author: By the Court.—Dugro, J.

text:
    JOHN S. RIGGS, Respondent, v. THE COMMERCIAL MUTUAL INSURANCE COMPANY, Appellant.

      Marine insurance.—What is an insurable interest in a vessel owned by a corporation other than the interest of the corporation.

    The Merchants’ Steamship Company was a corporation organized under the laws of South Carolina, with a capital stock of $45,000, divided into 450 shares of $100 each, and owned the steamship “ Falcon ” at the time of her loss, which occurred November 8, 1879. At the time, and previously to her loss, Joseph L. Tobias was a stockholder in said steamship company and owned thirty-six shares of the capital stock at the time of the issue of said policy by the defendant. Tobias had for several years carried an insurance on the vessel, underwritten by defendant, and had duly paid the premiums, including that which fell due after the loss of the steamship.
    The sole question before the court in this case was, “ Had Tobias an insurable interest in the steamship ‘ Falcon ’ at the time of the issue of the policy in question to him by the defendant ” ?

      Held, that Tobias had an insurable interest in the “Falcon,” for he had such an interest in the vessel that he would suffer pecuniary loss by its destruction. An insurable interest in property may exist without any estate or interest in the “ corpus ” of the property or thing insured, and it is not necessary to show that the insured was the legal or equitable owner or possessor of the property itself. The owner of shares of capital stock of a corporation that owns a steamship, or other property, has an insurable interest in said steamship or property.
    Before Sedgwick, Oh. J., Truax and Dugro, JJ.

      Decided May 6, 1889.
    Appeal from a judgment entered in favor of plaintiff against the defendant.

      Oliver Drake Smith, attorney, and David Willcox, of counsel, for appellant, argued :—
    That no liability under the policy existed or has been proved in favor of the person who procured it. The subject of the insurance was the steamship “ Falcon.” This was the property of the Merchants’ Steamship Company. Tobias was a stockholder in that company. This, of course, conferred upon him no title to, lien upon, or property rights or interests in the property of the company. This is well settled. In Queen v. Arnaud, 9 Ad. and Ell,, N. S., 806, the question related to the registry of a ship owned by a corporation. The court, by Lord Denman, said, “ it appears to me that the British corporation is, as such, the sole owner of the ship. The individual members of the corporation are, no doubt, interested in one sense in the property of the corporation, as they may derive individual benefits from its increase or loss from its decrease ; but in no legal sense are the individual members the owners.” In Van Allen v. Assessors, 3 Wallace, 573, it was held that a tax on the shares of a bank in the hands of individuals was not a tax on the capital or property of the bank, but upon a distinct, independent interest or property held by the shareholder. The court said (Nelson, J.), “ a tax on the shares is not a tax on the capital of the bank. The corporation is the legal owner of all the property of the bank, real and personal ; and within the powers conferred upon it by the charter, and for the purposes for which it was created, can deal with the corporate property as absolutely as a private individual can deal with his own. * * The interest of the shareholder entitles him to participate in the net profits earned by the bank in the employment of its capital during the existence of its charter, in proportion to the number of his shares ; and upon its dissolution or termination to his proportion of the property that may remain of the corporation after the payment of its debts. This is a distinct, independent interest or property held by the shareholder like any other property that may belong to him.” Accordingly, it is held that a stockholder in a corporation has no right to take for his own benefit insurance generally upon the property of the corporation. In Philips v. Knox, etc., Co., 20 Ohio, 174, the property insured was owned by a corporation in which the parties taking the policy were the sole stockholders. The court held that even in that case the stockholders could not insure the property of the company as their own individual property. It said, “ in fact, these plaintiffs had no insurable interest in this property whatever. The fee was in another person, not in a natural person, but an artificial person—a corporation. If they had any insurable interest, it was the stock which they held in the company, and this they did not attempt to insure.” This case is cited as stating the correct rule in Wood on Insurance, 684. And it is in accordance with the view already expressed by the court in this case. “ It is not perceived that he (Riggs) had any interest in the vessel. He was not legal or equitable owner of any part, nor of its earnings, nor of any lien” (51 Superior, 467).
    The case of Seaman v. Enterprise Co., 18 Fed. Rep., 250, and again 21 Fed. Rep., 778, has been relied upon as establishing the broad principle that stockholders in a corporation have an insurable interest in the property of the corporation. That was an oral decision in one of the Western circuits. Upon the argument of this appeal it was cited by the respondent,, but was not regarded by this court as controlling, and probably will not be deemed to have gathered weight by mere lapse of time. In any event it should be observed that the case is not an authority in support of the recovery here. The court, indeed, there said that “ it is not necessary that the party who takes out the policy should have any title to the property insured ; it is sufficient if he has such an interest in it as that, by its destruction, he would suffer pecuniary loss * * the stock of a corporation represents its property, and is evidence of the right of the stockholder to receive the profits and increase of the corporate property. It is a plain proposition, in our judgment, that the destruction of the corporate property may entail pecuniary loss upon the stockholder, and therefore that he has a right to insure his interest as such stockholder.” (18 Fed. Rep., 250.) But it said further, “ some question has been raised as to the measure of damages. It has been insisted on the part of the defendant that the corporation may be insolvent; that there may be many debts which must be paid before a stockholder can receive any dividends ; and that, therefore, his interest may be nothing. We reserve all questions of this character until the trial of the cause, simply saying now that the loss of the policy holder must be shown upon the trial by competent evidence.” The same rules are recognized in the further report of the case found in 21 Fed. Rep., 778. In other words, the case holds that it must be shown that the destruction of the corporate property has injured the stockholder by subjecting him to a loss of something which he would otherwise have received. But in the present case there is no finding or proof that Tobias’ interest as a stockholder was in any way injured by the loss of the steamship ; that by reason thereof he has lost anything which he'would otherwise have received. Por aught that appears, the value of his stock was not affected thereby. These observations cover also the case of Warren v. Davenport Ins. Co., 31 Iowa, 464. There the insurance was expressly upon the plaintiff’s interest as a stockholder in the property of the corporation. And damage to that interest was shown, aside from the damage to the corporation itself. The court stated in that case also that the case was controlled by the rule that no more than the actual loss sustained was recoverable.
    It is manifest, therefore, that no liability by reason of any interest of Tobias is shown, because (1) that was not an insurable interest, and (2) in any event no damage thereto has been proved.

      J. E. Buvrill and G. ZabrisMe, attorneys and of counsel, for respondent, argued :—
    I. Any one has an insurable interest in a ship on whom an injury to it will inflict pecuniary loss. The theory on which the general term disposed of this appeal on the first argument (51 Supr., 466), was that, in the absence of evidence showing that plaintiff was legally or equitably owner of a part of the vessel or of its earnings or of some lien in respect of one or the other, the court could find in him no insurable interest. But the authorities to which reference is made below establish the principle that it is not necessary that the assured should be legally or equitably an owner or should have any lien upon, or direct interest in, the subject of the insurance. White v. Hudson River Ins. Co., 7 How. Pr. 341; Cone v. Niagara Fire Ins. Co., 60 N. Y. 619 ; Herkimer v. Rice, 27 Ib. 162; Harvey v. Cherry, 76 Ib., 436 ; Rohrbach v. Germania Fire Ins. Co., 62 Ib. 47 ; Hooper v. Robinson, 98 U. S. 528; National Filtering Co. v. Citizen’s Ins. Co., 106 N. Y., 535, which was decided in October, 1887, 'subsequently to the decision of this court. The nature of insurable interest is the same, whether the risk be against fire or against marine perils. Herkimer v. Rice, 27 N. Y. 162, 173. (1)The leading case in this court is De Forest v. Fulton Fire Insurance Company (1 Hall, 84) decided in 1828. The case was tried before Oakley, J., and the opinion of the court on motion for judgment upon the verdict was delivered by Jones, C. J. The plaintiffs were commission merchants and insured goods partly their property and partly held by them on commission, and the question was, whether the plaintiffs had any insurable interest beyond their advances and commissions in-goods which they did not own.- The court held that they had, and said (page 102): “ It is well settled • that an insurable interest, in mercantile language, does not necessarily import an absolute right of property in the thing insured. A special or qualified interest is equally the subject of insurance, and it has often been determined that each distinct interest in the same subject may be protected by a separate policy on the subject, for the party interested in it.” The court proceeded-to cite cases, and especially reviewed at length the case of Lucena v. Crauford (3 B.& P. 75), where commissioners appointed under an act of parliament for the custody, care, sale and management of such ships and cargoes belonging to subjects of the United Provinces as should be brought into the ports of the United Kingdom, were held to have an insurable interest in Dutch ships and cargoes while on their passage to England, which had been taken by a British cruiser under the instructions of the admiralty. The De Forest case was approved, and the subject of insurable interest was re-examined at length on principle and on authority in Herkimer v. Rice (27 N. Y. 163), where the court (Denio, C. J., Op., 172) held that the administrator of an insolvent estate has an insurable interest in buildings descended to the heirs, on the ground that the right of creditors to resort to a sale of real estate of decedent for the payment of debts, gives them such an interest therein as to support an insurance, though they have no estate in the real property and no lien on it, but have important rights connected with it, and a pecuniary interest in its preservation ; and that the administrator insures for the benefit of such creditors so far as required to pay the debts of the estate, and that the law does not require that the assured should have an estate or property in the subject of the insurance ; it is sufficient that he have a direct pecuniary interest in its preservation. The case of Lucena v. Cranford, supra, was elaborately .reviewed, and followed ; and the court said (page 177): “ No property in the thing is required ; it is enough if the assured is so situated as to be liable to loss if it be destroyed by the perils insured against.” Because.the creditors have such insurable interest, the court concluded that the administrator had also, since he is charged with the duty of procuring the application of the real estate to the payment of debts, when necessary. (2) Herkimer v. Rice was reviewed and approved in Rohrbach v. Germania Fire Ins., Co. 62 N. Y. 47, where the subject of “ Insurable interest ” was fully and at length considered (Folger, J., writing the opinion). It was stated in the opinion : “ But the result of a comparison of the text writers above cited is, that there need not be a legal or equitable title to the property insured. If there be a right in or against the property which some court will enforce upon the property, a right so closely connected with it, and so much dependent for value upon the continued existence of it alone, as that a loss of the property will' cause pecuniary damage to the holder of the right against it, he has an insurable interest.” * * * The question is one of damages rather than title or possession ; and it will be enough in general to show such a relation between the insured and the property, that injury to it will, in natural consequence, be loss to him; and it is not necessary to show that the insured is the legal or equitable owner.” Numerous authorities are cited to support the principle enunciated ; among others, the court refers to Springfield Co. v. Allen, 43 N. Y., 389, 395-396, and quotes the remarks of Allen, J., made in that case : “ An insurable interest may exist without any estate or interest in the corpus of the thing insured.” It was enough that there be a pecuniary interest in the preservation and protection of the property, and that the insured might sustain a loss by its destruction. Nor was it necessary that the nature of the interest should be disclosed. (3) In Hooper v. Robinson, 98 U. S. 538, Justice Swayne, delivering the opinion of the court, says : A right of property in a thing is not always indispensable to an insurable interest. Injury from its loss or benefit from its preservation to accrue to the assured may be sufficient, and a contingent interest thus arising may be made the subject of a policy,” citing Lucena v. Crauford, supra, and other cases. (4) It has been repeatedly decided, and no one at this day will question the right of an underwriter to reinsure so as to protect himself against the risk he has incurred by having insured, and yet he has no estate in or lien on the property insured, but he has “ such an interest in the property insured connected with its safety as will occasion loss if it be destroyed.” N. Y. Bowery Ins. Co. v. N. Y. Fire Ins. Co., 17 Wend. 363. Mutual Ins. Co. v. Home, 2 N. Y. 235. The last case originated in this court, and its judgment was affirmed on the principle that “ the interest acquired in consequence of the previous insurance was an insurable interest, * * * and the interest of the insured in the preservation of the property was the interest insured.” (5) The principles above stated have recently been again examined by the Court of Appeals, and applied to a case in which the interest of the assured was at least as remote as in the present case. National Filtering Oil Co. v. Citizens’ Ins. Co., 106 N. Y. 535.
    II. The precise question involved in this appeal has been decided by the United States Circuit Court, Eastern District of Missouri, 18 Fed. Rep. 250, where the court says :—“ It only remains, then, to determine whether a stockholder in a corporation may have such an interest as I have indicated. We are very clearly of the opinion that he may. It is true that the title to the property is in the corporation ; that the beneficial interest is in the stockholders of the corporation. The stock of a corporation represents its property, and is evidence of the right of the stockholder to receive the profits and increase of the corporate property. It is a very plain proposition, in onr judgment, that the destruction of the corporate property may entail pecuniary loss upon the stockholder, and, therefore, that he has a right to insure his interest as such stockholder. In this case the property was a steamboat, and the insured was the holder of a portion of the stock, which entitled him to three - sixteenths of the corporate property.” In this decision the court sustained the principle established in Cone v. Niagara Ins. Co., 60 N. Y. 619 ; Herkimer v. Rice, 27 Ib. 162, and National Filtering Oil Co. v. Citizen’s Ins. Co., 106 Ib. 535—that it is not necessary that the party who takes out the policy should have any title to the property insured : it is sufficient if he has such an interest in it as would subject him to pecuniary damage or loss in the event of its destruction—and held that a stockholder would suffer pecuniary loss by the destruction of the corporate property, and consequently had an insurable interest in it.
    III, The interest of a shareholder in the corporate property is such that he will be liable to pecuniary loss through its destruction. Warren v. Davenport Fire Ins. Co., 31 Iowa, 464 ; Seaman v. Enterprise Ins. Co., 18 Fed. Rep., 250 ; May, Ins., § 95 ; Greenhood Public Pol., 255. That a shareholder is “ interested in the preservation of the corporate property,” or that he will “ sustain pecuniary loss by its destruction,” cannot be denied. He has as great, if not a greater, interest in the preservation of it as a creditor of the corporation. If this steamboat constituted all the corporate property and was destroyed by fire or by the sea, and there was no insurance, would not the shareholder lose everything ? If the vessel was partially damaged (in the absence of insurance) would he not be proportionately injured by reason of the depreciation of his interest in the vessel ? The shareholder is not only interested in the preservation of the property and its escape from ' destruction, but he is interested that the property should be preserved from injury, and kept in a condition in which it might be productive of income or profit in which the shareholder would share ; if it was a building owned by the corporation, that it might produce rent; and in case of a vessel that it might earn freight, in which rent and freight he could share. So again the loss would not only occasion damage to the corporation to the extent in value of the property destroyed, but might so cripple the corporation that it would be unable to continue its business or pay its debts, and thereby not only injure the shareholder, but subject him to liability for the debts of the company. The loss of a steamer in which capital of this corporation was invested evidently diminishes the earning power of the company, and reduces its power to pay dividends, and in that way produces a direct pecuniary loss to the shareholders. In order to replace the steamer and restore the earning power of the stock, the corporation must either use its surplus assets, or borrow money ; and in either case the loss falls on the shareholders, who thus come clearly within the principles which have already been stated, and which require no other interest in the property than one which will be subject to pecuniary loss if the property be destroyed.
    IV. The relation of the stockholder to the corporation and its property is that of a cestui que trust towards the trustee and the trust estate. Anderton v. Wolf, 41 Hun, 571, 574 ; 1 Morawetz Corp. (2d Ed.), § 237. The cestui que trust has an insurable interest in the trust property, and it follows that the stockholder has an insurable interest in the corporate property. White v. Hudson. River Ins. Co., 7 How.
      341 ; Hume v. Ins. Co., 23 So. Car., 190. There is no difference in principle between the case of the stockholder and the case of a creditor. They are both, in their relation to the corporate property, cestui que trust, and if the one has an insurable interest, as cases cited' above show that he has, no reason is perceived why the other has not.
    V. Philips v. Beckel, 20 Ohio, 174, is the only case heretofore cited by the defendant’s counsel, or, after much examination of the authorities, discovered by plaintiff’s counsel, in which it is said that a stockholder has no insurable interest ; but that case proceeded upon the ground of misrepresentation as to the nature of the interest of the assured, who stated in their application that they owned the property in fee unincumbered, whereas it belonged to a corporation whose stock they held, and was subject to a mortgage ; and that misrepresentation was the more material because the Insurance Company in that case was entitled by its charter to a lien upon property insured by it. The dictum at the close of the opinion that the plaintiff had no insurable interest in the property whatever, was based entirely upon the reason that “the fee was in another person,” which, as the cases cited above clearly show, is not sufficient in this state to defeat an insurance where the assured is in such a position as to suffer pecuniary loss by the destruction of the property. The well reasoned case of Warren v. Davenport Fire Ins. Co., 31 Iowa, 464, follows the principles stated in the preceding points, and shows that they lead to the conclusion that a stockholder’s interest in the corporate property is insurable.
   By the Court.—Dugro, J.

The stipulation between the parties reads, “***** it was considered by both parties that if the decision of this (the superior) court in the steamship company’s case, holding that the vessel was a total loss, should be affirmed by the court of appeals, the plaintiff herein would then be entitled to recover, if J. L. Tobias had an insurable interest in the vessel, and it was thereupon agreed that * * * * * the question of J. L. Tobias’ insurable interest in this case, should be reargued at the general term, and that the decision of the general term on such re-argument should be final, so far as the plaintiff was concerned. * * * * *

“ Whereupon it is agreed that this cause be re-argued at general term on the question of J. L. •Tobias’ insurable interest, &c.”

The only question, therefore, before this court is : Did Tobias have an insurable interest ? If he did, the decision of the general term on this question by a fair interpretation of the stipulation is to be final in regard, to the appeal.

The defendant in the statement on his brief says, Upon March 15, 1879-, the appellant, The Commercial Mutual Insurance Company, issued to one Joseph L. Tobias a policy of insurance upon the steamer “ Falcon ” for the sum of $1,000.

Tobias was, at the time of effecting this insurance, a stockholder in the Merchants’ Steamship Company, which then owned the steamers “ Sea Gull ” and “ Falcon.”

Accepting this as a correct statement of the facts, I think Tobias had an insurable interest in the vessel; for he had such an interest in it as that by its destruction he would suffer pecuniary loss. Seaman v. Enterprise Co., 18 Fed. Rep. 250 ; 21 Ib. 778. An insurable interest may exist without any estate or interest in the corpus of the thing insured. Springfield Fire and Marine Insurance Co. v. Allen, 43 N. Y. 389, 395-6.

The question is one of damages rather than title or possession, and it will be enough if such a relation exists between the assured and the property that injury to it will, in natural consequence, be loss to him. And it is not necessary to show that the insured is the legal or equitable owner. Rohrbach v. Germania Fire Ins. Co., 62 N. Y. 47.

That the policy runs to the plaintiff, and by its terms insures his interest in the vessel (he being neither legally nor equitably the owner of the vessel), does not prejudice the plaintiff’s claim.

There is no doubt what property the plaintiff and defendant meant to insure, or that it was that which was destroyed. Rohrbach v. Germania Fire Ins. Co., supra, p. 60.

With this opinion I think the judgment appealed from should be affirmed.

Sedgwick, Ch. J., and Truax, J. concurred.


source: Caselaw Access Project

author: By the Court.—Sedgwick, Ch. J.

license: Public Domain

text:
    JOHN TOWNSHEND, Plaintiff, v. EDWARD FROMMER, et al., Defendants.

      Ejectment, action of, when it lies■—Conveyance in trust.—Estate of trustee and cestui que trust under same.—Mortgage foreclosure, parties to same.

    The land and premises in question, the subject of this action, were conveyed to one Clarissa E. Curtis, subject to a prior-purchase money mortgage, and she and her husband conveyed the same to Eliza Eacey in trust, “ to receive the yearly income, rents and profits during the natural life of said Clarissa, and to her sole and separate use, and at the death of said Clarissa, to convey said land to the children of said Clarissa, living at her death, and the surviving children of such of them as may then be dead, in equal portions, per stirpes and not per capita.” The deed further provided that in case of the death of said Clarissa, leaving no child or grandchild her surviving, the lands shall belong to and vest in the heirs of said Clarissa, to whom the trustees shall convey the same, &c. The mortgage to which the lands were subject was foreclosed by action. Clarissa Curtis and her husband, and Eliza Eacey, the trustee and holder of the estate for the life of Mrs. Curtis, were made parties thereto, and the lands were sold under the judgment in said foreclosure action, and the defendants claim title to the same under the Master’s deed. Mrs. Curtis died in 1886, leaving children and grandchildren, none of whom were made parties to said foreclosure action, and after her death the plaintiff began this action to recover thepossession of four undivided tenths of said lands that had been conveyed to him by certain of the children and grandchildren of Mrs. Curtis. Eliza Eacey, the trustee, never made any conveyance of the lands under the trust deed.

      Held, That this action of ejectment cannot be sustained. The rule given by Chitty prevails in this state. “ The lessor of the plaintiff must also have a strict legal right, a mere equitable and beneficial interest without the legal title will not suffice.” The facts do not admit a presumption that those under whom the plaintiff claims have received a conveyance from Mrs. Eacey, the trustee, or her heirs. The trust in question was not merely nominal, or such a trust that equity will execute it by deeming the conveyance made, although not actually made, &e. That under the statute and at common law the execution of a power implied the occurrence of the event or the doing of the act, which is the future existence of the use intended by the grantor. The cestui que trust, represented by the plaintiff, took no estate by the trust deed, but will have an estate according to the act done and the appointment of the use provided in the trust deed. When that act is done, and not until then, the rule applies that “ the appointment relates back to the deed of the grantor of the power.” The plaintiff had no legal interest in the land that entitled him to maintain an action of ejectment, and, if he had no such legal interest, it is not necessary to inquire if he had an interest of some other kind, and then to inquire into its characteristics.
    Before Sedgwick, Ch. J., and O’Gorman, J.

      Decided June 3, 1889.
    Exceptions of plaintiff ordered to be heard in the first instance at general term, a verdict having been directed for defendants.

      John Townshend, in person, for plaintiff.

      John T. Dillon, attorney, and John M Parsons, John C. Shaw and Grate Nathan, of counsel, for defendants.

       The points of the counsel, of plaintiff and defendants, in this case are most voluminous and exhaustive of the subject in law and equity, and together cover all the leading cases and the statute and common law in relation to trusts, and estates in trusts, and powers in trusts ; and also in relation to the estate of mortgagees and purchasers at a foreclosure sale, and the necessary parties in an action for foreclosure. The reporters deem it impracticable to report a summary of the main points that shall fairly represent'the counsel on the important questions involved in the case, and therefore refer to the points on file in the office of the clerk of this court.— Beporters.

   By the Court.—Sedgwick, Ch. J.

The action is in ejectment. The land in question, in 1835, was held in fee by one Wagstaff. He conveyed to one Dimond, taking from the latter a purchase-money mortgage. The land then was conveyed by mesne conveyances, to Clarissa E. Curtis, subject to the mortgage. She and her husband, in 1837, conveyed to Eliza Racey, as trustee. ° The decision of this case turns upon the nature of this conveyance.

The conveyance was to Eliza Racey, “ the party of the second part, her heirs and assigns, to her and their own proper use, benefit and behoof forever, but in trust, nevertheless, that the said party of the second part and her heirs shall receive the yearly income, rents, profits and produce of the said land and premises, and apply the same yearly during the natural life of the said Clarissa to the use of the said Clarissa, free and clear, &c., but to the sole and separate use of the said Clarissa. And on the further trust, that the said party of the second part and her heirs shall, at the decease of the said Clarissa, convey the said lands, and every part of them, in fee simple, to the children of the said Clarissa, living at her decease, and the surviving children of such of them as may then be dead, in equal portions per stirpes and not per capita, &c. And in case of the death of the said Clarissa, leaving no child or grandchild her surviving, the said lands and premises shall belong to and rest at her decease in fee simple to her right heirs, to whom the said party of the second part and her heirs shall convey the same accordingly.”

The mortgage that has been described was assigned, and the mortgagee began a suit to foreclose it in 1837. Mrs. Curtis and her husband were made defendants. No child or grandchild of Mrs. Curtis was made a defendant. The land was sold under the judgment in the suit, and the present defendants claim under the Master’s deed then given.

Mrs. Clarissa Curtis died in 1886, leaving children and grandchildren. In 1885 certain of the children and grandchildren conveyed to the plaintiff four undivided tenth parts of the land. After the death of Mrs. Clarissa Curtis the plaintiff began this action to recover the possession of these undivided interests. On the trial the court directed a verdict for the defendants, and ordered the exceptions to be heard, in the first instance, at general term.

The plaintiff’s counsel claims that the plaintiff has such an interest in the land that he is entitled to bring an action of ejectment. The defendants’ counsel claims that the plaintiff has no legal interest in the land which will support ejectment.

The rule given by Chitty (1 Ch. P. [190]) prevails in this state. “The lessor of the plaintiff must also have a strict legal right, a mere equitable and beneficial interest without the legal title will not suffice.” The notes to this cite some of the cases in this state, and see also Moore v. Spellman, 5 Den. 225; Peck v. Newton, 46 Barb. 173. The facts of this case do not admit a presumption that those under whom the plaintiff claims have received a conveyance from Mrs. Racey or her heirs or trustees.

The plaintiff claims no other source of legal title than the trust deed, and that this gave his grantors legal title under the clause “ on the further trust that the said party of the second part and her heirs shall, at the decease of the said Clarissa, convey the said lands, &c., in fee simple, to the children of the said Clarissa living at her decease, and the surviving children of such of them as may then be dead.”

It may here be said, that the last clause of the trust deed is to be disregarded here. It was a provision for the case of an event which now cannot occur. This event was the death of Mrs. Curtis without leaving living children and grandchildren.

The provision on which the plaintiff rests as giving a legal title to his grantors, in reality gives a power in trust. It gives authority to the trustee' to do what might be lawfully done by the grantor of the power, that is to convey. (2 Rev. Stat. [732]). And in case of such a trust (§ 59), the lands to which the trust relates shall remain or descend to the persons otherwise entitled, subject to the execution of the trust as a power. As the trust has not been executed by conveyance as directed, Mrs. Curtis remained entitled in fee, and that fee was foreclosed in the foreclosure suit already referred to, and has been transmitted to the defendants under the Master’s deed. It is also true that Mrs. Curtis’ fee was subject to the estate of the trustee for the life of Mrs. Curtis. The trustee was a party to the foreclosure. This, however, does not affect the nature of the interest of the grantors of plaintiff.

It is not necessary to examine the cases which counsel for defendants have cited. They apply the provisions of the Revised Statutes on the subject, and which are so clear in expression that they do not call for construction. It is proper to look at the cases on which the counsel for plaintiff relies. This fundamental proposition made by plaintiff is, that the trust in question is merely nominal, or is such a trust that equity will execute it by deeming the conveyance made, even although it has hot been made. As to this, it must be said that the statute keeps the trust in existence as an express trust, as completely as if it were an express trust of that kind in which the trustee validly becomes possessed of the fee, so far as the purposes of the trust require. § 58. The statute declares that it is valid as a power in trust, and if it is valid it is to' be executed in the manner that the grantor designates. Section 118 explicitly states that “ no power can be executed except by some instrument in writing which would be sufficient in law to pass the estate, or interest intended to pass, under the power, if the person executing the power were the actual owner.” It cannot be said that law or equity, in giving due consideration to the trust, can repeal the statute.

At common law the rule was the same, and the execution of a power implied the occurrence of the event or the doing of the act which is the condition of the springing into existence of the future use intended by the grantor. The cestui que trust takes no estate by the trust deed, but he will have an estate according to the act done and appointment of the use. When that act is done, then, and not until then, is the rule to be applied, that the appointment relates back to the deed of the grantor of the power. 4 Kent (13 ed.) 316 ; 2 Sug. on Pow. (23); Duke of Marlborough v. Lord Godolphin, 2 Ves. 6.

The counsel for plaintiff cites Downing v. Marshall, 23 N. Y. 366, and N. Y. Dry-Dock Co. v. Stillman, 30 Ib. 174. It seems to me that they do not confirm the position of plaintiff. In the latter case, according to the opinions, there was declared a trust to sell lands for the benefit of one Smith and his associates, or to sell lands, and divide the proceeds among Smith and his associates. The question was, whether, thereby, Smith had a legal interest in the proceeds, the lands having been sold. Judge Mullin said, that the interest that Smith acquired under the trust was an equitable title to enforce the execution of the power and the sale of the land for an account and distribution of the proceeds.” Judge Seldee said: “ It is clear, therefore, that Smith had no title to the lands in question under section 47 as the beneficiary of the trust attempted to be created,” Judge Seldee had cited Downing v. Marshall, supra, for the purpose in following that case of saying that section 47 refers exclusively to a class of passive trusts, where the immediate possession and whole beneficial use of the land is given directly to the cestui que trust.

In view of what is the exercise of a power, it cannot be said that until that power is exercised the cestui que trust has a right to immediate possession.

In Parks v. Parks, 9 Paige, 107, I cannot find anything that is relevant to a trust which, by the statute, is valid as a power in trust. Nor is Nicoll v. Walworth, 4 Den. 385, to be applied to an existing, unexecuted power in trust, as it is substantially a case of a trustee whose only trust is to allow to others the possession and use of land.

Welch v. Allen, 21 Wend. 147, was an action of ejectment. The plaintiff was the heir of one John Welch. Commissioners of the land office, in .pursuance of an act of the legislature, had issued a patent to T. in trust for John Welch and his heirs and assigns, with a provision that T. should dispose of the land, and apply the proceeds to the support of John Welch and family, and after his decease pay the residue, if any there be, to his legal representatives. After the decease of John Welch, certain of the lands remained unsold. As to these the plaintiff, heir of John, recovered in ejectment, on the ground that the trust to sell and pay the proceeds ceased with the death of John, and that then as to . the unsold land T. was but a nominal trustee, the use being in the heir, and the Revised Statutes executed such a trust. In reality the dominant provision was a general trust to John Welch and his heirs. This would, if not varied, he a conveyance to the use of John Welch and his heirs, and the only modification of this was, that something might be done by the trustee during the life of John Welch, and at his decease his heir received the land under the provision of the general trust. The authority of this case is to a certain extent affected by an explanation of its statement of facts in Welch v. Silliman, 2 Hun, 491. The cited case does not show that the trustee of .a power to convey has not an active duty imposed upon him, that is to convey. If such were not his duty, and if the law executed it, the result would be an estate at law. And then equity would not compel, as it has the right to compel, the execution of the power for, being executed at law, equity would have no jurisdiction.

In the matter of the petition of Livingston, 34 N. Y., 555, the conveyance was by William Winter to one Birdsall, as trustee, to receive the rents and profits to the use of Winter during his natural life, and upon the death of Winter to assign, transfer and convey, &c., in the manner following, that is to say, to the lawful issue of Winter living at the time of his death, according to the rules prescribed by the statute regulating the descent of real property, and in case of Winter dying without leaving him surviving any such lawful issue, then upon the further trust, to assign, transfer and convey to his nephews now; living. There were here, if the views that have been given are right, an express trust for the life of William Winter, and for that the fee went to the trustee, and a valid power in trust, namely, the power to convey to the issue, in which case, if issue survived, without William Winter having conveyed the fee, such issue would have the fee and also be entitled to have the power executed, and also a valid power in trust to convey to nephews, if issue of Winter had not survived. In Winter’s lifetime, he not having issue, the nephews made petition for the removal of the trustee. The court finally held that they could not maintain such a proceeding, whatever was the nature of their interest. Before the court announced this, it passingly said that, as Winter had no children, “ it may perhaps be assumed that the nephews in question take a vested remainder under our statute.” The court then said: “So far as the deed creates a trust in Birdsall to receive the rents and profits, and apply them to the use of William Winter during his life, it is expressly authorized (1 R. S. 728, § 55), by statute. So far as it requires the trustee to convey the legal estate to those who shall be entitled in remainder under the trust deed, his services will be useless ; as the transfer will be made, if at all, by operation of the statute of uses, and his office will then terminate. 1 R. S. 730, § 67.”

It is not clear whether it was meant that the trustee’s conveyance would be useless because the nephews were entitled in remainder, without the trustees executing the power, or that the trust deed intended to give a remainder, and the execution of the conveyance was merely ceremonial. I think it was an inadvertence to say that the terms of the trust-deed gave a remainder or a use to the nephews. The whole estate, so far as it was necessary to accomplish the purposes of the trust, was given to the trustees and not to the cestuis que trust, and so far as the trust existed- as a valid power in trust, neither the trustee had any estate or the nephews as cestuis que trust had remainders, but the whole estate of inheritance was in William Winter subject, to the estate for his life in the trustees. At Winter’s death, if it be supposed that the nephews would be his heirs, they would get the fee by inheritance and not by the trust-deed. I am of opinion that, as an exact estimation of what the nephews took under the power in trust in the trust-deed was not necessary to the decision of the case, the remarks of the court were not intended for more than an assumption favorable to the petitioners as to their interests in the lands, with the result that, even on that assumption, they were not entitled to take the proceeding in Winter’s lifetime.

In Williamson v. Field, 2 Sand.Ch. 533, it is said: “ The direction that the trustees are to convey the property to the issue of Clarke living at his death, in no manner affects the point. The issue would be deemed in equity as having the whole interest upon the death of Clarke, without any regard to a conveyance of the legal title. And the objects of the trust having been accomplished, the estate would now be held a legal estate in those entitled under the will (1 R. S. 727, §§ 47-48 ; Ib. 730, § 61). I do not proceed to examine this case particularly, for any inference from it that might be deemed favorable to plaintiff’s position, is opposed by the later case of Wood v. Mather, 44 N. Y. 249, which specifically approved the opinion delivered in that case at the general, term, 38 Barb. 473. The trust was to pay the rents and profits to J. during her life, and after her death to convey to such of her children, as should survive her. Both courts held that this trust was not executed as a legal estate in the surviving children, either by the Revised Statutes or the former statute of uses. It was considered that the duty to convey was an active duty; and that the children were intended to take the uses through the conveyance. Nothing was said about a power in trust, but the decision really concerned such a power.

I therefore think that the plaintiff had no legal interest in the land that entitled him to maintain ejectment. If he did not have a legal interest, it is not necessary to inquire if he had an interest of another kind, and then to ascertain its characteristics. This result makes it unnecessary to examine other questions made by the case.

The plaintiff’s exceptions should be overruled, and judgment entered on the verdict, with costs.

O’Gorman, J., concurred.


author: By the Court.—Truax, J.

text:
    CROFT C. CARROLL, Appellant, v. CLAYTON E. SWEET, Respondent.

      Payment of debt pleaded, must be proved.—Receipt for indebtedness subject to parol proof in explanation of its real import~Pleadihgs should not be submitted to jury without proper instruction.

    In this action to recover a balance of indebtedness for service, &c., one of the defences was payment, and it appeared in evidence that plaintiff rendered his bill for services to defendant in the sum of $439, on account of which defendant paid his own check for $165.55 and the check of one Wood-ruff, endorsed by defendant, for $273.45, and plaintiff receipted the bill. The only evidence on this point was the uncontradicted evidence of the plaintiff, who testified that, when he presented the bill, defendant handed him the Woodruff check saying, “ I have Mr. Woodruff’s ■ check, will you take that?” and plaintiff replied, “Ves, with your endorsement,” and thereupon the defendant endorsed the Woodruff check and handed it to the plaintiff. Nothing was said about the checks being taken in payment of the account. The Woodruff check was not paid on presentation, and plaintiff brought this action to recover the balance of the original indebtedness. Held, that this evidence did not warrant the jury in finding that the Woodruff check was given to the plaintiff in payment, and the verdict should have been set aside and a new trial granted.
    Another defence was, that the Woodruff check was not presented for payment for nine days after it was given to plaintiff, and by reason of such failure to present the check there was a loss to defendant. Held, that there was not the slightest evidence to warrant the jury in finding that there was any loss to defendant by reason of the failure of plaintiff to present the check. The uncontradicted evidence being that at no time did the drawer of the check have enough funds in the bank, upon which . the check was drawn, to pay the check ; that the place of payment was the bank, and it was the duty of the drawer to have funds at the place named in the check. The plaintiff fulfilled all the obligations that the law placed upon him. when he presented the check for payment at the place named therein. Held, also, that in an action for the collection of a pre-existing debt, the onus of proving payment is upon the defendant, and proof of the delivery to, and receipt by, the plaintiff of a check on account of the indebtedness, is not sufficient proof of payment. The defendant must go further and show that the check has been paid or that by the laches of the plaintiff he has incurred a loss. The delivery of a check does not operate as payment of a previous debt, and a receipt given upon delivery of a check acknowledging the receipt of money, adds nothing to the effect of such delivery, and is subject to parol proof as to its real import.
    The court, at the close of this case, allowed the jury to take the pleadings into the jury-room, instructing the jury “ that the pleadings may be regarded as in evidence, but only so far as they relate to questions at issue and presented at the trial, and as to which evidence has been taken, or where the facts are admitted.” The counsel for plaintiff' requested the court to instruct the jury “ that the matters alleged in the answer are not to betaken as admitted, because there is no pleading on the part of the plaintiff in reply.” The court refused the request of counsel, and he excepted. Held, that it was error to submit the pleadings to the jury with the instructions given by the court and without the modification asked for by the counsel for plaintiff.
    Before Sedgwick, Ch. J., Truax and Dugro, JJ.

      Decided June 3, 1889.
    Appeal from a judgment, entered upon the verdict of a jury, and from an order denying a motion for a new trial upon the minutes.

      Carter, Hughes & Cravath, attorneys, and Charles E. Hughes, of counsel, for appellant, argued :—
    I. The check of a third party, delivered by a debtor to his creditor, is, in the absence of an express agreement, presumed to be given simply as a means of obtaining payment of the debt, and not as absolute payment. This principle is not varied by the fact that the creditor, upon receiving the check, gives a receipt in full. It is a rule well set-tied and repeatedly recognized in this court that taking a note either of the debtor or of a third person for a pre-existing debt is no payment, unless it be expressly agreed to take the note as payment and to run the risk of its being paid, or unless a creditor . parts with a note, or is guilty of laches in not presenting it for payment in due time. He is not obliged to sue upon it. He may return it when dishonored, and resort to his original demand. It only postpones the time of payment of the old debt until a default be made in the payment of the note. Tobey v. Barber, 5 Johns. 68. In Bradford v. Fox, 38 N. Y. 290, where the action was brought on an account for goods sold, and it was alleged that a check had been received in payment, the court said : “ The delivery of the check did not operate as payment of the previous debt. (Hill v. Beebe, 13 N. Y. 566.) The receipt given by the plaintiff’s attorney, therefore, although it did not refer to the check, but acknowledges the receipt of $75, as per account rendered, added nothing to the effect of a mere delivery of the check to them. The receipt, although, prima facie, importing the receipt of the money, was subject to explanation by parol proof, and the defendant himself proved that no money was paid, but the check only delivered. * * * Here the action is for the collection of a pre-existing debt, and the onus of proving payment was upon the defendant. To effect this, proof of the delivery to and receipt of the check by the plaintiff not being sufficient, the defendant was bound to go further and show that, by the laches of the plaintiff, a loss had accrued, to be borne by some one, and when this appeared, the law would cast the loss upon the plaintiff, and would work out such result, by making the check operate as payment of the debt. Retaining the check after giving notice did not affect the question. It was held subject to the order of the defendant, and surrendering it upon the trial was sufficient. Nichols v. Michael, 23 N. Y. 567. See also Porter v. Talcott, 1 Cow. 359, 383 ; Vail v. Foster, 4 N. Y. 312 ; Turner v. Bank, 4 Abb. Ct. App. Dec. 434 ; Buswell v. Pioneer, 37 N. Y. 312 ; Syracuse R. R. Co. v. Collins, 3 Lans. 31 ; S. C. on appeal, 1 Abb. N. C. 47. When, however, a note or check, either of the debtor or of a third person, is given for the purchase price of goods, at the time of the sale, a different rule applies, and, in the absence of an express agreement, the note or check is presumed to be taken in absolute payment.. Whitbeck v. Vanness, 11 Johns. 408 ; Noel v. Murray, 13 N. Y. 167 ; Gibson v. Tobey, 46 Ib. 640. The distinction between the two cases is well stated by Judge Dean in Noel v. Murray [supra), p. 172, as follows : “ It is well settled, both on authority and principle, that the acceptance by the creditor of the note of a- third party for an antecedent debt, is no extinguishment of the debt, unless it is shown that there was an agreement between the parties that it should operate as an extinguishment, and that, in such case, the onus is upon the party seeking to set it up as a payment. But where there is no debt existing between the parties, arid the one delivers to the other property, and receives in return the note of a third person in full or part payment, and gives a receipt saying that it is received in full or part payment, the presumption is that it was so received, and the onus is then upon the party receiving such note, to show the contrary.” The presumption that a note or check delivered by a debtor to his creditor, on account of an indebtedness, is not received in absolute payment, is not altered by the giving of a receipt in full. In Tobey v. Barber (supra), where this rule was recognized, the court, referring to an early precedent, said: “ The case of Murray v. Gfouveneur & Kemble, which was decided in the Court of Errors in February, 1800, on an appeal from a decree in Chancery, is in point as to the question before us, for it is to be observed that the rules of evidence are generally the same in cases of law and of equity. It was there decided that receipts were explainable, and that a bill was not a discharge of a precedent debt, unless by express agreement, and that a receipt of a bill as cash was still not sufficient evidence that the bill was taken as absolute payment.
    II. When a check given by a debtor to his creditor is not paid on presentation, the debtor is not relieved from the payment of his debt, unless he has sustained actual loss by the laches of his creditor. The debtor is none the less a debtor because he has provided his creditor with a means of obtaining payment. Unless he can show that, by the negligence of his creditor in dealing with the check, he has suffered actual loss, he will not be excused from payment of the debt. This is well stated by Mr. Daniels as follows : “ But while it is true that the burden of proof is upon the plaintiff to show that no loss or injury resulted to the drawer when he seeks to excuse the non-presentment of the check, yet where the suit is brought upon the pre-existing debt for which the check was given, it has been held that the defendant who pleads payment, must not only show delivery to and. acceptance of the check by the plaintiff, but also that through the plaintiff’s laches loss or injury has accrued.” Daniels on Negot. Insts., .§ 1588. The leading authority upon this point is Syracuse R. R. Co. v. Collins, 1 Abb. N. C. 47,reported below, 3 Lans. 29. When the debtor gives to his creditor a check of a third person, it is equally clear that no definite loss can accrue from the creditor’s delay in presenting it for payment, unless by reason of the neglect, the fund upon which it was drawn can no longer be made available for its payment. If the check was worthless when given, and no funds are subsequently deposited to meet it, it furnishes the creditor no opportunity to collect his claim, and his neglect to promptly present it can occasion the debtor no actual damage. The principle established by the authorities is that the onus of proving payment is upon the debtor. If he alleges that he has sustained loss through the laches of the creditor, that loss must be definitely determined and clearly proved. It must not be left to hypothesis or conjecture.

      J. W. Bartram, attorney and of counsel, for respondent, argued :
    I. The plaintiff agreed with defendant to accept the Woodruff check in full payment and gave receipt in full. When a vendor of goods takes at the time of the sale and delivery, the note of a third person and gives a receipt for payment in full of the price of the goods, the presumption is that the note was taken as an absolute and final payment for the goods. Barbour’s Law of Payment, Page 470, § 2 ; Noel v, Manning, 1 Duer, 385 ; aff’d 13 N, Y. 167 ; St. John v. Purdy, 1 Sand, 9 ; Hall v. Stevens, 40 Hun, 578 ; Conklin v. King, 10 N. Y. 440.
    II. The burden of proving that the check was not received in full and as a cash payment, rests with plaintiff. Gibson v. Toby, 46 N. Y. 637, and cases above cited. No such proof appears in the case at bar, but on receipt of the check, plaintiff gave receipt in full.
    III. The question as to whether or not the check was received in satisfaction of the claim, and was intended so to be received, was a question of fact for the jury. The jury found the agreement to be, that the check was received by plaintiff as such satisfaction. Darnell v. Morehouse, 45 N. Y., 64.
   By the Court.—Truax, J.

On the 22d of August, 1887, the defendant was indebted to thé plaintiff in the snm of $439.00 for services rendered before that date by plaintiff to defendant. The plaintiff presented his bills for such services, and the defendant gave him his own check for $165.55, and the check of one Woodruff, which was drawn to thó order .of the defendant, for $273.45. ‘Defendant’s check was paid, but the Woodruff check was not paid ; and plaintiff brought this action, on the original indebtedness to recover the said sum of $273.45.

One of the defences is payment. There is no direct evidence that the Woodruff check was taken in payment. The defendant says that the plaintiff presented his bill; he (defendant) gave him his check and the Woodruff check, and plaintiff gave defendant a receipt in full. Plaintiff says that when he presented his bill to the defendant, the defendant handed him the Woodruff check saying, “ I' have Mr. Woodruff’s check ; will you take that?” And plaintiff replied, “ Yes, with your endorsement” —and thereupon defendant endorsed the Woodruff check and handed it to plaintiff. Nothing was said about the check’s being taken in payment of the account, and it is to be noticed that the receipt does not purport to be in full payment. This testimony of the plaintiff was not contradicted on the trial, and is the only evidence in the case on this point.

We are of the opinion that this evidence did not warrant the jury in finding that the check was given to plaintiff in payment ; and, as we shall hereafter see, as there was no other evidence in the case that warranted the jury in finding for the defendant, the verdict should have been set aside and a new trial granted.

One of the defences was that the Woodruff check was not presented for payment by the plain tiff until some nine days after it was given to him by the defendant, and that by reason of this failure to present the check there was a loss to the defendant. There is not the slightest evidence to warrant the jury in finding that there was any loss to the defendant by reason of the aforesaid failure of the plaintiff to present the check. The uncontradicted evidence is, that at no time did the drawer of the check have enough funds in the bank to pay the check. The fact that he had money enough in his possession is immaterial, for plaintiff was under no obligation to the defendant to present the check to the drawer personally and demand payment from him. The place of payment was the bank,—and it was the duty of the drawer to have funds 'at the place named in the check. What the nature of- the relations between the bank and Woodruff were is also immaterial. The plaintiff was not bound to take part in a litigation or controversy between the bank and Woodruff. He had fulfilled all the obligations that the law placed upon him when he presented the check at the place named in the check.

In an action for the collection of a pre-existing debt, the onus of proving payment is upon the defendant; and proof of the delivery to and receipt by the plaintiff of a check on account of the indebtedness is not sufficient to prove payment, but the defendant must go further and show that the check has been paid or that, by the laches of the plaintiff, he has incurred a loss. The delivery of a check does not operate as payment of a previous debt, and a receipt given upon delivery of a- check acknowledging the receipt of money adds nothing to the effect of such delivery, and is subject to parol proof as to its real import. Bradford v. Fox, 38 N. Y. 289.

The court at the close of the case allowed the jury to take the pleadings into the jury-room and instructed the jury that “ the pleadings may be regarded as in evidence, but only so far as they relate to questions at issue and presented at the trial, and as to which evidence has been taken or where the facts are admitted.” The counsel for the plaintiff asked the court to instruct the jury that “ the matters alleged in the answer are not to be taken as admitted, because there is no pleading on the part of the plaintiff in reply.” This was refused and he excepted.

It was error, we think, to submit the pleadings to the jury with the instruction given by the court, and without the modification asked for by the appellant. It presented to the jury without proper instruction, and with an erroneous instruction that the jury might regard as admitted facts, certain allegations of the answer to which the plaintiff had not replied.

Some of the facts that the jury might consider as admitted under this instruction of the court were the allegations in the fifth, sixth, seventh and eighth paragraphs of defendant’s answer. Some of these allegations were entirely immaterial, and no evidence was offered to sustain then,—and yet they went before the jury as undenied by the plaintiff, and it may well be said that they influenced the minds of the jury.

• We are of the opinion that the judgment and order appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Dugro, J., concurred.

Sedgwick, Oh. J., dissented.


author: By the Court.—O’Gorman, J.

text:
    THE MAYOR, &c., OF THE CITY OF NEW YORK, Respondents, v. MARY A. KENT, et. al., Appellants.

      Lease of city real estate executed by comptroller, valid, as also bond executed by sureties for its performance.

    A lease of real estate, executed in behalf of the city of New York by its comptroller in accordance with resolution of the “ commissioners of the Sinking Fund,” is not void. Even if deemed informal it could have been cured on demand of either party, but if not objected to within reasonable time after execution, the parties thereto are estopped by their own laches from complaint or objection on the ground of informality.
    The current of judicial authority favors giving effect to corporate acts, even where formalities prescribed by law have been omitted, provided the manifest lawful intention has been carried into effect, and there is no element of fraud in the transaction, and no violation of justice or equity. This principle of law is held to apply with special force to the case at bar, where the contract in dispute has ceased to be merely executory, and has, in fact, been in part carried out, and where the party dealing with the corporation, having enjoyed the advantages of the contract, seeks to escape from the performance of obligations on the ground of a defect in formal execution.
    A bond executed to the corporation of the city of New York by sureties to secure the performance of such a lease by the lessee is valid, notwithstanding it was not executed by the lessee. Being joint and several, it binds all -who execute it, especially if the intention of the sureties sufficiently appears.
    Before Sedgwick, Oh. J., Freedman and O’Gorman, JJ.

      Decided June 3, 1889.
    Appeal from a judgment entered in favor of the plaintiffs against the defendants upon a trial at special term, a jury having been waived.

      Benjamin Yates, attorney and of counsel, for appellants, argued :—
    I. The lease is invalid. Carlton v. Darcy, 46
      Supr. Ct. (15 J. & S.) 484 ; Ib. Darcy, 90 N. Y. 566. In Carlton v. Darcy, supra, this court held a lease executed in the same manner as the lease in question to be invalid and void and not to convey a title, and the court at page 493 says : “ The answer set up a lease dated April 3d, 1876, which is put in evidence by the defendant between the mayor, aider-men and commonalty of the city of New York, acting by the commissioners of the Sinking Fund, and defendant Darcy, under which he claimed title. This lease is executed by Andrew H. Green and not by the board of the commissioners of the Sinking Fund, nor by the mayor, aldermen, &c. This lease has no validity and confers no title upon Darcy. It was not executed by the commissioners of the Sinking Fund, who appear upon the face of the lease to be acting as agent of the city. Besides Green as an individual or comptroller had no authority to execute the lease.” Carlton v. Darcy was an action of ejectment, and was reversed by the court of appeals (90 N. Y. 566), but the decision of this court as to the validity of a lease of this kind was not disturbed. The court of appeals at p. 573 say : “ The' relation of landlord and tenant between the city and Darcy was recognized by both parties, and although the lease was not formally correct in the manner of execution, the plaintiff is not in a position to question the existence of that relation between the defendants. Whether the city could be made liable upon the covenants in the case in an action by the lessee is not a material question.” Carlton v. Darcy, 90 N, Y. 566. The lease in this case is a lease from the city, and the clerk’s signature and seal of the corporation are necessary under existing laws. (Laws 1873, §§ 13, 102). The charter creating the Board of Commissioners of the Sinking Fund gives them the power to sell or léase lands of the city, but it does not authorize them to execute grants or leases, (Laws 1873, § 15.) Where the charter prescribes the mode in which an act must be done, that mode must be followed, otherwise the act is invalid. Taylor v. Beebe, 3 Robt. 262 ; Brady v. Mayor, 2 Bos. 173; S. C. 20 N. Y. 312; Schenck v. Mayor, 69 Ib. 444; Smith v. City of Newburg, 77 Ib. 138; Lawton v. Met. E. Church, 97 Ib. 119; Dillon on Mun. Corp., 3 ed., § 578; Rex. v. Inhabitants, 5 East. 239.
    II. The lease, the principal obligation, being invalid, the bond, the . collateral obligation, is also invalid, as a valid subsisting' principal obligation is necessary to render the sureties liable. Brandt on Sureties, p. 181; Swift v. Boers, 3 Den. 70; Purdy v. Peters, 35 Barb. 239; Putnam v. Schuyler, 4 Hun, 170. The condition of the bond is that the lessee will perform the covenants of the lease, but the lessee not being liable on the covenants, the defendants cannot be subrogated to the rights of the plaintiffs under the lease, so the plaintiffs have no rights, and the bond necessarily falls with the lease.
    III. The bond, independently of any question as to the validity of the lease, was never executed so as to become a binding obligation upon the defendants. Choteau v. Suydam, 21 N. Y. 179; Whitford v. Laidler, 94 Ib. 145; Alb. Law Jl, vol. 37, p. 188— 208, and cases cited. . The bond was signed by the defendants at different times, and the condition under which it was signed, was that it should be executed by the lessee and two sureties, and approved by the comptroller. These were the terms announced by the plaintiffs, the bond was prepared by them, has been always in their possession, the name of Mary Kent was recited therein-, and a seal was affixed for her signature, but was never signed by Mary Kent nor approved by the comptroller. A surety has the right to prescribe the exact terms upon which he will enter into the obligation and to insist upon his discharge in case these terms are not complied with. Barnes v. Borrow, 61 N. Y. 39.

      Henry R. Beekman, counsel to the corporation, and Henry B. Twombly, of counsel, for respondents, argued :—
    I. The defendant sureties are estopped from denying the right of the comptroller to execute the lease in question. The facts in the case at bar wbre entirely within the knowledge of the sureties. The lessee acted in the capacity which the bond in question recited she occupied ; she had received the benefit from the lease, and had become a defaulter therein. In all such cases, it has been uniformly held that the principles of equitable estoppel apply, as well as the rule that a man cannot aver against his own deed. In the case of Otto v. Jackson, 35 Ill. 349, a parallel case where the action was of covenant on a seal guaranty of a lease, it was objected that there was no proof that one of the lessors executed the lease ; but it was held that the guarantors were estopped from denying the- execution of the lease by the lessees. The court said : “ Entering into this guaranty was an acknowledgment by the guarantors that the lease was duly executed by both lessees.” The same rule is laid down in the text-books, Brandt on Suretyship, § 31. Baylies on Sureties, p. 403. Baylies states the general rule as follows : “Nor will a guarantor of the payment of a bond assigned by him be permitted to defend an action on his guaranty, by showing that the makers of the bond were not competent to contract in the manner they did, by reason that the bond issued by a corporation for a purpose not authorized by its charter. The guaranty of payment of the bond in such case imports an undertaking or agreement that the makers were competent to contract in the manner they have, and that the instrument is a binding obligation on them.” And the cases all bear this rule out: 1869, Remsen v. Graves, 41 N. Y. 471 ; 1859, Zabriskie v. R. R., 23 How. (U. S.) 399 ; 1875, Dalrymple v. Hillenbrand, 62 N. Y. 9 ; 1875, Putnam v. Schuyler, 4 Hun, 169 ; 1875, Arnot v. Erie R. R. Co., 5 Ib., 608. (a.) By virtue of the lease, the defendant has had the possession and use of the property ; the contract, whether authorized or not, has been fully performed in good faith by the city, and the lessee has had the benefit of such performance. Under such circumstances the law will not permit her or her sureties, whose duty it was to see that the lessee did pay, to be relieved from the duty of payment, even if the contract was made without authority by the corporation. When a contract between corporations, or < between a corporation and an individual, has been executed by one of the parties and not by the other, the delinquent party cannot set up ultra vires as a defence. It is only when a contract remains executory on both sides that the defence is available'. In Whitney Arms Co. v. Barlow, 63 N. Y. 62, the court of appeals say : “If the other party has had the benefit of the contract fully performed by the corporation, he will not be heard to object that the contract and performance were not within the legitimate powers of the corporation. * * * The only justification for such a plea by an individual sued upon a contract with the corporation, is, that the obligation is not mutual, as the other party, the corporation, would not be bound by it.” Parrish v. Wheeler, 22 N. Y. 494, says : “ The executed dealings of corporations must be allowed to stand for and against both parties, where the plainest rules of good faith require.” In Steam Navigation Co. v. Weed, 17 Barb. 378, it is decided that a party who has had the benefit of the contract cannot be permitted, in an action founded upon it, to question its validity upon the' ground of want of capacity to contract,, or regularity in contracting, on the part of the corporation which was a party to the contract. In Woodruff v. The Erie Railroad Company, 93 N. Y. 618, it is stated that, a lessee, who has under the lease had possession and use of the property, is es-topped from questioning its validity in an action to recover the stipulated rent, and the court quotes : Whitney Arms Co. v. Barlow, supra and Bissel v. Michigan Southern R. R. Co., 22 N. Y. 258, with unqualified approval. Vide Moss v. Rossi Mining Company, 5 Hill 137 ; Parrish v. Wheeler, 22 N. Y. 494 ; Arnot v. Erie R. R. Co., 67 Ib. 315 ; Buffet v. T. & B. R. R. Co., 40 Ib. 168 ; Fisher v. N. Y. C. & H. R. R. Co., 46 Ib. 644 ; Remsen v. Graves, 41 Ib. 471 ; Olcott v. Cayuga R. R. Co., 27 Ib. 546; Castle v. Lewis, 78 Ib. 134 ; Kent v. Quicksilver Mining Co., 78 Ib. 183. Probably the latest application of this principle is found in the decision of the supreme court in Starin y. The Staten Island Rapid Transit Railway Co., decided January 15, 1889, in which the court say : “ If the lease is executed the city could maintain an action against the corporation for the recovery of the rent, and it would be no defence to that action to say that the railroad corporation had no legal right to enter into such contract. Having entered into it as matter of fact and being in possession under the lease and enjoying its privileges, it would be agaiñst justice and right to set up such lack of power when asked to pay the consideration it promised in return for the granting of such lease. This principle was decided in Whitney Arms Co. v. Barlow (63 N. Y. 62), and has been followed in several cases in this court since that time, and is now the well - established doctrine in such cases.”
    II. The commissioners of the Sinking Fund had .the power to delegate a purely ministerial duty of the comptroller, even though it involved more or less discretion on the part of the said comptroller. The charter of 1873, chapter 335, at section 102, granted the commissioners of the Sinking Fund power to execute leases in the following words : “ The said board shall have power to sell or lease for the highest marketable price or rental, at public auction, or by sealed bids, and always after public advertisement and appraisal under the direction of said board, any city property except wharves and piers.” 1876, Schanck v. Greene, 64 N. Y. p. 501; 1877, Hitchcock v. Galveston, 96 U. S., 341.
    III. The informalities in the execution of the bond in question, said bond being sufficient in substance and containing the proper conditions, will be disregarded, as not affecting the validity of said bond. (a) The fact that the sureties were not named in the body of the bond does not release them from liability. 1857, Decker v. Judson, 16 N. Y 439 ; Stewart v. Carter, 4 Nebraska, 564 ; Baylies on Sureties, p. 404 ; Smith v. Crooker, 5 Mass. 538 ; Danker v. Attwood, 119 Ib. 146 ; Scheid v. Leibshultz, 51 Ind. 38. (b)

    The omission of the principal to sign the bond does not release the sureties' from their liability upon it. The attention of the court is called to the fact that in this case the bond was joint and several. 1864, Williams v. Marshall, 42 Barb. 528 ; 1870, Dillon v. Anderson, 43 N. Y. 235 ; 1862, Secor v. Laws, 9 Bosw. 185 ; 1842, Parker v. Bradley, 2 Hill, 584; 1874, Russell v. Freer, 56 N. Y. 67 ; 1871, Loew v. Stocker, 68 Penn. St., 226 ; 1881, Board of Trustees v. Scheick, 10 Brad. (Ill.), 51 ; State v. Bowman, 10 Ohio, 445 ; Brandt on Sureties, § 127.
   By the Court.—O’Gorman, J.

This is an appeal from a judgment entered against the defendants upon a trial at the special term, a trial by jury being waived.

The action was brought for the recovery from the defendants, as sureties, upon a bond executed by them, to secure the performance by “ Mary Kent ” of the covenants of a lease made by the plaintiffs to ' her, of certain premises in the city of New York, of which the plaintiffs were owners. The lease was for a term of two years, from May the first, 1877.

The lessee entered on the premises and occupied them, according to. the terms of the lease, until May the first, 1879, leaving rent unpaid, amounting to $750.

The lease was executed in counterpart by “ John Kelly, Comptroller,” on behalf of the plaintiffs, and the lessee received one counterpart lease, at' the time of its execution.

The defence is that this lease, so called, was invalid, void, and of no force or effect, on either the lessors or lessee, because executed by “ John Kelly, Comptroller,” inasmuch as he was not the proper officer of the plaintiffs to execute said lease on their behalf; and, further, because the clerk of the common council had not signed said lease, and attached the seal of the corporation thereto.

The defendants contend that the lease, being thus void, and incapable of conveying any title or interest in the premises to Mary Kent, the bond executed to secure her performance of the covenants in the lease, set forth, was also void, and of no binding force or effect as against them. They further contend that, by reason of certain fatal defects in the bond itself, it is void.

The material facts are these :

The “ commissioners of the Sinking Fund,” under authority of law giving them full power to execute leases on behalf of the city adopted a resolution that the “ comptroller ” be authorized to lease the premises in question, and he proceeded to carry the resolution into effect, and executed, signed and sealed the lease to “ Mary Kent.” § 102, ch. 335, Laws of 1873.

The lease and bond were prepared by the counsel of the plaintiffs, and there is reason for the presumption that any defect' in the lease or bond was, the result of inadvertence on his part.

The defendants contend that the law required that the lease should be signed by the clerk, and the seal of the corporation affixed, and that the signature of “ John Kelly, Comptroller,” without the corporate seal, was a fatal defect, and cite various judicial decisions in support of their proposition.

I have examined these decisions, and I do not think that they sufficiently sustain that proposition. On the contrary, the prevailing current of more recent judicial authority seems to me. in favor of giving effect to corporate acts, even where formalities and preliminaries prescribed by law have been neglected, provided the manifest lawful intention of the corporation be thereby carried into effect, and there is no element of fraud in the transaction itself, and no violation of justice and equity. This rule of law is held to apply with special force to cases where, as in the case at bar, the contract in dispute has ceased to be merely executory, but has in fact been in part carried- out, and where the party dealing with the corporation, having enjoyed the advantages of the contract, seeks to escape from the performance of its obligations, on the ground of defect in its text, or formal execution. Mayor v. Sonneborn, 113 N. Y. 423. This liberal application of the principles of law is sustained in Kent v. Quicksilver Mining Co., 78 N. Y. 183 ; Whitney Arms Co. v. Barlow, 63 Ib. 62 ; The People, ex rel Schanck v. Green, 64 Ib. 501 ; Woodruff v. Erie R’y Co., 93 Ib. 609 ; Rider Life Raft Co. v. Roach, 97 Ib. 378, 381 ; and in Starin v. Edson et al., 112 N. Y., 206 ; N. Y. State Reporter, Vol. 20, No. 5, pp. 898, 903.

For these reasons, the execution of the lease by the “ comptroller," was not, in my opinion, void, but, at the most,- an informality, capable of being at any time, cured, on demand of either party, and, if not objected'to within reasonable time, the parties are estopped by their own laches from complaint.

The claim of the defence, that the sureties are not bound, by reason of defect in the execution of the lease, is, therefore, not sustained,

The defendants further object that, independently of any defect in the lease, the bond itself was void, because not executed by “ Mary Kent,” the lessee. The bond here was joint and several, and binds all those, severally, who execute it. The intention of the defendants in executing the bond sufficiently appears. Williams v. Marshall, 42 Barb. 528 ; Dillon v. Anderson, 43 N. Y. 235 ; Parker v. Bradley, 2 Hill. 584 ; Decker v. Judson, 16 N. Y. 439 ; Loew v. Stocker, 68 Penn. St. 226.

The proper time for raising these objections was when these documents were executed, or soon after. It is too late to raise them now, after a long and almost suspicious silence, when their interposition only tends to promote injustice.

I am of the opinion that no error was committed at the trial, and that the judgment appealed from, should be affirmed, with costs.

Sedgwick, Ch. J., and Freedman, J., concurred.


author: By the Court. — Sedgwick, Ch. J. Truax, J.

text:
    DANIEL F. APPLETON, Appellant, v. JAMES G. SPEER, et. al., Respondents.

      Order of attachment, vacation of.

    On amotion to vacate an order of attachment, made upon the original papers upon which the attachment was granted, the plaintiff has no right to present additional affidavits to remedy any alleged defects in the original papers. If the latter were defective the attachment should be vacated.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.

      Decided June 28, 1889.
    Appeal from an order vacating an order of attachment.

      Abbett & Fuller, attorneys, and Henry Schmitt, of counsel, for appellant.

      Morse & Haynes, attorneys, and Waldo G-. Morse, and David A. Haynes, of counsel,' for respondents.
   By the Court. — Sedgwick, Ch. J.

From the original papers, taken together, on which the order of attachment was issued, it appeared that some facts, the existence of which it was necessary to prove, were sworn to upon information and belief and the sources of the information not disclosed. For this reason the court below was correct in granting the motion to vacate the order. The original defect could not be remedied by proving by other affidavits produced upon the motion to vacate, that the facts referred to really existed, and the more is this true, because the motion to vacate was made upon the original papers when the plaintiff has no right topresent additional papers. Steuben Co. Bank v. Alberger, 75 N. Y. 179.

The order should be affirmed with $10 costs.

Freedman, J., concurred.

Truax, J.

The order should be affirmed for the reasons assigned by the chief judge. See Cribben v. Schillinger, 30 Hun, 248 ; Marine Nat. Bank v. Ward, 35 Ib. 395 ; Buhl v. Buhl, 41 Ib. 61 ; Lee v. Co-operative, &c., 19 N. Y. St. Rep. 879.


author: By the Court.—-Sedgwick, Ch. J.

text:
    FREDERICK P. FOSTER, as Executor, &c., Respondent, v. JOHN E. DEVLIN, as Ancillary Administrator, &c., Appellant.

      Judgment under section 511 of the Code, in case the answer admits a part of plaintiffs claim.

    In this case the plaintiff claimed a lien on a draft for his services to the amount of $2, 542.72, and the right to have that lien enforced in equity, demanding judgment for such enforcement. In answer defendant denied the lien and the value of plaintiff’s services, as alleged, stating that, by-agreement, they amounted only "to $579.62, which he had offered and was willing to pay.
    The court below, on motion, ordered judgment in favor of plaintiff for the sum of $579.62 and costs, on the assumption that the case was within section 511 of the Code.

      Held, that the motion for judgment should have been denied. That a true construction of the answer does not admit that the value of the services was absolutely and unconditionally due or payable to plaintiff. That, on the pleadings and the assumption of the answer, it was not due and payable until plaintiff performed a duty antecedent to his right to receive payment, namely, he (plaintiff) must pay over the draft. If he retained it, the money would not be due. If he received the money and the defendant’s contention that no more had been earned were correct, there would be no lien. By the judgment defendant was deprived of the right to avail himself of the position of the answer, that the defendant "was not bound to pay the value of the services until plaintiff performed his concurrent duty of a delivery of the draft.

      Before Sedgwick, Oh. J., Freedman and Truax, JJ.

      Decided June 28, 1889.
    Appeal by defendant from a judgment and from the order directing such judgment to be entered.

      Marsh, Wilson & Wallis, attorneys, and William G. Wilson, of counsel, for appellant, argued :—
    The case is not one of those contemplated by section'511 of the Code. That section provides that where the answer of the defendant expressly or by not denying admits a part of the plaintiff’s claim to be just, the court, upon the plaintiff’s motion, may in its discretion order that the action be severed ; that a judgment be entered for the plaintiff for the part so admitted ; and, if the plaintiff so elects, that the action be continued with like effect as to the subsequent proceedings as if it had been originally brought for the remainder of the claim. It will be seen at once that this language is inapplicable to the present situation. The plaintiff’s claim is a claim of a lien and of a right to have that lie'n enforced in equity. The defendant’s answer distinctly denies such claim in toto, and alleges the real transaction between the parties to have been something entirely different. It cannot, therefore, be said that the answer admits a part of the plaintiff’s claim to be just, for it does nothing of the kind ; it merely admits that under circumstances different from those alleged in the complaint the plaintiff would be justly entitled to the payment of a certain sum. But from both the pleadings it is obvious that this different state of circumstances does not yet exist, for the reason that the plaintiff still retains the Treasury draft and refuses to surrender it upon the terms specified in the answer, and that, therefore, under the admissions of the answer, the condition precedent, that is, the collection of the money upon the performance of which alone any right in the plaintiff is admitted, has not yet been performed. It would certainly be a remarkable state of things if the plaintiff were • entitled to retain in his own possession the draft which represented the whole result of his alleged services—to prevent the defendant from receiving the same or receiving the moneys payable under it—to thus at the final stage of the matter refuse to make collection possible ; to take advantage of his position to endeavor to extort from the defendant a sum largely in excess of what was rightfully payable to the plaintiff; and then, upon the defendant’s admission of the true contract and true relations between the parties, to permit the plaintiff to retain his unconscionable advantage to still deprive defendant of all benefit and yet to obtain summary judgment upon the contract alleged by defendant but repudiated by plaintiff.
    The contract between the parties as set up in the answer was that the plaintiff should rehder all proper and necessary services in and about the collection of the claim ; and it is upon such collection only that any indebtedness from defendant to plaintiff arises ; certainly, so far as the defendant is concerned, the amount of the treasury draft cannot be deemed to be collected, for defendant derives no benefit whatever from it. so long as it remains in possession of the plaintiff. It is simply locked up in a form in which it is of no present avail to either party, and can be of no benefit until its possession and control are surrendered to the defendant, to whose order it is drawn. It is manifestly improper to call this performance a severance. The original cause of action as asserted was an equitable one to have a lien declared and enforced. The judgment which has been entered is not in any sense for a part of that cause of action, but is a common law judgment against the defendant personally for a certain number of dollars. It might be that the plaintiff upon a trial, being defeated in his claim of specific lien, might, by establishing such a contract as the defendant admits, obtain a common law judgment for the amount so established. But he could only do this by abandoning all claim to equitable relief and by limiting his common law claim to the amount so established. And what other or greater right can he have upon his own motion made upon the pleadings without waiving or abandoning in any respect, either in nature or in amount, his original claim ? The confusion which has arisen in this case we think is due to a failure to discriminate between the two different senses in which the expression “ the plaintiff’s claim ” may be used. When we speak of the plaintiff’s claim, referring simply to the amount of money which he claims, we use the expression in one sense, but not that which is given to it in section 511 of the Code. That section evidently refers to the plaintiff’s claim as it is asserted in the action, or, in other words, the relief to which the plaintiff claims himself to be entitled, and thus asserts in his complaint. In the complaint in the present case the “ claim ” is that of a specific lien upon a specific piece of property for an alleged indebtedness. But the admission of a smaller indebtedness on different terms and distinct and apart from any such lien is not an admission that a part of such claim is just, because’it is no admission-of the contract itself which forms the basis of the claim which the plaintiff has chosen to assert. And until that contract is admitted, a simple admission of indebtedness, present or contingent, from defendant to plaintiff is not in any sense an admission of a part of the plaintiff’s claim.

      Frederick P. Foster, in person, for respondent, argued :
    I. As the complaint alleges that there is due plaintiff by defendant $2,542.70 for services rendered, which is a legal cause of action, and the answer admits that there is due “the sum of $579.62, the amount of said plaintiff’s agreed compensation, * * which * * defendant has repeatedly offered and has been and is ready and willing to pay to the plaintiff,” the action was rightly severed and judgment directed for the amount admitted to be due. (1) Code, § 511 : “ Where the answer of the defendant, expressly or by not denying, admits a part of the plaintiff’s claim to be just, the court * * may * * order that the action be severed; that a judgment be entered for the plaintiff for the part so admitted.” This section means that where an answer admits facts which give plaintiff a different cause of action against defendant from that stated in his complaint, he is entitled, nevertheless, to judgment thereon, although the admission is of a cause of action not stated in the complaint. In Stedeker v. Bernard, 102 N. Y. 327, the plaintiff sued defendants jointly, as members of the firm of H. 0. Bernard & Co., to recover the amount of a check drawn by them in the firm name, which had been dishonored. The answer alleged that the check was II. 0. Bernard’s individual transaction, and denied any joint liability. On a motion for judgment on this answer the court gave an individual judgment against H. 0. Bernard. Held, that although no such cause of action was stated in the complaint, the plaintiff was entitled to a personal judgment against H. 0. Bernard, on the admission in his answer, and that it was rightly granted on a ruotion on the pleadings before trial. (2) The admission that $579.62 is due, is unqualified. To constitute a qualification, some fact must be stated, showing that plaintiff can by no possibility recover the amount which has been due, and on which, if true, his complaint must be dismissed. No such fact is stated in the answer. In Marsh v. West Mfg. Co., 46 Supr. (J. & S.), 8, an answer admitted that a sum of money was due by defendant, and alleged that a third party had attached the indebtedness in .an action against plaintiff, that such action had since been pending, and that the defendant had never been released from its obligations by reason of such levy. Held, that an order denying a motion for leave to enter judgment for the amount admitted to be due was erroneous, and should be reversed, as it did not appear that the attachment and levy were still in force, and that the admission was, therefore, unqualified.
    II. As defendant’s answer formally and explicitly admits that he owes the plaintiff “ the sum of $579.62 * which * defendant has repeatedly offered and has been and is ready and willing to pay to the plaintiff,” defendant cannot claim on appeal that a judgment should not be entered against him for the amount which he admits is due. “ When the defendant’s pleading formally and explicitly admits that which establishes the plaintiff’s rights, he will not be suffered to deny its existence of to prove any state of facts inconsistent with that' admission.” Schreyer v. Mayor, 39 Supr. (J. & S.). 1; Paige v. Willet, 38 N. Y. 28, 31; Tell v. Beyer, 38 Ib. 161; Fleischmann v. Stern, 90 Ib. 110, 114, 115; Prentice v. Jansen, 79 Ib. 480, 487; Ross-Lewin v. Redfield, 68 Ib. 627; Dunham v. Cudlipp, 94 Ib. 129, 130, 134; Holmes v. Wood, 88 Ib. 651; Getty v. Hamlin, 46 Hun, 1; Trimmer v. Hiscock, 27 Ib. 364, 365; Ballou v. Parsons, 11 Ib. 602.
    III. It was not necessary to specifically demand a money judgment in the prayer for relief, as the facts constituted a legal cause of action for services rendered, for which a money judgment was proper. In any event 'the prayer for general relief is sufficiently broad to include a money judgment; as the only cause of action set out is a legal one. Where a complaint states facts showing a legal cause of action and asks equitable relief, a money judgment for damages will be granted. Post v. R. R. Co., 50 Hun, 301; Fairchild v. Lynch, 42 Supr. (J. & S.) 267; Redfield v. Frear, 9 Abb. N. S. 449, 452; Williams v. Slote, 70 N. Y 601, 602; Marquat v. Marquat, 12 Ib. 336. If, however, the action is an equitable one, the court will settle the entire controversy between the parties and adopt its relief to the exigencies of the case. As all the relief needed is a judgment for the amount admitted by the answer to be due, plaintiff will be given a personal judgment therefor. Post v. West Shore R. R. Co., 50 Hun, 305; Murtha v. Curley, 90 N. Y, 372; Henderson v. N. Y. C. R. R. Co., 78 Ib. 423; Mad. Ave. Bap. Ch. v. Oliver, 73 Ib. 95; Wells v. Tates, 44 Ib. 525.
   By the Court.—-Sedgwick, Ch. J.

The action was begun by the present plaintiff’s testator. The complaint alleged, that the plaintiff was retained by the defendant to prosecute a claim for $22,067.45, in the court of the commissioners of the Alabama Claims, the plaintiff being an attorney of that court ; that the plaintiff, as attorney, recovered a judgment in that court, in favor of the defendants, in the sum of $16.453.40 ; that in part payment of the judgment the plaintiff obtained-a draft on the treasury of the United States for $5,796 ; that the draft was sent to the plaintiff to protect his lien for services and disbursements, which were reasonably worth $2,542.70.

The allegations as to services were, if taken by themselves, sufficient to enable the plaintiff to maintain upon sufficient proof a recovery for the value of the services in the form of a money judgment.

The relief asked was a judgment enforcing the plaintiff’s lien upon the draft; that a receiver be appointed, and that defendant be directed to endorse the draft, &c.

The answer admitted the plaintiff’s employment, but denied the value of the services, as alleged in the complaint, or that the value was more than $579.62, “ which sum said defendant has repeatedly offered, and has been and is ready and willing to pay to the plaintiff.” The answer further alleged that plaintiff received for account of defendant, the draft, “ and that said plaintiff has ever since refused to surrender the same to said defendant, unless upon condition that the defendant would pay to him a sum largely in excess of the value of his services and disbursements, and largely in excess of the amount of his agreed compensation.”

The plaintiff made a motion for judgment for the amount of the value of the services, as admitted by the answer, and that the action be severed, if plaintiff so elect, with liberty to proceed to enforce the remainder of the claim: the motion was made under section 511, Code Civil Procedure. “Where the answer of the defendant, expressly or by not denying, admits a part of the plaintiff’s claim to be just, the court, upon the plaintiff’s motion, may, in its discretion, order that the action be severed, that a judgment be entered for the plaintiff for the part so admitted, &c.”

I am of opinion, that a true construction of the answer did not show that the answer admitted that the sum which was alleged to be the value of the services was absolutely and unconditionally due to the plaintiff, or unconditionally payable to him. On the pleadings, and on the assumption of the answer, it was not due and payable. It would be payable, if, at the time the amount was tendered, the plaintiff would perform a duty antecedent to his right to receive the tender, that is, pay over the draft. If he retained the draft, the money would not be due; or, if he received the money, and the defendant’s contention that no more had been earned was correct, there would be no lien. So that, if the fact is that the judgment represents the whole value of the services, it deprives the defendant of a right to avail himself of the position of the answer, and which he has at least a right to have tried, that the defendant is not bound to pay the value of the services until the plaintiff has performed his concurrent duty of delivering the draft upon payment for his services.

The motion should have been denied.

Judgment and order reversed, with costs.

Fbeedman and Tbuax, JJ., concurred.