author: O’Brien, J.:

text:
    Samuel Galle and Samuel Karlen, Respondents, v. Adolph Tode and Others, Appellants.

      Confession of judgment in fraud of creditors — when admissions of an attorney are evidence against his client — declarations to impeach a judgment by confession — declarations of conspirators — trial by a referee — technical rulings upon evidence — refusals to find.

    If a confession of judgment is part and parcel of a scheme to remove property from the reach of creditors, the judgment is tainted by the intent of the parties confessing it, and may be avoided at the suit of other creditors of the judgment debtor, although the plaintiff in the judgment may be entirely innocent, and although his debt may be entirely honest.
    It is not the law that fraud cannot be predicated upon a judgment confessed for a Iona fide indebtedness, in the absence of some agreement between the parties thereto whereby the debtor is to be benefited.
    The party in whose favor a judgment is confessed is not a purchaser for a valuable consideration within the exception of the Statute of Frauds, and may be affected by the fraudulent intent of the debtor without having participated therein.
    The rule which renders an attorney incompetent to make admissions in conversations with third persons which will be evidence against his client as to the facts of his case, does not apply where the client refers a person to his attorney for the purpose of having him state the client’s position with respect to any situation.
    The rules, that declarations of a defendant who has confessed judgment, made in the absence of the judgment creditor, are inadmissible to impeach the judgment, and that the declarations of a grantor after the conveyance are inadmissible to impair the title of his grantee, do not, after a conspiracy to hinder, delay and defraud creditors has been established, render the acts and declarations of the conspirators incompetent against those claiming the fruits of the conspiracy.
    When, in an action in equity based upon an intent to defraud creditors, tried before a referee, the findings and conclusions of the referee are supported upon competent and uncontradicted evidence, mere technical rulings upon evidence, which did not affect the result or do injury, are not available to invalidate the judgment.
    Where there is any evidence to sustain the findings of a referee, his refusal to find a fact which is but a link in the chain of propositions logically leading to a different result is not erroneous.
    To make exceptions to a refusal of a referee to find a fact sufficient ground for a reversal, it must appear that had he found as requested the result would have been affected.

      Appeal by the defendants, Adolpb Tode and others, from a judgment of the Supreme Court iu favor of the plaintiffs, entered in the office of the clerk of the city and county of New York on the 22d day of October, 1892, upon the report of a referee.
    This action was brought by judgment creditors to set aside what is claimed to have been a fraudulent disposition of property made by the defendant debtors, Tode and Wulling, by means of judgments confessed in favor of various parties, under which the property was sold by the sheriffs of New York and Orange counties. The relief sought is that such judgments be held to be fraudulent and void as against the plaintiffs, and that plaintiffs be first paid out of the proceeds of the property in the hands of the sheriffs.
    In March, 1891, the debtors, being embarrassed, sought to devise some plan by which they could continue their business and occupy a position where “ none of their creditors could attach or levy upon or seize any of the property so transferred.” In furtherance of this plan or intent, a corporation was formed in which, besides the debtors, there were Messrs. Levi, Máteme and Studeman, the first two of whom were creditors and friends, and the last a bookkeeper in the employ of the debtors. The capital stock was neither paid in^nor issued, but the property of the debtors was transferred to this corporation. No secrecy was made of the purpose for which the corporation was formed, the debtors themselves avowing that it was formed “ in order to prevent the creditors from seizing the jiroperty.”
    Concluding that the creditors were thus Ijeld in a safe position, a meeting was called by the debtors with a view to compel such creditors to enter into a settlement. At such meeting the creditors undertook to formulate a plan by which the assets could be placed in such a position that all the creditors might be treated alike and equitably. Apparently acquiescing in this suggestion, an understanding was had between both debtors and creditors present that no action should be taken by either until such time as a plan of settlement might be devised. In violation, however, of this understanding, and under an arrangement by which confessions of judg-. ment should be first given to Levi, then to Máteme and some six or eight others, hone of whom except the two named had knowledge of the debtors’ intention, confessions were made and the assets were transferred back to the debtors, in whose possession they were seized under executions upon the judgments thus confessed.
    March twenty-sixth was the date fixed upon for the final meeting of the creditors, when the plan of settlement was to be presented by a committee appointed for that purpose; but on the day preceding the retransfer of assets and the confession of eight judgments were made, and all the assets transferred were thereafter sold under the executions; and with the, exception of the Bowery store, which was undesirable property, the other assets, including the place of business in Kfty-ninth street and the Monroe Cheese plant, which was made into a corporation, passed into the hands of the wives of the debtors as nominal owners, but were really controlled by the debtors themselves, who, under co-partnership articles between the wives, were made managers of the business.
    Before this property, however, got into the possession of the debtors and their wives, and after it had been seized under the executions issued upon the confessed judgments, feeling certain that the other creditors were then at bay, a meeting was called by the attorneys for the debtors, who also represented the judgment creditors, for the twenty-eighth of March, for the purpose, as stated in the notice, of presenting a statement of affairs and submitting a proposition of settlement.
    Upon such facts, the referee decided that the plan thus devised was fraudulent, because entered into with an intent to hinder, delay and defraud the creditors. And from the judgment entered upon his decision this appeal ¿s taken.

      Emanuel J. Myers, for the appellants.

      A. J. Simpson, for the respondents.
   O’Brien, J.:

The questions presented on this appeal have been so many time’s passed upon in the various litigations growing out of the attempted disposition by the debtors of their property, that it would appear needless to repeat the reasons in support of this judgment.

Upon the motion to vacate the attachment in the common-law action, which is the basis of the present suit in equity, an opinion upon the facts then appearing was delivered by Mr. Justice Pattekson, and upon an appeal ta»this General Term, by the presiding justice. (Galle v. Tode, 60 Hun, 132.) In addition to these, the record before us is supplemented by an opinion by the referee, which succinctly states the facts, and correctly states the principles of law which should control, supporting, as it does, the decision rendered by him.

The appellants, however, have with so much earnestness urged .upon us a reconsideration of the questions, that we feel that a brief summary of the facts such as has been given, together with a review of the authorities, will demonstrate that there are no questions presented upon this appeal except such as have been frequently passed upon in the class of cases to which this belongs.

The most strenuous argument against the validity of the judgment is, that, inasmuch as the judgments were confessed for bona fide debts, and there was a failure to show any fraudulent intent upon the part of some at least of the persons in whose favor the judgments were confessed, this is fatal to a conclusion that such judgments were fraudulent.

In answer to this argument, we would repeat what we have frequently endeavored to point out in construing the Statute of Frauds, that it is not the intent of the person in whose favor a conveyance is made or a judgment confessed, that is to control, but it is the intent of the debtor. By the terms of the first section of the Statute of Frauds we find it expressly stated that every conveyance of property, and other acts done as therein enumerated, including a “ decree or judgment suffered, with the like intent as against the persons so hindered, delayed or defrauded, shall be void.” (4 R. S. [Banks’ 8th ed.] 2593.) And to emphasize the purpose of this statute as to those who alone can be protected against its sweeping provisions, we find by a subsequent section that protection is extended only to bona fide purchasers for value. (4 R. S. [Banks’ 8th ed.] 2592.)

Upon this question, therefore, we need but quote, as expressive of the view of this court, from the opinion of the presiding justice in the case of Simons v. Goldbach (9 N. Y. Supp. 360) wherein he says: There was evidence adduced by the affidavits that there was a scheme upon the part of these defendants to remove their prop-erty from the reach of their creditors, and that the attorney who issued this execution and who was the attorney for the entry of the confession of judgment, was cognizant of this intention. The entry of the judgment and the carrying out of the intention was evidently one scheme; but it is urged that the knowledge of this attorney of this attempt cannot affect the plaintiff, because his action cannot he said to involve the plaintiff in a scheme to cheat the creditors of the defendants, so as to have his honest judgment set aside. In this proposition the learned counsel forgets that it is not necessary, in order to invalidate this judgment, that the plaintiff had cognizance of the scheme to defraud the creditors. It is sufficient, even if this judgment was confessed upon an honest debt, that it was part and parcel of a plan by which some portion of defendants’ property was to be removed and concealed from their creditors to render such judgment absolutely void, because all the acts of the defendants in the carrying out of such a scheme are necessarily tainted with the same infirmity. In the case of an assignment with preferences, although honest debts may be preferred, yet if any portion of it is tainted with the intent to defraud creditors the whole assignment falls. So in the case of the confession of a judgment, if it is part and parcel of a scheme to remove property from the reach of creditors, although the plaintiff in the judgment may be entirely innocent, and although his debt maybe entirely honest, the judgment is tainted by the intent of the parties confessing the same.”

And in Illinois Watch Co. v. Payne, another decision of this General Term (11 N. Y. Supp. 410), it was said : “ All that it (the statute) has required is that the judgment shall be suffered or permitted with this intent, and its existence in the mind of the debtor fulfills and satisfies the language of the statute, and it has been so construed and administered by' the courts. (Starin v. Kelly, 88 N. Y. 418; Loos v. Wilkinson, 110 id. 195.) Against that intent an innocent purchaser for a valuable consideration has alone been protected, and the party in whose favor a judgment has been fraudulently confessed is not such a purchaser.”

These we deem sufficiently expressive of our dissent from the appellants’ contentions ; first, that fraud cannot be predicated upon a judgment confessed for a bona fide indebtedness, in the absence of some agreement between the parties thereto whereby the debtor is to be benefited; or, second, that the creditors in whose favor the judgments were confessed are purchasers for value, and cannot be affected by the fraudulent intent of the debtors, unless they participated therein.

Another position assumed by appellants is, that the intent of the debtors Tode and Wulling to commit a fraud will not prevent them from purging themselves therefrom by abandoning the enterprise and devoting their property to the payment of 'their just debts.

The answer, however, to this proposition is to be found in the fact that the case is entirely barren of any evidence to show that the debtors at any time purged themselves of the intent to commit a fraud; but, on the contrary, the evidence is consistent only with the view that the intent was ever present in all the plans and schemes devised by them, and which would result, if not held to be void, in their enjoying the fruits of their fraudulent acts by obtaining, through their wives, the possession, control and management of the property, free from any claims of their creditors. The only conclusion consistent with the evidence is, that not only did they not abandon the enterprise fraudulently entered upon, for the purpose of applying their property to the payment of their just debts, but that they have secured, and would continue to secure, immunity from the just attacks of their creditors if the scheme devised were not held to be void.

As we do not, therefore, regard the questions presented as new, we think that sufficient has been said to show the counsel for appellants that nothing in his argument has convinced us that the settled view of this court in actions of this character, so frequently enunciated and consistently upheld, should be now departed from. Upon the facts appearing, we fail to see how any other conclusion could be reached than that arrived at by the learned referee. The debtors started with an intent to place the property where the creditors could not reach it, and while thus holding them at arms’ length, compel them to make just such a settlement-as they saw fit to propose, and when it was found that this plan was likely to be abortive, the subsequent steps were indicative of the original fraudulent intent that no portion of the property should be applied to the payment of their debts, and the judgments confessed were a scheme by which they planned, and successfully as it would appear, to get the property practically under their own control by having it placed in the names of their wives, and thus, secure from their creditors, to reap the reward of their fraudulent scheme.

It is insisted, however, that while the findings of the referee may be supported by the evidence, the judgment must be reversed, because a great portion of the evidence upon which such findings rest was incompetent and improperly admitted by the referee.

To show how fallacious the argument in support of this position is, we will first take the objections made to the evidence admitted as separately urged before the referee and then group the objections together for the purpose of showing to what an absurd conclusion we should come if the argument of the appellants were to prevail.

The first objection is that to the admissibility of testimony given by a lawyer, who was appointed chairman of the meeting of creditors, when it was thought feasible to effect a plan of settlement between the debtors and all the creditors. While considering this plan, this witness’ attention was called to the bad faith of the debtors and their counsel in entering the judgments by confession in violation of the agreement that no such action should be taken; he thereupon called upon one of the debtors for an explanation, who, instead of giving it, stated that he had nothing to say, but referred the witness to his counsel, under whose advice he said he was actipg. This witness accordingly saw the attorney, and it was to the statement of what this attorney then said to the witness that the objection was made, the argument in support of the objection being that any statements of the attorney were incompetent and inadmissible as against the debtors.

There is unquestioned authority for the proposition that an attorney is not competent to make admissions in conversation with third persons, which will be evidence against his clients as to the facts of his case, and that the admissions of an attorney are not competent testimony to bind clients. But these are subject to the modification that where the client refers a person to his attorney for the purpose of having him state the client’s position with respect to any situation, thus conferring authority upon the attorney to speak for him, and leading the person seeking the information to rely on the right of such attorney to speak for the client, the reason for the rule referred to by the appellants is wanting.

Another objection is to the ruling of the referee in admitting testimony of the declarations and acts of the debtors in the absence of and without the concurrence of the judgment creditors. This objection, it is urged, is supported upon the ground that the cases hold, first, that declarations of a defendant, who has confessed judgment, made in the absence of the plaintiff, are inadmissible to impeach the judgment, and, second, that the declarations of a grantor after the conveyance are inadmissible to impair the title of his grantee. The charge here was that certain persons conspired together to cheat and defraud. Having established such a conspiracy, can it be claimed that the acts and declarations of the conspirators are not competent against those claiming the fruits of the conspiracy ?

Without, however, further discussing them separately, let us see to what lengths the appellants’ argument would go if we consider the objections grouped together.

Certain persons enter into a conspiracy with intent to hinder, delay and defraud, and it is argued that upon it appearing that some of the conspirators, together with certain innocent third parties selected by them, are nominally or ostensibly benefited, it cannot be shown by the acts and declarations of those who are engaged in the fraud that it was intended to cheat creditors, and that it did in fact benefit principally the fraudulent actors.

That is the case here presented. The debtors and two creditors, with the aid of their attorneys, planned a scheme under which, by means of judgments, they intended to hinder, delay and defraud their creditors; and upon the evidence of such fraud being apparent and an explanation demanded, it is insisted that one who had a right to know, and who was referred to the attorney who acted for all of the conspirators by one of them, was not entitled to state what, that attorney told him because such declarations are not binding upon the clients, and that the declarations and acts of the debtors cannot be given unless it can be shown that those in whose favor the judgments were confessed were present at the time. The result would be, as we understand the appellants’ argument, that before the declarations or acts of any of these people, who had conspired together and arranged a plan by which their creditors were to be defrauded, can be used in evidence against them, they are all to be brought together in one place and then interrogated, and that only the admissions or declarations so made would be binding ; and that with respect to their acts, unless it were likewise shown that what each one did was done in the presence of all the others, the evidence of such acts would be incompetent.

It is not necessary, however, to pursue a discussion of these objections and many others which have been urged, and which we regard as frivolous, because though one or two of them might be technically right, they would not affect the validity of this judgment.

Upon competent and uncontradicted evidence the findings and conclusions of the referee are supported, and in this state of the record, having in mind the fact that this case was one in equity, tried before a referee, mere technical rulings upon evidence which did not affect the result or do injury would not be available to invalidate the judgment. As held in Donovan v. Clark (138 N. Y. 633), where the action was on the equity side of the court to establish a partnership and for an accounting, in such cases exceptions to evidence should be disregarded unless the appellant can show that in justice has been done upon the whole case or that the ruling complained of may have affected the result. (See, also, Pach v. Geoffroy, 67 Hun, 406.)

The only remaining question is that in which it is insisted that the findings are irreconcilable with the judgment upon the questions of fraud, and that the referee erred in making certain findings for the plaintiffs and in refusing to find for the defendants. The answer to this, in addition to what has already been said, we think, is to be found in Crim v. Starkweather (136 N. Y. 635) and Baldwin v. Doying (114 id. 312), the former of these cases holding that where there is any evidence to sustain the findings of a referee, his refusal to find a fact which is but a link in the chain of propositions logically leading to a'different result is not erroneous, and the latter, that to make exceptions to a final refusal of a referee to find a fact sufficient ground for a reversal, it must appear that had he found as requested, the result would have been affected.

Our conclusion, therefore, is that the judgment is right and should be affirmed, with costs.

Van Brunt, P. J., and Follett, J., concurred.

Judgment affirmed, with costs.


source: Caselaw Access Project

license: Public Domain

text:
    Lorenz Reich, Appellant, v. William F. Cochran, Respondent.

      Bes adjudicates■ — landlord and tenant — judgment in swmma/ry proceedings for nonpeiyment of rent — a bar to an action to avoid the lease for usury.

    A judgment of a District Court of tlie city of New York, rendered in a summary proceeding to recover the possession of premises for non-payment of rent, declaring the petitioner entitled to possession, is an adjudication that the relation of landlord and tenant existed between the parties thereto, and that there was a valid lease of the premises between them, and, when properly pleaded or the omission to plead it is waived, and sufficient facts to show the jurisdiction of the court to render it appear affirmatively upon the record, will bar a . recovery in an action brought by the tenant in such judgment against the landlord therein to avoid the lease on the ground that it was in reality a mortgage to secure a usurious loan.
    Defenses to such a judgment which might have been available on a direct appeal or on a motion to vacate the judgment, cannot be raised collaterally in another action.
    Appeal by the plaintiff, Lorenz Reich, from a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 2d day of March, 1893, upon a decision of the court rendered after a trial by the court at the New York Special Term, dismissing the complaint upon the merits.

      Delos McCurdy, for the appellant.

      Treadwell Cleveland, for the respondent.
   O’Brien, J.:

This action was brought to have an agreement in the form of a lease from defendant to plaintiff declared a mortgage to secure a loan with usurious interest, and to have the same declared void and delivered up and canceled. The plaintiff, having obtained a lease of the Cambridge Hotel, assigned the same to defendant, who thereupon made a sub-lease of the same premises to plaintiff, which arrangement, the plaintiff alleges, was a mere cover for a usurious loan and should, therefore, be held void. As a defense it was alleged that defendant, through a duly authorized agent, served upon the plaintiff a three days’ notice and demand for the payment of a certain sum due as rent under said lease, or for tlie delivery of tlie premises, and that the plaintiff refused to pay the rent or deliver the premises. That thereafter defendant commenced summary proceedings to recover possession of the premises, by filing a petition with the clerk of the District Court according to the statute, praying for the removal of the plaintiff from possession of tlie premises and for delivery thereof to the defendant. That a precept was issued which was served on the plaintiff, who appeared by his attorneys, asked for an adjournment of the proceedings, which was refused, and judgment was thereupon rendered in favor of the defendant “ that the said petitioner have possession of tlie said premises, and that a warrant issue to remove the said tenant and all persons from said premises, and to put the petitioner into full possession thereof.”

Hpon the trial the defendant offered in evidence a certified copy of this judgment, and thereupon moved for a dismissal of the complaint. As shown by the record, the following stipulation was made by the counsel: “For the purposes of this motion it is conceded that in August last a proceeding was instituted in the Sixth Judicial District Court in the city of New York, whereby this defendant sought ;to dispossess the plaintiff on the ground that there was a certain amount of rent due under the lease that is set up in the complaint, and that such proceedings were had on the 17th of August, 1892; a judgment was entered in favor of the petitioner that said petitioner have possession of the premises therein described by reason of the non-payment of the tenant’s rent, and' that a warrant issue to remove the said tenant and all persons from the said premises, and to put the petitioner in full possession thereof.”

The court thereupon granted the motion and dismissed the complaint, “ on the ground that this judgment is an adjudication that the relation of landlord and tenant existed between the parties; that there was a valid lease of the premises described in the complaint, from the defendant to the plaintiff, and that the plaintiff is estopped by such adjudication from questioning the truth of those facts, the existence of the relation, and the execution of a valid lease.” To this ruling the plaintiff excepted, and in support of such exception, upon this appeal, it is insisted that the learned justice erred.

It is urged that, in order that the judgment of the District Court should operate as an estoppel, or have the force accorded that was given to it by the judge in the court below, two things must concur: First, the judgment must be properly pleaded ; and, second, the facts which conclusively established the jurisdiction of the court must affirmatively appear on the record of the judgment. With respect to the first, that the judgment was not properly pleaded, there are two answers, one, that this objection was not taken upon the trial, and another, that by tine stipulation referred to it was impliedly waived. As to the necessity for stating the facts showing jurisdiction we think that, taking the certified copy of the judgment and the stipulation, sufficient facts affirmatively appear upon the record.

This being the situation upon the trial, we think the court correctly held that the plaintiff was estopped by such judgment from questioning the validity of the sub-lease.

In Brown v. The Mayor (66 N. Y. 385), and in Jarvis v. Driggs (69 id. 146), the extent to which the question of res adjv>dÁcata will be applied, showing that it includes summary proceedings, is fully stated. And in the opinion in the latter case the court, commenting upon Brown v. The Mayor, says: This court decided that the quéstion of the existence and validity of the lease between the plaintiff and defendants was conclusively established by the determination of the summary proceedings.”

That the claim of usury sought to be made available in this action was equally available as a defense to the plaintiff in the proceedings in the District Court has been expressly held in The People ex rel. Ainslee v. Howlett (76 N. Y. 574). And in Nemetty v. Naylor (100 id. 562), which was an action brought to recover damages for an alleged breach of a contract to alter over certain premises and fit them for a school, and to execute to plaintiff a lease thereof for a term of years, and an which a judgment -in summary proceedings was pleaded as a bar, Miller, J., in writing the opinion, says: “We think that the adjudication in the summary proceedings was final and conclusive, and is a bar to the plaintiff’s light to recover in this action. The judgment beyond any question settled the facts as to the tenancy existing between the plaintiff and the defendants, the non-payment of rent due and unpaid, and the holding over after default in payment by the plaintiff; and unless there was some invalidity in the proceedings which affected the authority of the court and rendered its judgment inoperative -and void, or a want of jurisdiction over the parties, it is not apparent how the proceedings can be disregarded.”

And that case is further authority for the proposition that an informality does not invalidate the proceedings and judgment, and is no objection to the judgment when collaterally brought in question ; it may only be taken advantage of on objection taken in the proceedings.

So here, many of the grounds urged against giving proper force and effect to the judgment, and which might have been, available upon a direct appeal therefrom, or upon a motion to vacate the same, cannot be resorted to for the purpose of attacking the validity of such judgment collaterally. Without discussing them all, we think it clearly ajipears from the record that the court obtained jurisdiction over both the cause and the parties; and when to this is added the facts appearing in the stipulation, that it affected the same premises and was between the same parties as are joined in ■ this suit, we do not think the court would be justified in seizing upon captious objections, which were neither taken in the District Court nor upon the trial of this action in the court below — and which if they had been might have been obviated — for the purpose of destroying the binding force of the District Court judgment.

Upon the whole case we think that the decision dismissing the complaint was right, and that the judgment entered should be affirmed, with costs and disbursements.

Van Brunt, P. J., concurred.

Judgment affirmed, with costs.


author: Follett, J.:

text:
    Benjamin H. Howell and Others, Respondents, v. James P. Bennett, Appellant.

      Damages —failure to deny in an answer the amount of damage alleged in the complaint — not an admission of the amount — measure of damages for fraud in obtaining goods on credit.

    When, in an action brought by the vendor of goods sold on credit, to recover from the vendee damages because of his fraud in obtaining the goods by means of false representations as to his financial ability, the complaint alleges the value of the goods to be a certain sum, and that by reason of the premises the plaintiff has been damaged in a certain sum, the defendant does not admit the amount of the damages alleged by failing to deny in his answer these allegations of the complaint, and the plaintiff must prove the amount of damage sustained by him, or he will be entitled only to nominal damages.
    In such an action the measure of the plaintiff’s damages is the value of the goods sold and neither paid for nor returned.
    If the vendor has received notes for the goods sold he should not be allowed, in such an action for damages, to recover the value of the goods without surrendering or offering to cancel the notes.
    Appeal by tbe defendant, James P. Bennett, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the city and county of New York on the 16th day of March, 1893, upon a verdict rendered at the New York Circuit, and also from an order entered in said clerk’s office on the 23d day of March, 1893, denying the defendant’s motion for a new trial made upon the minutes.

      Denis A. Spellissy and Jos. L. Keane, for the appellant.

      Frank E. Blackwell, for the respondents.
   Follett, J.:

In 1890 the plaintiffs were wholesale dealers in teas and coffees in the city of New York, and the defendant was a retail dealer in those articles and in groceries in the same city. On the 6th of May, 1890, the defendant, for the purpose of obtaining credit, wrote the plaintiffs that he was worth from $10,000 to $15,000 over and above all liabilities, and was doing a prosperous business.

Upon this statement the plaintiffs sold, on credit, to the defendant, on May sixth coffee at the agreed price of $4,371.57, which he subsequently paid. Afterwards, and before June 28,1890, the defendant wrote the plaintiffs as follows ;

“New Yoek, 188-.
“ Mess, H. B Howell, Son & Oo.:
“ Gentlemen.— I wish to amend my former statement as follows;
“ My assets exceed my liabilities by not less than twelve thousand dollars; this does not include any horses, trucks, wagons, machinery, fixtures or good will of my stores. My business is paying about $15,000 yearly for past 15 months.
“ Resp’y,
“J. P. BENNETT.”

After receiving this statement the plaintiffs sold to the defendant teas and coffees for the following sums, on the following dates, on a credit of ninety days: June 28, 1890, ’ $2,971.50; July 10, 1890, $3,367.35; July 14, 1890, $495.38; July 24, 1890, $1,152.34; September 25, 1890, $2,468.42.

The goods sold on the 28th of June, 1890, were paid for, but the subsequent bills have not been paid. On the 7th of October, 1890, the defendant made a general assignment. This action is brought to recover damages on the ground that the defendant obtained the goods by means of false representations in respect to the amount of his property and of his ability to pay. It should be observed that this action is not to recover damages for the conversion of the goods, the plaintiffs not seeking to disaffirm the sales and recover the value of the goods, but damages for the fraud. It is alleged in the complaint that the value of the said goods, wares and merchandise so sold and delivered as aforesaid, was the sum of $7,211.31, and no part of the price or value thereof has been paid.”

On the trial one of the plaintiffs testified to the sale of the four bills last above mentioned, which aggregate $7,479.49, which is $268.18 more than the amount stated in the complaint, which is evidently the value of certain goods referred to by the judge in his charge to the jury as having been replevined by the plaintiffs. On the trial, a witness sworn for the plaintiffs, who had charge of the replevin action, testified that they recovered teas of about the value of $230. The assignee, who was called by the plaintiffs, testified that the plaintiffs replevined goods of the value of $3,000 or $4,000. The defendant testified, and in this he was not contradicted, that he returned about seventy-six bags of coffee worth about $2,200; and the plaintiffs’ witness, Steven, testified that warehouse orders for coffee were returned by the defendant to the plaintiffs shortly before his failure, but he did not know their value. One of the plaintiffs testified that the defendant gave his notes for the sales made in July.

The foregoing is all of the evidence bearing upon the question of damages which was given upon the trial.

Upon the question of damages the court instructed the jury as follows: “ I have mentioned the sum of $2,468.42. A larger sum has been stated to you, but I withdraw from your consideration the amounts mentioned, because the defendant has given notes for those amounts, and there is no evidence before you showing where the notes are. They have not been produced on the trial, and they may be outstanding now in the hands of a man who would haye a right to sue the defendant and to recover upon them. Therefore, I have withdrawn those from your consideration — the three items of $3,367.35, $495.38, $1,152.34, and I leave only for your consideration the last item of $2,468.42, for which no note was given. If you come to the conclusion to find a verdict for the plaintiffs, then you may add to that sum interest from the 25th of September, 1890.”

At this point the plaintiffs’ counsel asserted that the damages were admitted in the pleadings. The following are the allegations in the complaint bearing upon this question: •

Fifth. That the value of the said goods, wares and merchandise so sold and delivered as aforesaid, was the sum of $7,211.31, and no part of the price or value thereof has been paid.
Sixth. That by reason of the premises the plaintiffs have been damaged in the sum of $7,565.28.”
These allegations are not denied in the answer. The court then charged the jury : “I withdraw what I have said as to the amount of damages. * * *
“ The defendant admits certain damages amounting to $7,483.49, from which is to be deducted the sum of $988.97, the amount of a dividend received, and also the further s,um of $272.18, the amount of goods replevined.
“ On that balance you may, if you see fit to award any verdict for the plaintiffs, allow interest.”

The jury returned a verdict for $7,155.69. The defendant’s counsel did not request that the value of the goods replevined be submitted to the jury, nor did he ask that the jury be instructed to take into account the value of the goods returned by the defendant, but he did take an exception to that portion of the charge instructing the jury as to the amount of the verdict, provided they found one. We think this exception is sufficient to raise the question that an error was committed in submitting the question of damages. In this action the measure of the plaintiffs’ damages would be the value of the goods sold and not paid for nor returned. If, as testified to by the defendant, the goods of the value of $2,200 had been returned, this sum should have been deducted. Again, in an action of this kind the plaintiffs should not be allowed to recover the value of the goods without surrendering or offering to cancel the notes which were given for them.

It is alleged that the fifth and sixth divisions of the complaint not having been denied the amount of the plaintiffs’ damages was admitted. In an action arising out of a tort and sounding in damages, the defendant, by failing to deny the amount of damages alleged to have been sustained, does not admit them, and the plaintiff must prove the amount sustained by him or he will be entitled only to nominal damages. (Connoss v. Meir, 2 E. D. Smith, 314; Hackett v. Richards, 3 id. 13; McKensie v. Farrell, 4 Bosw. 192; Stuart v. Binsse, 10 id. 436; Gilbert v. Rounds, 14 How. Pr. 46; Vanderslice v. Newton, 4 N. Y. 130; Woodruff v. Cook, 25 Barb. 505; Sedg. Dam. [8th ed.] § 1260; Pom. Rem. § 617; Moak’s Van Sant. Pldgs. 798; Boon’s Code Pldgs. § 75; Abb. Tr. Brief Pldgs. §§ 39, 536, 540.)

The court erred in holding the defendant bound by the undenied allegations respecting the damages contained in the complaint. The jury should have been permitted to take into account the value of the goods returned voluntarily and through the action in replevin.

It is quite impossible to determine from the record upon what theory the damages in this case were assessed, and were it not for the statement that the case contains all of the evidence we might assume that some evidence was given or some admission made which would sustain the verdict, but from the record as made up we are ■of the opinion that an error was committed in the assessment of damages which entitles the defendant to a new trial.

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

Yan Brunt, P, J., and Parker, J., concurred.

Judgment and order reversed and new trial granted, with costs to the appellant to abide the event. *


author: Per Curiam:

text:
    Wales Henry Dunham, Respondent, v. Hartley H. Parmenter, Appellant.

      Change of place of trial — convenience of witnesses — stipulation to take evidence lyy depositions.

    In an action, brought in New York county, to recover the value of a quantity of personal property alleged to have belonged to a decedent, residing in Clinton county, at the time of his death, and to have been converted by the defendant, where all the transactions out of which the alleged cause of action arose occurred in Clinton county, a motion was made by the defendant to change the place of trial to Clinton county, on the ground of the convenience of witnesses. The plaintiff swore to six material witnesses residing in New York city, and the motion was denied.

      Held, that the defendant made out a case for a change of venue from New York to Clinton county;
    That the motion should have been granted upon condition that the defendant stipulated that the evidence of the witnesses residing in New York city be taken (if the plaintiff so elected) by deposition.'
    Appeal by the defendant, Hartley H. Parmenter, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and county of New York on the 4th day of October, 1893, denying the defendant’s motion to change the place of trial of this action from New York county to Clinton county, on the ground of the convenience of the defendant’s witnesses.
    The action was brought by the plaintiff, as only heir and next of kin of one George D. Dunham, deceased, to recover the value of personal property worth $565.20, alleged to have belonged to said George D. Dunham at the time of his death, and to have been converted by defendant.

      The answer was a denial of the conversion.
    The articles alleged to have been converted were over fifty in number, and were enumerated in a bill of particulars served with the complaint.
    George D. Dunham, the father of the plaintiff, and under whom he claims the property alleged to have been converted, died at Plattsburgh, N. Y., on the 29th day of November, 1891, where he had resided for many years prior to his death. All the transactions involved in this case, including the transfers of the various articles of property alleged to have been converted, and all proceedings in relation to the settlement of the estate of George D. Dunham, took place at Plattsburgh, Clinton county, and the property itself was there.
    The defendant resides in Clinton couuty, and the plaintiff himself resided in that county and an adjoining county during the time that the estate of his father was being administered, and until the final accounting and discharge of the administrator, and then, a few months before this action was brought, went to New York.

      Sheddon & Booth, for the appellant.

      J. George Flmmner, for the respondent.
   Per Curiam:

The transactions out of which the alleged cause of action arise all occurred in the county of Clinton. The defendant makes out a case for a change of place of trial. But the plaintiff testifies to six witnesses residing in the county of New York, whose evidence he regards as material to establish his cause of action. Considering the nature of the action, the place where the transactions occurred, the possibility of an earlier trial and the materiality of the testimony of the greater number of witnesses, we think the motion should have been granted upon condition that the defendant stipulate that the evidence of the witnesses residing in this city be taken (if the plaintiff so elects) by deposition, to be used on the trial with the same force and effect as though they were produced and sworn.

Order reversed and motion granted, provided the defendant gives the stipulation to take the testimony of the witnesses residing in New York county on deposition, without costs to either party.. Upon failure to make the stipulation the order is affirmed, with, costs.

Present — Van Brunt, P. J., O’Brien and Follett, JJ.

Order reversed and motion granted, without costs to either party, on conditions stated in opinion.


text:
    In the Matter of the Application of The Board of Street Opening and Improvement of the City of New York, Relative to Acquiring Title to Forest Avenue, in the Twenty-third Ward of the City of New York.

      New York city — street openings in the twenty-third and twenty-fourth wards — a/recs of the assessment district -— the Consolidation Act, sections 677, 958, 970.
    The general provisions of section 970 of the New York City Consolidation Act. (Laws of 1882, chap. 410) in reference to the area of the assessment district in. street opening proceedings are not applicable to proceedings affecting property-in the twenty-third or twenty-fourth wards, which are governed and controlled, by the special provisions'of sections 677 and 958 of the Consolidation Act.
    The special provisions of sections 677 and 958, in relation to proceedings for street, opening in the twenty-third and twenty-fourth wards, are not in conflict with the general provisions of section 97Ó, and are not to be deemed repealed or superseded thereby.
    In street opening proceedings in the twenty-third and twenty-fourth wards, to' which sections 677 and 958 are applicable, the commissioners of estimate and assessment may, by force of those sections, when buildings are taken, assess for such opening such property as they may deem benefited by the improvement, and if the commissioners, through a belief that section 970 is controlling, proceed by an erroneous method and crowd into a narrower area than the law requires the amount necessary to cover the cost of the improvement, their proceedings will be vacated.
    Appeal by the executors and trustees of the estate of Henry Br .Dawson, deceased, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and county of New York on the 13th day of February, 1893, confirming the report of commissioners of estimate, and assessment and denying a motion to vacate and set aside all the proceedings.

      Ernest Hall, for the appellants.

      Matthew P. Ryan, for the respondent.
   O’Brien, J.:

This proceeding was instituted to acquire title to Forest avenue in the twenty-third ward, from Home street to East .One Hundred and Sixty-eighth street, a distance of one block. After viewing the premises, depositing an abstract of their estimate and assessment, together with their damage and benefit maps, and after hearing all the objectors, the commissioners completed their final report, and upon notice to all parties the same was presented at 'Special Term and confirmed. From the order of confirmation an appeal was taken, and the order reversed, upon the ground, as shown in the former opinion (64 Hun, 59) that: “ The method hi which this assessment was levied was so manifestly unjust and out of harmony with the system upon which assessments of this kind should be levied that the report of the commissioners should not have been •confirmed upon that ground.”

Hpon such appeal it appeared then, as it does now, that in addition to .land a building was taken, and it was assumed that section •970 of the Consolidation Act was applicable.

That section provides, among other things, “ that in case of the opening of any street or avenue, or portions of any street or avenue, in said city, where the street or avenue, or portions thereof, sought to be opened shall have been laid down and shown upon any general map or plan made and filed in pursuance with any law of the State of New York, relative to the mapping and planning of streets and avenues in said city, where no buildings for which compensation •can lawfully be made- shall be taken, the assessment district shall not extend beyond the center line of the blocks adjacent thereto, nor beyond the ends of the street or avenue, or portions thereof, ■sought to be opened.”

The construction given to this section was, that while it allowed ■the commissioners to extend the assessment district “ beyond the •center line of the blocks,” and beyond the ends of the street or ■avenue, or portions thereof, sought to be opened,” upon the area thus extended no more than a ratable proportion of the cost of the building taken ought to be imposed. In other words, that the assessment for the land taken for the street should not extend heyond the center line of the blocks, nor beyond the ends of the street or avenue, or portions thereof, sought to be opened, while the value of the building taken ought to be ratably apportioned upon the property embraced in such extended area. Under this construction the value of the land taken would be assessed upon the area as above defined, and only the cost of the building would be imposed upon the extended area.

Subsequently to this decision a motion for reargument was made upon the ground that the court’s attention had not been drawn to sections 677 and 958 of the Consolidation Act.

These sections (677 and 958) make applicable to street proceedings in the twenty-third and twenty-fourth wards all the laws then in force in reference to street proceedings in the city of New York (and particularly section 970) just the same as if these streets liad been laid out by the commissioners appointed under the act of 1807, “ except that the said commissioners of estimate and assessment who may be appointed as herein provided may assess for such opening all such parties and persons, lands and tenements as they may deem to be benefited by such improvement, to the extent which said commissioners of estimate' and assessment deem such parties, persons, lands and tenements benefited thereby, provided that as to streets, avenues or roads which shall be in the opinion of said commissioners of estimate and assessment, or a majority of them, more than one mile in length, not more than one-half of the amount awarded for damages and of the expenses attending such opening shall be so assessed, the amount of such damages and expenses not so assessed being hereby made a charge upon the city of New York to he paid as hereafter provided.”

The motion for a reargument was denied, upon the ground, as stated in the memorandum, that independent of the construction to be placed upon the statute, we do not think that a reargument should be ordered, as the decision was correct, because the commissioners had adopted an entirely erroneous principle in the levying •of the assessment.”

Notwithstanding this intimation that the question of whether section 970 or sections 677 and 958 applied was an open one and .subject to reconsideration» when again presented, the commissioners, assuming that tlie court liad held that section 970 applied, state in their final report presented upon this appeal as follows : “ The commissioners refer to the previous report as made by this commission, as to their prior action in this matter, and they now, in deference to- and in accordance with the decision of the General Term in the same matter, make their final report in accordance with that decision by reducing the assessment upon the property beyond the center line of the block to the limit prescribed by the opinion of the General Term.”

In other words, the commissioners assumed that they were instructed by the General Term to place the assessment for the land taken, upon the area defined by section 970, and to impose upon the extended area of assessment only the value of the building. In this the commissioners fell into the error of assuming that this court had placed its decision upon the ground that section 970 controlled, whereas the court had left that question open, as shown by its memorandum upon the application for reargument, when its attention was called to the special provisions relating to the twenty-third and twenty-fourth wards. Whether it will adhere to the expression contained in the opinion as to what portion of the assessment can be placed upon the extended area, will be passed upon when that question is presented. At present it is only necessary to say that upon, consideration we have reached the conclusion that section 970 is not applicable, for the reason that this proceeding affects property in the twenty-third ward, and is, therefore, governed and controlled by sections 677 and 958 of the Consolidation Act, which are made specially applicable thereto.

Section 970 contains the general provision in reference to the assessment district in street opening proceedings, and, as will be seen by a reading of the Consolidation Act, sections 677 and 958 except the twenty-third and twenty-fourth wards from the general provision of section 970. Between these sections there is no conflict, and under well-settled rules of construction relating to statutes all can stand. Such rules require that a special statute providing for a particular case, or applicable to a particular locality, is not repealed by a statute general in its terms and application, unless the intention of the Legislature to repeal or alter the special law is manifest. (McKenna v. Edmundstone, 91 N. Y. 231; Matter of Railroad Avenue, East, 47 Hun, 305.) Moreover, that it was not tlie intention of the Legislature to supersede tlie special provisions of chapter 604 of tlie Laws of 1874, is apparent from its re-enactment in the Consolidation Act, as well as from the saving clause of section 1008 of the Consolidation Act, which provides that “nothing contained in this title (street openings) shall be construed as affecting any provision of special acts relating to particular districts or portions of the city, so far as such provisions are inconsistent with the provisions of this title.”

And the existence of these sections (677 and 958) has been recognized and the sections applied in many proceedings since the enactment of the Consolidation Act. Thus, since the former appeal was decided, tlie attention of this court was called to section 958 in the Matter of Opening Wendover Avenue (20 N. Y. Supp. 563). As said in that case : “By section 958 of the Consolidation Act, it is provided that the commissioners may assess for street opening persons, lands and tenements, as they may deem to be benefited by such improvement to the extent which said commissioners of estimate and assessment deem such persons, lands and tenements so benefited thereby. * *

The commissioners in their report further say, “ That certain pieces or parcels of land lying beyond the center line of the block adjacent to the avenue opened by us, and beyond the ends or portions so opened, are benefited more than the amounts assessed against, such parcels by reason of the reductions made as aforesaid, in accordance with the opinion of the General Term.”

Since tlie commissioners in this proceeding, as shown by their report, did not assess property which they considered benefited by the improvement to the extent of the benefit for the reasons already given, and as they proceeded under section 970, instead of sections 677 and 958, cf the Consolidation Act, it follows that the order confirming the report must be set aside.

Under the sections (677 and 958) applicable to this proceeding, therefore, the commissioners, when buildings are taken, may assess for such opening such property as they may deem benefited by tlie improvement.

This conclusion renders it unnecessary to point out what are claimed to be the inequalities in the assessments levied upon particular parcels, because it would appear that tlie commissioners,, deeming themselves controlled by the former expression of opinion of this court, and proceeding by an erroneous method, felt compelled to crowd into a narrower area than the law permitted the assessment necessary to cover tlie cost of the improvement.

So much of the order as denies the motion to vacate and set aside all the proceedings should, therefore, he affirmed, and so much of it as confirms the report of the commissioners should he reversed, and the proceedings sent hack to the commissioners for revisal and correction.

Follett and Parker, JJ., concurred.

Ordered accordingly.


text:
    James H. Ferguson and Another, as Surviving Partners, etc., Respondents, v. George H. Gill, Appellant.

      Manvfaaturing Act of 1848 — false certificate — individual liability — review of orders setting aside verdicts.

    In an action brought to enforce the individual liability for the debts of a corporation imposed by the Manufacturing Act (Laws of 1848, chap. 40, § 15), against officers of the corporation who have knowingly signed a false certificate, the burden is placed upon the plaintiff of establishing that the certificate filed was in point of fact false, and that the defendants signed it with knowledge of its falsity.
    When a trial judge becomes impressed with the preponderance of the evidence in favor of the party against whom a verdict has been rendered, or thinks that injustice has been done by the verdict, it is a proper exercise of the power vested in him, to set aside the verdict upon the ground that it is contrary to-the weight of evidence. (§ 999, Code Civ. Proc.)
    The reasons for sustaining, on appeal, an order made by a trial judge setting aside a verdict are not limited to the reasons assigned by the trial judge for his action; but when there are other reasons for setting aside the verdict they must he given due weight.
    A correct decision should stand, whether all the reasons therefor be assigned or not.
    Appeal by tlie defendant, George II. Gill, from an order of the Supreme Court, made at tbe New York Circuit and entered in the office of the clerk of the city and county of New York on the 21th day of January, 1893, setting aside a verdict in favor of the defendant rendered by tlie jury and granting a new trial upon tbe plaintiffs’ motion made upon the minutes.

      Charles E. Rushmore, for the appellant.

      Benjamin Estes, for the respondents.
   O’Brien, J.:

This action was brought to enforce a liability against defendant, for certain debts of a corporation organized under the Manufacturing Act (Laws of 1848, cliap. 40), on tbe ground that be, being a. trustee of that company, joined in tbe making and filing of a false-certificate that tbe capital stock of tbe company bad been paid in., Tbe trial resulted in a verdict for tbe defendant, and thereupon the, plaintiffs moved tbe trial court on tbe minutes to set aside tbe verdict and grant a new trial on tbe ground that it was against tbe evidence, and on tbe ground of rulings made upon tbe trial, and upon all tbe grounds mentioned in section 999 of tbe Code of Civil Procedure. Tbe motion was granted, and it is from tbe order granting such motion that tbe defendant appeals.

In tbe memorandum filed by tbe learned judge be says : “ I am of the_ opinion that tbe verdict rendered by tbe jury was contrary to tbe evidence.” Tbe liability sought to -be enforced was predicated upon tbe 15th section of tbe Manufacturing Act of 1848, which reads as follows: “ If any certificate or report made or public notice given by tbe officers of any such company in pursuance of tbe provisions of this act should be false in any material representation, all tbe officers who shall have signed tbe same, knowing it to be false, shall be jointly and severally liable for all tbe debts of the-, company contracted while they are stockholders or officers thereof.”'

It will thus be seen that tbe burden was placed upon tbe plaintiffs-of establishing two things : First, that tbe certificate filed was in point of fact false, and second, that with knowledge of its falsity the-defendant signed it. Upon an examination of tbe evidence we think that a preponderance thereof inclined to tbe view that the burden, upon tbe first question as to tbe certificate being false in point of’ fact was sustained.

Upon the second question as to whether tbe defendant knowingly signed it, there was an undoubted conflict of evidence, and neither-side took exception to tlie presentation by 1 he court of this question to the jury. Subsequently to the rendition of the verdict, and. upon consideration, the trial judge, as shown by the memorándum, reached °the conclusion that the verdict of the defendant was contrary to the weight of evidence, and upon this ground granted the motion.

In passing upon a motion of this character it must be remembered that the trial judge has had the advantage of seeing the witnesses, 'hearing their testimony, noting their manner and of becoming impressed with the weight to be attached to evidence offered, which it is impossible to have photographed upon the record on appeal. And in a case where lie becomes impressed with the preponderance in favor of either side, or thinks that injustice has been done by the verdict, it is a proper exercise of the power vested in him to set aside such a verdict. We are unable to see that the power thus vested in the trial judge has in this instance been abused.

But, apart from the ground upon which he placed his decision, we think that there are other reasons, which are available upon appeal, though not referred to in the memorandum of the trial judge in granting the motion, which would have justified the disposition made.

The most we think that could be claimed by the defendant upon this question of the known falsity of the certificate is, that upon the evidence it was a close one, and the effect of immaterial or incompetent evidence cannot be overlooked, because it is difficult to determine what effect such., testimony may have had on the minds of the jurors. Thus, in this case, against the objection and over the exception of the plaintiffs, considerable testimony was admitted tending to show that one of the plaintiffs, Ferguson, was cognizant of the steps leading up to the formation of the corporation; that he had knowledge of the way in which it was proposed to issue the stock, and of the slight value of the patent in payment for which the entire capital stock of $100,000 was issued. That the plaintiffs, or either of them, aided or abetted in the plan by which the fcntire capital stock was issued for the letters patent is not claimed, and in the absence of such a contention or issue we fail to see how their knowledge of what was done by the corporation, or of the value of the patent can affect the question of whether or not the defendant knowingly signed the false certificate. We think that such evidence was both incompetent and immaterial, and, no doubt, tended to prejudice tbe plaintiffs with tlie jury.

Tliere are other rulings to which exceptions were taken by plaintiffs equally good; but we think sufficient has been said to show that where there are other reasons than those assigned by the trial judge for setting aside a verdict, these must be given due weight upon an appeal such as this — the rule being that a right decision should stand whether all the reasons be assigned or not. (Marvin v. Universal Life Ins. Co., 85 N. Y. 278, 284.)

The order should be affirmed, with costs and disbursements.

Van Brunt, P. L, and Parker, J., concurred.

Order affirmed, with costs and disbursements.


text:
    Albert N. Todd and William H. Oscanyan, Composing the Firm of L. Feuchtwanger & Company, Respondents, v. James Gamble and Others, Composing the Firm of Procter & Gamble, Appellants.

      Sale of goods by executory contract — ref usa,l of the vendee to accept the goods — •measure of damages — market value — cost of production.

    ■When the vendee in an executory contract of sale refuses to accept the goods, the measure of his liability is the difference between the contract price and the actual value of the goods, which latter is deemed to be the market value of the goods, if they have any; if the goods have no market value, their actual value must be ascertained in some other way, as, by showing the cost of production.
    Before the difference between the cost of production and the contract price can be applied as the measure of damages, in an action brought to recover damages for the vendee’s failure to accept goods under an executory contract, the burden is upon the plaintiff to show that the article had no market value, and when the evidence is conflicting, this is a question of fact for the jury and not one of law for the court.
    In an action brought by the vendor to recover damages for the vendee’s failure to accept silicate of soda under an executory contract of sale, held, that, on the case presented, it was not error for the trial court to refuse to held as matter of law that silicate of soda had a market value, and that the question whether or not it had a market value was properly submitted to the jury.

      Appeal by tbe defendants, James Gamble and others, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the city and county of New York on the 16th day of March, 1893, upon a verdict rendered at the New York Circuit, and also from an order denying the defendants’ motion for a new trial made upon the minutes.
    This action was brought to recover damages for defendants’ failure to receive and pay for silicate of soda to be manufactured and delivered under an executory contract in writing, as follows:
    “ March 1st, 1887.
    “"We hereby agree to furnish Procter & Gamble whatever quantities of Silicate of Soda they will require to use in their factories during one year from date, the same to be of our regular standard make, and as per price and terms annexed :
    “Price, $1.10 per 100 lbs., F. O. B. in New York.
    “ Terms cash in 60 days.
    “ Barrels returnable at 80c. each, delivered in good condition at P. R. Depots in N. Y.
    “ Messrs. Procter & Gamble reserve the right to use such amounts of English Silicate as is necessary in their business, to which we agree.
    “L. FEUCHTW ANGER & CO.,
    “per Geo. B. Lincoln, Jr.
    “PROCTER & GAMBLE.”
    Under this contract the plaintiffs delivered a certain quantity of the silicate between March 1 and April 22, 1887, upon which latter date the defendants notified the plaintiffs that no more silicate of ■soda would be received under the contract. It was conceded on the trial that between the date last mentioned and March 1, 1888, the defendants purchased from other manufacturers and used in their business, 1,582,168 pounds of American silicate of soda.

      Frederic R. Kellogg, for the appellants.

      Albert Boardman, for the respondents.
   O’Brien, J.:

It being conceded - that defendants are liable for a breach of the contract, the questions presented upon this appeal relate to the measure of damages and the competency of evidence admitted or excluded upon the trial.

On the former appeal in the same case before this court (67 Hun, 38), we held, that when an executory sale is made of articles having a marketable value, which the vendee refuses to accept, the-measure of his liability is the difference between the contract price- and their actual value, which the law deems equivalent to their value in the market. But if the subject of the sale has no market value, the measure of the vendee’s liability is still the difference between the contract price and the actual value of the goods, the actual value being a factor in each case in determining the question of damages. When the value of the article cannot be determined by what it will seil for in the market, it must be ascertained in other ways, sometimes by showing the cost of production.

It appearing upon the former trial that there was a question as to-•whether or not the commodity had a market value, the judgment was reversed because the trial judge had held as a mattei\ of law that the article was without a market value, and permitted damages to be measured by the difference between the cost of production and the contract price. We also held that before the latter measure of damages could be applied, the burden was upon the plaintiff to show that the article had no market value, and that upon conflicting evidence this was a question of fact for the jury, and not one of law for the court.

In addition to what formerly appeared, we have on the part of' the defendants the testimony of a witness in substance to the effect that he was a member of a firm that dealt in silicate of soda ; that the firm bought it from manufacturers and sold it to consumers, and that it kept a stock on hand of from fifteen to thirty barrels, which it sold mostly to soap makers. This, together with other testimony presented here, as upon the former appeal, by defendants, was to offset the testimony offered by plaintiffs tending to prove that tlier.e was no market value for the commodity.

It is insisted upon this appeal that in the present state of the record it was error not to hold as a matter of law that silicate of' soda had a market value. We do not think it necessary to add anything to our former opinion on this subject, further than to say that, we think the disposition made by the trial judge was correct.

Though not acquiescing in this view, but assuming that it is right, the appellants further contend that the court’s charge at the plaintiffs’ request, that “ in such an action the usual measure of damages is the difference between the contract price and the cost of production,” is reversible error. This position we do not regard as tenable, because the court in its main charge had very fully presented to the consideration of the jury the question as one for their determination as to whether there was or was not a market value for the silicate ; and the jury could not have understood this instruction, presented by the court at plaintiffs’ request, otherwise than as a rule to guide them in the event of their determining that there was no market value. If the defendants had desired to avoid any confusion, they should have called the court’s attention to the fact that such a rule was applicable only Avliere there is no market for the goods. The jury having found, however, .that there was no market value, the instruction or request was a presentation of a mere abstract question of law, which did not mislead the jury and could not have injured the defendants, and would not, therefore, be proper ground for reversing a judgment in other respects valid.

It is further claimed that the verdict is excessive. The learned court charged the jury :

“ The plaintiffs, however, were obliged in their contract to make ■an allowance for barrels returned. Mr. Oscanyan says that, in the 40 cents which he computed as the cost of producing this article, those barrels are put in' at 76 cents. Should you come to the conclusion that there was no market value, and that the plaintiffs are entitled to recover the difference between the cost of the production and the contract price, you will allow the defendants a deduction of four cents upon the number of barrels which were called for by the 1,582,468 pounds, which has been stated by General Tracy, and, I suppose, is conceded to he 2,877 barrels or thereabouts.”

The defendants excepted to this charge, and it presents the question whether, in estimating the rebate, the defendants should have been allowed for the barrels eighty cents, or merely the difference between seventy-six and eighty cents, as charged by the court.

It was shown that a bariel would hold 550 pounds of silicate of soda, that the cost of production was forty cents a hundred weight or two dollars and twenty cents per barrel, and that in this was included seventy-six cents as tlie cost of the barrel. By following-the instructions of the court, the jury would proceed to a computation of plaintiffs’ damages as follows:

Contract price per barrel: 550 pounds at $1.10 per cwt. $6.05.

Contract price of 2,877 bbls. at $6.05.............. $17, 405 85-

Cost of production of 2,877 bbls. at $2.20 .......... 6, 329 40

Difference................................. $11, 076 45

Allowance to drafts on 2,877 bbls. of 4 c. per bbl.... 115 08-

Amount of plaintiffs’ damages................ $10, 961 37

That this is the correct result becomes clear if w,e take a single-barrel of silicate and determine, under the terms of such a contract as the one under consideration, what would be the difference between the cost of production and the selling price:

Contract price per barrel............................. $6 05

Cost of production including barrel (550 lbs. at 4 c.).....' 2 20-

Difference..................................... $3 85

Allowance to defendants for return of barrel........... 80

Plaintiffs’ money profit, per barrel................ $3 05

This leaves the transaction with plaintiffs in possession of their money profit of three dollars and five cents and the returned barrel, which latter article they are entitled to have turned into its money value and added to their profit on the barrel’s contents. The only-evidence showing the value of a returned barrel is that furnished by the contract, in which plaintiffs agree to a valuation of eighty cents. But, as one of the plaintiffs testified, it only cost seventy-six cents originally; it is fair to say it was worth no more after use. Adding then seventy-six cents as the value of the returned barrel to plaintiffs’ profit on the contents of the barrel, makes three dollars- and eighty-one cents per barrel as the sum for which plaintiffs would be entitled to recover. There being 2,877 barrels, this number multiplied by three dollars and eighty-one cents gives $10,961.37 as. the amount due the plaintiffs — which is the same amount as that arrived at by following out the instructions of the court. The ver■diet in the case was $10,692.19, or $269.18 less than the jury would have been justified in allowing under the ruling of the court. The charge, therefore, on this subject does not present error as against the defendants.

This consideration, throwing out the difference between what the jury would have been entitled to assess and what in fact they did ■assess, equally disposes of many of the other objections urged upon our attention. Thus is answered the suggestion that it was reversible error to permit testimony concerning conversations between the parties preceding the written contract, and concerning the original and increased capacity of the plaintiffs’ plant before and after the making of the contract, together with any evidence as to the capacity .of plaintiffs’plant previous to the making of the contract and the fact that subsequent thereto its capacity was increased. Though it would appear that such testimony was either incompetent ■or immaterial, it is shown by the result arrived at by the jury that no injury was done thereby to the defendants.

Another error assigned is, that in violation of the rule relating to ■damages, the plaintiffs’ testimony purported to average the price of the various elements entering into the cost of production during the whole contract year, and did not specify the price as of the time when the breach occurred. This objection was presented upon ■a motion to strike out the testimony which had been given by the plaintiffs’ witness as to the cost of production, and when the motion was made the plaintiffs’ counsel in answer thereto offered to fix the cost as of the twenty-second of April, the date of the breach, and to further prove that the price remained so throughout the year. Instead, however, of defendants electing to fix upon' a date when the damages should be estimated as of that time, their counsel remained silent, standing upon his strict legal right to have his motion to strike out granted or denied, to the denial of which motion he excepted.

We do not think that this exception is good. The plaintiffs, upon their theory as to how the damages were to be estimated, averaged the cost of production throughout the year and presented testimony showing such cost. Thereafter the defendants, having presented the question that this mode was not the proper one, were met by the offer of- the plaintiffs’ counsel to conform to their view as to fixing the date and to correct tlie proof, but tbe defendants seemed more anxious to get a bad exception tlian to get evidence as to the true measure of damages.

It is further insisted that the jury in estimating the cost of production of the article failed to include any portion of the fixed charges by way of loss of interest, taxes, insurance, etc., upon the value of the plant at which the commodity in question was manufactured. It does appear that upon cross-examination the defendants elicited the fact that the total business of the plaintiffs during the contract year in question was about $200,000, of which the silicate of soda contracted to be sold to these defendants would have equaled the sum of about $17,000 ; and from this the argument is adduced that seventy-two-liundredths of the fixed charges .should have been allowed by the jury. It thus appears that what items were included and what excluded in fixing the cost of production were before the jury, and that the amount awarded was less than the full amount based upon multiplying the cost of producing a single barrel by the total number of barrels provided for in the contract, and we cannot, therefore, say that the jury did not make some allowance for this item of fixed charges in arriving at their verdict.

The appellants’ further contention that the court erred in excluding defendants’ cross-examination as to the total annual profits of the plaintiffs’ firm is not entitled to much weight, because the extent to which cross-examination shall be allowed is within the discretion of a trial judge ; and where, as here, such discretion was exercised for the purpose of preventing what would have been practically an accounting with respect to plaintiffs’ business, it was proper for the court to prevent the cross-examination exceeding the legitimate bounds.

Ve think, therefore, that the judgment was right and should be ■affirmed, with costs.

Yan Brunt, P. J., and Parker, J., concurred.

■Judgment affirmed, with costs.


text:
    The Equitable Life Assurance Society of the United States, Respondent, v. Thomas Brennan, Appellant.

      Negative easement — when created by deeds, with Wee covenants, of several lots — constructive notice thereof— release given by the devisee of the original grantor — action for a perpetual injunction — alternative judgment.

    ■When a parcel of land is subdivided and the subdivisions are conveyed by the owner thereof to several grantees at different times, and by various conveyances, each of which contains similar restrictive covenants, an equitable negative easement is created in favor of each lot against all of the others, which the respective owners may enforce in equity.
    Such a covenant is not to reserve a purely personal right to the grantor but is to restrict the uses of the land for the benefit of grantees.
    An owner of real estate has constructive notice of all of the limitations and restrictions contained in the recorded conveyances forming his chain of title, and thus, is deemed to have knowledge of the existence of a restrictive covenant-contained in the deed to another of a subdivision of the property whereof his real estate was a part, when he has knowledge of the situation of the surrounding property and the purposes for which it is used, besides having knowledge that an easement exists in his land in favor of other property, by which he is put on inquiry as to the property to which this easement attaches.
    An easement which has thus attached to land by virtue of conveyances containing a like covenant of several parcels of a tract, is not destroyed by a subsequent release given by the devisee of the original grantor.
    In an action brought, under such circumstances, to restrain the defendant from u,sing as stables certain buildings on his lands, judgment was rendered for the plaintiff, in the alternative permitting the defendant to pay $10,000, instead of being perpetually enjoined from so using such premises.

      Meld, that the defendant had no cause of complaint.
    Appeal by the defendant, Thomas Brennan, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on the 20th day of March, 1893, upon the report of a referee, restraining the defendant from using certain buildings as stables unless he paid to the plaintiff the sum of $10,000.
    Prior to April 15, 1881, the trustees of St. Patrick’s Cathedral and J. Augustus Page entered into a contract by which the former agreed to sell and convey, and the latter to purchase, a block of land bounded on the north by Fifty-first street, on the east by Fourth avenue, on the south by Fiftieth street, and on the west by-Madison avenue.

      Previous to this date the land had been divided into lots, as shown by a map attached to the deed, executed April 15, 1881, by said trustees to said Page, which conveyed lots Nos. 10 to 31 inclusive, pursuant to said contract. This deed was duly recorded April 16, 1881.
    Attached to said deed, and forming a part thereof, was a map, of which the following is a copy:

    On the same date (April 15, 1881) said trustees, by the direction and appointment of Page, conveyed to Henry Yillard lots Nos: 1 to 9 inclusive, and No. 32 as described on said map, by a conveyance, which was duly recorded April 16, 1881.
    The deeds contained the following covenant, which relates to the half of the block west of lots Nos. 13 and 28, or west of the line AB : “ And the said party of the second part, for himself, his heirs, executors, administrators and assigns, doth hereby covenant, promise and agree to and with the said parties of the first part, their successors and assigns, that neither he, nor any of his heirs or assigns, shall at any future time or times erect or build, or permit or cause to be erected or built, any stable, factory, machine shop, brewery, distillery, slaughter house, carpenter or smith’s shop or structure or erection for the purposes of any kind of manufacturing, or for any trade, business or employment wliicb shall be dangerous or noxious, or constitute a nuisance upon any part of the above-described premises. And the said party of the second part, for himself, his heirs, executors, administrators and assigns, doth hereby further covenant, promise and agree to and with the parties of the first part, their successors and assigns, that no building or buildings other than first-class stone or brick front dwelling houses, or French apartment houses, shall be erected upon any part of the above-described premises, it being understood and agreed that the foregoing covenants on the part of the party of the second part shall run with the land and bind all successive owners and their heirs and assigns.”
    The covenant in Yillard’s deed relates to lots Nos. 1 to 9 inclusive, and 32, otherwise it is a copy of the above covenant.
    January 10, 1882, Page conveyed, by a warranty deed, to Robert and Ogden Goelet lots Nos. 13 and 14, which deed was duly recorded January 10, 1882.
    January 10, 1883, Page conveyed, by a warranty deed, to Rosanna Spaulding lots Nos. 27 and 28, which deed was duly recorded January 10, 1883.
    March 1, 1883, Page conveyed, by a warranty deed, to Abraham Benson lots Nos. 15 to 26 inclusive, which deed was duly recorded March 3, 1883.
    By the last three deeds Page conveyed the east half of the block and all east of the line AB. Each of these three deeds contained the following covenant: “ And the said parties of the second part, for themselves, their heirs, executors, administrators and assigns, -do hereby covenant, promise and agree, to and with the parties of the first part, their heirs and assigns, that neither they nor any of their heirs or assigns shall, at any future time or times, erect or build, or permit or cause to be erected or built, any stable, machine shop, brewery, distillery, slaughter house or smith shop upon said premises, it being understood and agreed that the foregoing covenants on the part of the parties of the second part shall run with the land and bind all successive owners thereof and their heirs and assigns.”
    May 31, 1886, Rosanna Spaulding conveyed, by a warranty deed, to James J. Spaulding lots Nos 27. and 28, which deed was duly recorded June 7, 1886.
    June 1,1888, Spaulding conveyed these lots, by a warranty deed to William S. Maddoek, which deed was duly recorded June' 12, 1888.
    William S. Maddoek, December 20,1888, conveyed, by a warranty deed, these lots to Eugene T. Lynch, which deed was duly recorded December 24, 1888. None of these three deeds contained or referred to a restrictive clause.
    February 21, 1890, Lynch conveyed, by a warranty deed (duly recorded February 28, 1890), these lots to William H. Sturtevant. This conveyance was subject to the restrictive clause contained in the deed from J. Augustus Page to Rosanna Spaulding.
    February 21, Í890, William II. Sturtevant gave a mortgage (duly recorded February 28, 1890) to Eugene T. Lynch upon these two lots to secure the payment of $90,000, which mortgage was subject to the restrictions contained in the aforesaid deed from J. Augustus Page to Rosanna Spaulding. This mortgage was subsequently assigned to the plaintiff, was afterwards foreclosed, and on August 3, 1891, the two lots were conveyed by the referee in the foreclosure action to the plaintiff. This deed was duly recorded August 3, 1891, and was subject to the restrictions contained in the deed from J. Augustus Page to Rosanna Spaulding.
    February 21, 1884, Abraham Benson conveyed, by a warranty deed, to Robert C. lime lots Nos. 15 to 26 inclusive. This deed did not contain or refer to any restrictive covenant, and was duly recorded February 23, 1884.
    September 20, 1883, J. Augustus Page died, leaving a last will and testament by which he devised and bequeathed all of his estate to Mary E. Page, his widow, who, March 10, 1884, executed a release of the lots conveyed to said ITine from the covenant contained in the deed from J. Augustus Page to Abraham Benson.
    March 1, 1892, the defendant, Thomas Brennan, acquired, through mesne conveyances (all duly and timely recorded), title to the land bounded on the east by Fourth avenue, on the south by Fiftieth street, on the west by a line drawn parallel with Fourth avenue and seventy-five feet therefrom, and on the north by Fifty-first street. None of the mesne conveyances contained or referred to a restrictive clause or covenant.
    An apartment house, which was erected when the premises were owned by Rosanna Spaulding, stands on the plaintiff’s lots.

      In May, 1892, the defendant began to erect six private stables on his land, three of them fronting on Fiftieth street and three of them on Fifty-first street.
    On July 9, 1892, this action was begun to restrain, perpetually, the defendant from erecting or maintaining the stables on his land.

      Samuel Untermyer, for the appellant.

      Lucius H. Beers, for the respondent.
   Follett, J.:

In determining the rights of these litigants it is unnecessary to consider the deeds conveying the lots in the west half of the block, except in so far as they may throw light on what the grantors and grantees intended to effect by the conveyances relating to the east half of the block.

January 10, 1882, J. Augustus Page was the owner in fee of the east half of the block bounded on the north by Fifty-first street, east by Fourth avenue, south by Fiftieth street, and west by a line parallel with and 100 feet west of Fourth avenue, and designated by the letters AB on the map. This tract had been divided into sixteen lots designated by Nos. 13 to 28 inclusive, and described on the map which was recorded in the register’s office April 16, 1881. This tract was then free from restrictions.

On the 10th of January, 1882, Page conveyed lots Nos. 13 and 14 to R. and O. Goelet, and January 10, 1883, he conveyed lots Nos. 27 and 28 to Rosanna Spaulding, plaintiff’s predecessor in title, and March 1, 1883, he conveyed the remainder of the tract, Nos. 15 to 26 inclusive, to Abraham Benson, defendant’s predecessor in title. Every one of these three deeds contained the same restrictive clause (the second in the statement of facts) and from them, and the purposes for which the neighboring real estate was at the date of the conveyances then adapted and used, the learned referee found :

Twelfth. Said Page adopted and acted upon a uniform plan of restriction in making conveyances of said easterly half of said block, but this finding is not based upon any oral statements alleged to have been made by Mr. Page to Mr. John Lindley.”

This is the only finding of fact challenged by the appellant on this appeal, but it seems to the court that it is sustained by the weight of the documentary evidence and by the testimony descriptive of the uses of the adjacent property at the time the deeds containing the restrictive clauses were executed. The uses which could be made of the west half of the block were limited by the deeds from the trustees of the cathedral to Page and Yillard, and the uses which could be made of the east half of the block were limited by the deeds from Page to Goelet, Spaulding and Benson. These restrictive covenants did not arise by chance, but out of the agreements between the grantor and his grantees, and were created for a purpose. It is apparent that the design of the parties to these covenants was not to reserve a purely personal right to the grantor, solely enforcible by him, but to restrict the uses of the land for the benefit of the grantees and their successors in interest. This purpose is apparent from an inspection of the covenant.

Three questions are involved in this appeal: (1) Did the covenants contained in the deeds from Page to Goelet, Spaulding and Benson, which conveyed the east half of the block, create an equitable easement in favor of every one of those grantees, and enforcible by either against any one of them who should violate his covenant % (2) If these conveyances created such an easement, had the defendant notice of its existence % (3) Did the release of Mary E. Page, of March 10, 1884, to ITine, discharge the lands held by him and subsequently acquired by the defendant, from the burden imposed or benefit created by the restrictive covenant ?

The first question should be considered quite apart from the one of notice. The leading and best-considered case in this country which has come to our ¿knowledge, bearing upon the first proposition, is Parker v. Nightingale (6 Allen [88 Mass.], 341), which arose out of the following facts : Tenants in common of a tract of land in the city of Boston laid it' out into a street with lots of suitable size for residences, which abutted on the street and were distinguished by numbers. It was orally agreed among the co-tenants that in conveying the lots the grantees should be laid under an express obligation by way of condition or limitation, that no other building shall be erected or built on the lot except one of brick or stone, not less than three stories in height, and for a dwelling house only.” These lots were conveyed to different purchasers, all upon this condition. Forty years afterwards a subsequent grantee of one of the lots converted the building thereon into a restaurant, and thereupon several owners of the other lots filed a bill to restrain this use of the defendant’s lot, and it was held that this condition was for the benefit of the owners of all the lots held under a like condition, and that they could maintain an action to restrain the defendant from using his lot for the purpose of a restaurant. The decision was not placed upon the oral agreement entered into between the co-tenants, but it wras held that an equitable negative easement arose out of the deeds in favor of the owners of the several lots. The deeds in this case did not contain a covenant on the part of the grantees, but the conveyances were on condition. Nevertheless, the condition was held to create an easement in favor of the owners of the other lots held under a common source of title on like conditions. The case was carefully considered, and the reasons for the conclusion reached are clearly stated by the learned chief judge, and the only purpose that would be served by quoting or restating the argument would be to increase the volume of our overgrown, and in great part, useless reports of cases which neither involve a new principle nor apply a well-recognized principle to, new or unusual facts. This case was followed in Sanborn v. Rice (129 Mass. 387) and in Tobey v. Moore (130 id. 448), in which cases it was again held that restrictions imposed upon a number of parcels of land included in one tract in pursuance of a general scheme of improvement, may be enforced by a grantee of one parcel against the grantee of another.

In this State it has been several times held that when a parcel of land is conveyed by its owner to several grantees by independent conveyances containing similar restrictive covenants, an equitable negative easement is created in favor of eachjot as against all of the others, which the owners may enforce in equity. In Barrow v. Richard (8 Paige, 351) the owner of a tract of land divided it into lots which he conveyed from time to time to purchasers. In the deed of the first five lots conveyed a condition was inserted that the conveyance should be void if there should at any time be erected, made, carried op, permitted or suffered, upon any part of the premises so conveyed, any livery stable, slaughter house, tallow chandlery, smith’s forge, furnace, brass or other foundry, nail or other iron factory, or any manufactory for the making of glue, varnish, vitriol, ink or turpentine, or for dressing or keeping skins or, hides, or any distillery or brewery, or any other manufactory, trade or business whatsoever which should or might be in anywise offensive to the neighboring inhabitants.”

In tlie first five conveyances this provision was inserted, as a condition, but in the subsequent deeds it took the form of a mutual covenant between the grantor and grantees that the lots should not be used for the purposes specified. The owner of one of these lots established on it a coal yard, and an action was brought by the owner of another lot to restrain such use. Three questions arose in the case : (1) Whether an easement in favor of each lot as against the others was created by these grants ? (2) Whether establishing a coal yard, which was not one of the prohibited businesses, was a violation of the covenant? (3) Whether the owner of one of the lots could restrain the owner of another from using it for a prohibited business? All three propositions were determined in favor of the complainant, the second on the ground that a coal yard, conducted as described in the bill, was prohibited by the clause “ trade or business whatsoever which should or might be in anywise offensive to the neighboring inhabitants.”

In Brouwer v. Jones (23 Barb. 153) the owner of a tract of land divided it into lots, and conveyed them to various purchasers, inserting in the conveyances a covenant that the property should not be used for certain purposes. The concluding clause of the covenant read as follows: “ Or any manufactory, trade, business or calling whatever which may be in anywise dangerous or noxious or offensive to the neighboring inhabitants.” The defendant, a subsequent grantee, established a planing mill on one of the lots, and in an action brought to restrain this use of the premises the same questions arose as in Barrow v. Richard (supra), and were decided in favor of the complainant. The planing mill was not mentioned in the restrictive covenant, but it was held to be covered by the sentence last quoted. It was not held in either of the foregoing cases that the ambiguous term “neighboring inhabitants” was descriptive of the class of persons in favor of whose property the- easement was created. This term embraces the owners and occupiers of the restricted lots and none other, and its effect, in the connection in which it was used, was held to enlarge the scope of the covenant so as to include businesses other than those specially mentioned, and it may be that this term was effectual as a notice that persons other than the one to whom the covenant in terms ran were interested in it.

In Raynor v. Lyon (46 Hun, 227) it was held that when a person who is a common source of title of several lots imposes restrictions on their use by the deeds by which they were conveyed, that each of the grantees and their successors in interest have an easement in the other lots conveyed with the restrictive clause. This rule was recognized in Amerman v. Deane (132 N. Y. 355), and it is laid down as an established rule of equity by various text writers. (Washb. Eas. [2d ed.] 90, 94; 2 Dart V. & P. [6th Eng. ed.] 864 et seq.; Pom. Eq. Juris. [2d ed.] §§ 689, 1342.)

By the three deeds from Page to Goelet, Spaulding and Benson there was created an equitable negative easement in favor of every lot against all the other lots conveyed by these deeds.

Had the defendant notice of the existence of the easement ? The referee did not find whether the defendant had or had not knowledge of the existence of the easement, though the defendant testified that he had no knowledge of it until after he purchased. But he had constructive notice of all of the limitations and restrictions contained in the recorded conveyances forming his chain of title, and so in law he is deemed to have had knowledge of the existence of the restrictive covenant contained in the deed from Page to Benson. He had knowledge of the situation of the surrounding property and the purposes for which it was used, which, together with his knowledge that an easement existed in favor of some property in his land, he was put on inquiry as to the property to which this easement was attached.

He was bound to search the records for conveyances by the former owners of his lot impairing or incumbering the land which he proposed to purchase. Had he done this he would have discovered the existence of the easement in favor of the plaintiff’s lot.

The easement having attached to the plaintiff’s lo,t by virtue of the conveyances, it is plain that the subsequent release by the devisee of Page did not destroy it. (Hills v. Miller, 3 Paige, 254.)

The defeiidant has no legal nor equitable ground for complaint, because the judgment is in the alternative, permitting him to pay $10,000, instead of being perpetually enjoined from using the premises as proposed. This question has been many times determined in the elevated railroad cases.

The judgment should be affirmed, with costs.

YaN Bbukt, P. J., and PabKee, J., concurred.

Judgment affirmed, with costs.