text:
    GEORGE F. VIETOR, et al., Plaintiffs and Respondents, v. THE INTERNATIONAL NAVIGATION COMPANY, Defendant and Appellant.
    COMMON CARRIER.—LIMITATION OF LIABILITY TO INVOICE PRICE.
    What allegations and proofs deprive a party of the benefit OF SAID LIMITATION.

      Estoppel. What acts or statements on the part of the common carrier, tending to apprise the consignee of the arrival of the goods in question, and readiness to deliver the same, i are sufficient to induce the consignee, believing the same, to make entry at the Custom House and pay duties on the same, so that afterwards, the carrier being unable to deliver said goods or account for the same, he would be deprived of such limitation, and be compelled to pay the invoice price of the goods, with the duty and interest on the same added thereto.
    Before Sedgwick and Van Vorst, JJ.

      Decided April 7, 1879.
    The facts and the rulings of the court thereupon, as also the rules of law and decisions applicable to carriers, their liabilities, and to equitable estoppels, are fully set forth and discussed in the opinion of the court.
    The court held, in this case, that the carriers were only liable for the invoice price of the missing goods.
    Appeal from judgment entered on verdict for plaintiff, directed by the court.
    The complaint stated, as a first cause of action, that there were delivered to the defendant at Aix-la-Chapelle twelve bales of cloth, which the defendant agreed to transport to Hew York and deliver there to the plaintiff, under a certain bill of lading particularly set forth; that they did not transport, &c., the said bales, but “ so negligently and improperly conducted itself in the premises ” that, although delivering ten of said bales, it failed to deliver the remaining two bales, “ and the said two bales, through the negligence and improper conduct of the said defendant, were wholly lost to the plaintiffs hereinthat “the invoice value of the said two bales of cloth so lost and not delivered as aforesaid, is the sum of $1,074.40, in gold coin of the United States, for which amount, with interest from, &c., judgment is hereby demanded.”
    It stated, for a further and second cause of action, after reiterating the allegation of the first cause of action, that, on the arrival of the steamship named in the bill of lading, the plaintiffs received from the defendant notice of the arrival of said steamship and of said twelve bales ; that defendant entered on the manifest of the said steamship all of said twelve bales, and on July 17, 1876, filed said manifest, in pursuance of law, in the custom-house of the port of New York ; thereupon, on July 18,1876, these plaintiffs paid to the United States the legal duties on all of said bales so entered on said manifest, including duties on the said two bales, which afterwards were not delivered to plaintiffs, which latter duties amounted to $787, in gold coin of the United States, and thereupon received from the said United States a permit for the landing of said twelve bales ; that the plaintiff, on the production to the defendant of said landing permit, received from it a delivery order on their agent in charge of said steamship for all of said twelve bales, and, on duly presenting the same, received from the said defendant only ten bales, as aforesaid ; that, by the revenue laws and customs at the port, &c., unless the duty be paid within twenty-four hours after the arrival of a vessel, the goods therein are sent to the public store-house, and thereby an additional expense is incurred; that the plaintiffs, desiring not to incur such expense, “relying upon the aforesaid notice received from the defendant, and upon the manifest of the defendant filed in the custom-house at, &c., and the other acts and doings of the defendant, paid said duty as aforesaid, in order to obtain possession of their goods and to prevent their being sent to the public store-house that the government of the United States declined to refund to these plaintiffs the sum of said duties, unless these1 plaintiffs furnish positive proof that the said two bales, were never shipped on board the said steamship at her port of departure, viz. : Antwerp ; that the plaintiffs are unable to comply with this condition, unless proof be furnished by the defendant and its agents ; but the defendants, although often requested, have totally failed and neglected so to do, to the damage of the plaintiffs in the sum of $878.49 lawful currency, which these plaintiffs paid for the gold, in which the duties were paid; whereupon, &c.
    The answer admitted the defendant’s liability for the damage set out in the first cause of action, “ which, with the interest, the defendant has always been ready to pay, and has offered and now offers to pay to plaintiffs, who have always refused to receive and accept the same.”
    As to the second cause of action, the answer alleged good faith on its part in all the acts and doings in regard to the transaction; that defendant had no knowledge or information that the two bales were not oh board.
    At the trial, it appeared that, on the arrival of the steamship, a clerk of plaintiff saw in a newspaper an advertisement as follows :
    “Notice. Red-Star Line, Steamship Kenilworth, from Antwerp, will commence discharging under general order at Pier 53, N. R., on Wednesday, July 19, at ten o’clock. Consignees will please send their permits on board and attend to receipt of goods without further notice. All goods remaining on the dock are at the risk of owners or consignees. All persons are hereby cautioned, &c.
    “GEO. W. COLTON, Agent.”
    This was the notice, referred to in the complaint, as notice of the arrival of said steamship and of said twelve bales. The clerk saw it on July 18. The vessel had been entered at th.e custom-house on arriving, on the 17th. By the testimony, if goods were not taken away from the vessel wifhin forty-eight hours after the entry of the ship, they would be sent to a public store. To prevent such sending, it was necessary within the forty-eight hours to pay the duties and obtain a permit to land the goods, and to act upon the permit within the forty-eight hours. The dock clerk of the defendant would not allow goods to be taken from the dock without a “ delivery order” obtained from the proper agent of the defendant. Generally, a delivery order would- not be made until the custom-house permit was exhibited ; but exceptions were made to this in case of large dealers like the plaintiffs, who could be trusted.
    The clerk of plaintiffs, on seeing the advertisement, went to the office of defendant and applied for a delivery order. It was made up from a list of goods, which list had been made from counterpart bills of lading in possession of defendants. The defendants had no right to keep the goods until payment of freight, for the goods were free of freight. The plaintiff’s clerk thought that the officer he applied to could not have been on the vessel to see if the goods were on board. No facts were given in evidence to show that plaintiffs had any reason to believe that the vessel had been so far discharged that it was possible for the defendant’s agents to know whether the whole of plaintiff’s goods were on the vessel. On all the facts a jury would not have been justified in finding that there was an opportunity on the part of defendant’s agent to know what the fact was.
    Plaintiff’s clerk received an order directed to the dock clerk in charge of the vessel, viz.: “Please deliver to Yiet-or & Achelis sixty-nine packages merchandise per steamship Kenilworth, marked as follows.” The marks comprised the marks by which all the twelve bales were designated upon the bills of lading.
    No agent of plaintiffs, nor any one of them, saw the manifest of the cargo, that had been made in Antwerp and filed in the custom-house, on arrival of ship.
    Plaintiffs’ clerk, after receiving the delivery order, entered the goods at the custom-house and paid the duties on them all. The duties upon the two bales amounted to the sum stated in the complaint. He also obtained the custom-house permit, certifying that duties had been paid, and stating, “ Permission is accordingly given to land” the goods. This was on July 18. On the same day, plaintiffs’ clerk delivered to the custom-house inspector in charge of the steamship the custom-house permit to land the goods, and to a carman the delivery order for the clerk at the dock. The carman did not receive the two bales. The defendants were not able to deliver them. No facts were given to account for the non-delivery or any loss of them.
    On the trial the defendants admitted that they were liable in the invoice value of the goods. The plaintiffs claimed for the invoice value $1,074.40 in gold, and interest from June 29, 1876, on first cause of action, and for the amount of customs duties $878.49, and interest from July 18, 1876, oh second cause of action. The court directed a verdict for plaintiff in both amounts, and judgment accordingly. The defendants duly excepted.

      Benedict, Taft & Benedict, attorneys, and E. C. Benedict, of counsel, for appellants, urged:
    I. The defendant admits the non-delivery of the two bales in-question, but pleads the limitation of its liability to the inmice price, as stipulated in the bill of lading. Of the benefit of this limitation it can be deprived only by allegation and proof of: 1. Fraud and deceit on the part of defendant, or its agent. 2. Conversion by the defendant. 3. Misfeasance or abandonment by defendant of the character of carrier (Magnin v. Dins-more, 70 N. Y. 410, 417). a. The complaint contains no allegation of fraud or deceit, or of any intent by defendant to defraud or deceive, nor was any proof thereof attempted. t. It contains no allegation of a conversion, nor was any proof thereof attempted, c. It contains no allegation of misfeasance, or of an abandonment of the character of carrier, by the defendant, nor was any proof thereof attempted. The evidence is uncontradicted that everything done by the defendant and its agents was done without intent to defraud or deceive, and in good faith, d. It contains no allegation of any facts from which fraud, deceit, conversion, misfeasance, or abandonment of the character of carrier could be drawn inferentially, nor was any evidence given tending to show such facts, e. The pleadings and proofs disclose simply non-delivery of the goods. Such non-delivery unexplained amounts in law to negligence, rendering the carrier liable under the till of lading, but confining his liability to the terms thereof (Magnin v. Dinsmore, 70 N. Y. 410, supra. See Marsh v. Falker, 40 Id. 567).
    II. It is alleged in the complaint that the plaintiff, “relying upon the aforesaid notice received from the defendant,” (viz., the advertisement of the arrival of the vessel in the Journal of Commerce, ‘ ‘ and upon the manifest of the defendant filed in the custom-house, at the port of New York, as aforesaid, and the other acts and doings of the defendant, paid said duty as aforesaid.” But neither the notice so advertised, nor the manifest filed, nor any of the acts or doings of the defendant, constituted any representation as to these goods upon which the plaintiffs had any right to rely, nor was any such representation intended thereby by the defendant or its agents. 1. The notice advertised was simply a notice that the vessel had arrived, and would begin to discharge at a specified time. 2. The manifest filed was made up from the bills of lading, not from actual inspection of cargo, which was impossible. This fact was known to Fisher, plaintiffs’ clerk, who represented the plaintiffs in this matter. The manifest' was therefore (as plaintiffs knew) only a list made up from bills of lading, and constituted no representation. 3. The delivery order was made up from the bills of lading, and nol/from or after an inspection of the cargo : that fact was known to plaintiffs’ clerk. It constituted no representation ; it was simply a notice to the dock-clerk that freight had been paid, and he was at liberty to deliver. 4. The delivery order had no reference to the payment of duties. The defendant,and its agents had no knowledge or idea that it would be used with reference to payment of duties. The evidence is uncontradicted that neither the defendant nor any of its agents knew that the two bales were missing until after the filing of the manifest, the giving of the delivery order, and the unloading and delivery to plaintiffs of the goods consigned to them. The bill of lading is not a representation ; it is a promise or contract to carry, but not a representation that defendant had carried and could deliver. Neither the manifest, the notice of arrival and discharge of vessel, nor the delivery order was a representation that defendant had carried and could deliver.
    III. Nothing was done or said by defendant or its agents, constituting a representation upon which the plaintiff had the- right to rely in paying duties (see Alston v. Mechanics’ Mutual Ins. Co., 4 Hill, 329). Fisher, plaintiffs’ clerk, who obtained the delivery order, and who attended to the entry of the goods and payment of duty, admits that he knew that the manifest and the delivery order were made up from the bills of lading, and not from an inspection of cargo ; it follows, then, that he did not consider them, or either of them, as a representation that the goods were on the vessel and could be delivered.

      IV. Plaintiffs did not rely upon any representation in paying duties.
    V. 1. The defendant is not estopped from setting up the limitation of liability contained in the bill of lading. The bill of lading does not constitute an estoppel (Bates v. Stanton, 1 Duer, 79). Nor does the manifest, nor the delivery order, as they were simply transcripts from the bills of lading. 2. An equitable estoppel is not created by any representation or admission, unless the party' making such representation or admission means it to be acted-upon, and it is acted upon accordingly (Freeman v. Cooke, 2 Exch. R.; Young v. Bushnell, 8 Bosw. 1). 3. All the elements necessary to constitute an equitable estoppel are wanting (see Dezell v. Odell, 3 Hill, 215, and cases cited; Brown v. Bowen, 30 N. Y. 519; Baker v. Un. Mut. Ins. Co., 43 Id. 283; Kingsley v. Vernon, 4 Sandf. 361).

      Blatchford, Seward, Griswold & Da Costa, attorneys, and C. M. Da Costa, of counsel, for respondents, urged:
    I. The exception to the direction of a verdict under the first cause of action fails, of course, because the answer admits the liability therefor.
    II. The court was equally justified in directing a verdict for the amount claimed under the second cause of action. On the undisputed evidence, the direction was right, and the plaintiffs were entitled to recover, on the elementary principle of an estoppel in pais, for it appeared beyond question that on the ship’s manifest, filed in the custom-house, the defendant entered all of the bales; that the defendant gave to plaintiffs a delivery order, representing that all of the bales of goods consigned to them were on board; that the plaintiffs would not have entered all the goods, or paid the duties on all the goods, had the defendant, at the time the delivery order was given, informed them that two of the bales were short, or had so stated on the said manifest or delivery order, or had given them any reason so to believe; that relying upon the statements contained in such delivery order, and the silence of the defendant in that respect, the plaintiff did enter the twelve bales, and did pay the duties thereon; that, subsequently to such payment, the defendant discovered its inability to deliver all of the goods, two bales being missing and wholly unaccounted for; that application was made to the government to refund the duties paid on such bales, which were never received by the plaintiffs, and that the government refused so to refund unless it were furnished with positive proof that the two missing bales had never been shipped on the Kenilworth at Antwerp, which evidence was alone in the possession of the defendant; and that the defendant, though requested to furnish such proof, has refused, and (in view of the testimony of its officer above alluded to) has willfully refused so to do. On these facts, therefore, the well-known principle of an estoppel in pais is applicable, and it is on that ground that the plaintiffs have proceeded, and seek to enforce the liability of the defendant (2 Pars. on Cont. 6 ed. 793; in note q, on same page, all the authorities are collated; Costello v. Meade, 55 How. Pr. 356, 358; Cornish v. Abington, 4 H. & N. 556, per Bramwell, J.; Continental Bank v. Bank of the Commonwealth, 50 N. Y. 575). It was held in Blair v. Waite (69 N. Y. 113): 11 It is not necessary to an equitable estoppel that the parties should design to mislead. It is enough if the act or declaration was calculated to, and did, in fact, mislead another, acting in good faith and with reasonable diligence.” And the same doctrine was reiterated in Morgan v. Railroad Co. (96 U. S. 716); also in Merchants’ Bank v. State Bank (10 Wall. 604, 645). “It seems,” says Bigelow on Estoppel (p. 170), “to be settled that a party’s ignorance of the truth of a representation made will not remove the estoppel if he was bound to know the fact, or if his ignorance is the result of gross negligence.” It will hardly be claimed that a common carrier is not bound to know the fact whether or not he has lost goods; and certainly his utter ignorance on the subject is gross negligence within all the authorities.
    III. The proof required by the government before it would refund the duties was exclusively within the power of the defendant to furnish. The plaintiffs applied to the defendant to furnish it, and it has failed to do so. The defendant has therefore been willfully negligent in the premises. The testimony of the defendant’s agent, Mr. Colton, that, so far as he knows, all efforts to get any trace of the missing bales have been unavailing, will not militate against our contention. Had the witnesses, who, it is to be presumed, were the only persons who knew anything about it, been examined, or tendered for examination, the truth would probably have been arrived at, and the liability of the defendant either absolutely fixed, or the proof furnished to the government, on the production of which it had expressed its willingness to refund the duties paid for the missing bales.
    IV. But, irrespective of the foregoing, the direction of the court was right. The bill of lading did not in terms exempt the defendant from loss arising from negligence. The clause of the bill of lading limiting the liability, in case of damage, loss or non-delivery, to an amount not to exceed the invoice value of the goods, does not apply to cases of loss by negligence; because, neither by such terms, or by any other terms contained in the bill of lading, is a loss by negligence exempted or limited. It is perfectly well settled that, while a carrier may exempt himself from loss by negligence, he must, if he so desires, exempt himself by positive words, and that general words, limiting his liability, will not be construed to include losses incurred by negligence (Magnin v. Dinsmore, 56 N. Y. 168; Mynard v. Syracuse, &c. R. R., 71 Id. 180, where all the authorities are collated). The defendant being unable to furnish any proof of the loss of the two bales,' or to account for their loss in any way, was prima facie guilty of negligence (Steers v. Liverpool, N. Y. &c., Co., 57 N. Y. 1; Fairfax v. New York Central & Hudson River R. R. Co., 67 Id. 11).
   By the Court.—Sedgwick, J.

It was agreed at the argument, that if, upon the plaintiff’s paying the duties in question, he had no cause of action for the duties, the subsequent omission or neglect of defendants to furnish proof sufficient to obtain from the government a repayment, did not give an action.

The learned counsel for appellant argued that the verdict could be maintained if the proof showed such negligence in respect of the loss of the two bales, that the plaintiff would be entitled, in an action on the bill of lading, or on the case, to recover the full value of the goods, which would include the invoice value and the duty combined ; without inquiring into the validity of this proposition, the case shows that the recovery of the duties was not placed on that ground. The complaint made two causes of action. Damages were' stated and calculated on the trial, as if arising from two causes of action. There were, in fact, two recoveries. The general course of the trial shows that no claim was then made, that in an action on the bill of lading, the plaintiff was entitled to recover, under any measure of damages other than that stated in the contract', viz.: the invoice value of the goods. Neither the law nor the facts were investigated in a manner appropriate to a claim that negligence on the part of the defendant would give greater damages than the invoice value.

Another ground on which the judgment was maintained by the learned counsel for the respondents, was that the conduct and silence of the defendants’ agent, together with the contents of the delivery order issued to the plaintiff, led him to believe that the goods had actually arrived and were ready to be delivered, and, relying upon that as a fact, to pay the duties on them to the United States. It was claimed that the rules that prevail in an estoppel in pais were to be applied to this state of facts, and made the defendant liable for the amount of duties.

It attracts attention at once that an estoppel operates to prevent a party from asserting the non-existence of a fact, that he formerly asserted did exist. If the effect of the acts, or silence of defendant’s agent, was to lead the plaintiffs to believe that the cloth had arrived, an estoppel would prevent the defendants from showing that they had not arrived. It is only necessary to observe that such an estoppel would not be at all relevant to the case here.

It may be imagined, that, if the defendant was estopped to show that the goods had not arrived, then, in an action on the bill of lading, or rather on the case, for the two bales of cloth, the defendants might have to meet a claim that they, having the two bales, refused to deliver them, and were therefore liable for their conversion and their value at the time and place of conversion. Of course, under the views that have been expressed, as to what was the real nature of the action, and what the trial of it involved, it is impossible to pass upon such a question here. A cause of action cannot'be split, and if there be any recovery upon it, the rights of the parties are finally settled. Nevertheless, an inquiry as to the right of the defendant on the case made, will involve considerations that would be pertinent to the claim of estoppel, on the same facts in any action.

I will ask if the facts below showed certain things, that must exist, to create liability on the part of defendant ? Is it proven that the defendant’s agent did or said anything which was equivalent to an. assertion that the cloth had arrived and was ready to be delivered, or was the delivery order and the silence of the defendant’s agents calculated to lead the plaintiff to believe that the defendant’s agent meant to represent that he knew that the cloth had actually arrived ? Did the defendants intend that their act or silence should influence the plaintiffs in the matter of paying the duties, or did they know or have sufficient reason to believe that the plaintiff meant to be influenced in paying the duties forthwith, by what the defendants did, in issuing the delivery order ?

It is undoubtedly law, that it is not necessary to an equitable estoppel that the party should design to mislead. It is enough that the act was calculated to mislead, and actually did mislead, the party while acting in good faith and with reasonable diligence. This was said to be the law in Blair v. Wait (69 N. Y. 116), and to support it the Mechanics’ & Traders’ Bank v. Hazard (30 N. Y. 226), was cited. In Blair v. Wait, the rule was applied to the fact that plaintiff had said to one of the defendants, that a third person was the owner of a judgment, and that if the defendants settled with him it would be all right, and accordingly the defendants did settle the judgment. Thereupon the plaintiff was estopped from an action on the judgment, although he may have been the owner. It was clear that the plaintiff intended that what he saiff should influence and be acted on by the defendants.

In Continental Bank v. National Bank of the Commonwealth (50 N. Y. 577), Judge Folgker said • that there need not be an intention to mislead, and applied the principle to the assertion of plaintiff’s teller, that a check having on it his forged certification was all right. The facts spoke for themselves that the teller intended that the clerk who asked him the question should act on what he answered. Judge Folger cited In re Bahia & S. P. Railway Co. (Law R. 3 Q. B. 584), saying it held that if a representation is made with the intention that it shall be acted upon by another, and he does so, there in an estoppel.

In Manufacturers’ & Traders’ Bank v. Hazard (30 N. Y. 226), the case above cited, Judge Johnson said it was not necessary to an equitable estoppel that the party should design to mislead. The facts were that the defendant had written his Christian name, as indorser of a note, in such a manner that the notary in sending notice of protest read it A. C. instead of M., which was the real initial. The defendant was held to be estopped from setting up a defense that the notice was not addressed to him. The defendant knew and intended that whoever should act upon his indorsement would act upon it as he wrote it.

In Brown v. Bowen (30 N. Y. 541), Judge Mullin said, that to establish an estoppel in pais it must be shown that the person sought to be estopped had made an admission or done an act with the intention of influencing the conduct of another, or that he had reason to believe would influence another.

In Payne v. Burnham (62 N. Y. 72), Church, Ch. J., said, an indispensable requisite of an estoppel in pais is, that the conduct or representation was intended to influence the other party. The same language has been used in Wilcox v. Howell (44 N. Y. 398), Welland Canal Co. v. Hathaway (8 Wend. 483), Dezell v. Odell (3 Hill, 222), Reynolds v. Lounsbury (6 Id. 534), Carpenter v. Stilwell (11 N. Y. 61), Otis v. Sill (8 Barb. 108).

The actions in the nature of deceit are founded upon intentional misleading. Apart from fraud, there would be no foundation for responsibility in cases of words spoken, of a legal kind, unless the person speaking knew or believed that another was about to act upon what he said, and therefore, when he spoke, intended to influence the other. The evidence as to this intention is in the facts of the case, and, as one of them, the character and form of the matter claimed to be an estoppel. If the character is such as is likely to influence, the presumption is that the probable effect was intended. An intention to influence is consistent with no intention to mislead.

Undoubtedly, if the person charged referred in his speech or conduct to one object, disclosed, and there is another undisclosed object not brought to his attention directly or circumstantially, an equitable estoppel would not operate to bind him for the consequences connected with the undisclosed object. There could be no intention to influence as to the undisclosed object. As against him, no person could claim that he was justified in thinking that the other knew or was bound to know that he would act in reference to a matter not disclosed. The one alleging the estoppel as part of the burden of proof, must show to what subsequent course the alleged estoppel was meant to refer.

It will, no doubt, be admitted that the foundation of an estoppel is the assertion of the existence of a thing as a matter of knowledge, to this extent, at least, that no matter how positive in form the assertion is, nevertheless, it does not operate as an estoppel, if it appears that in substance the assertion is an inference from something, and the person addressed knew, or had reason to know so.

The facts were, that when the plaintiffs’ clerk applied to defendant’s clerk for a delivery order, he stated nothing as to his object, excepting that he wanted it. He chose his own time for the application. There was nothing to except the incident from the usual methodical routine of business. He was entitled to receive the delivery order at any time he saw. fit to ask for it. The main object in issuing delivery orders was to show the dock-clerk that, so far as the company was interested, he might allow carmen to take away goods, or, in other words, that freight had been paid. To the most of persons who held bills of lading, delivery orders were not issued before the customhouse permit was shown, but to persons of character and responsibility, and among them the plaintiffs, it was usual, as matter of convenience, to issue the delivery order whenever it was requested, before or after the custom-house permit was obtained. The freight in this instance had been paid or secured at Aix-la-Chapelle, and the defendants would have had no reason to delay issuing the order. Indeed, in the present case, there was no reason for the defendants’ clerk to think, if the matter of duties had come up to his mind, that they had not already been paid. With not uncommon activity, the duties might have been paid. The defendants’ clerk had no reason to think of what had been or would be the plaintiffs’ conduct as to duties. And the delivery order might have been asked for before the hatches were open or the ship really moored to the dock. So proof was given as to this matter.

The substance of the face of the delivery order was a release or waiver of any claim by defendants to detain the goods. Addressed to its clerk, it was necessary to give the number of the packages, and the marks upon them, to prevent the goods of others being delivered by mistake. If there were no chance of such an accident, the order might as well have said all the plaintiff’s goods, or all the cargo, or anything equivalent. Its purpose was known to plaintiffs, and the meaning of its terms must be found from its intended operation. It was permissive and in the nature of a release ; there is no more reason for supposing that there was an assertion that the particular goods had arrived and were on hand, than there is in the case of a quit claim of land with no covenants, for saying that it is an assertion that there is an estate in the laud. A controlling and most significant fact is that to the knowledge of both clerks there was an unexecuted contract between the principals, the consummation of which was to be in the future, viz., the goods themselves were thereafter to be delivered or demanded. Perhaps the clerk had no power to waive any of defendant’s rights under the contract; but if he had, the transaction of giving the delivery order was evidently not intended by either to affect the contract rights of the parties as it would be affected by an admission that the goods had actually arrived.

I am further of opinion that the testimony shows that the defendant’s clerk did not mean to assert that he knew the cloth had in fact arrived. Plaintiffs’ clerk himself testified, that he thought defendant’s clerk could not have been on the vessel to see if the goods were on board. The witness said, that was improbable. It was more than improbable. There was only a bare possibility of the improbable incident, that the clerk, who had no duties connected with the ship, should have seen the ninety-nine pieces specified in the order. When he was applied to for the delivery order, he forthwith and in the presence and to the knowledge of plaintiffs’ clerk, took from a list in his possession the marks of the goods. This list had been made from counterpart bills of lading in defendant’s possession. There was no proof that plaintiffs’ clerk believed, or had, from anything said or done by defendants, reason to believe, that the list was of goods that had actually arrived. It may be here said, that plaintiffs’ clerk neither saw nor acted on the manifest filed in the custom-house.

The published notice to consignees to take their goods, &c., cannot be justly deemed to have led any particular consignee to believe that his particular goods had arrived. While it incited consignees to prompt action, it did not suggest anything that would involve the consignees omitting to find out that goods had arrived before paying duties upon them. It does not appear that the placing goods in public store was so expensive, that to avoid it an owner would pay duties even before he had ascertained that the goods were on board.

It appeared from the testimony that defendant’s clerk acted with reference only to the plaintiffs having an unembarrassed opportunity to get their goods whenever they should be prepared to receive them, and with no reference to the payment of duties, and no intention to influence the plaintiff as to that payment. The plaintiffs’ clerk did not disclose, nor did the cir* cumstances, that he meant to act upon the delivery order’, as evidence of actual arrival, and as making it safe for him to proceed to the payment of duties. He had no reason to believe that the defendant’s clerk intended to influence him in that regard. The two things had no necessary or probable connection.

The plaintiffs’ clerk was not justified in believing that the other meant to assert that he had any knowledge of an actual arrival. The latter evidently was acting in what he did on a supposition or an inference.

The facts show that the necessary constituents of an estoppel in pais that have been specified, did not exist in this case, and that the plaintiff did not have the right to recover the amount of duties, even if the other facts were sufficient.

I am of opinion that the amount of the judgment should be reduced, in the sum of $878.49, and interest from July 18, 1876, and affirmed as reduced. As the appeal was from the whole of the judgment, neither party should have costs of this appeal, in case such an order is entered. But if the defendants wish a new-trial, then the appellant should have costs of the appeal.

Van Vorst, J., concurred.


source: Caselaw Access Project

author: By the Court.—Sedgwick, J.

license: Public Domain

text:
    HARRIET H. GARNER, et al., Plaintiff and Respondent, v. THE HARMONY MILLS, Impleaded, &c., Defendants and Appellants.
    Before Sedgwick and Van Vorst, JJ.

      Decided April 7, 1879.
    Order overruling- demurrer, appealability of.—Interlocutory ORDERS, &C.

    The direction or order of the court, overruling the demurrers of the defendants, and that the plaintiff have judgment, &c., unless the defendants within twenty days, &c., pay the costs and serve an answer, is not appealable under section 1347 of the Code of Civil Procedure.
    Except in some cases like the present one, an interlocutory judgment, on an issue as to the merits, is a final determination of part of the issue, leaving the rest of the issue to be thereafter adjudged. An order or direction of the court cannot be deemed a judgment of any kind, unless on its face it determines some part of the issue.
    In this case the judgment is not pronounced. It is an order that plaintiff have judgment, &c., but the judgment must be entered before defendant is entitled to an appeal.
    - Appeal by defendant from order overruling demurrer and motion to dismiss appeal.

      Messrs. Luther R. Marsh and Homer A. Nelson, for appellants, urged:
    I. The appeal is properly taken. The Code confers the right to appeal. An appeal lies from an interlocutory judgment (Code, § 1349). This is an interlocutory judgment. The judgment appealed from': (1.) Recites the trial of the issues of law raised by the demurrer. (2.) It then orders and decides that the demurrer of the Harmony Mills be and the same is thereby overruled, with costs to the plaintiffs. (3.) It then proceeds to order and decide that the plaintiffs have judgment against the Harmony Mills for the costs herein, and for the relief demanded in the complaint, according to the prayer thereof, unless defendant pays costs, and answers. This surely is a judgment or decree ; either final, with a condition or defeasance, or interlocutory. It fixes or defines the rights of the parties, i. e., they are such as are claimed in the complaint. Now, if, on non-service of answer for payment of costs, nothing more need be done by plaintiffs, except for the clerk to put together the papers constituting the judgment roll, then the judgment or decree is final. If anything more is to be done to fix the plaintiff’s rights, then it is interlocutory. An interlocutory judgment or decree is an “'intermediate” or “between” judgment or decree. This is more than an order; it is a judgment or decree of some kind. If the decision had stopped after ordering that the demurrer be overruled with costs, as in Miller v. Sheldon (15 Hun, 220), there would be ground for claiming it to be simply an order. The decision expressly gives judgment; that is the word used, and judgment for the relief demanded in complaint. Is it not, then, a judgment ? Do plaintiffs now wish to take back their own words, and say, “ we didn’t mean judgment; we only meant an order” ? An interlocutory judgment, on overruling a demurrer, can be granted. This is recognized in Miller v. Sheldon (15 Hun, 220). This judgment determines everything except the form of. the final judgment. If defendant does not pay costs and answer, then, all that remains is for plaintiff to enter the final judgment authorized by this interlocutory judgment (Hoffman v. Barry, 2 Hun, 52). Both in substance and in form the determination of the court appealed from in this case is a judgment. (1.) In substance. A decision on a trial is defined to be a judgment, as distinguished from a decision on a motion, which is an order (Bentley v. Jones, 4 How. Pr. 335; King v. Stafford, 5 Id. 30; Hoffman
      v. Barry, 2 Hun, 52). This is a decision' on a trial of issues of law, which issues were raised by the pleadings. (2.) In form. It settles the rights of the parties —adjudges them. It does not recite, according to the invariable and proper practice, “ on reading and filing the affidavits,” &c., but according to the common form of a judgment, it recites, “ this action, having been brought to trial on the issues of law raised herein, by the demurrers,” &c. The two cases decided in the fourth district of New York supreme court (Miller v. Sheldon, 15 Hun, 220, and Lacustrine F. Co. v. Lake Guano, &c. Co., Daily Register, Feb. 15, 1879), were appeals from orders simply.

      Messrs. Choate and Hugh L. Cole, for respondents, urged:
    I. An order of the special term, overruling or sustaining a demurrer, is not appealable (Lacustrine Fertilizer Co. v. Lake Guano and Shell Fertilizer Co., Daily Reg., Feb. 15, 1879. Supreme Court, Fourth Department, General Term, October, 1878; Miller v. Sheldon, 15 Hun, 220). The Code of Procedure, section 349, specifically authorized an appeal from an order of the special term, from a single judge, to the general term of the same court, sustaining or overruling a demurrer. The Code of Civil Procedure (new Code) has altered all this, and does not authorize an appeal from such an order. Section 1347, which takes the place of section 349 of the old Code, in providing for an appeal to the general term from orders of the special term, does not include the case under consideration ; clearly showdng the intention of the commissioners to do away with appeals in such cases. The object of the legislature, in enacting the amendment of 1851, to section 349 of the old Code, was to enable a party who was defeated upon the argument of a demurrer, to stay the trial of issues of fact, until the question of law which might render the trial uunecessary should have been finally settled upon an appeal from the decision of the special term on the demurrer. But it is apparent that this object could not be accomplished unless the party who is defeated at the general term, has the right to prosecute his appeal to the court of appeals. “If, therefore, there is any sufficient reason for allowing an appeal to the general term before final judgment, upon the same principle a like appeal should be allowed to the court of appeals” (Code Civil Procedure, Throop's Ed. § 1350, n.). The defendant’s remedy, in a case like the present, is by appeal from the judgment, whether final or interlocutory, entered upon the decision of the issues of law raised by the demurrer. Judgments, both interlocutory and final, are provided for in the new Code, and section 1236 provides that ‘ ‘ the clerk must keep among the records of the court a book for the entry of judgments, styled the ‘ Judgment Book.’ Each interlocutory or final judgment must be entered in the judgment book, and attested by the signature of the clerk,” &c. .....In the case at bar no judgment, final or interlocutory, was entered. An order overruling the defendants’ demurrer was duly entered. As the Code has made no provision for an appeal from this order, the conclusion is obvious. The case of Miller v. Sheldon (supra) arises under precisely the same circumstances as the case under consideration. In the case of Lacustrine Fertilizer Company v. Lake Guano and Shell Fertilizer Company (supra), an appeal from an order of the special term sustaining demurrer to the complaint was dismissed. The new Code defines final and interlocutory judgments, provides the methods of entering both, and distinctly allows and authorizes appeals from each. The “order” sustaining or overruling a demurrer being omitted from the orders appealable, under this new Code, and the reasons given for this omission (Code Civil Procedure,

      Throop's Ed. § 1350, n.), this present appeal cannot be entertained.
    II. We agree with the learned counsel for the defendants that the Code has not substantially altered the rules of equity pleading as to multifariousness, and that the matter rests as in equity before the Code. Reverting, then, to the rules then followed, we say that the whole matter of multifariousness is mainly a matter of discretion in the court, to be applied to the circumstances of each particular case as it transpires (Story Eq. Pl. § 530). The leading case in our own courts on the subject (Brinkerhoff v. Brown, 6 Johns. Ch. 139) will be found most fully to sustain the bill as framed in the present case. And the case of Fellows v. Fellows (4 Cow. 682), in the court of errors, sets forth similar doctrines upon the demurrer to a bill combining quite as extensive a series of matters, all constituting what the law regards as the same transaction like that at bar. Woodworth, J., cites the saying of Lord Redesdale in Whaley v. Dawson (2 Sch. & Lefr. 370), with approval. The case of Getty v. Devlin, reported in the commission of appeals (54 N. Y.), and in court of appeals (69 Id.), is also a strong authority in support of the present bill, and many cases cited in the text-books fully sustain the theory of the present action (Story Eq. Pl. §§ 285, 285 a, 286, 286 a, and cases cited; also 278 a, and §§ 530-535, 539).
   By the Court.—Sedgwick, J.

It is agreed that, under section 1347 of the Code of Civil Procedure, the direction of the court, unless it is an interlocutory judgment, is not appealable. The words of this order are “it is ordered that the demurrers of the defendants, &c., and of the defendant, the Harmony Mills, be, and the same hereby are overruled,” and “it is further ordered and decided that the plaintiffs have judgment against the several defendants as above specified, for costs herein, according to the prayer thereof, unless the several defendants above specified, within twenty days from the entry of this order and notice, pay the costs, &c., and serve their answer.” Under any circumstances, the form of this is imperfect. As it stands, the service of an answer would leave a demurrer upon the record undetermined,, or an implied determination in defendant’s favor. A better form, perhaps, would have been, with leave to the defendants, within; &c., on payment of costs, to withdraw the demurrer and' serve an answer.

Except, perhaps in some cases, not like the present one, an interlocutory judgment on an issue as to the merits is a final determination of part of the issue, which leaves the rest of the issue to be thereafter adjudged. It cannot be a judgment of any kind, if on its face it does not determine some part of the issue. Merely overruling a demurrer is essentially removing an obstacle, which the demurring party has interposed, to the other side proceeding to judgment upon the facts. In and of itself, that does not give the other side a judgment. It leaves him at. liberty to proceed to judgment. Beyond this, an order asserting that the plaintiff have judgment is not a part of the judgment which he may have. The judgment is yet to come ; when it is-entered, it adjudges the existence of certain things, for instance, in a case like this, it would determine that a trust existed, that the trustees took the mortgage made by the defendants ; that the defendants knew the terms of the trust, and if the court so held, for this is said only as illustration, that the defendants cause to be procured the consent in writing, &c. . It would or would not leave some part of the issue undetermined, according to circumstances.

In the present case it is ordered that the plaintiffs have judgment and nothing more. The judgment in whole or in part is not pronounced. Indeed, if it is at all a judgment, it is a final judgment, if it were not for the clause “ unless,” &c. But this clause, unless the defendant serve an answer, goes back of the order that plaintiffs have judgment. If an answer be served, that prevents a judgment being entered. In that case, the order in substance is that the plaintiffs do not enter judgment, but proceed to trial of the issue of fact.

If, however, it should appear that the defendant allowed the twenty days to pass without serving an answer, there would be nothing then but an order overruling the demurrer. Before the defendant is entitled to appeal judgment must be entered, and this judgment will be final or interlocutory, according to its terms, and the contingencies of the facts.

The motion to dismiss appeal is granted, with costs. The order is to be settled upon notice.

Van Vorst, J., concurred.


text:
    THADDEUS F. MORE, as Assignee in Bankruptcy, &c., Plaintiff and Appellant, v. LOUIS DURR, Survivor, &c., Defendant and Respondent.
    Secobity fob costs.
    Section 317 of the Code of Civil Procedure provides ‘1 that the court may, in its discretion, in the cases mentioned in this section, require the plaintiff to give security for costs.”
    Among the cases mentioned in this section is that of a “trustee of an express trust.” An assignee in bankruptcy is a trustee of an express trust, within the meaning of this section (Reade v. Waterhouse, 52 N. Y. 587).

      Held, that the court has power to require the plaintiff to give security for costs, when hé is an assignee in bankruptcy.

      Before Sedgwick and Van Vorst, JJ.

      Decided April 7, 1879.
    Appeal from order requiring plaintiff to file security for costs.

      Edward Sexton, for appellant.

      S. B. Brownell, for respondent.
   By the Court.—Sedgwick, J.

The appeal is taken from an order that the plaintiff file security for costs, &c. The order does not direct in what form the undertaking should be, and on this appeal it does not appear that an undertaking has been filed. It was, however, orally claimed by the counsel for the respondent that an undertaking had been filed, and that therefore this appeal should be dismissed. But, as no motion to dismiss had been made, and the claim was not presented on affidavit, the court decided not to entertain the motion to dismiss, but to proceed to the merits of the appeal.

If the learned judge had power to grant the order, the facts of the case show no reason why his particular exercise of discretion should be reviewed.

The court of appeals held, in Reade v. Waterhouse (52 N. Y. 587), that an assignee in bankruptcy was a trustee of an express trust within the meaning of section 317 of Code of Procedure. At the end of the section is the clause And the court may, in its discretion, in the cases mentioned in this section, require the plaintiff to give security for costs.” When the meaning of a statute is plain, "it must be followed without an attempt to construe another meaning into it, or out of it. The meaning is clear if the “ cases mentioned ” can be ascertained. If that includes, as a case, where a trustee of an express trust is plaintiff, and where, by the section, costs shall be recovered, as in an action by a person prosecuting in his own right, the court had discretion to require security. If, however, something more limited was meant by a “case mentioned,” it would be when the “costs shall be only chargeable upon or collected of the estate, fund, or party represented. ’ ’ This would be a “ caseand the third ‘ ‘ case ’ ’ would be, ‘ ‘ unless the court shall direct the same to be paid by the plaintiff . . . personally, for mismanagement or bad faith in such action,” &o. Undoubtedly the section meant that the security should be required before the event of the special provision for costs in the judgment had been reached. It was to be given, in a proper case, before the defendant had yet suffered the expense or burden of meeting the claim. It could only secure this, viz. : that the estate should really pay the costs, or that the plaintiff personally should pay them, if he were charged for his mismanagement or bad faith. I do not see how the section could mean that the power of the court to require security was limited to the single case of mismanagement or bad faith on the part of the plaintiff, to be shown before the security would be required.

I am of opinion that if “by cases mentioned” the section did not intend actions by executors, administrators, trustees of an express trust or a person expressly authorized by statute, as a matter of formal interpretation, it substantially meant so by classifying such actions in the subdivision, (1) when the costs are chargeable against the fund, (2) when they are to be paid by the plaintiff personally.

The only doubt as to' this may be that an assignee in bankruptcy, no matter how valuable the assets, has no “ estate or fund” under the power of a State court. Be this so ; then an action brought by an assignee in bankruptcy is a case by itself mentioned in the section, and if the section intended that security should be required when there was an estate or fund on which a State court could charge costs, its intention applied more strongly to a case where there was no such fund.

I am of opinion that the order should be affirmed, with costs.

Van Vorst, J., concurred.


text:
    PETER MARIE, et al., Plaintiffs and Respondents, v. CORNELIUS K. GARRISON, et al., Defendants and Appellants.
    Demurrer to complaint.—Tender.
    It was necessary to allege a breach by defendant of the contract set forth in the complaint.
    The complaint alleges no more than ‘1 that although often requested so to do, the said Garrison has refused and does refuse to fulfill his sadd contract and agreement with the plaintiff,, and to issue or cause to be issued and delivered to the plaintiffs thirty-six thousand shares of stock in said company, in exchange for the stock of the Pacific Railroad, so as aforesaid held by the plaintiffs.” This allegation does not allege a fact so much as an opinion of .the pleader, that something said or done, but which is not stated, was a refusal to comply with defendants’ part of the contract.
    The omission to state when and where the request was made may be deemed as only indefinite and uncertain, but the omission to state by whom the request was made is substantial, and the demurrer is well taken.
    But in this case there was stock to be delivered by the plaintiff, and until the plaintiff, being ready, tendered in presentí their stock, the defendant was not bound by the contract to deliver his. The pleading must allege the tender, or must show something sufficient as an excuse for not tendering (Lester v. Jewett, 11 N. Y. 463).
    An absolute refusal of the party on one side to perform and fulfill a contract is a sufficient excuse to the other side for not making a tender, when a tender is necessary; but the complaint must allege and show the fact, that there was such a refusal, and that the omission to tender was occasioned thereby.
    Before Sedgwick and Van Vorst, JJ.

      Decided April 7, 1879.
    In case of refusal that excuses a tender, still there can be no recovery unless it appears by the pleading that the party so excused was ready and able to tender.

      Held, that this complaint was demurrable for these reasons.
    Appeal by defendants from order overruling demurrer to complaint.

      Messrs. W. B. Putney, M. C. Day, Henry L. Clinton and George F. Comstock, for appellants.

      Messrs. Tremain & Tyler and W. A. Beach, for respondents.
   By the Court.—Sedgwick, J.

It was necessary to allege a breach, by defendant, of the contract which it is said he made. Of this, the complaint says no more than “that although often requested so to do, the said Garrison has refused and does refuse to fulfill his said contract and agreement with the plaintiffs, and to issue, or cause to be issued, and delivered to the plaintiffs, thirty-six thousand shares of stock in said company, in exchange for the stock of the Pacific Railroad so as aforesaid held by the plaintiffs.” The allegation “refuses to fulfill his said contract” does not allege a fact, so much as an opinion of the pleader, that something said or done, but not stated, was a refusal to comply with the defendant’s part of the agreement. The fact stated is that the defendant refused to issue, or cause to be issued, the stock. If a refusal, after request alone, with nothing more, was a breach, it is doubtful that the pleading states the request properly (1 Chitty’s Pl. 331). It may be only indefiniteness or uncertainty, in so far as it does not state where ■ and' when the request was made, but probably its omission to state by whom is substantial.

But it does not appear that a refusal to issue stock, upon a request, is a breach of the contract. He agreed that “he would deliver to the plaintiffs and said Denny, in return for the amount of the stock of the Pacific Railroad, so as aforesaid held by them, thirty-six thousand full paid shares.” He was to deliver, only, as and when the plaintiffs returned their stock. The duties respectively were of equal standing. Unless and until the plaintiffs, being ready, tendered in presentí their stock, the defendant was not bound by the contract to deliver his. Therefore plaintiffs must plead that they tendered, which clearly they have not pleaded, or must show something sufficient as an excuse for not tendering. With many other cases, Lester v. Jewitt (11 N. Y. 463), is clear as to this.

It is, however, argued that a sufficient excuse for not tendering is alleged, on the rule, that an absolute refusal of one side to perform is an excuse to the other side from tendering. Of course, there is a general rule, that a refusal, which as matter of fact waives the tender on the other side, or leads it to. omit to tender, or which, as against the party refusing, shows that he would not accept the tender, is an excuse for not tendering. Then the complaint must show, as the fact, that the omission to tender was occasioned by the refusal, which is almost the reverse of the complaint, alleging that after a request, without more, the defendant refused. Then the question is, was not the defendant justified in his refusal, by the omission to tender. Should there be a refusal of a kind that excused from a tender, there could not be a recovery, unless it appeared that the party who was excused was ready and able to tender.

A mere refusal to perform is not per se an excuse. A refusal may not be a breach, for the construction of the contract may uphold the "refusal. This complaint shows such a case, for its true meaning is that the defendant oftentimes refused to issue the stock, although' the plaintiff, without tendering or being able to tender, asked him to do so.

There lurks the semblance of a doubt as to the correctness of this, in the words, in exchange for plaintiff’s stock; that is, “ he refused to deliver the thirty-six thousand shares, in exchange for the stock of Pacific Railroad, held as aforesaid by the plaintiffs.” This gives rise to no real doubt, for these words cause only an obscurity of the true construction of the complaint. The defendant’s refusal to exchange for plaintiffs’ stock was justified when, without a tender, he was only requested to exchange for plaintiffs’ stock. The request was only a demand, not necessarily—and here, so far as the complaint goes," not, in fact—accompanied with a tender. In fine, the complaint has no allegation of the essential fact, that the plaintiffs were ready and able to tender and did tender performance on their part, nor of any excuse for not tendering.

This point requires a reversal of the order overruling the demurrer. As leave will be given to the plaintiff to amend on terms, it is not necessary to discuss all the other objections to the complaint. These objections are serious, and call for a restatement of the matters to which they apply. At least, they suggest the expediency of amendment. I refer now to the allegations as to the consideration, and as to the terms of the contract.

There are some objections which should receive specific attention on this appeal. One was that it did not appear that the plaintiffs have legal capacity to sue, as there is no averment “showing whether plaintiffs sue in their own right or in trust for others, and no authority is shown for suing in .trust for others, and no specific interest in the matters complained of is shown to exist in the plaintiff or any of them,” &c. Another is, that there is a misjoinder of parties plaintiff, inasmuch as it does not appear from said complaint that the plaintiffs have any joint cause of action.

The complaint does not show that the plaintiffs lack capacity to sue for any right that the complaint may allege to exist in their favor. In the first part of the complaint it is averred that before the making of the contract pleaded, they, plaintiffs, owned and held, either in their own right or in trust for others, with full power of disposition, as hereinafter related, “thirty-six thousand shares of the capital stock of the Pacific Railroad of Missouri,” &c. It is seen that if it were necessary for the plaintiffs to show the fact of their ■ title or power of disposition, as part of their cause of action, it would be impossible to say from the allegations whether the plaintiffs sued in their own behalf as owners, or in behalf of beneficiaries for whom they were trustees. The interest, however, which they assert is not such as depends upon the title of the stock. They claim an interest in a contract alleged to have been made in reference to the stock. That contract was made with them jointly, as the complaint states that said defendant “promised to and agreed with the plaintiffs.” They agreed, as any one not owning at present property might, to exchange it in the future, and the property which they agree to exchange is described as stock, which they owned or held in trust, and over which they had full power of disposition. Their right to recover is placed upon the stock they are to return being one or the other, wholly or partly. As against the defendant, who made the contract, the plaintiffs, on the face of the complaint, are interested in their own right. Their respective interests in the stock to be issued or their obligations to others, does not, on this complaint, change the nature of their joint legal interest in the contract. Whether the facts would sustain the pleading is not a question on the demurrer.

There were certain objections made to the complaint, based upon the proposition that the contract on its face was void, for a fraudulent intent to other stockholders, or because its legal operation was to prevent the plaintiffs’ bidding at the sale in foreclosure. These were not fully discussed by the respondents, for the reason, as I suppose, that in the court below the complaint was not attacked on these grounds. The best course will be, to argue these points again, if it becomes necessary after an amendment of the complaint.

It is best to say, that on this appeal the plaintiff did not object that the order was not appealable. The fact that the merits are heard must not be a precedent for appeals from orders overruling demurrers.

Order overruling the demurrer is reversed and judgment ordered for defendant, with costs, with leave to plaintiff to amend on terms to be settled.

Van Vorst, J., concurred.


text:
    ANDREW KOCH v. MARGARET PURCELL.
    I. Referee’s report.
    1. Varying by affidavits not allowed.

      (a) Report of sale.
    To sustain a report of sale as against exceptions filed to it, affidavits showing that the terms of sale were different from those reported are inadmissible.
    H. One not a party to action.
    1. Standing in court, when.
    Assignee of mortgage made after Us pendens filed for the foreclosure of a prior mortgage, has when.

      Before Sedgwick and Van Vorst, JJ.

      Decided April 7, 1879.

      {a) Such assignee can come into court to assert a right TO THE SURPLUS.
    1. E. G. To move that referee pay into court a surplus, shown by the judgment and report of sale to exist, although he reports a deficiency.
    HI. Referee to sell.
    1. Mortgage cases.

      (a) Payment by, of surplus shown by the judgment, and his report of sale compelled, although he reports a deficiency.
    1. Where the report of sale shows that the deficiency was caused by the allowance of a prior mortgage which was not authorized by the judgment (the report not showing that by the terms of sale such allowance was to be made), and that but for such allowance there would be a surplus, the surplus thus ascertained will be ordered to be paid into court.
    Query. Whether a referee, without being thereunto authorized by the judgment, can, by making it a part of the terms of sale that a prior mortgage will be deducted from the purchase-money, entitle himself to be credited with the amount of the deduction.
    IV. Appeal.
    1. Correct decision below—power of general term in respect to.

      (a) Affirmance absolute does not always follow.
    1. Where the form in which the matter is presented in the court below, and on the appeal, is such that, although the order below made in such form is correct, yet it does present a question of vital importance to the appellant, and an absolute affirmance would bar the presentation of such question, the general term has power to make an order giving leave to the appellant to apply to the court below for leave to present the matter in such shape as to raise such question, and ordering that in ease no such application is made to the court below, or if made, then in case it is denied, the order appealed from be affirmed; and further ordering that in case the application be made and granted, then, that the order appealed from abide the decision to be made de novo in the proceedings then to b& taken.

      Appeal by the referee appointed to sell in a foreclosure suit, from an order, made on the application of one who, though not a party to the action, yet is the owner of a mortgage made subsequent to the filing of notice of lis pendens, compelling him to pay surplus moneys into court, and sustaining exceptions to the report of sale.
    This action was to foreclose a mortgage for $5,000, upon land. The owner, a party defendant, after the filing of the notice of Us pendens, made a mortgage, which was afterwards assigned to Johanna Lewniski, who was the person for whom the motion for the order appealed from was made.
    By the judgment, the referee was directed to sell the premises, and out of the proceeds to deduct certain things. He was not authorized to deduct from the proceeds the amount of any prior mortgage. He sold, and reported, that he had sold the premises to the plaintiff for $8,000, that he had allowed the plaintiff, .the purchaser, for a first mortgage on the premises, $6,290.50, and after deducting certain amounts directed by the judgment, that there was a deficiency of $4,689.
    Upon this report being filed, Lewniski, the moving party below, not being a party to the action, filed and served exceptions to the report, and gave notice bringing on the exceptions for hearing, and that at same time, &c., a motion “will be made that the report of the referee, in the particulars excepted to, be set aside, and said referee be directed to pay into court the sum of $1,400, and interest.’’
    On the hearing the exceptions to the report, it was argued that the referee had no power to pay out of the proceeds the amount of the prior mortgage, and that the amount he did pay for that, should have been applied to the mortgage in action, and that there would be left, instead of a deficiency, a surplus of more than $1,400. In opposition to the motion, affidavits were read in substance that before the bidding it was announced by the referee that there was a prior mortgage, and' the amount of it would be allowed to the purchaser out of his bid. These affidavits are more fully stated in the opinion. It also appeared that there was a prior mortgage, on which was due the amount deducted. The court sustained the exceptions, confirming the report as to matters not covered by the exceptions. It was ordered, among other things, that “ that part of the report of sale of said referee, in which he credited himself with the sum of $6,290.50, allowed to the plaintiff on account of the alleged first mortgage on the premises described in the complaint, be, and the same hereby is set aside and vacated, and said credit is disallowed . . . that part of the réport .... which states that there is a deficiency of $4,689.92 is hereby vacated and set aside . . . it is furthermore ordered and adjudicated that there is now in the hands of the said referee, for the purposes of sale, a surplus, over and above the claim of the plaintiff ... of $1,400.33 . . . and the said referee is hereby ordered and directed to pay into this court, to the chamberlain of the city of New York, to the'credit of this action, the sum of, &c. . . . subject to the further order of this court.”

      Ambrose Monell, attorney, and of counsel, for appellant, urged:
    I. The applicant has no standing in court, first, because she is not a party to the action, and, second, because she has not shown that she was damaged by the course pursued by the referee. 1. The total amount due on the first and second mortgages at the time of sale was about $11,600, which, together with $666 unpaid taxes, made an incumbrance upon the property of $12,266, which had to be paid before the lien of the third mortgage became of any value. 2. The proof is uncontradicted that these two mortgages were actual bona fide liens, and also that the value of the property sold did not exceed $8,000, which was the sum bid. It follows then that the premises not being worth as much as the amount due on the mortgages, the lien of the third mortgage was of no value, and so remains (Root v. Wheeler, 12 Abb. Pr. 294).
    II. The referee did not err in allowing to the purchaser the amount due on the first mortgage. 1. Assuming that no mention was made at the time of sale, of the existence of the first mortgage, and that the premises had sold for $8,000, the purchaser would have been entitled to a conveyance free and clear of all incumbrances, or else to have been relieved of his purchase. Suppose plaintiff did not know of the existence of this first mortgage, and the premises had been sold for $8,000, upon ascertaining this fact, would not the referee have had to discharge this lien before he could have enforced the purchase % (a) This first mortgage was a prior lien to that of the mortgage in suit. The rights of the first mortgagee could not be foreclosed in this action, and he was entitled to be paid before any other liens. Hence, practically," it made no difference whether the premises were sold subject to this mortgage or whether the amount of it was allowed to a purchaser out of his bid. 2. The case of Bache v. Doscher (67 N. Y. 429), is claimed to be decisive on this question, and as warranting the granting of the order appealed from. That case differs from this. In that case there was nothing before the court but the report of sale. It did not even appear that the referee, in terms, sold the land free of the prior mortgages, or that it was one of the terms of the sale that the purchaser was to assume any prior mortgages. And it did not appear who held the mortgages, nor how much was due upon them, nor even that there were any prior mortgages, or that the plaintiff paid them. All these facts are supplied by the proofs submitted by the referee, and hence we bring ourselves directly within the line laid down by the court of appeals to entitle the plaintiff to recover.

      Barrett & Patterson, attorneys, and of counsel, for respondent, on the points determined and suggested by the court, urged:
    I. The referee for the purposes of sale had no right to allow to the purchaser the $6,290.50, or any sum, for prior mortgage. He was a ministerial officer, bound to follow the commands of the judgment (People ex rel. Day v. Bergen, 53 N. Y. 404). The referee was plainly prohibited from applying any portion of the proceeds of sale in any other manner. In Bache v. Doscher (67 N. Y. 429), precisely this question was before the court of appeals upon the same facts, and it was held that the referee had no right to make any such allowances for prior mortgages. It is apparent, therefore, that the referee disregarded his duty in allowing the sum of $6,290.50, to the purchaser.
    II. The referee is not assisted by the fact (if such be the fact) that he agreed upon the sale to allow the sum of $6,000 and interest out of the purchase-money. He could not vary the judgment in prescribing the terms of sale, nor relieve himself thereby from the performance of the duties enjoined upon him (53 N. Y. 404). His duty was to sell the mortgaged premises subject to prior mortgages, if any. He could only sell such title as the parties to the action had (67 N. Y. 432; 2 Rev. Stat. 192, § 158, marg. paging). The referee had no authority even to announce upon the sale that the premises were subject to a prior mortgage for $6,000, and that the title conveyed would be subject to such mortgage, because no such fact had been determined against the defendants. His duty was to make the simple announcement that the sale would be subject to prior mortgages, if any. If the plaintiff desired to have the sale made subject to the first mortgage for $6,000, and interest, he should have made the prior mortgagee a party. The court could then determine the interest of such mortgagee, the amount of the lien, &c., and would decree the sale to be made subject to such lien, stating its amount (Weston Ins. Co. v. Eagle Fire Co., 1 Paige, 284). Or the prior mortgagee could be made a defendant, and the sale could be made free of the lien of such prior mortgage—the proceeds of sale being applied to its payment as far as necessary (Haines v. Beach, 3 Johns. 459; Vanderkemp v. Shelton, 11 Paige, 28). In either case the defendants would have an opportunity of contesting the existence, validity and amount of such prior lien. Without such opportunity the land of defendants could not be applied either directly or indirectly to the satisfaction of such alleged prior mortgage. The defendants are thus cut off from any defense they may have to this alleged lien. The mortgage may be a forgery, or it may be void for usury, or there may be nothing due upon it; but defendants have had no opportunity for a hearing on those points.
    III. A conveyance of the land in pursuance of the judgments would vest the title, subject to the rights of prior incumbrancers. Hot being parties to the action their rights against the land would not be affected by the conveyance. But as between the purchaser at this sale and Margaret Purcell, the primary obligation to pay this alleged $6,000 mortgage rested on Mrs. Purcell, and if the purchaser was obliged to pay it to relieve his land he would be entitled to recover from Mrs. Purcell the amount paid. For the purpose of determining the equities between the purchaser of the land and Margaret Purcell, the mortgage in suit is to be regarded as an alienation of the land jpro tanto at its date (Kellogg v. Brand, 11 Paige, 60; La Farge Ins. Co. v. Bell, 22 Barb. 67). The purchaser at the foreclosure sale acquires the title which the mortgagor had at the-date of the mortgage (De Haven v. Landell, 31 Penn. 120; White v. Evans, 47 Barb. 186). In addition, he acquires all the rights of the mortgagee given by the mortgage in respect to the land (Hart v. Wandle, 50 N. Y. 381). It would be different if the judgment expressly directed the sale to be subject to the first mortgage and the deed conveyed expressly subject to such mortgage ; that would be a dedication of the land in the first instance to the incumbrance, and would render it primarily liable. This was the distinction upon which Hart v. Wandle (50 N. Y. 381) turned. If the deed recite nothing as to a prior incumbrance, the land will be subject to the right of the prior incumbrancer. But the land will not be the primary fund for its payment. If the deed expressly recite that the sale is subject to prior incumbrances, then the land is primarily liable for their payment; but the deed in a foreclosure sale could not contain this clause except in pursuance of a direction contained in the judgment, and such judgment would make proper provision for the protection of the rights of subsequent incumbrancers against Mrs. Purcell (50 N. Y. 381).
    IV. The referee was properly directed to bring into court the surplus which would have been realized had he done his duty. The referee is a trustee of the title of the land for the parties to the cause; if he parts with the title without receiving the purchase money, he is clearly responsible for the amount of it. In this regard the order of the special term simply carried to its logical conclusion the principle decided in Bache v. Doscher (67 N. Y. 429).
    V. Upon the settlement of the order before the judge at special term, counsel for the referee suggested that a re-sale would help the referee out of his difficulty. No motion for a re-sale was made upon the hearing of our exceptions, and it was never suggested until after the decision of the special term. The respondent objected to any re-sale, and Judge Speir declined to grant it. As a re-sale may be urged here we make this point in opposition to it. (1.) No motion for a re-sale was made upon-the hearing of this motion ■ at special term. The affidavits on the part of the referee were introduced in opposition to our relief upon the exceptions, we had therefore no notice of the contents of those affidavits, and no opportunity to answer them. If any suggestion of a re-sale had been made on the hearing of the exceptions, we might have obtained leave of the special term to file affidavits in opposition (a discretionary matter on that hearing). As no such suggestion was made on that hearing, the general term on this appeal cannot in justice make any such order. The referee chose to attempt to justify his conduct, and he should be held to that course upon this appeal. Affirmative relief cannot be granted to a party opposing a motion, upon matter appearing in his papers, which the other party has had no opportunity to answer (Garcie v. Sheldon, 3 Barb. 232). (2.) A re-sale is only ordered in case of surprise, fraud, or well-grounded misapprehension or mistake (30 N. Y. 80; 1 Abb. N. S. 424; 62 Barb. 280; 25 How. 403). In addition, the party desiring such a re-sale must move promptly, and if any damage arise to any party by his delay, it is clear that the re-sale ought not to be granted. There was no well-grounded mistake here ; the law and the facts were plain to the comprehension of any person. But the inexcusable neglect and delay of the referee, and the consequent damage to the parties to the cause, is a complete answer to the motion for a re-sale. The report of sale was not filed till May 6, 1878, nearly three years after the sale. The referee says it was given to the plaintiff’s attorney to file about the time of the sale, but the referee was not directed to report to the plaintiff’s attorney, but to the court. He should have filed the report himself ; by giving it to the plaintiff’s attorney he made such attorney his agent for that purpose, and he is responsible for the neglect. The respondent’s attorneys requested the referee to file his report February 2, but no notice of that filing was served upon them till July 18, 1878. On February 2, 1878, the referee was informed of our mortgage, and on July 24,1878, our exceptions apprised him fully of our claim, yet he never suggests a re-sale till December 19, 1878—more than three years after the sale. Since the sale, property in New York city has depreciated fully one-third. The resumption of specie payments has reduced all values. If a re-sale had been suggested on the hearing below non constat, but that we might have shown that Margaret Purcell, who was primarily bound for the alleged $6,000 mortgage, was solvent in September, 1875, and had become insolvent since; this would prevent any re-sale. No case can be found where a re-sale was ordered to relieve the officer from the result of his own negligence, to the prejudice and against the objection of the injured party.
   By the Court.—Sedgwick, J.

I think there is no doubt that the directions of the court, which concerned matters stated in the report of sale, must rest upon the report- itself, and that the report could not be sustained against exceptions by affidavits, which tend to show that the referee made the sale on other terms than the report specified. In a proper case, the court would allow the referee to make and file another report, if an application for that were made. No such application was made in this case. It was clear from the report that the referee had made a payment out of the purchase-money, to protect the purchaser against the first mortgage, when the judgment had not allowed him to make it. If this payment had not been made, and the purchase-money had been applied according to the judgment, there would have been the surplus that the learned judge below found did really exist.

If there be any question as to the form of the proceeding to redress the departure from the judgment, it was not made on this appeal, and there was no suggestion of a more proper form than the one used. The claims made by the counsel for the appellant were, that on the case shown by the affidavit the referee was not liable for the amount of surplus which the report showed, after correcting the irregularities that appeared on its face, and that the person making the motion below had no standing in court, because she was not a party to the action. On the report, apart from the affidavits, which cannot be heard against it, I think there was a liability of the referee to the amount of the surplus. Although the applicant was not a party, it appeared that she had become an assignee of a mortgage made pendente lite by the owner of the equity of redemption. To the extent of the mortgage she had the same right to the surplus that the owner would have had. To assert this right, it was not necessary, as I understand the practice, for her to be made a party. In fine, on these points I am of opinion that the order below was right, and should be affirmed. And a strict regard to the disposition of the case, as the parties have chosen to shape it, would leave the matter here. Strictness, in particular instances of this kind, leads to a better administration of justice in the aggregate. It is the strongest incentive to an exact and thorough exposition of the rights of parties in other cases, in the first instance, and hence to prompt justice in a sound form. But it is, sometimes, the practice to look after the equity of' the case on appeal, if justice demands it, even where it has not been presentecL in due form to the court below. I think the affidavits, read for the referee, disclosed facts which would have suggested to the court a modification of the order, if it had been requested, and would not have weakened the sound rule stated by the court in the opinion.

The affidavit of the referee showed that immediately before the sale it was “publicly announced to the persons present at said sale, that there was upon said premises a mortgage, upon which there was due the sum of $6,500 and interest, and which was a prior lien to the mortgage under which the premises were then being sold,” which would be allowed to the purchaser out of his bid ; and that “ said premises were then and there fairly struck off to the plaintiff for the sum of $8,000, he being the highest bidder, and that being the highest sum bidden for the same.” The affidavit of the auctioneer is to the same effect. The plaintiff and his attorney make like statements severally by affidavit. These say the matter orally announced was in or noted on the terms of sale, although these terms were not presented on the motion, the recollection of plaintiff’s attorney being “that only one copy was made out, and that was left with the referee the probability of the announcement being made is confirmed by the situation and value of the property and the liens upon it. There was no testimony to the contrary.

I find that these facts are singularly like those in Hotchkiss v. Clifton Air Cure (4 Keyes, 170), which, as it was not cited to us on the argument, I believe was not to the judge who heard this motion.

The action in the case cited was for the foreclosure of a mortgage. Prior to this mortgage was another for $2,500, with interest. The prior mortgagee was not a party, nor did the pleading or judgment refer to his mortgage. On the day of sale, the property was put up for sale, subject to the prior mortgage, and the person who afterwards purchased bid $16,000. Then the plaintiff’s attorney said to the referee .that the judgment permitted the land to be sold free and clear of the prior mortgage, and the referee thereupon announced to the bidders that he would pay off the prior mortgage and give a clear title. The property was then sold for $20,000. The referee executed a deed of the premises free from incumbrance, and the purchaser paid him the amount bid, less $2,562, the amount of the prior mortgage. Parties in interest then moved that the purchaser complete his purchase by paying the sum that had been deducted. The special term granted the motion that the purchaser pay the additional sum ; but the general term^reversed it.

In the court of appeals, the counsel urged that the referee had uo power under the judgment to sell the property in the way he did, or to make the deduction, and that the purchaser had constructive notice of the judgment; that the prior mortgagee was not a party, and its existence or amount had not been determined as to the parties to the action ; that under any circumstances the whole amount should have been paid to the referee, so that he might pay over the amount of the first mortgage and present the receipt for it with his report. Judge Hunt, after saying that it was possible that the referee erred in undertaking upon the sale to provide for the payment of the first mortgage, continued (p. 178): ‘ ‘ Assuming the law to be as claimed by the appellants, the relief asked for is a non-sequitur. If the sale was irregular or unauthorized, it by no means follows that the purchasers should be compelled to pay $2,500 more than they bid for the premises. On the contrary, the plain remedy would.be to vacate the sale, and again to offer the premises for sale. This the appellants do not ask, and apparently do not desire. While they insist that the sale was irregular, they also insist upon its confirmation. While they say that the referee had no right to sell upon the promise of giving a clear title, they still insist that the purchasers shall be held to their purchase, and shall pay $2,500 more than they undertook to pay when they bid on the property. This claim is in violation of every sound principle. The purchasers never made the contract which the appellants seek to impose upon them. They have fully performed the bargain they did make.” Judge Clerke said: “This may be deemed an application seeking the equitable interposition of the court. The application is that the purchasers should be compelled to complete their purchase. The answer is that they have already done so. The referee expressly told them, at the time of the sale, that at the suggestion of the plaintiffs’ attorney in the foreclosure suit he would pay off the prior mortgage, and give a clear title. The premises were then sold under that announcement for $20,000, and thereupon such an arrangement was made that the referee executed and delivered a deed, and the purchasers paid him $20,000, less $2,562, which was the amount of the prior mortgage on the day of sale, and which, unless since paid by the purchasers, is still an incumbrance on the premises. The effect of granting this application would be to compel the purchasers to pay $2,562 more than they contracted to pay. This would be inequitable.”

I do not mean to decide that these propositions are to be applied, as the case stands at present. As against the applicant, there was no case before the court on which there could be a hearing, irrespective of the face of the report. When the case is presented, the court may have an opportunity to pass upon the obligations of the referee. I think, however, that before the present order is carried into effect, or rather, before it is to be held or be deemed a final adjudication, the referee should have an opportunity to present to the court below, an application for leave to file a new and correct report, and for the decision of the court to be stayed upon the principal motion until such new report be filed and exceptions thereto made and argued. Of course, such application will not be granted, unless it is properly made and supported. In case such application is denied, the present order appealed from is afiirmed, with costs. If it be granted, the present order is to abide the decision to be made de novo, in the proceedings then to be taken. The costs of this present appeal, and disbursements to be taxed, are to be paid, in any event, by the referee.

Van Vorst, J., concurred.