author:
Barbour, Ch. J.
      Jones, J.

text:
    GILBERT GILES, Plaintiff and Respondent, v. WILLIAM AUSTIN, Defendant and Appellant.
    H. Forfeiture, Belief against, in-Equity.—Lease.
    1. When eguity will not relieve.

    1. Where there has been gross and inexcusable neglect.

      a. Application of principle.
    When a lessee, who has covenanted to pay taxes and assessments, leaves seven years’ taxes (ending with the tax for 1867) unpaid, suffers a part of the premises to be sold for the first two years’ taxes, neglects to pay the taxes then due when notified in the seventh year to pay the same, and informed that the lessor is unable to procure a loan by reason of their outstanding, puts in an answer to an ejectment suit (commenced December 10, 1867), about four months after the commencement of the suit, alleging, among other things, the payment of the first two years’ taxes, and of divers other taxes and assessments, but falsely denying that any taxes remained unpaid, does not redeem the portion sold until January 14, 1868, nor pay the fourth year’s tax until February 14, 1868, nor the fifth year’s until October 27, 1868, nor the sixth and seventh years’ until July 80, 1868, and then on October 12, 1868 (before the payment of the fifth year’s taxes), notifies the lessor that he has paid all taxes and assessments payable up to date, asks for a waiver of. any technical forfeiture, offers to pay all rent due and interest thereon, and costs of ejectment suit, both plaintiff’s and defendant’s, and on the same day commences an action in equity to procure relief from the forfeiture of the lease on the terms mentioned in his offer, and a perpetual injunction against the prosecution of the ejectment action.

      Held, that he was not entitled tó any relief in equity, the only excuse offered by him for his neglect and action being that he was advised by his then attorney that he need not be in a hurry to pay the taxes so long as his lessor allowed an assessment, which was on the premises at the time of the execution of the lease, to remain unpaid ; that he never thought he was injuring anybody but himself by the taxes being in arrears, and had no intention of injuring the lessor by his delay.
    Lease containing covenants for payment by lessee of lasses and assessments, and a clause of re-entry for default inpayment.

    Questions Aeisens Undeb—
    1. Oan equity relieve from a forfeiture caused by non-payment of taxes and assessments ?
    3. If it can, will an action in equity lie inf mor of the lessee after an action of ejectment based on such forfeiture has been commenced by the lessor ?
    Both these questions discussed ably by the counsel, and the latter one discussed by one of the judges, but neither decided.

    Before Barbour, Ch. J., Monell and Jones, JJ.

      Decided December 31, 1871.
    This is an appeal by the defendant from a judgment entered upon the report of a referee. The case is as follows:
    In April, 1859, a lease was executed by and between the defendant and the plaintiff, whereby the former demised and let to the latter certain lots of land, with the buildings thereon, in this city, for the' term of twenty-one years, from May 1, 1859, at an annual rent of two thousand eight hundred dollars, payable quarterly, which the lessee covenanted and agreed to pay, as well as all taxes and assessments, as the same should become due and payable ; and the lease further provided that if default should be made by the lessee in any of the covenants to be by him performed, then it should be lawful for the lessor to re-enter, &.c.
    In December, 1867, the lessor brought an action of ejectment against the lessee and three other persons, who were tenants under him, to recover possession of the premises, setting forth, in his complaint, the lease, with its covenants and conditions, and alleging that the lessee had neglected and refused to pay the taxes for several successive years, and still refused and neglected to pay the, same, and that he had even suffered the premises to be sold for non-payment of some of the taxes which he had so covenanted and promised to pay as the same should become due and payable, and had not redeemed them from such sale; and the plaintiff claimed, thereupon, the possession of the premises. The defendant .put in an answer to the complaint in March,- 1868, and the cause was-thereupon noticed for trial by the plaintiff. The answer in that action admitted the making of the lease, and, in effect, the fact that the premises had been sold for taxes; but it alleged that the plaintiff was fully informed of such sale, and notwithstanding such knowledge, thereafter, several times,'received the rent of the premises from the lessee. The answer further alleged that the plaintiff had failed to pay certain assessments upon the property which had been made and confirmed before the date of the lease,.and which the lessor had covenanted to pay; it also denied all other averments contained in the complaint, , and prayed that the complaint be dismissed, with costs.
    On October 12, 1868 (about two months after the commencement of the action in ejectment), the lessee served on the lessor a notice that he had paid all the taxes and assessments on the property, and offered to pay him all rent in arrear, with interest, together with the costs of all the parties in the ejectment suit; and, on the same day, the lessee commenced this action, and obtained therein an injunction restraining the lessor from prosecuting his action of ejectment, until the determination- of this suit.
    In his complaint in this action the plaintiff sets out the lease, with its covenants, &c., and states the institution of and proceedings in the ejectment suit, and admits that some taxes and assessments remained unpaid when that action was commenced, but alleges that he always designed to pay them and had, in fact, paid them before the commencement of his suit, sets forth his offer to pay rent, costs, &c., and demands that upon his paying or tendering payment of such costs, rent, &c., he be relieved from the forfeiture, and that the defendant be perpetually enjoined against further prosecuting his action in ejectment. The answer was served about October 27, 1868, and on June 12, the action was referred to a referee to hear and determine.
    •Upon the trial it appeared that when the action of ejectment was commenced, the following taxes and assessments were outstanding and unpaid:—
    For an assessment in 1859............... $40 00
    “ “ “ 1857............... 221 00
    For taxes of . 1861............... 70 06
    “ “ 1862............... 60 70
    “ “ 1864............... 75 00
    “ “ 1865............... 104 65
    “ “ 1806............... 874 00
    “ “ 1867................ 1,201 50
    $2,646 91
    besides interest thereon, at the rate of twelve per cent, per annum; of which amount two thousand three hundred and fifty dollars and ninety-one cents besides interest, remained unpaid when the answer in the ejectment suit was served, and that one hundred and four dollars and sixty-five cents remained unpaid at the time this suit was commenced. It' also appeared that a portion of the premises was sold in 1866, for the taxes of 1861 and 1862, for two hundred and six dollars and twenty-one cents, but that it was redeemed by the lessee from such tax sale after the ejectment suit was commenced, and before issue joined; and that all the taxes and assessments were paid before the trial of this action. The assessment of1859 was paid February 14, 1868, and that of 1867 was paid October 10, 1868. The taxes of 1861, 1863 and 1863, were paid October, 1864, except the tax on a rear lot; those of 1864 on February 14,1868 ; those of 1865 on .October 37,1868 ; those of 1866 and 1867 on July 30, 1868; the tax on the rear lot above mentioned for 1863, was paid November, 1867, that lot was sold for the taxes of 1861 and 1863, but was redeemed and the tax paid June 14, 1868. It was also shown that the plaintiffs written offer, to pay costs, &c., and request to be permitted to redeem the term from the forfeiture, was served on October 13, 1868, being the day on which the summons in this action was served, and more than nine mouths after the commencement of the action in ejectment. The defendant also proved upon the trial that he gave the lessee notice that the taxes and assessments were unpaid and requested him to pay the same, before the ejectment suit was instituted, and at the same time told him that his failure to pay them prevented the lessor’s obtaining a loan of twenty thousand dollars upon the property, and that unless they were paid, the latter would bring an action of ejectment against him.
    On the trial of this action plaintiff testified that he was advised by a lawyer not to be in a hurry to pay his taxes and assessments so long as the lessor let so much be in arrear; that he never thought he was injuring anybody but himself by the taxes being in arrear ; and that he had no intention of injuring the lessor byt his delay in making payment.
    Upon the opening of the case for trial the defendant’s counsel moved to dismiss the complaint upon the ground : first, that the cause of action, if any existed, was available as an equitable defense to the ejectment suit, and must be set wp by answer in that suit; and, second, that an action for an injunction cannot now be maintained to stay the prosecution of another ac

      tion in the same court;—which motion was denied, and the counsel for the defendant duly excepted.
    On the submission of the cause upon the pleadings and 'proofs, as above, the referee held, as matter of law) that the covenant in the lease for the payment of taxes and assessments was only a covenant for the payment of money, arid that the lessée ought to be relieved from the lessor’s right' of forfeiture which had attached. because of the failure of the foriher to make such payments at the several times required by the lease ; and he thereupon decided that the plaintiff was entitled to a judgment perpetually enjoining and restraining the defendant from further prosecuting his action of ejectment, upon the plaintiff’s paying, or tendering to the defendant all the costs of the action in ejectment and of this suit, with all the back rents and the interest thereon, wiMin thirty days after the notice to him from the lessor of the judgment in this action, and of a time and place whe/fe the Tatter would be in attendance to receive the same; or at such time as the plaintiff should elect, if he should not choose to wait for such notice; and the judgment appealed from was thereupon entered, in accordance with such decision.

      Thomas B. Browning, of counsel for appellant, urged:
    I. This action' cannot be maintained. The referee should' have granted the motion to dismiss the complaint. The matters alleged in the complaint are only available as an equitable defense to the ejectment suit. (1.) The' defendant may set forth by answer as many defenses . . ." as he may have, whether they be such as have heretofore been denominated legal or equitable, or both (üode, § 150). (2.) The word may méans must, (a.) Dobson v. Pearce, 12 N. Y. 156; Crary v. Goodman, Id. 266 ; Foot v. Sprague, 12 How. Pr. 355 ; Auburn City Bank v. Leonard, Leonard v. Auburn City Bank, 20 Id. 193; Arndt v. Williams, 16 Id. 214; Bowers v. Talmadge, 16 Id. 325 ; Grant v. Quick, 5 Sandf. 612). The case of Haire v. Baker, 1 Seld. 351, was sustained only on the ground that the plaintiff demanded affimative relief ; the case being decided in 1851, and the amendment giving affirmative relief to a defendant being made in 1852. Siemon v. Schurck, 29 N. Y. 598, was sustained because the relief demanded required the presence of new parties. (b.) The judgment or decree of a court of competent jurisdiction is not only final as to the matter actually determined, but as to every other matter which the parties neglect to litigate in the canse, and which they might have had decided (Bruen v. Hone, 2 Barb. 586 ; Southgate v. Montgomery, 1 Paige, 41; Canfield Monger, 12 Johns. 347; Hays v. Reese, 34 Barb. 351 ; Harris v. Harris, 36 Id. 88 ; Leonard v. Auburn City Bank, ante. It is conclusive upon every question involved in the plaintiff’s right to recover. Davis v. Tallcot, 12 N. Y. 1846 ; Ballinger v. Craige, 31 Barb. 534). “ The question in an action is not whether the plaintiff has a legal right or an equitable right, or the defendant a legal or equitable defense against the plaintiff’s claim ; but whether, according to the whole law of the land applicable to the case, the plaintiff makes out the right which he seeks to establish, or the defendant shows that the plaintiff ought not to have the relief sought for” (Crary v. Goodman, ante). If judgment had been rendered in the ejectment suit, that judgment must have affirmed that there were no equitable eircum - stances entitling the plaintiff in this action to relief. It would therefore have been a bar to this action, (c.) Before the Code the rule was that no relief in equity could be had against proceedings at law where a party had been guilty of laches in not making a legal defense, or where the defense was not available by reason of his own neglect (Smith v. Lowry, 1 Johns. Ch. 320; Penny v. Martin, 4 Id. 566; Murray v. Graham, 6 Paige, 622; Vilas v. Jones, 1 Comst. 281-282). Legal and equitable defenses being now equally available, it follows that unless some reason exists other than the plaintiff’s neglect; why he did not set up the matters in his answer to the ejectment suit, then this action cannot be maintained. (d.) Cess-ante ratione legis, eessat et ipsa lex. The only ground upon which courts of equity formerly allowed an injunction to restrain proceedings at law, was the inability of courts of law to grant relief (Grant v. Quick, 5 Sandf. 613 ; Dederick v. Hoysradt, 4 How. Pr. 352). (e.) The law discourages a multiplicity of actions. (/.) Garner v. Hannah, 6 Duer, 262, is the only case opposed to these principles. The parts of the opinion holding that relief can be given as well after as before judgment, and a second action to obtain relief, will lie, are only dicta. The case cannot be maintained. (3.) If the matters alleged in the' complaint afford any ground for relief, then they constitute an equitable defense. An equitable defense" is any' matter which before the Code could have authorized an application to the court of chancery for relief against a liability (Dobson v. Pearce, 12 N. Y. 168 ; Leonard v. Auburn City Bank, 20 How. Pr. 195; Traphagen v. Traphagen, 40 Barb. 538; Hunt v. Farmers’ Loan & Trust Co., 8 How. Pr. 418). (4.) The parties to both actions are the same. The word “parties” includes “ privies ” (Goddard v. Benson, 15 Abb. Pr. 191). (5.) The plaintiff asks for no affirmative relief—only an • injunction, which answers the same purpose as a defense at law. (6.) The plaintiff can have all the relief he desires in the ejectment suit; this action therefore cannot be maintained.
    II. The plaintiff is entitled to no relief in equity. The rule is that equity will not relieve against a forfeiture incurred by a breach of covenant, other than a covenant for the payment of money (some authorities restrict relief to covenants for the uayment of rent), where the breach is willful or where precise compensation cannot be made. But where the stipulation is intended as a mere security for the payment of money the court will relieve (De Scarlett e. Denett, 9 Mod. 22 ; Eaton v. Lyon, 3 Ves. 692; Hill v. Barclay, 18 Id. 55; Rolfe v. Harris, 2 Price, 210, note ; Reynolds v. Pitt, Id. 22; Bracebridge v. Buckley, Id. 210; White v. Warner, 2 Merivale, 459; Livingston v. Tompkins, 3 Johns. Ch, 431 ; Baxter v. Lansing, 7 Paige, 352 ; Green v. Bridges, 4 Sim. 96 ; Gregory v. Wilson, 9 Hare, 689 ; Wadman v. Calcraft, 10 Ves..66; Hancock v. Carlton, 72 Mass. 58; Roberts v. Geis, 2 Daly, 540. (Garner v. Hannah, 6 Duer, 273, states the principle, but misapplies it. The earlier cases, followed by Sanders v. Pope (12 Ves. 282), and Davis v. West (Id. 474), held, that relief would be given in all cases if compensation could be made; but these have been overruled (See Bracebridge v. Buckley, and Hill v. Barclay, ante). In Rolfe v. Harris, ante, it is said that the decision in Sanders v. Pope is founded rather on dicta than authories, and goes farther than the authorities warrant. But there is no case in which relief has been given, unless there could be complete compensation. (1.) A covenant to pay taxes, &c., is not a covenant to pay money within the meaning of the authorities : it is a covenant for the preservation of the inheritance, (a.) A covenant to pay money is one in which money is the thing to be received and enjoyed by the covenantee, and in which the only effect of its breach is the inconvenience to the covenantee in not receiving the money at the proper time ; which inconvenience is regarded as fully compensated by the payment of interest. The reason, too, why equity relieves in such cases, is that the right of re-entry is only a security for the payment. But where money is used only as an instrument for the accomplishment of some ulterior purpose—as a means to an end—and the injury resulting from its breach is not limited to interest, there the covenant is not for the payment of money. This is sustained by all the authorities. (5.) A covenant to pay taxes is one in which money is used only as an instrument to procure their discharge, and to preserve the inheritance from a sale for their non-payment. The injury to the landlord arising from its breach is not limited to interest; he does not receive either principal or interest. The only advantáge derived by him from the performance of the covenant, is the protection of his property. It is like a covenant to lay out money in repairs, or a covenant to insure. In both of these, money is used only as an instrument, (c.) But in covenants for the payment of money, the right of re-entry is a security for its payment. ' But where the breach attacks and will eventually destroy the security, the covenant is surely not one to pay money within the meaning of the rule. (2.) The plaintiff’s breach of covenant has been willful. Willfulness does not consist in the intention to do wrong. Hor does an honest belief that one is doing right excuse the act (People v. Brooks, 1 Den. 459). Willfulness is the absence of inevitable accident, whether the party be asleep or awake. Unintentional neglect is willfulness (Elliott v. Turner, 13 Sims. 477 ; Eaton v. Lyon, 3 Ves. 692 ; Rolfe v. Harris, 2 Price, 210; Gregory v. Wilson, 9 Hare, 689). The advice of counsel is- no excuse (Hunt v. Rousmaniere, 8 Wheat. 174 ; McDaniel v. Bank of Rutland, 29 Vt. 230.) The plaintiffs only excuse for the breaches, is his own negligence; for his persistent neglect to perform his covenants, his own determination and the advice of Simms after the commencement of the ejectment suit. (3.) There can be no complete compensatirn for the breach of covenant to pay taxes. It is the landlord who is injured, and to him compensation must be made. What is the measure oí damage ? (a.) Interest is not the rule because the principal is not payable to landlord, and interest follows the principal. (5.) But there must be some compensation in damages, and some rule by which the damages are to be measured, or equity will refuse relief. “This court never relieves but in such cases where it can give some compensation in damages, and where there is some rule to be the measure of damages to avoid being arbitrary” (Wafer v. Mocato, 9 Mod. 112.) In Peachy v. Duke of Somerset, 1 Strange, 447; Rolfe v. Harris, Id. 210, the rule is similarly stated, (e.) It makes no difference that the court cannot see that there has- been any substantial loss in money, or believes that there has been none. Equity can only interfere where it can determine the precise injury, and can give precise compensation for it by the payment of money (Elliott v. Turner, 13 Sims. 483 ; Bracebridge v. Buckley, ante; Atkyns v. Kinnier, 4 Excheg. 776). In covenants to insure, there can be no loss if there is no fire, nor in convenant not to assign can there be a loss, for the landlord has a double security, but in such cases equity always refuses relief, (d.) But it has been shown that a covenant to pay taxes is a covenant for .the preservation of the inheritance, that its breach tends to the prejudice of the inheritance, and will ripen into right—a lease of the premises for a long term of years—and it is well settled that in all such cases the damages cannot be estimated, for there is no rale by which the damages can be measured (Rolfe v. Harris, Reynolds v. Pitt, Hill v. Barclay, Bracebridge v. Buckley, Green v. Bridges, Gregory v. Wilson, De Scarlett v. Denett, Wafer v. Mocato). The defendant has suffered the risk of the loss of his property, as well as the interest on twenty thousand dollars, which is only a portion of the.injury. The time in which to redeem from the sale of 1866 had. nearly expired. The covenant to pay taxes is stronger than any of the other covenants for the preservation of inheritance, for its breach may occasion the loss not only of the buildings, but of the land itself. Money cannot be given as a compensation for the breach, for there is no rule by which the amount can be determined. The court cannot give anything but money; there can, therefore, be no compensation, and consequently no relief.
    III. The danger of relief. To relieve in case of a breach of covenant of this kind, is to surrender the landlord to the mercy of his tenant. The security which the parties have fixed for the performance of the covenant is first destroyed, and then after the landlord has lost his property, for the destruction of the security involves the loss of the property, he is turned over for damages to perhaps an insolvent tenant.

      Evarts, Southmayd & Choate, attorneys, and Joseph H. Choate, of counsel for respondent, urged:—
    I. The jurisdiction in equity to relieve from penalties and forfeitures which are inserted merely as security for the payment of money, so that what the law regards as full compensation may be made by the payment of money and interest, is well established, and the right of the tenant to relief from the forfeiture on payment of the money and interest has long been settled (3 Story Eq. Jur. § 1314, and cases cited). Eelief from forfeitures for non-payment of rent are of every day occurrence in England and America, and the only reason why relief in the case of forfeiture for non-payment of taxes and assessments has not been so frequent, is because the covenant has not been so common. This court, in Gamer v. Hannah, 6 Duer, 363, has furnished the precedent of affording the same relief where the forfeiture is for non-payment of assessments or other taxes as of rents. The authority of that case is conclusive. The only distinction is between penalties and forfeitures which are inserted to secure the performance of some act or thing for the benefit of the landlord, other than the payment of money, for the breach of which, therefore, the mere- payment of the money will not in the contemplation of the parties be a complete compensation, where equity will not interfere, and the case of covenants to pay money, where if the money is paid, the landlord gets all he ever designed to have, and to exact more would be oppression and injustice on his part. Here a court of equity is bound to interfere. Covenants to repair, not to underlet or assign, to insure and keep insured, not to remove timber, &c., &c., are of the former ctass. -Covenants to pay rent, taxes, &c., are of the latter (4 Geo. Il. c. 28 ; Rev. Laws, 1802-1813 ; 2 Sellons Pr. 209 ; Burr. 614 ; Wafer v. Mocato, 9 Mod. 112 ; Sanders v. Pope, 12 Ves. 282 ; Reynolds v. Pitt, 19 Id. 134 ; Peachy v. Duke of Somerset, 1 Strange, 447 ; Skinner v. Dayton, 2 Johns. Ch. 535 ; S. C., 17 Johns. 357 ; Davis v. West, 12 Ves. 282, 475).
    II. The power and duty of the court to interfere for the relief of the plaintiff against the merciless oppression of the defendant being thus "clear, it is no answer to the plaintiff’s action to say that possibly the relief asked for might have been secured by a motion for a stay in the ejectment suit, (os.) The authority of this court in Gamer v. Hannah, supra, gives to the tenant in such case the election of remedies, whether to proceed by motion or by filing- his bill, as the exigencies of the case may require, (b.) It is not a case of a party having a complete equitable defense in a suit at law, resorting to a bill in equity, merely to stay proceedings in that suit. He had no defense in the action at law. The forfeiture had been incurred, and could not be denied. Willingness, or a desire to pay the taxes and assessments in arrear, or even the actual payment of them, as here, by the tenant, after the commencement of the ejectment suit, was no answer to the allegations of forfeiture then made. It was matter purely supplemental, dependent on the discretion of the court, on a motion. In such a position there is no rule or authority that prohibits the defendant from himself resorting to equity for relief, (c.) The party so situated is not to be put to the peril of staking his fate upon a motion, wherein he may be outsworn, and that falsely, by his adversary. He has a substantial and recognized right, and is entitled to the established and usual remedy to enforce that right. He is entitled to a trial upon the merits of his application for relief, upon which the ordinary rules of evidence shall be applied, and the safeguard of cross-examination secured, and where he may have his appeal on the law and the fact, and may not be concluded by the exercise of the discretion of a judge at chambers on affidavits. A careful examination of the conflict of evidence in this case, will show the value and importance of the right of the tenant to go into equity, (d.) The entire fitness and propriety of opening the forfeiture in this case is self-evident. The taxes had been left unpaid, partly from mere improvidence, the tenant considering, as the referee finds, that the delay was immaterial, and that there was no need of promptly paying them, and partly from a notion that as long as the landlord chose to leave a much older assessment unpaid and undischarged, it would do no harm to leave the latter assessment in the same condition. When called to account by the ejectment suit, he pays all the taxes and assesments, notifies the landlord, and tenders rent, interest and costs, and still the landlord refuses to raise the technical forfeiture; but, having got all that he was entitled to, seeks to punish the tenant by extorting from him his investments in the demised premises, found by the referee to be worth, forty-two thousand five hundred dollars, and his prospective profit of rents, one hundred thousand dollars more, (e.) Judge Stoey, in treating of the subject, would seem to have had this case and these parties in mind (2 Eq. Jur. § 1816).
   Barbour, Ch. J.

The judgment seems to be erroneous in form. It ought, probably, to have directed the plaintiff to pay the money into court, in case the defendant should decline to receive it, instead of requiring him to forfeit or endanger his right of appeal by accepting the amount awarded to him in the judgment, or to hazard the ultimate recovery of the money so awarded, by refusing to receive it when tendered to him. But, as no point is made by the appellant’s counsel upon that question, it is not necessary for us to consider it further.

In former times, the right of a lessee to invoke the interposition o'f a court of equity in matters' of this character, was founded upon the necessity of the case. It was because the defendant in an action of ejectment, brought to enforce a covenant of forfeiture, was wholly remediless at law, and, therefore, courts of equity would entertain jurisdiction of his suit, founded upon sufficient facts, for the purpose of administering justice between the parties according to the benign principles of equity and good conscience. The one hundred and fiftieth section of the Code, however, now permits a defendant to set forth by answer as many defenses and counter-claims as he may have, whether they be such as have heretofore been denominated legal or equitable, or both;” and, of course, a suit of this character is not necessary for the protection of the equitable, or any, rights of a tenant against whom an action of ejectment has been brought by his landlord to obtain possession of the demised premises because of a violation of the covenant of the former to pay taxes and assessments. If he is entitled to any relief in equity, he may obtain it by means of a proper answer in the ejectment suit itself.

It is true, the taxes and assessments which the tenant in this case had undertaken to pay were not only unpaid when thu action in ejectment was commenced, but still remained unpaid at the time the answer was put in. But that was Ms own fault. Surely, he was not entitled to any greater favor because of that further failure by him to perform his legal obligation; nor was it necessary for him to institute this action for the purpose of setting up the • equities acquired by him by reason of such payment of taxes, &c., pendente lite. For, if those payments operated as an equitable release and discharge of the term from the legal forfeiture which had been incurred because of the previous failure of the lessee to perform his covenant, they would have constituted a perfect defense to the action of ejectment if duly set forth in a supplemental answer ; and, in that case, certainly, the defendant then would have been entitled, upon a proper motion, to an order permitting him to put in such an answer.

Assuming, then, as may well be done, that the plaintiff here might have' asserted and protected his equitable rights to the fullest extent in the action of ejectment, and that this suit was, therefore, wholly unnecessary and improper, we may; without pausing to inquire whether the complaint here ought not to have been dismissed for that reason alone, next consider the question whether the bringing and prosecution of this suit by the plaintiff therein, did not, under •the facts and circumstances of the case, constitute such a violation by him .of the fundamental principles of equity as ought to deprive him of any equitable right he might otherwise have had to the relief prayed for.

Saying nothing of the omission of the lessee, for several years, to pay the assessments and taxes, it was, obviously, his duty as an honest man, to pay all the back taxes and assessments and to redeem the property from the tax sales which had been had, immediately upon and after the commencement of the action of ejectment. If he had done that, the lessor’s property would have been released from the dangerous liens upon it, and he could have used it for the purpose of obtaining a loan, if he desired to do so, at once ; and it is possible that the latter would then have been willing to release the lessee from his forfeiture, on proper terms as to costs. If not, the making of such payments, within the three months which had elapsed before the answer was served and the averment thereof in such answer, would have left nothing to be determined in the ejectment suit, except the single question whether the defendant ought, under the rules and principles which control the decisions of the courts in equity in such cases, to be relieved from the forfeiture which had legally attached. But, instead of paying the back taxes and assessments and redeeming the premises from the tax sales immediately upon the commencement of the action of ejectment, the lessee suffered more than three months to pass away before he put in an answer, and then falsely denied therein the fact alleged in the complaint, that certain taxes (other than those fbr which the premises had been sold) remained unpaid; thus raising an issue by the averment of a denial which he, himself, proved upon the trial to be untrue, and which delayed the trial for several months more, and until the cause could be reached in its regular order upon the calendar; and it was not until he had thus delayed the lessor for about ten months, during all which time the premises remained charged with the lien of the unpaid taxes, that he paid the same. And, even then, instead of obtaining leave and serving a supplemental answer setting up such payment in the ejectment suit, where he could have obtained all the substantial relief to which ho could be entitled in any action, he still further delayed the lessor in obtaining the determination of the litigation, by bringing this unnecessary suit and obtaining an injunction restraining the latter from proceeding with his action of ejectment, until this suit in equity could be reached upon the calendar, tried, and determined.

Considering all these facts, thus stated, I have arrived at the conclusion that the plaintiff was not entitled to any relief in this action, and that a judgment ought to have been rendered upon the pleadings r and proofs dismissing the complaint with costs, upon the ground, first, that the suit was wholly unnecessary, inasmuch as the plaintiff therein could have obtained all the relief to which he was entitled, if any, by paying the taxes and setting up in his answer in the action of ejectment the same facts, substantially, which form the subject matter of his complaint here; and, secondly, because the bringing of such unnecessary suit, the procuring of an injunction therein, and the prosecution thereof, under the circumstances above detailed, together with the conduct of the plaintiff in delaying the determination of the action of ejectment by putting in an answer which was untrue, constituted such breaches of the rules of equity and good conscience as deprived Mm of all claims to equitable relief in tMs suit.

Having arrived at this conclusion, it is unnecessary to consider the question whether-a covenant on the part of a lessee to pay taxes as they become due and payable, is a covenant for the payment of money, merely ; or whether one who has thus covenanted and who has legally forfeited Ms term because of a breach thereof, is entitled to relief in equity within the principle of adjudicated cases.

The' judgment should be reversed, and a judgment entered dismissing the complaint, with the costs of the action and appeal.

Jones, J.

I concur in reversing the judgment. The laches and action of the plaintiff has been such as not to entitle him to favorable consideration by a court of equity.

I am unwilling to make this case a precedent for granting relief under circumstances of such gross and inexcusable neglect.

Monell, J.—Dissented.

Note.—The general term order entered on above decision by defendant without notice to the plaintiff, reversed the judgment below and dismissed the complaint.

Thereafter plaintiff at a subsequent general term moved for a re-argument, or, if that was denied, for a resettlement of the order entered so that it should provide for a new trial, instead of a dismissal of the complaint.

The motion for a reargument was denied, and that for a resettlement granted.

The decision is reported, post.


source: Caselaw Access Project

author: By the Court.—Monell, J.

license: Public Domain

text:
    FRANCIS H. DYKERS, Plaintiff and Respondent, v. LABAN C. STUART, Defendant and Appellant.
    I. Contract to Advance Monets fob the Development of an Invention, containing an assignment of one-half of the invention, and an agreement to repay the money advanced, if the party advancing is not satisfied with the practicability of the invention.
    1. Meeission of, by the advancer,'when.

    1. When several machines have been constructed, none of which were such as was contemplated by the contract, and plaintiff had never expressed satisfaction with any of them, but the defendant (the inventor) was himself dissatisfied with them as they were constructed, each being set aside for another, and the last one condemned and abandoned by him, the advancer may rescind and recover bach his advances.

    2. Waiver of this right—what subsequent action does not operate as.

    The joining by the advancer with the inventor in an agreement with other parties, whereby the inventor assigns to such other parties a certain proportion of his interest, and the advancer a certain proportion of the interest obtained by him under his agreement with the inventor, and the other parties agr.ee to construct at their own- costs a suitable engine, and put it in practical operation, and pay all the necessary expenses for testing and bringing forward the engine so as to put it in practical operation, and to pay the inventor a certain weekly sum for his personal expenses, and to pay out of the first profits of one-half of the interest assigned to him a certain sum, a certain proportion of that sum to the inventor, and a certain proportion to the advancer; and whereby it was agreed that none of the parties should part with or dispose of any part' of their •interest in the invention, without the consent and concurrence of all the parties, does not operate as a waiver of the right of rescission by the advancer.

    3. Restoration to the inventor of all that he has parted with to the plaintiff.

    1. Under the circumstances, an offer before suit to execute all papers necessary to put the inventor in possession of the right to any patent which the advancer might hold, is a sufficient compliance with the condition precedent of restoration.

      4. Mutual covenants. The principle governing them not applicable to such a case.
    31. Objection.—Tkial.—Appeal.
    1. A ground not taken at the trial cannot be urged on appeal.
    Before Barbour, Ch. J., Monell and Freedman, JJ.

      Decided March 2, 1872.
    Appeal from a judgment entered-on the report of a referee.
    The action was to recover on two causes of action: first, for money advanced, and second, for expenses incurred.
    On June 20, 1864, the plaintiff and defendant made an agreement, wherein the defendant assigned to the plaintiff the one-half of a certain invented magnetic engine to be used as a general motive power, and agreed to devote all the time and attention necessary to the construction of a machine, for the purpose of showing its practical operation, and for the' purpose of obtaining patents therefor. The plaintiff agreed to advance one hundred dollars toward the construction of the machine; and if, on a practical test of the same, he should be satisfied that the invention was practical as a motive power, he agreed to advance such sum as might be requisite for the purpose of obtaining patents for .the same, not to exceed the sum of four thousand dollars, and such sum as might be requisite for the personal wants of the defendant, not to exceed the sum of one thousand dollars.
    It was further agreed between the parties that if the invention should not, on a practical test, be considered feasible by the plaintiff, he should not be required to make any further advances, than the amount already advanced by him, for the construction of the machine.
    And it was further agreed, that if the invention was not patentable, then any advances made by the plaintiff should be repaid to him, with interest by the defendant.
    And it was further agreed, that if the invention should be put in practical operation, then that all advances and expenses incurred by the plaintiff should be repaid to him, with interest, out of the first profits on the sale of machines or rights to construct the same under said invention. And it was further agreed that the plaintiff should devote all the time and attention necessary to securing and protecting the rights of the parties thereto, to such invention, without any compensation therefor.
    And it was further agreed, that neither of the parties thereto should sell, dispose of, or mortgage his right or share to the invention, without having first offered the same to the other, and in no case, without the consent, of the other first had and obtained in writ- ' ing.
    Under this contract, the plaintiff alleged, that he advanced to the defendant the sum of one hundred and seventy-five dollars, towards the construction of the experimental machine, and for the defendant’s personal expenses.
    The plaintiff further alleged, that the defendant constructed a machine, which did not prove satisfactory to the plaintiff, and thereupon, the parties made another agreement, of date of June 25, 1864, as follows:
    “It is understood and agreed between the parties to the foregoing contract, that, whereas a machine has been constructed, which from its imperfection of construction, does not fully illustrate the advantages claimed for it by said party of the first part (defendant). And, whereas said party of the first part is desirous that said party of the second part (plaintiff) should advance the necessary sum therefor, and is also desirous that said party of the second part should advance to him, the said party of the first part, the further sum of thirty dollars per Week, until said machine is constructed, for his personal expenses, which several advances, the said party of the second part is willing to make. Now, in consideration of such advances, the said party of, the first part covenants and agrees, to and with the said party of the second part, that if,. on the construction of such new machine, said, party of the second part is not satisfied with the practicability of the same as a motive power, said party of the first part will repay to said party of the second part, all moneys heretofore advanced, and for which receipts are given on the other side, and all moneys which he may hereafter advance under this agreement.
    “And moneys advanced by said party of the second part, and hereafter to be advanced in excess of the one hundred dollars agreed to be furnished for building a machine, shall be credited to said party of the second part on the amount required by the contract to be furnished for taking out patents, unless the same shall have been furnished for personal expenses of said party of the first part, in which case they shall be credited to said party of the second part on the amount agreed to be advanced for his expenses.
    “These credits are to be made if the machine proves satisfactory to said party of the second part, and is put in practical operation.”
    Under this last contract the plaintiff alleged that he had advanced five thousand and fifty-eight dollars and fifty cents. He further alleged that none of the engines constructed were practicable as motive powers, and that in January, 1869, he notified the defendant, as follows:
    “New York, January 11, 1869.
    'L. C. Stuart, Esq.,
    “ Dear Sir:

    “As the contract entered into by us, relative to the Electro-magnetic Engine, gives me a right to the return of the money advanced by me, under the contract, if I shall not be satisfied with the practicability of the engine as a motive power, I write for the purpose of notifying you that I am not satisfied with the practicability of the engine as a motive power, and that I claim my right under the contract. I am ready and willing, and hereby offer, to execute all papers necessary to put you in possession of the right to any patent which I hold.
    “Hoping the favor of an early reply,
    • “I am, very respectfully,
    “Your obdt. Servnt.,
    “Frauoís H. Dykers.”
    There was a second cause of action for money expended by the plaintiff at the request of the defendant, in and about the business of the defendant. .
    The defendant denied all the plaintiff’s allegations except the making of the contracts.
    Subsequent to the above agreements, the following agreements were made:
    “Agreement made this ninth day of May, one thousand eight hundred and sixty-six, between Laban C. Stuart, of Mamaroneck, Westchester Co., Mew York, and Francis H. Dykers, of the city of Mew York, parties of the first part, and Joseph Kingsland and Richard Kingsland, of Franklin, Essex Co., Mew Jersey, parties of the second part. Whereas, the said parties of the first part are the owners of a certain invention of improvements in Electro-magnetic Engines, for which letters patent have been applied for to the United States Government by Laban C. Stuart, one of the parties of the first part, as inventor, and said parties of the first part are owners in equal proportions of said invention.
    “And whereas, the parties of the second part are desirous of purchasing a share of said invention, to be used in the United States, and of the patent which may be issued for the same by the United States Government :
    “ Mow, this agreement witnesseth that the said parties of the first part, for and in consideration of the money hereinafter agreed to be paid by the said parties of the second part, have bargained, sold, assigned, transferred, and set over, and do hereby bargain, sell,” assign, transfer and set over to said parties of the second part, one quarter part of said invention of improvements in Electro-magnetic Engines, to be used in the United States, and of any patent issued by the United States Government for the same, or for any improvements on the same.
    “To have and to hold the same to said parties of the second part, and to their separate use and benefit forever.
    “And the said parties of the second part, for and in consideration of the said one-quarter part of said invention to be used in the United States, covenant and agree to pay to said parties of the first part, the sum of fifteen thousand dollars, as follows :
    “ Twenty-five hundred dollars in cash. Forty dollars a week at the end of each week, and such sums from time to time as may be required for the expense of experiments for improving and advancing said invention, and constructing engines and batteries, or any other thing appertaining to said invention, and for patenting the same in the United States until said various payments shall amount in the aggregate to the sum of seven thousand dollars.
    “ And the remaining eight thousand dollars shall be paid out of the profits belonging to the one-quarter of said invention hereby sold, arising from the sale of engines under said invention.
    “And it is understood and agreed, that if the amount required to pat such invention in a practical condition for the construction and sale of engines shall not amount to forty-five hundred dollars, that then such part of said forty-five hundred dollars which shall not be so required, shall be paid as well as the eight thousand dollars hereinbefore referred to, out, of the profits of the one-quarter hereby sold.
    “And it is further understood and agreed, -that neither of the parties to these presents shall dispose of their shares, or any part of the same, without the consent and concurrence of the other party hereto.
    “ In witness whereof the parties hereto have hereunto set their hands and seals the day and year above written. L. C. STUART. [Seal.]
    FRANCIS H. DYKERS. [Seal.]
    JOSEPH KINGSLAND. [Seal.]
    RICHARD KINGSLAND. [Seal.]”

      ‘ ‘ This Agreement, made this eighth day of April, one thousand eight hundred and sixty-seven, between Laban C. Stuart of Mamaroneck, Westchester Co., Yew York, Francis H. Dykers, of the city of Yew York, Joseph Kingsland, and Richardson Kingsland, of Franklin, Essex Co., Yew Jersey, parties of the first part, and Cornelius H. De Lamater, of the city of Yew York, party of the second part. Whereas, The said parties of the first part are the owners in the right in the United States to an invention of improvements in Electro-magnetic Engines, discovered by Laban C. Stuart, and for which an application has been made by him for letters patent to the United States Government.
    “And whereas, said right to said invention in the United States is owned by said parties of the first part, in the following proportions:
    ‘Laban C. Stuart, three-eighths thereof; Francis H. Dykers, three-eighths thereof; and Joseph Kingsland and Richard Kingsland one-quarter thereof.
    “ And whereas, the said party of the second part is desirous of purchasing one-eighth of the right in and to said invention in the United States.
    “ Yow, this agreement witnessetk, that said parties of the first part, in consideration of the covenants on the part of said party of the second part herein contained, hereby bargain, sell, assign, transfer, and set over unto said party of the second part, one-eighth part of the right in and to said invention in the United States, out of their respective shares, in the following proportions:
    “ The said Laban C. Stuart, one eighth of his three-eighths or three sixty-fourths; the said Francis H. Dykers one-eighth of his three-eighths, or three sixty-fourths ; and the said Joseph Kingsland and Richard Kingsland the one-eighth of their one-quarter or two sixty-fourths, making in all eight sixty-fourths, or one-eighth part of the whole right in the United States.
    “In consideration of the same, party of the second part covenants and agrees that he will, at his own proper cost and charge, construct an engine suitable to be sold and put in practical operation. The engine now in course of construction, or so much thereof as shall be considered suitable and proper to be used, to be considered'the engine so to be constructed for that purpose, and to pay all the necessary expenses for testing the same, and for bringing the same forward, so as to be put in practical operation.
    “That he will pay to Laban 0. Stuart, for his personal expenses, the sum of forty dollars a week from the date of this agreement, until the engine shall be put in practical operation. That said ’ party of the second part will obtain free of any charge whatever the services of John Ericsson, for the purpose of developing, improving, and putting in practical operation said invention, or will use his best endeavors to obtain the said services. Said party of the second part will use all his influence and experience for the production, putting in operation and sale of all engines manufactured under said invention.
    “ Said party of the second part further covenants to pay out of the first profits of the one-half of the one-eighth part hereby sold to him the sum of five thousand dollars, to be paid to said parties of the first part in the following proportions: To Laban 0. Stuart, three-eighths thereof; to Francis H. Dykers, three-eighths thereof; and to Joseph Kingsland and Richard Kings-land, one-quarter thereof.
    “ And it is understood and agreed that none of the parties hereto shall part with or dispose of any part of their interest in said invention without the consent and concurrence of all the parties hereto.”
    The action was tried before a referee, who made the following findings of fact:

      “ That under the contract an engine was constructed, and that the plaintiff advanced the sum. of two hundred and seventy-five dollars to the defendant; that the engine so constructed did not fully illustrate the advantages claimed for it by the defendant, and that thereupon the contract of June 25, 1864, was made; that under the contract two engines were constructed, and the first of these, which was originally constructed with small magnets, had them replaced with large ones; that the last of these engines was the last engine constructed with the money furnished by the plaintiff; that the amount of money advanced by plaintiff under the second contract was four thousand seven hundred and eighty-three dollars and fifty cents; that when the engine was constructed and tested, the defendant applied to the plaintiff for more money to construct another engine on a different plan, which plaintiff refused to furnish ; that, subsequently the defendant obtained money from the Messrs. Kingsland, under a contract made with' them ; that plaintiff received no part of the money paid by the Kingslands, under that contract, for his own use ; but it was all disbursed for constructing engines, and for defendant’s expenses ; that when all that money was exhausted, a contract was made with one De Lamater, as none of the engines were satisfactory as motive powers ; that under that contract, two engines were constructed, and they were the last constructed by the defendant; that no engine, such as was contemplated by the second contract between the plaintiff and the defendant, had ever been constructed by the defendant; that the plaintiff never expressed himself satisfied with the practicability as a motive power of any engine constructed by defendant-; that the plaintiff did express hopes of the success of the enterprise ; that the defendant was not satisfied with any of the engines constructed ; but each was successively set aside for another, and the last one condemned and abandoned by defendant; that patents were applied for in the joint names of plaintiff and defendant, before any practical test of the engine patented was had in the presence of plaintiff; that the plaintiff was no electrician or mechanic, and relied, for his information of the efficacy of the engines, on the defendant; that the plaintiff notified defendant before the commencement of this action that he was not satisfied with the practicability as a motive power of any of the engines constructed by defendant, and demanded the repayment of the money advanced by him to defendant, under the contract; that the plaintiff, at the special instance and request of the defendant, remained in Paris, contrary to his (plaintiff’s) intentions, from January 1,-1868, to March 18, 1868; that while so staying there, he necessarily incurred expenses for which he paid a sum amounting in American currency, to seven hundred dollars.
    The defendant duly excepted to the findings of fact, and requested the referee to find as a conclusion of law, that the plaintiff at the time, and long before the commencement, of the action, was joint owner with the defendant and Joseph Kingsland, Jr., Richard Kings-land, and Cornelius H. Delamater, of the said invention, and of the engines so constructed thereunder.
    The referee refused so to find, and the defendant excepted.
    Judgment was entered for the plaintiff, and the defendant appealed.
    P. J. Gage, attorney for appellant, and Christopher Fine, of counsel, urged:
    I. That under the conceded facts, the report of the referee should be set aside, the judgment entered thereon vacated, and a new trial granted. 1. Although the plaintiff at the time, had a right, under the contract of June 25, 1864, modifying contract of March 26, 1864, to demand a repayment to him by the defendant of the moneys he had advanced, or might advance, under that agreement, “if on the construction of such new machine ” he was “ not satisfied with the practicability of the same as a motive power,” yet the plaintiff waived that right, and es-topped himself from demanding back the payment of the money, by entering into a partnership and joint ownership with the defendant and Joseph and Richard Kingsland, and also into another partnership with these gentlemen and Cornelius W. Delamater, as he did on May 9, 1866, and April 8, 1867, and consented tu accept an engine to be constructed by Mr. Delamater. By these agreements the plaintiff—(1.) Elects to act as and become a joint owner and partner with the defendant, and to share the ■ advantages or dis- ' advantages of the enterprise; (2.) Transfers to third parties a portion of his one-half interest as owner, and also becomes partners with them, and is to receive and enjoy the various considerations therefor; and (3.) Consents to accept an engine to be constructed by Mr. Delamater; and (4.) Puts it out of his power of making restoration to the defendant of that which formed the consideration of the money, now sought to be recovered by the plaintiff. He cannot restore the entire patents, invention, machines, engine, &c., &c., to the defendant. He cannot place him in statu quo. And that plaintiff and defendant, in fact, regarded themselves as partners.
    II. Even if the subsequent contracts of May 9, 1866, and April 8, 1867, between the plaintiff and the defendant, and the Messrs. Kingsland and Delamater, respectively, did not operate as a waiver of, or supersede the supplemental contract of June 25, 1864, yet a new trial must be granted. Because—1. In each of these contracts with the Messrs: Kingsland and Delamater, the plaintiff expressly agrees (in the Messrs. Kingsland contract), “ that neither of the parties to these presents shall dispose of their shares, or any part of the same, without the consent and concurrence of the other party heretoAnd in the Delamater contract, that “ it is understood and agreed that none of the parties hereto shall part with or dispose of any part of their interest in said invention without the consent and concurrence of all the parties hereto.” How there is not a word of testimony in the whole case showing, or tending to show, that the plaintiff ever obtained or has the consent or concurrence of either of the Messrs. Kingsland, or of Mr. Delamater, to dispose of his share, or any part of his share, or his interest, or any part of his interest, in the said invention, &c., &c., to the defendant. Without such consent and concurrence, he cannot transfer even his own interest therein, much less the one-quarter of the said invention, &o., transferred to the Messrs. Kingsland by himself and the defendant, and the one-eighth part of the same, transferred by himself, the defendant and the Messrs. Kingsland to Mr. Delamater. 2. The plaintiff, as a lawyer, of course felt the necessity of restoring everything to the defendant which had been obtained from him before he could even demand the money back, and therefore, in his complaint, ignores the Kingsland and Delamater contracts, and avers that he is ready and willing * * to execute all papers necessary to put defendant in possession of the right to any patent which he (the plaintiff) held. But even this he neither did, nor tendered even as to his own interest, and if he had done so, it would not have been sufficient, for the defendant was eguaTly entitled to the other interests, and they were all outstanding, and beyond the control of the plaintiff. “ Where a party desires to abandon or rescind a contract, because of some alleged breach, &c., the law requires him to act with due promptness in making his election, and . . he will not be permitted to do so when at the time of the rescission both parties cannot be placed in the identical situation, and cannot stand upon the same terms as at the time the contract was made ” (Hunt v. Singer, 1 Daly, 209, and many cases cited). “A party to a contract, who rescinds it for any cause, must restore all that he has received■ under it” (Utter v. Stuart, 30 Barb. 20, and many cases cited ; Stoddard v. Grraham, 23 How. Pr. 518). There is no evidénce of even á tender by the plaintiff of the retransfer, &c., of even his own interests in the invention, patents, &c., to the defendant, and, of course, no tender of the interests in the King'slands and Mr. Delamater. “A tender imports not only a readiness and ability to pay money, or deliver over a deed dr conveyance, &c., but also the actual production of the thing to be delivered, &c.” . (Holmes v. Holmes, 12 Barb. 137). Nothing .like this was ever done or attempted, not even on the trial.
    III. Even if the agreements with the Messrs. Kings-land and with Mr. Delamater had never been made, or did not work a waiver or estoppel of the plaintiff’s present claim, yet he cannot recover. Because I. Outside of the said agreements, the plaintiff waived his character of money loaner, and became a partner and joint owner with the defendant - in the invention, the patents and improvements thereon, &c., and all rights thereunder. (1.) The plaintiff, during the years 1867 and 1868, procured patents of the invention, in his own name, as proprietor, and also in the name of the defendant and himself jointly, as inventor and proprietor, and went to Europe and wanted to obtain orders to sell the engine constructed by the defendant, and said he had embarked much money in the matter. Because: II. The evidence shows that plaintiff was even satisfied on the construction of the machine . . with the practicability of the same as a motive power, and therefore was not entitled, under the conditioned supplemental agreement of June 25, 1864, to any repayment. This is the language of the plaintiff, and his acts equally prove, that he was satisfied with the “ practicability of the machine as a motive power ”— and that is all the condition calls for. Even plaintiff’s own witness, Mr. Delamater, swears that the 'machine “ was practicable as a motive powers We submit that in no aspect of the case was the plaintiff entitled to recover for moneys advanced, under his first alleged 'cause of action.

    TV. Neither was the plaintiff entitled to recover on his second alleged cause of action, being for moneys alleged to have been expended by him in Paris, from December, 1867, to March, 1868. Because : I. His contract with the defendant provides, and the plaintiff agrees, that he will “devote all.the time and attention necessary to securing and protecting the rights of the parties hereto (the contract), and to such invention without any compensation therefor.” Because : II. The plaintiff in his stay in Paris was engaged in the duties he had assumed as joint owner and patentee of the invention, and did only what he had contracted to do, and what he knew it was his duty to do, in the joint interest of himself and the defendant.
    Y. Plaintiff admits that he did not fully comply with his agreement of March 26, 1864, nor as modified June 25, 1864, but shows that he governed himself by,- and intended to be controlled by, the agreements with the Messrs. Kingsland and Mr. Delamater. (1.) That he did not comply with agreement of March 26 and June 25, 1864, in that although he had agreed to advance five thousand dollars ; lie refused to advance beyond four thousand nine hundred and seventy-three dollars and seventy-nine cents, and also refused to retire). (2.) That he intended to act as a partner, &c., and govern his rights and claims by the agreements with the Messrs. Kings-land and Delamater, is apparent from all the testimony cited, and the plaintiff especially insists that such was the case when cross-examining the defendant. “ There must be a full performance to entitle a party to recover” (Pike v. Butler, 4 N. Y. 360, 363; McMillen v. Vanderlip, 20 Id., 486 ; Hoyt v. Hall, 3 Bosw. 42; Brown v. Weber, 38 N. Y. 187).

      Francis H. Dykers, in person, attorney, and A. J. Vanderpoel, of counsel for respondent, argued:—
    I. The clear intention of the parties to the contracts, as expressed therein, and as sustained by the proof, was that the defendant should have the benefit of the plaintiff’s capital to develop his invention, in exchange for which he agreed to shield the plaintiff from loss if it should turn out to be a failure. This was the more just and reasonable from the fact that the plaintiff knew nothing of electricity, and because defendant knew that many experiments had been made to produce a marketable motive power by electricity, all of which had failed, owing to the expense being too great. And the defendant himself considered the engine a failure, and abandoned it. So that it appears fully established by the proof that no engine such as was contemplated by the. contracts was ever constructed by defendant.
    II. The plaintiff never expressed himself satisfied with the practicability, as a motive power, of any engine constructed by defendant, and defendant does not testify to any such admission. Plaintiff was very hopeful of success, and as he relied on defendant for all his knowledge of the value of the engines, the representations made by defendant naturally encouraged those hopes. *
    III. The subsequent contracts do not operate as an estoppel to prevent the plaintiff from claiming the return of his advances from the defendant. 1. Both contracts recognize the engine as it then existed, as unfinished, and provide for the application of the money to be advanced to the development of the idea, and to the personal expenditures of the defendant, am ;+ w? s so applied, and no part of it was ever received )ov plaintiff. 2. The recital in the contracts of the facts showing in whom the title to the invention resided, and the proportions of plaintiff’s interest, was strictly true, in accordance with the terms of Exhibit 1, and did not exclude the idea that plaintiff might surrender that interest, in conformity with the terms of Exhibit 7. 3. The interest which the plaintiff was to have in any money arising out of those contracts could only be received when the conditions of Exhibit 7 had been complied with, viz., when the engine was sold for motive power. 4. A mere reference to the general rules governing estoppel will show that it is not applicable here (Welland Can. Co. v. Hathaway, 8 Wend. 480; Jackson v. Waldron, 13 Id. 178; Huntington v. Havens, 5 Johns. Ch. 29; Gaylord v. Van Loan, 15 Wend. 308; Sparrow v. Kingman, 1 Comst. 242 ; Borst v. Corry, 16 Barb. 136). 5. If any representation can be said to have been made by plaintiff in Exhibits A and B, to any one, which would operate as an estoppel, it certainly was not made to defendant, but to Kiugsland and Belamater. 6. The party who relies on the estoppel must show that he has acted on a belief of the facts to which it relates to his prejudice. Here there is not a word of any such proof (Dezel v. Odell, 3 Hill, 221; Lawrence v. Brown, 1 Seld. 394; Chautauqua County Bank v. White, 2 Id. 236; Brown v. Bowen, 30 N. Y. 519). There can be no estoppel in pais in behalf of one having full knowledge of all the facts (Baker v. Union. Mut. L. Ins. Co., 43 N. Y. 283; Shapley v. Abbott, 42 N. Y. 443.)
    IV. The second cause of action is fully sustained by the proof.
    V. The findings of the referee are all supported by the evidence, and none of the exceptions to the evidence are well taken, and the judgment should be affirmed with costs (Hoogland v. Wight, 7 Bosw. 394; Mann v. Wilbeck, 17 Barb. 388; Monell v. Marshall, 25 How. Pr. 425).
   By the Court.—Monell, J.

By the terms of the contract between the parties, the money which the plaintiff agreed to advance, and which he did advance, was to be repaid to him, if he was not “ satisfied” with the “practicability” of the engine, as a motive power.

It is not necessary to go the length of holding that this was so absolute a right, that the plaintiff could arbitrarily, and without reason, determine to be dissatisfied, and claim a return of his advances, without establishing by any evidence the impracticability of the machine.

The contract and the evidence show, that the defendant desired to avail himself of the pecuniary aid of the plaintiff, to develop the invention; and it was the design, as well as the agreement of the parties, that the plaintiff should be protected from any loss, which , might be caused by a failure of the experiment. Hence, in broad terms, the plaintiff was authorized to determine for himself, on the practical working of the engine, and its sufficiency as a motive power ; and upon a literal construction of the agreement he might claim, that he was to be the sole judge, and that his conclusion should be final, without furnishing any proof whatever, of any impracticability in the machine or its purpose.

But as has been said, it is not necessary to go so far. The referee has found, that several engines were constructed, none of which were such as was contemplated by the contract; that the plaintiff never expressed satisfaction with the machine as a motive power ; and that the defendant, himself, was dissatisfied with them, as they were constructed, each being set aside for another, and the last one condemned and abandoned by him. This finding, being supported by the evidence, established a sufficient ground for a rescission of the contract, and furnished a sufficient a reason for declaring the impracticability of the machine. Thereupon the plaintiff, prima facie, was entitled to repayment of his advances.

A point was made by the appellant, that the plaintiff had failed to show a performance on his part, of the contract, namely, that he had not advanced all the money he agreed to ; and had also refused to retire.'

The first ground was not taken at the trial, and it is now too late to be urged here. Besides, under a contract of this nature, the plaintiff had a right to stop the advances whenever he became satisfied with the insufficiency of the experimentand, therefor, he is not affected by the principle governing the performance of mutual amounts. The second ground arises, it is supposed, from .the relation of the parties under the contract with the Kingslands and Delamater ; but I can: not find anything in the contract of June 20 and 25, which authorizes the objection. There was no period fixed for the completion of the machines, or of the experiments with them ; nor was there any covenant for the plaintiff’s retirement. When he became dissatissatisfied, he could terminate the contract, and, probably, was bound to restore to the defendant, all that he had parted with to the plaintff. Had the latter, therefore, become possessed of any tangible interest in the invention, he was bound to restore it to the defendant, as a condition precedent to a rescission of the contract. All this he offered to do before suit was brought. But, if I understand the objection, it is, that the new relation of the parties, under the transfer to the Kings-lands and Belamater, furnished proof of an inability, and, therefore, it was equivalent to a refusal to retire from the enterprise, and of an election to continue under the new arrangement. I do not find any evidence, outside of the contracts themselves, which goes to sustain the objection, and I shall have occasion to construe those contracts upon another branch of the discussion.

The principal objection to the decision below is,, that the plaintiff waived his rights under the contracts, and is estopped from demanding a return of his advances by entering into what the defendant claims was a partnership and joint ownership with the Kingslands and Be Lamater.

The transfer to the Kingslands was of one-quarter, and to Be Lamater of one-eighth. These several transferees advanced, and agreed to advance, money for the expense -of experiments, and for advancing the invention and constructing the engines. In the transfer to Be Lamater, he undertook to have an engine constructed and tested, under the supervision of Ericsson, the electrician, for the purpose of developing, improving and putting the invention into practical operation. And to this arrangement the plaintiff was a party, and consented to it.

These several parties then became joint owners of the invention, and, inter se, were, probably, to some extent, partners in the enterprise. The different agreements seem to have contemplated a continuance of the joint ownership, and an ultimate joint engagement in the sale of engines under the invention.

1 But these subsequent arrangements did not merge or destroy the prior agreements between the plaintiff and defendant. There was certainly no expressed design of doing so, nor can any such design fairly be inferred from the transaction. The object of all the parties was to develop the invention, and they united in furnishing the necessary pecuniary aid for that purpose. In each instance, the profit or loss was dependent upon the success of failure of the experiment; and whatever separate or individual rights the parties, or any one of them, had; were not designed to be, nor were they, subordinated to, or in any manner affected by, the collected or aggregate rights of all.

The plaintiff, whose assistance had been exhausted, was not unwilling to allow the additional aid of others ; and in uniting in the transfer, he did nothing more than to consent to further attempts to develop the invention for the mutual benefit of all concerned. I do not perceive that the plaintiff acquired, under these transfers, any new or different interests, or other interests than such as depended upon the performance of the conditions contained in the first and second agreements with the defendant. And there is no where to be found an intention on the part of the plaintiff to merge those interests in the subsequent contracts.

Notwithstanding, therefore, that there was a qualified partnership, or what might have resulted in a partnership inter se, yet there was nothing in these subsequent transactions which was in fact, or in legal effect, an abandonment of the covenants and conditions in the original agreements.

Nor was there anything in these later transactions which can operate as an estoppel upon the plaintiff. He surrendered nothing. ' He held out no false lure to the defendant; nor did he acquire any interest that was not dependent upon the fulfillment of the defendant’s obligations. And it is not enough that a mere possible benefit, to which he consented, but which was thus dependent, can estop him from asserting his prior claim.

The parties agreed that De Lamater should construct the test machine, and so far, it may be said, he was substituted in the place of the defendant, and, possibly, to that extent, the conditions in the defendant’s agreements, depended upon the machine which De Lamater might construct. But if the latter, in constructing a machine, failed to satisfy the terms of the condition, by showing the practicability of the invention as a motive power, the parties were restored to all primary rights.

So the referee has found that the machine constracted by De Lamater was not satisfactory, and was condemned and abandoned by the defendant.

Upon such condemnation and abandonment, the parties were referred to their rights under the former contracts.

The second cause of action was sustained by the proof. The finding, therefore, that those expenses were paid or incurred at the instance of the defendant, was justified.

I have noticed all the exceptions which were urged on the argument or stated in the printed points, and do not find any error in the judgment.

It should be affirmed.


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    GEORGE W. RATHBUN, Plintiff and Respondent, v. DANIEL W. INGERSOLL, Defendant and Appellant.
    An order for a commission to examine witnesses with a stay of proceedings, although in a sense discretionary with the judge who granted it, is' reviewable by the general term. It affects a substantial right within subdivision 3 of section 349 of the Code, and under the authority of In Be Duff, 41 How. Pr. 350, is appealable.
    A referee has no power to issue a commission to examine witnesses. The court only can do this.
    An order for a commission, although not an absolute right, has become almost a matter of course. When applied for and the applicant is not guilty of laches, a stay of proceedings is also usually granted, but where much time has elapsed, very satisfactory excuse is required, and the party must make out so strong a case (not only excusing . the laches but also of the necessity and materiality of the evidence sought), as will remove the natural suspicion of bad faith (Forrest ». Forrest, 3 Boaw. 666).
    A party has no right to rest upon an expectancy that foreign witnesses would attend. In view of the comprehensive powers of referees on the trial of actions, the court should use its powers of restraint with great discretion and caution, and should not interrupt nor stay a trial except in a clear case of necessity, and only' when substantial justice requires it.
    Before Barbour, Ch. J., Monell and Freedman, JJ.

      Decided March 2, 1872.
    Appeal from an order for a commission to examine witnesses, with a stay of proceedings.
    The action was commenced in April, 1866, and was pending before a referee, with numerous meetings and much testimony taken, until July 25, 1871, when the evidence was declared by the referee closed on each side, and the trial adjourned to September 7, for summing up. On July 18, the motion by the defendant for a commission was noticed, and adjourned from time to time to September 7, when it was dismissed on failure of the defendant to appear. The default was subsequently opened, and the motion for a commission with a stay, granted.
    The day for summing up was adjourned to September 11, on the defendant’s motion, on condition that he within ten days pay referee’s fees for all adjournments made at his request. Such fees had not been paid.
    By December, 1870, the plaintiff had put in all his evidence, and the trial was continued by repeated adjournments to May 6, 1871, when the defendant began taking testimony and continued three days, and the further trial was then adjourned to July 24. The defendant failed to appear, and on the next day, the referee closed the evidence.
    The only affidavit,- touching the merits of the motion, was made by one of the defendant’s attorneys, who stated: “That after the plaintiff had aguin rested his case, the said motion to dismiss was renewed and was denied, and in May, 1871, the defendant- opened his case, and intended and expected to examine six witnesses, all of whom reside in Minnesota. That two of said witnesses were produced and examined before said referee here in New York, and defendant was led to believe, and did expect that the other four witnesses would appear and be examined orally and personally, but to his disappointment it has been found impracticable to procure their personal attendance. That deponent has been informed by said defendant what he expects to prove by each of said witnesses, and believes such information to be true, and communicated in good faith; and that the testimony of each and every of them is material and necessary for said defendant on the trial of this action, as deponent had advised said defendant, and as deponent verily believes. That deponent has delayed the procuring of the testimony of said witnesses till the present time, solely because he calculated and depended, down to a late day, on their willingness to come and render their testimony here ; and another more recent cause of such delay, is that for the last four weeks deponent’s health has been so bad, that he has been confined to his house, and unable to any considerable extent to give attention to his legitimate business, and that none of his law partners have any conversance with the case, the trial having been wholly under the charge of deponent.”
    The plaintiff appealed.

      Mr. H. Z. Hayner, for appellant.

      Mr. Knox, for respondent.
   By the Court.—Monell, J.

The order, although in a sense discretionary with the judge who granted it, is reviewable by the general term. It affected a substantial right, within subdivision 3 of section 349 of the Code, and is, therefore, under the authority of In Re Duff, 41 How. Pr. 350, appealable.

The power of a referee in respect to the ordinary incidents of a trial are the same as the court. He can grant or refuse amendments of pleadings, or conform the pleadings to the facts. He cam compel the attendance of witnesses, and is authorized to grant adjournments from time to time, to suit the convenience of parties or witnesses.

A referee, however, has no power to issue a commission to examine witnesses out of the State, nor can he compel the attendance of such witnesses. The court only can allow the issuing of a commission.

The granting óf a commission, although not an absolute right, has become to be almost a matter of course; and when applied for without laches or unreasonable "delay, is usually accompanied by a stay of proceedings for such reasonable time as may be required for its due execution.

Where much time, however, has elapsed, very satisfactory excuse for the delay is required ; and the party applying must make out so strong a case, not only excusing his laches, but of a necessity for the evidence, as will remove the natural suspicion of bad faith (Forrest v. Forrest, 3 Bosw. 666).

And where the trial has been going on, as in this case, for nearly two years, the party should be required, besides excusing the delay, to disclose the nature of the evidence he expects to obtain.

It is probable that no case like this has arisen, when a motion for a commission, 'and a stay of all other proceedings, has been granted, after the evidence has been closed. Indeed, not even after the trial has been begun. The court of course has the power, but I do not know a case where it has been exercised.

The reason for the delay in procuring the evidence of these foreign witnesses is not satisfactory to me. It is that it was expected they would personally attend.

The defendant has no right to rest upon such an expectancy. He, or Ms counsel, knew that such an attendance would be wholly voluntary and could not be compelled ; and if he took the risk of a disappointment, he should be made to take the consequences of the failure.

Besides, he is in default. He has not complied with the condition annexed to the order opening the proofs, and he • is, therefore, shut out from giving further testimony.

In view of the comprehensive powers of referees, on the trial of actions, the court should use its powers of restraint with great discretion and caution ; and should not interrupt or stay the trial, except in a clear case of necessity, and only when substantial justice reqmres it.

I think so much of the order as allows a commission and stay of proceedings should be reversed with costs.


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    LOUISA D. WEHLE, Plaintiff and Respondent, v. HENRY L. BUTLER, et al., Defendants and Appellants.
    In the case of several attaching creditors, if the sum obtained by the sheriff on the sale was more than sufficient to satisfy the execution of the creditor who has the prior lien, the surplus would be applicable to the claims of the other attaching creditors, and their attachments would hold this surplus.
    An action being brought against the judgment creditor to recover the value of the property taken by his attachment and sold on his judgment and execution, the evidence of there being a surplus, and other attaching creditors, would be available to the defendant, in mitigation pro tanto of damages.
    Upon such a state of facts it would be error to exclude such evidence, although the facts were not set up in the answer. Being in mitigation of damages, it need not be pleaded (Travis «. Barger, 24 Barb. 614).
    Mere proof of other attachments, without any proof of the surplus to apply on the same, is "not admissible in mitigation of damages.
    In the absence of proof of the amount of the judgment, and the amount obtained by the sheriff on the sale to apply on the same, it may be assumed that the whole proceeds of the sale were exhausted by the execution issued upon the judgment, leaving nothing applicable to the claims of the other attaching creditors.
    Before Barbour, Ch. J., and Monell and Freedman, JJ.

      Decided March 2, 1872.
    This was an appeal from, a judgment recovered by the plaintiff for the value of a stock of goods, taken by virtue of void attachments issued on application of the defendants out of the marine court.
    The defendants procured six attachments, all of which were vacated by order of the marine court. The goods were sold upon an execution issued by defendants upon a judgment obtained in one of these actions.
    It appeared in evidence that other parties had obtained attachments and levied upon the same property. This testimony was stricken out by order of the court.
    ■ Defendants offered to prove that after these actions in the marine court had terminated, and before this action was commenced, they had commenced new actions in the common -pleas, and attachments had issued therein, and the sheriff had seized and now held these same goods under those attachments. On objection, this testimony was excluded.

      Dubois Smith, for appellants.

      Charles Wehle, for respondents.
   By the Court.—Monell, J.

It does not appear with any distinctness, that the execution, under which the sheriff subsequently levied upon and sold the property, seized under the attachments, was issued upon a judgment in favor of these defendants in the action in which the attachments were granted. It does appear, however, that the subsequent levy and sale was under an execution, which these defendants had issued, and it may, perhaps, be assumed that it was issued upon a judgment in their favor and against the plaintiff.

The amount of the judgment is hot stated ; nor does it appear, from the papers before us, what was the amount of the defendant’s claim. If,_ therefore, the sum obtained by the sheriff on the sale was more than sufficient to satisfy the defendant’s execution, the surplus would be applicable to the claims of the other attaching creditors. In that event, their attachments would hold to the extent of such surplus, and their existence would be available to the defendants in this action, in mitigation, pro tanto, of damages.

Upon such a state of facts, it would have been erroneous to have excluded the evidence and levy of such attachments, even although it was not set up in the defendant’s answer, doing merely in mitigation of damages, it need not have been pleaded (Travis v. Barger, 24 Barb. 614).

But the defendants had not furnished sufficient evidence to make their offer available. If the sale by the sheriff was under an execution in their favor, and their judgment was sufficient to exhaust the whole proceeds of sale, then the subsequent attachments were no lien upon any of the property ; and no part of the proceeds went to the plaintiff’s benefit, in satisfying the claims of other creditors.

Upon the proof, therefore, before the court, the offer to prove the attachments was, properly overruled, and the case is brought directly within Lyons v. Yates, 52 Barb; 237, and Peak v. Lemon, 1 Lans. 295.

Every intendment is in favor of sustaining the judgment ; and it was incumbent on the defendants to show clearly a state of facts, leaving nothing to inference or implication, which would have made the evidence they offered proper.

Having failed to show such facts, it was proper for the learned justice at the trial to assume that the whole proceeds of the sale were applied to the defendant’s execution, leaving nothing for the other creditors to attach.

Upon such assumption, the attachments could furnish no proof in mitigation of damages.

The. judgment should be affirmed.


author: By the Court.—Sedgwick, J.

text:
    OTTO STEINHART, Plaintiff and Respondent, v. JOHN F. DOELLNER, Defendant and Appellant.
    The firm of Steinhart & Heyne was composed of Otto Steinhart & Frederick W. Heyne, and in June, 1868, were indebted to the firm of Scholler & Co. in the sum of seven hundred and eighty-four dollars and fifty-nine cent's. About the same time, Heyne sold'his interest in the firm of Steinhart & Heyne to John F. Doellner, who, with Steinhart, formed the new firm of Steinhart & Co. One of the considerations of the sale was Doellner’s agreement to pay the debts of Steinhart & Heyne, among which was the debt due to Scholler & Co.
    On August 7, 1868, Steinhart sold out his interest in the firm of Steinhart & Co. to Doellner, and Doellner gave him a bond of indemnity against all the valid debts and liabilities existing against Steinhart & Co. mentioned in the schedule annexed, and the schedule contained the following entry: “ 8'¿holler & Go., $784.59.”
    Scholler & Go. commenced an action against Steinhart & Heyne, and recovered judgment, by default, for eight hundred and forty-three dollars and three cents, which Steinhart paid. Steinhart brings suit on the bond of indemnity against Doellner to recover the amount paid on that judgment.
    Doellner claims that this debt of Scholler & Co. was not a valid debt against the firm of Steinhart & Co., and not included in the terms of the bond of indemnity.

      Held, by the referee and by the court on appeal, that this debt of Scholler & Co., against the firm of Steinhart & Heyne, was also a valid and subsisting debt and lidbilil/y against the firm of Scholler & Co., and as such included in and covered by the bond of indemnity, and plaintiff could recover said debt, and all losses, damage and expense to which defendant was necessarily subjected to, by reason of said debt and liability.

      Held, also, that plaintiff could recover only the costs that had accrued and were incurred by him upon the summons being served upon him, as he did not then give any notice of the action to the defendant Doellner, but allowed the costs and expenses to increase by judgment and execution, and therefore he cannot recover for any costs and expenses after that time.

      Before McCunn, Curtis and Sedgwick, JJ.

      Decided March 2, 1872.
    Appeal from a judgment. The facts in the case appear fully in the opinion of the court.

      J. E. Cary, for appellant.

      F. J. Fithian, for respondent
   By the Court.—Sedgwick, J.

Before August 7, 1868, the plaintiff and defendant were members of a firm—“ Steinhart & Co.at that date the plaintiff sold his interest in the- firm property to the defendant, who went into sole possession of it.

At the same date, the defendant covenanted to indemnify the plaintiff against the payment of the debts of Steinhart & Co., “hereafter mentioned in the schedule hereto annexed, which are found to be valid and subsisting claims against said firm, and from and against all loss, damage and expense to which he or they .may be subjected for or" by reason of said debts and liabilities.” The action is brought on this covenant, for damages suffered by the plaintiff in paying a debt due to Scholler & Co., for seven hundred and eighty-four dollars and fifty-nine cents, alleged to be a debt due by Steinhart & Co. within the terms of the covenant, and expenses connected with such payment.

The plaintiff, to maintain his action, had to show that he had paid this debt; that it was a valid debt of Steinhart & Co., provided for by the covenant; that at the time of payment it was outstanding, and that he was subjected to further loss and expense by reason of his liability to pay that debt.

On the trial he proved that a firm “ Steinhart & Hayne” were indebted to Scholler & Co. in the sum of seven hundred and eighty-four dollars and fifty-nine cents. The evidence given by Thompson, of the latter firm, and by Hayne, of the former firm, both as to the fact that such a debt existed and as to conversation with the defendant, in which he referred to it as a debt existing as between Scholler & Co. and Steinhart &. Hayne, supports the finding of the referee in that regard.

The presumption was that it remained unsatisfied down to and through the time of the covenant of indemnity.

Hayne, who with Steinhart, the plaintiff, composed the firm of Steinhart & Hayne, assigned, in writing, about' June 25, 1868, to the defendant, Do'ellner, his interest in the partnership property of Steinhart & Hayne, and the defendant, on the same day (the various parts of the transaction being connected together), formed with the plaintiff, by written articles, the partnership, Steinhart & Co. By these articles it was witnessed that the parties thereto had contributed to" the capital stock of the said copartnership all their and each of their right, title, and interest in and to the property and effects pertaining to the said piano-forte business, and in and to the said business owned by them at the said premises, Hos. 125 and 127 Worth street, in said city of Hew York, and elsewhere, being the property and business formerly of “ Steinhart & Hayne.” The new firm of Steinhart & Co. did go into possession of the partnership property of the old firm of Steinhart' & Hayne.

It appears by this, that Steinhart & Hayne had property which was first applicable to the payment of its indebtedness, in which were the debt due to Scholler & Co., and it was the duty of the new firm of Steinhart & Co. to so apply it. This being the duty of the new firm, that an express promise by it to assume and pay that indebtedness was made, has probability in its-favor. The referee heard evidence, direct and circumstantial, from which he found that Steinhart & Co. had made such a promise. Hayne testifies that at the time he sold his interest to the defendant, he handed to him a statement of the debts of Steinhart & Hayne, which the defendant promised to pay.

The defendant, at the same time, asked Hayne to use his influence to get the creditors of Steinhart & Hayne to take the notes of Steinhart & Co., and Hayne specially mentioned to him the debt to Scholler & Co., and the defendant promised to pay that, in cash. The conduct of the defendant, in paying other debts of Steinhart & Hayne, is a circumstance that has its weight in this matter, although not conclusive.

The defendant’s counsel takes the position that this shows only an individual promise by the defendant, but not a promise by Steinhart & Co., and that whosever promise it was, it was void by the statute of frauds, as a promise to answer for the debt of another, and which was not in writing.

As to the former position, it seems clear, when the facts are looked at together, that whatever pronoun the defendant used, whether I or we, he was .acting and promising, not for himself, but for the firm of Steinhart & Co. He meant to subject the property of Steinhart & Co. to the satisfaction of their promise, because about a fortnight after we went into the new firm, he asked Hayne if he could not induce Scholler & Co. to accept the round sum of seven hundred dollars for the debt of seven hundred and eighty dollars, and if not, if he could get them to accept business notes held by Steinhart & Co.

As to the position that the oral promise is void, by the statute of frauds, it is said that the statute does not apply to a promise made to a debtor to pay his debt to’ his creditor (Wolff v. Hoppell, 5 Hill, 460; Barker v. Bucklin, 2 Denio, 60); at least, when such promise is’ made upon a new consideration moving to the promisor (1 Smith' s Leading Cases, 9 Am. ed. 494).

In this case, Hayne was a debtor owing the debts which the new firm of Steinhart & Co., promised to pay. He was bound jointly with another to the creditor, but he was none the less their debtor. One of the promisors, viz: Steinhart, was himself a debtor jointly with Hayne, but it is not necessary to advert to that to find the promise valid. For this promise by the new ■ firm there appears sufficient consideration in the firm being put into the possession and use of the partnership property of Steinhardt & Hayne.

The testimony of Thompson that the debt due to Scholler & Co., was a valid debt, was objectionable but harmless. It was elsewhere and otherwise shown by competent testimony to have been valid.

The conversations that were testified to as had between Thompson and the defendant were objected to as being negotiations for compromise. Technically the objection was not good, because it was made in part to a conversation which stood by itself and was a bare promise by defendant to pay the whole of the debt. As to the other conversation, it was at best for the defendant, doubtful whether the defendant made an offer to free himself from the burden of an alleged objection, while denying its existence, or whether he made the offer he did, admitting the existence of the obligation. This was a question of fact for the referee to pass upon, with the other facts.

The many exceptions to the admission of evidence and to the findings, and to the refusals to find, have been examined.

They are exhausting and ingenious, but none of them can be sustained, beyond the one hereafter mentioned.

The covenant of the defendant was to indemnify the plaintiff against payment of the debts referred to, and against “all loss, damage, and expense, to which he or they may be subjected for or by reason of said debts and liabilities.” It has been seen that the debt due to Scholler & Co., was a liability of Steinhardt & Co., and it was mentioned in the schedule attached to the covenant.

The defendant, not by force of the covenant by itself, but because of his being, after the plaintiff’s assignment to him, in sole possession of the property of Steinhart & Co., and of his having covenanted to indemnify the plaintiff, was bound as between himself and the plaintiff to pay the amount due to Scholler & Co. Steinhardt had a right to rely upon the performance of this duty. Therefore, for the purpose of this action, the plaintiff was justified in not paying the claim before the action was brought by Scholler & Co., against the plaintiff and Hayne. The defendant had no notice of the bringing of that action, and under the terms of the covenant is not bound by it. The claim on which it was founded was, however, otherwise shown in the case to have been a valid subsisting claim against Steinhart & Co., which the creditors had a right to enforce against Steinhart & Hayne. The proof shows that the plaintiff paid the amount of the judgment, which included the sum of the indebtedness, costs, and sheriff’s charges upon the execution. In this way it appears that the plaintiff paid an indebtedness of Scholler & Co., and for that he can recover in this action. He, too, can recover the amount of costs that accrued, upon the summons being served upon him. As he was not bound to pay before the action was begun, these costs may be considered as an expense or loss to which he was subjected by reason of the liability. He cannot recover for the subsequent costs and expenses. They were unnecessarily incurred. If the action had been allowed to proceed, without payment or tender when notice of it had been given to the defendant, and then the plaintiff had paid the execution, that would make another case. The plaintiff chose not to notify the defendant, but took the responsibility of the validity of the claim in action and it being valid to his knowledge, he should have stopped costs and expenses as soon as possible. The judgment in this action cannot be sustained as to those costs and expenses which accrued after the service of summons in Scholler •& Co. *. Steinhart & Hayne.

Judgment must therefore be reversed, unless the plaintiff remit from it such subsequent costs and expenses and interest, in which case judgment must be affirmed.