text:
    ELIZABETH M. CROSBY, as Trustee, &c., Appellant, v. MOSES H. MOSES, Respondent.

      Covenants for renewal or to pay value of building—when lessor's option determined.—Arbitration—defects in return.—Specific performance of covenant of renewal.

    Where it is covenanted in a lease that at the expiration of the term the lessor will grant a renewal for a certain number of years, at a rent to be fixed in case of disagreement, by appraisers and an umpire, and it is further covenanted that the lessor shall have full choice either to grant said renewal or to pay the value of the building on the lot, to be ascertained in the same way, and an appraisement is had under the covenant of renewal, the lessee finding and becoming liable to pay an appraiser on his part,—the lessor’s election is thereby made and determined, and the lessee, having borne the burdens of the covenant, is entitled to its benefits.
    Where an agreement for arbitration requires that the umpire’s appraisement shall be under oath, it is sufficient if it show upon its face that an oath was administered within the jurisdiction of the notary, though there be no scilicet, and the venue, etc., be informal.
    Where the property is by agreement to be appraised at its value at private sale, it is not necessary that the umpire’s decision show on its face that it was so valued, where such fact appears from said decision and the valuations of the two appraisers taken together.
    In an action for specific performance of a covenant of renewal, plaintiff is not bound to show performance of a simple covenant to pay rent and taxes, or tender of any sums due thereunder. It is enough if the complaint contain an offer to perform and the decree provide for such performance as a condition. An omission to make such offer in the complaint is not fatal if not objected to.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal by plaintiff, from judgment entered upon the decision of a judge at special term.
    The action was brought to have appraised, the value of a building on a lot of land, in order that the plaintiff might pay or tender the amount to the defendant in accordance with the covenants of a lease, to the terms of which lease, the parties to this action were respectively bound. The defendant put in issue plaintiff’s claim, and made a counter-claim that the plaintiff, by the lease, was bound to give a new lease of twenty-one years to the defendant. The answer alleged that the lessees and their successor bad performed all the covenants of the lease to be performed on their part. On the trial it appeared that the lessees had not paid certain parts of the quarterly rent, and certain taxes, as provided by certain covenants.
    In the lease it was covenanted that at the expiration of a term described “ the said party of the first part, her executors, etc., will grant unto the said party of the second part, etc., a renewal of this lease for the further term of twenty-one years, at an annual rent, to be agreed upon, or in case of disagreement, to be fixed by appraisers and umpire. It was further covenanted that at the expiration of the said term, the party of the first part, etc.," shall have full liberty and choice either to grant” the renewal for twenty-one years or to pay the value of the building on the lot, which value was to be ascertained in the manner provided for fixing the amount of rent. There was an appraisement, which the court found to have been under the covenant for renewal. The plaintiff claimed that he still had liberty to pay the value of the building, in lieu of renewing.
    The court directed judgment for the counter-claim, and held that plaintiff was not entitled to the relief demanded by the complaint.

      J. B. Lindley, attorney, and Sutherland Tenney, of counsel, for appellant.

      Osborn E. Bright, for respondent.
   By the Court.—Sedgwick, Ch. J.

The plaintiff, under the lease, had the full right of election to grant the renewal for twenty-one years at a rent to be fixed under an appraisement of the value of the vacant lot, or to take possession of the premises upon paying the value of the house. In my judgment, that election was made and determined by proceeding to the appraisement of the value of the lot. One thing in particular influences me. The appraisement involved trouble and expense to the defendant. He had to find and to become liable to pay, an appraiser on his part. From the time the lessor laid upon the lessee any of the burdens of the covenant, the lessee had a right to enjoy its benefits.

As the case stands we have to be content with the finding of fact by the court, to the effect that the appraisement was made under the covenant for renewal.

The plaintiff makes as an objection to the appraisement, that the appraiser and the umpire took property which, was not vacant property as their guide, in estimating the value of the premises. If the doing of such a thing contrary to the terms of the contract would legally invalidate the appraisement, the lease does not forbid it. The persons chosen were to value the lot “ considering the same as an unincumbered vacant lot.” This is not violated by enlightening the judgment, by a knowledge of the value of lots in the neighborhood, that had valueless buildings upon them.

It is argued that, in contravention of the lease, the umpire’s appraisement was not under oath. It is said that no form of oath was given on the paper and no venue was shown. It is, however, in the usual form of an affidavit, excepting that it begins New York, June 11, 1879. No scilicet appears, or to wit, or that is to say. As under no circumstances, could a falsehood in such a proceeding be a public offense, and the oath was only meant to bind strongly the conscience, it is not necessary to look at the matter technically. The paper sufficiently discloses that the oath was administered at New York city within the jurisdiction of the notary.

Again, it is said that the appraisement by the umpire did not show on its face that his valuation of the lot was such as it would be worth at private sale. He was the umpire. The appraisers had made individual valuations which they set forth under oath in writing. In each it appeared that the valuation as at private sale had been made. ' It must be intended that these were handed to the umpire. He made his valuation in a writing addressed to the two appraisers. Heading the three papers together it appears that the valuation of the three was on the same basis.

The findings of the court below prevent our considering that the appraisement was entered into by the plaintiff, under the mistake that it was not to be an appraisement under the covenant for renewal.

It is not objected, that the claim made in the answer for a renewal lease of twenty-one years was not the subject of a counter-claim. In order to support the present judgment it is not material to consider the defendant’s position that the action as stated in the complaint will not lie.

It is, however, urged by the learned counsel for the appellants, that the defendant was in default, in two of the covenants of the lease, the one to pay rent and the other to pay taxes. The case shows this default. The bills for the rent had made a mistake as to its amount, stating it quarterly to be $87.50, instead of the right amount of $93.75. It appears that the tenant, in paying the amount charged, did not act dishonestly. The taxes had not been paid. No excuse for this was shown. The counsel does not claim that this default worked a forfeiture of the right to a renewal, under the covenant, but that the defendant “seeking the specific performance of a contract must show that he himself has kept and performed all the conditions precedent to its fulfillment.”

' There is a peculiarity of this case, to be noticed. There was no reply to the answer. Strictly perhaps, and if the commendable practice of the attorneys below had not been followed, the plaintiff could not have used the facts of the default, as they had not been pleaded. It is enough to say that on the pleadings, the plaintiff did not allege the default as a reason that the defendant should not have the benefit of the covenant of renewal, and did not deny the allegation of the answer that the defendant had performed all the covenants on his part by the lease to be performed. The ques.tion then is to be answered upon the facts as they appeared in testimony, and it is, whether to support the judgment in defendant’s behalf it was necessary for the defendant to show that before the action he had performed the covenants or tendered performance of them.

It is not claimed that the default was a cause of forfeiture. The covenant of renewal does not, on its face, make the right to renewal dependent upon the lessee’s having performed his covenants. But if the covenants of both were mutual and dependent, by construction, which it is not necessary to decide, then in an action for specific performance, as the counter-claim here is in substance, it is not necessary to perform or to offer to perform. It is enough, if the decree for the specific performance requires the plaintiff to perform on his part the conditions. It must be kept in mind, that the present is not a case where the obligation to give the renewal has been legally brought to an end by a reentry or a rescission of the lease. The lease and all its covenants have been kept alive. The obligation to renew is alive. There is still time for the defendant to do what is required of him.

In Freeson v. Bissell (63 N. Y. 168), a contract had been made, by which the plaintiff was to sell to defendant certain land for'a certain sum of money. The defendant did not pay the money. The action was brought to declare the unpaid purchase money a lien and .to foreclose the lien. Judge Miller said: “The only question presented ... is whether a tender of a deed of the land by the plaintiff to the defendant, was necessary to enable the plaintiff to maintain the action. The plaintiff had a right to file a bill for the specific performance of the contract without making a tender of a deed before the commencement of the action.” He further said, citing Bruce v. Tilson (25 N. Y. 194), “ It is sufficient, if he offer to perform in the bill of complaint. and is able to perform at the time of the final decree.” He stated another case. “ In Stevenson v. Maxwell, where, in a contract for the sale of lands, the purchase money was to be paid on a particular day and neither party performed or offered to perform on that day, it was held that neither party could maintain an action at law,, upon the contract, and that in such case either party may claim a specific performance in equity, making the offer incumbent upon him. in the bill.” In Bruce v. Tilson, the complaint did not make an offer to' perform, and that was not held fatal as no objection on that ground was made upon the trial. In this case, a like defect in the counter-claim may be disposed of in the same manner and because of the situation of the pleadings that has been described.

On this view, it is -not necessary to advert to the leave given to amend the complaint, so as to conform it to the proof. It was not necessary and it did not injure the plaintiff, as it was enough if the decree should provide for the conditions referred to.

Judgment affirmed, with costs. Order re-opening, case affirmed, without costs.

Freedman and Russell, JJ., concurred.


source: Caselaw Access Project

author: By the Court.—Sedgwick, J.

license: Public Domain

text:
    JAMES J. RYAN, Respondent, v. KATY C. BOLTZ, Appellant.

      Infant,—liability for board and lodging furnished at request of general guardian.

    One who was furnished with board and lodging, while she was an infant, upon the sole and express request of her general guardian who had means to pay therefor, cannot be held liable for the same, though the bill for such board and lodging never was paid, and the guardian upon his accounting did not charge the estate therewith. The authorities reviewed, and Atchison v. Bruff (50 Barb. 381),— disapproved.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal from judgment and order denying motion for new trial made upon the minutes.
    On the trial, it appeared that the plaintiff had furnished, in his own house, board and lodging to the defendant when she was an infant. She had arrived at age before action begun. The board and lodging were furnished at the express request of the general guardian of the defendant. The defendant had means consisting of real property. The defendant had made no express request that the board be furnished, or promise to pay the value of the board. It appeared that said bill had never been paid, and that the guardian, upon his accounting, had not charged the estate therewith.
    The court directed a judgment for plaintiff.

      James McKeen, for appellant.

      Samuel G. Adams, for respondent.
   By the Court.—Sedgwick, J.

The general rule is, that whenever an infant lives with, or is under the care and protection of a parent, master, or guardian, and that care and protection is duly exercised, the infant is not bound by his contract for the articles called necessaries (Reeve’s Dom. Rel. 345 [227]). In Kline v. L’Amoureux, (2 Paige, 419), the chancellor used these words : “An infant is liable for necessaries suitable to his rank and condition, when he has no other means of obtaining them, except by the pledge of his own personal credit. But if he is under the care of a parent or guardian who has the means and is willing to furnish him what is actually necessary, the infant can make no binding contract for any article whatever, without the consent of his legal protector and adviser.” Bainbridge v. Pickering (2 W. Black, 1325), was cited, where it held that ‘ ‘ if an infant lives with her parent, who provides such apparel as appears to the parent to be proper, so that the child is not left destitute of clothes or other real necessaries of life, I apprehend that the child cannot bind herself to a stranger, even .for what might otherwise be allowed as necessaries.” It is the primary duty of the general guardian of an infant to provide for its support, maintenance and education, and he may pay for that out of the infant’s estate (Clark v. Montgomery, 23 Barb. 472; Elliott v. Gibbons, 30 Id. 498), In Atchison v. Bruff (30 Barb. 381), the defendant was an infant, she lived with her mother and step-father, when the cause of action accrued. Her father had died intestate, leaving property to amount of $15,000. The administrator had advanced money from the estate for the support of the infant. The claim was for the value of reasonable clothing, furnished by the plaintiff, who was a dressmaker. The court said: “They were furnished at the infant’s request, with the consent of her mother, with whom she resided, and with the expectation and understanding, on her part and on the part of the mother, that they were to be paid for out of her fund, or her portion of her deceased father’s estate. Under such circumstances, the law binds her to pay the value of the necessaries so furnished.” In support of this, 2 Kent's Com. 239 ; 1 Pars, on Cont. 245, marg. 285, were cited. I do not find that these authorities support the proposition. In 2 Kent, 239: “The tradesman who trusts the infant is bound to make due inquiry, and if the' infant has been properly supplied by his friends, the tradesman cannot recover. If the infant lives with his father or guardian, and their care and protection are duly exercised, he cannot bind himself even for necessaries.” Whatever implication there may be, that if the guardian does support the infant, in part, yet if something more is necessary, the infant may be bound for that, it does not seem that the infant can bind her estate specifically, even with the consent of her natural guardian which her mother was only, she was not the guardian of her property ; that was in the hands of an administrator, and the law has made definite provisions in respect of the manner in-which the estate may be disposed of, for the benefit of the infant owner.” Whatever reflections may be necessary to limit the general statements of the case, the decision in it does not uphold this .judgment. In applying Kline v. L’Amoureux (2 Paige, 419), the opinion said tbe rule, as gathered from all the authorities, will be found to be that when an infant is under the care of a parent or guardian, who has means and is willing to furnish whatever is necessary, he cannot, without the consent of such parent or guardian,, make a binding contract for necessaries. The court did not i-ender or support a kind of personal judgment that follows the obligations of a contract. The judgment was that the amount recovered be paid out of moneys in the hands of the administrators, or out of any real or personal property belonging to defendant, declaring the same to be an equitable lien upon 'all her property, but that no part of the real estate should be sold to satisfy this judgment without special application to the court. '

The facts of this present case áre, that the defendant did not make any request that the necessaries be furnished her or any express contract that their value should be paid to plaintiff. Therefore, the defendant’s guardian did not give any assent to such request or contract. The necessaries were furnished upon the express request of the guardian. He had means and it was his duty to provide the defendant with necessaries. When such was the case there could be no implied contract on the part of the defendant. I do not mean to say that if the facts were not so favorable to the defendant, she would even then be liable. As the case is, it should be considered that the guardian having made, by his request, provision for the defendant’s support, the law imposes no liability on the infant to pay the value of what was furnished on that request. It was not necessary for the support of the infant that she should go under any liability. She- not only might be and was passive, but in law, she was bound to abide the arrangements made by her guardian and it slegal consequences. Perhaps, the plaintiff was not obliged to furnish the board on the contract of the guardian. He did, however, and did not furnish it on the implied or express request or contract of the infant.

The judgment is reversed and new trial ordered, with costs of appeal to the appellant to abide event.

Freedman and Russell, JJ., concurred.


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

text:
    WILLIAM GREEN, Appellant and Respondent, v. JOHN BANTA, Appellant, and EDWARD CLARK, Respondent.

      Negligence—master and servant—fellow workmen—evidence.

    Plaintiff and other servants of defendant were dumping bricks upon a scaffold when it fell, and plaintiff was injured thereby. In an action to recover for said injuries,—Held, that it was the duty of defendant to furnish, for plaintiff to work on, properly built scaffolding, and any negligence of the foreman, or other workmen employed by the defendant to erect the same, was defendant’s negligence and not that of a fellow-workman of plaintiff.
    Also held, that the fact that the scaffold gave way was prima facie evidence of negligence.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal by plaintiff from judgment in favor of defendant Clark, dismissing complaint against him.
    Appeal by defendant Banta from judgment against him, in favor of plaintiff entered on verdict of jury.
    The plaintiff was a hod-carrier employed to carry bricks, &c., to a scaffold on a building which the defendant Banta was erecting under a contract between him and the owner, defendant Clark. The plaintiff was hired by Banta. The plaintiff and several other hod-carriers were dumping bricks upon the scaffold when it fell, and plaintiff was damaged by the fall. There was evidence relevant to the question whether the overloading of the scaffold by the plaintiff and his fellow-workman did not cause the fall.

      James M. Smith, attorney, and William Allen, of counsel, for plaintiffs.

      Thomas H. Hubbard, for defendant Banta.

      R. T. B. Easton, for defendant Clark.
   By the Court.-—Sedgwick, Ch. J.

It was the duty of defendant Banta to plaintiff to furnish for him to work upon, a properly built scaffolding. In the performance of this duty, he employed the foreman named in the case. Therefore, any negligence of the foreman in putting together the scaffold would be the negligence of the defendant Banta, and not the negligence of a fellow-workman of plaintiff (Crispin v. Babbett, 81 N. Y. 516). The same proposition would be true, as to any workman not called a foreman, who was directed by the master to make the scaffold. If, after the scaffold be built, the foreman use the scaffold with the workman afterwards injured, and the injury ensues from the negligence of the foreman, they hold the relation of fellow-workmen, so-called, and the master is not responsible (Slater v. Jewett, 85 N. Y. 61). This law was correctly applied on the trial.

There was no error in the charge of the court, relating to a presumption of negligence on the part of defendant Banta. The charge was this: “The fact that the scaffold gave way, is some evidence—it is what might be called prima facie evidence—of negligence, on the part of the person or persons, who were bound to provide a safe and proper scaffold.” The head-note of Caldwell v. N. J. Steamboat Co. (47 N. Y. 282), states correctly the result of the opinion. It is that the happening of an accident which usually, and according to the ordinary cause of things, would not happen if proper care was exercised, raises a presumption of negligence. Mullen v. St. John (57 N. Y. 571), is to the same effect, and among other points quotes this proposition: “Where the thing is shown to be under the management of the defendant or his servants, and the accident is snch as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want of care.” The learned counsel for appellant disagrees to, these propositions only in saying that they are to be applied to the ‘ class of accidents that could never occur without negligence.” If this were exact, then the presumption from the accident would-be conclusive proof of negligence.

The testimony showed that the defendant Banta put up in the scaffold, an ordinary and well known appliance of his trade. He knew all the ordinary risks it had to meet. The means of meeting them, in the material and plan of the platform, not only should have been, but in fact were at hand. He undertook to make it safe, and so admitted, that by using due care, he could make it safe. The law is not'harsh to him in laying on him the burden of showing where and why it was not in fact safe. The court said, in connection with this part of the charge, that if at the same time it appeared that the scaffold had been improperly used by the workmen,—for instance, overloaded,—that would sufficiently meet and overcome the presumption referred to. Of course, such a misuse would present another cause than the master’s negligence in building, of the fall of the scaffold.

As to the plaintiff’s appeal, the court was correct in holding that the injury could not be attributed to any servant or agent of defendant Clark. The relation between the latter and the defendant Banta was that of co-contractors.

The judgment against defendant Banta is affirmed with costs.

The judgment in favor of defendant Clark is affirmed with costs.

Freedman and Russell, JJ., concurred.


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

text:
    WASHBURN & MOEN MANUFACTURING CO., Respondent, v. HENRY P. WILSON, Appellant.

      Contracts—application of consideration.—Royalties—accounting for.— Re-issue of patent—when void.—Appeal—when questions must be raised at special term in first instance.

    Plaintiff and defendant entered into two written contracts ; by the first, plaintiff licensed defendant to make a certain invention patented by him, for which defendant agreed to pay royalties; by the second, defendant was to continue to pay the royalties and to do other specified things, in consideration of all which plaintiff continued the license and made other covenants unconnected therewith.

      Held, in an action for an accounting for royalties during the period of the two contracts, that though the re-issued patent for the use of which they were to be paid, was void, defendant must account for the whole period; that the plaintiff’s covenants could not be applied distributively to defendant’s obligations, as the consideration to plaintiff for his promises was the promises generally of defendant.
    Also, Held, that though the license was the only consideration for the first agreement, the judgment requiring an accounting for that period must be affirmed, though the re-issue were void, as the appeal book shows that' no offer, request, or exception that suggested the difference, was made at the special term, and no modification of the judgment was asked.
    Whether one sued for royalties can defend on the ground that the re-issued patent for the.use of which they are claimed, is void, as showing on its face that it is for an invention substantially different from that described in the original patent, qumre.

      Before Sedgwick, Ch. J., and Freedman, J.

      Decided April 3, 1882.
    Appeal by defendant from judgment entered upon the decision of a judge at special term.
    The action was for accounting, under two written contracts. By the first, the plaintiff, as owner of letters patent No. 66,065, dated June 25,1867, and re-issue, No. 7,388, dated November 7, 1876, licensed the defendant to make for one year, wire bale ties, as described in the patents, and the defendant promised to pay a certain royalty. By the second, the defendant promised to sell to plaintiff a certain patent owned by him, to continue to pay the royalties provided in the first agreement, and to sell to plaintiff wire of a certain kind, at specified rates.
    It was objected by defendant below, that there was no consideration for defendant’s agreement, because the re-issued patent was void, as being for an invention substantially different from the invention claimed by the original patent.
    The court ordered judgment that defendant account, &c.
    Further facts appear in the opinion.

      Peter Van Antwerp, for appellant.

      Chamberlain, Carter and Hornblower, attorneys, and William B. Hornblower, of counsel, for respondent.
   By the Court.—Sedgwick, Ch. J.

Whether or not the invalidity of there-issued patent, referring, as it does, to the original patent, and showing on its face that it, in itself, irrespective of extrinsic circumstances, is void, distinguishes the present case from Marston v. Swett (82 N. Y. 527; 66 Id. 206), doés'not require examination. It will not, however, be assumed, that the re-issue is invalid.

There were, beyond the license, sufficient legal considerations to support the promises made by the defendant. They were, 1st. To pay $300 'to defendant for a patent applied for. by him ; 2d. To grant him the exclusive right to use his machine for splicing wires, that had already been used for binding bales, and not to license, within twenty-five miles of New York city, any one to make ties under plaintiff’s patent; 3d. To buy at a specified rate scrap iron from defendant; 4th. To pay the expense of obtaining certain patents ; 5th. Not to engage in splicing second-hand wire for bale ties, in. a specified district, during the continuance of the agreement. These considerations cannot be applied distributively to the several obligations of the defendant. For, the consideration to the plaintiff in making his promises, was the promises generally of the defendants.

The learned counsel for the appellant said, on the argument, that if this view was correct as to the second agreement, it could not be applied to the first agreement, as in the latter there was no consideration other than the re-issued patent, and, therefore, the judgment should be modified so far as it required the defendant to account from the time of the first agreement. If this particular called for examination on this appeal, it might have been necessary to definitely decide, as to the effect of the alleged invalidity, upon the first agreement. The question is not here. The case shows that counsel did not present to the court the difference, nor make any request, or offer any evidence, or take any exception, that suggested the difference, or ask for a modification of the judgment.

Judgment affirmed, with, costs.

Freedman, J., concurred.


text:
    HANNAH W. ANDREWS, as Guardian, &c., Respondent, v. JOHN TOWNSHEND, et al., Appellants.

      Inspection of papers, &c., under Code Civil Procedure, § 803.
    The right of a party to the inspection of papers, &c., under section 803 of the Code of Civil Procedure, is confined to those papers that relate to maintaining the position taken by the applicant, not that of the opposite party, there being no claim that the papers are forged.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided April 3, 1882.
    Appeal by defendant from an order requiring the defendant to deliver to plaintiff’s attorneys copies of certain papers referred to in answer of defendant.
    The petition, among other things, averred that the defendant, made an affirmative claim of a right to possession under certain conveyances and assignments of mortgage, and that an inspection of the writing was material and necessary to establish her case, to ascertain the date of the alleged conveyance and alleged assignment, and what was conveyed or assigned thereby, and if same was properly executed, and to ascertain whether said defendant is in possession of said writings. There was no allegation that the papers were forged or of any suspicion that they were.

      John Townshend, appellant

      Cited: Code Civ. Proc. 803 ; Code Proc. § 388; 2 Wait Pr. 331; Meaking v. Cromwell, 1 Sandf. 698; Brevort v. Warner, 8 How. 324; Mott v. Consumers’ Ice Co., 2 Abb. N. C. 145; Strong v. Strong, 1 Abb. Pr. N. S. 237.

      John Andrews, for respondent.
   By the Court.—Sedgwick, Ch. J.

The cases cited for appellant show, that the writings to be inspected must relate to the maintaining the position taken by the applicant, not that of the opposite party. As there was no application on the ground that the papers might be forged, the order should be reversed, with $10 costs and disbursements to be taxed.

Freedman, J., concurred.


text:
    ANN TOOLE v. JOHN McKIERNAN.

      Trustee of lands cannot take assignment of lid of purchaser on foreclosure sale.

    One who holds, as trustee, the legal title to lands, subject to a mortgage, cannot individually acquire an interest therein by taking an assignment of the bid of the purchaser on foreclosure sale under said mortgage and a deed from the referee. Until the sale to the original purchaser is consummated by payment and delivery of the deed, the disability of the trustee to take title individually is absolute. That the trastee was duly made a party to the foreclosure, together with the cestuis que trusts who were represented by guardian, and that the mortgagee was the purchaser at the sale, does not affect the case.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    On a case agreed upon between the parties, pursuant to section 1279 of the Code of Civil Procedure.
    The husband of the plaintiff died, leaving her, his widow, and four minor children. By his will, he appointed as its executor his friend James Duff, and its executrix, his wife, the plaintiff. The will devised to them, after a specific legacy to his wife, all his estate, real and personal, in trust among other things for the benefit of his children. The plaintiff qualified as executrix. A part of the real estate was subject to a mortgage. After the plaintiff had qualified, and before the trust was performed, this mortgage was foreclosed. The widow as executrix and individually, and the minor children were made defendants. Guardian ad litem was duly appointed for the infants. The due proceedings were had, and judgment of foreclosure and sale was entered. In the words of the submission, the premises were sold by the referee, ‘‘ and on such sale were purchased by the plaintiffs in said foreclosure action, who subsequently assigned their bid to the plaintiff in this action, and thereafter the referee in the foreclosure action aforesaid, duly executed, acknowledged and delivered to the plaintiff herein a deed of the premises, &c.
    The plaintiff herein entered into a written contract with the defendant herein, for a sale of a part of the premises conveyed by the referee. The defendant declined to take title to the premises from the plaintiff, upon the ground that said plaintiff could not convey a good and perfect title to said premises under the conveyance executed to her by the referee, &c., inasmuch as, at the time of such conveyance to her, she could not purchase or take the title to the property, &c., because she, at the time of the assignment of said bid and the taking of the deed as such assignee, was executrix and trustee under the will of her husband, &c. The question is, should the defendant be adjudged to specifically perform the contract.,

      Miller & Kip, attorneys, and Isaac L. Miller, of counsel, for plaintiff.

      Townsend & Mahan, for defendant.
   By the Court.—Sedgwick, Ch. J.

The learned counsel have not cited any authority in this State which decides the controversy. The general rule forbiding guardians, trustees, or persons in similar relations to deal for their own benefit with the property in which the eestuis que trust have an interest, is familiar. The trustee is forbidden to buy it (Gardner v. Ogden, 22 N. Y. 327; Forbes v. Halsey, 26 Id. 65 ; 33 Barb. 578; and many other cases). The present plaintiff, by her purchase from the bidder at the foreclosure sale, acquired the interest both of the mortgagor and mortgagee.

It does not, however, seem necessary to search for prcedents in this State. Such safe and sound principles are announced in the note to Fox v. Mackreth and Pitt v. Mackreth (1 Leading Cases in Eq. Hare & Wallace’ s Notes, 4 Am. ed. pt. 1, 255), that it is only necessary to give the words: “ Where the purchaser at such a sale reconveys the property at once or within a brief period to the executor or trustee, the presumption is that he was used as a tool or cover, and the transaction will be set aside as a constructive, if not actual fraud (Obert v. Obert, Stockt. Ch. 98; 1 Beas. 423 ; Rosenberg’s Appeal, 2 Casey, 67). And where the defect is apparent on the face of the record or title papers, a third person buying subsequently will be affected with notice and cannot hold the land (Rosenberg’s Appeal). The presumption may, however, be repelled and does notapply where it is made to appear with sufficient clearness that the purchaser bought for himself, and that there was no concert between him and the trustee (Waterman v. Skinner, 1 Beas. 423). In Waterman v. Skinner the court refused to interfere,-although the executor purchased the premises immediately after the sale from a bidder, who, as it would seem, had not paid. Such a transaction should, nevertheless, be scrutinized with jealous care, and it is very clear that the disability continues until the sale is consummated by payment and the delivery of the deed. Until then, the vendor is acting on behalf of the cestuis gae trust, and cannot acquire an interest in the property confided to his care.

In a foreclosure action, the referee sells for the mortgagor as truly as for the' mortgagee. And when the trustee buys the bid, he becomes owner of the equity of redemption and of the mortgage. The intervention of the mortagee, as the successful bidder, cannot obviate the objection. His relation to the matter is not an absolute security against the manifest dangers there are in allowing combinations that are likely to be made at the expense of the price to be bid for the property.

I am of opinion that the defendant should not be compelled to take title.

There should be judgment for defendant, with costs.

Freedman and Russell, JJ., concurred.


author: By the Court.—Freedman, J.

text:
    TRUMAN H. BALDWIN, as Receiver, &c., Appellant, v. EDWARD REARDON, et al., Respondents.

      Extra allowance—when should, not be granted—baüis of.

    Where a receiver in supplementary proceedings, in consequence of disclosures upon the examination, was properly authorized to bring suit to set aside a certain absolute conveyance of real estate by the judgment-debtor to a third party, and an instrument executed by said third party declaring that he held the premises in trust (1) for the payment of all debts contracted for or on account of the premises, except mortgage liens, and (2) for the benefit of the judgment-debtor and one Blesson; and on the trial it appeared that by secret arrangement the declaration of trust was not recorded for a long time, and was kept from the knowledge of the unsecured creditors; that the apparent value of the property largely exceeded the record liens; and that Blesson disavowed all interest therein,—Held, in view of the conduct of the judgment-debtor defendant, that though the declaration of trust be upheld and the complaint dismissed, defendants should not be awarded an allowance in addition to taxable costs, it appearing that the adverse result was due largely to the inadequacy of the property to meet the claims upon it, which claims could only be ascertained by suit.' Further held, that as plaintiff sought to enforce a claim of only $900 against the judgment debtor’s equity of redemption, there was no basis for an allowance of $2,000, in any event.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.

      Appeal by the plaintiff from an order granting an extra allowance of $.2,000, and from a judgment adjudging that the complaint be dismissed, that the defendants Reardon and Richard S. Treacy recover of the plaintiff, as receiver of the property of Edward Reardon, $124.68 taxable costs, and the further sum of $2,000, granted as an extra allowance, and that Ferdinand Kurzman as receiver in this action, pay to the said Reardon and Richard S. Treacy the balance in his hands, exclusive of his proper costs and charges.
    The facts appear in the opinion.

      Samuel F. Gregory, attorney, and William Allen Butler, of counsel, for appellant.

      M. J. A. McCaffery, attorney, and Joseph J. Marrin, of counsel, for respondents.
   By the Court.—Freedman, J.

This action was commenced by the plaintiff, as receiver of the property of Edward Reardon, appointed in proceedings supplementary to execution upon judgments recovered in this court for work and labor as mechanics, by Arne t Seaman, and John H. Seaman, as plaintiffs, against said Edward Reardon, as defendant, in May, 1878, amounting in the aggregate to $857.35.

The action was brought to set aside a conveyance executed by the defendant Edward Reardon, to the defendant Richard S. Treacy, March 26, 1878, of certain lands and buildings thereon, in the city of New York, particularly described in the complaint, and a certain instrument or declaration of trust executed on March 29, 1878, by said Richard S. Treacy, declaring that he held and would hold said conveyed premises upon certain trusts: 1st. As security for the payment of all debts and liabilities contracted for or on account of said premises except the mortgage liens thereon; also the taxes and assessments on said property; and, 2d. In trust for said Edward Reardon and Edward J. Blesson, also a defendant in this action, equally, share and share alike.

Upon the trial the plaintiff’s complaint was dismissed with costs and an allowance of $2,000 was shortly thereafter granted on motion. There is an appeal from the judgment of dismissal in conjunction with an appeal from the order granting the allowance ; but on the argument it was conceded that by reason of the foreclosure of a prior mortgage on the premises and the insufficiency of the fund iri the hands of Richard S. Treacy as trustee and of Ferdinand Kurzman as receiver, the plaintiff as the receiver appointed in the supplementary proceedings could not succeed to enforce in this action the lien of the judgments represented by him. The substantial controversy upon this appeal relates, therefore, to the allowance that was granted. Upon the facts contained in the printed case it clearly appears that the judgment-creditors represented by the plaintiff were entitled to the remedies they took ; that the defendants, by their secret and suspicious transactions, invited this action ; that, in consequence of certain disclosures in the supplementary proceedings, this court was justified to, and by order did, authorize the commencement of the suit; that the adverse result to the plaintiff is due largely to the inadequacy of the property to satisfy all proper prior claims against it; and that, under the peculiar circumstances of this case, these claims could only be .ascertained by an equitable action like the one instituted. According to the record in the register’s office, the defendant Reardon, the judgment-deb tor, was the sole owner of the premises, and as such he conveyed to the defendant Richard S. Treacy, by a deed which made the latter the apparent owner, while in fact he had no individual interest, and was trustee for other parties, under an arrangement secret as to the unsecured creditors, and not put on record for a time by the express agree-of the parties interested. , The defendant, Edward S. Blesson, the alleged copartner of Reardon, was an infant, and he disavowed the partnership relation and claimed to represent Hugh Blesson, his father; while the latter in turn swore that he was not a partner and had no interest in the property. Moreover, the apparent value of the entire property exceeded all the liens and claims against it which were matters of record. Although, therefore, the trust deed was upheld as an equitable mortgage, and the plaintiff’s complaint dismissed, yet upon all the facts of the case it is not equitable that the succeeding defendants should have a greater indemnity than simple costs. Nor is there anything in the case upon which so large an allowance as was granted, could be upheld, even if it were a case for an allowance ; for the value of the property in dispute consisted of the value of Reardon’s equity of redemption, no question having been made as to the mortgages on record, and the claim sought to be enforced against such equity of redemption by the plaintiff amounted to only about $900.

The order granting an allowance should be reversed, and the judgment modified by deducting therefrom the amount of the allowance included therein, and, as thus modified, the j udgment should be affirmed, without costs to either side on this appeal.

Sedgwick, Ch. J., and Russell, J., concurred.


text:
    CHARLES L. GUILLEAUME, Appellant, v. EDWARD ROWE, et al., Respondents.

      Attorney and client. —Execution against the person.—Duress.

    A party to an action is, prima facie, bound by, and responsible for, the act of his attorney .in issuing an execution against the person, void for want of jurisdiction to issue.

      A release from liability for false imprisonment, executed by one in actual custody under a void process, and upon a statement of the deputy sheriff that unless he signed it he would have to stay in jail a long time, is void for duress, and is not a bar to an action for false imprisonment, such facts appearing therein.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal by plaintiff from judgment dismissing complaint, and from order denying motion made upon the judge’s minutes for a new trial.
    This action was brought to recover damages sustained by reason of a false imprisonment, &c.
    In 1871, the defendants, doing business as copartners in this city, under the firm name of C. Dord & Co., brought an action in the supreme court against the plaintiff to recover the sum of $10,000; and judgment was recovered therein on- October 12, 1877, against the plaintiff for the full amount, which judgment was subsequently reversed by the general term. After the entry of judgment, the defendants’ attorneys issued an execution against plaintiff’s property, which was returned unsatisfied. Execution was thereupon issued by the attorneys for the defendants, against the person of plaintiff, under which the plaintiff was arrested and incarcerated in jail for three days. The nature of the action did not warrant.the issuing of an execution against the person of plaintiff, and the attorneys for the defendants conceded this upon the trial. Upon the trial, and at the close of plaintiff’s case, the defendants moved to dismiss the complaint upon the proof produced, upon the ground that (conceding that the execution against Gruilleaume was void for want of jurisdiction to issue) there is no evidence showing that either of the defendants authorized the issuing of the execution, or authorized the arrest of plaintiff in this action. The court denied the motion. The defendants then simply offered in evidence a certain release executed while plaintiff was in actual custody ; reciting that he (plaintiff) would not, in any manner, hold defendants liable for the arrest under the said execution. The evidence in rebuttal showed that plaintiff’s discharge from imprisonment was conditioned upon his signing the stipulation not to sue. At the close of the whole case, the defendants renewed their motion to dismiss, upon the grounds previously stated. The court granted the motion, at the same time stating that it did not consider the release binding. A motion was made for a new trial on the minutes, which was denied. Judgment having been entered, the plaintiff appealed from it and from the order denying his motion for a new trial.

      John F. McIntyre, for appellant.

      Blumenstiel & Hirsch, for respondents.
   By the Court.—Freedman, J.

The stipulation was not a bar to the action. The uncontradicted testimony showed that the plaintiff signed under compulsion, while restrained of his liberty under a process illegally issued and upon being told by the deputy sheriff that, unless he signed, he would have to stay in jail a long time. It was, therefore, void for duress.

Upon the proofs adduced by the plaintiff, taken in connection with the concession made by the defendants, that the execution against the person of the plaintiff was issued without warrant in the law, the complaint was improperly dismissed. The evidence fully established that in the action of Rowe v. Guilleaume, the attorneys who issued the execution against the person of the plaintiff in this action, acted as such attorneys all through the litigation, before and after judgment for the plaintiffs in that action. This was sufficient to make the said attorneys, prima facie, the agents of the defendants in this action ; for, unless restricted, an attorney has plenary power in the prosecution of a suit to judgment and execution, and in these respects-his acts bind and conclude his client (Newberry v. Lee, 3 Hill, 523). In such a case the authority may be deduced from the nature of the employment—which is to collect the claim by legal process ; and the principles-of law which regulate the relation of attorney and client are the same as those which regulate the relation of principal and agent. As a general rule, a principal is liable for such wrong of his agent as is committed in the course of his employment -and' for the benefit of his principal; and this is so, although no express . command or privity is proven (Fishkill Savings Ins. v. Nat. Bank of Fishkill, 80 N. Y. 162). And an act which is adopted as a means of accomplishing the object of his agency cannot well be extrinsic to the agent’s emplopment.

It is only, therefore, when, after having issued execution, the attorney undertakes to give special directions for its enforcement in a manner not warranted by the language of the writ, or for which the officer executing the writ may justly decline to take the responsibility in the absence of indemnity, as in Averill v. Williams (4 Den. 295), and Welsh Cothran (63 N. Y. 181), that the client can only be held upon proof of special authority to the agent, express or implied, or of subsequent ratification with knowledge of the facts.

In the case at bar no facts were developed sufficient to take the case out of the general rule, and the judgment and order should therefore be reversed and a new trial ordered, with costs to the appellant to abide the event.

Sedgwick, Ch. J., and Russell, J., concurred.


text:
    RUFUS F. ANDREWS, as Receiver, &c., Respondent, v. ALBERT SCHNITZLER, Appellant.

      Costs—term fees.

    When an action has been noticed for trial, the party finally prevail- ' ing, either at the trial or on special motion for want of prosecution, is entitled to costs for all proceedings after notice of trial, and the usual term costs, not exceeding five, though the notice of trial was not given by him, but by his opponent.
    Tillspaugh v. Dick (8 Sow. Pr. 33), distinguished.
    Before Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal from order denying defendant’s motion for a re-taxation of his costs.
    The action was at issue, and was noticed for trial at the January term, 1875, by the plaintiff, and placed on the calendar of jury causes for that term, where it remained until 1878. The defendant never noticed the case for trial. ' The complaint was dismissed January' 3, 1882, for want of prosecution, and defendant noticed his costs for taxation. The plaintiff „ objected, before the clerk, to all except the first and fourth items of the bill, on the ground that the action having been dismissed for failure to prosecute, the defendant was entitled to disbursements, costs before notice of trial, and costs of motion only, and the clerk sustained the objections. The costs were taxed at $20, and the disbursements at $2.27, total' $22.27. Defendant moved at .special term for a new taxation, which the court denied.

      Johnson & Cantine, for appellant.

      George W. Cotterill, for respondent.
   By the Court.—Freedman, J.

The true construction of the Code in my judgment is, that as long as a cause has been noticed for trial, the party finally prevailing, either at the trial or on special motion for want of prosecution, is entitled to costs for all proceedings after notice of trial, and to the costs for each term, not exceeding five, at which the cause was necessarily on the calendar, though the notice of trial was not given by him, but by his opponent. Neither from the language of the Code nor from any reported case, can I find that a party’s right to the costs in question der pends strictly upon the fact that he noticed the cause for trial. Tillspaugh v. Dick (8 How. Pr. 33), is plainly distinguishable. In that case there were two defendants. One of them had noticed the cause for trial, and as to him the complaint had been dismissed. As to the defendant who asserted the claim for costs after notice of trial, and for term fees, the cause had been noticed by neither side, and it was in view of this fact, and in reference to this defendant, that the court observed: “ As to this defendant the cause has never been noticed for trial; .... it was never on the calendar as between these parties.”

The costs' under consideration, it seems to me, are given to either party for preparation rendered necessary in consequence of the service of a notice of trial. The preparation to be made is the same whether only one or both parties give such notice. If I am correct in this, it follows that in the case at bar it was an immaterial fact that the defendant had failed to notice the cause for trial, because it appeared that the plaintiff had dope so, and that the cause, had been necessarily on the calendar for more than five terms under said notice, during which time the defendant was compelled to attend, though he was not in a position to take the plaintiff s default.

The order should be reversed with $10 costs, and a new taxation ordered, with instructions to the clerk to allow $15 after notice of trial, and $50 for term fees.

Russell, J., concurred.


text:
    THE BANK OF CALIFORNIA, Respondent, v. WILLIAM H. WEBB, et al., Appellants.

      Application of payments.—Contract of guaranty.—Surety.

    Defendants duly guaranteed the payment, at maturity, of all drafts which should be drawn by the agent of the American G-uano Co., in Honolulu, upon the company in New York, the amount guaranteed at any one time not to exceed $13,000. Said agent drew a draft for $13,000 on the company, and shortly afterwards another draft for $8,000, to the order of the same payees. After both drafts had been protested, the payees notified their New York agents, who held the drafts, that a payment of $2.144 had been made which was to be credited on the $8,000 draft, which was done. It appeared that no application was made by the debtor at the time of payment, and that, though the application by the creditor was made after suit had been brought on the $13,000 draft, it was done as soon as possible. Held, that this sufficiently established an application which the • creditor had a right to make, and further, one which harmonized with the intention of the parties to the guaranty, the $8,000 draft being in excess of the line of credit guaranteed.
    Before Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal from judgment in favor of the plaintiff, entered upon the verdict of a jury rendered pursuant to the direction of the court.
    The facts appear in the opinion.

      Butler, Stillman & Hubbard, attorneys, and Thomas E. Stillman, of counsel, for appellants.

      McDaniel & Souther, attorneys, and Everett P. Wheeler, of counsel, for respondent.
   By the Court.—Freedman, J.

The main question involved is one arising under the law as to the application of payments. The law upon this point is well settled. The debtor, when he makes the payment, has the right to direct the application, because it is his money which is being paid. If he fails to make any application, the creditor may make it. If none is made by the parties, then the court directs such application as, in equity and justice, and under all the circumstances, should be made.

In the class of cases in which the law makes the application, the position of a surety sometimes presents the strongest equity; sometimes an unsecured debt is preferred over a secured one ; and sometimes the application is made to the debt of the longest standing in the account. Each case falling within this class turns upon its own facts.

In the case at bar there is no proof that any application was made by the debtor at the time of the payment. Hence, none could be made by the debtor’s agent thereafter, and no effect can be given to his subsequent declarations.

The action is brought upon a contract of guaranty. By that the defendants jointly and severally guaranteed the payment, at maturity, of any and all bills of exchange or drafts that might be drawn at sixty days’ sight by the agent of the American Guano Company at Honolulu (Mr. E. P. Adams) on said company in New York, between August 1,1878, and, July 31, 1879, provided that the amount guaranteed should not, at any one time, exceed the sum of $13,000, in gold coin.

The draft in suit was drawn June 30, 1879, at sixty day’s sight, on said company in New York, for the sum of $13,000; indorsed and delivered, for value and before maturity, by Bishop & Co., of Honolulu, the payees .therein named, to the plaintiff, who is now the lawful owner and holder thereof; presented July 25, 1879, for acceptance, to the drawee, at its office in the city of New York ; accepted, and made payable at the office of the drawee ; and at maturity duly presented for payment and duly protested for non-payment. Thereupon the plaintiff demanded of the defendants that they should pay the draft, which they refused to do. All other drafts that had been drawn by said Adams prior to June 30, 1879, was paid at maturity, but there was another and similar draft drawn July 7, 1879, for $8,000, which was also allowed to go to protest.

Now as to the payment which the defendants claim the court should properly apply, the proof simply amounts to this. At a certain time the agents of the plaintiff in the city of New York, who held both protested drafts, were notified by Bishop & Co., of Honolulu, the payees and indorsers of said drafts, that they, Bishop & Co., had received the sum of $2,144, and that plaintiffs’ agents should credit said sum on account of the $8,000 draft, because there was no security for such draft, and that, pursuant to such direction, plaintiffs’ agents made the required application.

I am inclined to think that this sufficiently established an application by the creditor which the creditor, in the absence of a contrary application by the debtor at the time of the payment, had a right to make. Though it occurred after suit brought upon the $13,000 note, it was done as soon as it could be done. Moreover, the application thus made harmonized with the intentions of the parties to the contract of guaranty at the time of the execution of that instrument. For by it a continuous line of credit was given by the defendants to the extent of $13,000, and the evident intention of the parties to it was that such credit might at all times within the period named be used to the extent of the limit assigned. The draft in suit formed part of such credit, while the $8,000 draft was drawn in excess thereof.

I am unable to discover any merit in any of the exceptions ; and all credits in favor of the draft in suit to which it is entitled, having been allowed, the direction of the verdict should be sustained, and the judgment affirmed, with costs.

Russell, J., concurred.


text:
    JACOB BOOKMAN, et al., v. FERDINAND KURZMAN.

      Seal estate—defeat in title—erroneous description in deed.

    Where, in one of the earlier deeds in plaintiff’s chain of title, the premises in question are erroneously described as beginning and ending at a point on the westerly side of Second avenue, fifty feet ten inches from the south-easterly corner of Second avenue and One-hundred-and-eleventh street, &c., the' error being the use of the word “ south-easterly,’’ for “ south-westerly,” there being nothing else in the deed which tends to fix the location, defendant should not be compelled to accept a deed of the premises and pay the purchase-price, under a contract for the sale and purchase of the same.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Submission of controversy to general term on a case agreed upon.
    The facts appear in the opinion.

      James M. Fisk, attorney, for plaintiffs.

      Ferdinand Kurzman, attorney, in person.
   By the Court.—Freedman, J.

The plaintiffs, as owners of the premises described in the printed case, agreed to sell the same to the defendant, but when, in pursuance of the agreement, the deed was tendered, the defendant refused to accept it and pay the purchase-money. The refusal proceeded upon the ground that plaintiffs’ title is imperfect, because, in a former deed to one Flannelly, through whom plaintiffs derived title, the piremises were erroneously described as beginning and ending at a point on the westerly side of Second avenue, fifty feet ten inches from the south-easterly comer of Second avenue and One-hundred-and-eleventh street, &c., the error being the use of the word “ southeasterly ” for “ south-westerly.”

The question submitted is whether the defendant should be compelled to take title and pay the purchase-price.

There can be no doubt that, as a general rule, every conveyance should be so construed as to carry into effect the intention oí the parties, and that consequently any particular part of a description may be rejected, if inconsistent with the other parts, and sufficient remains to locate the land intended to be conveyed.

But I fail to see that the plain tiffs, upon the facts of this case, are entitled to have the rule enforced for their benefit. The rule rests entirely on considerations of an equitable nature. Under their contract, which must also be constrúed so as to carry into effect the intention of the parties to it, the plaintiffs are bound to convey a good title. It is not enough that they tender a deed sufficient in form. When they come into a court of equity and ask that the defendant be .compelled to take what they tender, they must show that equity is on their side. But here they are confronted with the fact that the error complained of relates to a point upon which the whole description hinges, and that there is no reference in the deed to any map or prior deed or other instrument which could assist in fixing the location. True, the said deed contains the clause: “Subject nevertheless to three certain mortgages now on said premises, made to secure the sum of $21,000, which the party of the second part hereby assumes and agrees to pay, with interest at the rate of seven per cent, per annum from the date hereof.” But this clause is in its turn also subject to the objection, that from it, it does not appear with sufficient certainty what mortgages were intended. Even if it were clear that the word “south-easterly” can be rejected as erroneous, nothing is left to show which corner of Second avenue and One-hundred-and-eleventh street was meant. For all that remains, the grantors named in said deed may as well have intended to convey from a point distant fifty feet ten inches northerly from the north-westerly corner, as to have intended to convey from a point distant fifty feet ten inches southerly from the south-westerly corner of said street and avenue.

In every aspect of the case the error is of sufficient gravity to justify the defendant in his refusal, and equity will not compel him to take the doubtful title.

There should be judgment in favor of the defendant, with costs.

Sedgwick, Ch. J., and Russell, J., concurred.


author: “ Speir, J. By the Court.—Freedman, J.

text:
    WILLIAM H. JOHNSTON, et al., Respondents, v. HESTER BATES, et al., Appellants.

      Lease—assignee’s liability upon covenants—lessor’s covenant to purchase building, when personal, action on—payment of rent, condition precedent—summary proceedings, effect on covenants.

    The assignee of a lease cannot be held liable under a covenant for payment of rent, taxes, &c., where the liability thereunder did not accrue until after an assignment of the lease by said assignee. Tate v. McCormick (33 Sun, 318), followed.
    Where a lease contains a covenant by the lessee to erect a building upon the premises, and an agreement on the part of the lessor to purchase the same by payment of one-half its value, “at the expiration of the aforesaid term,” no right of action on the lessor’s agreement accrues till the expiration of the term, by efflux of time, though the tenancy be terminated before then by summary proceedings and re-entry.
    Such a covenant is personal and does not run with the land.

      It seems, that payment of rent, &c., under the covenants, is a condition precedent to the right to recover the amount to be paid for the building, though not so expressly declared by the lease.

      It seems, that where the lessor re-enters under summary proceedings the lease is thereby canceled and annulled, and no covenants remain to be enforced by an assignee of the lessee.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.

      Appeal from judgment entered upon decision at special term. The facts as stated by the court are as follows :
    On November 19, 1866, the plaintiffs leased the premises 3, 5 and 7 White street, for twenty-one years from May 1, 1867, to one Sturgis ; the lease contained a stipulation on the part of the lessee to erect a building, to cost not less than $30,000, the lessors agreeing to pay one-half the value of the building at the expiration of the term ; and upon payment the building was to belong to them; the lease was assigned to one Mann, who assigned to Jones, who put up the building, which was accepted by the plaintiffs ; Jones mortgaged to the defendants, who foreclosed, and on January 30, 1875, entered as purchaser under the foreclosure. On August 21, 1879, they assigned the lease, premises, &c., to one Bingham; on October 3, 1879, Bingham assigned to Bloomfield; December 23, 1879, the plaintiffs re-entered, in pursuance of a warrant in summary proceedings. After this re-entry, on February 14, 1880, Bloomfield re-assigned the lease to the defendants, and all causes of action against the plaintiffs. Plaintiffs sue the' defendants for the taxes for the years 1876, 1877, 1878, and also for the year 1879, as to which last year’s taxes and for the rent that fell due November 1, 1879, the defendants say that they had assigned to Bingham before the liability accrued. The defendants interposed a counter-claim, under the seventh clause of the lease, for one-half the value of the building put upon the premises by Walter Jones, the assignee of the lessee, under the supposition that Jones was entitled to recover for it, and that his interest had passed to the defendants.
    The court at special term delivered the following opinion, in regard to defendant’s counter-claim :
   “ Speir, J.

The plaintiffs seek to recover taxes, Croton water rates, and ground-rent, under a lease made by the plaintiffs of premises in White street in this city, the lease having twenty-one years to run from May 1, 1867.

‘ ‘ It was admitted on the trial that default had been made in the conditions of the lease, as to the payment of taxes, water-rates and ground-rent, and that the defendants had been dispossessed for non-payment of rent, by summary proceedings, under the provisions of the Revised Statutes.

“The defendants by their answer set up a counterclaim for half the value of the building erected by them on the demised premises, and claim that they were entitled to the same under the covenants in the lease, and sought to -prove by a witness the value of the building at the time the dispossession warrant was issued, to which testimony the plaintiffs’ counsel objected, and claims that such testimony was not admissible.

“Under the covenants in the lease the payment of half the value of the building cannot be called for until the expiration of the term of years granted by the lease, May 1, 1888. The language of the covenant is, ‘ At the expiration of the aforesaid term the building on the premises, &c.,’ and after setting forth the manner of the appraisement, proceeds, ‘ upon payment of one-half of such appraised value of said building,’ the building should belong to the party of the first part. It is therefore plain that the phrase, ‘ aforesaid term,’ means the term hereby granted,' which is the term of twenty-one years, and until that date the defendants can have no right of action for one-half the value of the building.

‘ ‘ Again, the lessees cannot ask for payment of their building without performing all the covenants on their part which rest upon precedent conditions, even though the time of payment had arrived. They had omitted to pay the taxes, water-rates, and ground-rent at the time of the commencement of the action to recover their value (People’s Bank v. Mitchel, 73 N. Y. 406). Nor, under the decisions, is it necessary that the lease in words should make the payment for the value of the building conditioned upon the performance of the covenant. It is sufficient if from the lease acts are to be performed by one party in order of time previous to the performance of the acts of the other party ; the doing of the first act is a condition precedent to compel the performance of the latter (Id.; Paine v. Brown, 37 N. Y. 228).

Edward Van Ness, for appellants.

M. S. Thompson, for respondents.

“ I cannot see that there are any covenants existing under the lease, which the defendant may enforce. The summary proceedings under the statute ‘can-celled and annulled ’ the lease, default was made, and the plaintiff, &c., entered.

‘ ‘ The lessors were under no obligation either to buy the building for half cost, or to give a new lease for twenty-one years. It was optional for them to do either. The tenants were not prohibited from removing the building if the lessors did not buy.

“The building was not erected at the time of the demise, and the covenant relating to its purchase was simply a personal one between the parties, and did not run with the land and could not be enforced by the defendant, but by the original lessees.

■“The plaintiff’s objection to the admission of the testimony is sustained:”

The court rejected the counter-claim and gave judgment for the plaintiffs for the amount sued for, and the defendants appealed.

By the Court.—Freedman, J.

The counter-claim of the defendants for one-half the value of the building was properly rejected. The reasons assigned by the learned judge below for this ruling are satisfactory and sound.

As-to the counter-claim for hoisting apparatus, steam and gas pipes, &c., no testimony was offered.

This leaves for consideration the evidence introduced by the plaintiffs in support of their claims under the lease, and upon a careful examination of it, I have reached the conclusion that it proved the liability of the defendants as assignees of the lease for alT the; items claimed by the the plaintiffs except the rent of $750, which fell due November 1,1879, and the taxes for 1879, which were not confirmed until October 17,1879,. and then amounted to $1,492.25.

As to these two items the defendants sufficiently established as a defense that on August 21, 1879, they assigned the lease to Theron A. Bingham. Whatever defect there was in that assignment, by reason of the insufficient acknowledgment of the instrument, as to Althea Schmid, was cured by her subsequent deed of confirmation, executed October 23, 1879, and its relation back to the time of the execution of the assignment, ánd even without that the assignment in any event passed the interest of her co-defendants. Aside from the defect stated, nothing was elicited showingthat the assignment was invalid. There was nod sufficient evidence to warrant a finding, and the judge did not find that it was fraudulent, colorable or-fictitious. What-then is the legal effect which should be given to it in this action ?

The liability of the assignee to perform the covenants, of the lease depends wholly on the privity of estate which is established by the assignment of the lessee’s-whole interest to the assignee, followed by actual possession. But since there is no privity of contract between the lessor and assignee, the privity of estate may, at any moment, at the option of the assignee, be severed by assigning over, and possession is presumed to follow the assignment to the new assignee. Attornment is not required. The objects or motives of the assignment, or the character of the new assignee, do not concern the lessor, as he has the lessee still liable upon all the covenants. The decision of the general term of the supreme court in the recent case of Tate v. McCormick (28 Hun, 218), is expressly to this effect, and no sufficient reason has been assigned why that decision should not be followed.

The judgment appealed from should therefore be modified, by deducting therefrom the amount allowed therein for principal and interest for the quarter’s rent due November 1, 1879, and for the taxes of 1879, and as thus modified it should be affirmed, without costs to either side on this appeal.

Sedgwick, Ch. J., and Russell, J., concurred.


author: By the Court.—Horace Russell, J.

text:
    WILLIAM H. STRATFORD v. EDWARD R. JONES, et al.

      Bankruptcy—what not sufficient evidence of fraud to prevent proof of debt.

    The complaint alleged that defendants as stock-brokers purchased for plaintiff certain stock for which plaintiff paid, and that,'two months thereafter, being in pecuniary difficulties and intending to fail, defendants, without authority, fraudulently sold the said stock and converted the same to their own use. Upon the above facts, there being no proof of fraud, except such as was to be inferred from the fact that the stock was sold immediately prior to the failure, and from the testimony of plaintiff that previous to the purchase of the stock, when he contemplated removing his account from defendants, he was assured by them of their solvency,—Held, that a discharge in bankruptcy was a complete defense.
    Hennequin v. Clews (77 H. 7. 127),—followed.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.

      Exceptions ordered to be heard in the first instance at the general term.
    ’The complaint alleged that the defendants, as stockbrokers, purchased for the plaintiff, on July 1, 1878, two hundred shares of the capital stock of the Central Railroad of New Jersey, for which the plaintiff paid, the price, and that the defendants held said stock for the plaintiff ; that on August 23, 1878, the defendants, being in pecuniary difficulties, and intending immediately to suspend payment and fail, without authority from the plaintiff, fraudulently sold the said stock and converted the same to their own use, to the damage of the plaintiff, &e.
    The answers deny that the plaintiff paid for the stock or that it ever became his property, and they allege that they purchased the stock for the plaintiff, and held the same for him and as security for their advances on account of such purchase, and sekup discharges in bankruptcy as their defense.

      Albert Stickney, for the plaintiff.

      William Man, for defendant Jones.

      J. Warren Lawton, for defendant Davidson.
   By the Court.—Horace Russell, J.

The only question in this case is whether the plaintiff made out a cause of action which could be included within section 5117 U. S. Revised Statutes, which is : “ No debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character, shall be discharged by proceedings in bankruptcy ?’

1 am unable to see any distinction between the case at bar and that of Hennequin v. Clews (77 N. Y. 427). When the complaint in this case was drawn, it would seem quite certain that no distinction was contemplated by the pleader, for it alleges a bare conversion, and not those suggestions of fraud now relied on to distinguish this case from that. It is now claimed that inasmuch as, some time previous to the purchase of this stock, when the plaintiff contemplated removing his account from the defendants, he was assured of their solvency ; such assurance, connected with the subsequent failure, and conversion of his stock, amounts to a fraud with reference to the conversion.

This reasoning is very far-fetched. There is no proof that the defendants were insolvent at the time such assurances were given, and if they were, it would make no difference. There is no pretense that the plaintiff was induced to buy the stock in question by the defendants. On the contrary, they endeavored to dissuade him from the purchase. Nor would it make any difference that, on a general striking of their accounts, it would be made to appear that at the time of the purchase the plaintiff was entitled to a balance large enough to entirely pay for the stock, though the plaintiff’s assertion on that subject is entirely overthrown by the proof that when the stock was sold, the sum due the plaintiff from the defendants, was considerably less than the amount at which the stock was sold.

In Hennequin v. Clews (supra), the plaintiff was the absolute owner, by previous purchase, of the bonds, and they were deposited only as against a contingent liability which, so far as appears, had not yet become an actual one, but it was held that the conversion there did not bring the case within the section of the bankrupt act quoted. No more does the proof here.

The exceptions should be overruled and judgment rendered for the defendants, with costs.

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


text:
    ISAAC INNESS, Appellant, v. BENJAMIN A. WILLIS, Respondent.

      Land contract—action by vendee to recover moneys paid under, on ground of fraud—implied warranty of title.—Pleading.

    A complaint which alleges defendant’s lack of title; his hopeless insolvency at and since the time of making the contract; that defendant concealed his want of title with fraudulent intent, “ knowing that he could not convey to plaintiff said premises as agreed in the contract;” that plaintiff was ignorant of defendant’s lack of title, &c., contains sufficient allegation of fraud to justify rescission of a contract for the purchase of real estate, and to support a recovery of damages to the amount paid on the contract and for searching title, &c., this, though defendant be not actually in default under the contract. It makes no difference whether the fraud consisted in positive representations, or concealment of things the vendor was bound to disclose. The vendor in an executory contract for the sale of land, in the absence of express statements to the contrary, represents and warrants that he is the owner of the property.
    Before Sedgwick, Ch. J., Freedman and Russell, JJ.

      Decided April 3, 1882.
    Appeal from an order sustaining a demurrer to the complaint, and from a judgment entered thereon.
    The complaint was as follows: “I. That on or about the 19th day of May, 1880, in the city of New York, the defendant, Benjamin A. Willis, an attorney at law, in said city, made with the plaintiff a certain agreement or contract in writing, wherein, in consideration of the sum of $24,000, to be paid to him as therein set forth, by the plaintiff, the said Willis did contract and agree with the plaintiff to sell to said plaintiff three certain lots of ground on the south side of Ninety-fourth street, in the city of New York, situate 11 feet 8H inches west of Madison avenue, and together in size 76 feet 8 inches front, by 102 feet 2 2-3 inches in depth, and said Willis did further contract and agree therein to execute, acknowledge and deliver to the plaintiff or his assigns, a deed containing a general warranty and full covenants" for the conveying and assuring to him or them the fee simple of said premises, free from all incumbrance, which deed should be delivered on the 12th day of June, 1880, at 12 o’clock M., at the office of said Willis, at No. 51 Chambers street, in the city of New York. II. That upon the making and execution of said contract, as aforesaid, the plaintiff paid the defendant, as a part payment thereon, the sum of $750. III. That at the time of the making and execution of said contract, as plaintiff is informed and believes, said Willis was not the owner of the aforesaid premises, and had no title to the same. IV. That the said Willis has not acquired title to the said premises at any time subsequent to said contract, as plaintiff is informed and believes. V. That the said Willis, at the time of executing the aforesaid contract, had and still has numerous unsatisfied judgments, aggregating at least the sum of $40,000, docketed against him in the city and county of New York, as plaintiff is informed and believes. VI. That at the time of executing the aforesaid contract, the defendant, Willis, was and now is wholly insolvent and irresponsible, as plaintiff is informed and believes. VII. That all the negotiations attending the making and execution of said contract were made by the said Willis'with one J. H. Inness, who acted as this plaintiff’s agent, attorney and legal adviser. VIII. That the defendant, Willis, did suppress and conceal from the said J. H. Inness and also from plaintiff the fact, that he was not the owner of the aforesaid premises, and had no title to the same at the time he executed the aforesaid contract with this plaintiff. IX. That said Willis did suppress and conceal from plaintiff and his agent and adviser the fact, that he was not the owner and had no title to the premises aforesaid, fraudulently and with intent to deceive this plaintiff and his said agent and adviser, and to induce plaintiff to enter into the said contract and to pay the said sum of $750, said Willis well knowing that he could not convey to the plaintiff the said premises, as agreed in said contract, as plaintiff is informed and believes. X. That the said J. H. Innes, plaintiff’s agent and adviser as aforesaid, relying entirely upon the contract hereinbefore set forth, the same having been drawn and offered by said Willis, and relying upon said Willis’s ownership of the said premises, and ignorant of his want of title thereto, as plaintiff is informed and believes, did advise plaintiff to enter into said contract, as a safe and binding one, and to pay said $750, as aforesaid, which the plaintiff did, relying upon such advice, and wholly ignorant of said defendant’s want of title. XI. That upon discovering the fraud and deceit of defendant, plaintiff repudiated and rescinded the aforesaid contract and demanded of the defendant the return of the aforesaid part payment of $750, but that the defendant neglects and refuses to pay the same. XII. Plaintiff further alleges, that he has paid to his counsel, J. H. Inness, for services rendered, about and under the aforesaid agreement, and for making an examination of title to the premises aforesaid, and for counsel and advice in regard to the same, the sum of two hundred dollars, which this plaintiff claims against the defendant, as special damages. Wherefore, plaintiff demands judgment against the defendant for nine hundred and fifty dollars, with interest on the sum of seven hundred and fifty dollars, from the 19th of May, 1880, together with the costs of this action.”
    The defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained at special term, the judge delivering the following opinion : “ The defendant is entitled to judgment on the demurrer. The performance of the plaintiff was a condition precedent to that of the defendant. No demand was made for the deed when it was to be given, nor did plaintiff show he was prepared to take title. Order to be settled on notice.”

      M. L. Hollister and J. H. Inness, for the appellant.

      William Settle, for the respondent.
   By the Court.—Horace Russell, J.

At the argument of this appeal, I was strongly inclined to concur in the view of the learned judge who sustained the demurrer, but a careful examination of the complaint has led me to a different conclusion. He treated this case as if the plaintiff had, for no reason, rescinded an executory contract, and, while himself in default, had sued to recover the moneys paid as a deposit on account of the purchase. If that were the case, of course the plaintiff could not recover. The argument, and authorities cited by the counsel for defendant, relate only to cases of that character (Brown v. Weber, 38 N. Y. 187; Watt v. Rogers, 2 Abb. Pr. 261; People ex rel. Taylor v. Brennan, 39 Barb. 522; Sinclair v. Tallmadge, 35 Barb. 602).

But an examination of the complaint (and the demurrer is to be determined solely by its allegations) shows that the action sounds in fraud, for which the plaintiff claims he had a right to rescind upon discovery of the fraud, and, having rescinded, to recover the moneys paid on account of the contract: The only question is whether the complaint alleges such fraud as, if proved, would authorize rescission and recovery.

There can be no doubt that, as fraud vitiates every contract, a party to an executory contract into which he has been induced to enter by fraud, may, if he choose, rescind upon discovery of the fraud, and bring his action to recover any moneys or property paid or transferred by him on account of the contract. “ If a vendor should sell an estate, knowing that he had no title to it, or knowing that there were incumbrances upon it of which the vendee was ignorant, the suppression of such a material fact, in respect to which the vendor must know that the very purchase implied a trust and confidence on the part of the vendee, that no such defect existed, would clearly avoid the sale on the ground of fraud” (1 Story Eq. Jur. § 208). And to the same effect, Bigelow on Fraud, 401; and the " rule at law is the same as in equity” (Selden, J., in Burwell v. Jackson, 9 N. Y. 535).

It makes no difference whether the fraud consisted in positive representations or concealments of things which a party was bound to disclose, for representations and such concealments are to be treated alike, and give the same right of rescission. It is the same that a party concealed the fact that he was without title to the property which he assumed to sell, as that he made a positive false representation as to that fact, provided that, under the circumstances of each particular case, he was bound to disclose that which he concealed, and he concealed it with a fraudulent intent to defraud the other party.

The vendor in an executory contract for the sale of lands, in the absence of express statements to the contraryrepresents and warrants that he is the owner of the property which he assumes to sell (Burwell v. Jackson, 9 N. Y. 535; Story v. Congor, 3 Trans. App. 213 ; Smith v. Babcock, 36 N. Y. 169 ; Thomas v. Bartow, 48 Id. 198; Leggatt v. Mu. L. Ins. Co., 53 Id. 398 ; Bensel v. Gray, 6 J. & S. 449 ; Green v. Chandler, 25 Texas, 148).

The law on this subject is the same as on sales of personal property, where the vendor is in possession of the property which he undertakes to sell. In such case it is well settled that the vendor warrants and represents that he is the owner of the property sold (Benj. on Sales, 523; Burt v. Dewey, 40 N. Y. 283 ; McGiffin v. Baird, 62 Id. 329; 101 Mass. 42). The law implies the warranty from the representation. In the sale of real property, the parties are, in contemplation of law, on the land at the time of the sale (Harsha v. Reid, 45 N. Y. 418 ; French v. Carhart, 1 Comst. 107); so that the analogy between sales of real and personal property is quite perfect (Selden, J., in Burwell v. Jackson, supra). If, upon a purchase like this, a vendee should rely only upon the warranty, as such, and should seek to disaffirm a sale before the time for the transfer of title arrived, he could not do so. There would be no breach at that time nor until the time for the delivery of the deed. But the plaintiff here does not count upon a warranty, but upon a fraudulent concealment. While a concealment of want of title would not be per se fraudulent—for the vendor might intend and have it in his power to acquire title before the time of the execution of the contract should arrive—it is fraudulent when accompanied with a fraudulent intent to deceive and defraud, and with a positive knowledge that he cannot acquire title to the property sold, and that he cannot deliver to the other party what he has contracted to sell.

The complaint in this case alleges the hopeless insolvency of the defendant; that he did not have, and has not since acquired, title to the property sold; that he concealed his want of title with a fraudulent intent “ and well knowing that he could not convey to the plaintiff the said premises, as agreed in said contract.”

•This seems to me a sufficient allegation of fraud to justify a rescission and the recovery sought.

The judgment should be reversed, with costs, and the demurrer overruled, with costs, with leave to the defendant to answer upon payment of such costs.

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