author: O’Brien, J.:

text:
    Libbie Spannocchia, Appellant, v. Frederick W. Loew and Another, as Executors, etc., of Jacob Vanderpoel, Deceased, and Others, Respondents.

      Release of dower fraudulently obtained — remedy of the releasor — rescission of contract— return of amount receiued — proof of fraud required —compromise, how far conclusire.

    Where the release of her inchoate right of dower has been fraudulently obtained from a married woman and a certain sum has been paid her in consideration therefor, she has three remedies. She may sue for the deceit, admitting that she has received such sum and keep it, stating that the right she parted with was worth much more, and upon proof thereof she can recover whatever amount of damages the evidence shows would make her as well off as if she had not been defrauded, or she may sue in equity to rescind, offering in her complaint to repay such sum and tendering it on the trial, or she may bring her action at law for an admeasurement of dower, in which case she must pay back or tender the amount received upon the trial thereof.

      The general rule is that a party cannot rescind a contract for fraud without restoring whatever has been received under it. The exceptions to the rule are:

      First. In equity where it appears that the party seeking relief was bound to pay some unascertained amount before the relief could be granted, in which case it is not necessary to pay or tender the amount before bringing suit; it is enough if the plaintiff offers in his bill to pay or perform whatever obligations rest upon him in that regard.

      Second. If the particular sum in question was undisputably due the plaintiff it is unnecessary for the plaintiff to tender or return the money paid as, in any view of the case, so much would be due to him.
    Where parties disagree the law favors a fair adjustment of their differences between themselves out of court, and it is only upon the clear showing that the party complaining has been over-reached by fraudulent means that the court’s aid can be invoked to right the wrong.
    Appeal by the plaintiff, Iibbie Spannocchia, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 4th day of January, 1895,'upon the verdict of a jury rendered by direction of the-court after a trial at the New York Circuit, granting the defendants judgment against the plaintiff on the issues, upon the merits, with notice of an intention to bring up for review upon such appeal an order made at the New York Circuit on the 28th day of December, 1894, and entered in said clerk’s office, granting the motion of the defendants for an extra allowance.
    This action was brought for the admeasurement of dower and for the recovery of damages for its detention.

      John D. Townsend, for the appellant.

      William Man, for respondent George B. Vanderpoel.

      William V. Rowe, for respondent Loew.
   O’Brien, J.:

Jacob Yanderpoel was married to the plaintiff December T2, 1812, and he died in February, 1884. This action was commenced in March, 1893, against the executors of his last will and testament and others interested in the property by his wife Libbie Spannocchia (who, after his death, had married again), to compel admeasurement of her dower.

Prior to his death, and on June 1, 1881, vanderpoel conveyed to Frederick W. Loew all his real estate. The plaintiff, in consideralion of $20,000, admitted to have been paid, released to lier husband’s grantee all her inchoate right of dower in the real estate by sealed release, duly acknowledged on June 2, 1891. In March, 1883, a suit for limited divorce Avas brought by plaintiff against her husband, and an agreement Avas made between lier then attorney (who is the same person that represents her in this action) and Mr, Loew, representing the husband, by which it was agreed that she was to bring an action for absolute divorce, t'o which no opposition Avas to be made, and in which she was to receive $10,000 in lieu of alimony and of all claims that she had or might have against Vanderpoel or his property, and in addition that her attorney was to receive $1,500 for his fees and expenses, and that upon such payment she should “give to the said Jacob Vanderpoel a general release from all claims and demands which she or her heirs or assigns have or may have against the said Vanderpoel or his property.” The agreement also provided for making irrevocable a power of attorney theretofore given to Mr. Loew, so as to authorize him “ to act in her stead in all matters in Avliich she has or had any interests in common with her husband growing out of their married relations.” This agreeement was carried out; she got an absolute divorce on June 29, 1883, and received her $10,000, and her attorney the $1,500 as agreed, and she executed on the back of the old power of attorney a declaration dated July 11, 1883, that for value received she made it irrevocable, and she gave a general release to Mr. Vanderpoel. In 1892 she brought suit against Mr. Loew for damages, alleging that she had been induced, through fraud and misrepresentations, to sign the release of dower to the realty conveyed by Vanderpoel to Loew in June, 1881. On March 6, 1893, this suit was compromised by the payment of $500 in settlement and the execution of a release to Mr. Loew of the cause of action, and on the same day upon which the suit Avas compromised, viz., March 6, 1893, the summons in this action Avas dated and the complaint verified.

Upon the trial it was admitted that of the moneys thus paid to plaintiff, which included the $20,000 received by her upon the execution of the original release of dower to the defendant Loew on June 2, 1881, the $10,000 and $1,500 paid in connection Avitli the divorce suit, and the $500 paid by Loew in settlement of the action against him, none was either tendered or returned, nor did the plaintiff make any offer to return any or all of such sums After these-various releases of dower and other documents were introduced by the defendants and the latter had rested, plaintiff sought in rebuttal to attack them' on the ground that the defendant Loew had procured them by fraud, the claim made by counsel being that he-had evidence tending to prove that the defendant Loew had misrepresented to the plaintiff the value of Jacob Vanderpoel’s property and his wealth and the nature of the instruments which he had induced her to sign; but such testimony was objected to, and in the-oral opinion sustaining such objection the learned trial judge, among; other things, said :

“In 1883, when she brought her action for separation, Mr. Vanderpoel and she having, as I understand the matter, been previously actually separated, and in her complaint in that action she alleged that she had been deceived as to the amount of his property, and that he was then the owner of some $700,000 worth of real estate,, showing that at that time she had information upon the subject as to-the amount of his real estate; whether it was correct or not there is-nothing before me to show. Then it appears that an agreement-was entered into between Judge Loew and Mr. Townsend, representing the parties, which provided for a variety of matters, and,, among others, it provided that she should receive $10,000 more, in addition to the $20,000 which she had received when she executed the first release, and that a divorce should be secured by her without opposition on the part of her husband in some State other than New York, and that her counsel should receive $1,000 for counsel fees- and $500 for expenses. It appears that that agreement was carried out, with the difference that the divorce was obtained in this State by her, which was an absolute divorce on the ground of adultery,, and, of course, entirely separated the parties for all legal purposes. Then it appears that the $10,000 was paid her, and the other sums agreed upon were paid, and at that time, in consideration of this arrangement, she executed a general release to Mr. Vandepoel himself of all claims and demands of every description whatever, including any possible claim for dower, although I do not remember whether dower was specifically mentioned or not. * * * Then it appears that nothing further was done, as I understand it, until the action was brought in the Court of Common Pleas in the year 1893, in which it was set up in the complaint that she had given these releases as the result of fraudulent representations made to her b.y Judge Loew. In that action she demanded $150,000 damages-because of these fraudulent representations. That action assumed the existence of the release and its validity and demanded damages-because she had given it. It appears that that action was subsequently settled upon the payment of $500, and thereupon the plaintiff executed a third release to Judge Loew, releasing him from all claims of every sort and description. Thereupon a consent was made,, and that action was discontinued, and immediately afterwards the present action was brought. Here are these three releases that have been given by the plaintiff : The original one of dower specifically to Judge Loew in 1881; the second one, in 1883, to Mr. Va-nderpoel himself, after she had been divorced, which was a general release, and also a release of dower; and, in the third place, a release to Judge Loew, in 1893, which was also a general release. Upon this state of facts the defense raises four objections to the admissibility of this testimony. The first one is that in this suit it is sought to avoid the effect of the Statute of Limitations because if an action was brought at the time this was brought to set aside these releases, it would have been barred by the Statute of Limitations ; therefore, an attack cannot be made upon these releases collaterally in this suit.
“The second is, that having received $20,000 in consideration of releasing her dower, she cannot maintain an action without restoring that $20,000.
■ “ The third is, that having in the first suit which she brought in the Common Pleas elected, not only her remedy, but her right, and insisting that the release which she had given was in full force, and demanding damages because of'the release, she cannot now, at least as against Judge Loew, insist that the release is void.
“ Fourth, it is claimed that under the [Revised Statutes she has-made the election as to her dower. The statute provides that where any arrangement is made by a married woman, and that pecuniary provision is made, that she must elect within a year whether she will accept that pecuniary provision or whether she will stand upon her rights and claim her dower in the land ; and it is insisted that slie elected to take the pecuniary provision and has never returned it, and, therefore, she cannot maintain such an action as this.
- “As to the first ground of objection, my impression is that the point is not well taken. As to the third and fourth grounds, I am inclined to think that the objections are well taken, but it admits of argument pro and con as to those two points. Put as to the second objection, it appears to me that there is no answer to it, at least I have heard none suggested, and I have not been able to think of any answer, that is, that before she can maintain this action she was bound to return the $20,000.”

We have thus quoted at length from the views expressed by the court in disposing of the objection to the testimony offered by the plaintiff in rebuttal, because it contains a clear summary of the facts as they were then made to appear, and shows a clear apprehension on the part of the trial judge of the legal principles applicable thereto, and we might be well content to rest our affirmance upon his opinion, were it not that the principal ground upon which the ruling was claimed to be supported is strenuously assailed upon this appeal, and it is, therefore, necessary that we should supplement his views by a brief reference to the legal principles and the authorities which we think control.

As correctly said by one of the respondents, this is an action at law, not for damages for the claimed fraud or deceit, but • for the identical thing released or sold. The plaintiff retains the consideration paid her and thereby affirms the sale, and yet sues to get the identical thing and the whole thing that was the subject of sale. Unless the release of dower is set aside, it is an absolute bar to any recovery of dower. If fraudulently obtained from her, she had three remedies. She might have sued for deceit, admitting that she got $20,000, and kept it, stating that the right she parted with was worth much more, and upon proof she could recover whatever amount of damages the evidence showed would make her as well off as if she had not been defrauded. She might have sued in equity to rescind, offering in her complaint to repay the $20,000 and tendering it on the trial. Or she could have brought her action at law, such as was here brought, for an admeasurement of dower, and whether in such action she should pay back or tender the $20,000 upon the trial, the authorities must determine.

At tlie time tlie release of dower was delivered the plaintiff Avas not entitled to any sum whatever, and Avhat, was paid her then Avas not in satisfaction of any absolute right or claim that she then had, but Avas given in consideration of the release and transfer of her inchoate and contingent right or claim for dower. This sale, settlement or release she seeks to repudiate upon the ground of fraud, claiming that she Avas entitled to doAver in the lands, so that if she were permitted to recover without paying back or offering to refund what she had received, she Avould have both the land and the money.

The general rule is that a party cannot rescind a contract for fraud without restoring whatever has been received under it. (Lee v. Vacuum Oil Co., 126 N. Y. 579, 586.) The exceptions to this rule are : First. In equity, Avhere it appears that the party seeking the relief was bound to pay some unascertained amount before the relief could be granted, it is not necessary to pay or tender the amount before bringing suit; it is enough if the plaintiff offers in his bill to pay or to perform whatever obligations rest upon him in that regard. (Zebley v. Far. Loan & Trust Co., 139 N. Y. 470.) Second. If the particular sum in question “ was indisputably due the plaintiff, then it would have been unnecessary for the plaintiff to tender or return * * * the money paid, because in any view of the case so much would have been due the plaintiff.” (Gould v. Cayuga Co. Nat. Bank, 86 N. Y. 75; Kley v. Healy, 127 id. 555.)

"Whether the plaintiff was entitled to the benefit of this second exception is to be determined by the answer to be furnished to the query whether in any event she was entitled to retain the $20,000 paid her at the time the release sought to be set aside Avas delivered. The action is to obtain ah admeasurement of plaintiff’s dower or to have set apart her interest in the land ; and she would not be entitled to both that relief and 'any sum equal to or in excess of the $20,000 paid her. Therefore, under the general rule she Avould be required to refund A\diat she had received under the contract which she seeks to have rescinded for fraud. ,

It will thus be seen that avo concur in the conclusion reached by the learned trial judge, and leave undisposed of the other questions which are serious obstacles to plaintiff’s right to maintain this action.

That little weight is to be attached to the claim that her knowledge of the deception practiced upon her in misstating the amount of Mr. Vanderpoel’s wealth was but recently obtained, is shown by the fact that in her verified complaint in March, 1883, ten years before the commencement of this action, she alleges that Vanderpoel “is a man of very large fortune, as the plaintiff believes, being worth at least the sum of $700,000.” And she therein further alleges that ¡she was “ induced to sign off her dower right in all the defendant’s '(Vanderpoel’s) estate nominally for the sum of $20,000, but in reality for the sum of $10,000.” It was subsequent to verifying such complaint that, with the assistance and advice of her present attorney, she entered into the agreement relating to her obtaining an absolute divorce and receiving for herself the $10,000 and for her counsel the $1,500, which agreement was fully carried out by the payment of the sums named and by,her giving, as she had agreed to do, another release of all her claims against her husband’s property.

If the maxim that there should be an end to litigation can ever be invoked this would seem an eminently proper case for its application. Not content with her former steps, and claiming to have been defrauded, she elected after an interval of years to sue Mr. Loew personally for damages for such fraud, which action, as ¡shown, was compromised and' settled on the very day that this present action was commenced. We do not think it can be seriously contended that the plaintiff has not had her day in court, or has not had the advice and assistance of competent counsel, because it is made to appear that by shifting her position she has succeeded up to the present time in obtaining three different settlements, which apparently have no other force or effect upon her than to whet her appetite for additional litigation; and if this action can be mainfained, we fail to see when there is to be an end to the dispute between this plaintiff and the estate of her former husband. Where parties disagree the law favors a fair adjustment of their differences between themselves out of court, and it is only upon a clear showing that the one complaining has been overreached by fraudulent means that the court’s aid can be invoked to right the wrong. But where as here the plaintiff urges her claims through the same attorney that conducted the negotiations for her leading up to the settlement from which she obtained pecuniary compensation, and after tlie lapse of years, during which with knowledge she rested upon her rights, she does not make a showing commending her to the favorable consideration of the court.

We think upon the merits that the disposition made by the trial judge was right, and that the granting of the full allowance was' a proper exercise of discretion, because warranted by the extraordinary Character of the action, and justified by the only conclusion to be ■drawn from the facts, that the plaintiff, without any just cause of complaint, speculated upon the chances of a recovery, and having lost, should, as all other suitors in similar actions, pay the penalty.

Judgment accordingly affirmed, with costs.

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

Judgment affirmed, with costs.


source: Caselaw Access Project

license: Public Domain

text:
    The National Pipe Bending Company, Respondent, v. George E. Fisher, Appellant.

      Amendment of pleadings — terms imposed — relief not refused heaa/use of an offer of settlement — denial in the amended, of a contract admitted in the original, cmsicer.

    ‘The Supreme Court has the power to permit the amendment either of a complaint or an answer, and the practice has been to exercise such power liberally in furtherance of justice, so as to permit either a fuller statement of the cause of action, or the opportunity to make a proper defense, and when the application is made in good faith, without delay, an amendment should be allowed on such terms as are just.
    It is within the power of the court to fix, as one of the conditions for the granting of a motion made to permit a party to an action to serve an amended pleading therein, that such party should stipulate to try the cause when reached upon the day fixed by the adverse party.
    Courts, while favoring the settlement of actions, will not seize hold of an offer of settlement, and because of it refuse to grant relief which, but for such offer, would be granted.
    'The answer in an action seemingly admitted the existence of the contract alleged in the complaint. The defendant subsequently moved for leave to serve an amended answer, setting up facts in avoidance of the contract, on the ground that the original answer was drawn and verified by the defendant’s attorney in the absence of the defendant, upon insufficient information and without full opportunity to consult with the defendant as to his defense. Upon an appeal from the order denying the defendant’s motion for leave to serve an amended answer,

      Held, that the rule forbidding a party who has admitted a contract, to subsequently set up facts in avoidance, should not be so strictly enforced as to impair the power of the court to permit an amendment, where the amendment sought is not based upon a mere matter of technical defect in the execution of the contract, but goes to the denial of the contract itself.
    Appeal by the defendant, George E. Fisher, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 2d day of April, 1895, denying the defendant’s motion for leave to serve an amended answer.

      O. P. Buel, for the appellant.

      Frederic R. Kellogg, for the respondent.
   O’Brien, J.:

The action is brought to recover the value of certain goods, wares and merchandise and certain services furnished and rendered upon the express promise of the defendant to pay therefor. From the complaint it appears that the order for the goods was originally received by the plaintiff from one A. Perry Bliven, but that prior to the acceptance of the order and the manufacture and delivery of the goods, the plaintiff required the express promise or guaranty of the defendant that he would pay the plaintiff therefor, and that thereupon the defendant did so agree. The answer denied that the goods were made in reliance on defendant’s promise, or that they were to the satisfaction of Bliven, but seemingly admitted the statements as to the promise of the defendant that he would pay for the goods, and as to the requirement by the plaintiff of this promise before it would accept the order for or manufacture them. The difference between this and the proposed amended answer, would result, as urged by the plaintiff, in permitting the defendant to change his admission of the contract set forth into a denial of it in its entirety, and would permit him further to amplify the affirmative defense by alleging that a party other than Bliven was the purchaser, and that the purchase, was made, not from plaintiff, but from another company.

There is no question as to the power of the court to allow the amendment either of a complaint or answer, and the practice has been to exercise such power liberally when in furtherance of justice, so as to permit either a fuller statement of a cause of action or an opportunity to make a proper defense; and, when the application is made in good faith without delay, an amendment should be allowed upon such terms as to the other party are just. Here the complaint was served on November 16, 1894, and the original answer in January, 1895. Shortly after the last date the case was set down for trial on the special calendar for short causes on March 22, 1895. The original answer was drawn and verified by one of the defendant’s attorneys during the absence of the defendant from the city, and, as he swears, without full opportunity to consult with the defendant as to his defense, such opportunity having been presented only on the twenty-first of March, when the defendant came to the city to attend the trial of the case. The trial, which was set down for the twenty-second of March, was adjourned at plaintiff’s request to the second Friday of April, and thereupon the plaintiff’s attorneys were immediately requested to accept service of the amended answer, which was refused, and the motion was made for the twenty-ninth of March for leave to serve the proposed amended answer. The attorney, in the affidavit in support of the motion, states how the original answer failed definitely to set forth the defense, and that the failure to move earlier was due to the defendant’s absence from the city, and we have his sworn statement that the application was not made for the purpose of delay. The motion was opposed, and we must presume upon the same grounds that are urged upon this appeal, viz., that the defendant had been guilty of laches ; that the application was not made in good faith, and that the defendant should not be permitted, after admitting the contract, to set up facts in avoidance thereof.

We can find no evidence upon the facts here presented, either of laches or want of good faith in making the application. The delay that occurred is fully explained and is uncontradicted, and the suggestion that the application was made to obtain delay or to have the case consume more than an hour is met by the sworn statement that no delay of the trial was asked or expected, and it was within the power of the court to affix, as one of the conditions for the granting of the motion, that the defendant should stipulate to try the case wlien reached upon the day fixed by the plaintiff. The strongest argument to support the claim of bad faith is in the suggestion that the defendant made an offer to pay something in settlement of a liability upon a contract which, by the proposed amended answer, is denied. And while this is not without force, we think it would be going too far to hold that where one desiring to buy his peace or for any other reason may make an offer, this can be subsequently resorted to to prevent his obtaining relief which otherwise he would be entitled to. In other words, the court, while favoring settlements, should not seize hold of an offer, and, because of it, refuse to grant relief which but for such offer would have been accorded.

As to the third objection urged, that a party who has admitted a contract should not be permitted subsequently to set up facts in avoidance, it is sufficient to say that if this rule were to be strictly adhered to it might impair the right of the court to permit an amendment, for unless it is necessary in some respects to change the pleading there would be no need to apply for an amendment. It is true that in Smith v. City of Athens (74 Hun, 26), where the answer expressly admitted the execution of the contract, and where it was sought to amend by setting up certain defects in the execution thereof by the amended answer, the court in affirming the order of the Special Term refusing to permit such amendment said : “ The alleged defects in the execution of the contract, if they exist, must have been well known to appellant when the answer was interposed. If they existed the appellant clearly elected to waive them and defend the action upon the merits. To such election it should be held. To allow it first to admit and then after reflection to deny facts upon which the rights of parties rest, would not be in furtherance of justice.” This case, however, differs from the one cited in that the original answer, upon insufficient information, was interposed by the defendant through his attorney, it having been verified by such attorney in the absence of the defendant himself, and the amendment sought, unlike that in the case cited, is not upon a mere matter of technical defect in the execution of the contract, but goes to the denial of the contract itself.

"We think that the application was one which, upon terms that were just, should have been granted. The order is accordingly reversed, with ten dollars costs and disbursements, and the application granted upon the condition that the defendant pay all the costs of the action up to the time of the application and stipulate to try the case when reached on the short cause calendar.

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

Order reversed, with ten dollars costs and disbursements, and application granted on terms stated in opinion.


author: Parker, J.: Van Brunt, P. J.:

text:
    Thomas H. O'Connor, Respondent, v. Peter W. Felix and Others, Defendants. Michael H. Hagerty, Appellant.

      Judgment of a court of general jurisdiction — collateral attack — objection that a defendant was not served — marketable title.

    In determining questions of fact upon contradictory evidence, the testimony of witnesses is to be weighed and not counted.
    The judgment of a court of general jurisdiction should be protected from collateral attack, as before the court can render the j udgment it must decide upon the evidence before it that jurisdiction of the defendant has been acquired in the manner provided by.statute.
    Except under some peculiar and extraordinary circumstances, the objection that a party to an action was not served and that an appearance by an attorney in a court of record of the State of New York for such party was unauthorized, and hence that the court directing the entry of the judgment was without jurisdiction, cannot be taken in a collateral proceeding or action, and the party is confined to a motion in the original action in order to obtain relief.
    How far a title is rendered unmarketable by the claim, of a party to an action for the foreclosure of a mortgage on the premises in question, that he was not served with process in that action, considered.
    Appeal by Michael H. Hagerty, the purchaser of real property at a foreclosure sale, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 30th day of November, 1894, confirming the report of a referee, and directing that the appellant complete his purchase of such real estate.

      James A. Deering, for appellant Hagerty.

      Richard O. Gorman, for the respondent.
   Parker, J.:

The appellant, a purchaser at a foreclosure sale, insists that the order requiring him to complete his purchase should not have been granted, because the title tendered is not marketable.

The judgment, under which the sale was had, was rendered in a suit to foreclose a mortgage of $25,000, made by the defendants, Peter W. Felix and wife, to the plaintiff, covering eighteen lots of land in the city of New York. February 10, 1893, judgment of foreclosure and sale was granted and entered.on the usual affidavits showing that all of the defendants had either been served or liad appeared. At the sale had thereunder Patrick Fox, one of the defendants, bid in two of the lots, and afterwards failed to compílete his purchase. A resale was ordered and Fox again bid in the same two lots, and again failed to complete his purchase. An order was made requiring him to compílete, which was not complied with; thereafter a third order for the sale of the lots was made, at which sale Michael IT. Hagerty, this appellant, became the purchaser. Between the sale and the time fixed by the terms of sale for the completion of his purchase, there was served upon him an affidavit made by the mortgagor Peter ~W. Felix, entitled as of the suit in foreclosure, in which the affiant stated that he had been informed that an affidavit was on file with the judgment roll in the action, alleging that he had been duly served with a summons and complaint, but that such complaint was never served upon him. For this reason Hagerty refused to compílete his purchase, and thereafter a motion was made by the plaintiff to compel him to complete which was opposed by Hagerty, who presented on the motion the affidavits of Felix and Fox, as well as his own affidavit, and the court, in pursuance of the provisions of section 1015 of the Code of Civil Procedure, appointed a referee to hear and determine whether the amended summons and eopiy of amended complaint in the action were personally served on Peter ~W. Felix. The referee took the proofs offered and reported that service had been made upon Felix, as stated in the affidavit of service annexed to the judgment roll. This report was confirmed at Special Term, and an order made requiring the purchaser to complete the sale. Upon the hearing Felix testified that he had never been served with a summons and complaint.

Having been informed by his brother-in-law, Patrick Fox, that papers were to be served upon him,'that he ought to avoid service, and in order to do it would have to keep out of the way, lie took the advice and acted accordingly. His testimony with that of Thomas Colwell and Bernard Mulligan was to the effect that by a ruse the process server York was led to serve the summons on another party, supposing him to be Felix. Mr. York, who made the affidavit of service, testified that before making the service he had obtained a description of Felix, and was informed by the janitor of the building in which Felix was working, who Felix was, and when Felix was coming outlie served him with the summons, having first addressed him, “ This is Peter "W. Felix ? ” and received the rejily, “If it is, what do you want of me?” After which the-man served took the papers and put them in his pocket. When brought face to face with defendant Felix on the reference, Mr. York swore positively that Felix was the man upon whom he had served the papers.

While in numbers Felix’s witnesses predominated, still our examination of the testimony satisfies us that this was a proper case in which to bear in mind the rule that testimony of witnesses is to be weighed, not counted, and we concur in the report that service was in fact made by York upon Felix as stated in the affidavit annexed to the judgment roll. But the purchaser urges, however firmly ‘ convinced this court may be that the referee and the Special Term reached a correct conclusion in determining that the summons was served upon the defendant Felix, still the purchaser ought not to be compelled to take title, for the question of service is yet open to an attack by Felix. True, but it can only be attacked by a direct motion in this action, and from the evidence brought out on this motion it is apparent that the same result must follow.

The assertion we have made, that this judgment can only be attacked hereafter by direct motion, is controverted by several authorities in this State; still we regard it as accurately expressing the present state of the law.

In Ferguson v. Crawford (70 N. Y. 253) it was held that a recital in a judgment roil in an action of foreclosure that the defendant was served with the process and appeared therein was not conclusive, and did not preclude such defendant, in an action brought by him to foreclose a junior mortgage, from showing that he was not in fact served and that he did not appear. The question was elaborately discussed by the court, authorities of many jurisdictions being considered, and in the course of the opinion the court said: “ After considerable research, I have been unable to find a single authoritative adjudication in this or any other State, deciding that, in the case of a domestic judgment of a court of general jurisdiction, want of jurisdiction over the person may be shown by extrinsic evidence, while there are a great number of adjudications in neighboring States holding that, in the case of such judgments, parties and privies are estopped in collateral actions to deny the jurisdiction of the court over the person as well as the subject-matter, unless it appear on the face of the record that the court had not acquired jurisdiction; and that, in such cases, there is a conclusive presumption of law that jurisdiction was acquired by service of pro-, cess or the appearance of the party.”

This assertion was not only borne out by the authorities in other jurisdictions, to some of which the learned judge referred, but there was, at that time, no authority in this State holding to the contrary in the case of a domestic judgment rendered by a court of general jurisdiction.

Judge Marcy, however, in Starbuck v. Murray (5 Wend. 148), which was an action for debt on a judgment rendered in a sister State, commenced by attachment of goods had, held that the defendant could plead, in bar of a recovery, that no process was ever served upon him in the suit in which the judgment was rendered, and that he never appeared therein in person or by attorney, notwithstanding the averments in the record to the contrary. This decision had been followed in a few other cases at the time the opinion in Ferguson's Case (supra) was wi’itten, and to them reference was made as establishing the law in this State to be that, in regard to judgments of sister States, the question of jurisdiction may be inquired into, and the want of jurisdiction over the person shown by evidence.

Starting with that proposition, it was argued, in Ferguson's case, that there was no basis upon which to rest a distinction between domestic judgments and judgments of sister States, in view of the provisions of the Constitution of the United States requiring full faith and credit to be given in each State to the public acts, records and judicial proceedings of every other State. And, as the court could find no room for distinction between the two classes of judgments, it held that, so far as this State is concerned, the rule of Starbuck’s Case (supra) must be held to apply to domestic judgments as well. The mistaken positions which sometimes result from so close an observance of the rule of stare decisis as overlooks the error involved in the decisions invoked, rarely has a better illustration.

Mr. Justice Marcy, in his opinion, said: So long as the question of jurisdiction is in issue, the judgment of a court of another State is, in its effect, like a foreign judgment; it is prima facie evidence; but, for all the purposes of sustaining that issue, it is examinable into, to the same extent as a judgment rendered by a foreign court.” Thus overlooking the constitutional provisions invoked in Ferguson’s case. In other words, the court said: The question of jurisdiction may be inquired into ; as to a foreign judgment, the judgment of a court of another State is in its effect like that of a foreign judgment; therefore, the question of jurisdiction as to the judgment of another State may be inquired into.

In Ferguson’s case the court decided that, it having been determined that judgments of sister States maybe inquired into as to the question of jurisdiction, and it being settled that under the provisions of the Constitution of the United States that, when the judgment of a court of a sister State is duly proved in a court of this State, it is entitled here to all the effect to which it is entitled in the courts of the State where rendered, therefore, the jurisdiction of a court of general jurisdiction in this State to render a given judgment may be attacked collaterally.

The proposition in Starbuck’s case, that it is a fundamental rule that no court can acquire jurisdiction by the mere assertion of it or by deciding that it has it, is discussed in Vanfleet’s Collateral Attack (p. 472) in these words: “ It sounds plausible, * * * but * * * the fallacy lies in confusing laxo with right. A judgment rendered after the utmost care, at the end of an impartial trial, may not be right, and it may unjustly sweep away the life, liberty or property of the defendant; yet it is lawful, and a just and rightful foundation for the titles of others; and, although wrong in itself, it is lawful cmd right collaterally. The question of service or appearance must be decided by the court in each case as a question of fact, and it is the allegation of the plaintiff that he has caused service to be made, or the defendant to appear, which gives the jurisdiction to hear liis evidence on that point.”

Ferguson’s case came again before the Court of Appeals in 86 N. Y. 609, where it was held that the evidence adduced on the new trial, for the purpose of showing that the defendant was not served, was insufficient to rebut the presumption in favor of the regularity of the judgment. It was also cited with approval in People ex rel. Frey v. Warden of County Jail of New York County (100 N. Y. 20), which was an appeal from an order of the General Term affirming an order of the Special Term dismissing a writ of habeas corpus and remanding relator to custody. It is again cited, with other cases, in Craig v. Town of Andes (93 N. Y. 405) as authority for the proposition that it is “ now well established that the record, whether of a superior or an inferior court, is never conclusive as to the existence of a jurisdictional fact, and that a defendant may show a want of jurisdiction although the record avers the contrary.”

Bolton v. Schriever et al. (135 N. Y. 65) was an action of ejectment to recover possession of a lot of land on Tenth avenue, of which Theodore B. Talmadge died seized. Talmadge’s will was admitted to probate by the surrogate of the county of New York. Plaintiff’s position was that Talmadge was not an inhabitant of New York county at the time of his death, and, therefore, the surrogate had no jurisdiction to take proof of the will, and as there was no other proof of the execution of the will the defendants made out no title to the land, and the plaintiffs were entitled to recover it as heirs at law of Talmadge.

It was held, as the surrogate has power and is bound to inquire and decide whether the testator was an inhabitant of the county at the time of his death, his decision that he was, upon legal evidence tending to support it, could not in the absence of fraud or collusion be questioned.

For the same reason it would seem that a judgment of a court of general jurisdiction should be protected from collateral attack, for before the court can render the judgment it must decide upon evidence before it that jurisdiction of the defendant has been acquired in the manner provided by statute.

In the recent case of Murphy v. Shea (143 N. Y. 78), an action brought to compel a purchaser to take title, which he had declined to accept on the ground that it was not marketable, it appeared that the seller had obtained his title under a judgment of foreclosure. One of the defendants was an infant, for whom a guardian ad litem, had been appointed upon a verified petition presented by the father of the infant, in which it was stated that the summons and a'copy of the complaint were served on the infant at a time stated. After the sale the purchaser procured an affidavit of the father, in which he stated that he was mistaken when he said that the summons and complaint had been served on the infant in the petition requesting his appointment as guardian ad litem, and denied that the infant had been served. On the affidavit he made a motion to be relieved from his purchase, and the motion was denied and he compelled to take title. On the argument in the Court of Appeals it was insisted that this decision constituted another adjudication as to the jurisdiction of the court in foreclosure actions, and, therefore, was not the'subject of collateral attack. This proposition the court did not pass upon. Instead, it said, “ if we assume without in any manner deciding that the defendant is mistaken in that matter, the plaintiff is no better off,” and then proceeding with the assertion that the burden rested upon the plaintiff to show that there was no service, it demonstrated that the burden thus resting upon him had not been met.

The decision in Washbon v. Cope (144 N. Y. 287), in which the opinion of the court was delivered by the learned judge who wrote the opinion in Murphy v. Shea (supra), persuades us that had it been necessary for the court to pass upon the question, whether the judgment, which was the subject of consideration in that case, could have been attacked collaterally on the ground that the court had not acquired jurisdiction by the service of the summons and complaint upon the infant defendant, it would have been answered in the negative. In Washbon’s case it was contended by Mrs. Cope, a defendant, that no effect could be given to a certain decree of the Surrogate’s Court, because she was not served with a citation in the proceeding, and the alleged appearance of the attorney therein for her was wholly unauthorized, by reason of which the surrogate failed to acquire jurisdiction.

This position the court- held to be untenable. It said: It has been settled by an unbroken line of decisions in this State, running many years back, that, unless under some peculiar and extraordinary circumstances, not existing in this case, the objection that a party was not served, and au appearance by an attorney in a court of record for such party was unauthorized; and, hence, that the judgment was without jurisdiction, cannot be taken in a collateral proceeding or action, and that the party is confined to a motion in the original action in order to obtain relief.” As authority for this position it cited, among other cases, Vilas v. R. R. Co. (123 N. Y. 440).

In Vilas’ case, it is true, it was not necessary to pass upon the question whether a domestic judgment of a court of general jurisdiction can be attacked collaterally for want of jurisdiction owing to the failure of service of process or the non-appearance of attorney. For the question was raised by a motion to open the judgment and to set aside and vacate an appearance in the action by an attorney. The authorities, however, bearing upon this general question are quite fully considered, the court holding that it has become the settled practice in this State that relief against a judgment rendered against a party upon an unauthorized appearance of an attorney in his name, is to be sought in a direct application to the court by motion in the action in which the unauthorized appearance was entered, and that equity will not take jurisdiction to set aside a judgment unless the court can see that the circumstances are such that the right to or measure of relief cannot properly be determined on motion. While these later decisions do not iii terms overthrow the rule of Ferguson’s case they accomplish practically that result by restricting its operation to a limited class of cases in which relief cannot be had on a motion.

They clearly deny the right of the defendant Felix to attack this judgment, which was rendered upon evidence of service of the summons upon him, other than by direct motion, for he had full knowledge of the fact that the judgment roll contained an affidavit showing that service had been made upon him prior to the sale under which the appellant became the purchaser and had full opportunity to obtain relief, if he was entitled to any, by a motion to open the judgment.

Our conclusion, therefore, is that the title is marketable.

The order should be affirmed, with ten dollars costs and printing disbursements.

O’Brien, J., concurred.

Van Brunt, P. J.:

I concur upon the ground that there is no reasonable ground to suppose that Felix could succeed in setting aside this judgment by a direct proceeding.

Order affirmed, with ten dollars costs and disbursements.


author: Parker, J.:

text:
    Thomas Crimmins, Respondent, v. The Metropolitan Elevated Railroad Company and Another, Appellants.

      Rental damages to real estate fro7n an elevated railroad — when the right of action therefor is in the tenant and when in the landlord.

    Where the lease of property abutting upon a street on which is erected an elevated railroad is made subsequent to the construction of the road the exclusive right of action for rental damages is in the landowner. In such case the rent is presumed to be based upon the reduced value of the property occasioned by the railroad which burdens the landlord with the loss, but where the lease was made before the building of the road the lessee has the right of action. In such case the lessee pays for the full use of the property, is deprived of part of it, and is, therefore, the one injured.
    Under a renewal lease, made after but in pursuance of a lease given before the erection of the elevated railroad, and by which the parties are constrained in fixing the rent, terms and conditions of the renewal lease, the right of action is in the lessee because the two terms are treated as the outcome in effect' of one continuous lease commencing before the erection of the road.
    In an action brought by a tenant of real property against an elevated railway company to recover damages sustained by the operation and maintenance of the elevated road two leases were given in evidence, one made in 1869 for twenty-one years and the other made in 1890 for the same period, the elevated railway having been erected subsequent to 1869 and prior to 1890.

      Held, that the burden was upon the plaintiff to prove that the lease of 1890 was given in renewal of the lease of 1869, and under provisions contained in such prior lease which so constrained the action of the parties that they were not in a position to negotiate freely with reference to the situation existing in 1890.

      Appeal by the defendants, The Metropolitan Elevated Railroad Company and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 12th day of November, 1894, upon the decision of the court rendered after a trial at the New York Special Term awarding the plaintiff rental damages and enjoining the operation and maintenance of the defendants’ elevated railroad unless they pay the amount awarded as fee damages to the real estate in question.

      Julien T. Davies and Frederick Allis, for the appellants.

      Benjamin Yates, for the respondent.
   Parker, J.:

This suit seems to have been prosecuted with the idea that certain facts which ought to have been alleged and proved could be assumed by the court.

The complaint alleges the execution of certain leases, March 1, 1869, by Adam T. Sackett to Thomas and John D. Crimmins, covering certain vacant lots on the southerly side of Sixtieth street for a period of twenty-one years, with privileges of renewal for the further period of twenty-one years each; the erection of buildings thereon by the lessors; an assignment by John D. Crimmins to Thomas Crimmins of his interest therein, and that Sarah E., Clarence, Gertrude T., George E., Helen, T. William and B. Lambert Sackett leased and conveyed to the plaintiff Thomas Crimmins, on the 15th day of April, 1890, the same. premises for a period of twenty-one years with' the privilege of renewal for two further terms of twenty-one years each. It does not contain any allegation connecting the leases of 1869 with the leases of 1890.

The grantors in the leases are not the same, and the complaint does not allege that the title of the original lessor has become vested in the lessors of the leases of 1890. Nor does it allege that the second leases were made in pursuance of the renewal clause in the leases of March 1,1869, or that they grew out of them or were connected with them in any manner.

This question was brought to the attention of the court by a motion to dismiss made at the commencement of the trial. But the complaint was not amended, nor was an amendment asked for. Nor do we find any evidence connecting tlie leases of 1890 with those of 1869. The leases of 1890 do not recite the execution of former leases by Adam T. Sackett, and the devolution of his title upon the lessors in the leases of 1890. They do not recite any right of renewal covenanted in the former leases, or that the present leases are made in pursuance of such right, or that the new rent has been appraised or fixed under the terms of a renewal clause. No evidence was presented aside from the leases bearing’ upon these questions.

We may conjecture that the leases of 1890 were renewals of those of 1869 by parties who had succeeded to the title and interest of the lessor of the 1869 leases, but it is neither alleged nor proved that such is the fact.

If the existence of such facts be essential to sustain a recovery for rental damage during the present term, the conjecture of the court will not suffice to accomplish the purpose. They must be proved.

The courts have been called upon to apply the general principle that the right of action belongs to the party who sustains the loss, in a number of suits between lessees of real estate and elevated railroads resulting in the establishment of certain rules.

1. When the lease is made subsequent to the construction of the elevated railroad, the exclusive right of action is in the landlord. This is because the rent is presumed to be based upon the reduced value of the property occasioned by the railroad which burdens the landlord with the loss.

2. The lessee has the right of action where the lease was made before the building of the road. In such case the lessee pays for the full use of the property and is deprived of part of it, and, therefore, is the one injured.

3. Under a renewal lease made after but in pursuance of alease given before the erection of the elevated railroad and by which the parties are constrained in fixing the rent, terms and conditions of the renewal lease, the right of action is in the lessee. And this is so because the two terms are treated as the outcome in effect of one continuous lease commencing before the railroad and, therefore, within the rule applicable to leases for a term of years made prior to the construction of the elevated railroad. (Kernochan v. N. Y. E. R. R. Co., 128 N. Y. 559 ; Kearney v. M. E. R. R. Co., 129 id. 76; Witmark v. N. Y. E. R. Co., 76 Hun, 302.)

Having these general rules in mind we see that the leases of 1890 standing alone and wholly unconnected with any other lease, would deny recovery to plaintiff for rental damage for the present term, for they were made after the railroad was built.

Therefore, it became necessary for the plaintiff to prove, if he could, that the leases of 1890 were not independent renewals, but the renewals provided for by the leases of 1869, which latter leases so constraine'd the action of the parties that they, or one of them, were not in a condition to negotiate freely with reference to the situation existing in 1890.

This burden the plaintiff did not meet. Indeed his complaint was not so framed as to entitle him to meet it without amendment. It did not allege that the leases of 1890 were renewals of the leases of 1869, the only other leases pleaded. Although it asserted that the lessors were different it contained no allegation that the lessors in the leases of 1890 had succeeded to the title of the lessor in the leases of 1869.

Upon these questions the evidence, as we observed at the outset, is also silent.

As the judgment of a court must be founded on evidence, rather than surmise, the judgment rendered must fall for want of support.

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

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

Judgment reversed, new trial ordered, costs to appellants to abide event.


text:
    Hannah Springer, Respondent, v. Robert E. Westcott, as President of The Westcott Express Company, Appellant.

      Submission to the jury of a ground of liability, not embraced in thepleadings — cmnendment of pleadings by the General Term upon appeal.

    Where, upon the trial of an action, the court submits to the jury a ground of liability not suggested by the pleadings, it is the rule that, if there be a general verdict, the judgment will not be upheld unless the other ground of liability, which is pleaded, is so clearly established that if a direction of the verdict had been ordered it would be sustained.

      While it would he doubtless proper for the General Term, upon an appeal, to amend the pleadings to conform to the facts proved upon the trial, in order to sustain the judgment rendered where both parties, in apparent disregard of the pleadings, try the case as if the questions involved were such as the court presented to the jury, yet, where the unsucessful party, at the trial, endeavored to confine the questions to the issues presented by the pleadings, no such amendment of the pleadings will be made.
    Appeal by tbe defendant, Robert E. Westcott, as president of tbe Westcott Express Company, from a judgment of tbe Supreme Court in favor of tbe plaintiff, entered in tbe office of tbe cleric of tbe county of New York on tbe 26th day of November, 1894, upon tbe verdict of a jury rendered after a trial at tbe New York Circuit, and also from an order made on tbe 22d day of November, 1894, and entered in said clerk’s office, denying the defendant’s motion for a new trial.

      E. Luther Hamilton and Austen G. Fox, for the appellant.

      B. F. Einstein, for the respondent.
   Parker, J.:

Tbe court submitted to tbe jury a ground of liability not suggested by tbe pleadings, and it is the rule that if, in such case, there be a general verdict, tbe judgment will not be upheld unless tbe other ground of liability be so clearly established that bad a direction of a verdict been ordered it would be sustained. (Baldwin v. Burrows, 47 N. Y. 199.)

Tbe action was to recover for a breach of contract in failing to deliver a trunk and contents to tbe plaintiff. Plaintiff delivered a check which she bad received from a railroad company for her trunk, to tbe agent of tbe defendant, who caused the trunk, but not its contents, to be delivered to her.

She alleged in her complaint, “ that on the 14th day of September, 1889, tbe plaintiff caused to be delivered to tbe said association, and tbe said association received, her trunk and its contents at the Grand Central Depot in tbe city of New York,” but defendant omitted to convey tbe contents of the trunk to tbe place agreed upon. Tbe defendant, on this trial, attempted to show, by one of its expressmen, that the trunk was delivered to tbe plaintiff in tbe same condition in which it was received by the defendant. When the court came to instruct the jury, however, it charged them, in effect, that if they should reach the conclusion that the trunk was rifled while in the baggage room of the railroad company, the defendant could, nevertheless, be charged with liability for its neglect in failing to demand promptly the trunk from the railroad company, as will appear from a brief quotation from the charge: “ As I said before, the question is with reference to the diligence of the defendant’s servants as regards that subject. Was that baggage lost because they did not get it in time, or get there in time to claim it for the plaintiff, and to take possession of it and deliver it at its appointed place of destination t It is for you to determine, under all the circumstances of the case, whether that is so or not. If you find that the defendant is responsible in that way for its negligence, and if the baggage was lost by fault of the defendant in the way indicated, then the plaintiff would be entitled to recover. If you find in favor of the plaintiff upon that issue, that the defendant, or its servants, did not do what they should have done, and did not get the baggage from the baggage room, and that the theft or loss was accomplished by reason of that negligence, then you will come to the consideration of another-question.”

The other “question” referred to by the court in the concluding sentence involved the question, of damages. It wall be observed that the charge, in such respect, was inconsistent with the complaint, which not only did not contain an allegation of negligence in failing to demand the trunk promptly, but, on the other hand, positively alleged that on the day mentioned the trunk and its contents was delivered to the defendant at the Grand Central Depot.

The opening of counsel contains no suggestion that plaintiff intended a recovery upon any other ground than that mentioned in the complaint, nor was there anything done or said, so far as the record discloses, during the trial, prior to the charge of the court, to indicate that such a question was to be presented to 'the jury. Apparently'the form of the complaint was not brought to the attention of the court, and the jury were instructed as to the law as seemed to it proper under the facts proved. Exceptions, however, were properly taken by defendant’s counsel, and they are available to him for a reversal of the judgment, for the plaintiff’s evidence in support of the ground of liability alleged in the complaint was not of such a character as would have justified the court in directing a verdict in favor of the plaintiff upon that issue.

It may be said that the testimony warranted the instructions given to the jury by the court, and, therefore, this court should amend the complaint to conform to the facts proved. It would doubtless be proper to do so had the parties, in apparent disregard of the pleadings, tried the case as if the questions involved were such as the court presented to the jury.- But the record shows that this case was not tried upon any such theory. Not only is it silent touching any claim of that character by plaintiff’s counsel, but it contains objections by defendant’s counsel which show that he not only understood the boundaries of the complaint, but intended to confine plaintiff within them. This will sufficiently appear by quoting from the record a question asked of the plaintiff, and defendant’s objection thereto : “ Q. Did you tell this "Wescott’s Express man, or did he tell you when this trunk would be delivered? [Objected to as irrevelant, and because declarations are not admissible to bind defendant, and because this action is not brought for delay in delivering or delay in demanding, but on the contract which is set forth in the complaint.]”

The fundamental rule that judgment shall be secundum allegata, et probata (Day v. Town of New Lots, 107 N. Y. 148 ; Romeyn v. Sickles, 108 id. 650) having been violated, the judgment cannot be sustained.

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

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

Judgment reversed, new trial granted, costs to appellant to abide event.


author: FoUlett, J.:

text:
    The People of the State of New York ex rel. Frank Schaeffler, Appellant, v. Edward P. Barker and Others, as Commissioners of Taxes and Assessments of the City and County of New York, Respondents.

      Taxation of personal property — assessment of shares of banking corporations — time of levying assessments in the city of New York— deduction of debts under chap. 202 of 1892 — review of assessments under chap. 269 of 1880 — assessments to a dead man under § 318, chap. 409 of 1882, as amended by chap. 714 of the Laws of 1892.
    In case assessable personal property is in the possession and control of its owner, the policy of the State of New York is that it shall be assessed to, and the taxes thereon be paid by, the owner thereof at his legal residence.
    Under the general statutes relating to the assessment of personal property requiring it to be assessed to the legal owner, its assessment to a dead man would impose no liability on any one to pay the tax assessed. The rule, however, is otherwise under section 313 of chapter 409 of the Laws of 1882, as amended by chapter 714 of the Laws of 1892, in respect to the assessment of the shares of banking corporations. Under such provisions in case John Doe owns ten shares of stock in the bank, and the bank, by mistake, returns the name of Robert Roe as the owner of the shares, and the assessment is made in the latter name, the name Robert Roe should be deemed to be the name of the true owner for the purpose of assessment and taxation, and the assessment of the shares under such name will be valid.
    An error in the name does not invalidate the assessment of the shares as against the true owner whoever he may be, and the assessment of shares in the name of the person appearing on the bank list as the owner thereof is in effect an assessment upon the shares against whoever owned them at the time of the assessment, and any subsequent transferee takes the shares subject to the lien of such assessment.
    In the city of New York, assessments are deemed to be levied on the second Monday of January in each year, and changes in ownership subsequent to that date have no effect on the validity of the assessments.
    Under the provisions of section 9 of article 2 of title 2 of chapter 13 of part 1 of the Revised Statutes (1 R. S. 390), as amended by chapter 202 of the Laws of 1892, the just debts owing by persons and corporations assessed for taxation are to be deducted from the assessed valuation of their personal property, and if the debts exceed the value of the personalty no assessment can be levied on account of the personalty.
    Chapter 269 of the Laws of 1880 was passed to provide a remedy for illegal, erroneous and unequal assessments in whatever form or manner they might be levied. It must be construed so as to suppress the mischief aimed at by its authors and a person cannot "be deprived of the right to review an assessment on his property because without his fault the name of a person not its owner is entered against it as the owner thereof.
    Appeal by tlie relator, Frank Schaeffler, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 5th day of March, 1895, quashing a writ of certiorari granted to review the proceedings of the respondents in assessing the property of the relator for taxation.
    Joseph Schaeffler in his lifetime was the owner of twenty shares of the stock of the German Exchange Bank in the city of New York. May 15, 1893, he died at said city, leaving a last will which was probated June 2,1893, and letters thereon were issued by the Surrogate’s Court of the county of New York to Frank Schaeffler and Joseph Schaeffler of said city. November 15, 1893, the cashier of said hank, pursuant to section 313 of chapter 409 of the Laws of 1882, as amended by section 2 of chapter J14 of the Laws of 1892, furnished tiie commissioners of taxes and assessments with a list of the names and residences of the shareholders of the bank, with the number of shares held by each. In this statement Joseph Schaeffler was set down as the owner of twenty shares of the par value of $100 each. January 5, 1894, the aforesaid executors transferred said twenty shares to Frank Schaeffler, which transfer was' registered on the transfer book of the bank. On the second Monday’ of January, 1894, which was the eighth day of the month, the assessment roll of the city was completed, on which Joseph Schaeffler was assessed for twenty shares of stock in the German Exchange Bank, valued at $6,260. Hue notice of this assessment was given, and, on the 11th day of April, 1894, Frank Schaeffler appeared before the commissioners of taxes and assessments and filed his affidavit in which he stated the foregoing facts; he also testified that all of his personal estate, including said shares, did not exceed in value $15,000, and that his debts amounted to $46,000, and asked that the assessment upon the shares be stricken off, which the commissioners refused. None of the foregoing facts are disputed, and the affidavit of Frank Schaeffler was not controverted. Upon a petition stating the facts a writ of certiorari was issued pursuant to chapter 269 of the Laws of 1880, returnable on the first Monday of October, 1894, on which a hearing was had February 11, 1895, and the writ was quashed. From the order quashing the writ the relator appeals.

      Frank Schaeffler, appellant, in person.

      George S. Coleman, for the respondents.
   FoUlett, J.:

In case assessable personal property is in the possession and control of its owner, the policy of this State is that it shall be assessed to and the taxes be paid by the owner at his legal residence. On the date fixed by the statute for the assessment of personalty in the city of New York the relator was the owner of the shares of bank stock,, and he should pay the taxes thereon, subject to legal exemptions. The first question jnesented is, was the assessment of the shares to Joseph Schaeffler, who was then dead, legal ? It is clear that under the general statutes relating to the assessment of personal property requiring it to be assessed to the legal owner, its assessment to a dead man would impose no liability on any one to pay the tax assessed. But chapter 409 of the Laws of 1882 creates an exception to the general rule in respect to the assessment of shares of banking corporations. Section 313 of this chapter, as amended by chapter 714 of the Laws of 1892, requires that incorporated banks-shall keep a con’ect list of the names and residences of stockholders, the number of shares held by each, and that banks in the city of New York shall, on or before the first day of December in each year, furnish the taxing officers with a certified copy of such list. The section further provides : And the names of the holders of such shares appearing upon such list shall be deemed the names of the owners of such shares as are set opposite them respectively for the purposes of assessment and taxation, as provided for in this-chapter.” Section 314 of this chapter, as amended by chapter 714-of the Laws of 1892, provides that: “ And the tax on the shares of said stock shall be and remain a lien thereon from the day when the property is by law assessed till the payment of said tax, and if transferred after such day the transfer shall be subject to such lien.” By section 315 of this chapter, as amended by chapter 714 of the Laws of 1892, it is made the duty of the bank to pay the taxes on said shares out of the dividends declared on them.

Section 312 of chapter 409 of the Laws of 1882 provides: “ But in the assessment of said shares, each stockholder shall be allowed all the deductions and exceptions allowed by law in assessing the value of other taxable personal property owned by individual citizens of this State, and the assessment and taxation shall not be at a greater rate than is made or assessed upon other moneyed capital in the hands of individual citizens of this State.”

The clause quoted from section 313 does not provide that the persons whose names appear on the bank list shall be deemed to be the owners of the shares set opposite of their respective names, but that the names of the holders of such shares appearing upon such list shall be deemed the names of the owners of such shares as are set opposite them respectively. Under this provision, if John Doe owns ten shares and the bank should, by mistake, return the name of Robert Roe as the owner of the shares, and the assessment should be made in his name, that name, Robert Roe, would be deemed the name of the true owner, John Doe, for the purpose of assessment and taxation, and the assessment of the shares would be valid. An error in the name does not invalidate the assessment of the shares as against the true owner whoever he may be. By section 314 above quoted it is provided that the tax on the shares shall be and remain a lien thereon from the day when the property is by law assessed until the payment of said tax, and if the shares are transferred after such day they shall be subject to such lien. In this city the assessment is deemed to be levied on the second Monday of January in each year, and changes in ownership subsequent to that date have no effect upon the validity of assessments. (Sisters of St. Francis v. The Mayor, etc., 51 Hun, 355; affd., 112 N. Y. 677; Matter of Babcock, 115 id. 450, 454; People ex rel. Twenty-third Street R. R. Co. v. Commissioners of Taxes, 91 id. 593, 602; Austen v. Hudson River Telephone Co., 73 Hun, 96.) Under the provision of the section last referred to an assessment of shares in the name of the person appearing on the bank list as the owner is, in effect, an assessment upon the shares against whoever owned them on the second Monday of January of the year in which the assessment is laid, and any subsequent transferee takes the shares subject to the lien of the assessment. The purpose of the statutory provisions under consideration was to prevent the owners of shares in banking corporations from escaping taxation by making transfers after the lists of the banks have been returned to the taxing officers. By this construction of the statutory provisions exact justice is promoted as between the taxing power and the owners of shares whoever they may be.

The second question involved in this appeal is whether the person, who is the legal owner of the shares on the second Monday in January, the date when the assessment is deemed to have been laid, though not the apparent owner by the bank list, has the legal right to have the assessment stricken off in case his indebtedness exceeds the value of his personalty ? By section 9 of article 2, title 2, chapter 13 of the 1st part of the Revised Statutes (1 R. S. 390), as amended by chapter 202 of the Laws of 1892, the just debts owing by persons and corporations' assessed are to be deducted from the assessed valuation of personal property, and if the debts exceed the value of the personalty no assessment can be levied on account of the personalty.

It is urged that the relator was not aggrieved within the meaning of chapter 269 of the Laws of 1880. The act provides : “ Section 1. A writ of certiorari may be allowed by the Supreme Court on the petition, duly verified, of any person or corporation assessed and claiming to be aggrieved, to review an assessment of real or personal property for the purpose of taxation made in any town, ward, village or city of this State, when the petition shall set forth that the assessment is illegal, specifying the grounds of the alleged illegality, or is erroneous by reason of over valuation, or is unequal in that the assessment has been made at a higher proportionate valuation than other real or personal property on the same roll by the same officers, and that the petitioner is or will be injured by such alleged illegal, erroneous or unequal assessment.” It is urged that because the assessment is not against the relator by name, he is not within the class of persons entitled to the remedies provided by the act. This-construction, we think, is too narrow and technical. The act was passed to provide a remedy for illegal, erroneous and unequal assessments in whatever form or manner they are levied. The assessment under review is just as effectual for the purpose of taking the property of the relator as though levied against him by name. By section 818 of the Consolidation Act (Chap. 410, Laws 1882) an assessment against real estate is not void because the name of the true owner is not entered on the assessment roll. If the construction contended for prevails, and a piece of real estate should be assessed at many times its value, but the name of some person not its owner entered on the roll as the owner, the true owner would be remediless and compelled to pay an unequal tax. The statute must be construed so as to suppress the 'mischief aimed at by its authors, and it cannot be that a person is to be deprived of the right to review an assessment on his property, because, without his fault, the name of a person, not its owner, is entered against it.

The order quashing the writ should be reversed and the assessment vacated, but as it does not appear that the assessing officers acted with gross negligence, in bad faith or with malice,” without costs.

Van Brunt, P. J., and O’Brien, J., concurred.

Order reversed and assessment vacated, without costs.


author: Follett, J.:

text:
    Amelia Sieburg, Plaintiff, v. Massachusetts Benefit Association, Defendant.

      Mutual benefit association — waiver of forfeiture for non-payment of an assessment.

    Upon the trial of an action, brought to recover the amount of two life insurance policies issued by a mutual benefit association, it was shown that the insurer did not intend to terminate the policies by reason of the failure of the insured to pay a certain assessment levied thereon, provided such assessment was subsequently paid, and the insurer, by a notice to the insured, stated that the policies might be renewed “by immediate payment, if the risk is approved by the Association upon receipt of said payment at the home office.” Immediate payment was made at the home office, the risk was approved by the insurer and the policies were renewed by it.

      Held, that the insurer expressly waived its right to insist that the policies were forfeited and was estopped from asserting that they were not in full force at the time of the death of the insured.
    Motion by the defendant, the Massachusetts Benefit Association, for a new trial on a case containing exceptions ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the plaintiff rendered by direction of the court after a trial at the New York Circuit on the 10th day of December, 1894.

      Andrew Shiland, Jr., for the plaintiff.

      J. K. Hayward, for the defendant.
   Follett, J.:

This action'was begun December 10, 1892, to recover the amount due on two policies of life insurance, and the only defense is that they had been forfeited by failure to pay mortuary assessment No. 71 of March 1, 1892.

The defendant is a mutual benefit association, incorporated in 1818 under the laws of the State of Massachusetts. The statute under which it was organized is not in evidence nor referred to, nor are its articles of association, and so we assume that it was authorized to make the policies set out in the complaint. July 13, 1888, the defendant issued to George Sieburg of this city two instruments, each called a “ policy,” one being numbered 20,228 and the other 20,229, both being alike except the numbers. By each policy the defendant promised, on the death of George Sieburg, to pay to Amelia Sieburg, his wife, $5,000. Each policy was issued in consideration of a pre-payment of twenty dollars and of the payment thereafter of certain sums, as provided in the following articles of each policy:

Fifth. There shall be paid by the member under this contract in forty days from the date thereof and annually from said date thereafter, to the Treasurer of the Association, an assessment of 15 dollars as a part of the expense fund, which fund is at the sole disposal of the officers of the Association, and he shall not be liable for any further sum in each year except as following:
Sixth. Upon the death of any member of the Association said member under this contract shall at once pay, if required, to its Treasurer an additional assessment of six 95/100 dollars, which can be used only for the payment of death losses and for the Emergency Fund as authorized by law; but such assessment will not be required so long as there remains in the death fund, subject to call of the Treasurer, a sum sufficient to pay outstanding claims for death losses.
Seventh. The form of notice to and process of collection from each of the members of the assessments above named shall be as follows : A notice shall be sent, announcing such assessment, to the last post office address given to the Association by each member; if the assessment is not received within thirty days from the mailing of said notice it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the Association, which connection shall thereupon terminate, and the party’s contract with the Association shall lapse and be void, and all rights thereunder be forfeited to the Association ; but said party may again renew his connection with the Association by a new contract made in the same manner as at first; or he may be reinstated by the officers of the Association for reasons satisfactory to them, and upon such conditions as they may require. But such renewal of this contract or reinstatement shall not operate, or be treated or construed to be a waiver of any of the terms, conditions or requirements of this contract.”

It is conceded that George Sieburg paid the annual assessment or premium on each policy in each year, as required by the fifth article above quoted. George Sieburg died April 18, 1892, leaving his widow surviving. Due proofs of death were made, and it is conceded that if the plaintiff is entitled to recover she is entitled to $10,000, with interest thereon from September 27,1892, for which sum the verdict was directed. The only defense interposed is that' March 1, 1892, the defendant made a mortuary assessment of ten dollars and forty-three cents on each policy “ for the payment of death losses and for the emergency fund,” which George Sieburg neglected to pay, as required by said sixth and seventh articles.

March 1, 1892, the defendant mailed to George Sieburg the following notice:

“Massachusetts Benefit Association,
“ Offices : Exchange Building, Boston,
“ 53 State Street.
“ Take the Elevator,
“53 State Street,
“ Hours, 9 a. m. to 5 p. m.
“ Boston, March 1, 1892.
“ Mortuary Call No. 71 is now made, and must be paid on or before April 1, 1892, at the office of the Association, in order to maintain your policy in force, which will otherwise lapse and be void. This call is for mortuary and disability purposes, and not exceeding one-thirtieth, of one per cent on the amount insured for expenses under Article XVI of the By-Laws of this Association,, and in accordance with the Statutes of Massachusetts.
Full particulars of the last call will be found on accompanying' statement.
“ The sending of this notice shall not be held to waive any forfeiture or lapse of membership if previous assessments remain, unpaid.
“ Payment of Mortuary Calls will be demanded six times in each, year, once in every two months, beginning January 1.
“Next call is now made for May 2, 1892, and must be paid on or before June 1, 1892, in order to maintain your policy in force,, which will otherwise lapse and be void.
“ The payment of this Call will be accepted by the Association and a receipt given therefor, on the express agreement that no condition whatever upon which any previous payment has been received, is waived thereby.
“W. G. CORTHELL, Treasurer.
“ Pay now and avoid overlooking it.
“ The .cost in this association averages only about one-half that in Level Premium Companies.
Massachusetts Benefit Association.
“Mortuary call 71 remittance may be made by checks, drafts-money orders, postal notes, registered letters or express orders, but such remittance must reach the home office of the association, in Boston, on or before the expiration of the time limit _ named in the-notice. Parties not keeping a bank account can easily obtain a-check from some friend.
“ Do not lose this original bill. Send bill and coupon to the-Treasurer when remittance is made and receipt will be returned.
“Notice expires April 1, 1892.”

April 9, 1892, the defendant mailed George Sieburg a duplicate of the aforesaid notice, across tlie face of which was stamped the-following:

“Certificate forfeited for non-payment. May be renewed by immediate payment, if the risk is approved by the Association,, upon receipt of said payment at the home office.”

April 11, 1892, the insured received the duplicate notice, and on. the same day mailed to the defendant this letter:

“ Office of George Sieburg, Manufacturer of Office and
Bar Fixtures, Nos. 211 and 213 Wooster Street.
“ New York, April 11th, 1892.
“ Massachusetts Benefit Assoc’n :
“ Gents.— Having been away from business a couple of weeks Z find that the payment of your assessments have been forgotten.
“ I herewith send you Check for $20.86, requesting you to excuse the delay and to acknowledge receipt and oblige
“Yours truly,
“ GEORGE SIEBURG.”

Inclosed in the letter was a check drawn by George Sieburg on. the Germania Bank of New York, payable to defendant’s order. The letter and check were received by the defendant April 12,. 1892, and thereupon defendant, mailed to George Sieburg the following receipt:

“Massachusetts Benefit Association,
“ Exchange Building, Boston, Mass.
“ Received of Geo. Sieburg $10.43 on this 12th day of April,. 1892, for Mortuary Call or Assessment No. 71 on Policy No. 20,228, which amount became due and payable before this day (thirty days allowed for payment thereof having expired).
“ For non-payment of said assessment on or before the date ifr became due, said Certificate or Policy lapsed or expired, and the above payment being tendered after the same became due and payable, said payment is made and received and this receipt given by the Association and accepted by the member, and every person having or acquiring any interest in said policy, upon the following" conditions and not otherwise :
First. That said member is now living and of temperate habits, and is now in good health and free from all diseases, infirmities or weaknesses, otherwise said payment and this receipt and said policy shall be and is null and void.
Second. The receipt and acceptance of the above sum by the Association shall not be held to waive forfeiture or expiration of membership, or to reinstate membership, or to create any liability on the part of the Association under said certificate, except upon fulfillment of the first condition of this receipt.
Third. The acceptance of the above sum after the same became due shall not establish a precedent for acceptance of future payments to the Association, nor shall any subsequent payment upon said certificate impair, waive, alter or change any of the conditions of this receipt or of said certificate.
“ W. G. COETHELL, Treasurer.
“ Not valid unless countersigned by
“ E. Clark, Gashier.”

A like receipt was mailed on account of policy No. 20,229. The check was indorsed by Wendell G. Corthell, the defendant’s treasurer, for collection, and was paid April 19, 1892, upon presentation to the drawee. The defendant’s cashier testified that the check and letter were received April 12. 1892. and it was treated as if check was in payment of the March assessment on said Sieburg policies respectively.” The treasurer also testified that the check was not immediately deposited for collection, but was held until a sufficient number of checks were on hand to justify a deposit.

In the proofs of loss the plaintiff and two physicians who attended the decedent in his last illness testified that he was taken sick April 13, 1892, two days subsequent to mailing the. check, was ill five days and died from acute rheumatic disease of the heart. The defendant offered no evidence tending to show that the insured was not in good health on the day that the check was mailed and on the day the defendant mailed the foregoing receipts. The defendant did not show', or offer to show, that it had returned or had offered to return the payment of April 11, 1892, and it now insists as a defense that the policies were forfeited because the assessments were not paid when due, and that, notwithstanding its acceptance and retention of the money, it is not estopped from insisting that the failure to pay the assessments when due caused a forfeiture of the policies.

This contention cannot be sustained. By, the seventh article of the policy above quoted it is provided : “ If the assessment is not received within thirty days from the mailing of said notice, it shall be accepted and taken as sufficient evidence that the party has decided to terminate his connection with the association, which connection shall thereupon terminate, and the party’s contract with the association shall lapse and be void, and all rights thereunder be forfeited to the association, but * * * he may be reinstated by the officers of the association, for reasons satisfactory to them, and upon such conditions as they may require.” It is apparent that the insured did not intend that his policies should be forfeited, and it is also apparent that the defendant did not accept the failure to pay the assessments within thirty days as sufficient evidence that the insured had decided to terminate his connection with the association. And it is apparent that the defendant did not intend to terminate such connection, provided the assessments were subsequently paid The intention of the insured is shown by his letter and check, and the intent of the defendant is manifest by its second notice, its acceptance and retention of the amount of the assessments and by its two receipts given for them. On the second notice the defendant stated that the policies might be renewed “ by immediate payment, if the risk is approved by the Association, upon receipt of said payment at the home office.” Immediate payment wás made at the home office, the risk approved by the association, and the policies were renewed by the defendant. By these acts the defendant expressly waived its right to insist that the policies were forfeited, and is estopped from asserting-that they were not in full force at the time of the death of the insured. (Wyman, v. Phœnix Life Ins. Co., 45 Hun, 184; Haas v. Montauk Fire Ins. Co., 49 id. 272; Shay v. National Benefit Society, 54 id. 109 ; Titus v. Glens Falls Ins. Co., 81 N. Y. 410; Dennis v. Massachusetts Benefit Association, 120 id. 496; Kenyon v. Knights Templar & M. M. Assn., 122 id. 247; 2 Biddle Ins. pp. 1106 et seq. and cases cited; 2 May Ins. [3d ed.] § 362.)

The exception taken by the defendant, that it was not shown by legal or competent evidence that the plaintiff was the wife of George Sieburg, is not worthy of much consideration. The policies are payable to “Amelia Sieburg (wife).” A witness testified that he knew George Sieburg, who introduced the plaintiff as his wife; that he knew she was his wife, and knew she was the same person mentioned in the policies as the wife of George Sieburg. It was not necessary to prove . their marriage by one who saw them married, nor by documentary evidence. It might as well be urged that a person designated as the son of one taking out a policy must, in an .action to recover on the policy, show that he was begotten by the person insured.

The defendant’s exceptions should be overruled and a judgment ordered for the plaintiff on the verdict, with costs.

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

Exceptions overruled and judgment ordered for plaintiff on verdict, with costs.

       The following was printed in the margin : “If unpaid April 1, your Certificate will at once lapse and he void.”

       The following was printed in the margin : “ Coupon attached to notice.”