author: Freedman, J. —

text:
    ISAAC L. KIP, et al., as Executors, &c., Respondents, v. EDWARD HIRSH, Appellant.

      Specific performance.—Adverse possession, title resting on must be free from reasonable doubt—JRésumé of decisions on.— Vacant and unenclosed land, no adverse possession of—Mortgagee, when possession deemed not to be under claim of exclusive title adverse to the mortgagor.

    Leonard W. Kip had a mortgage on certain vacant, unenclosed property. He commenced an action to foreclose this mortgage, in which a judgment of foreclosure and sale was rendered. The premises were sold by a Master to him, and the Master executed his deed therefor to him, dated December 30, 1840. The then owner of the equity of redemption being an assignee for the benefit of creditors, was not made a party to this action, but the assignor was. Kip died in 1860 without ever having taken possession of the premises, and they remained vacant and unoccupied, and without fence or enclosure. He left a will whereby he devised his residuary real and personal estate to his executors (the plaintiffs) in trust to lease his productive property and pay its net income to his wife, and upon her decease to divide all his estate, real, leasehold and personal, equally among his children, with a provision that they might sell all his vacant and unproductive lots within the state of New York, and divide its proceeds among his children. The premises remained vacant, unproductive and unenclosed until about April 15,1867, when the executors executed a lease to one Reeber which did not cover the premises, but he claiming under the lease entered into possession and at once enclosed the premises with a substantial fence. The lease was for only nine months, and was never renewed, nor was any rent paid after the expiration of the demised term, but the lessee continued to occupy and keep enclosed the premises, holding over, as the plaintiffs claim, as their lessee in possession. The action was brought to compel a specific performance by defendant of a contract made between him and plaintiffs for the sale by them, and purchase by him of said premises.

      Meld, 1st. That there is no adverse possession while premises are vacant, unoccupied und unenclosed; that possession in this case did not commence until the lease to Reeber, in 1867, and conceding it to constitute adverse possession yet as only 18 years had run, plaintiffs had not a good title by adverse possession.

    2d. That if the possession of plaintiffs (such as it was) be regarded as being under the mortgage, then such possession could only be that of mortgagees in .possession not claiming an exclusive title adversely to the mortgagor ; and consequently the ten years within which by the provision of the statute applicable to this case (to wit, that existing immediately before the taking effect of section 379 of the Code of Civil Procedure passed in 1877), an action to redeem real property from a mortgage must be brought, had never been set running; and even if it had commenced to run, there may have been disabilities which suspended the running.
    3d. That it was doubtful whether under the provisions of the will, the plaintiffs had power to make the contract in question.
    4th. That upon the whole case it sufficiently appeared that the title offered was not so free from reasonable doubt that the defendant should in equity be compelled to accept it.
    Before Van Vorst and Freedman, JJ.

      Decided January 4, 1886.
    Appeal by defendant from judgment entered upon the decision of a judge at special term.
    The facts appear in the opinion.

      John H. V. Arnold, attorney and of counsel for appellant,
    on the questions considered in the opinion, argued : —I. While the premises remained vacant and unenclosed, the statute of limitations did not run against Smith and those he represented, or who claimed through or under him.

      II. The claim of plaintiffs that as they as executors, gave a lease of these lots to Reeber, and he entered under it, his possession was their possession, and as the foreclosure was defective as to Smith, they took such possession through him, as mortgagees under the Delavan mortgage, and that, no action to redeem having been brought within ten years from the time of taking such possession then under §§ 90-102 of the old Code, then in force, no action can now be brought by Smith, or any one claiming under him for that purpose, is not well founded. They did not enter or claim as mortgagees, but as owners, which they were not, as no interest whatever in the vacant lands was devised to them by the will, and as executors they had no right to lease the same. Besides, more than twenty-two years elapsed between the foreclosure and the mortgagee’s death, during which time he took and had no possession of the premises. The presumption from lapse of time is then, that this mortgage was paid, and upon Kip’s death it was no asset in his executors’ hands, and they could do nothing under it without rebutting that presumption, which they have not attempted to do.
    III. The plaintiffs offer nothing except a transfer of such title at they acquired by leasing the premises as mortgagees under a mortgage, which at the time had presumptively been paid and extinguished. This is not such a title as his contract calls for, or which he should be compelled to accept. A title even by adverse possession is not such a one as the court would compel a purchaser to accept (Hartley v. James, 50 N. Y. 42; Schultz v. Rose, 65 How. 75 ; Mott v. Mott, 68 N. Y. 258 ; Rogers v. McLean, 10 Abb. 306 ; Althause v. Radde, 3 Bos. 426 ; Wood v. Squires, 3 T. & C. 470 ; Brooklyn Park Commissioners v. Armstrong, 45 N. Y. 234 ; Jordan v. Poillon, 77 Ib. 518 ; Shriver v. Shriver, 86 Ib. 515).
    IV. The burden rests upon plaintiffs to show that they have a good title (Wilson v. Holden, 16 Abb. Rep. 133 ; Argall v. Raynor, 20 Hun, 267). Smith having died some years since (1865), and before plaintiffs made the lease to Reeber, the trusteeship under the Delavan deed has remained in abeyance, there being no one representing the paper or record title, and it is questionable whether under such circmnstances the statute has begun to run (Bucklin v. Ford, 5 Barb. 393; McCahill v. Hamilton, 20 Hun, 388). Defendant would have to take the risk of defending an action of ejectment by Smith’s representatives, and the defense could be only made by virtue of a mortgage which was presumptively paid and actually outlawed.
    V. The cases cited by plaintiffs do not maintain their theory (Here counsel commented on Miner v. Beekman, 50 N. Y. 338 ; Hubbell v. Sibley, 50 Ib. 468 ; Hubbell v. Medbury, 53 Ib. 98).
    VI. Mere occupancy of a lot under a claim of right in virtue of a grant which does not embrace it, and made by parties, who neither owned nor claimed it, is not enough to defeat a transfer on the ground of adverse possession at the date of the conveyance (Lavefty v. Moore, 33 N. Y. 658.)

      Isaac L. Miller, attorney, and of counsel for respondents,
    on the questions considered in the opinion, argued : —I. The plaintiffs, in taking possession of the property by leasing same to Reeber, became mortgagees in possession, and a mortgagee in possession can defend his title against the owner of the equity of redemption in any action, save one for an accounting, and to redeem, and the mortgagor’s whole interest is gone, if he does not redeem within the time required by statute (Shriver v. Shriver, 86 N. Y. 580 ; Van Dyne v. Thayer, 14 Wend. 233 ; Phyfe v. Reiley, 15 Ib. 248; Pell v. Ulmer, 18 Ib. 142; Chase v. Peck, 21 Ib. 586 ; Hubbell v. Moolson, 53 Ib. 227; Ingersoll v. Savage, 2 Pick. 277).
    II. An action for an accounting and to redeem is not an action for the recovery of real property. It is purely an equitable remedy, and, prior to the adoption of the new Code, was governed by § 97 of the old Code, which limited the time therefor to ten years (Miner v. Beekman, 51 N. Y. 337 ; Hubbell v. Sibley, 5 Lans. 51; affd, 50 N. Y. 473; Hubbell v. Medbury, 53 Ib. 101; Peabody v. Roberts, 47 Barb. 103 ; Cleveland v. Boerum, 21 N. Y. 617).
    IV. It follows in the light of the foregoing authorities, that the plaintiffs, becoming mortgagees in possession April-15, 1867, their title to the premises in question became perfect by adverse possession, in conformity with the statute on April 15, 1877.
    V. The statute of hmitations runs against a trustee (Hubbell v. Medbury, 53 N. Y. 98-102).
    VI. A clear adverse possession for the time required makes a title which a purchaser may not refuse (Seymour v. Delaney, Hopk. Ch. 436 ; cited and approved in Shriver v. Shriver, supra; Cahill v. Palmer, 45 N. Y. 478 ; Sweeburn v. Heavy, 18 Hun, 284; Bicknell v. Comstock, 113 U. S. 149).
    VII. The suggestion that plaintiffs may not have power to convey the lots in question, is met and answered as follows : (a.) If the testator died seized thereof, the power of sale is ample. (6.) If the testator’s interest therein was only personalty, viz. : the mortgage, the same passed to the executors as part of the assets of the estate (3 Redfield Law Wills, 2 ed. 130, 144; 3 Waite’s Actions & Defenses, 241-244). (c.) The executors, by taking possession of the property and holding it for ten years, foreclosed and cut off the right to redeem, and it is perfectly well settled that real estate thus acquired is considered as a substitute for the mortgage, and takes its place, and is to be treated as personalty, which the executors may sell, and that the same is not governed by the trusts created by the will. It is not treated as land belonging to the testator, and the heirs and devisees cannot dispute the title of a purchaser from the executors, though no power of sale is contained in the will (Lockman v. Reilly, 95 N. Y. 71; Vallentine v. Belden, 20 Hun,
      527 : Cook v. Ryan, 29 Ib. 249 ; Long v. O’Fallon, 19 Sow. U. S. 116 ; Williams Exec. 650, note d).

   By the Court.

Freedman, J. —

The judgment appealed from, directs the specific performance by the defendant of a contract made between him and the plaintiffs, for the sale by them, and purchase by him, of certain real estate in the city of New York.

The defendant was ready and able to perform the contract on his part, but refused to take title on the ground that the plaintiffs, by a deed of the premises exe cuted by them alone, which was the only deed tendered by them, could not convey to him a marketable title.

His objection to the title rests upon admitted facts in the chain of title.

It appears that in June, 1835, plaintiffs’ testator was seized of the premises in question, and in that month conveyed them to one Daniel E. Delavan, by deed, recorded on June 29, 1835. Said Delavan gave back a purchase money mortgage to said testator, to secure part of the purchase money, which was also recorded on the same day. Delavan, the grantee, conveyed the mortgaged premises to one Walter J. Smith, in trust for the benefit of certain creditors therein named, by deed dated May 16, 1840, acknowledged by grantor on May 19, 1840, and recorded on June 6, 1840. Said Smith has never made any conveyance of said premises. Kip, the mortgagee, commenced an action in the court of chancery, to foreclose the said mortgage made to him by Delavan, and the same proceeded to a judgment of foreclosure and sale by master, at which sale said mortgagee was the purchaser, and the master’s deed was executed to him, dated December 30, 1840, recorded February 23, 1841. Smith was not made a party to this foreclosure suit, but Delavan was. The bill and notice of pendency of action were filed on May 30, 1840, after the date and acknowledgment of the Smith deed, but before that instrument was recorded, which recording took place on- June 6, 1840 ; but the subpoena was not issued until August 5, 1840, for service upon Delavan, and was not served upon him until August 15, 1840. Kip never took possession of the premises, and they remained vacant and unoccupied, and without fence or enclosure, until after his death, which took place in 1863. He left a will appointing the plaintiffs his executors, to whom letters were issued in 1863. He devised his residuary real and personal estate to said executors, in trust to lease his productive real and leasehold estates, and collect and pay the net income thereof to his wife for life, and upon her decease to divide said residuary real and personal estate among his children, with a further provision that they might sell all his vacant and unproductive lots within the state of New York, and divide the proceeds of such sale, when made, among his children. The executors did not take possession of the premises in question, and they remained vacant and unproductive, and unenclosed, for some years after the testator’s death. On April 15, 1867, plaintiffs executed a lease to one John J. Reeber of four lots of land on the east side of Fourth avenue, fifty feet and five inches from the north-easterly corner of One Hundred and Twenty-first street and Fourth avenue.” This description does not cover the premises in question. They should have been described as situated on the easterly side of Fourth avenue, distant “ fifty feet five inches from the south-easterly corner of One Hundred and Twenty-first street and Fourth avenue.” The misdescription was, as is claimed, the result of a clerical error in the drawing of the instrument. At any rate, Reeber, under and by virtue of the lease, took possession of the premises in suit, and at once enclosed them on all four sides with a substantial board fence four feet high. The lease was for nine months only, and it never was renewed, nor was any rent paid after the term demised had ended, but Reeber continued to occupy, and to keep enclosed the said' premises as a lumber-yard, and, as the plaintiffs claim, held over as their lessee in possession, down to about two years ago, when he gave up his business to his sons, who have since occupied the lots.

Upon these facts it was held at the trial that the testator did not, at the time of his death, own the real estate in' question, and that, as he was not such- owner, the executors could not convey by virtue of any expressed power of sale in the will, because such power referred only to land of which the testator was the owner at the time of his death.' It was held that the interest of the testator in respect of the premises in suit was personal property, viz., the mortgage, and Delavan’s rights under the assignment for the benefit of creditors, and that the executors took such personal property in trust for the purposes described in the will. The trial then seems to have proceeded, and judgment for the plaintiffs seems to have been given, upon the theory that the will by implication conferred all the powers necessary to a performance of the duties of the trust; that taking possession of the premises, under the foreclosure proceedings and master’s deed, was a legal exercise of enforcing the mortgage in one way ; that, in the course of time, Smith’s right of redemption was cut off by the statute of limitations ; and that thereupon the executors, as trustees, became the owners of the laird by operation of law, and' invested with an implied power to sell.

On the appeal before us it was substantially conceded that the failure to make Smith a party defendant in the foreclosure action, left his interest in the premises outstanding and unaffected. It was claimed, however, that his interest is only a right to bring an action to redeem the premises from the mortgage; that such right has been barred by statute ; and that, by reason thereof, the title of the plaintiffs, as mortgagees in possession, became so perfect by adverse possession, that a court of equity will compel a purchaser to take it.

In order to properly test this claim, it is well to consider, at the outset, whether a court of equity will, in an action for the specific performance of a contract calling for a good title, compel a purchaser to take a title resting upon adverse possession, and if so, under what circumstances he will be compelled.

An examination of the cases cited by the learned counsel for the respondents discloses that, while it has been said on several occasions that a purchaser may be compelled to take such a title, there is not a single case among them in which he was actually compelled to do so. The cases of Cahill v. Palmer, 45 N. Y. 478 ; Swettenham v. Leary, 18 Hun, 284; and Bicknell v. Comstock, 113 U. S. 149, were not cases for specific performance, and they amount only to a reiteration of the general rule which no one disputes, that clear adverse possession for the time prescribed by statute establishes a title.

Hellreigel v. Manning, 97 N. Y. 56, was not a case of adverse possession, but of apparent defect in the record title, and the proof established beyond reasonable doubt that the defect was the result of a mistake and that the title was in fact perfectly good.

In Seymour v. De Lancey, Hopk. Ch. 436, the Chancellor, it is true, said that “if the possession of William Seymour had been clearly adverse for 25 years, his title would not, I think, be sufficiently impeached, either by the slight proof that Henry E. Lutterloh may have been an alien, or if he was a citizen, by the mere contingency that his title may have resided, since his death, in persons disabled to assert their rights.” But as he had previously said, that there was not proof enough of an adverse possession, the remark quoted was held obiter in Shriver v. Shriver, 86 N. Y. 575 (584).

So in the case last referred to, Folger, Oh. J., in delivering the opinion of the court óf appeals, starts with the proposition that a clear adverse possession for the time prescribed by statute makes a title which a purchaser at a judicial sale may not ■ refuse. He then concedes that “ though there may have been possession thus characterized for the requisite time, there may also be circumstances that will prevent it becoming adverse.” And finally lie concludes to affirm the order relieving the purchaser at a sale under the judgment from his purchase, on the ground that “the vendee has brought such facts and circumstances as call upon the vendors to show how they may be met and nullified before they can compel him to complete his purchase.”

On the other hand, an examination of the cases cited by the learned counsel for the appellant, shows that, in delivering the unanimous opinion of the court of appeals in Hartley v. James, 50 N. Y. 38, Allen, J., said (p. 42) :

“... It is very evident that to a strip of land twelve feet in width, traversing diagonally the contracted premises, and being a part of the premises agreed to be conveyed, the defendants had no paper title, or such a paper title as was sufficient in the law, and the plaintiff was not bound to accept a title resting upon adverse possession, had such title been shown.” This statement is important because it occurs in a case in which the action was brought to recover a payment made on account of the contract of purchase and the expenses incurred, on the ground that the defendants could not make a good title to the premises, and in which the claim by adverse possession was pressed before the court, as appears from the points raised by defendants’ counsel, and because in such a case the burden resting upon the purchaser is much greater than in an action against him .for specific performance. The difference is as follows : In an action for specific performance equity will not compel a reluctant purchaser to take a doubtful title. If the doubt of the sufficiency of the title is reasonable and practical, the court, in its discretion, will excuse performance by the purchaser. In an action at law, to recover back a deposit, the complaining purchaser must satisfy the court that the title is absolutely bad, and before he can succeed, the court must so decide. Here a merely doubtful title will not be sufficient.

So, in Schultz v. Rose, 65 How. Pr. 75, which was an action against a purchaser for specific performance, the dismissal of the complaint was accompanied by the following remarks, made by Yah Yorst, J., in the course of a well-considered opinion, viz: “To compel a purchaser to accept a title founded exclusively upon adverse possession, unless the facts of the case were clear and free from all reasonable doubt, would assuredly be an abuse of the powers of a court of equity. A decision of this court in an action for specific performance can heal no inherent weakness or restore no broken link in the chain of title, unless the facts and parties, essential and affected, are before it, and in a relation and condition to be dealt with. Experience shows that titles founded upon adverse possession exclusively are subject to be disturbed by claims arising from quarters often unexpected, and which it was supposed, or hoped, had been effectually cut off by lapse of time, the assertion of which, however, was delayed by conditions and disabilities which the law created and favored.”

Other cases might be referred to, but from the foregoing it already sufficiently appears that in this state the weight of judicial opinion is that, before a purchaser will be compelled, in an action for specific performance, to accept a title resting upon adverse possession, such title as a whole must be free from reasonable doubt, and that if there be any doubt which is practical, the vendor must show that it is capable of being dispelled by competent evidence within easy reach. And such is in substance the weight of judicial opinion in other states and in England. .

An application of the rule to the facts of the case at bar, produces the following result, viz : While the premises remained vacant and unenclosed, the statute of limitations did not run against Smith and those he represented, or who may claim through or under him. Eeeber was in possession of the lots for about two years prior to 1867, but, as he testifies, and as plaintiffs concede, under no claim of title. His possession under plaintiff’s lease began in that year, and therefore about eighteen years ago. This, assuming that his possession was, and continued to be, plaintiffs’ possession, and that, as against Smith ánd those he represented, or who might claim through or under him, it constituted adverse possession, does not, of itself, confer a good title upon the plaintiffs, because in such a case the statute requires twenty years uninterrupted possession, adverse to the title of the record owner.

The plaintiffs are thus compelled to fall back upon such possession as they took in fact under the relations which existed between them and Smith by reason of the defective foreclosure, and then to rely upon the claim that, under the law as it stood prior to the passage in 1877 of section 879 of the Code of Civil Procedure, and as it was construed in Miner v. Beekman (50 N. Y. 887), and Hubbell v. Sibley (50 Ib. 468), any action which might have been brought by Smith or those he represented, or by any one claiming through or under him, was barred because not brought within ten years from the time they took possession.

Taking then into account such existing relations, we must proceed upon the theory that the mortgage, so far as it remained unforeclosed as against the owner of the equity of redemption, remained an asset of the estate of plaintiffs’ testator, and as such, came to the plaintiffs as executors, and that, as executors, the plaintiffs had the right to take possession of the mortgaged premises as one method of enforcing the mortgage. This view must regard the land as personalty in the hands of the executors. We then encounter the following difficulties, viz :

First. By the terms of the mortgage, it became due on June 24, 1836. No payments are shown to have been made upon it; but if we take the master’s deed to Kip, with a consideration of $1,000, and assume that that amount was credited upon the mortgage debt as of the date of that deed, December 30, 1840, we still find that more than twenty-six years elapsed after that before the lease to Beeber was given, and more than twenty-two years elapsed before the mortgagee’s death, during which time he took and had no possession of the premises. The presumption from lapse of time is then, that this mortgage was paid, and upon Kip’s death it was no asset in his executors’ hands, and they could do nothing under it without rebutting that presumption, which they have not attempted to do. In none of the cases cited by plaintiffs did the mortgagee take possession after twenty years from the time the mortgage debt became due.

Second. On the other hand, if there were no such presumptions, then the plaintiffs, by entering into and continuing in possession to enforce the payment of the mortgage, entered into and continued in possession avowedly as mortgagees, and in such a case the statute would not run while they so held, for the reason that while a mortgage continues to be recognized by the holder as a mortgage, it is a continuing right of the owner to pay it off and discharge it, and, by so doing, regain the possession of the land. In such a case the possession by the mortgagee is not adverse (Miner v. Beekman, 50 N. Y. 337).

The statute runs only from the time of the entry of the mortgagee, under claim of exclusive title (Hubbell v. Sibley, 50 N. Y. 468).

The plaintiffs are thus driven back to the position that they took possession, not as mortgagees, but as owners claiming the exclusive title. This claim was held untenable by the court at special term, and it certainly finds no support in the provisions of the will. The property in suit, at the time of taking possession, consisted of vacant lots, and no interest whatever in vacant lands was devised to the plaintiffs by the will. All the testator’s vacant land descended to his children, subject to the power of sale. Plaintiffs could not change the whole course of descent by their own act, for if they could, by leasing, make vacant and unproductive property productive property, they could convert what would otherwise descend to the children in fee subject to their power of sale, into property which they could insist upon holding in trust for the benefit of the widow during her life. They therefore had no authority to make the lease to Reeber.

The consequence of all this is that, to say the least, it is doubtful whether the plaintiffs, in view of their limited powers under the will and under the peculiar circumstances of this case, ever took such a possession of the lots in question as was necessary to set running, as against Smith and his representatives, that provision of the statute which limited the time for the commencement of an action to redeem to ten years. Moreover, there may have been disabilities which suspended the running of the statute, if it ever commenced to run.

In addition to what has already been said, the question still remains whether the plaintiffs, though they had no express power under the will to make the contract in question with the defendant in this case, had implied power to do so. This question is also involved in doubt, for if the property is personalty, it may be that under the provisions of the will it cannot be 'sold during the fife of the widow, who is still alive. But in view of the doubts already expressed, I do not deem it necessary to determine it.

Upon the whole case it sufficiently appears that the title offered by the plaintiffs is not so free from reasonable doubt that the defendant should in equity be compelled to accept and pay for it. For a period of forty-five years from the record of the deed from Belavan to Smith, there is no deed or instrument of record conveying, describing or even mentioning the premises. The title offered rests largely upon parol evidence, and upon the assumed bar of the statute of hmitations. The parol evidence consists in the main of Reeber’s testimony, who is now over eighty years of age, in connection with a lease which the plaintiffs had no power to make, which does not truly describe the premises, and is not recorded, and which, if recorded, owing to the misdescription, would not be returned upon an official search in the register’s office against the premises in question. There clearly was no strictly adverse possession for twenty years, and from the facts, so far as they do appear, it remains extremely doubtful whether the statute of limitations even commenced to run as a bar to an action to redeem. Moreover, the nice and complicated question of implied power arising under the will in various forms, and upon which so much, if not all, depends, remains involved in doubt. ' All these things taken together show that the title is not a marketable one. The burden rests upon the plaintiffs to show that their title is so free from reasonable doubt as to be marketable, and the plaintiffs having failed to give the necessary proof, the defendant should not be compelled to take the title (Shriver v. Shriver, 86 N. Y. 575 ; Mott v. Mott, 68 Ib. 246 ; Schultz v. Rose, 65 How. Pr. 75).

The judgment appealed from must be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Van Vorst, J., concurred.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    CHARLES W. DURANT, Jr., Respondent, v. WILLIAM P. ABENDROTH, Impleaded, &c., Appellant.

      Notice of appeal, service of—burden of proof of am equivalent—Extension of time to malee a case—effect of—estoppel and waiver.

    It was claimed by appellant that there had been a transaction which was the equivalent of service of notice of appeal. The averments in appellant’s affidavits as to this transaction were met and fully denied by respondent’s affidavits. Held, that the burden of proof was on the appellant, and his proof having been neutralized by that of the respondent, no transaction which was the equivalent of service of notice of appeal has been established.
    The extension of time to make a case does not, of itself, extend the time to appeal.

      Where both parties, the one in asking an extension of time to serve a case, and the other in granting it, acted on the supposition that an appeal had been taken, there is neither an estoppel against respondent’s claiming that notice of an appeal had not been served in time, nor a waiver by respondent of the omission to serve the notice in time.
    Before Sedgwick, Oh. J., Van Vokst and Freedman, JJ.

      Decided January 4, 1886.
    Appeal by defendant from a special term order, denying his motion to vacate and set aside the execution herein, and to stay all proceedings on the part of the plaintiff to enforce the judgment herein, until the hearing and decision of the general term on the case and exceptions on appeal herein.
    The motion was heard at special term before Judge Ingraham, who delivered the following opinion:
    “Ingraham, J.—The only question to be determined on this motion is whether or not an appeal has been taken from the judgment below within the time allowed bylaw. By section 1300 of the Code, an appeal must be taken by serving on the attorney for the adverse party and upon the clerk a written notice to the effect that the appellant appeals from the judgment or order, or from a specified part thereof.
    “No such notice was served within the thirty days from the service of notice of entry of judgment.
    “The only section of the Code authorizing the courts to supply defects in the proceedings necessary to perfect the appeal, is section 1303, which provides that where the appellant seasonably and in good faith serves a notice of appeal, either upon the clerk or the adverse party, but omits, through mistake or inadvertence, or excusable neglect to serve it upon the other, or to do any other act necessary to perfect the appeal, the court may, in its discretion, permit the omission to be supplied. The power granted by this section, however, is only where the notice of appeal has been served either upon the clerk or upon the adverse party within the time allowed by the Code, and in this case, as no notice of appeal was served within the thirty days after the notice of entry of judgment, no power is given by this section to permit the deponent to serve the notice.
    “ The only remaining question is, whether the consent of the plaintiff extending the time of the defendant to serve a proposed case and exceptions was a waiver of the notice of the entry of judgment or of the right to insist that no appeal has been taken within the time allowed.
    “It appears, however, in this case, that at the time the consent was given, the plaintiff’s attorney expressly refused to receive a notice of appeal, on the ground that the time in which to serve the notice had expired ; and having taken that position, it is difficult to see how they could have intended to waive the right which they expressly insisted upon by granting the stipulation.
    “ The case of Staats v. Garrett (21 Week. Dig. 39), cited by defendant, was very different from the case at bar. There the notice of appeal had been served and accepted by the respondent without objection, and the court held that the consent extending the time to make a case was a confession or admission, that the notice of appeal had been received in time, or at least a confession that the notice of entry of judgment was for some cause ineffectual. In this case, however, the plaintiff’s attorney had refused to receive the notice of appeal, refused to waive the default, and insisted that no appeal had been taken. Under such circumstances it cannot be held that there was any waiver.
    “ The failure to serve the notice of appeal in this case was evidently a mistake on the part of defendant’s attorneys or some one in their employ, and upon the facts shown, would justify the court in relieving the defendant from the effect of such mistake if it was in the power of the court.
    “ Section 784 of the Code provides that the court or a judge cannot allow either of those acts, viz.: c The commencement of an action or the taking of an appeal, to he done after the expiration of the time fixed by law for doing it,’ except in a case specified in the next section, which does not apply to the case at bar. The court has no power, therefore, to relieve the defendant from the effects of the failure to serve the notice of appeal within the time allowed.

      “ I have examined the questions presented on this motion without regard to the claim on the part of the plaintiff that the question has been passed upon by Judge O’Gorman, and having come to the conclusion that no appeal from the judgment has been taken, it is unnecessary to determine whether or not the questions were included within such decision.

      “ The motion must, therefore, be denied.”

      Arnoux, Bitch & Woodford, attorneys, and William H. Arnoux, of counsel for appellant,
    on the questions considered in the opinion, argued :—I. The notice of appeal was duly filed with the clerk of this court, because of the extension of the time to make a case given by plaintiff’s attorneys. Granting time to make a case was an extension of the time to serve a notice of appeal. The only object that a party has in making a case is to appeal. A case subserves no other purpose. Then to say you may make a case after your time to appeal has expired, is a mockery, a delusion and a snare. It invites a party to make large expenditures of time, labor and money, which are absolutely useless if this view prevails. This is the meaning of the consent according to that view : “I extend your time to serve the case, but I will refuse to accept it when served.” On the other hand, we contend that the meaning of such a consent is : “ I will accept the case if served within the extended time.” And that implies that the party will argue the appeal upon that case if it is correct, or that he will have it corrected, and then argue the appeal. No other meaning can honestly be given to such a consent, and that being the case, the notice of appeal was filed in time.

      II. The service of the proposed case on appeal on August 18, was a sufficient notice of appeal, and was duly served (Baker v. Scott, 2 Sup. Ct. [T. & C.] 606). Such a case conforms to the requirements of the Code for an appeal, which simply demands that it shall be in writing (Code Civ. Pros. § 1300).
    III. The extension of time to serve the case was either a waiver of any default, or an admission that the time to appeal had not expired. 1st. The service of a notice of appeal after the time had expired is a nullity. And when a paper is an absolute nullity, it is not necessary to return it. 2nd. We are in a similar situation, because the last extension was given after the notice of appeal had been filed with the clerk, to the knowledge of plaintiff’s attorneys. This motion was not made to the favor of the court, for we were well aware that the court had no power ex gratia to extend the time to appeal, but the motion was made strictissimi juris, and as such the defendant should have prevailed (See also Staats v. Garrett, 12 Weekly Dig. 39 ; S. C., on appeal, 97 N. Y. 630).

      Norwood & Coggeshall, attorneys, and Carlisle Nor-wood, of counsel for respondent,
    cited: Parsons v. Winne, 17 Week. Dig. 237; Whiting v. Townsend, 67 N. Y. 40 ; Cotes v. Smith, 29 How. Pr. 326 ; Humphrey v. Chamberlain, 11 Ib. 274 ; Whitney v. Townsend, 7 Hun, 233 ; Wait v. Allen, 22 N. Y. 321; Salls v. Butler, 27 How. Pr. 133 ; 27 N. Y. 638 ; Morris v. Morange, 26 How. Pr. 247; Waring v. Senior, 48 Ib. 226 ; Kelly v. Sheehan, 76 N. Y. 325.
   Per Curiam.

The ground of the motion was that an appeal was pending, the plaintiff having waived the right that there should be an undertaking given to secure the judgment. The plaintiff took the position that there was no appeal pending.

On the affidavits for defendant there was a claim, that there had been a transaction which was the equivalent of service of notice of appeal upon the attorneys for plaintiff. The affidavit as to this was that the affiant “duly tendered ” to one of defendant’s attorneys “a written notice of appeal in each of the above entitled cases ; he refused to accept the same, upon the ground that the time to appeal had expired.” Under the facts otherwise shown, it would be necessary perhaps to hold that there was no service, as the written notice was not left at the office. There is, however, no intention to decide so, inasmuch as the affidavit for plaintiff met and denied fully and particularly the averments that have been specified. It must be -held that the burden of proof that notice had been served was upon the defendant, and that the proof given for him, was neutralized by the evidence to the contrary. The result is that no notice of appeal had been served, and therefore there was no appeal.

It is argued that if no notice had been served upon the attorneys for plaintiff, yet as service of notice had been made upon the clerk of the court, the omission to serve might be cured under § 1303 of the Code of Civil Procedure. To enable the defendant to ask the benefit of this section, he must show that service upon the clerk was within the time allowed for such a proceeding. That service was on July 6, and two days after the time for appeal had passed. It is claimed, however, that the plaintiff' had waived an earner service or was estopped from claiming that there should have been an earlier service. This waiver or estoppel is placed upon a consent given by plaintiff’s attorney that defendant’s time to make and serve a case and exceptions be extended. The court at the end of the trial on June 1, had given defendants thirty days time to make a case, &c. Judgment was entered and notice of entry given on June 2. On June 22, the plaintiff’s attorney consented that defendant have until July 6, to make the case. On July 6, in the morning, there was a further extension of twenty days, and in the afternoon the notice was filed with the clerk. In the meantime, on that day, the plaintiff’s áttorney had expressly refused to disregard the omission to serve notice of appeal upon him.

Merely giving time to make a case is not in itself a recognition that an appeal is pending, or will be pending at some point within that time. At the trial, the court gave such a time, and also stayed proceedings. It was intended that there should be an appeal taken by the defendants in the usual way. An extension of that time by the court or the opposite party, would give the right described for what it might be worth, but would not relieve the party of his obligation to gain or perfect another right. Therefore, if there be anything in the defendant’s claim, it must be found in the circumstances of the extension. They must operate as a waiver or an estoppel in the particular case.

A marked feature of the present case is that neither attorney was conscious that the appeal had not been perfected. The plaintiff’s attorney had no active duty in respect of perfecting the appeal, and without examination, when he gave extension of time he took for granted that the other side had served notice of appeal. The defendant’s attorney supposed that the proper clerk had served the notice. Both sides placed the right to appeal upon the necessity of serving notice. Neither thought of the appeal as connected with the extension, or supposed that the extension would affect, or give, or recognize the right to appeal within a certain time. Neither side could have believed that a waiver was within the intention of either. Still less could there have been an equitable estoppel, for. the transaction amounts to the plaintiff’s saying, if you have perfected your appeal, as I suppose you have, and as you believe, then I extend the time to make a case. If this view be not correct, and there be some right in the defendant to have his proceeding validated because of inadvertent omission to serve the notice, the same right must be accorded to plaintiff’s position that he inadvertently considered that there was an appeal when he gave the extension, and the extension should be set aside on that ground.

And it would not be correct to say that the extension led to the trouble and expense of making the case, &c. The defendant was not compelled or induced to make the case. He had received a favor upon which he might or might not act, at his pleasure.

There being neither waiver nor estoppel, the order should be affirmed, with $10 costs, and disbursements to be taxed.


author: Van Vorst, J.

text:
    THE PRESIDENT AND DIRECTORS OF THE MANHATTAN CO. v. RICHARD H. LAIMBEER, Impleaded, &c.

      Limited fartmerships—essentials to.

    The actual recording of the certificate required to be made and signed by section 4, title 1, chapter 4, part 2 of the Revised Statutes, is essential to formation of limited partnership. Until such recording, no limited partnership is created.
    Before Van Vorst, Preedman and Truax, JJ.

      Decided January 4, 1886.
    Exceptions heard at general term.
    Under the direction of the court, a verdict was' rendered against defendant Laimbeer, who alone defended. The exceptions taken on the trial were ordered to be heard in the first instance at the general term. The question presented at general term was whether, under the evidence, defendant Laimbeer was hable as a general partner of Phillips & Co., he claiming that Phillips & Oo. was a limited partnership duly formed under title 1, chapter 4, part 2 of the Revised Statutes, and the various acts amending the same, in which limited partnership he was a special partner.
    The facts appear in the opinion.

      Stem & Myer, attorneys, and of counsel for plaintiff,
    after reviewing the Revised Statutes and the act of 1882, argued :—I. It has been frequently held by the court of appeals in this state that, inasmuch as the grant is a special privilege, and inasmuch as its various provisions are intended to give all possible publicity and certainty and security for the benefit of the public, therefore its provisions should all be strictly construed as against the members of the firm (Haviland v. Chace, 39 Barb, 283 ; Durant v. Abendroth, 41 Super. Ct. 59 ; 69 N. Y. 154; 91 N. Y. 132 ; Argall v. Smith, 3 Den. 435 ; 6 Hill, 479 ; Van Ingen v. Whitman, 62 N. Y. 513 ; Pierce v. Bryant, 5 Allen, 91).
    II. The authorities cited by defendant’s counsel do not apply to this case. Counsel here commented on Veeder v. Mudgett, 95 N. Y. 295 ; Sutherland v. Olcott, 29 Hun, 161; Henkel v. Hayman, 91 Ill. 96 ; Beekman v. Fraser, 18 Johns. 544 ; same case in error under title of Frost v. Beekman, 1 Johns. Ch. 288).
    III. Under the recording acts, a grantor or mortgagor must as between him and a subsequent grantee or mortgagee bear the loss arising from the record of his deed ox-mortgage out of the order due to its date, or in a wroxxg book (N. Y. Life Insurance Co. v. White, 17 N. Y. 469; Gillig v. Maas, 28 Ib. 191).

      Winchester Britton, attorney, and of counsel for defendant Laimbeer,

    argued: I. The maxxifest purposes of recording wex-e to perpetuate the evidence of the fact, and that persons desiring to know, may ascertain with more x-eadiness than by filixxg alone, and more ixi detail, the provisioxxs of the partnership, thaxx appear by the publication ; and if the ruling of the coux’t be correct, then dux-ixxg the intex-val of time between the actual filing and the actual x-ecording, no pax-tnership exists, though, as in the recording of deeds and mortgages, it is wholly practicable to examine the files, between the date of the last recox-d and the date of inquiry, for information as to that period. The fact is, that in the eye of the law, a paper required by law to be recorded, is deemed to be recorded from the time it is left, fees paid, at the place for record. And such is the construction of the clerk of this court, who, on receipt of a certificate, marks on the outside thereof “ filed and recorded,” with the year, day, hour and minute ; and especially is this so in constuing a statute remedial, not penal (Carman v. McIncrow, 13 N. Y. 73). Further, it is a well established principle, that no one having done all which he can do of the thing required to be done, which must be finally consummated by the act of a public officer, shall be prejudiced by the omission of such officer to perform that act. This ruling, in effect, holds every supposed special partnership in the city New York to be general, and while the argument ab inconvenienti has force only when the construction is doubtful, if this is such a case,' as it surely is, then here it has especial force. It was proved in this case, that many days and sometimes weeks intervene between the time of receipt of a certificate of special partnership and its actual record. Under section 29 of the statute, the publication must be made immediately after such <cregistry,” meaning “ recording.” The universal practice of the bar is to advertise at once, on leaving the certificate with the clerk ; and such publication, being in fact, before any actual record of the paper, and on the construction of the court at the trial term, before and not after record, is, therefore, fatal.
    II. The Revised Statutes are a substantial re-enactment of the law of 1882. But in addition to the requirements of the Revised Statutes, the act of 1882 (§ 8), contains a provision expressly requiring the partners, besides the performance of their duty by them above mentioned, to see that the clerk performed his, and recorded the certificate, under penalty of failure of formation of the limited partnership, and the consequent general liability. The duty imposed by this provision is precisely the duty which plaintiffs claim to be the duty of the defendant under the Revised Statutes. But this provision was stricken out by the revisers, and is wholly omitted from the Revised Statutes, and the inevitable inference from that very marked and material change is, that it was thereby meant and intended to declare that the above mentioned requirement in the act of 1882, thus omitted, was thereafter to be dispensed with, and that it should no longer be necessary for the partners to see that the certificate was spread upon the record; and to leave the matter precisely where the law, without said provision, must leave it, viz., subject to the principle, that when a duty is imposed on a public officer, his omission to perform it shall not prejudice a person who has wholly performed his. And said omitted parts cannot be revived by construction (Matter Southworth, 5 Hun, 55 ; Lyon v. Smith, 11 Barb. 124; Taggard v. Roosevelt, 8 How. Pr. 141; Ellis v. Paige, 1 Pick. 45). After applying that principle to this case, as was done in Veeder v. Mudgett (95 N. Y. 295), when the defendants had left the certificate with the county clerk and paid the fees, and the clerk marked it “filed and recorded,” as he testified he invariably did, the certificate was, in the eye of the law, so far as the defendants and their rights and liabilities were concerned, filed and recorded in fact. It would seem, therefore, that a comparison of the part of the Revised Statutes forming the existing statute relating to limited partnerships with the act of 1822,* which it was enacted to supersede, has solved the question as to the true interpretation of the present statute in its bearing on this case, and solved it adversely to the claim of the plaintiff.
    III. The following provisions of the act of 1848, authorizing the formation of mining, manufacturing, &c. corporations, to wit: “ § 10. All the stockholders of every company incorporated under this act, shall be severally individually liable to the creditors of the company in which they are stockholders, &c., until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shah have been made and recorded, as prescribed in the following section.” “ 11. The president and a majority of the trustees, within thirty days after the payment of the last installment of the capital stock so fixed and limited by the company, shall make a certificate, stating the amount of the capital so fixed and paid in, . . . and they shall, within the said thirty days, record the same in the office of the county clerk of the county wherein the business of the said company is carried on”—are analogous to the one in question. In Veeder v. Mudgett [supra), it was held that the thirty days’ clause was directory merely, and that the omission to record being wholly the fault of the clerk' who was directed to make the record, the defendants were not to be prejudiced by the omission. Their duty was done. So also in Sutherland v. Olcott (29 Hun, 161), under the same act as amended by Laws of 1864, chap. 517, § 2 ; Laws of 1871, chap. 481. A corporation formed thereunder was authorized to. mortgage its property, “ Provided that the written assent of the stockholders, owning at least two-thirds of the capital stock of such corporation, shall first be filed in the office of the clerk of the county where the mortgaged property 'is situated.” In the Rochester Savings Bank v. Averill (96 N. Y. 467), the court held that the filing of the assent in the office of the clerk of the county where the mortgaged property is situated, was not an indispensable condition to the validity of the mortgage.; as against a subsequent mortgagee or purchaser, with notice, the mortgage is valid. So also it is held that a delivery to the proper officer for record, was a compliance with the terms of an agreement requiring the recording of a mortgage as a condition precedent to the delivery of a deed (Beekman v. Frost, 18 Johns. 544). Henkel v. Heyman (91 Ill. 96), arose under a limited partnership act substantially like that of this state ; the court held tliei-e was a general partnership on the ground that, on the defendant’s own plea, it appeared that the proper papers were not on file and recorded, and that they were not so on file or recorded was by their own voluntary act, is argued, as the plea averred that they took the papers away from the clerk’s office, and had ever since had them in their .possession. The court said, “ Had the certificate, acknowledgment and affidavit been left with the county clerk, with directions to file them, his refusal to comply with the directions would not, doubtless, have affected the rights of the parties. In that case, the parties would have done all that they could have done to comply with the law. But here the papers are taken away by the parties themselves. By their own voluntary act they prevent the papers from being on file.” To the same effect is Pferman v. Henkel (1 Bradwells R. 1 Ill. App. 145, 150). In Dodge v. Potter (18 Barb. 192), and Dikeman v. Puckhafer (1 Abb. N. S. 32), it was held that the rights of the mortgagees were not affected in the one case by the failure of the town clerk to number the mortgage, and in the other by the failure of the mortgagees to index it. And in Wood and Brown’s Appeal (82 Pa. State, 116), the court went further and held, “ It is not incumbent on the mortgagee to supervise the recorder, and see that the mortgage is recorded and indexed.” Some cases arising under the recording act, that visit the consequences of the failure of the clerk to discharge his duty, upon the party whose act was the foundation for the performance of that duty, do not conflict with our view. They are governed by the express provisions and purposes of the recording act, which provides that the records shall be constructive notice only when recorded as therein provided, and if they were not so the recording act would become utterly useless, and the records thereunder wholly unreliable and in vain, and no titles would he ascertainable with certainty, while the express purpose of the recording act is that this may be rendered certain (Frost v. Beekman, 1 Johns. Ch. 299). But, in general, outside of the recording act, when the law requires an instrument to be recorded in a public office, and imposes upon the officer the duty of recording it, and a party has left the instrument there for record, and has thus done all that is in his power to do toward recording it, in the eye of the law it is recorded from the moment it is so left for record, and especially is this so in view of the fact that this statute is a remedial statute, and should be liberally construed (Riper v. Poppenhousen, 43 N. Y. 73).

   By the Court.

Van Vorst, J.

Limited partnerships can only be formed in pursuance of the statute, and in the manner substantially directed.

It is provided by statute, that persons desirous of forming such partnership, shall make, sign and acknowledge a certificate, the contents of which are given ; that the certificate shall be filed in the office of the clerk of the county in which the principal place of business of the partnership shall be situated ; that the certificate shall be recorded by the clerk in a book to be kept for that purpose, open to the public inspection; and that “ no such partnership shall be deemed to have been formed until a certificate shall have been made, acknowledged, filed and recorded r' as above directed. There are other incidents and steps not necessary to be stated here (1 R. S. 765, §§ 4-8).

The case under consideration arises from a failure to record the certificate, in pursuance of the requirements of § 8.

The defendant Laimbeer, who is sued as a general partner, claims that the firm of which he was a member was a limited partnership, duly created under the statute, and that he was the special partner, and as such, is not liable for the debt sought to be recovered in this action.

Evidence was introduced on the behalf of this defendant upon the trial, tending to show that on or about the date of the formation of the firm, formal articles of partnership, and a certificate and affidavit, papers used in the forming of such limited partnerships, were executed by the parties interested, and that the certificate and affidavit were delivered, by the direction of the defendant Laimbeer, to the clerk of the city and county of New York, with directions to him to file the same, and that the fee demanded by the clerk was paid.

It was, however, proved on the trial that no certificate of the formation of the alleged limited partnership was ever recorded in the office of the clerk, in the book kept by the clerk for the purpose, and that no such certificate could be found on the files.

The learned counsel for the defendant, at the close of the evidence, asked that it should be presented to the jury “whether or not the defendants, in fact, did cause to be filed the certificate, and the affidavit which goes toward making up this special partnership, whether in fact they did leave them in the county clerk’s office, in the proper place, and with the proper person, with the request that they should be filed, and also whether they are now on file in that office.” In disposing of this request, the learned trial judge said, “The statute refers toa point, when shall begin the special partnership, and it says that no such partnership shall be deemed to have been formed until the certificate shall have been made and acknowledged, filed and recorded. There is no dispute that the certificate was not recorded. I must hold that the defendant is hable as a general partnerand he directed a verdict for the plaintiff.

We are of opinion that the learned chief judge who presided at the trial, was right in the conclusion he reached, and in the direction he gave.

We have already said that the provisions of the statute, which authorize limited partnerships, through which the special partner is exonerated from the common law liability of a general partner, must be, at least in substance, followed. This rule obtains with respect to all statutory rights and immunities; especially when peculiar privileges and exemptions are conferred upon particular individuals or classes.

The first section of the act in regard to “limited partnerships,” expressly directs that such partnerships shall only be formed upon “the terms,” and “subject to the conditions,” expressed.

These terms and conditions are expressed with clearness. And not the least of these is the provision requiring the recording of the “certificate ” by the clerk “in a book to be kept for the purpose, open to public inspection,” and this direction is followed by the distinct proviso, that until the “certificate” shall have been recorded, the partnership shall not be deemed to have been formed.

The filing of the certificate with the clerk of the county, by the special partner, is no satisfactory answer to the unambiguous declaration of section 8, determining the consequences of a failure to record the certificate, nor does it avoid those consequences. When we consider the scope and object of the statute and its provisions, through which partnership liabilities are limited and peculiar privileges are conferred upon one embarking in partnership engagements, we cannot overlook the importance of the provisions requiring the recording of the certificate, in an appropriate book, open to the inspection of all who may have dealings with the firm.

The legislature intended, in the directions given, to provide for recording of the certificate, as a condition precedent to the creation of the limited partnership.

It is true that the duty of recording is cast upon a public officer, but the consequence of his failure to perform the duty, is in effect cast upon the person claiming to be the special partner.

The consequences of such failure must rest somewhere, and the legislature have the power, in framing the law, to say where they shall rest. The consequence is, that the projected enterprize never becomes operative as a limited partnership. It is argued by his counsel, that the defendant, having filed the papers, had a right to rest upon the presumption that a public officer will perform his duty.

That is not an indisputable presumption, and is liable to be rebutted, and experience shows that it is fallible.

But in the face of the positive injunction of the statute under consideration, a person would fely upon such presumption at his peril, and would suffer the consequences of a failure on the officer’s part, to perform his duty.

In Smith v. Argall (6 Hill, 479), it is said, “Partners are bound at their peril not only to see that all the necessary papers are filed and recorded, but that correct notices are published.”' And in Van Ingen v. Whitman (infra), the court says, “This statute does not set out to deal with motives, but with acts and their results, and it guards the public, not by requiring good intentions, but a certain act done in a certain mode.”

Notwithstanding the express directions from the clerk in section 6, to record the paper in an appropriate book, had the words “and recorded,” been omitted from section 8, a filing of the paper with the clerk might have been sufficient to create the partnership ; for in such case the defendant might have been justified in relying upon the clerk’s performing his duty. But by the terms of section 8, a filing of the certificate is not enough to prevent the consequences therein declared, but effect must necessarily be given to the words “ and recorded.”

The current of authority with respect to the statute in question, is very considerate. While on the one hand mere technical and immaterial omissions or mistakes have been disregarded, defects in substance have imposed upon the special, the liabilities of a general partner.

In Long v. Lock (5 Daly, 46), where the certificate was not filed for twenty-eight days after its execution, the partnership was held to be a limited one as to creditors becoming such after the filing. In Bowen v. Argall (24 Wend. 495), a mistake in publication of the names of partners, as Avgall for Argali, was held not to vitiate the publication. But Haviland v. Chase (39 Barb. 283); Argall v. Smith (3 Den. 435); Van Ingen v. Whitman (62 N. Y. 513) ; Durant v. Abendroth (41 Super. Ct. 53 ; S. C., 69 N. Y. 148), are illustrations of the strictness to which persons are held in proceeding to organize as a-limited partnership, under the statute in question.

In our state, no case seems to have arisen, in which the effect of an omission on the part of the clerk to record the certificate, where one had been filed with him, has been distinctly considered.

The only case which we have been able to find, which bears directly upon that question, arose in the supreme court of Michigan. It is Gray v. Gibson (6 Mich. 300). In that case, the New York statute concerning limited partners was directly under consideration, and this question was passed upon. Two opinions were written in the case, but upon this point there was a concurrence.

It appeared that the certificate had been duly filed, but had not been, recorded by the clerk. Christiancy, J., in his opinion, says : The certificate in this case, not having been, recorded, did not, and was not claimed to have the effect, to create a limited partnership and Justice Manning, in his opinion (p. 325), says : The certificate was made and acknowledged, and with the requisite affidavit was filed, but it was not recorded ; why it was not recorded does not appear. . . . From whatever cause, it did not put an end to the copartnership, but left it, as if nothing had been done, under the act, an unlimited partnership, or partnership at common law.”

Henkel v. Heyman (91 Ill. 96), contains an obiter dicr turn in these words : “ Had the certificate, acknowledgment and affidavit been left with the county clerk with directions to file them, his refusal to comply with the directions would not doubtless have affected the rights of the parties. In that case, the parties, would have done all that they could to comply with the law.” That statement was not necessary to the decision of the case, as will be seen upon an examination, and it is an incomplete view of the duty of one seeking to become a special partner under the statute. He could have done more than direct he could have demanded the recording as a right, and could have compelled its performance.

There is no reason to suppose that upon the tender of fees for recording, such a demand would have been refused.

It is the interest of the county clerk to record, as it is his duty to do so.

We are not justified in looking for some unnatural or unreasonable ground upon which to base a supposed refusal to record, or to regard it as intentional or willful, in order to defeat the operation of the statute.

It is suggested on the defendant’s behalf by his learned counsel, that becaus 3 the statute in question does not, as the act of 1822 did. d. ¡clare it to be the duty of all the partners inheres cea uj see that the requirements of the several sections or tne act are complied with, that no other duty in this regard is imposed upon them, other than to file the certificate. We do not so look upon the statutory changes.

Section 8 of the present statute, substituted in the place of the former one, amounts to an injunction to do certain things, if a person would avail himself of the statute. Under the former statute, the consequence of a failure in any thing directed to be done,-was to make “ all the partners interested in such partnership liable for the engagements thereof, as general partners.” Under the present statute, such failure leaves it, the copartnership, as was-said in the Michigan case, “as .if nothing had been done under the act” towards creating a “ limited partnership.” And such is the effect of the directions given by the chief judge upon the trial of this cause.

It is stated in a note to Kent’s Commentaries, vol. 3, p. 36, that “It has been ruled in Hubbard v. Morgan (U. S. D. C. for N. Y. May, 1839), that the special partner must, at his peril, see that the law is complied with in all its essentials, or he will be liable as a general partner.”

We have examined the cases of Veeder v. Mudgett (96 N. Y. 295), and Sutherland v. Olcott (29 Hun, 161), arising under the act for the formation of manufacturing companies, which imposes and continues liabilities upon stockholders for a failure on the part of the officers to file a certificate, called for by that act. But the analogy between cases arising under the provisions of that act, and those falling under the- limited partnership act, is imperfect. These cases are clearly in principle distinguishable from the one before us. The omission to file and record a certificate of the payment of the capital stock, in pursuance of section 11 of the act, did not touch the question of corporate life. The corporation existed, whether the certificate was, or was not filed. The omission' to file and record the paper, affected the continuance of the stockholder’s liability, determined by a previous section of the act.

In the first of these cases the main question seemed to be, whether the thirty days clause mentioned in section 11 was mandatory or directory ; it was held to be directory. It was indeed held that the officers or stockholders were not responsible for the failure of the county clerk to record the certificate. But it is quite clear to us that the structure, scope, and policy of the act concerning limited partnership differs wholly from the portion of the manufacturing act considered above.

It seems to us entirely clear, that the provision for the recording of the certificate is as important as that for filing, and is in the same category, and that it is not directory—that it is made absolutely fundamental to the validity of the effort to constitute a limited partnership, and is in effect mandatory.

It follows, therefore, from what has been already stated, that it is as much the duty of the persons seeking to form such limited partnership to see that the certificate is recorded, as it is to file the instrument, as a condition precedent to the creation of the partnership.

No argument can be adduced from the provisions of the recording acts, to which our attention has been called, or the practice thereunder, which will break the force of the conclusion above reached.

. We have examined all the exceptions taken by the learned counsel for the defendant, and do not find that any of them can be sustained.

The judge’s disposition of the other question upon which the defendant’s counsel asked to go to the jury,'— that is, as to whether the note was paid or not,—was entirely correct.

The exceptions of the defendant are overruled, and judgment is ordered in favor of the plaintiff, on the verdict, with costs.

Freedman and Truax, JJ., concurred.


text:
    ABRAHAM VAN DOLSEN, et al., Respondents, v. WILLIAM P. ABENDROTH, Imp., &c., Appellant.

      Judgment—setting aside, on motion or affidavits.

    The erroneous computation of interest on the trial, does not constitute a ground for setting aside, upon a motion founded on affidavits, a judgment entered in conformity with the verdict.
    Before Sedgwick, Oh. J., Van Vorst and Freedman, JJ.

      Decided January 4, 1886.
    Appeal by defendant from order denying his motion to vacate the judgment against him entered on verdict of jury.

      Arnoux, Bitch & Woodford, attorneys, and William H. Arnoux, of counsel for appellant.

      Norwood & Coggeshell, and Carlisle Norwood, Jr., of counsel, for respondents.
   Per Curiam.

On the trial, there was an erroneous computation of interest, to the extent of $2.62, and this was included in the verdict and judgment for plaintiffs. This error was the ground of a motion below to set aside the judgment. Much might be said in the case. It is not necessary to consider more than one proposition. The error complained of is, in its character, like any error based upon inaccurate or mistaken testimony. The party who may be affected unfavorably by it is concluded by a failure to answer or correct it, or to make it the subject of objection and exception at the time. It is inadmissible to try the issue of damages anew upon affidavits read upon a motion. It is not necessary to consider the power of the court trying the case to correct such an error, during the term, or of the special term upon a motion for a new trial on a case so settled.

Order affirmed, with costs of motion, $10, and disbursements to be taxed.


author: Freedman, J.

text:
    WILLIAM GHORMLEY, Respondent, v. WILLIAM B. DINSMORE, President, &c., Appellant.

      Carrier—receipted contract limiting extent of liability—instructions to jury that verdict eannot exceed limit, when defendant has a right to.

    One of the forms of contract of shipment in use by defendant’s company, containing, among other provisions, the following: “ . . . nor in any event shall the holder hereof demand beyond the sum of $60, at which the article forwarded is hereby valued, unless otherwise herein expressed,” was filled up by plaintiff without any statement concerning the value of the package therein described and which was to be shipped, and in that condition was tendered an employee of defendant’s company for signature at the time of the delivery of the package to the company. It was signed by such employee and delivered to such clerk without the expression of any value. The plaintiff knew the terms of the contracts of shipment used by defendant’s company. It further appeared that the defendant’s company had a tariff of charges for transportation which was affected by the value of packages, and knowledge of this fact was not denied by plaintiff. There was positive evidence of negligence; but there was no evidence, and under the complaint, none would have been admissible, which would have authorized the submission to the jury of the question whether the defendant’s company had been guilty of a wrongful and willful act beyond mere negligence.

      Held, that defendant had an absolute right to have the jury instructed that the recovery of the plaintiff could in no event exceed $50 and interest thereon from the date of shipment.
    Before Sedgwiok, Oh. J., Van Vorst and Freedman, JJ.

      Decided January 6, 1886.
    Re-argument of appeal from judgment, and from order denying defendant’s motion for a new trial.

      Blatchford, Seward, Griswold & Da Costa, attorneys, and Charles M. Da Costa and William D. Guthrie, of counsel for appellant,
    cited :—Magnin v. Dinsmore, 56 N. Y. 168 ; same case on second appeal, 70 Ib. 410 ; Belger v. Dinsmore, 51 Ib. 166 ; Steers v. Liverpool, N. Y. & P. Steamship Co., 57 Ib. 1; Wetzell v. Dinsmore, 54 Ib. 496 ; Berry v. Dinsmore, U. S. Circ. Court for Southern District of N. Y., .unreported ; Muser v. Holland, 17 Blatch. 412; Graves v. Lake Shore Co., 137 Mass. 33; Dinsmore v. Neresheimer, 32 Hun, 204.

      Peter Mitchell, attorney, and of counsel for respondent,
    argued :—All the reported cases on the subject draw the distinction, that where the question of negligence on the part of the carrier is established, then its liability is not restricted to the terms of its contract (Sheldon v. Merch. Desp. Tr. Co., 59 N. Y. 258 ; Magnin v. Dinsmore, 56 Ib. 168 ; Canfield v. Balt. & O. R. R. Co., 93 Ib. 532 ; Maynard v. Syracuse, &c. R. R. Co., 71 Ib. 183 ; Edw. on B. § 671 ; Westcott v. Fargo, 61 N. Y. 543). To relieve itself from liability the copipany was called upon to show proper care or absence from negligence on its part, and failing in this, the jury properly found against it on those questions (Alexander v. Greene, 7 Hill, 533 ; Russell Mfg. Co. v. N. H. Steamboat Co., 57 N. Y. 127 ; Brace v. Kelly, 7 J. & S. 27). The case of Hart v. Penn. R. Co., 112 U. S. 331, is clearly distinguishable from the case at bar. In the former there was a contract under seal, signed by the shipper ; in the latter there was no such contract, and the shipper signed no contract whatever, or paper of any kind. See Southern Express Co. v. Moon, 39 Miss. 822 ; The City of Norwich, 4 Ben. 271; U. S. Express Co. v. Bachman, 28 Ohio St. 144 ; Black v. Goodrich Trans. Co., 55 Wis. 319 ; Chicago R. R. Co. v. Abels, 60 Miss. 1017; Kansas City, &c. R. R. Co. v. Simpson, 30 Kans. 645 ; Moulton v. St. Paul, &c. R. R. Co., 31 Minn. 85.
   By the Court.

Freedman, J.

In affirming the judgment and order appealed from in this case, we have heretofore held (51 Super. Ct. 196), that for the defendant’s failure to deliver plaintiff’s package as directed, the plaintiff, upon the proceedings had at the trial, was entitled to recover, and that none of the claims advanced by the defendant to defeat a recovery was tenable. To this extent we shall adhere to our former decision.

The only question requiring a re-examination at our hands relates to the right of the plaintiff to recover more than fifty dollars, notwithstanding the fact that the special contract limited the right of recovery to that sum.' This limitation we did not enforce, because we were of the opinion, as was stated by us, that the point in respect to it had not been sufficiently raised to be available to the appellant.

The re-argument which was had, has satisfied us that we overlooked certain exceptions which did raise the point, that the point came properly before us for decision, and that it is our duty to pass upon the merits of it. We have therefore re-examined the whole case, with the view to a proper determination of this additional point.

At the trial the plaintiff, as part of his case, and as the evidence of the contract under which the package was shipped, read in evidence a receipt or bill of lading of the Adams Express Company, which, among other provisions, contained the following, viz: “. . . nor, in any event, shall the holder hereof demand beyond the sum of fifty dollars, at which the article forwarded is hereby valued, unless otherwise herein expressed.”

The plaintiff had been a customer of the Adams Express Company for many years in Chicago and elsewhere, and between five and six years in the city of New York. He had a book of blank receipts, and it was his custom to fill out a blank receipt whenever he had occasion to ship a package through the express company. He shipped sometimes three or four packages a day, and at least one per week, and upon each shipment prior to the one in question, he tendered a receipt similar to the one in suit to the defendant’s company for signature. He was therefore perfectly acquainted with the terms of these receipts and contracts, and his testimony was : “I would read one and know what it was ; but my man, who has charge of all this business, knows the whole thing.”

The receipt and contract in suit was, .according to the course usually pursued by the plaintiff, filled out in the handwriting of the plaintiff’s clerk, but without a statement concerning the value of the package, and in that condition it was tendered by said clerk to an employee of the express company for signature at the time of the delivery of the package to the company, and signed by said employee without the expression of any value. In addition to all this, it was proved that the express company has a tariff of charges for transportation which is affected by the value of packáges.

Upon a receipt and contract in substance, if not identically, the same, and upon a similar, though not quite as conclusive, state of facts, it was held by this court, on affirming the judgment in Magnin v. Dinsmore (38 N. Y. Super. Ct. 248), that it was properly left to the jury to say whether, in omitting to disclose the true value, the shipper had been guilty of any fraud or concealment. But the court of appeals in 62 JSf. Y. 35, held that this was error. In delivering the unanimous opinion of the court on that occasion, Folger, J., said : “By accepting carriage upon the terms of a limited liability, the shipper indicates his judgment of the degree of the risk and of needed care ; and his silence as to real valuéis the same as an assertion of mean value, thus keeping from the carrier his adequate reward ; and, what is worse, misleading him as to the degree of care and security which he should provide: It is a concealment of an important fact in entering into the bargain to be made, such' a concealment as amounts to a fraud in law upon the carrier ; and where there is no dispute as to the material facts, as there is none in this case, it is a question of law for the court, and not of fact for the jury, I conclude that the defendant is right in its claim, that the question of concealment of value, upon the undisputed facts of the agreement, and of the silence of the plaintiffs, was one of law for the court, and not of fact for the jury ; and that silence only as to value amounted to such an imposition upon the defendant, as would relieve it from a liability for the total value of the goods, unless something more in its conduct is shown than negligence to carry safely and to deliver promptly.”

And on a subsequent appeal taken by the plaintiffs in that case, the court of appeals in 70 N. Y. 410, emphasized and reiterated, what it had before held, as follows : “The question made was elaborately argued by counsel and deliberately considered by the court, and it was adjudged, without dissent, that the silence of the shippers as to the real value of the goods delivered for carriage, although there was no inquiry as to their value by the defendant, and no artifice to conceal the value or to deceive, was a fraud which discharged the carrier from liability for ordinary negligence for an amount exceeding fifty dollars, the limitation of the contract. This was the principal question then before us, and the one chiefly considered, and upon which the judgment was reversed. The reasons and the authorities upon which the decision rests, are set forth with clearness and force in the reported opinion of Judge Folger, and it would be out of place to repeat them and a work of supererogation to supplement them.”

The same question was also thoroughly considered by the supreme court of the United States in Hart v. Pennsylvania R. R. Co. (112 U. S. 331), and the decision of that case is entitled to particular attention when it is recollected that the doctrine of that court is that common carriers cannot exempt themselves from liability for negligence, whilst our court of appeals has settled beyond question the rule in this state to be, that a carrier may so exempt himself. The court said in the Hart case :

The hmitation as to value has no tendency to exempt from liability as to negligence. It does not include want of care. It exacts from the carrier the measure of care due to the value agreed on. The carrier is bound to respond in that value for negligence. The compensation for carriage is based on that value. The shipper is estopped from saying that the value is greater. The articles have no greater value for the purposes of the contract of transportation between the parties to that contract. The carrier must respond for negligence up to that value. It is just and reasonable, that such a contract, fairly entered into, and where there is no deceit practiced on the shipper, should be upheld. There is no violation of public policy. On the contrary, it would be unjust and unreasonable, and would be repugnant to the soundest principles of fair dealing, and of the freedom of contracting, and thus in conflict with public policy, if a shipper should be allowed to reap the benefit of the contract if there is no loss, and to repudiate it in case of loss.”

It is claimed by the plaintiff that the case of Hart is distinguishable from the case at bar by reason of the fact that in the former there was a contract mider seal signed by the shipper, while in the latter the shipper signed no paper of any kind. But the distinction becomes immaterial when it is considered that the acceptance of the contract in the latter case is sufficiently binding upon the shipper (Falkman v. Fargo, 35 Super. Ct. 332 ; affi’d, 55 N. Y. 642).

And a comparison between the case of Magnin v. Dinsmore, as decided by the court of appeals, and the case at bar, shows that the former was not, in its facts, quite as strong for the, defendant as the latter is. In the former, the fact of concealment of value was not pleaded ; in the latter it was. So in the present case it was proved that the compensation for carriage was based on the value of the article, and knowledge of this fact of difference in charge was not denied by the plaintiff ; whereas, in the Magnin case, one of the plaintiffs testified, after the defendant had proved this fact, that he did not know of any difference in freight charged by reason of the value of the goods carried.

It thus seems to have been firmly settled that, under a receipt and contract like the one under consideration, with the value of the package undisclosed and unexpressed, the recovery cannot exceed fifty dollars, notwithstanding the carrier’s negligence, unless there was, as was said in Magnin v. Dinsmore (70 N. Y. 410), a conversion or misfeasance by the carrier involving not only a wrongful, but also a willful act. A mere non-delivery will not constitute such a conversion or misfeasance, nor will a refusal to deliver on demand, if the goods have been lost through negligence or have been stolen.

The case, as made by the plaintiff in respect of the package in controversy, both by the complaint and the proof given at the trial, resolved itself into one of nondelivery without any explanation. This was prima facie evidence of negligence in the defendant (Canfield v. Balt. & Ohio R. R. Co., 93 N. Y. 532), but no more. There was no evidence, and under the complaint none would have been admissible, which would have authorized the submission of the question to the jury whether the defendant’s company had been guilty of a wrongful and willful act beyond mere negligence ; and in the absence of such evidence the defendant had an absolute right, under the authorities, to have the jury instructed that the recovery of the plaintiff in this action could in no event exceed the sum of fifty dollars and interest thereon from the date of shipment.

The refusal so to instruct the jury therefore constituted error, and for such error a new trial should be ordered (see Thomas v. N. Y. Life Ins. Co., recently decided by the court of appeals), unless the parties by stipulation should obviate the necessity.

The judgment and order appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event, unless both parties by stipulation consent to a reduction of the judgment to the proper amount.

Sedgwick, Ch. J., and Van Vorst, J., concurred.


text:
    GEORGE C. GENET, Appellant, v. BENJAMIN KISSAM, et al., Respondents.

      Interest —Demurrer.

    A bond and mortgage was made in 1868, dated November 4,1868, to secure the payment of $10,000 payable, at three years from date, with interest at the rate of seven per cent, per annum, payable quarterly.—Held, that interest ran at seven per cent, until the principal was paid.
    The plaintiff demurred to the answer. Held, that on the demurrer, the sufficiency of the complaint might be attacked; and it being found insufficient, the demurrer was overruled, without inquiring into the sufficiency of the answer.
    Before Sedgwick, Ch. J., Van Vorst and Freedman, JJ.

      Decided January 4, 1886.
    Appeal by plaintiff from a judgment entered against him upon a decision made on a trial at special term, of issues of law raised by a demurrer interposed by him to the first defense set up in the separate answer of the defendant Charles H. Town, on the ground that it is insufficient in law, upon the face thereof; and by a demurrer interposed by him to the first defense contained in the separate answer of the defendant Be j amis T. Kissam, on the same ground.
    The issues were tried before His Honor George L. Ingraham, who wrote as follows :

      “This action is brought to recover the difference between the amount of interest at the rate of six per cent., as provided for by chapter 538 of the Laws of 1879, and seven per cent., the amount paid by plaintiff to the defendants as trustees on a certain mortgage held by them as such trustees, and which mortgage had become due prior to January 1, 1880. The complaint alleges that plaintiff offered interest at the rate of six per cent, after January 1, 1880, as provided by the act of 1879, which was refused by the defendants, who demanded interest at the rate of seven per cent., whereupon the plaintiff paid interest at the rate of seven per cent., under protest, until July 15, 1881, when the principal amount and interest up to that time was paid.
    “ The mortgage was dated November 4, 1868, and was given to secure the payment of $10,000, three years from date, with interest at seven per cent., payable quarterly.
    “ It was held in the case of O’Brien v. Young (95 N. Y. 428), when the contract provides that the interest shall be a specified rate until the principal shall be paid, then the contract rate governs until payment of the principal, or until the contract is merged in a judgment, and where one contracts to pay money on demand with interest, or to pay money generally with interest, without specifying the time of payment, the statutory rate then existing becomes the contract rate, and must govern until payment, or at least until demand and actual default, as the parties must have so intended.” This decision seems to be conclusive0as against the right of plaintiff to recover in this action. The bond to secure which the mortgage was given as alleged in the complaint, was conditioned for the payment of the principal sum, with interest at the rate of seven per cent, per annum, payable quarterly.
    “The court in the case of Bennett v. Bates (94 N. Y. 354), relied on by plaintiff, does not appear to have considered the question as to the rate of interest subsequent to 1880, after the mortgage became due, but, so far as it is an authority in favor of the plaintiff, it must be considered overruled by the case of O’Brien v. Young (supra).

    “On a demurrer to an answer, the defendant may show that on the face of the record, plaintiff is not entitled to final judgment (Parsons v. Hays, 50 Super. Ct. 29).
    “The demurrers must be overruled, and judgment ordered for defendants on the demurrers with costs, with leave to plaintiff to withdraw demurrers, on payment of costs.”

      Albert B. Genet, attorney, and of counsel for appellant,
    on the questions considered in the opinion, argued :— The legal rate of interest after January 1, 1880, was six per cent. (Bennett v. Bates, 94 N. Y. 374 ; O’Brien v. Young, 95 Ib. 425). The case at bar falls within the first cited case, and the reasoning of the second one; for the principal sum fell due and became payable three years from November 4, 1868, and there was no covenant in it to pay interest at seven per cent, until the principal should be paid. The absence of such a covenant takes the case out of the scope of the remarks made by Earl, J., in O’Brien v. Young (95 N. Y. 428-430), cited by the court below.

      John E. Ellison, attorney, and Charles A. Jackson, of counsel for respondents,
    on the questions considered in the opinion, argued: I. The act of 1879 (ch. 538), fixing interest at six per cent., has no application to this case (Salter v. Utica & Black River R. R. Co., 86 N. Y. 403 ; Randall v. Sackett, 77 Ib. 482 ; Association for Relief, &c. v. Eagleson, 60 How. 9 ; S. C., 3 Law Bull. 8 ; Erwin v. Neversink St. Boat Co., 23 Hun, 578 ; S. C., 11 Week. Dig. 372; Henken v. James, 16 Ib. 33; Rouse v. Northern Ins. Co., 12 Ib. 85 : O’Brien v. Young, 95 N. Y. 428).
    II. The defendants have a right to attack the complaint for insufficiency (People v. Booth, 32 N. Y. 398 ; Parsons v. Hays, 50 Super. Ct. 32).
   Per Curiam.

Judgment affirmed, with costs, upon the opinion of Judge Ingraham at special term.

See further : Erwin v. Neversink St. Boat Co., 23 Hun, 578 ; Henken v. James, 16 Week. Dig. 33 ; Rouse v. Northern Ins. Co., 12 Ib. 85).