author: Monell, J. Robertson, Ch. J.

text:
    Henry J. Baker, et al. plaintiffs, vs. Bradish Johnson et al. defendants.
    1. On the 9th of July, 1862, the defendants agreed to sell the plaintiffs 250 barrels of alcohol, of a designated strength, to be delivered “ under the tax law,” from the 20th to the 31st of August, 1862, duty paid, at forty-five cents a gallon. Parol evidence was adduced to show that the parties understood the. meaning of the words “ under the tax law,” in the contract, to be, that the alcohol was to be manufactured Under the tax law then in existence, and which by its terms, was to go into effect oh the 1st of August; and that the alcohol would be deliverable after the law would take effect, and thereby become duty free. By a provision in stich tax law, the Secretary of the Treasury was authorized to suspend its operation; and on the 30th of July he did suspend it until September 1; the effect of which, suspension was to subject alcohol manufactured before the laW went into operation to the duty previously imposed upon that article.

      Held that this was not an act of the law which rendered performance impossible, so as to excuse the sellers. That it was not impossible to deliver alcohol of the quantity and quality mentioned in the' contract, whether manufactured under the law, or before the law was in operation; and that- the sellers must abide by their agreement, and either do the act, or pay damages. (Robertson, Ch. J. dissented.
    2. The performance of a contract is excused when it has become impossible by the act of God, or of the law. in all other cases of failure to perform, from whatsoever cause, the defaulting party is answerable in damages.
    (Before Robertson, Ch. J., and Monell and Garvin, JJ.)
    Heard October 29, 1864;
    decided December 31, 1864.
    The complaint in this action sets forth a contract between the plaintiffs and defendants, dated July 19, 1862, whereby the latter sold the former two hundred and fifty barrels of alcohol, in prime western barrels of four iron hoops, to be delivered between August 20,1862, and August 31, 1862, on board vessel at 45 cents a gallon, cost. That the plaintiffs, on the 30th of August, demanded delivery of the alcohol on board the ship Adriatic, and tendered the purchase money— that the defendants refused—and demand judgment for damages in difference of value, The answer sets up that the agreement was to sell and deliver the quantity of alcohol as stated in the complaint “on board Vessel under the tax law, from the 20th of August to the 31st of August, 1862, duty paid." That prior to such sale', and on July 1, 1862, an act of congress was framed to provide internal revenue, which was commonly known as the tax law, and was so known by the plaintiffs and defendants in the making of the said contract; that when said contract was made, said law was to go into operation on the first day of August, 1862, but that subsequently, and on the 30th day of July, the secretary of the treasury, in pursuance of authority duly conferred upon him, postponed the period when said law should go into effect, until the first day of September, 1862. That alcohol under the tax law, was a distinct árticle of common use, and its price different from alcohol not under the same lato; that the same when sold for export was exempt from duty under said law and such exemption was part of the consideration on the said contract of sale. That since the said tax law went into operation, the defendants have always been ready and willing to comply with the said contract, &c.
    The action was heard on the 8th of April, 1864, before Justice Garvin, and a jury.
    The plaintiff’s counsel offered in evidence a contract between the parties as follows :
    “Sold H. J."Baker & Co.,
    Of Johnson & Lazarus, two hundred and fifty barrels alcohol, usual 95%., 88%., new standard. 4 iron, hoops— prime western barrels. Delivered on board vessel, under tax law, from 20th August to 31st August, 1862, duty paid, at 45c. cash. Broker for seller.
    W. W. Van Boskerck,
    Broker, 81 Wall street.
    Hew York, July 19, 1862.”
    At the close of the plaintiffs’ testimony, and again at the close of the defendants’ evidence, the defendants’ counsel moved to dismiss the complaint upon the grounds: Eirst. That there was a fatal variation between the contract as proved and the contract stated in the complaint, the action not having been brought for the non-delivery of alcohol under the tax law, but for the non-delivery of an article different from that specified in the contract, as proved in evidence. Also: That the action of the secretary of the treasury in postponing from the 1st of August to the 1st of September, 1862, the operation of the act of congress of July 1st, 1862, known as the tax law, had made impossible, and so discharged the performance by the defendants of the contract. The motion was denied, and the defendants excepted.
    The judge directed a verdict to be taken for the plaintiffs; and they found a verdict accordingly, for $2559.38; and the exceptions to his rulings made during the progress of the trial were ordered to he heard in the first instance at the general' term of this court; judgment in the meantime to be suspended.

      John E. Parsons, for the plaintiffs.
    I. The alcohol was bought' for exportation. “ Delivered on board vessel.” The act of July 1,1862, imposes no tax upon exported spirits. And therefore never had any application to the alcohol in question. “Under the tax law,” in the contract, merely meant subject to such provisions of the act then just passed, as might apply; but none of its provisions did apply ; and so the words “ duty paid,” meaning such duty as the act should impose, to be paid by the seller, had no operation, as the act imposed no duty. The act does permit the manufacturer to pay the duty, and in case of exportation recover it back; a useless ceremony, rarely performed, and resulting precisely as if no duty were paid. These words “ under the tax law,” and “ duty paid,” the broker who made the contract testified on the defendants' examination were merely intended to describe alcohol for export. Both the act and the action of the secretary of the treasury left this alcohol (for exportation) precisely as if no such act had been passed, or action taken. The substitution of September 1, in place of Agust 1, 1862, in the act, therefore, not only did not render impossible the performance of the contract, but did not to the slightest degree affect it or the parties to it.
    II. The act was passed July 1, 1862, the joint resolution of congress under which the secretary of the treasury substituted September 1 for August 1, 1862, was passed July 17, 1862. The contract was made on July 19, 1862, with direct reference to and mention of the act, and therefore with reference to the possibility of the very change made by the secretary of the treasury. Had this change, as was not the case, in any way operated to the benefit or injury of either party, it was in view of such a possible change that the parties contracted. Either, wishing to guard aginst the effect of such a change, might have specially provided against it; without such provision, the change could not affect the contract. “If a party-contract to perform any thing which is possible when the contract is made, but afterwards becomes impossible, he is liable for damages for non-performance. If, by his own contract, a man create a duty or charge upon himself, he is bound thereby, notwithstanding the occurrence of any contingency, because if he had chosen, he might have provided against it by the stipulations of his contract.” (Story on Cont. § 975.) “ It is not a valid excuse for the non-performance of an agreement to deliver goods of a certain quality, that goods of that quality were not to be had at that particular season when the contract was to be executed.” (Chitty on Cont. 630, note. Gilpins v. Consequa, 1 Peters’ C. C. R. 91. Yoqua v. Nixon, Id. 221.)
    III. Again, assuming, as was not the case, that the postponement from August 1 to September 1, 1862, did operate for or against either party to the contract, still it-did not render impossible, and therefore did not excuse performance by the defendants. The contract was for the sale of alcohol of a designated strength. Whatever the operation of the act, or time from which it should take effect, the contract would have been performed by the delivery of the same identical article—250 barrels of alcohol of the intended strength, There is no pretense the alcohol could not be delivered; and therefore no legal excuse for its non-delivery, even though a change in the act might have made the delivery more advantgeous to the plaintiffs. The answer avers that the defendants were willing to deliver after September 1, 1862, subsequent to the time fixed by the contract, and so had the alcohol to deliver at the time. Nothing will excuse performance except where performance is rendered impossible by act of the law, or of God, or of the other party. (People v. Manning, 8 Cowen, 297. Carpenter v. Stevens, 12 Wend. 589. People v. Bartlett, 3 Hill, 570. Fahey v. North, 19 Barb. 341. Wolfe v. Howes, 24 id. 174, 666. Where' the defendant covenated to obtain a patent right in England for the plaintiff’s benefit ’ held, that the fact, that under the British statute this could not be done, did not excuse him, it not being shown that it could not be effected by act of parliament. (Beebe v. Johnson, 19 Wend. 500.) In Jones v. Judd, (4 Comst. 411,) the legislature by act of March 29, 1842, put an end to the work on the canal, the completion of which by the contract between the parties was a condition precedent to payment to the plaintiff; held, that the legislature prevented the performance of the condition, and so that the plaintiff could recover on a quantum meruit.

      A. W. Bradford, for the defendants.
    I, The contract, described in the complaint, and the contract proved, are entirely different as to the subject matternamely, the article agreed to be sold. ' In the complaint it is stated simply as “alcohol” “to be delivered” “on board vessel.” In the contract it is described as “ alcohol ” to be “ delivered on board vessel under the tax law.” Alcohol under the tax law, at the date of the contract, was a distinct article from alcohol not under the. tax law, or alcohol in general. The difference consisted in this—that “alcohol,” simply, or alcohol not under the tax law, was alcohol then existing, and which the new tax law did not profess to tax; while alcohol under the tax law must necessarily be such as should be manufactured after that law went into operation, for the law only taxed alcohol manufactured after it went into effect. The first article was exempt from all duty; the second was chargeable with duty when intended for home consumption, but exempt from all duty when exported. The difference was substantial.
    1. The duty was to be levied “ on all spirits that may be distilled and sold, or reserved for consumption or sale,” “on and after the first day of August, 1862.” (Tax Law, § 47.)
    2. By the act there was no duty on spirits not distilled under the law. If shipped to another part of the United States, the duties were to be paid there. (Id. § 46.)
    3. If exported, no duties were chargeable. (Id. § 47.)
    4. At the time of the contract, therefore, alcohol then existing was not the subject of the contract, but the contract related solely to an article which was to be manufactured under that law, which was to he delivered for export, and which was to he duty free.
    It follows that there was a fatal variance between the contract stated in fhe complaint and that given in evidence, and the plaintiff having failed to move for an amendment of the complaint, the motion for a nonsuit should have been granted.
    II. The parol evidence shows that the articles in question were entirely dissimilar.
    1. The operation of the tax law upon alcohol distilled under it, and designed for domestic use, would be to raise the value by the addition of the new duty. If alcohol could be manufactured at forty-five cents a gallon, the price would be raised by the addition of the duty, which was to be forty cents a gallon, so that the article, if intended for home consumption, would cost eighty-five. This would not be the case with the article intended for export, for that would be free of duty, and the price would be regulated by the single element of its cost.
    2. As spirits distilled under the tax law would be worth the cost and the duty, if intended for home consumption ; and as spirits manufactured before the tax law went into operation would be free of duty, though intended for home consumption, the price of the latter article in July, 1862, rapidly rose, in View of the law then shortly going into operation. So that on the 19th of July, 1862, when this contract was made, not only were there two distinct articles of commerce recognized in the market, viz. alcohol made or to be made before the tax law went into effect, and alcohol to be made after it went into effect, but these articles were distinguished by a substantial difference in price.
    3. These facts appear very clearly by the evidence. In a physical sense there was no difference in the article, but the distinction rested upon the time of manufacture, and the purpose for which the article was to be used, whether for export or domestic use. This difference was indicated in the price, and in the terms “ long price or short price” The long price included the tax, and was meant for home consumption. The short price was the long price, less the duty.

      4. The plaintiffs were aware of the distinction. The difference in price the day of the contract was forty-five cents and sixty cents.
    5. The words “ under the tax law,” had a definite meaning. “ The parties to the sale understood the matter perfectly, that it was to be manufactured under the law.” The duty was forty cents, and to pay the duty was to pay nearly the whole price of the goods.
    III. The parol evidence establishing clearly that there was a variance between the contract as alleged and the contract as proved and explained, a verdict for the defendants should have been directed.
    IV. The contract was executory, being an agreement to sell alcohol to be manufactured under the tax law, and to be exported. By the terms it was to be “ delivered on board vessel, under the tax law, from 20th to 31st August, 1862, duty paid. It was provided by the tax law that its operation might be suspended by an order of the secretary of the treasury. It was so suspended to the 1st of September., 1862. The performance of the contract, therefore, from 20th to 31st of August became impossible, and was discharged. There was not, and could not be any such article, and there could be no delivery.
    V. Performance of a contract is excused when rendered impossible by law. (2 Pars, on Cont. 186.) “It is incumbent upon the obligor to procure the acts to be done, unless at the time of entering into the bond there was an impossibility of doing the act, or the doing of it had since become impossible by the act of God, or of the law.’’ (Mounsey v. Drake, 10 John. 28.) “ The performance of the required condition became impossible by the act of the law, &c.” (Jones v. Judd, 4 Comst. 413. Coke’s Litt. 206 b. People v. Manning, 8 Cowen, 297. Beebe v. Johnson, 19 Wend. 500. Wolfe v. Howes, 20 N. Y. Rep. 197. Broom’s Legal Maxims, vol. 34. Law. Lib. N. S. p. 112, 117, 120.)
    VI. If it be said that the contract could have been subsequently performed, the answer is that the plaintiffs did not put themselves on that ground. They demanded performance on the day when it was impossible, and by their action insist on strict performance. It was their interest not to urge subse-. quent performance if the article was to be used for home consumption ; for the price (forty-five cents) with forty cents duty added, would have made the cost eighty-five cents, when it could be bought in market for sixty-eight.
    YII. The designation of the article which was the subject of the contract, and the meaning which the parties attached to it, were the subject of parol proof. (Den v. Cubberly, 7 Halst. 308. Haven v. Brown, 7 Greenl. 421. Crawford v. Jarret, 2 Leigh, 630. Boardman v. Reed, 6 Peters, 328.) “ Where the terms used in a contract are of dubious meaning, the custom and usage of the country, or of any particular class of persons, as merchants conversant with the term,, to use it in a particular sense, is evidence that the' parties intended so to use it.” (Best on Presumptions, 116. Law. Lib. new series, vol. 31.) Proof of usage is admitted either to interpret the meaning of the language of a contract, or to ascertain the nature and extent of a contract, in the absence of express stipulations where the meaning is equivocal or obscure. (1 Greenl. Ev. 1, 412, § 292. 1 Phil, on Ev. p. 738. 2 Sumn. 569, per Story, J.) Parol evidence was admitted to show the meaning of the term “ cotton in bales.” (Taylor v. Briggs, 2 C. & P. 525. See Dana v. Fiedler, 2 Kern. 40, Brown v. Brooks, 25 Penn. Stnte R. 210.) This class of proof is constantly resorted to in the application of the tariff law to articles of merchandise or manufacture. (Elliott v. Swartwout, 10 Peters, 137.)
   By the Court,

Monell, J.

At the time this contract was made, there were in the market two prices for alcohol; the “ short price,” being alcohol purchased for exportation, and the “long price,” purchased for domestic consumption. Under the act of congress of July 1st, 1862, alcohol sold for exportation, being entitled to a drawback of duties, was in effect duty free.

The contract between the parties was a sale and purchase of 250 barrels of alcohol, to be deliverer! on board of vessel under the tax law, from the 20fch to the 31st of August, 1862, duty paid. The evidence shows that the parties understood the meaning of the words “ under the tax law” in the contract to be, that the alcohol was to be manufactured under the tax law then in existence, and which by its terms was to go into effect on the 1st of August. And they also understood that the words had reference to the “short price” article.

By a provision of the tax law the secretary of the treasury was authorized to suspend its operation. He did suspend it until the 1st of September. The effect of such suspension was to subject alcohol manufactured before the law went into operation to the duty imposed upon that article; in other words, alcohol not manufactured under the law.

I have no doubt, from the evidence, that both parties contemplated the influence.of the tax law upon their contract, and that the price agreed upon was regulated by the belief that the alcohol would be deliverable after the law would take effect, and would therefore be duty free. The suspension of the operation of the law to a period subsequent to the time of delivery, rendered it impossible to perform the contract without subjecting the seller to severe loss.

But it is urged that it was impossible to deliver at all, and that the defendants were thereby excused from performance. The performance of a contract is excused, when it has become impossible by the act of Grod, or of the law. In all other cases of failure to perforrh, from whatever cause, the defaulting party is amenable in damages.

One of the defendant’s witnesses says there were two different kinds of alcohol; the short price and the long price ; but he did not, mean, I think, that there was any physical difference, in quality, but a difference merely in the price of the same article, regulated by its being purchased for exportation or for home consumption. Alcohol of a designated quality is the same, "whether “long price” or “short price and these designations, employed in trade, to denote articles of a kind designed for exportation, and others intended for domestic use, do not change or alter the article in its physical nature.

- The cases where the act of the law excuses performance, or those where the law renders it impossible to perform ; as where a contract is made with the state .to do work on the canal, arid the work is suspended by the act of the legislature, full performance is excused, and a recovery may be had upon the quantum meruit. (Jones v. Judd, 4, Comst. 411.) But I am not aware of any case, where there was no physical impossibility to perform, that it has been held that the party was excused. If the defendants had been prevented from delivering, or if the delivery had become illegal by the act of the law, it would furnish an excuse. In this case, however, the act of the secretary of the treasury in suspending, the operation of the tax law, neither prevented the delivery of the alcohol, nor rendered its delivery illegal. And I can see no reason for not delivering, except the pecuniary loss to the defendants.

As I understand the argument of the defendants' counsel, he claims that inasmuch as-they agreed to deliver alcohol to be manufactured under the law, and the law having been postponed to a period beyond the stipulated time of delivery, it was impossible to deliver alcohol manufactured under the law. I cannot appreciate the force of the argument. The contract was made after the passage of the excise act, when its provisions were known to the contracting parties. The act was to take effect on the 1st of August, Unless its operations were suspended by the-secretary of the treasury. It was in the power of the defendants to have provided, by proper stipulations, for the contingency of a suspension of the law even for an indefinite period, ánd to have relieved themselves from liability if the contingency happened.- The possibility of a suspension of the law should have been foreseen and provided1 against. The power or authority to suspend was in the act and known to the defendants when they entered into the engagement.

The defendants entered into their contract without any qualification or exception, and it seems to me they must abide, by it and either do the act or pay damages. It was not impossible to deliver alcohol of the quantity and quality mentioned in the contract; and whether manufactured under the law, (by which I understand manufactured after the tax law took effect,) which was for the advantage of the sellers, or manufactured before the law was in operation, the quantity and quality of the alcohol which the defendants had sold, could have been delivered.

The plain English of the contract is, we agree to sell you alcohol, which we intend to manufacture after the 1st of August, when we expect the new tax law will go into operation, which alcohol we will deliver between the 20th and 31st of August. The tax law did not go into effect as was supposed. I cannot, see any difficulty in the way of the defendants manufacturing the alcohol after the first of August and delivering in fulfillment of their contract. That it could not be manufactured under the law was not such a legal impossibility as would excuse performance. Suppose goods are sold to arrive, duty to be paid by the seller, would a subsequent increase of duty excuse, performance ? Or, suppose goods are sold to be delivered on a given day under the present excise law, would an intermediate increase of the tax affect the obligation of the contract ? I think in neither case would performance be excused, for the reason that performance was possible.

I think the exceptions should be overruled and a judgment ordered for the plaintiffs upon the verdict.

Robertson, Ch. J.

(dissenting.) If the contract in question is to be construed as being merely for the delivery by the defendants, between certain days in August following, of a certain quantity of alcohol, of a certain degree of strength, then' liability may be conceded. Nor would they escape such liability, if such alcohol was required to be merely such as would be subjected to the duty imposed by the United States internal revenue act of July, 1862, in case it should take effect as originally prescribed therein, on the 1st of August, 1862. Because, in neither case, was there any impossibility of delivering such alcohol. The difficulty arises from such revenue act not being in operation at the time of making such contract, and the time when it was to go into effect being contingent, in fact dependent upon the action of the secretary of the treasury, under the authority given to him by a joint resolution of congress, to postpone such time. Both parties were chargeable with knowledge of the existence of that authority, and the legal effect of its exercise upon the original act; because such-joint resolution was passed two days before such contract was made. And if such contract was made, either in terms or by intendment of law, in reference to the possible shifting of the time when such revenue law was to take effect by the action of the secretary of the treasury under such resolution, it became wholly void and inoperative: because it undertook to furnish in August, what could not have any existence until on or" after the 1st of September.

It may be conceded for the present, for the sake of argument,if no authority had been given, before making the contract in question, to the secretary of the treasury to postpone the time when the revenue act in question should take effect, but after the making of such contract, congress had, by a legislative act, postponed such time, that the defendants .would still have been liable to deliver at the time appointed, the same kind and quantity of alcohol, which would, if the statute had not been so modified, been deliverable under such contract. In other words, that the defendants would take all the risk, and the plaintiff none, in such case, of a changé by future, unforeseen and unexpected events of the value of the article, or its subjection to duties. Tet the principle applicable in such a case would not control the obligation of a contract made in reference to a law whose time of taking effect was then uncertain, for the delivery of articles to be subject to such law, at a time when it might not be in operation. The authority so to-be exercised by the secretary of the treasury, was not an ordinary authority, belonging to him by virtue of his office; but derived exclusively from the joint resolution, which might have selected any other mode of determining the time the act should take effect. Congress could not delegate to him legislative power; the constitution does not provide for such delegation. Its exercise has the same effect as the assent of corporations or inhabitants of a locality to a law or action under it in order to make it binding, (Corning v. Greene, 23 Barb. 33 ; Bank of Rome v. Village of Rome, 18 N. Y. Rep. 38 ; Grant v. Courter, 24 Barb. 232 ; Starin v. Town of Genoa, 23 N. Y. Rep. 439 ; Gould v. Town of Sterling, Id. 456 ;) and its constitutionality must depend upon the same principle. It is equivalent to authorizing the secretary to license any and every distiller to manufacture alcohol without subjecting it to duty up to a certain time, after subjecting all alcohol to duty. The postponement, therefore, by such secretary of the operation of the law is not to be considered in the light of a subsequent legislative act, prohibiting the performance of acts previously agreed to be done, but as the determination of a contingency forming part of the law itself, and therefore a possibility within the contemplation of both parties when the contract was made.

The article required to be delivered by such contract was not only to be of a certain kind and strength, but to be delivered under the tax lato, which is conceded to be the act of congress in question, subject, of course, to the effect of the joint resolution, and .with duty paid. A subjection to duties under such act, was as essential a qualification of the article to be delivered as its quality or quantity. It clearly was as material, since the effect of the law, when in operation upon the price, would be, and proved to be, as great as any other element of its value. There is, therefore, no more ground for disregarding that qualification than any other. While, therefore, the defendants cannot claim to be discharged upon the ground that the action of the secretary of the treasury made impossible that which before was absolutely possible, they may claim that the contemplated contingency, which, if it had happened in a different way, might have enabled them to perform their contract, had, by happening the way it did, rendered it impossible. It is very plain that if, by the revenue act itself, or the action of the secretary of the treasury, before the contract was made, the law was definitively not to take effect until the first of September, the defendants would have undertaken to perform an impossibility, to wit, to deliver in August under a tax law, what could not be created so as to come under it until September. It was uncertain, until the action of the secretary of the treasury, whether, under the contract, the defendants had undertaken a possibility or an impossibility, which the plaintiffs were bound to know.. And they were subject to the rule of law whieh makes a contract to perform an impossibility inoperative and void. Of course, difficulty, however great, unless unsurmountable, would not be sufficient.

The broker’s memorandum itself is loosely drawn,.and needs a reference to extrinsic facts and evidence by both parties, to render it certain, or interpret it. Thus the defendants agree thereby to deliver so many barrels of alcohol; A barrel of liquid measure is thirty-one gallons and a half; whalers evidence was admitted, (perhaps improperly—see Many v. Beekman Iron Co., 9 Paige, 188,) to prove that the contents of an actual barrel used to contain alcohol varied from forty to forty-four gallons. . The words and figures, At 45 cts. cash,” do not indicate the quantity sold for that price. “ Under the tax law,” does not clearly designate what law was meant. On board .vessel,” would not necessarily mean for export. With the-assistance, however, of the testimony of the broker who negotiated the sale, (Van Boskerclc,) and another one, (Coolidge,) some definiteness and precision is given to the terms of such memorandum. The custom of selling goods liable to .be taxed under the .revenue act in question, by two prices according as they were intended for domestic consumption or exportation, was fully established; short price being that without the addition of the duty,- and long price with the duty added. The broker who made the sale testified to a long conversation between himself and one of the plaintiffs and-one of the defendants, and that the former understood the matter perfectly xoell. The phrase, “ under the tax law,” was understood by both parties. It was understood these articles were to-be manufactured under such law, and such phrase was understood to refer to the short price articles. The parties to the sale understood the matter perfectly well, that it was to be manufactured unddr the laio. This evidence was of course properly admitted to interpret the meaning of the parties. Not only the habitual use of words in a particular sense by an individual, (Wigram on Ev., p. 54, n. c. App. 1, p. 85, Jarmyn on Wills, 381-383,) as well as by persons of a particular trade or occupation or classes of persons or inhabitants of a particular locality, may be proved, (Shore v. Wilson, 9 Cl. & Fin. 555, per Parke, B.) but also surrounding circumstances, including the acts and declarations of the parties before making the agreement, have been admitted to render general terms specific, vague terms definite, and ambiguous terms certain. (Cole v. Wendel, 8 John. 116. Ely v. Adams, 19 id. 313. Almgren v. Dutilh, 5 N. Y. Rep. 28. Walrath v. Thompson, 2 id. 185. Agawam Bank v. Strever, 18 N. Y. Rep. 502. Perkins v. Goodman, 21 Barb. 218. Brinkerhoff v. Olp, 35 id. 27. Davis v. Talcott, 14 id. 611.)

The terms “ duty paid,” implied of course that the defendants were to pay the duty, and consequently to be entitled to its return in case the alcohol was afterwards exported. There can be no doubt, therefore, that in fact both parties entered into the contract under the supposition that no change would be made in the time when the revenue act should go into operation. The change may therefore be considered as an unexpected event, which, in a court of equity, if not at law, would discharge the contract. In the case of Quick v. Stuveysant, (2 Paige, 84,) lands actually conveyed by a deed, and not merely agreed to be by an executory contract, were ordered to be reconveyed, because they had originally been conveyed to carry out an agreement to lay out streets over the lands of both parties, the laying out of which had been subsequently prohibited by law. The reason 'assigned was, that while courts of common law only notice what voluntary acts are done, so that a deed would be effectual between the parties without regard to consequences, courts of equity consider every deed as a mere means to accomplish an end, and if an unexpected result occurs to defeat that end, they will undo the effect of such deed, and restore parties. to their former position. By parity of reasoning, an executory contract to deliver an article contemplated by both parties to be dutiable under a certain law, which by a change in the law afterwards becomes not dutiable, should not be enforced, since the subject matter of the contract is substantially and unexpectedly changed. If no reference had been made to the law, both parties would have taken the risk of a change in it; but the express reference to it, shows the understanding of the parties that the only subject matter' of the contract was a dutiable article, (Hildreth v. Buell, 18 Barb. 107,) and not merely alcohol as a subject of commerce.

It follows, then, that whether the contract in question is to be construed as contemplating, and made subject to, the power of the secretary of the treasury, to relieve all alcohol made before the first of September from duties under the revenue law in question, and thus to render it impossible for the defendants to fulfill their agreement, or as looking only to such law taking effect without any change by such officer in the time thereof, the defendants were entitled to be relieved from the performance of such contract.

The liability of the alcohol to duty could not be waived by ■ the plaintiff, because it is not apparent that such qualification was intended to be exclusively for his benefit. The result of enforcing this contract against the defendants would be to • compel them to pay the duty of forty cents per gallon for that for which the)1" are to receive only forty-five, cents by the contract, or to make them pay in damages the long price, including the duty for what they sold at short price, and which, at that kind of price, was only worth the contract price on the day the plaintiff demanded it. It is, perhaps, not to be deprecated, that the law contains principles capable of preventing such injustice.

The judgment ought therefore to be reversed, and a new trial ordered, with costs to abide the event,

Judgment for the plaintiffs.


source: Caselaw Access Project

license: Public Domain

text:
    Patrick O'Reilly, plaintiff and respondent, vs. Edward King, defendant and appellant.
    1. In equity, a reluctant purchaser will not he compelled to take a doubtful title. If the doubt of the sufficiency of the title be reasonable and practical, the court, in its discretion, will excuse performance by the purchaser.
    2. At law, however, the rule is different. There the party repudiating the contract, and seeking to recover back a deposit, must satisfy the court that the title is absolutely bad, and before he can succeed; the court must so decide. A merely doubtful title will not be sufficient.
    3. The power of the Supreme Court to authorize a sale of the real property of infants, by a special proceeding, is Wholly a creation of the statute, and is not inherent in it as a court. Hence the statute must be strictly followed, and its. terms fully complied with.
    4. A petition for the sale of real estate of infants was entitled “ The petition of, &c. infants, by their next friend.” Held that this Was the application of the infants, by their next friend, as required by the statute; and that the Supreme Court having determined that it was sufficient in substance, a mere departure from some prescribed form or rule of court would not affect the jurisdiction of the court, over the application.
    5. Such an application may be made by an uncle of the infants, being their only male relative, as their next friend; and the fact that he is a creditor of the infants does not "constitute an adverse interest which will disqualify him.
    6. A special guardian appointed to sell the real estate of infants, when authorized by the court, nlay properly unite with other tenants in common of the property, in making a conveyance.
    (Before Robertson, Ch. J., and Monell and Garvin, JJ.)
    Heard October 29, 1864;
    decided December 31, 1864.
    ' This was an action to recover a deposit of $600, made upon a contract for the purchase of two lots of land. The contract promised that if the title, on examination, should prove insufficient, the deposit should be paid back. The objection to the title was that certain proceedings in the Supreme Court for the sale of the interests of infant owners were defective.
    The action was-tried before the Chief Justice of this court, without a jury, at a special term. The following conclusions of fact were found :
    1. The contract in the complaint and answer mentioned, dated April 30th, 1862, was made by and between the plaintiff and defendant.
    2. That at the time of making the said contract the said premises were owned by the seven children of Isabella Cochran therein mentioned, four of whom were infants under the age of 21 years, viz. Lucy, Harriet, Caroline and William Cochran, and the remaining children were of full age, viz. Rupert, Isabella and Bayard Cochran. '
    3. That the said defendant was not authorized by the said infant children of the said Isabella Cochran, nor by James Brown, the alleged special guardian of said infants, to make the said contract at the time of making the same.
    4. That at the time of making the said contract, the plaintiff had no knowledge that any of the said children of said Isabella Cochran were infants, nor that any deed of conveyance of said premises was to be executed by a special guardian of such infants, nor that the title to said premises to be conveyed thereby was to be founded upon the proceedings hereinafter mentioned, or any similar proceedings.
    5. That the plaintiff paid the sum of $600 at the date of said agreement, and soon thereafter entered into possession of the said premises, but only remained in possession until about the 15th day of June, 1862, when he relinquished the same to the owners thereof, who accepted the same in November following.
    6. That immediately after entering into such contract the said plaintiff employed competent counsel to examine the title to the said premises, who, upon an examination thereof, deemed the title thereto to be insufficient.
    7. That on the 3d day of August, 1858, a petition was presented to the Supreme Court for the sale of the interest of the said Isabella, • Bayard, Lucy, Harriet, Caroline and William Cochran, six of the children of Isabella Cochran, deceased, in certain real estate, at which time all of said children were under twenty-one years of age—the first four being over 14 years, and the last two under 14 years of age; such petition was only signed by the first four infants, and, on behalf of the last two, by Bayard Clarke, their maternal uncle, described therein as next friend ; but the said Bayard Clarke was not the general guardian of said infants, or any of them, nor was any proceeding ever taken to appoint him the next friend of them, or any of them, in relation to such application.
    8. That on such petition and affidavits accompanying the same, an order was, on the 3d day of August, 1858, made by the said Supreme Court, which appointed George H. Brown the "special guardian of all the infants, to conduct the proceeding on such application, on giving security, and referring it to a referee therein named, to inquire, among other things, into the truth of the facts alleged in such petition.
    9. That the said referee- made a report to the said court, dated the 17th day of June, 1859, and annexed thereto the testimony taken before him, and upon such report an order was made directing the said special guardian to sell the right of the said infant petitioners in the premises mentioned in the said petition.
    10. That nothing was done on such proceeding until October, 1859, at which time the said special guardian applied to the court by whom he was so appointed for his discharge from the office, and for the appointment of James Brown in his place, and an order to that effect was made accordingly.
    11. No action was taken by such substituted special guardian under or in pursuance of said order, and no contract was ever made or entered into by the said special guardian, or his authority, for the sale of the premises mentioned therein, or any of them.
    12. In October, 1862, the said James Brown, as special guardian, presented a report to the said court, dated the 28 th day of October, 1862, setting forth the making of the contract set out in the complaint, as made by his authority, and an order was made on the 30th day of October, 1862, authorizing such special guardian to convey the interest of the said infant petitioners to the plaintiff in this action, on the terms of the contract between the plaintiff and defendant.
    13. That on the 31st day of October, 1862, a conveyance of the premises in the contract, dated October 31,1862, executed by Rupert J. Cochran, and Bayard 0. Cochran, and the defendant, and Isabella his wife, all then of full age, and by Lucy, Harriet, Caroline and William, by the said James Brown, special guardian, was tendered to the plaintiff, and a bond and mortgage from the plaintiff to said seven parties as obligees, were also presented to him for execution by him, and a demand that he should execute and deliver the said bond and mortgage, and pay the residue of the purchase money made upon the plaintiff,, which he refused, on the ground that he had been advised by his counsel not to take the title, and that the 'plaintiff at the same time demanded a return of the money paid by him.
    14. That the said order of October 30, 1862, and the proceeding which resulted therein, were obtained and conducted without any notice to the plaintiff, and he had no knowledge thereof at the time of ^said tender "and refusal, or any time before the trial.
    15. That the premises mentioned in the contract between the parties hereto are a part of those mentioned in the said petition, presented to the Supreme Court on the 3d day of August, 1858, and in the subsequent proceedings based thereon, and that no other reports,- petitions, order or proceeding, in respect to the said premises, were made or had, than those hereinbefore referred to.
    16. That the said Liicy; Harriet, Caroline and William, at the time of the commencement of this action, were under 21 years of age, and the said Isabella and the said Bayard C. Cochran were of full age.
    17. That the title to said premises were insufficient, and that the plaintiff would not, by the conveyance tendered to him, have acquired a sufficient title to the said premises.
    And, as conclusions of law, the court found that the plaintiff was justified in refusing to accept the conveyance tendered to him, and that he was entitled to recover from the defendant the sum of six hundred dollars paid to the defendant under the aforesaid contract, with interest from the first day of November, 1862, amounting to the sum of $670, besides the costs of this action, to be adjusted and allowed, and that the plaintiff was entitled to judgment accordingly.
    From the judgment entered in accordance with these findings, the defendant appealed.

      John E. Parsons, for the appellant.

      John E. Burrill, for the respondent
   By the Court,

Monell, J.

I am unable to subscribe to the views of the learned chief justice, that the title offered to the plaintiff was insufficient, and so doubtful that he had a right for that reason to disaffirm the sale and recover his deposit. If the action had been on the equity side of the court to compel Reilly to take the title, I should express any opinion of its sufficiency with much hesitation. The difficulties suggested by "the chief justice would, of themselves, cause me to hesitate, and perhaps to doubt. But the action is at law to recover back the deposit upon a rescission of the contract of sale. And I think the error of the learned judge was in applying the rule in equity instead of the rule at law to a question involving the sufficiency or goodness of a title to real property. The court, in the exercise of its equity powers, will not compel an unwilling purchaser to take a doubtful title.

Much discussion has been had as to what is a doubtful title. If the court is fully informed of the facts, it must know whether a title is good or bad. If the facts are not fully disclosed, it may with propriety doubt. It is, however, with practical certainty and practical doubts that the court must deal. In the language of Lord Hardwicke, (Lyddal v. Weston, 2 Atk. 19,) “ the court must govern itself by a moral certainty, for it is impossible, in the nature of things, there should bo a. mathematical certainty of a good title.” Where the doubt of the sufficiency of the title is reasonable and practical, the court in its discretion will excuse performance by the purchaser.

The rule, however, at law, is quite different. There the party disaffirming the contract must satisfy the court that the title is absolutely bad, and the court must decide that it is absolutely bad, before the party can recover. A merely doubtful title will not do. (Romily v. James, 6 Taunt. 263.)

The question then arises, whether upon the facts in this, case the title offered by the defendant is had, That is the question to be decided in this case.

I pass over all the objections to the title, except three, being satisfied, for the reasons so well expressed by the chief justice, that they are really groundless.

The first objection I shall notice is, that it is doubtful whether the Supreme Court acquired jurisdiction of the proceeding to effect a sale of the infants’ interests. The power of the court to authorize the sale of the real, property of infants is derived from the statute, and is not inherent in the court; hence the statute must be strictly followed, and its terms fully complied with.

The language of the statute (2 R. S. 194, § 170) is, “ Any infant seized of any real estate * * * may by his next friend * * apply to the court. * * for the sale,” &c.

The petition before us was by Isabella R. Cochran, &c. infants, over the age of fourteen years, and Caroline Ella Cochran, &c. infants, under the age of fourteen years, “ by Bayard Clark, * * their uncle and next friend, and only male relative of full age.” The petition is signed by Bayard Clark, without any addition to his name, of next friend, as respects the infants over the age of fourteen years, and by all the infants in person.

There is nothing in the statute prescribing the manner in which an infant may apply to the court. And I see no reason why he may not, by his next friend, apply orally. The courts have established rules on this- subject, but they are mere rules, which the court may, in its discretion, at any time disregard. (Dicas v. Brougham, 6 Car. & Payne, 248.) The late Court of Chancery, at an early day, adopted a rule on this subject, which subsequently became and continued the 158th standing rule of that court, and which required the application to be made by petition, prescribing its contents. But there is no doubt that the court may, in a given case, depart from the rule and allow the application to be made in some other way, and I can see no reason why it may not be made orally, although it probably would not be wise to allow such a practice. The material question is, did the infants apply by their next friend ? The form of the application is of no consequence, if the substance was there, The description in the petition is clear : “ The petition of, &c. by their next friend.” No one can doubt, I think, that this was the application of the infants, by their next friend, as required by the statute. And, the Supreme Court having determined that it was sufficient in substance, the mere departure from some prescribed form or rule of court would not affect the jurisdiction of the court over the application. The case of Hyatt v. Seeley, (11 N. Y. Rep. 52,) is not opposed to this view. In that case, the order authorizing the sale directed the deed to be executed by the guardian “ in the name of the infants.” It was executed by the guardian with the designation of guardian, &c. without naming the infants in the body pf the deed or elsewhere. But the court intimate, that if the deed had purported, in its commencement, to be made by the infants, it would have been sufficient. Besides, that was an application to the equity side of the court to compel the purchaser to take the title.

Second. It is objected that the application by Bayard Clark, as the next friend of the infants, was improper. The objection, however, was chiefly that he was a creditor of the infants. That was not an adverse interest, and nothing short of an interest in opposition to the interests of the infants, in the property sought to be sold, would disqualify even a special guardian. The statute does not tell us who is the next friend, nor how he is to be selected or appointed. The 158th rule of the late Court of Chancery said some relation or friend might make the application ; and in one case (Matter of Whitlock, 32 Barb. 48,) the mother was deemed a suitable and proper person. In this case the next friend is described as being their uncle and only male relative of full age. I cannot doubt that so near a blood relation is the next friend within the meaning of the statute,

Infants being non sui juris, cannot act for themselves, and the policy which requires the interposition in their behalf of a next friend is fully met by the presumption that the person selected will, from motives of love and affection, be desirous to promote and preserve their interest; and the next friend may therefore well be considered the near friend. I can but believe that any one may he the next friend ; hut it is the duty of the court, as the universal guardian of the persons and estates of infants, to scrutinize closely the qualifications and disinterestedness of those who present themselves as such.

The Supreme Court having entertained the application, we must presume that they were satisfied that the next friend was a suitable person to apply for the infants. And, as-the statute does not disqualify him, I cannot see how any question can seriously be raised against the validity and regularity of the proceedings in that respect.

Third. The objection that the special guardian of the infants entered into a contract of sale conjointly with the adult owners, and that the deed tendered to the plaintiff was in like manner executed by the guardian, jointly with the other owners, seems to me to have no foundation. The guardian .could neither agree to sell, nor could he convey any other than the infants’ interests. The order authorized that, and no more, and to that extent and no further did the guardian agree to sell, or did he convey. That other parties, owning other interests, joined in the same contract and deed, could not deprive either instrument of its binding effect upon -all concerned.

In looking throughout these proceedings, I. have not been able to detect any departure from the statute. There has been, it seems to me, not only a substantial but a literal compliance with its terms. If there was any departure, it was from some rule o# prescribed form of court, unessential (except as preserving uniformity in practice,) and subject to change at any time, but in no way impairing the validity of the proceeding.

The contract provided that if the title should be found to be “ insufficient,” the deposit should be returned. Eo greater signification can be given to the word insufficient than its natural meaning, pamely, that the title should be adequate, and such as should suffice and be equal to the end of vesting a good title in the purchaser. The parties doubtless meant that, if the title was defective, and the purchaser would not get a good title, the contract should be at an end- But they did not mean, nor are the words used capable of the meaning, that the title should be absolutely and mathematically proven to be good.

In any aspect I can view the case, I cannot conclude that the title is bad, or even that there is, as was said by Baron Alderson, (Cattel v. Corrall, 4 Y. & C. Ex. 237,) “ a reasonable, deoent probability of litigation ” about it.

I am, therefore, of opinion that the conclusion of the chief justice was erroneous, and that the judgment should be reversed, and a new trial granted, with costs to abide the event.

Robertson, Ch. J.

(dissenting.) I have not been able to satisfy myself, from any thing advanced before us, of the absence of all obligation on the part of the defendant to restore to the plaintiff his deposit.

There seems to be no doubt of the title to the land in question of the parties on behalf of whom, as vendors, the contract in question was made. Without reference to the minority of some.of such vendors, the pendency of proceedings to authorize some disposition of their interest, and the authority given to a special guardian to sell or mortgage as he should think fit, and laying out of view the fact that it was made by an agent, it appears on its face to be a mere contract by owners of land to sell and convey it, giving a good title therefor by a certain day. By introducing such extraneous facts, not noticed in the contract, it is sought to be converted into a mere con.tract, by the defendant or his principals, to procure a conveyance of a good title, by a certain day, which, of course, would be entirely speculative. To accomplish this, the condition of the return of the deposit, in case of the insufficiency of the title on examination, is brought down to a mere absolute failure of title. The procuring of an order from a court authorizing the execution of a conveyance two days before the time for delivering it expired, and a tender of such conveyance one day before that time, is claimed to be a compliance with such contract, although no time was thereby afforded for any examination of- the title at all. Both parties, on the contrary, treated the examination spoken of as one to be commenced forthwith, when, of course, the infancy of some of the vendors, the inchoate condition of the authority to the special guardian, and the alternative character of the disposition thereby authorized as being to sell or mortgage, might be 'discovered. Nothing short of prophetic power in such case would have enabled the plaintiff to discover, on his examination of the title, whether the Supreme Court would or not authorize a sale and confirm the contract in question. The fact that they did so has no bearing on the question whether the title thereby to be acquired was that to investigate which the plaintiff was entitled, as well as to a reasonable time for the purpose of discovering its sufficiency, I apprehend that the only legitimate construction of such contract, according to its terms, is, that the vendors therein named undertook that they had a good title, wliich they would be ready to convey, on or before the succeeding first of November, into an examination of the sufficiency of which the plaintiff could forthwith enter. And the legal result of it was, not that the plaintiff was bound to wait until the succeeeding first of November to ascertain whether a title could then be acquired, which he' was bound to take without examination, provided it should eventually prove to be good, but that if, on an immediate examination, he could find no one authorized to give him a title, he could rescind the contract and recover back his deposit. Under the contract, there was one from whom the plaintiff could at any time demand a conveyance, and the defendant could retain his deposit until at least the first of November, and then pay it to him back, and thus rescind the contract.

I cannot but regard the word “insufficient,” as applied to the title in this contract, as meaning something more than defective. The warranty of a good title implied in every sale of lands, (Burwell v. Jackson, 9 N. Y. Rep. 535,) was already inserted in express terms. And it was stipulated that “ if the title should, on examination, be found insufficient,” the deposit, with interest, was to be returned. Some act of examination was necessary, which was to be done by the plaintiff, and the word “ insufficient,” as expressive of its result, did not describe an absolute but a relative defect, having regard to some purpose or consequence. Taken in connection with the examination to be made, it probably was used in a sense similar to unsatisfactory to the plaintiff as a purchaser, that is, one to which a reasonable objection could be made, with which the party onght not to be satisfied, (Fagen v. Davison, 2 Duer, 158,) and not as an absolutely bad title, or none at all. I think, however, that the making of the contract for vendors incompetent to convey any title, the title proposed to be given by a guardian appointed in a judicial proceeding, whose authority to sell rested entirely on the future discretionary action of the Supreme Court, in which such proceeding was pending, and against whose neglect or omission the plaintiff had no redress, and the character of the contract being a sale not yet sanctioned by the court in question, and, therefore, not binding on the supposed vendors, formed reasonable grounds of objection to the title within the meaning of such contract. Such objection was substantially stated by the plaintiff' on the tender of the deed.

Upon either ground, therefore, that the contract was made, on behalf of persons incompetent to convey, and was not a mere covenant to procure a title in future, or that no authority to convey was vested in any one, thus rendering the power of giving the title agreed to be given impossible, and, of course, any title that could be given to the plaintiff insufficient, I think he had a right to rescind it. If the examination of the title was to be made after the acquisition of authority to convey, I think the objections specified in my opinion at special term were good grounds for rescinding the contract, as render- ' ing the title insufficient within its meaning. I think the judgment should be affirmed.

New trial granted.


author: Robertson, J.

text:
    Patrick Feeny, plaintiff, vs. The People's Fire Insurance Company, defendants.
    1. A complaint, in an action against an insurance company, is not demurrable for omitting to allege that the. defendants have express authority, by their charter, to make contracts of insurance.
    2. A corporation, as - an artificial person, is presumed to be capable of making every contract a natural person could make. When a statute contains- an exception, that corporations shall have only certain enumerated powers and those given by their charters, the defendants must bring themselves within the exception.
    (Before Robertson, J. at special term,
    October, 1862.)

      F. Bryan, for the plaintiff.

      E. P. Clark, for the defendant.
   Robertson, J.

The complaint is demurred to, for not stating facts sufficient to constitute a cause of action. The only-objection made is, that it does not allege that the defendants had express authority by their charter to make contracts of insurance. The Revised Statutes, (part 1, ch. 18, tit. 3,) provide for -the general powers, privileges and liabilities of corporations. The first section of the title containing such provisions (2 R. S. 439, 5th ed.) prescribes that every corporation shall have certaifi enumerated' powers, which the next section provides shall vest in every corporation, although- not specified in its charter. The succeeding section (§ 3) provides that no corporation shall possess any powers except such as shall be necessary to the exercise of the powers given in its charter, or so enumerated. I do not find in these provisions any rule established that a corporation shall not be presumed to have any powers unless given in their -charters, or by public laws. A corporation, being an artificial person, is presumed capable of making every contract a natural person could make. The statute containing an exception that corporations shall have only certain powers, enumerated and given by their charters, the defendants must bring themselves within the exception. They have not done so here. The demurrer, therefore, was not well taken.

The demurrer appears to me to be put in solely for delay ; as the defendants Anew their powers; and the judgment must be absolute for the plaintiff; damages to be. assessed in the Usual manner.


text:
    George W. Coster, plaintiff and appellant, vs. Mary Ann Isaacs, defendant and respondent.
    It was decided in this case that a married woman, carrying on a separate business, is liable for' contracts made therein; and in an action on such a contract, an averment that in making it she represented herself as making it for the uses of such business, is sufficient.
    Heard in general term, before Bosworth, Ch. J., and Moncrief and Robertson, JJ.,
    February 21,1863;
    decided April 25, 1863.
   See the demurrer and the appeal from the order thereon, with the opinion of the court at general term, reported in 16 Abbott’s Pr. 323.


author: Monell, J.

text:
    Nathaniel A. Cowdrey, plaintiff and appellant, vs. Jacob Carpenter, defendant and respondent.
    1. A stay of proceedings affected by taking an appeal from a judgment, with the requisite security to procure such stay, operates to suspend proceedings supplementary to execution on the judgment.
    2. But the proceedings should not be dismissed on account of the stay. The creditor’s lien acquired by them is not taken away, although its enforcement may be delayed. A dismissal by the judge should be reversed on appeal, as being, at least,'not an equitable exercise of discretion.
    3. It seems that the judge, before whom such proceedings are pending, has no power to dismiss them because of such stay.
    (Before Bosworth, Ch. J., and White and Monell, JJ.)
    Heard November 9, 1863;
    decided December 6, 1863.
    An order was obtained for the examination of a debtor to the defendant, who was a judgment debtor, supplementary to execution against the latter. Pending the proceedings, ■ and "before any examination had taken place, the defendant appealed from the judgment to the general term of this court. He perfected his appeal by the usual notice, and gave an undertaking pursuant to sections 334 and 335, of the Code. The sureties upon the undertaking justified, upon exception, and were approved by the judge.
    Upon presentation of these facts, the judge, before whom the supplementary proceedings were commenced, dismissed the supplementary order.
    The plaintiff appealed.

      F. N. Bangs, for the appellant.

      A. R. Dyett, for the respondent.
    I. The order was matter of discretion, and not appealable.
    II. The ordér was right, and a proper exercise of authority. It would be extremely unjust to restrain the defendant from collecting the demand in this action and to hold it subject to the plaintiff’s lien ; after the defendant had appealed from the judgment and given full security, which had justified and been approved, (Code, § 282.)
    III. The judge could not proceed on the order. (Code, §§ 322, 339.) If he could, he had a right to dismiss it, as the court may dismiss of suspend an execution upon security being filed, although it does not follow as matter of course.
   By the Court,

Monell, J.

The effect of the undertaking given upon the appeal from the judgment, was to stay all further proceedings upon the judgment appealed from. It, therefore, necessarily follows, I think, that all further proceedings upon the order supplemental to the execution issued and returned upon the judgment appealed from, were suspended. The examination of the judgment debtor could not proceed, nor could any action whatever be had or steps taken under the order. It is even doubtful if the judge could adjourn, and thus keep afloat the proceeding.

The question then arises, whether the judge had the power to, or could, in the exercise of his discretion, dismiss the supplemental order.

. These proceedings are not before the court, and never come before the court, in any of their original incidents. The order is granted by a “judge;” the examination is had before a “judge,” and all orders to carry into effect the results of the examination are made by a “judge,” and nothing connected with the proceeding, from first to last, comes before the court, except upon an appeal from some order made by the “judge.” We think if cannot be doubted, that the judge has the same general power over these proceedings, that the court would have, if the authority to make the order and conduct the examination had been conferred ‘ upon the court. He may adjourn the matter from time to time ; suspend the examination indefinitely; examine witnesses; admit or reject evidence, and prosecute parties and witnesses for disobedience of orders. His power, therefore, over the proceeding is absolute, and he is subject only to review by the court, on appeal from any of his orders.

But here, we think, the power of the judge ends, and he cannot ultimately dispose of the proceeding, to the prejudice of the debtor, by dismissing or annulling it, against his objection.

The object of the examination is to reach the equitable interests and things in action of the judgment debtor, which cannot be reached by execution upon the judgment. By the service of the order and the restraint of the debtor, the creditor obtains an equitable lien upon such interests and things in action, which he has the right to retain as a security, pending the suspension of' his power to proceed on his judgment. Having acquired such lien previous to the appeal, he cannot, I think, in the absence of some express provision of law, be deprived of it. The appeal suspends his right to obtain the benefit of his lien, but does not take it away. We are not aware of any case, where an appeal has been taken from the judgment, after execution and levy, where the court has set aside the execution and removed the levy. The levy is stayed and the sheriff cannot proceed to sell. Ñor could the lien of a judgment upon the real property of the judgment debtor, be removed by an appeal and security, until a recent special enactment, applicable to such a case. Before that law, the court were without power to retain the property, be the security never so ample.

The cases of Parsons v. Train, (2 Duer, 662,) and Spencer v. Rogers’ Locomotive Works, (13 Abb. 180,) I think, sustain this view.

If, however, the right to dismiss these proceedings rested in the discretion of the judge, (although we think it does not,) it would be an unsound exercise of such discretion' to deprive the creditor of a security obtained through his equitable lien upon the debtor’s property, by substituting for it the mere personal obligation of two sureties, who, although responsible now, may be utterly and hopelessly insolvent, before the determination of the appeal.

Until the legislature provides for the discharge of these proceedings, upon securing the judgment on appeal, as they have provided for relieving real property, it seems to us, independently of the want of power, that no other or greater effect should be given to the appeal from the judgment, than is given by the Code; namely, to stay all further proceedings on the judgment appealed from, and, necessarily, all further proceedings under the supplemental order.

We think the dismissal of the supplemental proceedings was erroneous, and the order appealed from should be reversed.

Order reversed.


text:
    Charles Peterson, plaintiff, vs. The Chemical Bank, defendant.
    1. Although an administrator with the will annexe^, of a testator domiciled in another state at the time of his death, cannot by virtue of his letters of administration granted in that state maintain an action in this state, upon any claim due to the estate of such testator, yet an assignee thereof from such administrator, for a valuable consideration, may do so.
    2. Such letters of administration, although not recognizable as giving the administrator a right tp sue in his own name in the courts of this state, are sufficient to transfer a valid title to any part of the estate to a third-party so as to enable him to sue in his own name as assignee.
    (Before Robertson and Garvin, JJ.)
    Heard December 10, 1863;
    decided December 18, 1863.
    Aabon Cohen, domiciled at New Haven, in the state of Connecticut, where he had resided for six years, died, at that place, in July, 1862, leaving assets there, and a last will and testament, which was admitted to probate by the probate court within and for the district of New Haven, and the executors named in the will having failed to accept and discharge the trust, a grant of administration, with the will annexed, was made to David J. Peck, Esq. city judge of New Haven, at the request of the next of kin, and upon his giving a bond, with approved sureties, in the sum of $200,000. At the time of his death, Mr. Cohen had on deposit, in the Chemical Bank, in the city of New York, the sum of $32,321.24, duly entered in his bank book, which came into the possession of the said administrator, upon the death of said Cohen. That sum is the balance struck by the bank itself. The administrator presented, duly authenticated, the record of the probate of the will, in Connecticut, and of the grant of administration to him, and requested payment, which the bank refused. He presented also, in writing, the request of all the next of kin, except the one in Savannah, iú which all the legatees residing at the North united, that payment should be made to him, and offered to give the bank a bond of indemnity, but the bank still declined. Subsequently, at the city of New Haven, he sold and assigned to the plaintiff, for cash to the full amount, the account, debt and demand against the bank for the money so deposited, and there delivered to him an assignment of the same, under seal, together with the bank book of the deceased, and also there drew his check upon the bank for the amount, in favor of the plaintiff. The plaintiff presented the record of probate, the grant of administration, and the' assignment, all duly authenticated, together with said check, to the bank, but payment was refused. He then presented his own check, payment of which was also refused. The bank book in his possession was also presented to the bank.
    The testator left no debts in this state. He resided in New Haven, but was accustomed to board, during a few months in winter, at a hotel in the city of New York. Before his return to New Haven, in the spring of 1862, he stated he would never come back to New York, or live in a hotel; that he would buy a house in New Haven and be in his own house. He accordingly bought a house and lot in New Haven, which was occupied by his servants; and he gave instructions for furnishing it and fitting it up for a summer and winter residence. He often declared his intention of remaining in New Haven.
    This action was commenced to recover of the bank the amount of the deposit, on the same day the demand and refusal were made. On the trial, before Justice Bosworth and a jury, in June, 1863, the counsel for the defendant moved to dismiss the complaint on the grounds that the assignee of a foreign administrator cannot commence a suit here, any more than the administrator. himself; that no consideration had been shown for the transfer. That as a foreign administrator cannot sue in our courts, neither could his assignee. And that the transfer was a mere evasion of our laws. Also on the ground that there was no jurisdiction shown in regard to the probate, in any respect. Motion denied. Exception taken. The counsel for the defendant claimed that the question of domicil should go to the jury. This was refused. The court thereupon ordered a verdict for the plaintiff for f33,496.48, to which order arid direction the defendant duly excepted. The jury rendered a verdict accordingly.
    The court thereupon ordered that the questions of law arising in the case, on the exceptions taken, be heard in the first instance at the general term, and that the judgment be, in the meantime, suspended.

      W. Bliss, for the plaintiff.

      S. W. & R. B. Roosevelt, for the defendant.
   By the Court,

Robertson, J.

There is nothing in the evidence in this case that points at any other places of residence of the decedent (Cohen) than the cities of Hew York or Hew Haven; and assuming that each place in turn became his residence according to the particular season of the year, the animus manendi at the latter city at the time of his death clearly appears, as well by his declarations as his acts to carry out such intention, the evidence of which is wholly uncontradicted. That was, therefore, properly withdrawn from the consideration of the jury, and the state of Connecticut must be assumed to have been the domicil of the decedent at the time of his death.

The state of Connecticut had, therefore, authority to declare in what manner the personal estate of the decedent should be distributed, and to whom; unless the local positive law of some other government, within whose territory the same was situated, intercepted the same and gave it a different direction. (Schults v. Pulver, 11 Wend. 361. S. C. 3 Paige, 182. Story’s Confl. of L. 403. 4 Burge’s Confl. of L. 156. Holmes v. Remsen, 4 John. Ch. 460. Sherwood v. Judd, 3 Brad. 267.)

The appointment of officers of the law in various countries where a decedent may have left assets, may be necessary to recover, prótect and collect them; but the disposition of such funds, when collected, depends upon the law of the domicil, and their distribution is to be made by officers appointed by that law, to whom such subsidiary collectors may be compelled to account. (Ordronaux v. Helie, 3 Sandf. Ch. 512.) The tribunals of the state where the decedent was domiciled may decree the disposition of assets in the hands of a subsidiary administrator in another state, (Suarez v. Mayor, &c. of New York, 2 Id. 173,) and such a decree is conclusive- upon the parties thereto, in an accounting by the latter administrator in his own state. (Churchill v. Prescott, 3 Brad. 233.) A judgment against the principal administrator is binding on the ancillary one. (Cummings v. Banks, 2 Barb. 602.) A different rule, however, prevails as to payment of debts of the deceased; as to which the distribution of his estate must be made equitably under authority of the local jurisdiction in which they are due. (Lawrence v. Elmendorf, 5 Barb. 73.)

Wherever the law of his domicil allows a decedent to dispose of his estate, the title to it must necessarily pass by the will. (Co. Lit. 209, a. Com. Dig. Chancery, 3, G. 1. Id. Administration B. 11, 12. Schultz v. Pulver, 11 Wend. 361.) An executor takes his title to the testator’s estate by virtue of the execution of his will, not by the probate of it. The law of this state only prohibits them from exercising any authority unless named in the letters testamentary, (2 R. S. 71, § 15,) but does not grant them any. An executor might commence an action before probate ; it was sufficient if it was granted before the trial, (Osgood v. Franklin, 2 John. 1,) and he might also alien the goods of the testator before probate. (Com. Dig. Administration B. 9. Valentine v. Jackson, 9 Wend. 303.) The administrator with the will of a decedent annexed is a mere substitute by the law for an executor or trustee dead, incapable of acting, or declining to act, or to supply his omission, appointed by the tribunals 'of his testator’s domicil to carry out such will; which right necessarily follows that of probate. His authority must then become co-extensive with that of the executor whose place he takes. This is recognized by the common law, (Dominick v. Michael, 4 Sandf. 410, 414; Edgerton Admrs. v. Conklin, 25 Wend. 233 ; Beekman v. Bonsor, 23 N. Y. Rep. 303,) and declared by statute, (2 R. S. 72, § 22.) His title equally relates back to the death of the. decedent. (Com. Dig. Administration B. 10. Valentino v. Jackson, ubi sup. Babcock v. Booth, 2 Hill, 181.),

The personal estate of a decedent, with the title to which his executor or administrator with the will annexed is vested, may consist of chattels, debts due to the- decedent, either not evidenced in writing, or choses in action evidenced in writing. A foreign executor or administrator need not produce his letters in order to bring an action for the recovery of chattels converted, (Valentine v. Jackson ; Babcock v. Booth, ubi sup.;) except to prove his title on the trial, if contested. The right of possession draws to it, in contemplation of law, the constructive possession invaded by the wrongdoer, (Smith v. Miller, 1 Term Rep. 480, per Ashurst, J.) and there is no need of stating the mode of acquiring title. So in actions upon choses in action, negotiable by delivering; the same rule prevails. (Smith v. Webb, 1 Barb. 230.) The recognition of the transfer in law of the right to collect the debts due a testator, to an executor or administrator with the will annexed, appointed by a tribunal of a testator’s domicil in other states in which an action may be brought, is to be found in the discharge of a debtor who pays such debts to him, (Parsons v. Lyman, 20 N. Y. Rep. 112 to 116,) in the liability of such executor or administrator for not. collecting debts due in other countries, (Schultz v. Pulver, 11 Wend. 363,) his authority to demand payment and give notice of non-payment of a note in another state than that wherein he was appointed, (Rand v. Hubbard, 4 Metc. 252,) and his power already referred to, to demand and receive from ancillary administrators the products of collections made by them.

At common law, choses in action not being assignable, no action could be maintained in the name of an assignee. Whenever, therefore, a foreign .executor or administrator sued in his own name, it would appear in the pleadings that he was not the original owner of the claim ; and the authority he proffered for his right to sue would be merely that of a foreign jurisdiction. Such an attempt would be apparently an invasion or usurpation of authority on the part of such jurisdiction in order to confer a right only to be derived from domestic tribunals. The court could not investigate preliminarily to bringing the action, the questions incident to such right and conferring such jurisdiction, such as domicil, and the like. A proferí of the probate or letters was requisite. The court was not to be presumed judicially acquainted with foreign laws, seals, forms and signatures, so as to determine by mere inspection the authenticity óf the evidence of authority. It was not, therefore, the ownership by such foreign executor or administrator of the debt or chose in action, but' his authority to sue in a domestic court to recover it, which was doubted. Such is the language of all the cases ; and most probably arose from a jealousy of the authority of foreign tribunals, as though they undertook to grant a power, to an assignee to sue, only conceded to officers appointed by domestic tribunals. The cases in this state merely followed the English authorities on this point. (3 P. William, 369. 8 Ves. 44.) That it rested only on such technical objection is evident not only from the recognition of the right of a debtor voluntarily to pay such foreign executor or administrator, when he could be compelled to do so, if caught within his jurisdiction, (Perkins v. Stone, 18 Conn. Rep. 270, 276,) but from sanctioning sales by them of land in this state under a power in a mortgage. (Averill v. Taylor, 5 How. Pr. 476.) Whether the same rule should prevail now when any assignee can sue in all cases in their own name, and a proferí is not necessary, need not now be considered.

The assignee, however, of a debt, or holder of a negotiable chose in action, deriving title through a foreign executor or administrator with the will annexed, merely makes the death of the original owner and the appointment of such legal representative links in his title. This question is fully determined in Harper v. Butler, (2 Peters’ U. S. 239,) where it was held that the purchaser of a chose in action from a foreign executor or administrator could recover in his own name in a domestic tribunal, from a debtor resident within its jurisdiction. A similar doctrine was sustained in Middlebrook v. The Merchants’ Bank, (24 How. Pr. 267; S. C. 14 Abb. 462.) Indeed, there does not seem any great distinction between the transfer by foreign tribunals of debts due to the deceased natural persons and those due to foreign insolvent corporations from debtors living within the state. And in the latter case a sale by receivers or trustees appointed by foreign tribunals has been held to convey the right to sue.. (Hoyt v. Thompson, 5 N. Y. Rep. 320.)

If the title of such foreign administrator could be at all embarrassed by any necessity of appointing a domestic aniliary officer to protect the interest of domestic creditors, it would be obviated by full proof in this case of the non-existence of any such claims.

As the ground which excludes a foreign administrator with the will annexed from suing is purely technical, as convincing proof of a sufficient consideration for the assignment is not as requisite as if it were an evasion of a substantial objection. The plaintiff appears to have given his check for the claim, which was deposited in bank by the administrator to the credit of the plaintiff as trqstee, he acting as the administrator’s attorney, It was mixed with other funds and drawn up'on. The bank recognized it as belonging to the administrator. The latter in his assignment covenants that the debt can be collected. The assignment being under seal, imports a consideration, and the plaintiff, if successful, may at least gain the difference of the rate of exchange between New York and New Haven and interest on his advance. The statement of the administrator is somewhat contradictory and confused, as to the condition of the funds he received ; but he positively denied any interest in the action. 1 do not therefore think there was room for a jury to decide that the assignment was a mere sham without any consideration.

The testator being domiciled in Connecticut and the tribunals of that state having jurisdiction to decree probate, we are not at liberty to inquire collaterally into the propriety of the proof or the regularity of the letters of administration. The whole of the proof is not apparently before us. The order admitting to probate recites that the testator was of New Haven. The probate court passed upon the sufficiency of the notices to the executors and next of kin in granting letters of administration. The certificates attached to the copies of proceedings in that court are not subject to the objections made on the trial. (Hatcher v. Rocheleau, 18 N. Y. Rep. 86.) And no formal error seems to have been committed in any respect.

The motion for a new trial on the exceptions must be denied, and the plaintiff allowed to enter up judgment for the verdict, with costs to be adjusted, including interest on the amount, and the costs of the argument of the exceptions.

Note. This judgment was affirmed on appeal by the Court of Appeals in 32 N. Y. Rep. 21.


text:
    Jane Bryant, plaintiff, vs. Mary H. Bryant and Edward P. Ogilvie, defendants.
    1. In actions for the wrongful taking of personal property, the tine of the taking is not essential, provided it he before the commencement of the action. When a day certain is averred in the complaint, it is sufficient for the defendant, in alleging title in himself, to state that he became the owner at or prior to such day. The precise day is not necessary to be stated; if it were, it is enough, if the answer allege that the defendant, at the time stated in the complaint, and for a long time prior, thereto, was the owner.
    2. Under such an answer, the defendant would he permitted to prove ownership at any tine before suit brought. And any erroneous averment could be corrected or disregarded.
    3. Administrators, representing the creditors of their intestate, who was insolvent at the time of his death, may disaffirm, treat as void and resist a transfer by him alleged to be fraudulent as against creditors. It also makes no difference whether they become actors in a proceeding to treat as void such transfer, and to recover the property transferred, or, having obtained possession of it, resist any attempt by the fraudulent vendee to recover either its possession or its value. In either case, the right of the persons representing the creditors is the £ame; and they may defeat a recovery, if they can establish, satisfactorily, the fraudulency of the transaction.
    4. Whether, as the Code of Procedure allows a defendant to set forth as many defenses as he may have, there is any express provision of law authorizing the court to strike out defenses merely because they are inconsistent'? Qutere. Per Monell, J.
    6. An action being brought against administrators, as individuals, does not prevent their claiming to have acted in their representative characters.
    7. It is not the duty of the court to reform or redraw a pleading on thé ground of redundancy. If obnoxious to that objection, the redundant matter should be so clearly pointed out by the party, in his notice of motion, that the court may put its finger upon it.
    (Before Monell, J. at special term,
    December, 1863.)
    Motion by the plaintiff that the defendants be required to make their answers more definite and certain, and strike, out parts as irrelevant, redundant, or inconsistent with other parts.
   Monell, J.

Whether this action is one, which, prior to the Code, would have been denominated an action of trover, or an action of trespass de bonis asportatis, is quite immaterial. The Code has abolished, not only the distinctions, but also the names of actions ; and there is now but one form of action,” which is denominated a u civil action.” (Code, § 69.) One general rule of pleading now applies to all actions. The pleader must state the facts constituting the- cause of action or defense. Fiction is no longer allowed in a pleading.

The complaint alleges that on the 19th of October, 1858, he plaintiff becamé the owner of the property alleged to have been converted by the defendants. The defendants in their separate answers, after denying the plaintiff’s ownership of the property, allege, that the defendant Ogilvie “ is the owner and possessor of said property, and has been such owner and possessor ever since a long time prior to the alleged acquirement of ownership and possession thereof by the plaintiff.”

The motion is, that the defendants be required to make their answers more definite and certain, as to the time when the defendant Ogilvie became the owner and possessor of the property.

The 160th section of the Code, provides that when the allegations in a pleading are so indefinite or uncertain that the precise nature of the charge or defense is not apparent, the court may require it to be made more definite and certain by amendment.

In actions for the Wrongful taking of personal property, the time, of taking is not essential, provided it be before the com-' mencement of the action, (Graham’s Pr. 2d ed. 211 ;) hence, it is sufficient to allege ownership in the plaintiff, and the taking by the defendant, át any time before suit brought. When a day certain is averred in the complaint, it is sufficient for the defendant, in alleging title in himself to state that he became such owner) at or prior to such day. The precise day is not necessary, and it is enough, I think, if the answer alleges that the defendant, at the time stated in the complaint, and for a long time prior thereto, was the owner. Under such an answer the defendant would be permitted to prove ownership at any time before suit brought. Can it be said) then, that the answer before me is so indefinite or udcertaih, that the precise nature of the defense is not apparent ? I think not. The defense is, ownership in the defendant “a long time prior” to the plaintiff’s alleged title. Under this issue, the defendants can' show title out of the plaintiff before the commencement of suit, by showing title in Ogilvie, at any tirrie prior thereto. The pleader has not been very felicitous in stating the' facts j but I think enough appears to render the nature of the defense apparent. '

The defendants, for a “third” defense, allege that the plaintiff claims the property under a bill of sale from one Samuel R. Bryant; that neither the bill of sale, nor the property was ever delivered to the plaintiff; that Bryant, at that time, was unable to pay his debts, and that he executed the bill of sale, upon an insufficient consideration, and with intent to defraud his creditors. The answer then' alleges, that Bryant died in July, 1861, intestate) and that the defendants, in October, 1862, were appointed to administer upon his estate; and that although the defendant Ogilvie was 'the owner of said property, he was disposed to sell the same for the benefit of the creditors of said Bryant, who died insolvent, and “ consequently the defendants took possession of, and aré disposing of said, property, in virtue of their right and authority as administrator and administratrix in the premises, and subject to the duties pertaining to such office.”

The motion, although presented in two aspects, is in effect to strike out this defense as irrelevant or as being inconsistent with the previous defense pleaded.

Standing by itself, is this third ” defense irrelevant ? The statute, (Laws 1858, ch. 314, § 1,) provides that any admin7 istrator of an insolvent estate, may, for the benefit of creditors, disaffirm, treat as void, and resist all acts done, transfers and agreements made, in fraud of the rights of any creditor, including themselves and others.

. Before this statute, it was held, (Babcock v. Booth, 2 Hill, 181,) that the fraudulent transfer of property made by an intestate, could be treated as absolutely void by the administrator, after his death, and a recovery could be had against the vendee in an action of trover. The statute, therefore, is but an enactment of the common law doctrine on the subject.

The bill of sale from Bryant to the plaintiff, inter partes, is valid. Its production and proof of execution and delivery, is all the plaintiff is required to show, to establish title in herself. But the defendants, representing the creditors of the insolvent and intestate vendor, may, as we have seen, disaffirm, treat as void and resist the alleged fraudulent transfer. And-it makes no difference whether the administrators became the actors in a proceeding to treat as void the transfer, and to recover the property, or having obtained possession of it, resist any attempt to recover either its possession or its value by the fraudulent vendee. In either case, the right of the persons representing the creditors is the same ; and they can successfully resist a recovery, if they can establish, satisfactorily, the . fraudulency of the transaction.

The third ” defense, therefore, standing by itself, is -not irrelevant.

In the view I have taken of the second objection to the “ third” defense, namely, that it is inconsistent with the previous defense pleaded, it is not necessary for me to determine whether clearly inconsistent defenses may or may not he set up by a defendant.

The Code, (§ 150,) allows a defendant to set forth as many defenses as he may have, and there is no provision of law. that authorizes the court to strike out defenses merely because they are inconsistent. The test of an inconsistent defense, seems to be its truth or falsity. (Stiles v. Comstock, 9 How. Pr. 48. Ostrom v. Bixby, Id. 57. Hollenbeck v. Clow, Id. 289.) If it is false, it may be stricken out as sham; if it is true, it cannot be stricken out as inconsistent.

The defendants, under their answers as a whole, maj, first, put the plaintiff to the proof of her title ; second, show title out of the. plaintiff, and in the defendant Ogilvie ; and third, title in themselves through Ogilvie. In showing title out of the plaintiff, they may attack her bill of sale ; and if successful, defeat her action. In a recent case, in this court, (Huntington v. Douglas, not reported,) the general term held, that a defendant to disprove conversion, might prove that at the time of the demand the property was not in his possession, and had been taken out of his possession by a third person claiming to own it; and this was under an answer, setting up title in a third person, and also title in the sheriff under an attachment, two apparently inconsistent defenses. So the defendants may show title in Ogilvie or in themselves. Either would be a defense to ’ the action. If they fail in this, they may still “treat as void” the bill of sale, and disaffirm the transfer. Their being sued as individuals does not prevent their claiming to have acted in their representative characters and capacity, which I think they have sufficiently done in their answers.

That the “third ” defense, detailing the facts at greater length than is necessary, renders it obnoxious to the objection of redundancy suggested in the moving papers, may be. But it is not the duty of the court to reform or redraw the pleading. The counsel should have pointed out in his notice of motion the redundant matter, that the court might have put its finger upon it.

The motion must be denied, with $10 costs of opposing.