brewery in the city of New York, between 13th and 14th streets. On that day she entered into a contract for the sale of that real estate to Thomas B. Langdon and Septimus W. Granger for the sum of $125,000, of which the sum of $12,500 was paid at the signing of the contract, $37,500 were to be paid on or before March 18, 1887, and the balance by the giving of a purchase-money mortgage at that date on the premises by the purchasers. The vendor agreed that upon receiving these payments and upon the execution and delivery of the mortgage, with the usual bond accompanying the same, and the payment of interest as provided in the agreement on or before March 18, 1887, she would then execute and give a good and sufficient deed of the premises; these payments were to be made and the bond and mortgage and deed were to be delivered at the Chemical National Bank in the city of New York at 12 o’clock noon of that day. It was also agreed that at the same time and place the vendees should purchase the materials, fixtures, etc., in and about the brewery business and premises at a price and on conditions to be agreed to in writing between them; otherwise the vendor should be at liberty to refuse to consummate the sale of the real estate under this contract. The vendees were to have the right and privilege of occupying the premises as tenants of the vendor for one year from the l'8th of March, 1886, or until the closing or consummation of the sale, if sooner completed. The payment of interest, taxes and insurance provided for in the contract was to be accepted in lieu of any further rent for that year. The'contract then contained the following provision :
    “It is further understood that in case of the failure of the parties of the second part on or before the eighteenth day of March, one thousand eight hundred and eighty-seven, to pay said sum of thirty-seven thousand five hundred dollars and said interest and taxes, and to deliver said bond and mortgage as herein .provided, and otherwise to perform, said contract on their part, all interest in the said premises and all right and claim to a conveyance thereof shall ipso facto cease and determine absolutely, and the premises shall be delivered over to the party of the first part.
    “ And it is understood that the stipulations are to apply to and bind the heirs, executors, administrators and assigns of the respective parties.
    “In witness whereof, the parties to these presents have hereunto set their hands and seals the day and year first above written.”.
    (Signed by the parties.)
    On the 27th of March, 1886, the parties to the above agreement also agreed, in writing, upon the terms for the purchase" of the materials and fixtures mentioned in the first contract. Subsequently, and on April 22, 1886, Mrs. McCoskry died, leaving a last will and testament which was duly admitted to probate as a will of real and personal property by the surrogate of the county of New York, and the plaintiffs, the executors named in the will, duly qualified and entered upon the discharge of their duties as such executors. Some little time prior to March 18, 1887, the vendees in this contract and the plaintiffs herein had negotiations in regard to the extension of the time for the payment of the balance of the purchase money and the giving of the purchase-money mortgage, and for the. payment for the fixtures and materials of the brewery as agreed to March 27, 1886, between the parties to the agreement for the sale and purchase of the real estate. The result of such negotiations had been an understanding between the plaintiffs and the vendees in the real estate contract for an extension of the time for closing the contract, from the 18th of March to the 1st of June, 1887, on which last-named day the money payments were made on account for the real estate and in full for the materials, and the executors gave a deed of the premises to the vendees who gave the purchase-money mortgage for $75,000, as agreed upon. The defendant, Katharine Yan Wyck Haddock, is an infant and is the daughter of a deceased nephew of the testatrix, Catharine M. McCoskry who died without ever having had any children. The infant defendant, by her guardian, claims to share in the proceeds arising from the sale of the real estate on the ground that such proceeds represent and are to be s deemed real estate, and that she is entitled to her share as one of the heirs at law of Mrs. McCoskry. The next of kin claim that by the contract for the sale of the premises, entered into by Mrs. McCoskry in her lifetime, the character of the real estate, became, in equity, changed into personal property, and should be distributed to the next of kin, and as the infant defendant is not one of such next of kin, but only one of the heirs at law, she is not entitled to any portion of the proceeds of such sale. The courts below have decided in favor of the next of kin to the exclusion of the infant, as one of the heirs at law, and have held that the executors had the right, under the provisions of the will of the testatrix, to execute the deed, and that a good title was thereby conveyed to the purchasers. The infant' defendant only has appealed to this court, and the sole question now'is whether the courts bepw were right in excluding the infant heir at law from any por-, tian of these proceeds.

      J. Edward Swanstrom, for app’lt; Charles A. Jackson, for resp’ts ; Manley A. Raymond, for executors, resp’ts.

      Affirming 60 St. Rep. 422.

   Peckham, J.

The question in this case arises upon the true interpretation of the contract for the sale of the brewery entered into on the 18th of March, 1886. The general rule in regard to contracts for the sale of land is that the owner of the real estate from the time of the execution of a valid_ contract for such sale is to be treated as the owner of the purchase money, and the purchaser-of the land is treated as the equitable owner thereof. The-vendor is deemed in equity to stand .seized in the land for the benefit of the purchaser, and the latter, even before the convey-, anee to him, can devise the same and it descends to his heir and the land which was agreed to be sold has been turned into money belonging to the vendor. Courts of equity regard that as done which ought to be done; they look at the substance of things and not at the mere form of agreements, to which they give the precise effect which the parties intended. It is presumed that the vendor in agreeing to sell his land intends that his property shall assume the character of the property into which it is to be con-, verted, and it cannot be denied that it is competent for the owner of land thus to make such land into money at his sole will and pleasure. If the vendor die prior to the completion of the bargain provided there have been no default, the heir of the vendor may'be compelled to convey and the proceeds of the land will go to the executors as personal property. Story’s Eq. Jur. §§ 790, 791, 1212; Sug. on Vend. [8th Am. ed.] pp, 270, 273, ch. 5; Baden v. Pembroke, 2 Vern. Ch. 213 ; Fletcher. v. Ashburner, 1 Brown’s Ch. 497; Eaton v. Sanxter, 6 Simons, 517; Farrar v. Earl of Winterton, 5 Beav. 1; Livingston v. Newkirk, 3 Jo. Ch. 312; Champion v. Brown, 6 id. 398 ; Craig v. Leslie, 3 Wheat. 563.

The learned counsel for the infant defendant does not deny the existence of the general rule above stated, but he says this equitable conversion is not invariable and that it cannot apply when the intention of the parties is clearly adverse to such a result. Citing the case of Bostwick v. Frankfield, 74 N. Y. 215. It may be assumed that the rule does not obtain under circumstances which show clearly that the parties never intended that it should, but in this case we think no such exception to the rule can properly be deduced from the contract itself. The argument of the learned counsel proceeds further, and he claims that if the performance of the conditions which the vendees were to perform were by the clear terms of the contract a condition precedent to any conveyance of the real estate by the vendor, that then the rule does not obtain and no estate, legal or equitable, vests in the vendees until the actual performance on their part of such conditions. He says further that the stipulation making time of the essence of the contract is considered by the courts as a condition precedent, and that this contract does make time of its very essence by virtue of the clause to that effect set forth in the foregoing statement of facts. The counsel also maintains that the vendees did not perform their contract on the due day, March, 18, 1887, but made default, and the executors had no power to excuse it, hence there was no performance of a condition precedent and the estate never vested_ in the purchasers until the deed to them, at which time there had been no conversion, and the proceeds have, therefore, come to the executors in the form of real estate which descends to the heir.

It may be said that in most contracts for the sale of real estate, the performance of some act on the part of the vendee is to precede the conveyance by the vendor, and hence such performance might be a condition precedent to such conveyance. These contracts generally provide for the payment of the purchase money, or some portion thereof, and the giving of a mortgage or some security for the portion which is not to be paid in cash, and that upon the payment of the money and the execution of the security the vendor is then to make the conveyance. But we think provisions of that nature found in contracts for the sale of real estate do not, prior to any default, alter this general rule in regard to the equitable conversion of the real into personalty so far as to prevent the ordinary results flowing from such conversion. After the happening of a default in the performance of conditions precedent, a very different case is made. We think there was an equitable conversion at the time of the execution of this contract, and that there has never been any default. The cases cited by the counsel are those generally which have arisen after a default has occurred on the part of the vendees in fulfilling their contract at the time mentioned in the agreement, where time has been made of the essetice of the contract. In those cases the right of the vendee, upon tender of performance after the due day, to have a deed of the premises executed and delivered to him has been denied by the courts on the ground that the parties had by their agreement made the performance of a certain act a condition precedent to the right to enforce specific performance of the contract. Where there was a default and a failure to perform such act within the time agreed upon (time being of the essence of the contract), it has been held that courts ..have no power to make any other or different contract for the parties, and that they would do so by enforcing specific performance where such default existed. It is stated that such a case is not within the principle which allows courts of equity to relieve against failures or forfeitures, such as would arise where time had not been made of the essence of the contract, and the party, within a reasonable time after the day designated for its performance, had tendered performance with compensation for delay, in which case the court would relieve upon providing for such compensation.

Counsel for defendant cites the case of Harvey v. Aston, decided in the Court of Chancery in 1737 (1 Atkyns, 361) as an illustration of his contention that no estate vests in the case of a condition precedent until the performance of the condition. The case is not an apt illustration of the principle involved here. There was a default and the case was one of a settlement under a trust' term for the benefit of the daughters of the testator to pay to each of them the sum of £2,000, if she should marry with the consent of her mother, if living, and a widow; if not then with the consent of the trustees or the survivor of them, his executor, administrator or assigns. The plaintiff Harvey, married one of the-daughters without this consent and claimed the payment of the legacy. The court (Hardwicke, Lord Chancellor) held that the plaintiff was not entitled to the portion because of the non-fulfillment of the condition precedent and its violation by the daughter marrying without the requisite consent. In the report a long argument is given of counsel on either side upon the question of the validity of such a condition as being in restraint of marriage, but the court held that it was a valid condition and must be performed before the party was entitled to receive the money. As it had been violated the • court could not relieve against the nonperformance of the condition.

In Attorney-General v. Day, 1 Ves. Sr. 218 at 220, cited by counsel, the following language was used by the Lord Chancellor (Hardwicke) in his opinion:

“There is no case where the representative of the personal estate is entitled to claim the money arising by sale of the lands; as personal estate, except where one or other of the contracting parties in the purchase is entitled to carry it into execution in a. court of equity; for, where the court holds it ought not to be executed, there is no conversion of real into personal, in consideration of the court, upon which that right of the executor depends ; for,, if not effectually converted into money, it must be considered, according to its original nature, as real, and the heir at law must have the benefit Whether there is any such conversion depends-upon there being an effectual agreement binding upon all the parties so as under all circumstances it ought to be carried into execution upon this general principle of equity; that what is contracted for valuable consideration to be done will, by the court-, be considered as done ; all the consequences arising as if it had been so, and as if a conveyance had been made of the land at the time-to the vendee. But if the circumstances are such that it cannot now or ought not to be carried into execution, though once it-might, these consequences cannot follow, for the court must consider it as land and the money as the parties’ own who was to be-the purchaser. ”

This language was used, in 1748, in a case where though specific performance might once have been decreed against original parties holding as -tenants in common, yet an alteration in the circumstances had taken place before suit brought which prevented a decree as to one moiety, and the court would not direct a performance as to the other, the contract being entire and the execution of half of it inadequate to the prime subject. In such a case as the court was then speaking of it regarded the alteration of parties and circumstances as furnishing good cause for refusing specific performance, and as the parties refused to perform, it is clear that the land remained with the original owner and the purchase money in the pockets of the would-be purchasers. In its results it was like the case of a default in the performance of a. condition precedent. It was not a case for the continuation of the doctrine of equitable conversion, and from the time when the court would refuse to enforce the contract the conversion would cease and the land would regain its original character in the hands of its owner.

The case of Scott v. Tyler, 2 Brown Chy. 431, is another case of a condition annexed to a legacy. It was argued at very great length by counsel and decided by Lord Ch. Thurlow, in 1788, in the same way as Harvey v. Aston (supra).

The case of Wells v. Smith, 2 Edw. Ch. 78, is the case of a contract to sell lands where time was of the essence thereof, and the vendee failed to perform the condition at the time mentioned in the contract. In other words, he had defaulted, and the court, held by reason of such default, under the terms of the contract which the parties had entered into, it had no power to decree the-performance upon tender or payment of the purchase money. But that case is not inconsistent with the principle contended for herein, that even in a contract where time is of the essence there is upon its execution and prior to a default on the part of the vendee an equitable conversion'of the land within the rule contended ior. When default is made this equitable conversion falls with the contract and the vendor is re-vested with his original right unimpaired. The vice-chancellor (McCoun) said, in Wells v. Smith, that that was a case of a condition precedent where no estate vested in law until the condition was performed. As the legal title did- not pass the vice-chancellor said he was not at liberty to suppose the parties intended it should have passed or that any effect was to be given to the contract beyond the plain import of its terms or inconsistent with the rules of law. No one, of course, contends that any legal title passes upon the execution of a contract of this kind, but it is claimed that even in a case where time is of the essence of the contract there is an equitable conversion prior to the default, subject to being converted upon the default happening.

The case of Teneick v. Flagg, 29 N. J. Law, 25, is also cited.

Mr. Justice Haines in that case, replying to the contention of .the defendant’s counsel, that by the contract of sale the estate was ■converted into personalty, and hence that the purchase money went to the administrators to be disposed of in due course of administration, said that “ such was undoubtedly the general rule in equity, but that it was not the rule at law. In equity the contract may. be specifically exposed and the land regarded as that ■of the purchaser, and held by the vendor in trust for him, while the consideration money is deemed to belong to the vendor, and held in trust for him by the purchaser, and equity enforces these several notional trusts. But at law it is otherwise. The purchaser is there left to his action for damages for the breach of the ■contract, and must take his relief in money, while the title of the land continues in the vendor or his heirs or assigns. Tlie doctrine ■of equitable conversion is not applicable to estates at law or to courts of law.” And as the action in question was an action at law the court held that that equitable doctrine did not prevail. - That was a case where land was sold and a part of the purchase money paid, and the deed was executed and placed in the hands ■of a third person to be delivered to the grantee, and the balance ■of the purchase money to be paid on the happening of a certain ■event. The grantee died before the event happened, and it was held that the title to the land did not vest in the purchaser, but descended to the heirs of the vendor, subject to the equitable rights of the purchaser.

That is a different case iron: the one at bar.

The provision in this contract, that the vendees should also agree thereafter with the vendor for the purchase of the materials .and fixtures; etc., in the brewery, with liberty to the vendor to •refuse to consummate the sale of the real estate if the other contract were not performed, does not alter the rule above stated. We cannot see in this any intention of the parties that they should not be bound by the general rule in regard to a contract for the sale of land. There is nothing which leads us to suppose that they intended by these provisions to change that rule, but, on the contrary, the whole meaning of the two contracts, taken together, clearly shows, as we think, an intention on the part of the vendor to change that land into money, andón the vendees’ part to change their purchase money into land. If the conditions are not performed then the ordinary rule comes into force, and the equitable ■conversion which existed during the running of the contract «ceases, and the parties return to their original positions.

The base of Bostwick v. Frankfield, 74 N. Y. supra, is one which shows beyond any doubt that the intentions of those parties was that this conversion should not take place. There was a leasehold term outstanding at the time of the execution of the contract of sale, and it appears clearly from the terms used and from the opinion of the court in that case that it was never the intention that that leasehold interest should be merged in the contract for the sale of the land, but that, on the contrary, it should exist as a valid outstanding estate during the time of the running •of the contract for the sale of the land, and until its performance .according to the terms thereof.

Holding then as we do, that in this case the general rule obtains, it follows that at the execution of this contract the equitable ■conversion took place. ‘Such was the condition of affairs at the time ■of the death of Mrs. McCoskry. There had been no default On the contrary, up to her death all the terms of the contract which the vendees were to perform had been by them performed, and the contract to purchase the materials had also been entered into, and upon her death the rule still obtained as to an equitable conversión of this land. Upon the performance, without default, of the terms of the contract the purchase money would come to the executors as personalty to be distributed by them as such and not to descend to the heirs at law. Under the circumstances we hold with the learned general term that the executors acting in good faith, of which there is no question, had the right prior to the default to extend the time for the performance of the conditions by the vendees, and when within the time extended, these conditions were performed the equitable conversion which originally took place remained in being and these moneys should go to the next of kin as personal property, to the exclusion of those who are only heirs at law.

For these reasons the judgment should be affirmed, with costs to the respondents and to the guardian ad liiem for the infant heir at law, to be paid by the executors out of the estate of Mrs. Mc-■Coskry in their hands.

All concur. Judgment accordingly.


source: Caselaw Access Project

author: Gray, J.

license: Public Domain

text:
    Horace G. Young, as Trustee, etc., App’lt, v. Sarah B. Overbaugh, Resp’t.

      (Court of Appeals,

      Filed February 26, 1895.)

    1. Gift—Real estate—Pabol.
    An exception to general rule that a paroi gift of real estate is void exists, where the donee enters into possession of and improves the property, upon the strength of the promise that it would be given to her.
    2. Save—Offset.
    Where there has been a paroi promise to convey, a taking of possession -’Affirming, 57 St. Rep. 310. under such promise and the making of permanent improvements on the property upon the faith thereof, the mere value of the occupation during the time is not to be set-off against the expenditures made.
    Appeal from j udgment of the general term of the supreme Court in the first judicial department, entered upon an order which reversed a judgment in favor of plaintiff entered upon a decision of the court on trial at special term and granted a new trial..

      A. T. Clearwater, for app’lt; J. Newton Fiero, for resp’t.
   Gray, J.

The plaintiff brought ejectment to recover the possession of land and a dwelling thereon, occupied by the defendant and her husband. It was conceded that the legal title was in plaintiff’s testator, at the time of his death; but the defendant claimed that she was the owner of the equitable title to the premises, by reason of promises made by the plaintiff’s testator to her and of acts done by her in reliance upon those promises.

The facts do not seem to be disputed ; but, upon the findings made at the trial term with respect to the facts, the learned judge presiding thereat and the learned justices at the general term have differed in their conclusions. I will state the facts as they were found. In 1872, Thomas Cornell, the plaintiff’s testator, was the owner of the premises in question. He was the half-brother of the defendant and upon his request she and her husband had settled in the city of Kingston. In the year mentioned, Mr. Cornell' asked the defendant’s husband to build a house for the defendant on a certain piece of his property, at the cost of $4,500, and to bring the bills to Mm for payment. The house was built at a cost, which exceeded, by about $1,200, the sum named by Mr. Cornell, and the defendant, subsequently, made valuable permanent improvements upon the property; such as building a barn, planting of fruit trees, putting in a heating apparatus, etc.; of all which Mr. Cornell had knowledge. Other facts found were that, after the defendant had contracted to erect a house upon the property, Mr. Cornell had stated that the house was built for the defendant and was hers; and so spoke of it to different persons at different times. Upon one' occasion, in the year 1876, upon the defendant’s husband informing Mr. Cornell that he had found a business at Yonkers, which he thought it would be a good thing to go into, the latter replied, to the effect, that if they moved away from the property where they then resided the defendant should not have it'and that they would lose it. There was this specific finding: ‘‘That such improvements, as well as the payment of $1,200, were made and expended on the faith of the promises by Cornell, to give the property to Mrs. Overbaugh (this defendant), and all such moneys were expended, and improvements made, for and on behalf of the defendant and at her request, and under her promise to repay her husband thereafter.” There was a finding that the total amount of money expended by the defendant for permanent improvements, repairs, taxes, insurance, etc., and including, also, repairs and expenses, which are incidental to the ordinary care of a house, from the beginning of the erection of the house down to the date of the trial," was the sum of $4,734.26 and that the fair rental value of the property of the defendant during her occupancy, for a period of about twenty years, was $250 per year; amounting in the aggregate to $5,000.

The learned trial justice conceded the existence of the exception to the general rule, that a paroi gift of real estate is void, in a case where the donee enters into possession of and improves the property, upon the strength of the promise that it would be given to her; but he did not think that the present case fell within the exception. He was influenced in that view by a consideration of the nature of the acts done by the defendant, in reliance upon the promise of Mr. Cornell. Regarding the equitable rule to be founded in the idea of preventing an injustice being done to a promisee, if the promisor be permitted to avail himself of the statute, and that the application of the rule is in a case where financial injury will be sustained ; he, in the first place, considered that as the defendant’s acts were only such as an ordinary householder would be expected to make and, in the second place, as the fair rental value of the premises during the twenty years of the defendant’s occupation was worth to her, altogether, a sum which exceeded the aggregate of the sum found to have been expended by her, or at her request, during that time,' that if the defendant was compelled to surrender possession of the premises, she would not, in fact, be a loser as the result of the entire transaction with Mr. Cornell, but the gainer. Hence he concluded that there was absent here that element of injustice to the donee ; which is essential to exist, in order to entitle him to an enforcement of the donor’s promise.

We find ourselves unable to agree with the trial justice in his judgment upon this question and we prefer the view taken at the general term, that where there has been a paroi promise to convey, a taking of possession under such promise and the making of permanent improvements upon the property upon the faith thereof, the mere value of the occupation during the time is not to be set oE against the expenditures made. I think it would not be within the spirit of the rule in equity, that its application should be made to depend, not upon the fact of a consideration for the promise being shown to have existed and to have been performed, but upon the question whether, when specific performance by the donor is claimed, the use has not compensated' the donee and relieved the donor’s obligation. In Freeman v. Freeman, 43 N. Y. 34, which was an action of ejectment and where the defense was a paroi promise to give the land to the defendant, accompanied by an actual delivery and possession by him; Geoveb, J., said: “ The question then is, whether a paroi promise by one owning lands to give the same to another will be enforced in equity, when the promisee has been induced by the promise to go into possession and, with the knowledge of the promisor, make comparatively large expenditures in permanent improvements upon the land. * * * In the case supposed, there has been no part performance of the contract, strictly speaking, except the talcing possession, no part of the purchase money having been paid, and yet the cases are numerous where performance of such contracts has been decreed in equity, where possession has been taken under the contract and large expenditures upon permanent improvements made.” Again he says : “ Expenditures made upon permanent improvements upon land with the knowledge of the owner, induced by his promise, made to the party making the expenditure, to give the land to such party, constitute in equity a consideration for the promise.” It was said by Parker, J., in Lobdell v. Lobdell, 36 N. Y. at page 330 : “ If the promisee, on the faith of the promise, does some act, or enters into some engagement, which the promise justified, and which a breach of the promise would make very injurious to-him, this equity might regard as confirming and establishing the promise, in which the same way as a consideration for it would.”

In such a case as this, to constitute a good consideration in equity, it is, of course, essential that it be substantial; in the sense that the promise shall rest upon a performance by the promisee, which evidences acceptance of and reliance upon the promise and consists in expending moneys in permanent improvements upon the land. In this case it may well have been, as found, that some of the expenditures made by the defendant upon the property were such as a householder would ordinarily make, or were trivial in their nature; but they do not influence the character of the others. We have the fact that the house was contracted for upon the promise of Mr. Oornell; that its cost exceeded the sum, which he agreed to be responsible for, by $1,200, and that there were the other improvements of a permanent character, to which I have adverted as being found. There was, in fact, such a consideration for the promise of Mr. Cornell as to have made it obligatory upon him to pei’form it, in order that the defendant should not be defrauded" and injured. It would be very" inequitable to deprive the agreement of its obligatory character, merely because, during the time of the occupation of the defendant under the paroi promise, the fair rental value of the premises would amount, in the aggregate, to a sum in excess of the amount altogether expended. If there was the promise to give the property, accompanied by the delivery of possession to the defendant and expenditures in permanent improvements made, in reliance upon the promise, injury will be presumed to follow by a failure to perform it. In enforcing such a promise, equity aims at preventing a fraud upon the donee and regards the case as taken out of the operation of the statute by the part performance.

The case supposed by the learned trial justice, of trivial repairs or improvements by a tenant entering into possession of real estate under a promise that it will be given to him, was not the case before him under his own findings.

I think that the defendant fully made out her claim to be the holder of the equitable title-and that she could not be ejectedfrom the premises at the suit of the plaintiff.

The judgment appealed from should be affirmed and judgment e absolute ordered against the appellant upon the stipulation, with costs to the respondent in all the courts.

All concur. Judgment accordingly.


author: Pryor, J.

text:
    Louisa A. Richardson, Pl'ff, v. William Harms, Impleaded, etc., Def’t.

      (New York Common Pleas, Special Term,

      Filed February, 1895.)

    Dower—Defense.
    A sufficiency of land remaining of the husband’s estate to satisfy all claim of dower, is no answer to an action for dower out of the land of the husband’s alienee.

      Wm. O. Campbell, for pl’ff ; Isaac L. Miller, for def’t.
   Pryor, J.

In an action for dower, the complaint alleges a marriage, seizin and death of the husband, his conveyance during; coverture without the plaintiff’s assent, and ownership of the land by the defendant. The prayer for judgment is that the plaintiff recover one-third of defendant’s property as her dower, and one-third of tfie rents and profits thereof since the commencement of. the action.

After denial of material allegations of the complaint, the answer advances as a “ separate and distinct defense” that the conveyance by the husband was with full covenants of. warranty; that he left other real estate “ of sufficient value to pay and provide for any claim or right of dower which plaintiff had, not only in and to tlie same, but in and to the premises mentioned and described in the complaintand that subsequently to his death, by an instrument under seal and in consideration of $50,000, the plaintiff “ released any and all her right, title and interest, dower and right of dower which she had or claimed to have in and to all the real property of which the said Benjamin Richardson died seized.”

The plaintiff demurs to the defense for insufficiency in substance. The husband not dying seized of the land in question, it is obviously not within the terms or operation of the release. Moreover, it is not apparent that the release was to tenant in fee or for life, or to remainderman, reversioner or equitable owner and unless to such it is ineffectual to bar dower. Elmendorf v. Lockwood, 57 N. Y., 322, 326, 330; Merchants' Bank v. ThompsonT 55 N. Y. 7, 12. Upon the argument, therefore, counsel for the defendant prudently abstained from pressing the release as an answer to the action.

Neither personal representative nor heir or devisee of the husband is a party to the litigation. That the plaintiff may realize all her dower out of the husband’s estate, is, therefore, but the futile statement of the defendant, who, of course, is incompetent either to offer, or, in the absence of the owners of that estate, to-compel its appropriation in discharge of the incumbrance on his property.

“ A widow shall be endowed of the third part of all the lands whereof her husband was seized of an estate of inheritance at any time during the marriage.” (1 R. S. 740, sec. 1.) “ No act, deed or conveyance by the husband, without the assent of his wife, shall prejudice the right of his wife to her dower nor preclude her from the recovery thereof.” (Id. 16.) “If during the life of the husband his land has been alienated, and if when his widow seeks the assignment of her dower the land is held in several parcels by different persons, her dower shall be assigned in each parcel separately.” Thomas v. Hesse, 34 Mo., 13 ; 84 Am. Dec., 66. Indeed, the answer in question admits the plaintiff’s right to dower in the land of the defendant; but avers that sufficient property remains of the husband’s estate to respond to her claim in respect of all the realty of which he was seized. Does the fact alleged in avoidance nullify the right conceded ? The methods by which the widow’s right may be defeated are familiar in the books, but it is nowhere suggested that the matter of this answer is pleadable in bar of dower. In reason the lien on his land is not discharged by the incumbrance on other lands, Masterson v. N. Y. C. & H. R. R. R. Co., 84 N. Y., 247, 255, and no matter how ample those other lands to satisfy the claim of dower, the right of recourse to this land still subsists. Plaintiff’s right to defendant’s, land not being affected by the fact of other resources for her dower, the answer is no defense to the action, and the demurrer is well taken.

The .principal of the cases adduced by defendant was not asserted as destructive of the right of dower in the particular land, nor advanced as, an answer to an action for such dower, but was •adopted only as an expedient by which the right might be enforced with the least hardship and the greatest equity. The right established, it may well be just and in ease of all parties, that the dower should be assigned of the husband’s estate, liable in any event as the ultimate recourse, rather than from the land of an alienee who, under his covenants, is entitled to indemnity. But this is a disposition of remedial procedure, and is practicable only when, all in interest being present, the decree may be of binding efficacy. Neither the representatives nor successors of the husband being parties to the litigation, how can the court enforce an assignment of dower out of their estate? Mechanics' Savings Bank v. Selye, 83 Hun, 282; 64 St. Rep. Should they be brought in, then, after plaintiff vindicates her right by the determination of the issues in her favor, the court, in exoneration of defendant’s land, might, by the interlocutory judgment, direct the dower to be ¡assigned out of the husband’s estate.

Demurrer sustained.


author: Bartlett, J.

text:
    Bridget Keenan et al., as Administrators, etc., App’lts, v. The New York, Lake Erie and Western Railroad Company, Resp’t.

      (Court of Appeals,

      Filed February 26, 1895.)

    1. Master and servant—Rules.
    A gang boss over forty or fifty men cannot, without direct authority from the company, change the safe and proper rules in pursuance of which the work in the repair yards is conducted, and direct workmen to prosecute their labors under cars standing on tracks other than the regular, duly protected repair tracks.

      2. Same—Fellow.
    A servant, who sustains injury from the negligence of a superior agent •engaged in the same general business, cannot maintain an action against their common employer, though he was subject to the control of such superior agent and could not guard against his negligence or its consequence.
    Appeal from order of the general term of the superior court of Buffalo, which reversed a judgment in favor of plaintiffs entered upon a verdict and affirmed on order denying a motion for a new trial.

      George W. Cothran, for app’lts; Adelbert Mott, for resp’t.
   Bartlett, J.

The plaintiff’s intestate, who was a car repairer, brought this action to recover damages for personal injuries received by him while working in defendant’s repair yard in Buffalo.

The jury rendered a verdict in his favor for $10,000, and the .general term of the superior court of Buffalo reversed the judgment on questions of law, ordering a new trial, and the intestate’s ■administratrix (he having died after verdict rendered) appeals to this court giving the usual stipulation for judgment absolute in case of affirmance.

The facts in this case are simple and will be assumed as stated •by the intestate for the purposes of this appeal.

There were three tracks running east and west at the place in the repair yard where deceased was working on the day of the accident; the southerly track was No. 21; the middle track, No. 2 ; the north track, No. 8. It is undisputed that the only entrance to these tracks was from the east; that No. 21 and No. 2 were used exclusively for repairing cars, and' No. 8 was known as the il cripple track,” on which were placed cars needing repairs ; that the repairing tracks were protected by flags when men were at work under the cars, but no such precaution was adopted on track No. 8, as no repearing was done there, and cars were shunted thereon at all hours of the day.

The deceased testified: . “ I was working right next to track No. 8 and within a short distance for three months, and saw cars ■on that track every day and the way they did business there.” From five hundred and fifty to nine hundred men were employed in the repair yards, and one Bobert Gunn was foreman in ■charge of the repairs of cars; O’Day was assistant foreman and Getz was the man who distributed the various articles of hardware such as bumper springs, braces, etc., to the men when at work.

The men were divided up into small gangs and one Tracy was foreman or gang boss of the gang in which the intestate worked.

On the day of the accident the intestate and another man were at work repairing a car on track No. 2, and found they needed an eight-inch bumper spring; the intestate applied to Getz for the spring and was informed that he did not have one ; he then went to what was known as the scrap pile, which contained secondhand material of all kinds, and failed to find the required article-there; he then reported these facts to the gang boss, Tracy, who-told him he had better go down to No. 8 track and take one from a car there; in company with his fellow-workman intestate followed out this suggestion, and while under a car on track No. 8, in the act of removing a bumper spring, some cars were backed in on that track, moving the car under which intestate was working,, and inflicting upon him very serious and permanent injuries.

The only legal question in this case is, did the gang boss, Tracy, in suggesting to the intestate to go down on track No. 8- and get the spring, represent the defendant ?

It is admitted by the learned counsel for the appellant that, there is no direct evidence in the case showing that it was any part of Tracy’s duty to furnish materials required by the workmen under him, but he insists that the defendant having failed to designate any one person whose duty it should be to borrow springs from other cars for temporary use, and still continuing the business of car repairing, it not only acquiesced in the gang foremen procuring such materials, but impliedly authorized them to-procure them wherever they could.

The appellant’s counsel also admits that Tracy was the fellow-servant of the intestate in everything except in the performance of a duty which the law imposed upon the defendant, viz., procuring materials for use.

We are unable to adopt these views.

It would lead to the establishment of an exceedingly unsafe rule to hold that a gang boss over forty or fifty men could, without direct authority from the company, change the safe and proper rules in pursuance of which the work in the repair yards was conducted, and direct workmen to prosecute their labors under cars-standing on tracks other than the regular, duly protected repair-tracks.

Tracy was in no legal sense the representative of the defendant when he suggested to the intestate that he should procure a spring from a car standing on track No. 8; he was a fellow-servont making a very unwise and dangerous suggestion.

A servant who sustains an injury from the negligence of a. superior agent, engaged in the same general business, cannot maintain an action against their common employer, although he was-subject to the control of such superior agent, and could not guard against his negligence or its consequences. Sherman v. Rochester & Syracuse R. R. Co., 17 N. Y. 153; Loughlin v. State of New York, 105 id. 159; 6 St. Rep. 826.

The order appealed from should be affirmed and judgment absolute directed for the defendant, with costs.

All concur.

Ordered accordingly.


author: Andrews, Ch. J.

text:
    William H. Meaker, as Executor, etc., App’lt, v. Nancy A. Fiero, Impleaded, etc., Resp't.

      (Court of Appeals,

      Filed February 26, 1895.)

    Usury—Creation.
    The defense of usury must he founded upon the loan or forbearance of money ; if neither of these elements exist in a contract, there is no usury, however unconscionable the contract may be.
    Appeal from judgment 'Of the general term of the supreme court in the fifth judicial department, entered upon an order, which affirmed a judgment in favor of defendant entered upon the report of a referee.
    The nature of the action and the facts, so far as material, are stated in the opinion.

      John D. Teller, for app’lt; F. B. Wright, for resp’t.

       Reversing 59 St. Rep. 42.

   Andrews, Ch. J.

This action was brought for the foreclosure of a mortgage .for $800, executed by the defendant, Nancy A. Fiero, to Samuel Stokes, the plaintiff’s testator, dated May 28, 1886, and acknowledged May 29, 1886, to secure the payment of a bond of the mortgagor of the same date and amount in five years thereafter, with annual interest. The defense was usury. This defense was sustained by the referee before whom the action was tried, and the judgment entered upon his report has been affirmed by the general term. The alleged usury consists in .the payment by the mortgagor to the mortgagee at the time of the delivery of the bond and mortgage of the sum of $15.00.

We think the evidence failed to establish any usurious transaction, for the reason that the contract or agreement under which the bond and mortgage were given was not a contract or agreement for the loan or forbearance of money, and that the sum of $15.00 exacted by Stokes and paid by the mortgagor was exacted by Stokes as a condition of his acceptance of the bond and mortgage in question, as payment on a debt of $2,500 secured by mortgage on other property maturing in 1893,' owing by one Hos-kins to Stokes, and that the sum of $15.00 was paid by Mrs. Fiero in compliance with this condition.

The evidence of the transaction upon which the alleged usury is predicated comes from witnesses on the part of the defendant. Stokes died in 1889. Several payments of interest were made on the mortgage prior to his death, and it does not appear that the validity of the mortgage was questioned until after that time. It appears that in 1883 one Hoskins (the brother-in-law of Mrs. Fiero) executed to Stokes his bond and mortgage for $2,500, payable ten years after its date, and that on the 29th day of May, 1886 (the day when the bond and mortgage in question were executed) the whole principal sum of the Hoskins debt was unpaid. In 1885 Hoskins bid in at foreclosure sale, for the benefit of Mrs. Fiero, a lot on Washington street, Auburn, taking title in his own name to secure his advance on the property. On the 29th day of May, 1886, the situation was that Mrs. Fiero was entitled to a conveyance of the lot from Hoskins on payment to him of $800. Hos kins, the principal witness for the defendant, testified in substance that on or about the 28th of May, 1886, Stokes came to him and desired, him to state to the assessors that his debt to Stokes was only $1,000 ; that he refused to do so, whereupon Stokes informed him that he had so sworn before the assessors; that he told Stokes he had perjured himself, and that it would go hard with him “if they got on to itthat, after some further conversation, he told Stokes he could help him out if he would take a mortgage of $800 on the Washington street lot, and $700 in money as payment of $1,500 on the mortgage for $2,500; that Stokes agreed to do this, but said, “ you will give me $25, the same as you promised me six months ago,” and that he replied, “No, sir; this is not for my accommodation, it is to accommodate you. This will be a transaction between you and Mrs. Fiero, and you can make a bargain with her if you want a bonus.” Hoskins further testified that Stokes requested him to draw the papers, and they were to meet the next morning to complete the transaction. Hoskins drew a deed from himself to Mrs. Fiero of the Washington street lot, and a bond and mortgage from her to Stokes on the same lot for $800. The next day (29th of May) Stokes, Hoskins and Mrs. Fiero met at Hoskins’ office. The deed from Hoskins to Mrs. Fiero of the Washington street lot, and the bond and mortgage from Mrs. Fiero to Stokes for $800 on the same lot were duly executed and acknowledged, and an indorsement was made on the mortgage held by Stokes against Hoskins of the payment of $1,500. Hoskins delivered his deed to Mrs. Fiero and passed the bond and mortgage from Mrs. Fiero to Stokes, with $700 in money, across the table to Stokes, who declined to receive them, saying, “ No ; I want to know something about that present,” and Hoskins then said to Mrs. Fiero, “ Stokes wants a bonus on this mortgage." Mrs. Fiero then approached Stokes and said, “What is it, Mr. Stokes ?” and he replied, “ I am always in the habit of taking a present when I take a mortgage and I want one now,” and in reply to her question as to the amount, he said, “ twenty-five dollars.” She finally paid him $15.00, and Stokes then took the mortgage and $700 in money. A witness (Kennedy) who was in the room and heard'the conversation, a lawyer, introduces the word “loan” in the answer made by Stokes to the question of Mrs. Fiero. His statement is that Stokes said, “ I must have a present in this matter. People generally make me a present when I make a loan—take a mortgage.”

The foregoing is a statement of all the material facts to sustain the defense of usury. It requires a very strained and unnatural construction of the evidence to convert this transaction into a loan of money. The defense of usury must be made out as any other defense. Where the evidence is conflicting, and the evidence to sustain it justifies the inference of a usurious transaction, and tire trial court has found in favor of the defendant, and the finding has been sustained by the general term, this court cannot interfere. But it is always open here to determine whether there is any evidence to sustain a finding of fact, and the finding of a material fact, without any evidence to sustain it, is error of law. It is perhaps unnecessary to repeat what has often been said that usury may exist although the transaction does not take the direct form of a loan of money. The usurer usually seeks to conceal the usury, and to accomplish his purpose by indirect methods; but no matter what the disguise, if the court can see that the real transaction was the loan or forbearance of money at usurious interest, its plain and imperative duty is to so declare, and to hold the security void. But where a transaction is capable of an innocent construction, and can only be held usurious by wresting it from its relation to other facts, or by imputing to the facts a sense and meaning which they cannot reasonably bear, then it is equally the plain duty of the court not to adjudge a forfeiture, but to preserve the contract and hold the parties to their respective obligations. There is no presumption that a contract is illegal or criminal. The illegality, if alleged, must be established by proof. The contract may be illegal in its nature , or may be shown to be so by extrinsic facts. It is a fundamental principle governing the law of usury that it must be founded on a loan or forbearance of money. If neither of these elements exists, there can be no usury, however unconscionable the contract may be. The law declares that no one shall loan money exacting for its use more than legal interest, or, having loaned money, he shall not exact a greater rate as a condition of postponing payment.

It is conceded that Stokes gave no money to Mrs. Fiero, and that she received none. The transaction between Hoskins and Stokes was a payment by a debtor to his creditor of $1,500 upon an admitted debt, in part by causing a transfer of a debt owing to him to be made by his debtor, Mrs. Fiero, to his creditor, Stokes. The transaction between Hoskins and Mrs. Fiero was a payment by her to him of her debt of $800 by inducing Stokes to take the mortgage on her land in payment of so much of the debt owing-by Hoskins to him, and this payment being made and accepted she acquired a right to a conveyance from Haskins of the legal title to her land. The transaction between Stokes and Mrs. Fiero was the acceptance by him of the $800 mortgage executed by her as payment by HoSkins of so much on his mortgage of $2,500. Tire $15 was exacted by Stokes for his consent to make a change of securities, thereby releasing the land mortgaged by Hoskins to the extent of $800 from the lien of his mortgage, and substituting the mortgage of $800 given by Mrs. Fiero as security for that sum. This was, we conceive, a legal and valid transaction. Stokes was not bound to make any change in his security. The mortgage of Mrs. Fiero was not only on different land, but the terms of payment were different. Stokes could lawfully demand compensation for assenting to the transaction. It is immaterial what his motive was in assenting, or that the exaction of $15.00 was made, as away of getting more than six per cent, on his investment. There was no borrowing and no lending. There was no loan, and in the absence of a loan in law or fact there was no usury. The transaction was not usurious as an agreement for forbearance. The original mortgage of $2,500 was not payable until 1893. The mortgage in question was payable in 1891.

We think no defense was made out and the judgment of the special and general terms should be reversed and a new trial granted, with costs to abide the event.

All concur, except Haight, J., not sitting.

Judgment reversed.


text:
    Harriet A. Brady, as Executrix, etc., et al., Resp’ts, v. Patrick Cassidy et al., App’lts.

      (Court of Appeals,

      Filed February 26, 1895.)

    ¡Evidence—Paroi.
    Where, in an action to recover the contract prices for goods delivered, plaintiff, upon defendant's alleging a breach of the contract in the failure to deliver the goods omitted from the inventory, amended the complaint by setting up a waiver of the condition that all the goods were to be delivered, evidence on the part of plaintiff that, during the negotiation it was understood between the parties that he had sold or agreed to sell a portion of the goods included in the bill of sale, that -these sales were assented to and acquiesced in by defendant, that just prior to the execution of the said bill certain of the goods were piled up and marked as sold to other parties, that subsequent to the delivery of the bill defendant assisted in making delivery of some of the goods to the vendees thereof, and acquiesced in the sales, that the delivery of the goods mentioned in the inventory was received by the defendant as a fulfillment of the requirements of the bill, and that he acquiesced in the partial delivery, only claiming damages for the omission to deliver all the goods, is admissible, not for the purpose of explaining the meaning or altering the effect of the bill of sale, but for the purpose of proving the allegation in the amended complaint, which sets up substantially a waiver by defendant of full performance of the contract on the part of plaintiff.
    Appeal from judgment of the general term of the court of common pleas for the city and county of Hew York,- entered upon an order, which affirmed a judgment in favor of plaintiff entered upon a verdict and also affirmed an order denying a motion for a new trial.

      John E. Parsons, for app’lts; Henry A. Foster, for resp’ts.

       Affirming 59 St. Rep. 729.

   Peckham, J.

This action is brought by the executrix and the executor of the will of Alfred Brady, deceased, against the defendants to recover from them the contract price of certain articles alleged to have been sold by the plaintiffs to them in 1883. Alfred Brady, prior to his decease in January, 1883, had carried on the business of making and selling plumbers’ castings at a foundry and warerooms in Hew York city. After his death the executrix and executor determined to sell the plant and also the materials on hand at the time. They effected a contract with the defendants by which the latter purchased the plant at a price agreed upon and also leased the foundry from the plaintiffs from the day of the sale in June, 1883, up to the 1st of January, 1884. On the 20th day of June, 1883, the parties entered into another contract by which the plaintiffs sold to the defendants their stock and executed an assignment thereof as follows:

“ Sold to Cassidy & Adler the entire manufactured stock, in good «condition, consisting of pipes, fittings, fines, etc., now on hand at foundry and storerooms on Fifty-fifth and Fifty-sixth streets, Tenth and Eleventh avenues. The price on same to be eighty (80) per cent, from the list price, besides the sum of $700; the stock to be taken without tarring and to be left on premises, the same to be paid for in cash. The receipt of $100, as part payment of same, is hereby acknowledged.
I. WlNTERBOTTOM,
Executor.

Certain portions of the property were delivered to and taken possession of by the defendants, while another portion, consisting of certain pipes and other materials, were omitted from the inventory which was taken immediately after the bill of sale, and were not received by the defendants, but most of them were delivered to other parties under a claim made by the plaintiffs that at the time of the execution of the bill of sale such goods so delivered to those third parties had been sold to them. The case has been twice tried and has been once before in this court, 104 E". Y. 147; 5 St. Bep. 569. Upon the first trial the plaintiffs claimed the right to give paroi evidence in regard to the meaning of the contract above set forth so far as to allow the jury to determine what the parties meant by the terms, “the entire manufactured stock in good condition on hand at the foundry.” The courts below permitted evidence of that kind to be given and the plaintiffs attempted to show that this language was not intended to mean that portion of the stock which was on hand in the foundry, but which the plaintiffs had sold or agreed to sell to third parties and which was to be delivered to them in accordance therewith. The inventory which was made showed that the net price of the property included therein was nearly $12,000. The defendants claimed that the property which was not included in the inventory and which was not delivered to them consisted proportionally of the most valuable part of the stock, and they claimed damages for its removal from the foundry. Upon appeal to this court it was held that the contract was entirely plain on its face and that paroi ’evidence was not admissible for the purpose of explaining or altering its obvious meaning; that the language used embraced all the stock on hand at the time of the execution of the bill of sale to which the plaintiffs had a legal title and which they were entitled to dispose of to the defendants, and that even if a valid executory contract of sale had been made by the plaintiffs to third persons prior to the sale to the defendants, those third persons acquired no title to any specific property, and on the refusal of the vendors to fill the orders they had only a right of action for damages, the legal title to the property remaining in the vendors, and they were bound to deliver it to the defendants under this contract.

The judgment was, therefore, reversed and a new trial granted. The plaintiffs had never pretended that the defendants had received all the goods which were in fact on hand at the foundry at the time of the execution of the contract of sale, but they had claimed on the trial that that contract, when properly construed,, did not call for such of the goods, which, although on hand at the-foundry, had at the time of this contract been already sold, or contracted to be sold, to other parties. The paroi evidence which, they offered was, therefore, addressed to the object of explaining the meaning of the language of the written bill of sale as in ac-cordance with the contention. As this court held that evidence-of that nature was incompetent for any purpose of explaining the-meaning of the writing, the plaintiffs were compelled to find, if possible, some other ground upon which to recover payment for goods which they had in fact sold and delivered to defendants, and for which they had never been paid anything but the original $100 upon the execution of the contract. The complaint was, therefore, amended by inserting an allegation that the defendants received all the goods which were spoken of in the inventory, and which did not include the omitted goods, and accepted and appropriated the inventory goods without intimating to the plaintiffs that they were received or accepted with any conditions whatever, and without any intimation or notice to the plaintiffs that they should not thereby consent to become liable to pay for the articles so delivered and accepted, unless the other articles were also received ; and the plaintiffs alleged that the defendants waived the condition that all the goods included in the agreement and on Nand at the time of its execution should be delivered before they should become liable to pay the contract price for the part that actually was delivered, and that they only reserved the right to claim and receive from the plaintiffs the damages which they had sustained by the plaintiffs’ failure to deliver all the goods. Upon this pleading the parties went to trial the second time. Upon that trial the plaintiffs proved, under the objection and the exception of the defendants, that during the negotiations which resulted in the written bill of sale, it was spoken of and understood between the parties that the plaintiffs had then sold or agreed to sell a certain portion of the goods which were, by the terms of the bill of sale, included in the sale to the defendants; and that such sale was assented to and acquiesced in by the defendants ; that subsequent to the execution of the contract of sale the defendants themselv.es assisted in making delivery of some of those goods to vendees thereof, and that just prior to the execution of the bill of sale certain of the goods had been piled up and marked as having been sold to other parties, and that one of the plaintiffs had said to one of the defendants that sales were going on quite rapidly, and unless they agreed pretty soon they would have nothing to purchase, and the defendant replied that the more was sold to others the less they would have to pay for. The plaintiffs also gave evidence that the delivery of the goods mentioned in the inventory was received by the defendants as a fulfillment of the requirements of the bill of sale, and that they acquiesced in such partial delivery as a delivery under the terms of the contract, and only claimed that they were entitled to certain damages which resulted from the omission of the plaintiffs to deliver all the goods, as provided for in the contract. All this; evidence the defendants’ counsel claims was in direct violation of the rule laid down by this court when this case was here on a former appeal. If it had been offered and received for the purpose of thereby explaining the meaning or altering the effect of the written contract that was entered into between the parties, sucli ruling would have been clearly erroneous, and in direct opposition to the ruling of this court; but it frequently occurs tlliat evidence which is improper for one purpose may be very material and competent for another, and cases are constantly arising where evidence is thus admitted. In this case it is clear that it was admitted for the purpose of proving the allegation in the complaint, which sets up substantially a waiver by defendants of full performance of the contract on the part of the plaintiffs. The contract in question contemplated one single delivery of the goods mentioned in the contract, and on hand in the foundry at the time-of its execution. If but a portion of the goods .were delivered and nothing said by the defendants in regard to the necessity for the delivery of the balance of the goods before they were to be called upon for payment, or if there were no evidence other than the fact that a portion of the goods only had been delivered, there would be no ground whatever upon which to base any claim that the defendants waived the full compliance with the terms of the contract by the plaintiffs. 'If, however, the facts above stated were proved, there would be sufficient foundation upon which to rest the allegation qf a waiver on the part of the defendants, as alleged in the amended complaint. It is no objection to evidence which characterizes and explains the facts which occurred at the time of the delivery of a portion only of the goods, that such explanatory matters occurred'before or at the time of the execution of the contract itself, and not at the time when the partial delivery was made. If the facts, whenever they occurred, tend to explain the circumstances attending the failure to deliver all the goods and to show that such failure was understood, acquiesced in and assented to by the defendants, the evidence itself is competent. The evidence given on the part of the plaintiffs, if believed by the jury, was sufficient to constitute a waiver by the defendants of the full performance of the contract by the delivery of all the goods included in its terms, and it was sufficient to justify the-jury in finding for the plaintiffs in the amount of the contract, price for all the goods actually delivered, deducting therefrom the defendants’ damages resulting from the failure to deliver the balance. Avery v. Willson, 81 N. Y. 341; Parke v. Franco-American, etc., Co., 120 id. 51-56; 30 St. Rep. 275; Dalzell v. The Fahys Watch Case Co., 138 N. Y. 285-290; 52 St. Rep. 354.

Another ground for questioning the correctness of this judgment is stated in the alleged refusal of the court to instruct the jury that the plain meaning of the contract was that all the goods on the premises were sold, that the words “goods on hand’’ meant goods physically in the premises at the time. This request was made as referring to the goods on hand in the foundry at the time of the execution of the bill of sale and it was in reference to the goods which the defendants were entitled to receive and to have delivered to them under the contract. If the court had made no prior reference to this contract and its meaning and the obligations of the parties arising out of its execution, and had refused to -charge as requested, the defendants would have had a good exception. Upon reading through the charge of the learned judge we think that the rights of the parties as governed by the terms of the contract were correctly stated and that the defendants suffered no harm by the refusal of the court to charge in the language of the request. There was really no doubt or dispute in regard to the meaning of the contract and the whole question in difference between the parties rests substantially upon the issue of waiver and as to the real damages which the defendants had sustained by the failure to deliver certain goods which were known and in regard to which there was substantially no dispute whatever.

It is claimed that by the charge of the learned judge the jury was permitted to say whether the contract embraced the omitted goods. We think this is incorrect. What they were called upon to decide was whether there had been any failure to deliver all the goods mentioned in the contract and if there had been such failure whether the defendants had waived full performance and whether they had been damaged and the extent of such damage by plaintiff's failure. All the merchandise which the plaintiffs contracted to deliver was correctly stated by the court. What portion they did deliver was submitted to the jury for its determination, as was also the question whether the defendants waived the delivery of that portion which the plaintiffs omitted in the inventory, and then the further question of the damage sustained by the defendants was also submitted. This was a'fair, while at the same time, a correct and legal interpretation of the obligations of the parties and the verdict of the jury ought not under such circumstances to be interfered with, unless some error has been committed of so material a nature as to cause injustice to the defendant

The point that the plaintiffs should not have been permitted to recover anything on account of the goods delivered without proof as to their value is not well taken. The defendants claim on this proposition that the plaintiffs failed to comply with the terms of the contract in that they failed to deliver all the merchandise included in its terms, and by reason of such failure they are not entitled to recover the contract price of any goods which they did deliver, but are to be limited to a quantum meruit. The answer to this objection has, I think, already been given, and it consists in the fact which the jury were permitted to find from the evidence that the defendants waived the full performance of the contract by the plaintiffs and received the goods actually delivered as a -delivery under such contract, and at the contract price, and they are, therefore, liable to pay such price after deducting defendants’ damages. Avery v. Willson, 81 N. Y. 341, and other cases cited, supra.

The actual receipt of the goods under the contract, as the compliance called for by the contract subject to the reduction spoken of, was valid and binding as a waiver when fully executed and assented to by all parties.

The other questions which the defendants have argued we have regarded with care, but do not find any errors in the rulings of the court below which call for a reversal of the judgment. The contract was entered into nearly twelve years ago, and with the exception of the $100 spoken of in the contract itself, the defendants have paid nothing for the goods actually received by them. We think the amount of the damages allowed to the defendants by the jury was supported by some evidence, and that the resulting verdict which they have agreed upon in favor of the plaintiffs ought not to be disturbed.’

The judgment appealed from should, therefore, ■ be affirmed.

All concur.

Judgment affirmed.


text:
    Francisco Roca et al., Resp’ts, v. Anna D. Byrne, as Executrix, etc., Impleaded, etc., App’lts.

      (Court of Appeals,

      Filed February 26, 1895.)

    1. Principal and agent—Reclaiming property.
    A principal is entitled, in all cases when he can trace his property, whether it is in the hands of the agent or his representatives, or of third persons, to reclaim it, and it is immaterial that it may have been converted into money, if it is in condition to be distinguished from the other property or assets of the agent.
    3. Same.
    Though, between the principal and agent, the relation of debtor and creditor may exist according as the accounts show a balance due to the one or the other, this does not affect the fact that the relation is of a fiduciary character.
    3. Same.
    The fact that the avails of the property are deposited to the credit of the agent, does not affect the question as to whom they belong.
    Appeal from judgment of the general term of the supreme court in the first judicial department, entered upon an order, which affirmed a judgment in favor of plaintiff entered upon a decision of the court on trial at' special term.
    The.action is brought against the executrix of Daniel Byrne, ■deceased, and the Corn Exchange Bank, to obtain a judgment directing the latter to pay to the plaintiffs certain moneys standing to the credit of the deceased, claimed by them to be the proceeds ■of certain drafts transmitted to the deceased as their agent and to have been received by him in such fiduciary capacity. The following were the facts : The plaintiffs were co-partners, carrying on business, under the firm name of Boca & Henriques, at Guayaquil, Ecuador. In February, 1888, Daniel Byrne became their agent in New York city and continued as such, until his death on August 2d, 1891. The plaintiffs were accustomed to consign mer-chandise to Byrne for sale, the proceeds of which were credited to the account of the principals. Byrne also purchased goods at the -oity of New York fa,r, and shipped them to the plaintiffs, which were paid for by the avails of goods consigned to and sold by' Byrne, and by bills of exchange sent to him by the plaintiffs. The plaintiffs were also accustomed to draw bills on Byrne, which, he accepted, paid and charged to their account, and interest was-charged on the balances against whichever party happened to both e debtor. Every six months the account was settled. On June-30, 1891, a settlement was had of all unsettled matters, and a balance of $24,953.63 was found to be due to Byrne. Six bills, amounting to $9,721.58, drawn by plaintiffs, accepted by Byrne- and charged in the account of June 30th, fell due after that date, but were not paid by Byrne, and were thereafter paid by the? plaintiffs, which reduced their indebtedness to him to $15,232.05.. Between June 20th and August 1, 1891, the plaintiffs sent Byrnenine bills drawn bn various persons and firms amounting to $18,-313.69, which he and his representative received and collected, so-that the balance due from his estate when this action was begun was $3,081.64. During the period covered' by the transactions-involved in this litigation, Byrne kept an account with the Corn-Exchange Bank, to the credit of which all his own money, as well-as the avails of merchandise and bills of exchange received from-the plaintiffs, were deposited, and against which he drew for his-own account and benefit, and also in conducting the business of the plaintiffs. On July 25, 1891, Byrne received from the plaintiffs two bills of exchange amounting to $2,774.26, which on that, day he deposited in said bank to the credit of his account. On-July 30, 1891, he received from plaintiff a bill of exchange for $2,000, which on the same day he deposited in said bank to his-credit. On August 2, 1891, Byrne died insolvent. On August 5, 1891, some person claiming to act for the estate of Byrne received from the plaintiffs a bill of exchange for $440, the avails of which, amounting to $439.63, were on the same day deposited to the credit of said account in said bank, and on August 31, 1891, some person claiming to act for the estate of Byrne received from the plaintiffs a bill of exchange for $600, the avails of which were on the same day deposited to the credit of said account in said bank. The bills described, aggregating $5,313.89, were four of the nine bills which aggregated $1-8,313.69. When the action was commenced the balance of $4,514.05, in the defendant’s bank to the credit of the deceased, or of his estate, was derived from the four above-mentioned lulls of exchange. The plaintiffs had judgment in their favor at the special term; which was affirmed on appeal to the general term; and the defendant appeals to this court.

      Theron G. Strong, for app’lt; Michael H. Cardozo, for resp’ts.

       Affirming 52 St. Rep. 477.

   Gray, J.

This is a somewhat peculiar case upon its facts and the question is whether the plaintiffs, having traced the avails of the drafts, which they had remitted to their agent, shall have them, as against the claims of other creditors upon the insolvent estate of Byrne. The general and well-recognized rule is, and has been, that a principal is entitled, in all cases, when he can trace his property, whether it be in the ham’s of the. agent, or of his representatives, or of third persons, to reclaim, it and it is immaterial that it may have been converted into money, so only that it is in condition to be distinguished from the other property or assets of the agent. Story on Agency, § 231; Thompson v. Perkins, 3 Mason, 232 ; Robson v. Wilson, 1 Marshall Ins. 295 ; Van Allen v. American National Bank, 52 N. Y. 1; Importers,’ etc., Bank v. Peters, 123 id. 272; 33 St. Rep. 182. The difficulty, here supposed to prevent the application of the general rule, arises in the nature of the course of dealing adopted; which, as it is urged on behalf of the appellant, shows that the relation of debtor and creditor, only, existed between the plaintiffs and their deceased agent. The moneys, it is insisted, proceeding from the drafts remitted to Byrne, were not impressed with any trust; but were in part payment bn account of a balance due from the plaintiffs. It is undoubtedly true that the relation of debtor and creditor existed, according as the state of the accounts showed the balance to be one way or the other; but that fact was not inconsistent with, and could not affect, the fact that the relation was also of a fiduciary character. Byrne received all drafts in virtue of his agency and they, or the proceeds, were received for purpose connected with that agency. It was not necessary that they should have been remitted against my specific obligations. They must have been remitted generally and generally credited in the account; but their purpose was to discharge obligations incurred, or to be incurred, or disbursements made, by their agent for them. What was the evident, the indisputable fact here ? Plainly, that there resulted an excess, over what was incumbent upon the plaintiffs to pay, of a sum of money, which was not Byrne’s, but which belonged to the plaintiffs. This excess being unused, or not required for the purpose for which remitted, how could Byrne, or his representatives, claim it, in equity ? The legal title to the moneys may have been in him, but the right, in equity, to follow them, as the proceeds of their drafts, was in the plaintiffs. If Byrne, or his representatives, placed the moneys in the bank to the credit of his account, that would not affect the question as to whom they belonged benefically ; a question which equity, in a proper case, will always inquire into. If received, as here, in the course of transactions between the principal and the agent, the character of the moneys would be unchanged by the deposit, provided they could be identified. They would still be moneys held for the principal. However peculiar the circumstances here, from the particular course of dealing, the cardinal fact stands out, that the plaintiffs’ property was sent to their agent, as such, and for purposes comprehended within the agency. The case cannot be likened to that of bills sent on general account between a merchant and his correspondent; nor to the case of the deposit of bills on a general running account with a banker and without specific appropriation to other bills. It is more like the case supposed by Lord Chancellor Cottenham, in his opinion in Jombart v. Woollett, 2 Myl. & Cr. 390, who, stating the result of the law as laid down in some cases cited, said: “Unless there be a contract to the contrary, if a person, having an agent elsewhere, remits to him, for a particular purpose, bills not due, and that purpose is not answered, and then the agent carries them to account, and becomes a bankrupt, the property in the bills is not altered, but remains in the party making the remittance.” In Veil v. Administrators of Mitchell, 4 Wash. C. C. 105, the plaintiffs sent the defendant’s intestate two bills of exchange, with instructions to remit the proceeds. The intestate sold the bills, remitting a part of the proceeds of one, but keeping the rest and a post dated check which had been taken for the other. He died before the maturing of the check, which was collected by his administrators. On another account the plaintiffs were indebted to the intestate in a certain balance. The intestate died insolvent and the question reserved for the court was, whether the plaintiffs are entitled to recover the amount of the check and of the unremitted portion of the proceeds of the other note, after deducting what was due upon another account to the intestate. Mr. Justice Washington rendered judgment for the plaintiffs, upon the principle that, “where the principal can trace his property into the hands of his agent or factor * * * he may follow it, either into the hands of the factor, or of his legal representatives, or of his assigns, if he should become insolvent or a bankrupt.”

If it be objected that the proof here is that the bills were not remitted for a particular purpose, but generally on account of all obligations incurred and disbursements made by Byrne on account of plaintiffs, I think that is not a substantial distinction. The remittances were, in fact, to an.agent for a purpose within the scope of the agency and to meet the obligations or expenditures incurred for the remitters by the agent. I think, within the stipulated facts, the purpose of the remittance may be regarded as a particular one. We might paraphrase it as a general remittance for the particular purpose of furnishing moneys to the agent, to cover the obligations and liabilities incurred by him as such.

If the business relations between the plaintiffs and Byrne had been of the character of such which ordinarily exist between merchants and their correspondents, there would be no case; but it is because Byrne was the plaintiffs’ agent, that property, received by him for them, became impressed with a trust character and, if not disposed of, in good faith, to others, and if distinguishable from the agent’s property, could be re-claimed by the principal, as against the general creditors of the agent. I am unable to see that, in truth, the nature of the dealings between the parties, of which. so much has been made, necessarily did deprive their relations of their fiduciary character. The manner of his keeping the account, or of stating half-yearly balances, and the general nature of a remittance to him upon account, are facts, which need not have changed and,.in my opinion, did not change the fiduciary nature of the relation held by Byrne to the plaintiffs. Under the conceded facts of the case, whatever he did, he did as their agent. The duties enumerated as devolving upon and performed by him were all consistent with his acting therein as agent.

In the account of June 30th, 1891, showing a balance against the plaintiffs of $24,953.63, was included $9,721.58 of acceptances by Byrne, maturing after that date and which were not paid by him, but which were eventually paid and taken up by the plaintiffs. The plaintiffs’ indebtedness to him was, therefore, only $15,232.05. The drafts remitted by plaintiffs between June 20th,. 1891, and August 1st, 1891, and realized upon and credited to Byrne’s account in the bank, amounted to $18,313.69. There was, therefore, an excess over the amount necessary to discharge the indebtedness to the agent of $3,081.64. Can it be said that these moneys did not, in equity, belong to the plaintiffs? I cannot see it otherwise than in that light. I think it. is a plain case where the principal has been able to trace a remittance of bills, made for the purpose of putting his agent in funds to meet expenditures and liabilities incurred on his account and in excess of what was-needed to discharge their indebtedness in account, and where it has been possible to distinguish the moneys in bank as the avails, of those bills with absolute certainty. That the proceeds of plaintiffs’ drafts did not, by being deposited to the credit of Byrne’s bank account, lose their character, is indisputable. In Van Alen v. The Bank, (supra), the money sought to be recovered was mingled with some of the agent’s own money; but this was deemed of no consequence. The controlling fact was that the plaintiffs’ moneys were in the bank. In that case the authority of the Ætna, National Bank v. Fourth National Bank, 46 N. Y. 82, was not deemed in point; inasmuch as there was no question of title in the plaintiff, but, merely, of the discharge by the defendant bank of .an obligation to a depositor.

I think the affirmance by the general term was correct and that the judgment should be affirmed, with costs.

All concur.

Judgment affirmed.


author: Haight, J.

text:
    Margaret E. Thompson, as Administratrix, etc., Resp’t, v. Buffalo Railway Company, App’lt.

      (Court of Appeals,

      Filed February 26, 1895.)

    1. Negligence—Minor.
    A minor is expected and required to exercise tlie measure of care and
    . caution that is common and usual in one of his age.
    3. Same—Pedestrians.
    Though persons have the right to cross the street at any place they may select and are not confined to street crossings, street railway cars between such crossings have preference ; and, while they must be managed with care so as not to injure persons in the street, pedestrians-must use reasonable care to keep out of their way.
    Appeal from judgment of the general term of the superior court of Buffalo, entered upon an order which overruled defendant’s exceptions and directed judgment in favor of plaintiff up on. verdict.

      Porter Norton, for app’lt; George W. Cothran, for resp’t.
   Haight, J.

This action was brought to recover damages for the alleged negligently killing of plaintiff’s intestate. Aley, the deceased, was a daughter of the plaintiff, fourteen years of age, large for her years, and had been to school for two years.

The defendant was engaged in operating an electric double-track street railway in Broadway in the city of Buffalo.

On the 25th day of May, 1893, between eight and nine o’clock in the evening, Alcy with six other girls were engaged in playing I spy ” on Broadway, nearly in front of her residence, between Warner and Bother avenues. Alcy was on the northerly side of Broadway and started to run across to the southerly side. As she approached the northerly track of the defendant’s road a car from the east going west passed. She stopped until the car was by and then started to run across the street in the rear of the car, and as she reached the southerly track, she was struck by one of defendant’s cars going east on that track and killed.

Upon the trial evidence was given on behalf of the plaintiff tending to show that the defendant’s car upon the southerly track was proceeding at a higher rate of spéed than was sanctioned by the ordinances of the city, and that no gong was sounded announcing its approach.

The only question which we are called upon to consider relates to the contributory negligence of the deceased. This question is presented by motions for non-suit, for a direction of a verdict, .and by a request that the court charge the jury “ that if the girl passed immediately behind the west-bound car, without stopping to look in both directions to ascertain if a car was approaching, ' that the plaintiff cannot recover,” all of which were refused and exceptions taken.

Although a minor, no claim is made that Alcy was not sui juris. Whilst she may not have possessed the .judgment, caution and prudence of persons of more mature years, she was expected and required to exercise the measure of care and caution that is common and usual in one of her age. She was familiar with the defendant’s tracks, cars and their mode of operation. It is true that the day before the defendant had changed its motor power from horses to electricity, but we are unable to discover how she was misled or deceived by this change. Whilst persons have the right to cross streets at any place they may select, and are not confined to street crossings, street railway cars between such crossings have a preference, and, while they must be managed with care so as hot to injure persons in the street, pedestrians must, nevertheless, use reasonable care to keep out of their way. Fenton v. Second Ave. R. R. Co., 126 N. Y. 625; 36 St. Rep. 385.

In Baker v. Eighth Ave. R. Co., 62 Hun, 39; 41 St. Rep. 353, a child eight years of age passed behind a car going in one direction on to the other track, and was struck by the horses of another car going in the opposite 'direction, and it was held in the first department that there could be no recovery.

In Reich v. Union R. R. Co., 78 Hun, 417; 60 St. Rep. 450, a boy was playing in the street with some comrades in the evening. It was pleasant, but dark. His. comrades started to chase him. He ran behind a car going north, crossing the avenue diagonally, tending toward the south, and when he stepped upon -the southbound track was struck by a south-bound car and killed. It was held-that a non-suit was proper.

In Scott v. Third Ave. R. R. Co., 41 St. Rep. 152, the plaintiff and her husband were attempting to cross 125th street in the city of Hew York, upon which cable cars are operated, about half-past nine o’clock in the evening. They approached the track and stopped for a car to pass going west. As soon as the car cleared the crosswalk they proceeded to cross, and, upon stepping upon the south track, were struck by an east-bound car. A judgment in favor of the plaintiff was reversed.

In Tucker v. N. Y. C. & H. R. R. R. Co., 124 N. Y. 308: 36 St. Rep. 272, a boy twelve years old was killed by one of the defendant’s locomotives when attempting to cross its tracks. The day was windy and it was snowing, but not enough to obstruct the view. The street upon which he was traveling was crossed by four of defendant’s tragks. He stopped in the center of one of the tracks facing in the direction of the locomotive, which was backing down at a high rate of speed. H he had looked he could have seen the approaching engine. From the point where he stood to the center of the track, where he was struck and killed, the distance was fourteen feet. After changing a bag he was carrying from one shoulder to the other, he started on without again looking in the direction of the engine. It was held that he was guilty of contributory negligence. See Wendell v. N. Y. C. & H. R. R. R. Co., 91 N. Y. 420; Reynolds v. N. Y. C. & H. R. R. R. Co., 68 id. 248; Davenport v. Brooklyn City R. R. Co., 100 id. 632.

Such is the trend of the authorities, and applying the rule repeatedly asserted in this court to the facts under consideration, we can discover no theory upon which this judgment can be sustained. The deceased knew of the danger, and of the necessity to keep a lookout for passing cars, and yet evidently interested and excited by her game dashed suddenly across the street in the rear of a passing car without pausing to look or observe the approaching car upon the other track.

' It is said that she may have been deceived in reference to the approaching car by reason of its speed, but she could not have been deceived unless she saw it. Had she seen it approaching before the other car passed, she would hardly have been justified in attempting to cross the street after the first car had passed without’again looking for the approaching car.

The judgment should be reversed, and a new trial granted, ■with costs to abide the event.

All concur, except O’Brien, J., dissenting.

Judgment reversed.