author: MebwiN, J.: MaetiN, J.

text:
    THE VILLAGE OF STAMFORD, Appellant, v. JOHN H. FISHER, Respondent.

      Hawking and peddling — what constitutes peddling — there must he a concurrent exposure for sale and delivery — residence of vendor immaterial.

    Under the act (chap. 465 of the Laws of 1883) authorizing the trustees of specially incorporated villages “ to restrain, regulate or prevent hawking and peddling in the streets, except the peddling and sale of meats, fish, fruits and farm, produce,” the village of Stamford passed an ordinance forbidding such acts, and imposed a. penalty for a violation thereof. One Fisher, who had no store in the village, but had one in another town, went to residences in the village of Stamford, delivered groceries and like articles to customers who had ordered them about a month before, received pay for them and took orders for future deliveries.
    In an action brought by the village against him to recover the penalty imposed for a violation of its ordinance:

      Held, that he was not a “ peddler ” within the meaning of the act.
    That.as his sales were made under prior orders it was apparent that he was not carrying goods with him for the purpose of concurrent sale and delivery, which was essential to the character of a peddler.

      That tlie circumstance that he did not sell “in the streets” might properly bo considered.
    That the fact that he lived in another town was not made hv the statute material.
    (Martin, J., dissenting.)
    Appeal by the plaintiff, the Village of Stamford, from a judgof the County Court of Delaware county, entered in the clerk’s office of said county on the 20th day of July, 1891, reversing a judgment of a Justice’s Court in favor of plaintiff for ten dollars ■damages and costs, with notice of an intention to bring up for review upon such appeal the judgment of the County Court, and the decision and order of said court upon which it was rendered, and all the proceedings in said court.
    The plaintiff was a village duly incorporated by chapter 798 of the Laws of 1870.
    The action was brought to enforce the payment of a penalty alleged to have been incurred by the defendant by reason of his having engaged in peddling in the streets of the defendant.
    The judgment of the justice in favor of the plaintiff was reversed upon the ground that the defendant was not a hawker or peddler, or engaged in peddling in the public streets of the plaintiff.

      O. I. Andrus, for the appellant.

      Edwin D. Wagner, for the respondent.
   MebwiN, J.:

On the 8th of September, 1890, the board of trustees of the village of Stamford, the plaintiff above named, passed a resolution reading as follows:

Resolved, That from and after the passage of this resolution all ■persons are prohibited from hawking or peddling in the public ■streets within the corporate limits of the village of Stamford, or selling at auction in the streets of said village of any goods, wares ■or merchandise of any kind or description, excepting meats, fish, fruits and farm products, until such person or persons shall have first obtained a license therefor as provided in the next section.”

The section that followed, after stating the manner in which licenses should be obtained and the price to be paid therefor, proceeded as follows: “ Any such person failing or refusing to comply with this resolution, or to procure such licenses or pay such fee, shall forfeit the sum of ten dollars and costs of prosecution for each offense as a penalty therefor.”

These resolutions were passed under the authority given by chapter 465 of the Laws of 1883, which provided as follows :

“ The trustees of any village in this State, incorporated under special act of the legislature, and who have not the powers hereinafter conferred, shall, from and after the passage of this act, have' power and authority to restrain, regulate or prevent hawking and peddling in the streets; except the peddling and sale of meats, fish, fruits and farm produce, to regulate, restrain or prohibit sales by auction, and grant licenses to peddlers and auctioneers, and fix the amount to be paid therefor.” •

The claim of the plaintiff is, that on or about the 29th of October, 1890, the defendant was a peddler, and, as such, was engaged in peddling goods, other than the excepted articles, in the public streets of-the village of Stamford without a license, and that thereby he incurred the penalty of ten dollars. The plaintiff recovered before the justice. The County Court reversed the judgment upon the ground, as indicated by the opinion of the county judge, that the evidence before the justice did not-show that the defendant was a hawker or peddler, or engaged in peddling in the public streets of the village.

There is no particular dispute about the facts. The defendant resides in the village of Oneonta, which, we may assume, is a few miles distant from Stamford, and in a county adjoining Delaware county. On the 29th of October, 1890, the defendant was in the village of Stamford with a horse and wagon. Upon that occasion he stopped at several residences, and in each case took from his wagon one or more small packages of tea and coffee, and in one case á cup and saucer and plate, and in another case a bottle of lemon extract, agid delivered them in the house, receiving then the pay therefor. In every instance these deliveries were made in pursuance of orders taken by him about a month before. In some of the cases, when he made these deliveries, he solicited and took orders for like articles to be delivered about a month thereafter. It does not appear where the goods came from that were delivered, nor whether the defendant was owner. There is evidence that he had a place of business in Oneonta and did not have any in Stamford.

In substance, tbe defendant went from bouse to bouse and obtained orders for standard goods, to be delivered in tbe future; and thereafter, with a borse and wagon, and prepared packages, made deliveries in pursuance of tbe orders and received tlien tbe pay, and at the same time took or solicited like orders for subsequent delivery. Tbe claim of tbe defendant is, that this manner of doing business did not make tbe defendant a peddler. Reliance is placed on tbe circumstance that tbe defendant bad no goods except wliat bad been previously bargained for. It is, therefore, argued fhat there was no carrying to sell or exposing for sale, which are claimed to be essential characteristics of the occupation of a peddler.

Our statute does not define tbe term “peddler.” We may, however, to some extent, infer tbe legislative idea from tbe provisions of title 4, chapter 17, part 1 of tbe Revised Statutes, entitled, “ Of Hawkers and Peddlers.” By section 1 of that title, as amended by chapter 72 of the Laws of 1880, it is provided that no person shall be authorized to travel from place to place within this State for tbe purpose of carrying to sell, or exposing for sale, any goods, wares or merchandise of the growth, produce or manufacture of any foreign countiy other than family groceries and provisions, unless he shall have obtained a license as a hawker and peddler in the manner hereinafter directed.” Inferentially, it may be said that a person who travels from place to place for the purpose of carrying to sell, or exposing for sale, any goods, wares or merchandise, would be deemed a peddler. The ordinary meaning of the term is, one who travels about the country with merchandise for the purpose of selling it. (2 Bouv. Law Diet.)

In Rex v. McKnight (10 Barn. & C., 734) the defendant, as agent for a party living in a neighboring village, went about the country once a fortnight getting orders for tea, and on a subsequent occasion made deliveries. This was held not to be an exposing for sale, or carrying to sell, within the meaning of an act requiring any peddler or other trading person, going from town to town, or to other men’s houses, carrying to sell or exposing to sale, any goods, wares or merchandise, to take out a license. Emphasis was placed on the circumstance that the bargain for the goods and the delivery were on different occasions.

A similar view is taken in Commonwealth v. Ober (12 Cush., 498); Commonwealth v. Gardner (133 Pa. St., 289); Ballou v. The State (87 Ala., 145). In tlie latter case it is said tliat tlie distinctive feature of a peddler is that lie goes from house to house carrying his articles of merchandise with him, and concurrently sells and delivers. In Commonwealth v. Eichenberg (140 Pa. St., 160), it seems to have been held that a merchant going about the country and getting orders, which he subsequently fills, is not a peddler. In Graffty v. The City of Rushville (107 Ind., 502), it was held that it made no difference whether the goods were taken along for present delivery, or orders taken for future delivery.

It will be noticed that the statute of 1883 gives authority to regulate or prevent hawking and peddling in the streets,” while it gives authority to regulate or prohibit sales by auction without that limitation. This is a circumstance that may be properly considered in determining whether the defendant was within the prohibition. He did not, in fact, in the street, sell or offer to sell any goods. The case of Bradley v. The City of Rochester (26 N. Y. St. Rep., 823), cited by the counsel for plaintiff, involved a different question.

A penal statute is to be strictly construed. (Cameron v. Seaman, 69 N. Y., 401; The City of Buffalo v. Mulchady, 1 Sheldon, 431.) Many of the evils that are supposed in some of the cases to attach to the business of the peddler would not occur in business done after the manner of defendant. If a merchant living at Stamford, by himself or his agent, had been accustomed to do just what the defendant did, it would hardly be claimed that he was a peddler. Still the statute makes no distinction in the matter of residence.

The foregoing considerations lead to the conclusion that the defendant was not shown to be engaged in peddling in the streets of the village within the meaning of the statute. It follows that the judgment should be affirmed.

ITabdiN, P. J., concurred.

MaetiN, J.

(dissenting):

The evidence in this case reveals that the defendant’s method of transacting business in the village of Stamford was that he made business trips to that village about once a month for the purpose of selling at retail, and delivering to individuals, for use in their families, tea, coffee, crockery, groceries and other commodities in winch he dealt. On those occasions he delivered goods of the kind mentioned that had been ordered on his preceding trip, collected pay therefor, and solicited and took orders for other goods to be delivered on his succeeding trip. His goods were transported in a peddler’s cart, drawn by a horse driven by him from house to house in the village and left standing in the street, while he delivered goods from his cart and solicited trade from the occupants of such houses.

The only claitned or pretended distinction between the defendant’s method of transacting business and the method adopted by an ordinary peddler is that the defendant solicited trade when delivering goods that had been previously ordered, and subsequently delivered them and solicited other trade, the only difference being that the commodities in which he dealt were not delivered at the time the trade was solicited. That this difference in method changed the character of the defendant’s occupation from that of a peddler to some kind of an unnamed trader is the contention of the defendant, and seems to be the conclusion of a majority of this court. In that conclusion I cannot concur.

That it is competent for the legislature, in the exercise of the police powers of the State, to prohibit persons from hawking or peddling without a license or to delegate to the trustees of a village the power to pass an ordinance regulating hawking and peddling in the streets, was correctly held by the learned county judge.

The principal, and practically the only, question which arises on this appeal is, whether the trial court was justified, by the evidence in the case, in finding that the defendant was engaged in the business of hawking or peddling in the streets of the village of Stamford, without having obtained a license therefor. That he had obtained such license is not pretended. So that the question is, was he engaged in hawking and peddling in the streets ?

In determining the construction to be given to the words of a statute or ordinance, it is always proper to consider the purpose for which it was enacted, and the mischief it was intended to prevent or remedy. The manifest purpose of the ordinance or resolution adopted by the trustees of the plaintiff was to protect the local merchants of the village, who had fixed places of trade therein and were taxpayers, against traveling traders or peddlers, who had no such places of trade and wlio contributed nothing by way of taxes to the support of the village improvements, schools or other local interests, and also to protect its inhabitants from the arts, importunities and dishonest practices of that class of traders.

The theory upon which statutes and ordinances of this character are said to be founded is that a sound public policy demands that merchants who have fixed places of trade in a municipality, and are thus directly amenable to the legal and social restraints which must influence the business conduct of a merchant, depending for his patronage upon the inhabitants of the place where he resides, should be protected from, and not be brought in competition with, peddlers or transient traders who have no place of business in the village or city, have contributed nothing by way of taxation to the benefit of the place, and who go from house to house to ply their trade; and that public policy also requires that the inhabitants should be protected from the invasion of their homes by transient traders who are ofttimes unscrupulous, dishonest and dangerous persons. (Morrill v. The State, 38 Wis., 433; Commonwealth v. Gardner, 133 Penn. St., 289; Graffty v. The City of Rushville, 107 Ind., 502.)

Assuming that such was the purpose of the ordinance under consideration, it is quite obvious that the business carried on by the defendant was within its spirit and purpose, and, I think, within the letter of its provisions. Had the defendant delivered his goods when he solicited his trade, no doubt would exist that he was a hawker or peddler. Does the fact that he solicited trade at one time, and delivered liis goods at another, essentially change the character of his vocation ? As was said by Mitchell, J., in Graffty v. The City of Rushville (supra): “ If the itinerant trader may avoid an ordinance enacted to subserve the ends which we have supposed, by going from bouse to house, making sales, merely exhibiting samples of his wares, leaving another to follow to deliver the goods, or making the delivery by any other method, all the evils which were intended to be guarded against remain; while none of the protection contemplated is afforded.”

In that case it was held that going from house to house, selling or offering goods for sale at retail to individuals not dealers in such commodities, whether they be carried along for present delivery or the sales be made for future delivery, constituted tlie person so selling a liawker or peddler within the meaning of a statute to restrain hawking or peddling. I cannot think that his manner of doing business made the defendant any less a hawker or peddler than if lie had delivered his goods when he solicited his trade. It may be that he intended thereby to avoid the ordinance; but it does not seem to me that his effort should succeed.

The word “peddler” is defined by Webster as: “ One who peddles; a traveling trader; one who carries about small commodities on his back or in a cart or wagon and sells them.” By Worcester as: “A traveling merchant; one who travels about the country carrying commodities for sale.” By Johnson: “ One who travels the country vending small commodities.” By Bouvier: “Persons who travel about the country with merchandise for the purpose of selling it.”

“ The leading primary idea of a hawker and peddler is that of an itinerant or traveling trader who carries goods about in order to sell them, and who actually sells them to purchasers, in contradistinction to a trader who has goods for sale and sells them in a- fixed place of business.” (Commonwealth v. Ober, 12 Cush., 495.)

In the City of Chicago v. Bartee (100 Ill., 57) it is said : “ The term ‘ peddler ’ is defined by high authority to be one who deals in small or petty things, and this coincides with the popular meaning of the word, and we must conclude, as required by the canons of interpretation, that such is the sense in which it is employed in the charter. The term £ peddler ’ is used in the charter in its general and unrestricted sense, and fully embraces persons engaged in going through, the city from house to house and selling milk in small quantities to different persons ; nor can it matter that appellee had regular customers to whom he daily sold his milk.”

It seems'to me that the defendant’s business was that of a peddler within the definitions given. He was a traveling trader or merchant; was traveling through the country with merchandise for sale and for the purpose of selling it. That “was his business in Stamford, and he was engaged in no other there. The claim that, because he made an executory contract to sell, rendered the contract and delivery under it any the less a sale, I do not believe. Indeed, no sale was consummated or executed until the goods were delivered. If by taking orders for commodities to be subsequently delivered, instead of delivering them when ordered, the itinerant trader or peddler may evade such an ordinance when his trips are made monthly, he can as well evade it by the same method when his trips are weekly or daily. The question of the time which may intervene between his trips can in no way change the principle. If he would not be a peddler in one case, he would not in the other. Can it be that the man who peddles milk from house to house ceases to be a peddler when he is told by his customers the quantity or kind of milk or cream they will want the following day or on his next trip ? Or does the meat or fish peddler cease to be such when they are told by their customers on each trip what they desire or will require for the next day, or the next week, or the next month ? I think not. It cannot be that a transient trader, or itinerant merchant, who travels from house to house through a village for the purpose of selling his wares, having no fixed place of business in the municipality, is changed from a peddler to a person following some unnamed vocation, by the fact that he solicits his trade in advance and then furnishes his commodities to his customers, when he both sells and delivers them in the village. The defendant was not a commercial traveler, as a commercial traveler sells at wholesale to dealers to sell again. The defendant’s sales were to customers for their own use, and at retail.

In Village of Deposit v. Pitts (18 Hun, 475), where an ordinance was passed forbidding the sale of‘goods at public auction, except by residents, without a license, it was held that when defendant put up goods for sale at a certain price, and, if they were not taken at that price, offered them again at a lower one, and so on until they were taken or withdrawn, it was a sale at auction within the meaning of the ordinance. If such a sale is to be construed as a violation of an ordinance forbidding sales at auction, surely the defendant’s business should be construed as a violation of the ordinance against hawkers and peddlers in this case. If the defendant in that case could not evade the ordinance by the method adopted, the defendant in the case at bar cannot, by his method, evade the ordinance in question in this case.

I am thus led irresistibly to the conclusion that, under the evidence in this case, the jury was fully justified in finding that the defendant was engaged in the business of hawking or peddling in the village of Stamford.

It is, however, claimed by the defendant that if he was engaged in hawking or peddling, still his business was not carried on in the street, and hence did not come within the provisions of the ordinance under consideration. I do not think this claim can be upheld. He was engaged in selling and delivering goods from house to house, employed a horse and cart for their transportation, stopped in front of each house, leaving his horse and cart in the street, removed the goods from the cart and delivered them to his customers and solicited other trade. This, I think, constituted peddling in the public streets of the village. If not, then the milk peddler, the meat peddler, the fish peddler, the fruit peddler, the tin peddler and the peddler who transports his wares in trunks, or in a pack carried in his hand or on his back, would all be exempt from the operation of the ordinance, as they trade in the houses of those with whom they deal, and not in the streets. The construction contended for would nullify the ordinance and render it practically inoperative.

While penal statutes should be strictly construed, they should not be so strictly construed as to defeat the essential purposes of their enactment, when the intent is clear, but, on the contrary, their language should be understood in the common, customary and popular signification. (Merriam v. Langdon, 10 Conn., 469.)

“The paramount object, in construing penal as well as other statutes, is to ascertain the legislative intent; and the rule of strict construction is not violated by permitting the words to have their full meaning, or the more extensive of two meanings when best effectuating the intention. They are, indeed, frequently taken [not in their strict technical- sense, if that would defeat, but in a more popular sense, if that will uphold and carry out the intention of the legislature, but] in the widest sense, sometimes even in a sense more wide than etymologically belongs or is properly attached to them, in order to carry out effectually the legislative intent, or, to use Lord CoKe’s words, to suppress the mischief and advance the remedy. Nor is the rule of strict construction ever violated by permitting the words of a statute to have their full meaning, or by the application of common, sense to its terms, in order to avoid an absurdity. They are, therefore, to be held to embrace every case within the mischief, if also fairly within the-words read with such corrections-as the court may make to avoid insensibility.” (Endlicli on tlie Interpretation of Statutes, § 331.)

If we give the ordinance in question sucli a construction, accord to the words their full meaning, and hold that it embraces every case within the mischief intended to be suppressed, which is fairly within the words used, it becomes quite evident that the defendant’s business was within its inhibition, and that the jury was justified in finding that the defendant was a hawker or peddler in the streets of the plaintiff, and liable to the penalty imposed.

No case has been cited, and I have found none decided by the courts of this State, where the question involved in this case has been determined. It has, however, been decided by courts outside of the State, but their decisions are in direct conflict. I think those cases which hold a doctrine which would render the defendant liable are based upon better reasons than those that hold the opposite doctrine, and consequently should be followed.

The principle involved in this case is an important one, and its decision may be far-reaching in its consequences. If the doctrine of the opinion of my Brother Meewin is to prevail, many, if not most, of the ordinances of'the various cities and villages in the State may be easily evaded, their purpose utterly thwarted, and a source of large revenue to those municipalities entirely cut off.

These considerations lead me to dissent from his opinion and to the conclusion that the judgment of the County Court should be reversed, and the judgment of the Justice’s Court affirmed, with costs to the appellant.

Judgment of the Delaware County Court affirmed, with costs.


source: Caselaw Access Project

author: Mkrwin, J.:

license: Public Domain

text:
    ALFRED HIGGINS, Respondent, v. JACOB CROUSE, APPELLANT.

      Contracts — rescission■ — statute of limitations — time extended, until the discovery of the fraud —■ a party is hound to exercise reasonable diligence.

    In 1864 a corporation was organized to produce petroleum oil, of which Jacob Crouse was a director, who, in 1865, sold to Alfred Higgins some of his stock, at the same time making certain representations as to the property of the company, which were false. Higgins received a certificate which stated on its face that it was “liable to further calls.” The oil land was in Pennsylvania. Higgins never received either notice of calls or dividends. In 1866 he heard that the prospects were not good. In 1871 he had made up his mind that he had lost his money. In 1889 he investigated and discovered the fraud. At all times he had lived m the same city with Crouse, and in the same city in which the officers of the corporation resided.
    In an action in equity, brought by Higgins against Crouse to rescind the sale: Held, that the fact that the corporation was not a party would not prevent tlie action being maintained.
    That the transaction was wholly one between Higgins and Crouse, and, therefore, the corporation, so far as shown, had no interest therein.
    That the fact that tlie value of the stock was not-shown would not preclude the party defrauded from recovering his money and interest.
    That, upon the facts as established, Higgins was put upon inquiry certainly as early as 1871.
    That he was bound to use reasonable diligence.
    That a party will be deemed to have discovered facts constituting fraud from the time when, by the exercise of reasonable diligence, he ought to have discovered them.
    That, under the evidence, the action was not brought in time, under tlie provisions of the Code of Civil Procedure (§ 382, sub. 5), providing that, in an action other than for a sum of money, on the ground of a fraud cognizable in chancery, the cause of action is not deemed to have accrued until the plaintiff discovers the facts constituting the fraud, and that the six years’ statute of limitations was a bar thereto.
    Appeal by the defendant Jacob Crouse from a judgment of the Supreme Court, entered in the office of the clerk of the county of Onondaga on the 2d day of June, 1891, adjudging that a contract for the sale of certain stock between the parties be rescinded, that the defendant take it back and have it retransferred to himself, and that the plaintiff recover the sum of $3,215.50 as.damages,, with costs.

      This action was commenced July 3, 1889. In tlie complaint, as originally framed, the plaintiff sought to recover damages for fraud in the sale to him by defendant on the Ifcli of November, 1865, of 150 shares of the capital stock of the “ Shaffer Farm Oil Creek Company of Pennsylvania” at the price of $1,200, the par value being $1,500. It was alleged that at the time of the purchase plaintiff gave the defendant his note for $1,200, payable in three months, with interest, and that at its maturity on the 7 th of February, 1866, he paid it and received from the defendant the certificate of stock. It was also alleged that the fraud was not discovered till IVIay, 1889. Judgment was demanded for damages only, being the price paid with interest. The defendant answered, denying the fraud and setting up the statute of limitations as a bar. Afterwards, and upon leave of court, the complaint was amended. In this .the allegations of fraud are more fully set forth, and it was also alleged that the stock sold by defendant to plaintiff was not issued as full paid stock, but was issued as liable to further calls and assessments; that the certificate of stock which the defendant caused to be issued by the company to the plaintiff was issued as liable to further calls; that the company is still in existence and has not closed up its business, and the defendant is liable to future assessments; that before the commencement of the suit he tendered to defendant the certificate of stock, with a transfer thereof and sought rescission of the sale, which was refused. Judgment was demanded that the contract of sale from defendant to plaintiff be rescinded; that the defendant be directed to procure a retransfer to himself on the books of the company, to the end that plaintiff be relieved from all liability as a stockholder; that the defendant pdy back the price and interest, and be decreed to hold plaintiff harmless from all assessments which have been made since the sale or which may be made before the retransfer on the books of the company.
    Upon the trial it appeared that on the 20th of August, 1861, “The Shaffer Farm Oil Creek Company” was organized under the laws of this State, as a manufacturing and mining company, for the purpose of producing petroleum oil, with a capital stock of $160,000, divided into 16,000 shares, the manufacturing and mining operations to be carried on in the town of Cherry Tree, county of Venango, State of Pennsylvania, and its general business operations at the city of Syracuse, in this State. The defendant and nine others were the incorporators, and upon the completion of the organization the defendant was elected president, and A. W. Blye secretary and treasurer. Prior to this time the defendant and others were the owners of about twenty-nine acres of land in the town of Cherry Tree above named, and of a lease of three and a half acres of land in the immediate vicinity, with’ the right to dig wells for petroleum. In that neighborhood there were wells, one of which was a flowing well; others produced petroleum by pumping and others were non-producing. The land and lease above described were transferred to the corporation soon after its organization and defendant became the owner of one-quarter of the stock.
    From September, 1864, to April, 1865, tfle corporation at considerable expense sunk two wells upon its property, both of which turned out to be non-producing, and were abandoned with the knowledge and assent of defendant. The test of the last one was made in June, 1865, and soon thereafter the machinery, engine and tools employed by the corporation in the digging of wells were sold. This the defendant knew. Since’ then no wells have been dug by the corporation on its property.
    Upon conflicting evidence, the court found that in or about November, 1865, in a negotiation between plaintiff and defendant for the sale to plaintiff of 150 shares of stock, the defendant represented that “ we have got the Shaffer farm property in the oil country;” “we are putting down wells with every prospect of success; ” “ it bids fair to be a big thing; ” “ the stock is selling readily ’ at par.” The latter three of these statements the court found to be false to the knowledge of defendant; and made with intent to deceive, and that relying on these representations the plaintiff consummated the transaction, giving the defendant his note for $1,200, which he afterwards, and on the 7th of February, 1866, paid. At the time of its payment he received from the company, upon the order of the defendant, a certificate for 150 shares of stock, which bears date February 7, 1866, and on. its face purports to be “liable to further calls.” It is signed by defendant as president and by A. ~W. Blye as secretary. No dividends have been received by plaintiff and no calls or assessments have been made upon him. The court also found that the- plaintiff did not learn of the falsity of the representations and the facts constituting the fraud until about May 1, 1889; that he thereupon tendered back to defendant the certificate properly indorsed, and demanded that his loss be made good, which was refused; that the corporation is still in existence and plaintiff, under the certificate, is liable to future calls or assessments or other liabilities as stockholder; that the loss and damage to plaintiff was $1,200 and interest from November 4, 1865.
    As matter of law, the court found that plaintiff was entitled to relief, as less than six years had elapsed since the discovery by plaintiff of the facts constituting the fraud; that he was entitled to judgment rescinding the contract for the purchase by him of defendant of the stock and revesting the title in defendant, and •requiring “ the defendant to receive back the said certificate for 150 •shares of said capital stock, and to procure the same to he transferred to himself upon the hooks of said corporation, and also that he protect and save harmless the plaintiff from all future liability as a stockholder of said corporation,” and that defendant pay the plaintiff the sum of $1,200, with interest from November 4, 1865, amounting to $3,215.50. Judgment was ordered and entered accordingly.
    The court further found, as matter of fact, that the corporation was not insolvent, had not closed up its business, and that it contemplated renewed efforts and operations in boring for oil.
    The court, upon the request of the defendant, also found that “ the nature of the business of the corporation was such that their success or failure in obtaining oil was at all times contingent, depending upon the developments in the town where they were prosecuting their business and upon the course of business pursued by the corporation, and upon the contingency of their interest in successful experiments in any part of the town; and there was at all times a chance of fabulous wealth to the corporation and its stockholders in case of developments disclosing amounts of oil in sufficient quantities within the town in any territory to which they might acquire the right to experiment for their own benefit; ” but it refused to find that “ in this contingency the plaintiff was, as a stockholder, interested, and he had the benefit thereof at all times after February 7, 1866 ; and ordinary diligence wmuld have enabled him to discover at any time the precise nature of the abandonment; to have objected to it; to have made an effort to induce the corporation to return to further experiment on the Shaffer farm; to have tested that farm sufficiently to show whether oil existed thereon.” To this refusal.the defendant excepted.

      Waters, McLennan dé Waters, for the appellant.

      T. K. Fuller, for the respondent.
   Mkrwin, J.:

The defendant claims that the court erred in holding that this action was maintainable as an equity action. The court found that the transaction was entirely between defendant and plaintiff, and that it was not a purchase by plaintiff from the corporation, but from the defendant. The evidence sustains this view. That being so, an equitable action would lie. (Bosley v. N. M. Co. et al., 123 N. Y., 550.) It would have been appropriate for the plaintiff to have made the corporation a party. The relief granted would then have been more effectual. In its present form, the judgment is, in some respects, unusual, and no precedent is cited to sustain it. The case of Cohen v. Ellis (16 Abb. N. C., 320), referred to by plaintiff’s counsel, was afterwards reversed. (Cohen v. Ellis, 4 N. Y. St. Rep., 721.) Still the corporation, according to the facts found, had no interest in the matter. There wei’e no outstanding assessments. No defect of parties was set up in the answer. If in other respects the theory of plaintiff was correct, it is not apparent that the defendant will be injured by the form of the judgment.

But the defendant says there is no evidence of the present value of the stock, and, therefore, no proper basis for the finding of damages; Still, if a cause of action for rescission is made out, then, ordinarily, by way of damages, the party would be entitled to the return of his money, with interest.

The main question upon this appeal relates to the statute of limitations. The plaintiff has been awarded relief under that provision of the Code of Civil Procedure, section 382, subdivision 5, which provides that, in an action to procure a judgment, other than for a sum of money, on the ground of fraud, in a case which, on the 31st day of December, 1846, was cognizable by the Court of Chancery, the cause of action is not deemed to have accrued until the discovery by tbe plaintiff, or the person tinder whom he claims, of the facts constituting the fraud. In the Code of Procedure, which was in force at the time of this transaction, and for more than six years thereafter, section 91 enumerated the cases in which action must be brought within six years, and subdivision 6 thereof was as follows: “An action for relief on the ground of fraud, in cases which heretofore were solely cognizable by the Court of Chancery ; the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.”

The defendant claims that the rule upon this subject is that the statute begins to'run, not from the time when knowledge of the fraud was obtained, but from the time when, under the circumstances, knowledge ought, by reasonable diligence, to have been obtained. And reference is made to 2 Story’s Ecpiity ([13th ed.], § 1521, note a), where the rule is so stated. The same is said to be the rule in 13 American and English Encyclopaedia of Law, 730, and many cases are there cited.

In Mayne v. Griswold (3 Sandf., 464), it was held, under asimilar provision of the Revised Statutes (2 R. S. [2d ed.], 229, § 51), that a bill for relief on the ground of fraud, which shows that the fraud was committed more than six years before the filing of the bill, must not only state, by way of anticipation of the defense of the statute of limitations, that the fraud was discovered within six years, but must also show that it could not with reasonable diligence have been discovered sooner. I find no other case in this State directly on the subject. A similar view, however, has been taken in other States, having a similar statutory provision. (Penobscot Railroad v. Mayo, 67 Me., 470; Fritschler v. Koehler, 83 Ky., 78; Boyd v. Blankman, 29 Cal., 20; Parker v. Kuhn, 21 Neb., 413.) The case of District Township of Boomer v. French (40 Iowa, 601) and Commissioners of Mower County v. Smith (22 Minn., 97] are in the same direction. The statutes on this subject are collated in the appendix to Angelí on Limitations.

The reason of the rule, as indicated in some of the cases, seems to be that as the time of discovery is generally entirely within the knowledge of the plaintiff or party in interest, and as, therefore, it is difficult or impossible for a defendant to negative or rebut the positive allegation on tlae subject, the discovery will be deemed to have been made, or to exist, when the plaintiff or party in interest, in the exercise of reasonable diligence, ought to have found out the facts constituting the fraud.

In Angelí on Limitations ([6th ed.], § 187) it is said: The presumption is that if the party affected by any fraudulent transaction or management might with ordinary care and attention have seasonably detected it, he seasonably had actual knowledge of it.” In Kirby v. Lake Shore, etc., Railroad (120 U. S., 136) it is said: “ It is an established rule of equity, as administered in the courts of the United States, that where relief is asked on the ground of actual fraud, especially if such fraud has been concealed, time will not run in favor of the defendant until the discovery of the fraud, or until with reasonable diligence it might have been discovered.”

The cases cited by the counsel for plaintiff to the point that the party defrauded owes no duty of diligence in discovering the fraud to the party who defrauded him, do not relate to the statute of limitations. On the other hand, it is said, in Upton v. Tribilcock (91 U. S., 55), that parties who are shareholders, and claim to be relieved on the ground of fraud, must act with the utmost diligence and promptitude.

Following, as I think we should, the case of Mayne v. Griswold, and the current of authorities in that line, the question here is whether the evidence authorizes the conclusion that the plaintiff, in the exercise of reasonable diligence, could not have discovered the facts constituting the fraud prior to six years before the commencement of this action.

The main representation, and the one which is evidently the gist of the action, was, “We are putting down wells with every prospect of success.” The plaintiff testified: “ I relied upon his statement that it was a big thing, and they were putting down wells and developing the property, and it was going to be a big thing.” The statement that it was a big thing, or. going to be a big thing, was clearly a matter of opinion, and the plaintiff gave no evidence that the stock then was not readily selling at par. The fact as to wells was that, in or before the June previous, the two wells which they had dug had been tested and found non-producing and had been abandoned, and in or before July the tools and machinery, which they had purchased for the purpose of digging wells, had been sold and removed from the property. In other words, they had, in November, 1865, stopped digging wells, abandoned those they had dug, and disposed of their tools and machinery. These were the facts upon which plaintiff based his claim, and the discovery of which led to the action.

The plaintiff testifies that when, in February, 1866, he paid his note to defendant and received his scrip, he said to defendant that he had heard some rumors that their prospects were not very good for getting oil and he had no money to lose, and that defendant told him there was no truth in any such rumors and reassured him that everything was just as he stated when the note was given; that he made no inquiry of defendant as to what property the company had, and made no inquiries of Blye, the secretary, when he got his certificate of stock; that about a year afterward he asked defendant what the prospects were, and defendant replied that everything ivas all right; that he made similar inquiries of defendant several times prior to 1871, and then made up his mind that he had lost his money and said nothing more about it. From 1871 to May, 1889, the matter rested. The plaintiff .testifies that, at the latter date, he wrote the defendant to take back his stock and make him good; that he had bean unfortunate in speculations and his health was poor and he really wanted the money; that this was before he discovered the fraud; that the defendant came to see him, refused to pay him back, claimed it was a business transaction and was all right and fair; that the next day, or within a few days, he discovered, the fraud through Mr. Blye, the secretary, he giving him the information that the grounds were abandoned months before the negotiations between plaintiff and defendant in November, 1865, and referring him to Mr. Potter for the particulars. Potter was the foreman in charge of the digging of the wells. Plaintiff saw him a few days afterwards and learned further particulars.

The plaintiff, during all this time, was a business man in Syracuse, and the officers and corporators of the company were also there. The secretary and treasurer, Mr. Blye, and the foreman, Potter, were there. He, at any time, apparently could, by inquiry, have readily ascertained when the company stopped work. He, however, made no inquiries on the subject until Majr, 1889. He says that he was satisfied in 1871 tliat lie had lost bis money. He must have known tliat tbe company bad, prior to that time, stopped. No dividends or assessments were made. Having made up bis mind, in 1871, tliat tbe company was a failure, be was then put upon inquiry as to whether bis purchase was genuine. Nothing was then put in bis way. His delay from that time to 1889 is not consistent with reasonable or ordinary diligence. Tbe case furnishes no sufficient or any explanation.

As tbe case stands before us, we think tbe evidence does not authorize tbe conclusion that tbe plaintiff, in tbe exercise of reasonable diligence, could not have found out tbe facts constituting tbe fraud, prior to six years before tbe commencement of this action. This calls for a reversal of the judgment.

Hardin, P. J., and Martin, J., concurred.

Judgment reversed and a new trial ordered, costs .to abide the event.


author: Merwin, J. : Hardin, P. J.:

text:
    WILLIAM C. CUDD, Respondent, v. RHYS GWESYN JONES, Appellant.

      Statute of limitations — new promise — what is a sufficient “ acknowledgment."

    After the statute of limitations had run against a promissory'hote one of 'the makers wrote to the payee a letter, in which he said he was sorry he was unable to pay the note; that he never had any benefit from the money; that he had been paying on similar notes; that he did not admit any liability except that his name was on the note; that he believed the money was loaned on his credit; that it was difficult for him to pay; that he would be glad to meet the payee and do all he could for the sake of peace; that many had accepted upon their notes apart of the amount thereof, and he concluded by asking what the payee would take for the note.

      Held, that, within section Ofi-I of the Code of Civil Procedure, the letter was sufficient evidence of an “acknowledgment” to justify the court in submitting the case to the jury.

      Semble, that it was a recognition of the debt sufficient to take the case out of the statute.
    That while there was no. expression of a willingness to pay, there was nothing inconsistent with an intention to do so.
    That a statement of an inability to pay did not destroy the effect of the letter as an acknowledgment.

      Appeal by the defendant Bliys Gwesyn Jones from a judgment of the Supreme Court, entered in the office of tlie clerk of the county of Oneida on the» 15th day of January, 1891, upon a verdict for the plaintiff for $795.19, after a trial at the Oneida Circuit before the court and a jury, with-notice of an intention to bring up for review upon such appeal an order, entered in said clerk’s office on the 15th day of January, 1891, denying a motion for a new trial.
    The action is upon a note of which the following is a copy :
    “$500. _ Utica, N. Y., Jan. 1st, 1874.
    “ One day after date, we promise to pay to the order of Ann Owens, five hundred dollars, with use, at Welsh Land and Emigration of America office, 104 Genesee St., Utica, N. Y.
    “BUYS GWESYN JONES, Pres.

    “Take received.” “DA VID T. DAVIS, Treas.

    In defense the defendant set up the statute of limitations, and that the note was given and received as the corporate note of a corporation called “The Welsh Land and Emigration Society of America,” of which the defendant was the president and David T. Davis the treasurer.
    To avoid the effect of the statute the plaintiff relied on a letter written by defendant to the assignor of plaintiff before she transferred the note. The letter is as follows:
    “ Utica, N. Y., December 8th, 1887.
    “ Mrs. Ann Thomas :
    “ Dear Friend. — • I am very sorry that I am not able to comply with your wish to pay the note due to you from David T. Davies. I never saw the money, and never had any benefit from them. Besides your money, there are other notes of aboiit ten thousand dollars due, without any money to meet them. It was necessary for me to borrow near one thousand dollars to get things to a level, after coming back from California. I have been paying them in five or six pounds a month. I shall finish them by next April if I will have health. Though I do not confess that I am under any obligations for the money you loaned David T. Davies, further than that my name is on the note, which is also true of many other notes that persons have in America. They know that I have nothing to pay with, and for that they do not ask. I believe that the Bev. Mr. Owen would not have loaned the money, only that it was for me to sign the note, and I would not have done so, only I believed Mr. Davies was rich and honest. Both of ms have been unlucky in meeting him. No doubt that it is difficult for you to lose the money, and it is difficult for me to pay them. I would be very glad to meet with you and do all I can for the sake of peace. Many have received part of the debt from me. How much will you take for the notes, I send you five pounds a month from the beginning-of next May ? Will you take forty pounds ? The whole I will pay will be a loss to me, you must lose some, so we will be friends again.
    “ R. G-. JONES.”
    At the close of the plaintiff’s evidence the defendant moved for a nonsuit upon the ground that there was nothing in the letters submitted in the nature of a promise to pay the note in suit. This motion was denied and defendant excepted. At the close of the evidence the defendant asked the court to direct a verdict for the defendant on the ground that there was no evidence in the case to take the note out of the statute of limitations. The court denied the motion and the defendant excepted.

      A. M. Bea/rddey and John I). Griffith, for the appellant.

      Jones <& Townsend, for the respondent.
   Merwin, J. :

The questions litigated upon the trial of this case were whether the defendant was personally liable on the note and whether the defendant had made any acknowledgment or promise sufficient to-avoid the bar of the statute of limitations. No point is now made upon the first question. The sufficiency of the evidence on the second question is attacked as well as some rulings on the admission of evidence.

In the course of the trial the plaintiff produced and offered in evidence five letters, written by the defendant to plaintiff’s assignor, dated, respectively, June 24, 1878, July 16, 1879, September 29, 1880, October 1, 1883, and December 8,1887. These were objected to as immaterial and incompetent. The objection was overruled and the letters received in evidence. The defendant now claims it was error to receive the first four letters, as those were written more tliau six years before the commencement of the suit, and, therefore, inadequate to relieve the bar of the statute. Assume they had no bearing on that question, they were material on the other question as to whether the note was given and received without design to make the defendant personally liable. It was, therefore, not improper to receive them.

The defendant also claims that it was error to receive in evidence the letter of December 8, 1887, on the ground that it was an offer to compromise. This ground of objection was not taken at the trial. It was in the nature of a privilege and should have been raised there. (See Stevens v. Brennan, 79 N. Y., 255; Hoyt v. Hoyt, 112 id., 495, 514.) The objection as made was that the letter was immaterial and incompetent. Upon this being overruled no exception seems to have been taken. The defendant is, therefore, not in a position to claim error in the reception of the evidence. The effect of the letter, assuming it to be properly in evidence, is, however, another question and may be properly considered in determining whether the court erred in refusing to direct a verdict for the defendant.

The theory of the defendant is that the letter does not “acknowledge an indebtedness by the defendant on a note from which a willingness or intention to pay can be inferred.” The case of Creuse v. Defiganiere (10 Bos. 122), is cited. In that case it was held that a letter written by a debtor, in effect acknowledging the existence of an indebtedness and proposing a compromise, but distinctly indicating an unwillingness to pay and a determination to pay nothing if the offered compromise be rejected, is not such a recognition of the debt as will take it out of the statute. The cases of Manchester v. Braedner (107 N. Y., 346) and McNamee v. Tenny (41 Barb., 495) are also cited. In the Manchester case the general doctrine is said to be that the writing, in order to constitute an acknowledgment, must recognize an existing debt, and that it should contain nothing inconsistent with an intention on the part of the debtor to pay it. In the McNamee case it was held that the acknowledgment need not express an intention to pay the debt. In that case the defendant, evidently referring to a design to take the benefit of the two-third act, wrote the plaintiff as follows: “ I have been working at my matters since you was here, and find that I can get two-thirds of my indebtedness off, but dreading to take the act for the name of .it, I have come to the conclusion that I would borrow of my friends, providing that I can make a satisfactory arrangement. I propose to pay all my creditors twenty per cent cash on the original notes or bills; that is the best I can do and that is more than I can do without help.” He soon after wrote again that he made the same offer to all alike, and that if he could not make it a general thing he should try the other way; that he could raise enough to pay the twenty per cent and make a final settlement, and stated the amount which at that rate would be coming to plaintiff. These letters were objected to on the ground, among others, that they were offers of compromise, but the objection was overruled and exception taken. A verdict was ordered for the plaintiff, thereby, in effect, holding that the letters constituted a sufficient acknowledgment, and this was sustained at General Term. This case is somewhat adverse to the contention of the appellant.

There are some early cases indicating that the acknowledgment should express a willingness to pay. A different conclusion is reached by Davies, J., in Henry v. Root (33 N. Y., 534), upon a review of the cases upon that subject. In Kincaid v. Archibald (73 N. Y., 193) it is said that if the writing contains either a promise or acknowledgment, it is sufficient.

The latest enunciation that we have been referred to of the rule on this subject is in the Manchester case above referred to. Upon that basis, the question here is, whether, in the letter of December 8, 1887, there is anything inconsistent .with an inténtion on the part of defendant to pay the debt. The defendant, in that letter, in substance, admits his liability on the note, and that it is unpaid. There was, therefore, an existing obligation. He says he had none of the money himself, and in that sense, as it may be argued, was not under any obligation for the money. Still he says, in substance, that the money was loaned upon his credit. He says it is difficult for him to pay; he does not say he will not pay, and does not intimate that he has any defense. On the contrary, he says at the start that he is sorry that he is not able to comply with the wish of the holder of the note for payment. He, in conclusion, asks how much she will take for the notes, and makes an offer. Did this offer stand alone, there would be force in the suggestion that it would not be a sufficient acknowledgment. The letter is, however, to be taken as a whole. There was no controversy between the parties or any dispute as to the amount of the debt. The previous correspondence showed this. In the letter of September 29, 1880, he had said he would pay her every cent.

It has been held that a statemént of inability to pay anything does not destroy the effect of an acknowledgment otherwise sufficient. (De Forest v. Hunt, 8 Conn,, 179; Chidsey v. Powell, 91 Mo., 622.) It might be otherwise if there was a refusal to pay.

In the present case we think the letter of December 8, 1887, furnished sufficient evidence of an acknowledgment by defendant of an existing debt against him upon the note, and that it should not be said, as matter of law, that the letter contained anything inconsistent with an intention on the part of the defendant to pay it, or that, in effect, nullified the acknowledgment there made. The relations of the parties and the surrounding circumstances were, to some extent, shown, and if the intention of defendant was material, there was evidence sufficient to make it a question of fact to be j>assed upon as such. It follows that the motions of the defendant for a nonsuit and for a verdict in his favor were properly denied. No point is made as to the manner of the submission of the case to the jury-

The judgment should be affirmed.

Martin, J., concurred.

Hardin, P. J.:

Section 395 of the Code of Civil Procedure provides that “ an acknowledgment” contained in a writing is the only competent evidence to take a case out of the statute of limitations. “An acknowledgment ” of the debt by the defendant is made manifest by his letter: “ It was a distinct recognition of the existence of the debt.” (Anderson v. Sibley, 28 Hun, 18.) It was said in Allen v. Trisdorfer (4 N. Y. Supp., 896) that upon such “ an acknowledgment the plaintiff was entitled to recover.”

I concur in the opinion of Merwin, J., and favor an affirmance.

Judgment and order affirmed, with costs.


author: Merwin, J.:

text:
    MARY E. GILBERT, Appellant, v. PER LEE E. SHAW and Others, Respondents.

      Mortgage — condition subsequent — penaity —part performance — deferred payment — when equity will 'relieve from a forfeiture.

    Mary E. Gilbert paid and transferred certain moneys and property to one Sliaw. who, upon his part, agreed to give her a room and board for life, and to pay her annually three per cent interest upon the agreed value of the transferred property At the time of this arrangement there was a mortgage on Shaw’s farm, and to secure the performance of the foregoing agreement Shaw gave Gilbert his bond and a second mortgage upon the farm, in which he further agreed to make promptly the payments required by the prior bond and mortgage, and in default of his doing so it was provided that the whole consideration and interest should become due and be payable to Gilbert.
    Shaw made to Gilbert all the required payments, and performed all his covenants,
    ■ except that, by consent of the first mortgagee, Shaw, instead of paying to him the principal and interest due him as they became due, expended those sums during several years in permanent improvements on the farm, of which fact Gilbert had knowledge. An action of foreclosure was thereafter begun by Gilbert against Shaw, who, prior to its commencement, had, apart from the improvements, paid the first mortgagee all the principal and interest due him. The ground of action claimed by Gilbert to exist was that because Shaw had deferred the payments due the first mortgagee, Gilbert became, by the terms of her bond and mortgage, entitled to foreclose it for its full consideration.

      Held, that Shaw’s covenant to pay the first mortgagee “without default or delay, promptly,” was a condition subsequent and in the nature of a penalty.
    That part performance during' several years by Shaw of his agreement with Gilbert gave Shaw equitable rights.
    That as the transaction was not a loan, the strict rules applicable to the payment of money on the day it became due did not apply.
    That as Gilbert had received all that she was entitled to, and had received it with knowledge of the facts, or the means of knowledge; as nothing was due the first mortgagee, and as the value of the security had been increased by the improvements, it was proper for the court to relieve Shaw from the forfeiture and to declare that a foreclosure would be inequitable.
    Appeal by the plaintiff Mary E. Gilbert from a judgment of the Supreme Court, entered in the office of the clerk of the county of Chenango on the 2d day of April, 1891, after a trial by the court at the Chenango Special Term, at which the complaint was dismissed and the defendant was relieved from a forfeiture which arose from his default in failing to pay certain sums upon a mortgage held by the defendant Fowlston.

      The action was brought to foreclose a mortgage given by the defendants, Per Lee E. Shaw and Marram M., his wife, to the plaintiff, dated July 1, 1884. At that date, in consideration of the sum of $2,821 received by the defendant Per Lee E. Shaw from the plaintiff, which sum was made up of twenty-one shares of the capital stock of the Utica, Chenango and Susquehanna Yalley Railroad Company, of the value of $2,300, in fact, at the time, and as agreed upon by and between the plaintiff and said Shaw, and $42 L in cash, the said Per Lee E. Shaw executed and delivered to plaintiff a bond dated July 1, 1884, in the penal sum of $5,642, and having the following condition :
    “ The condition of this obligation is such that, if the said Pei-Lee E. Shaw, or his heirs, shall at his house, in the town of Norwich, aforesaid, furnish and provide the said Mary E. Gilbert with . a room, board, fuel and lights during the term of her natural life, she to provide furniture for the said room, and the said Per Lee E. Shaw, or his heirs, shall pay to the said Mary E. Gilbert annually on the first day of July in each year interest on the sum of twenty-eight hundred and twenty-one dollars at three per cent per annum, during the term of her natural life, and shall make all the payments required to be made on a certain bond and mortgage, given by the said Per Lee E. Shaw to Delos Eowlston, on or about the 10th day of January, 1884, to secure $5,000.00 and interest, both of interest and principal, without default or delay, promptly, according to the terms of the said bond and mortgage, then this obligation to be void, otherwise to remain in full force and virtue-; and it is further provided that in case of default in any of the foregoing conditions, including the provisions in relation to payments on the Eowlston bond and mortgage, then, and in that case, there shall immediately become due to the said Mary E. Gilbert hereon the said sum of $2,821.00, together with interest thereon from the date of such default at six per cent per annum, and all interest accruing before such default.
    “ In case no default occurs in the lifetime of said Mary E. Gilbert, then the said principal sum is not to be paid.
    “PER LEE E. SIIAW. [l. s.] ”
    As collateral security for the payment of the said indebtedness -and the performance of all the conditions of the bond, Shaw and wife, upon the same day, executed and delivered to the plaintiff the mortgage in suit, being upon certain premises in the town of Norwich. It was duly recorded July 5,1885. No payments have been made on the bond and mortgage except the interest on the sum of $2,821, at three per cent per annum, paid to July 1, 1890.
    The bond and mortgage to Fowlston, referred to in the condition' above set out, were dated January 10,1884. The mortgage covered the same property as the mortgage to the plaintiff, and was recorded January 10, 1884, and its condition, as well as that of the accompanying bond, was for the payment of the sum of. “ five thousand dollars ten years from date, the first day of April then next, with interest annually at five per cent per annum from and after the said first day of April; $300 of said principal sum to be paid on the first day of April, 1887, and $300 thereof on the first day of April in each and every year thereafter.”
    On the days when the interest and payments of principal became ■ due on the bond and mortgage to Fowlston for four years, Shaw did not pay the same, but such non-payment was with the consent and acquiescence of Fowlston, who then held the bond and mortgage, and with the understanding and agreement that, instead of paying such principal and interest to Fowlston at the times when due, he,. Shaw, would put improvements upon the farm described in the mortgage in building a hop-house and procuring hop-poles or otherwise; and that Shaw did build a hop-house upon the farm, and did put hop-poles upon the farm, which became a part of the real estate, and were of the value of $1,200.
    Long before/ the commencement of this action, and before the giving of any notice by the plaintiff in any way that she intended to foreclose, or should foreclose her mortgage, Shaw paid to Fowlston all payments of principal that had become due, and all accrued interest that had become due, and at the time this action was brought, no principal or interest upon the Fowlston mortgage was due. The balance of the principal unpaid was $3,800. The payments were made in cash and were not the improvements referred to. The interest going to the plaintiff on her bond and mortgage has been promptly paid. On the 5th of September, 1890, she demanded of Shaw payment of the principal sum of $2,821, which was refused, and this action was commenced on the 15th of September, 1890.

      The foregoing facts were admitted by the pleadings or conceded at the trial. The court also found that the plaintiff, with full knowledge of the facts, accepted the payments to her of interest; that the plaintiff’s security was not impaired by the failure to make payments to Fowlson as they became due; that the intent and purpose of the provision in the bond and mortgage to plaintiff — that the sum of $2,821 should become- due upon any default — was to prevent injury to. plaintiff’s security from the enforcement of the Fowlston mortgage, and to secure to plaintiff the prompt payment of her interest, and was intended as penalty or forfeiture.
    As conclusions of law it was held:
    “ 1 That this court has the power in the exercise of its equitable jurisdiction to relieve the defendant Per Lee E. Shaw, from the default claimed to have occurred by the non-payment of the principal and interest due to Fowlston on the days when due by the terms of the mortgage.
    “ 2. That the plaintiff not having suffered any damage, and her security not having been impaired, but, in fact, increased, and prompt payment having been made at all times of the interest due to her, and she having accepted and received such interest; and all payments due to Fowlston, both of principal and interest, having been made long before the commencement of this action and before any notice that the plaintiff claimed a default, or claimed the right to foreclose her mortgage, equity demands that the defendant be relieved from such default.
    “ 3. That the acceptance of the interest due to the plaintiff by her on the days when due, operated as a waiver of her right to claim the forfeiture of the $2,821.00.
    “4. The defendants-are entitled to a judgment relieving them from the aforesaid default, and declaring that the principal sum of $2,821.00, secured by the plaintiff’s mortgage is not due or payable.

      “5. The defendants are entitled to a judgment dismissing the complaint of the plaintiff.
    “ 6. That under the circumstances of this case it is inequitable to permit an enforcement of the penalty or forfeiture by permitting a foreclosure of the plaintiff’s mortgage for $2,821, and a judgment of foreclosure is, therefore, refused.”

      Stephen Holden, for the appellant.

      George W. Hay, for the respondents.
   Merwin, J.:

It is not claimed that any default has been made, except in failing to make the payments on the Fowlston mortgage upon the days they became due. We must, therefore, assume that, in other respects, the defendant Shaw has fully performed the contract upon his part. The theory of the plaintiff is that the failure of Shaw to make any payment to Fowlston, at the exact time it became due, gave immediately to her the right to recover back the full amount of the consideration that she parted with upon receiving the bond and mortgage, and this right was not taken away or affected by any subsequent performance by Shaw.

The transaction between the plaintiff and defendant Shaw was, in substance, that plaintiff paid and transferred to Shaw certain money and property of an agreed value, and Shaw in consideration thereof agreed to furnish plaintiff with a room, board, fuel and lights during her natural life, and also pay her annually, during her natural life, interest at three per cent per annum upon the amount of the consideration at the agreed value. To secure those things to the plaintiff the defendant gave' to plaintiff a mortgage upon his farm, which was at the time incumbered by a prior mortgage. In order to protect plaintiff’s security against being interfered with by this mortgage, the defendant agreed to make promptly the payments on the prior mortgage as they became due. Then came the provision that in case of default in the performance by defendant of any of these agreements, there should immediately become due to the plaintiff the full consideration, with interest from date of the default. According to the wording of the bond it made no difference whether the default was great or small, or whether it was the first year of the contract or the last year of the plaintiff’s life. If he fully.performed during the whole period, he then became absolute owner of the property or fund that he had received of plaintiff and was in possession of. The right of ownership dated from the time he made the contract and undertook its performance, and any condition which operated afterwards to take away or ■destroy this right, in effect, deprived the defendant of something of value which' he otherwise would have possessed. Such condition was, therefore, in the nature of a forfeiture. Shaw, by his performance of the provisions of the contract for several years, had rendered to plaintiff the compensation in part, which she was to have for the money and property she gave to the plaintiff. In this view the case is, in principle, somewhat analogous to the sale of real estate by contract, which, by its terms, is to become void on failure by the vendee to perform in any respect. After part performance the vendee has ordinarily equitable rights, although the legal title is absolute in the vendor by reason of lack of strict performance. (2 Story’s Eq., § 1315.) In such cases the title is deemed to be held as security.

We are referred by the learned counsel for plaintiff to many cases where, in a security for a loan payable on time, there has been a provision that if the interest was not paid promptly or at a certain fixed time the whole debt should become due; and it has been held that no relief would be given from the effect of a default in the payment of interest at the prescribed time and that it was not a case of forfeiture. Those cases do not apply here. The money and property advanced by plaintiff were not, at all events, to be returned. It was, therefore, not a loan. (Payne v. Gardiner, 29 N. Y., 167.)

Nor does the case of Trustees, etc., v. McKechnie (90 N. Y., 618), apply. In that case the question was whether the event upon the happening of which certain moneys advanced to the Ontario Female Seminary should be returned had, in fact, happened. No question was made as to the liability provided the event in question had happened. Nor does the case of Thompson v. Hudson (L. R., 4 House of Lords Appeal Cases, Eng. and Irish Appeals, 1), help us. There it was held that the reservation of a right to have full payment of money actually due on an existing contract, should there be a failure to pay a smaller sum on a certain day, cannot be treated as a penalty. In substance, the creditor offered to compromise on certain terms; the debtor did not comply with the terms and thereupon the creditor was remitted to his original rights. He got nothing beyond his debt.

In Giles v. Austin (62 N. Y., 486) relief was given from a forfeiture in a lease incurred by the failure of the tenant to pay taxes and assessments. The rule is there laid down that where the covenant- is simply for tlie payment of money, the forfeiture is regarded as a security merely for such payment, and equity will not allow it to be enforced after the party has obtained all that it was intended to secure to him. Mere delay is not a bar if no new rights have intervened or the position of the parties been changed. A similar doctrine was applied in Noyes v. Anderson (124 N. Y., 175). In that case there was an agreement by the owner of a mortgage with the owner of the equity of redemption that he would not enforce the mortgage during the life of the latter, provided, among other things, that no taxes or assessments on the premises remained unpaid and in arrears for more than thirty days. Default was made in the payment of a sewer assessment and thereiqion foreclosure of the mortgage was commenced. It was held that the default would result in a forfeiture from which, or its consequences, a court of equity had power to relieve, it being said that a court of equity has power to relieve a party against forfeiture or penalty incurred by the breach of a condition subsequent, where no willful neglect on his part is shown, upon the principle that a party having a legal right shall not be permitted to avail himself of it for the purpose of injustice or oppression. A similar view was taken by Judge Daniels in Shaw v. Wellman (59 Hun, 447).

In Steele v. Branch (40 Cal., 3) failure by the vendee in a land contract to strictly perform his covenant to pay a prior mortgage was held not to be fatal to the rights of the vendee, although by the terms of the contract such failure made it void, it aj>pearing that the vendees acted in good faith and the vendors were not damaged thereby. In Henry v. Tupper (29 Vt., 358), it was held that a court of equity might, in its discretion, give relief from a forfeiture occasioned by the breach of an agreement for support. In 1 Pomeroy Equity Jurisprudence (§ 450), the general doctrine is laid down as follows: “ In the absence of special circumstances giving the defaulting party a higher remedial right, a court of equity will set aside or otherwise relieve against a forfeiture, both where it is incurred on the breach of an agreement expressly and simply for the payment of money, and also on the breach of an agreement of which the obligation, although indirectly, is yet substantially a pecuniary one.” (See, also, 2 Leading Cases in Equity by White & Tudor [4th ed.], 2044.)

In the present case it is conceded that long before the commencement of the action, and before the giving of any notice by the plaintiff that she intended to foreclose, the defendant Shaw paid to Fowlston all that was due. So that when this action was begun there was no actual default. All payments of interest due the plaintiff had been promptly made and the court, among other things, found that such interest was accepted by plaintiff with full knowledge of the facts, and that, therefore, she waived her right to claim a. forfeiture. It may be, as claimed by plaintiff, that the evidence does not fully warrant the finding that she had full knowledge of the facts. Still, presumptively, she was living upon the premises, and must have known to some extent of the improvements going on. Apparently, if she had made inquiry, she would have found out that the payments were not being promptly made. If she did not inquire, it would indicate that she did not deem knowledge in that respect of vital importance, and so it would if she did inquire and found out the situation, and still received her payments without question. Her acquiescence in either aspect of the case, while it might not be a waiver, would have some bearing on the character or intent of the original transaction, and on the propriety of giving defendant relief. It is quite clear that the plaintiff’s security was not impaired. It may also be said with a good deal of force, as an inference from the conceded facts, that the provision making the original amount collectible was intended only as security, so far at. least as it related to the payment of the prior mortgage.

It seems to me that a proper case was presented for the exercise of the equitable power of the court and that the Special Term did not err in giving defendant relief from the forfeiture and in refusing to grant foreclosure of plaintiff’s mortgage.

The judgment should, therefore, be affirmed.

Hardin, P. J., and Martin, J., concurred.

Judgment affirmed, with costs.


author: Barnard, P. J.:

text:
    JAMES H. MULLARKY, as Trustee under the Will of JAMES SULLIVAN, Deceased, Respondent, v. JAMES SULLIVAN and Others, Appellants, Impleaded with Others, Defendants.

      Devise — “surviving brothers and sisters” — when it includes the children of one deceased — -the. law does not favor the exclusion of the issue of a deceased child.

    A testator, by his will, directed that his residuary estate should be divided into six equal parts, and that the income should be applied to the use of each of his six children during .the life of each. Upon the death of a child, leaving descendants, they were to take the share set apart for their parent. If any child should die without leaving descendants, then Ms executors were directed “to pay over the capital of such child’s share to liis or her surviving brothers and sisters.”
    One child' died after the testator leaving children. Two died without leaving children.
    In an action brought, for the construction of the will:

      Held, that, upon the death of those children who died without issue, their shares went to the surviving children.
    That the children of the child who died leaving issue were entitled to participate in those shares.
    That the “ death” of a child meant a death subsequent to that of the testator.
    That a construction should, if possible, be given to the will which would not exclude the issue of a deceased child.
    Appeal by the defendants, James Sullivan, Ricliard Sullivan and Agnes Mclingli, from a judgment of tbe Supreme Court, entered, after a trial by tbe court at tbe Kings County Special Term, in tbe office of the clerk of the county of Kings on the 29th day of September, 1891, construing the will of one James Sullivan to the effect that, upon the' death of either of his children without descendants, the share or portion of the testator’s estate theretofore, and during his or her life, held in trust for such child, should be divided between the brothers and sisters of such child living at the time of the death of such child, and the descendants of any deceased brother or sister.

      William J. Gaynor, for the appellants.

      William N. Lykman, for the plaintiff, respondent.

      Johnson (& Lamb, for the defendant Mullarky, respondent.
   Barnard, P. J.:

The testator, James Sullivan, directed a remainder of his estate to be divided into six equal parts, and the income applied to the use of each of six children during each of their lives. Upon the death of a child leaving descendants, the descendants were to take the share set apart for their parent. If any child should die without leaving descendants, “ then to pay over the capital of such child’s share to his or her surviving brothers and sisters.” One of the children of testator has died since his death leaving childz-en. Two have died without leaving descendants. The questiozi pz-esezzted is whether the capital set apart for the use of Frances Szzllivazz, one of the daughters of the deceased, for life, shall go to her surviving bz-others and sisters, excluding the children of Maz-y Ann Mullarky, deceased, or whether her childrezi shall participate in the distribution the sazne as their mother would if living at the death of Frances Sullivan. The intezzt of the testator was znaziifestly that the cliildz-ezi of a deceased child should take zznder the words surviving brothers azzd sisters.” The will provides for the cozztingency of a child dyizig before the testator, and the children of a deceased child wez-e to take the dead parent’s share. In the fifth, sixth and seventh articles of the second codicil, the rights of the childz-en of a deceased child are pz-eserved to property therein mentioned. "While the testator so carefully provided in other clauses of the will for the deceased child’s z-ight to take, it may be faiz-ly deezned his izitent to put them on azi equality with the deceased parent in coizsidering the clause izz question. If a child had died, leaving children, before the testator, he or his children would take in place of the parent. The deaths subsequently referred to are not those to happen before testator’s death, but after-wards. The estate vested, however, at his death. It is quite immaterial whether it was an estate in expectancy or one which was vested. The surviving children all take a life use in the sixth, with right to take a share of a child who should die without children. The estate would then become absolute in the survivors, including the children of a dead child. (Griffin v. Shephard, 124 N. Y., 70; Hann v. Van Orden, 84 id., 257.) A construction should be followed which will not exclude the issue of a deceased child. (Matter of Brown, 93 N. Y., 295; Matter of Mahan, 98 id., 372.)

In the case of Patchen v. Patchen (121 N. Y., 432), the distribution was to persons who were living at the end of the life estate. No such words are contained in this will. Surviving children include the child of a dead child.'

The judgment should, therefore, be affirmed, with costs.

Pratt, J., concurred.

Judgment affirmed, with costs.


author: Pratt, J.:

text:
    EFFA BROWN, Plaintiff, v. ELIZABETH KING and Others, Defendants.

      Executors — -the executor of a referee, how compelled to pay over money received by his testator as referee — executor not cha/rgeaMewith costs — effect of parties submitting a matter to the court.

    Tlie judgment in an action of partition directed tlie referee to pay to a county treasurer one-quarter of tlie net proceeds of the sale for certain unknown defendants. The referee died without having done so. Parties interested in the proceeds filed a petition in the action to compel the executor of the referee to pay over tlie moneys.
    In the proceedings had thereon there was no evidence given to identify the specific moneys, and it did appear that the referee had stated that he had invested the greater part of tlie moneys in a private business venture.

      Held, that the death of the referee threw the liability for the proceeds of sale upon his estate, and put the petitioners in the position of creditors thereof.

      That the petitioners should have proceeded against the executor by action, and that there was no warrant for a summary application of this character in tile-partition suit. ,
    That it was erroneous for the court to direct payment of the claim by the executor, and that it should merely hare ordered a recovery, leaving the executor to pay the claim in the ordinary course of administration.
    That as no charge of wrong was made against the executor he -was not chargeable with costs.
    That although the proceeding was irregular, the title of the petitioners to the money doubtful, and the executor not a party to the partition suit, yet as all parties had submitted themselves to the jurisdiction of the court, its order as modified would be allowed to .stand.
    Appeal by William II. Clark, as the sole surviving executor of John G. Wilkin, deceased, from an order of the Supreme Court, entered in the office of the clerk of Orange county on the 23d day of September1,1891, directing him to pay to the treasurer of Orange county $2,665.66,"and interest, for the use of the heirs of Ann Gaynor, deceased, who were unknown defendants in this action, to be invested by said county treasurer as directed by the decree made in the action on June 7, 1875, with costs to the petitioner John Swezy.
    This decree directed the referee in an action for partition to pay to the county treasurer one-quarter of the proceeds of sale for certain unknown defendants.
    John Swezy was a defendant in the action, and would have been entitled to a share in the money if no heirs of Ann Gaynor existed.

      William Vanamee, for the executor of John G. Wilkin, deceased, appellant.

      Daniel Finn, for John Swezy, petitioner, respondent.
   Pratt, J.:

This is an application by parties interested in the proceeds of land sold under judgment in partition in this action to compel the executor of the referee appointed by the judgment to pay over $1,230.15 to the county treasurer as required by the judgment, besides interest. The receipt of this sum by the referee prior to July 1, 1876, has been proven. The final order or judgment requires the payment of $2,665.66 to the county treasurer, besides $245.40 to the petitioners for their costs and disbursements.

Independently of the question of practice, the liability of the estate of the referee in the hands of his executor seems plainly established by the facts found by the referee and recited in the order. But the question of practice will, I think, be found to depend on the nature of this liability. If the executor had found the specific fund on the death of his testator, or any other fund of which it formed part, so that it could be ear-marked, then it did not' pass to him as a part of the decedent’s estate at all. In that view it formed a pait of a fund in this court which ought to have been in the county treasurer’s hands. The executor became its possessor by mere accident, and a trust arose, ex mquo et bono, for the benefit of the lawful owners of the money. I am inclined to think that, on this hypothesis, and to this extent at least,-it would have been proper practice to have required the executor by summary application in this action to have turned over the money to the county treasurer.

But this is not the case made by the petitioners. It may be that the findings of the referee will bear that construction, but I do not think that view is sustained by the evidence. The petitioners were not content with proving simply the receipt of the money and the failure to pay it over as required by the judgment. If they had stopped there, perhaps they might have justified their practice on the theory that the presumption was that the money remained in che referee’s hands at his death as a separate fund, or in some fund which came to the executor’s custody. They proved by the referee’s son that his father said that he had deposited this money in a saving’s bank; and the same line of proof showed that the deposit was made with the approval of the petitioners’ counsel. This proof was not controverted. They then proved farther that the referee had declared to his son that he had withdrawn this money to the extent, at least, of $1,000, and invested it in a private business venture. Thus it was an easy matter for the petitioners to have proven that the deposit was not made at all, if that was the fact, and how much, if any, of the fund remained on deposit, if it was true that the deposit was made. At all events it was the duty of the petitioners to have shown by some proof that the executor received this fund so that it could be ear-marked, and a finding that the money had gone into liis estate was not enough.

They, by their own proof, created the presumption that the referee had misapplied the fund in his own business, and they then failed to ear-mark any particular fund. The proof, therefore, as it seems to me, brought the ease within the rule stated in Hooley v. Gieve (9 Abb. N. C., 8) that the death of the referee threw the liability into his estate and remitted the owners thereof to the position simply of creditors, so that it was the duty of the executor to administer it. He was not a simple custodian of money which he did not own, and hence a simple motion to reach this supposed fund was not a proper remedy.

I have thus far spoken only of the original fund of $1,230,15. Undoubtedly, if the petitioners had proceeded against the referee in his lifetime, they could have obtained an order, on a mere motion in the original partition action, to compel the payment of this money to the county treasurer, and ■ the interest as well, by some form of summary proceeding, charging him with annual rests in the computation. That liability for interest comes in place of damages for the failure to perform the duties of the referee’s trust, but it by no means follows that the same remedy would apply to this interest by way of damages against the executor of the referee thus in default, especially when it appears that he used the principal fund in his business and its identity was thus lost.

The question then arises, can this order or judgment be sustained as made in a proper proceeding against the executor ? TTis testator died January 19, 1889. He received letters testamentary in March, 1889. This proceeding was commenced December 18,1890, twenty-one months after the qualification of the executor. It did :iot appear that any claim had ever been exhibited, to the executor against the estate of his decedent, and hence the case cannot be technically classed as a proceeding on the reference of a disputed claim under the statute.

But for all that it was competent for the owners of this fund to commence an action against the executor. So, too, it matters not how the litigants got into court to litigate this matter so long as they got there in some proper proceeding. The court had jurisdiction of the subject-matter, and these parties appear to have subjected themselves to its jurisdiction The question of jurisdiction or regularity seems to have been raised or suggested for the first time on this appeal. I am, therefore, inclined to think that it is too late to raise any question of jurisdiction or regularity.

Coming, then, to the merits, we find proof that the estate of the referee is solvent and able to pay this claim in full. The executor seems to have raised no point before the referee about notice of the claim. The amount directed to be paid is $2,665.66, which is $1,435.51 by way of interest. This sum is clearly within the amount for which the referee would have been liable if he had lived, charging him only with simple interest, but making annual rests in the computation. That rule doubtless applies to his executors. Hence the sum awarded is not beyond, but is within, the liability of the decedent’s estate.

But the order or judgment directs payment of this sum, and not simply its recovery, leaving the executor to pay the claim in the ordinary course of administration. I cannot see why this should have been done.

Again, the order or judgment requires- payment of costs and disbursements. There was no charge of wrong by the executor, and I cannot see how any case was made for the recovery of costs in any view.

It would, therefore, seem that this final decretal order, whether we call it a final order in a special proceeding or a judgment, must be modified in both these respects; i. e., it must be reduced to a mere recovery, and there should be no costs except after regular application under the appropriate sections of the Code.

We come, then, to the final question, can this proceeding and order be justified on any technical ground % I do not think it can be sustained as a mere order or a mere motion in the old partition action. The executor was not a party, and the whole subject-matter of the inquiry was not appropriate to a simple motion. There are difficulties, also, in the way of treating the application as an action. It is not in any form appropriate to an action. The petitioners are not the owners of the money or claim. The title to it would seem to be in the county treasurer as a trustee for the unknown owners for whose benefit it was to be paid to him. The defendants, doubtless, have an interest in it in default of such unknown owners. But the rule is that, before they can maintain an action for its recovery in their own names, they must show that there has been something equivalent to demand upon, and refusal by, their trustee to sue to enforce their rights.

But tlie fact still appears that these parties have voluntarily come into this court, taken these proceedings up to the making of this final order, without objection. They have made this record for themselves, and, with the modifications above suggested, substantial justice will be accomplished. If there is any irregularity or informality it is their own fault, and I do not see why the court should do more than simply to make such determination as would have been appropriate in an action or proceeding formally commenced.

The order should be modified, as above stated, and affirmed, without costs.

Dykman, J., concurred; Barnard, P. J., not sitting.

Order modified in accordance with opinion, and as - modified affirmed, without costs, order to be settled by Justice Pratt.


text:
    DAVID G. BURTON, Respondent, v. HARRIET R. ROCKWELL, Appellant, Impleaded with Another, Defendant,

      Mechanic’s lien — Laics of 1885, chap. 343, sec'. 19 — effect of an offer which does not state that it is' made ‘ ‘ in discharge of the lien ” — costs.

    The mechanic’s lien act (§ 19 of chap. 343 of the Laws of 1885) provides that an owner of property affected by a lien may, in writing, offer to pay into court an amount, to be stated, “in discharge of the lien.”

      Held, that such an offer which failed to state'that it was made “in discharge of the lien ” was ineffectual to defeat the right of the lienor to further costs.
    Appeal by the defendant Harriet R. Rockwell from an order, entered in the office of the clerk of the county of Westchester on the 17th day of October, 1891, awarding plaintiff costs and an allowance; and also from so much of a judgment of the Supreme Court, entered in said clerk’s office on the 2d day of November, 1891, as awarded the plaintiff costs against the defendant Rockwell after a trial before a referee.

      Charles A. Deeher, for Harriet R. Rockwell, appellant.

      Normcm A. la/wlor, for the respondent.
   Pratt, J.:

The only question raised in this case is one of law, to wit, whether, under the offer of the defendant, made in the course of the trial, the plaintiff or defendant was entitled to costs which accrued subsequent to the making of the offer.

The offer is as follows after the caption of the suit: “ I, Harriet R. Rockwell, one of the defendants above named, do hereby offer to allow the above-named plaintiff to take judgment against me in the above-entitled action for the sum of two hundred dollars, with interest from January 1st, 1890, together with the costs of this action, or to pay the same into court.”

The statute (§ 19, chap: 342, Laws of 1885), authorizing an offer to be made in a suit under the “ mechanic’s lien ” law, provides that: “At any time after an action is commenced, the owner or owners of the property affected may, in writing, offer to pay into court any amount stated in the offer, or to execute and deposit any securities or papers which he may describe in discharge of the lien or liens.”

It is objected that the offer, as made, was insufficient, because the words “ in discharge of the lien ” were not contained in the notice. The statute authorizing the offer is in the subjunctive, and the offer here contained more than the statute requires, as it offered to permit the plaintiff to take judgment for $200,ilT‘4ddition to offering to pay $200 into court.

It is clear that, the offer was a nullity under section 738 of the Code, as it was not made ten days prior to the trial of the action. (Sares v. Matthews, 15 N. Y. Supp., 511.) So that the only point is, whether it was necessary that the offer should contain the exact words of the statute, i. e., “ In discharge of the lien.” That such a form of offer is requisite was held in the case of Hall v. Dennerlein (39 N. Y. State Rep., 67).

I cannot well see how the omission of the words “ in discharge of the lien ” could work any injustice or surprise to the plaintiff. The words are a mere statement of the legal effect of the offer, and if this question was now raised for the first time, I should be strongly inclined to hold that the offer was sufficient to put the plaintiff to an election.

In substance, the defendant offers to pay the money into court, with costs, and it could be for no other purpose under the statute, except to discharge the lien.

The offer dicl more'; it anticipated that there was no valid lien, as afterwards turned out to be the fact, and it offered to permit plaintiff to take judgment for $200, etc., as in a common-law action. I cannot see why the plaintiff should be allowed to go on piling up' the costs, and when it was found that his claim was less than the offer, be rewarded with full costs and an extra allowance.

To avoid the confusion of one court holding one way, and another court the opposite, I think this order had better be affirmed, but Without costs.

The order must be affirmed, but without costs.

Barnard, P. J., concurred ; Dyicman, J., not sitting.

Order awarding costs affirmed, without costs.