author: By the Court.—Freedman, J.

text:
    ELMORE E. KENT, et al., Respondents v. JESSIE C. WOODHULL, Appellant.

      Case on appeal, court not necessarily confined to facts found, by statement in it that it does not contain all the evidence—Principal and agent—Cancellation by agent of time option contracts made in his own name, for account of his principal, by counter contracts on opposite side of the market, under rules of an exchange; when it so contravenes law, as that agent can have no recovery against principal by reason of canceled contract—New York Produce Exchange and Chicago Board of Trade, rules as to cancellation considered.

    Although the case on appeal states that it does not contain all the testimony given on the trial bearing on the questions at issue, the findings made and refused and the evidence admitted or ruled out, yet if certain evidence, especially documentary, contained in the printed record, about which there is no dispute and which cannot be affected by the omitted testimony, clearly establishes the findings of fact to be incomplete, or somewhat at variance with the real fact, effect should be given to such undisputed evidence in the determination of questions distinctly raised by the exceptions.
    Where a broker or commission merchant, who is a member of a Produce Exchange (an organization in which the transactions are confined to members, or the immediate agents, or representatives of members, and by the rules and customs whereof all contracts made on behalf of persons not members, are made by the members in their own names without disclosing their principals, and by which rule transactions maybe made by means of time option contracts, which may be canceled by the parties thereto, prior to the maturity thereof, by or through counter contracts on the other si.de of the market, made or hold by the same parties, the one against whom the difference is, paying it to the other, or performed by actual delivery at maturity, in case of cancellation before maturity, the principal of the member who made the canceled contract having the right to require from the member the full performance of the canceled contract at its maturity),—employed by an outside party to buy and sell for him through such exchange on time option contracts, without the consent of or notice to his principal, cancels, before its maturity, a contract made on behalf of his principal against another contract on the opposite side of the market, made on behalf of another person, whether made or held by him, as between himself and the other party to the canceled contracts, without their principals being in some effective way substituted, the entire contracts became extinguished. There is no longer any buyer or seller. The agent thus substitutes himself as the contracting party with his principal in place, in the one case of the principal on whose account and the members to whom the sale was made; and in the other, of the principal on whose account and the member from whom the purchase was made. This violates the law of principal and agent. No commissions are recoverable by reason of such canceled contracts, nor can the difference paid by reason thereof be recovered by the member of the Exchange paying it as against his principal.
    If the rules and usage authorize a cancellation without such substitution, and undertake to give a right of action, against the principal to the member who canceled a contract made by him on behalf of such principal, for commissions by reason of such contract and for such moneys, as he may have paid on the settlement of the difference, then sueh rules and usages are contrary to established legal principles, and therefore of no effect, and consequently no assent to them can impose any legal liability on the principal in respect of the contract so canceled.
    The rules of the New York Produce Exchange and the Chicago Board of Trade contemplate in case of cancellation of a contract by a counter contract, an actual substitution in some effective way, so that the substituted parties and contracts can be identified and ascertained ; and thus construed, the custom sanctioned by the rules may be deemed to be founded in commercial convenience and not to be in contravention of law. .
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.'

      Decided February 3, 1888.
    Apppeal by defendant from a judgment in favor of plaintiffs entered upon the report of a referee.
    The facts appear in the opinion.

      Henry S. Bennett, attorney and of counsel for appellant, cited as bearing on the questions involved (other than as to the effect of a case on appeal stating that all the evidence was not contained therein):
    Murray v. Beard, 102 N. Y. 505; Manuscript opinion of Judge Daniels in case of Keene v. Kent, decided March, 1887; Irwin v. Willair, 110 U. S. R. 508; Bigelow v. Benedict, 70 N. Y. 206.

      L. A. Gould, attorney and of counsel for respondent, on the question as to the effect of a case on appeal stating that all the evidence was not contained therein, cited:
    Spencer v. Chambers, 39 Hun 193 ; Griffiths v. Phelps, 21 Weekly Digest 390; Howard v. Hayes, 47 Super. Ct. 102 ; Hagerdorn v. Dodge; 21 Weekly Digest 288.
    He cited as bearing on the other questions:

      Story on Agency, § 423; Patterson v. Gandasequin, 15 East 62; Meeker v. Claghorn, 44 N. Y. 349; Butler v. Evening Mail, 61 N. Y. 634; Rankin v. De Forest, 18 Barb. 143; Ford v. Williams, 21 How. U. S. 287 ; Elwell v. Chamberlin, 31 N. Y. 611; Irwin v. Willair, 110 U. S. 499; Rodermund v. Clark, 46 N. Y. 354 and 357, and cases cited; Boerum v. Schenck, 41 N. Y. 182; 2d National Bank v. Burt, 93 N. Y. 233, 248, 249 and cases cited; Morris v. Rexford, 18 Ib. 552, 557; Baker v. Drake, 53 N. Y. 211; Pickering v. Case, 79 Ill. 330; Roundtree v. Smith, 108 U. S. 269, 275, 277; Storey v. Solomon, 71 N. Y. 421, 422; Dewey on Contracts for Future Delivery, etc., 47 to 62 and cases cited; Wolcott v. Heath, 78 Ill. 433 ; Von Saxe v. Kretz, 71 N. Y. 552 ; Cameron v. Burkheim, 55 N. Y. 426.
   By the Court.—Freedman, J.

The issues in this action were tried by a referee, and the case on appeal as settled and filed and printed, states that it “ does not contain all the testimony given at the trial bearing upon the questions at issue, the findings made and refused, and the evidence admitted or ruled out under defendant’s exceptions.” That being. so, the duty of. the general term in such a case,' ordinarily, is to see whether the facts as found by the referee support the conclusions of law at which he arrived. Nevertheless, if certain evidence, and notably documentary evidence, contained in the printed record about which there is no dispute and which cannot be affected by the omitted testimony, should clearly establish that the findings of fact are incomplete, or somewhat at variance with the real fact, effect may and should be given to such undisputed evidence in the determination of a question distinctly raised by the exceptions.

The referee made 134 findings of fact at the request of the plaintiffs which are set forth on pp. 102 to 129, and about 70 more at the request of the defendant which appear on pp. 61 to 95, of the printed case.

Briefly stated the action was brought to recover losses alleged to have been sustained by the plaintiffs as defendant’s agents upon various contracts of purchase and sale of merchandise made by them for defendant’s account and pursuant to his orders. The main defense, besides what may be deemed to be a general denial of everything except the employment and the giving of certain orders, is that the plaintiffs did not faithfully carry out the defendant’s orders and that- they without authority canceled most of the contracts before they matured.

To establish their case it was incumbent upon plaintiffs to prove affirmatively: (1) that the several contracts set forth in their bill of particulars were actually made; (2) that each of these contracts was severally carried out; and (3) that the losses alleged to have been suffered on each contract were actually sustained in the fulfillment thereof. The referee found that the plaintiffs had established their case in these particulars, according to customs and usages • binding upon the defendant, notwithstanding the further fact which he also found, that the plaintiffs, as agents of the defendant and without consultation with or notice to the defendant, had canceled most of the contracts sued on before their maturity.

The most important question presented by the appeal therefore relates to the legal effect of such cancellation upon the rights and liabilities of the parties in view of all the other facts found, and in view of the undisputed documentary evidence in respect to said customs and usages.

During all the times in question the plaintiffs were copartners, as commission merchants in grain and provisions, carrying on business in the city of New York under the firm name of E. A. Kent & Co., and in the city of Chicago, 111., under the firm name of Poole, Kent & Co. During the same time there existed in the city of New York an organization knoAvn as the New York Produce Exchange, and in the city of Chicago an organization knoAvn as the Chicago Board of Trade. Transactions in buying and selling grain and provisions for future delivery were had and made in both organizations. Each of them had a membership, and transactions therein were confined to members, or the immediate agents or representatives of members, and each of said organizations had rules, customs and methods of transactions in grain and provisions for future delivery, Avhich Avere substantially the same in both organizations. In November, 1881, the defendant employed the plaintiffs as commission merchants, or brokers, to buy and sell for his account and risk, and upon his order, grain and provisions for future delivery in the markets of New York city and of Chicago, 111., and such employment and authority continued until April, 1882. Prior to, at and during such employment, the defendant knew of the existence of the organizations referred to; he knew that the plaintiffs, or some of them, were members of the NeAv Yórk Produce Exchange, and that at least one of -them was a member of the Chicago Board of Trade; and he must be assumed to have employed them because they were such members, and he was not, and because he intended that his orders should be executed by them in said organizations according to the rules and customs established by said organizations. Indeed, in view of the findings made by the referee, all the orders given by the defendant must be assumed to have been given under the circumstances and for the purposes stated. The orders which were given, were executed by the plaintiff’s by their entering into contracts of purchase or sale for future delivery with other members of the organizations named, but such contracts were, soon after they had been made, canceled by the plaintiffs against other contracts made by them for account of other customers on the opposite side of the market. This cancellation is sought to be upheld under certain rules and customs of the said organizations.

The. most material findings made by the referee upon this branch of the case are as follows, viz:—

XXXIII. That as to all of said transactions prior to April 17, 1882, defendant in no case requested the manual delivery of the merchandise covered thereby to or by himself, or in his behalf.

“ XXXIV. That as to all of said transactions which were consummated upon defendant’s order or authority, prior to April 17, 1882, defendant ordered or authorized the consummation of his sales or purchases before the time for delivery had arrived pursuant to the contract, by making a purchase to meet the prior sale, or a sale to meet a prior purchase of an equal quantity of merchandise- of a like delivery.

“ XXXV. That until said transactions were so consummated by defendant’s authority, plaintiff firm had at all times the obligation of a firm or person other than itself to make a delivery of merchandise sold, and to receive and pay for merchandise bought upon defendant’s order (but plaintiffs did not specify, and have not specified such person or firm).

XXXVI. That according to the customs and rules prevailing as to said transactions, defendant entered into no obligation therein except to plaintiff firm.

“ XXXVII. That as to all of said transactions which defendant ordered or requested plaintiff firm to make in his behalf, and for his account, defendant, for the carrying out or consummation thereof, looked to plaintiff firm alone.

“ XXXVIII. In accordance with such rules and customs, defendant was freed from all liability as to each sale consummated by a purchase, and as to each purchase consummated by a sale immediately upon such consummation thereof, although the time for delivery had not arrived (except to pay to plaintiffs all sums required to meet the losses incurred in said transactions, and plaintiffs’ expenses and commissions).

“ LVII. That in case of all the transactions which plaintiffs made in their own names upon the order or by authority of the defendant, plaintiffs bound themselves by an agreement in their own names to make a delivery of all merchandise sold or directed to be sold, and to receive a delivery of all merchandise purchased or contracted to be purchased.

“LVIII. That by the rules and-customs in like cases, plaintiffs made said transactions by means of option, or time contracts, interchangeably with other commission merchants and members of said exchanges.

“LIX. That the option contained in said time contracts is not an option as to performance, but only as to the time of delivery of merchandise specified therein.

“LX. That such option contracts are not by rule, custom or otherwise, transferable by indorsement or by delivery, but are either canceled by or through counter-contracts of the. same party, or are performed by actual delivery of merchandise designated therein at the time of the maturity thereof.

“ LXI. That in case such option contract made upon defendant’s order should be canceled and surrendered, plaintiffs would not thereupon, and did not in any such case acquire any pecuniary interest whatever in the merchandise covered thereby, nor in the delivery thereof.

“ LXII. That in case of such surrender and cancellation defendant had the same right as before to require through plaintiff firm the delivery to himself, if a purchase, and by himself, if a sale, of the merchandise covered by said option or time contract at the price designated, and at the time of the maturity thereof.

LXIII. That in case of such cancellation and surrender of option or time contracts made upon defendant’s orders at the Exchanges, plaintiffs could not in any case foresee or select the parties with whom, nor could they foresee the counter-contracts against which such cancellation should be made.

LXIV. That under the rules and customs of the Produce Exchanges, in every instance of such cancellation of a contract of purchase or of sale, plaintiff firm would acquire the obligation of the party at whose request it had made the counter-transactions as security (in addition to its own guarantee that the transactions upon defendant’s order should be carried out according to the terms thereof).

“ LXVIII. That by the rules of the Exchanges, and the rules and customs of the trade in all cases of sales or purchases for future delivery, it is the right of the commission merchant or member of the Exchange holding-the option or time contract of another such merchant or member, to require the maker of said contract to deliverer furnish margins or securities for the fulfillment thereof at its maturity, and to increase the said margins or securities to meet the changes in the market price.

“ LXIX. That in case of the cancellation of such option or time contract, according to like rules and customs of trade, if the market price named in the option or time contract against which it was canceled was below the price named therein, the maker of said option of a sale, and the party with whom made, if a purchase, paid to the other party thereto at the time of such cancellation or surrender thereof, the difference between the two prices named in said options respectively.

LXX. That such difference paid is not limited, controlled or affected by the market price of the merchandise covered thereby at the time of such cancellation or surrender thereof.

LXXI. That in cases where contracts of purchase or sale were offset or canceled, they were so offset or canceled by means of the forming of direct settlements or ring settlements.

“ LXXTT. That said options or time contracts represent no actual market value, except in case of a variation in the market price between the time of the making and the time of the consummation thereof.

“ LXXIXI. That in case of such variation said option contracts represent no such value to the holder unless the market price has declined, if it be a contract of sale for future delivery, and unless it has advanced, if it be a contract of purchase for future delivery.

“ LXXVI. That in such settlement or cancellation of option or time contracts made upon defendant’s order, with like contracts made upon the order of another client, the sums received were not always received in whole or in part for defendant’s benefit, nor by virtue of his transactions or the transactions made at his request, and the sums paid were not always chargeable, in whole or in part, against defendant, or transactions made at his request and for his account.

“ LXXVII. That the mutual surrender or cancellation of option or time contracts is commonly called ringing out. or a settlement thereof.

“ LXXVIII. That the circumstances and method of the cancellation or surrender of option or time contracts ' are as follows: That purchases or sales to fill orders of customers are usually made on the floor of the Exchanges . respectively by open public offers to the members of the Board there assembled; that when it so occurs that a commission merchant who, upon the order of one customer, has sold to or purchased from another commission merchant, merchandise for a certain future delivery, and afterwards, upon the order of another customer, makes a like transaction for a like amount of the same class of merchandise and the same delivery with the same commission merchant, but on the opposite side of the market, then the two commission merchants, as between themselves, set off the contract of purchase as against the contract of sale, and mutually surrender or cancel said contract, settling between them the difference in price. And where such second transaction is not with the same commission merchant with whom the first had occurred, but a different one, and it is found that a circuit of like contracts exists by, or through means of which the same merchandise which a commission merchant upon the order of one customer has sold for future delivery, upon the order of some other customer he had purchased for future delivery, the commission merchants having such circuit, which, in the language of the Exchanges, is called a “ring,” do not make successive deliveries of the merchandise until the same shall come back to the one who first delivered it, but each pays or receives the difference in amount between the price at which he sold and the price at which he bought.”

There are many other findings bearing more remotely upon the point now under consideration, but the foregoing statement contains substantially all upon which the plaintiffs can rely, to'sustain the ruling of the referee that the defendant remained bound upon contracts which had been canceled without consultation with or notice to him. That the plaintiffs, as agents of the defendant, made such cancellation without consultation with, or notice to, the defendant at the time of the cancellation, is one of the undisputed facts of the case.

Now upon the facts hereinbefore stated the defendant contends that by such cancellation the plaintiffs converted the said contracts to their own use to facilitate their business in other respects; that by such cancellation the plaintiffs released the parties with whom the contracts had been made by the plaintiffs, from all liability thereon; that in consequence thereof, and no other parties or contracts having been actually substituted, whatever remained tó be done between the plaintiffs and the defendant thereafter, was, by plaintiffs’ own acts, reduced to a mere wager transaction, although the contracts between the plaintiffs and the defendant may have been valid in their origin; and that for these reasons the plaintiffs cannot recover upon the canceled contracts.

In my judgment the contention of the defendant is well founded, because the referee has nowhere found either that the principals for whose benefit the contracts had been made, were substituted in some effective way, or that other contracts were actually and specifically substituted in place of the canceled ones. The canceled contracts were made on both sides by commission merchants, or brokers, in their own names and without a disclosure of their respective principals, and when the commission merchants or brokers, who had thus contracted, or a number of them standing in a ring, canceled the contracts as between themselves without substituting their principals in some effective way, they canceled the entire contracts and released each other, or one another, from the obligations thereof, and the contracts became extinguished. Liability on a contract to buy and sell necessarily implies that there are parties to the contract, one of whom has the right to deliver merchandise, and the other of whom is liable to pay for that merchandise. The buyer and the seller must exist as well as the contract. In the case at bar all that the plaintiffs did in fact, was to substitute themselves in place of the released’ parties. Such a practice in effect violates the law of principal and agent because it enables the agent to buy from and sell to his principal and charge his principal commissions for making such purchased sales.

It is claimed by the plaintiffs, however, that in the present case the defendant should be held bound, because he assented to a continuance of his liability by assenting to the customs and usages of the Exchanges. Even if this had been strictly so, it would not follow that the defendant should be held, because a legal liability can never be created by an assent to a custom or usage which in itself is contrary to established legal principles.-

In point of fact the referee did not correctly set forth in his findings the custom or usage of the Exchanges. He only set forth so much of it as coincided with the practice of the plaintiffs. The defendants’ assent, on the other hand, attached to the custom or usage as established by the Exchanges, and the proof of that is to be found in a printed rule rvhich is set forth in the printed case at length and about which there is no dispute. This rule cannot be in any wise affected by the testimony omitted from the printed case. It is as follows, viz:—

“ § 37. In case any member of the Exchange, acting as a commission merchant, shall have made purchases or sales, by order, or for account of another, whether the party for whom such purchase or sale was made, shall be a member of the Exchange or otherwise, and it shall subsequently appear that such trades may be offset and settled by other trades made by such commission merchant, he shall be authorized to make such offset and settlement, and to substitute such other person or persons for the one w'hom, or to whom he may have purchased, or sold-the property originally, provided that in case of such substitution, the member or firm making the same shall be held to guarantee to his or their principal, the ultimate fulfillment to all contracts made for account of such principal, which have been so transferred, and shall be held liable to such principal for all 'damages or losses resulting from such substitution.”

The rule as set forth in full evidently contemplates actual substitution in some effective way, so that the substituted parties and contracts can be. identified and ascertained. Thus construed, the custom sanctioned by the rule may be deemed to be founded in commercial convenience and not to be in contravention of law.

The case of Irwin y. Willair, 110 U. S. R. 499, does not help the plaintiffs. In that case, it is true, it was claimed that the contracts were wagering con-contracts and void. This claim, however, was made in reference to the original contracts entered into between Irwin & Davis on the one side, and the Baltimore Commission Merchants on the other side, and it was concerning that claim that the supreme court of the United States held that the question had been properly submitted to the jury and that the verdict of the jury should not be disturbed on the ground stated. Another assignment of error was that, against Irwin’s objection and exception the circuit court had admitted evidence showing the existence among the Baltimore Grain Commission Merchants operating through the Flour Exchange in that city, of a custom of canceling contracts between them and substituting others, and that the circuit court had held the custom valid and binding upon Irwin although neither he nor his firm had any knowledge of it. There was some proof in the case that other contracts had been substituted, and it was assumed throughout that a sufficient substitution had been made, and all that the court was called upon to decide was whether the substitution was binding upon Irwin without proof of his assent. It was held that Irwin was not bound without- such proof, and for this reason the judgment of the circuit court was reversed and a new trial ordered.

In the later case of Higgins v. McCrea, 116 U. S. R. 671, the question as to the sufficiency of the substitution claimed, came directly before the court. Acting under a rulé like the one hereinbefore considered, the plaintiffs in that case who were commission merchants, released the seller from his contract and having many similar transactions in their business, proposed to themselves to substitute in the place of the contract with the seller, the agreement of such other contractor as might be available for the purpose at the time of settlement, but designated no particular contractor or contract. It was held that an instruction to the jury upon these facts, that there had been no valid substitution of other contracts for those which were canceled, and that consequently plaintiffs could not recover, was correct.

The examination so far made, conclusively demonstrates that the referee did not in his findings of fact, correctly set forth the custom or usage upon which the defendant was held liable, and that the referee erred in holding the defendant liable upon the canceled contracts in the absence of proof that actual substitution was made.

The appeal presents other questions besides the one discussed, but as to them it is not considered necessary to express an opinion now.

The judgment should be reversed upon the facts as well as the law, the order of reference vacated, and a new trial ordered with costs to the appellant to abide the event.

Sedgwick, Ch. J., and Ingraham, J., concurred.


source: Caselaw Access Project

author: Ingraham, J. By the Court.—Sedgwick, Ch. J.

license: Public Domain

text:
    THOMAS J. SMITH, Respondent v. H. EDGAR HARTWELL, Impleaded, &c., et al., Appellants.

      Assignments under L. 1877, ch. 466, as amended L. 1884, ch. 328—Em-ployees.

    An assignment for the benefit of creditors made under ch. 466, Laws 1877, as amended by ch. 328, Laws 1884, which omits by its terms, to prefer one of more of the employees of .the assignor to the amount of wages owing by said assignor, is void and will be set aside.
    Before Sedgwick, Ch. J., and O’Gorman, J.

      Decided February 28, 1888.
    Appeal by defendants from order continuing order of injunction.
    The defendants Hartwell and Woodward made a general assignment for the benefit of their creditors to defendant Lantry, as assignee. The plaintiff was a creditor for wages. He was not preferred by name in the assignment. He thereupon brought this action to set aside the assignment, claiming that the instrument was void under chapter 328 of the Laws of 1884, alleging no other ground of irregularity or fraud, and obtained an injunction pending the action. The motion for an inj unction was opposed by the defendants on the ground that no cause of action was contained in. the complaint.
    The following opinion was delivered at special term:
   Ingraham, J.

The only question on this motion is whether or not an assignment made for the benefit of creditors that directs the assignee to pay certain persons named the amounts due to them “for salaries or wages, and after paying such amounts to pay certain other preferred creditors is void, where it appears that certain persons other than those' mentioned, were creditors of the assignor for wages or salaries owing to them as employees of the assignor.

By section 328 of the Laws of 1884 the act in relation to assignments for the benefit of creditors was amended, so that “in all.assignments made in pursuance of this act, the wages or salaries actually owing to the employees of the assignor or assignors, at the time of the execution of the assignment, shall be preferred before any other debt.”

It would appear from the language of the statute that it was the intention of the legislature that the assignment itself should provide for such preferences.

The act does not say that such preferences shall exist independent of the assignment, but that “ in all assignments made, the wages or salaries, etc., shall be preferred before any other debt.”

In this case the assignors have directed that the wages due to certain employees shall be preferred, and have then disposed of the balance of the estate without providing that the amounts due the plaintiff shall be preferred.

This, I think, is clearly in violation of the statute, and as the assignee derives all his powers from the assignment, it is clear that he would not be authorized to pay any debts to employees not mentioned in the schedule.

In the case of Richardson v. Herron, 39 Ilun 537, a majority of the court held that where no attempt was made to prefer any of the debts due to the employees, the assignment was not void, but that decision would not apply where the assignors had directed that certain of their employees should be preferred without providing for other of their employees to whom there was an actual indebtedness for wages or salaries; and the contrary view appears to have been taken in Harriot v. Masterson, decided by the general term of the Second Department, and in the case of Roberts v. Tobias, decided by Justice Van Brunt, at special term.

Stabler & Hibbard, for appellant.

James B. Dill, for respondent.

I think therefore that this assignment is void.

By the Court.—Sedgwick, Ch. J.

I agree with the learned judge at special term.

The sole power of the assignee is to devote the whole of the assigned estate to the purposes described in the assignment. He has no power to pay out of the estate, any debt of the assignor in preference to others, that is not described by the assignment. If he should pay the plaintiff, or a creditor preferred by the statute, he would violate his duty. No other person than he has power to make this payment. Therefore the object of the statute would be defeated, while the assignment stands, and therefore it must be set aside.

Perhaps the plaintiff loses the preference intended for him. Yet, if this be so, it is inevitable, and he must have in its stead the position of a diligent creditor.

Order affirmed with $10 costs to abide the event.

O’Gorman, J., concurred.


author: By the Court.—Sedgwick, Ch. J.

text:
    ELIZABETH J.. SCOTT, Respondent v. THE TRUSTEES OF THE GOSPEL TABERNACLE, Respondents, and THE MADISON AVENUE CONGREGATIONAL CHURCH, Appellant.

      Appeal, order affirmed, if appellant be not aggrieved,—Appellant relien not aggi'iaved; party defendant in a foreclosure action being a grantor, subject to the mortgage, having an interest in the premises contingent on his

      grantee's non-performance of certain conditions for a certain period, when not aggrieved by a provision in the judgment, dispensing with bringing surplus in court, and authorizing his grantee to be credited with it.

    Where one who conveys mortgaged premises subject to the mortgage, assumed by his grantee, upon certain conditions, with a clause of re-entry in case the conditions are not kept for a certain period, is, with his grantee made a party defendant to an action to foreclose the mortgage, and fails to appear on a motion for judgment, whereupon his grantee procures a provision to be inserted in the judgment to the effect that, if such grantee becomes a purchaser on the sale, the surplus of his bid over and above the sum necessary to pay the amount due the plaintiff with interest and costs of sale, be credited on the amount bid by him as owner of the equity of redemption, without actual payment of such surplus.

      ’Held, that such grantor was not aggrieved by such provision, and that therefore an order denying a motion made by him to strike out such provision should be affirmed.
    Before Sedgwick, Ch. J., Truax and Dugro, JJ.

      Decided March 6, 1888.
    Appeal from order denying motion to strike from judgment in foreclosure, certain matters.

      Thomas T. Stillwell, attorney and of counsel for appellant, argued:
    I. The court had no power to make the provision complained of. 1. Section 1633 of the Code says that the surplus must be paid into court. 2. The direction of the Code is absolute, and no discretion is given to the court to vary it. 3. The law is framed to protect the rights which have accrued since the filing of the Us pen-dens, while this judgment completely wipes out all such rights. The judgment says, almost in so many words, that if The Trustees of the Gospel Tabernacle will pay the mortgage and interest, and the costs and expenses of the sale, it shall possess the premises free from all incumbrances, subsequent to the filing of the lis pen-

      dens, not only past but future. 4. It is no answer to the above to say that we have not shown that we are injured by this judgment. We are injured by having a judgment against us to which the plaintiff was not entitled. This was ruled in Payn v. Grant, 23 Hun 134. The law provides a way in which one can prove his claim to the surplus after the sale, and the court has no power to compel him to prove his claim before there is a surplus, and in default of which to direct the referee to at once pay it to a party who has never claimed it. The right to the surplus may arise after the judgment and before the sale.
    II. The Madison Avenue Congregational Church is prejudiced by the provision complained of. 1. The condition in the deed mentioned in the answer may be broken and the Madison Avenue Congregational Church may re-enter these premises before the day of the sale. If this should happen there could be no question but what the trustees of the Gospel Tabernacle would have no interest in the property or the surplus, but under this judgment it would get the property back again by paying the mortgage debt and costs. 2. As mortgagor, the Madison Avenue Congregational Church is liable for any deficiency _ arising from the sale, and is therefore entitled to have the property sold at a bona fide auction to the highest bidder, (a.) Under this judgment there can be only a mock auction. Any possible purchaser reading the judgment will see that The Trustees of the Gospel Tabernacle intend to buy in the property, and that it can bid $1,000,000 if necessary, as it will have to pay only a certain amount, whatever the nominal bid is. The result will be that no bona fide purchaser will attend the sale, and the property will be sold at whatever price the two parties in collusion herein may see fit to bid through their agents. (6.) It is no answer to this to say that we can attend the auction and bid it up to an amount sufficient to pay the mortgage and costs. A religious corporation presumably has no money with which to speculate in real estate, and its officers would have no authority to bid! A person bidding to prevent a sacrifice of property could not bid as high as one who desired that particular piece of property for a definite purpose. There is nothing to show that this property, under the most favorable auction sale, would bring enough to pay the mortgage, and if there is a possibility of a deficiency even on such a sale we are entitled to have the ordinary inducements of an auction to encourage attendance and' bidding, to wit: that the property is to be sold to the highest bidder without reserve. 3. There is at least sufficient merit in the claim of the Madison Avenue Congregational Church to an interest in the surplus to entitle it to have it settled in the regular manner, and not as a side issue to a motion, (a.) The interest of the said church is a mere “possibility of reverter,” and no reported case seems to have involved this question in respect to such an interest. A wife’s inchoate right of dower, however, is an interest in land very similar to a grantor’s “possibility of revert-er.” (6.) A wife’s inchoate right of dower will be protected in the distribution of the surplus. Denton v. Nanny, 8 Barb. 618; Blydenburg v. Northrop, 13 How. 289; Vartie v. Underwood, 18 Barb. 562; N. Y. Life Ins. Co. v. Mayer, Gen. Term, Com. Pleas, Daily Reg. Dec. 22, 1887. (c.) It naturally follows that a possibility of reverter would be protected in the same manner, and the surplus in this case would be invested until the expiration of the five years, and then given to the trustees of the Gospel Tabernacle, unless the condition should be previously broken, in which case it would be at once given to the Madison Avenue Congregational Church.
    III. This judgment “determines the-ultimate rights” of the two defendants, and the trustees of the Gospel Tabernacle did not demand it in an answer, and serve a copy of the answer on the attorney for the other defendant, as required by section 521 of the Code. In Payn
      v. Grant (23 Hun 134), the general term passed on this very point, and reversed an order denying a motion made by one defendant to have stricken from the judgment a clause which determined the rights of other defendants, who had not served their answers on him.
    IV. The judgment was taken by default on insufficient notice to appellant.
    V. The default of defendant was taken two days after the day for which the motion was noticed.
    VI. The moving papers did not ask for any relief similar to that in the provision complained of, and the judgment having been entered by default, the court had no power to grant such relief. Payn v. Grant, 23 Hun 134.

      Edward S. Clinch, attorney and of counsel for plaintiff, respondent, argued:
    It was proper to insert in the judgment the provision objected to. The property was valuable. The equity belonged to. the trustees of the Gospel Tabernacle, and it was right that in case they became the purchasers on the foreclosure sale, they should not be obliged to raise an amount sufficient to enable them to pay the amount bid, when the result would be that the surplus would be paid over to them, less the expense which they might be subjected to under proceedings to obtain the surplus. There was no claimant for the surplus. The Madison Avenue Congregational Church was certainly not prejudiced by this provision, and there is no suggestion of any reason for striking the provision from the judgment. It was a wise provision, and one which protected a religious society from much expense and the necessity for resorting to legal proceedings.

      Eugene S. Pomeroy, attorney and of counsel for defendant, respondent, The Trustees of the .Gospel Tabernacle :
    I. There is no valid ground stated in the affidavit upon which the motion was based for the granting of the motion. It is submitted that upon such a motion it was the duty of the moving party to show sufficient reasons for striking out the provision objected to. He should have shown at least by his affidavit the provision objected to was prejudicial to the rights of the moving party. The simple fact that the counsel did not know that the provision was to be inserted is no ground for granting a motion to strike the provision out.
    II. It is submitted that so long as the judgment stands as the judgment of the court, and is not appealed from, that an appeal from an order denying a motion to amend the judgment will not be of any avail to the appellant. The judgment establishes the law of the case. If erroneous, it should have been appealed from: The absence of an appeal will be deemed an acquiescence in the judgment by all parties to the action.
    III. The provision was inserted on the application of a religious society, a.nd the effect of the provision was to make it unnecessary for that society, if it became the purchaser upon the sale, to raise any more than sufficient to pay the amount due to the plaintiff. The Madison Avenue Congregational Church was certainly not prejudiced by any such provision, because it was not in any sense entitled to any surplus. The judgment has been executed ; the property has been sold; no application for a stay of the sale was made by the Madison Avenue Congregational Church, and it is submitted that now the judgment should not be modified, as asked by the Congregational Church.
   By the Court.—Sedgwick, Ch. J.

The action was for foreclosure of a mortgage of real estate. The plaintiff was the assignee of the mortgage. It had been made by the appellant, The Madison Avenue Congregational Church. The latter had conveyed to The Trustees of the Gospel Tabernacle, on condition that the property should be used for church and evangelical purposes for five years, from May 29, 1886, and that on breach of the condition, the property should revert to the grantor, and the grantee as part of the consideration of said conveyance, assumed and agreed to pay the mortgage.

The complaint did not aver the above condition or assumption. It averred the mortgage, etc., that the defendants claimed an interest in the premises, and demanded the usual judgment in foreclosure, including a provision that the moneys arising from the sale may be brought into court,” and not asking for judgment for deficiency against either of the defendants.

The appellant, The Madison Avenue Congregational Church, answered, setting up the conveyance and its condition and the clause of assumption. It further averred that the action was “ not brought for the purpose of obtaining the payment of the said mortgage, but that it is brought by collusion between the plaintiff and the defendant, The Trustees of the Gospel Tabernacle, etc., in order that the said defendant, The Trustees of the Gospel Tabernacle, or some one in its behalf, may buy the said property at the foreclosure sale and so become the owner thereof, free from the condition above referred to, wherefore this defendant demands the surplus arising from the sale, and prays for such other and further relief as to the court may seem just.”

The plaintiff thereupon made a motion, giving notice of it to appellant’s attorney, the other defendant not-having appeared, that the plaintiff have judgment upon the answer of The Madison Avenue Congregational Church, as frivolous, and for judgment for the relief demanded in the complaint. This motion was granted. Before judgment was entered The Trustees of the Gospel Tabernacle appeared by attorney. The plaintiff thereupon gave notice to the appellant’s attorney of motion for confirmation of the referee’s report, and that the judgment would be at. the same time settled.

The appellant claims that the notice was too short. This is not material, for the motion below was not to open the default or for a new hearing.

On the return day the attorney for defendant, The Trustees of the Gospel Tabernacle, appeared, but the attorney of the appellant made default. On the application of the defendant'who appeared, there was allowed to be inserted in the judgment the following provision:

“ That in case the defendant The Trustees of the Gospel Tabernacle, becomes the purchaser at such sale, the referee herein on payment to him of the amount due to the plaintiff, with interest, costs and the expenses of sale, be and he hereby is authorized, empowered and directed to deliver the deed of said premises to said The Trustees of the Gospel Tabernacle, and to give credit on the amount bid by them to the said The Trustees of the Gospel Tabernacle, as owners of the equity of redemption in said premises, without the actual payment thereof, any amount which may be bidden by said The Trustees of the Gospel Tabernacle over and above the amount necessary, as aforesaid, to discharge the amount due to the plaintiff, with interest, costs and expenses of the sale.” The plaintiff made no objection, to this being inserted. The appellant made afterwards the motion below, that this provision be stricken from the judgment.

One ground for the motion is a claim that the appellant has a right to whatever surplus may arise from a •sale, under the conditions contemplated by the clause objected to. I do not perceive any substance in this. If the surplus be in the stead of the real estate’, The Gospel Tabernacle has a right to the possession of the' real estate, until a breach of the condition occur. The Madison Avenue Congregational Church, has no more right to the possession, or control, or impounding of the surplus than of the real estate.

Another ground intimated rather than asserted, is taken upon the following consideration: As The Gospel Tabernacle, assumed to pay, it is bound to the other corporation to pay. This would leave the condition of the conveyance unaffected. But the provision objected to gives a color of an adjudication, or of a result, that by force of the provision, The Gospel Tabernacle, while in reality paying the mortgage, would gain the rights that a third person, who was under no obligation to The Madison Avenue Congregational Church would gain, namely, the title and right of the mortgagor and mortgagee.

As to this, it is to be said that if the provision was of a kind competently made, while the issue stood as between the plaintiff and The Gospel Tabernacle only, the appellant should have not made default, but should have appeared, objected, and in case the provision was then inserted, should have appealed.

If the provision does not refer to a matter within the proper scope of jurisdiction, the appellant is not bound by it, and may make yet any claim of action of an equitable kind, that it may have against The Gospel Tabernacle. As I understand the condition, it may be performed although the property is owned by another than The Gospel Tabernacle.- If performed, it would be indifferent to The Madison Avenue Congregational Church, whether the other corporation holds under their obligation to pay the mortgage, or not. There is no intention, however, of definitely passing upon the nature of the condition and the right of the parties under it.

As I am of opinion that the appellant is not aggrieved by the provision, the order should be affirmed, with $10 costs.

Truax, J., concurred, Dugro, J., not voting.


text:
    EDWARD H. EMERSON, Respondent v. ALMA L. CODDINGTON, et al., Executors, &c., Appellants.

      Vendor and vendee—when payment of brokerage is part of the purchase money, although not so stated in hcec verba, in the contraet—Payment under mistake, insufficiency of evidence to maintain action to recover it back.

    A vendee of real property, knowing that the sale to him was effected by a real estate broker acting for the vendor, and that the vendor’s price was $127,500, net, entered into a written contract for the purchase, which stated the amount of the consideration to be paid as $127,500, but made no reference to the brokerage. Afterwards, the vendee paid to the broker the bill rendered by him to the vendor for the brokerage. On the trial, the vendee testified that he deemed the brokerage to be a part of the consideration. Held, that the contract included the amount of the brokerage as part of the purchase money.
    The vendee, claiming that there was mistake as to the dimensions of the premises sold, brought an action against the broker to recover back the brokerage. It did not appear that the contract had ever been set aside or avoided. On the contrary, the testimony tended to show that the vendee had accepted a conveyance under it. Held, that the payment of the brokerage was not made by reason of the mistake, but because the vendee was bound to pay it by the contract, and that on such facts the action could not be maintained.
    Before Sedgwick, Ch. J., and Truax, J.

      Decided March 6, 1888.
    Appeal by defendant from judgment entered upon verdict of jury, and from order denying a motion for a new trial.

      William M. Whiting, attorney, and John Hallock Drake, of counsel for appellant.

      Dubois Smith, attorney, and Frederic W. Hinrichs of counsel, for respondent.
   By the Court.—Sedgwick, Ch. J.

The case made upon the trial was, in effect, the following:—

The testator, in his lifetime, was a broker in real estate. The plaintiff’s agent called at his office and asked if there was a piece of real estate for sale at a low price. The testator’s agent named a house and lot, No. 34 Broadway, and said that the lot was 32 feet on Broadway. The plaintiff’s agent believing that it was so broad, communicated with the. plaintiff and informed him of what had been said as to the breadth. The plaintiff, relying upon the statement, offered for the house and lot $127,500.

The testator communicated this offer to Mr. Roof, the owner of the property. He verbally agreed to take this price, if it were net. This meant that the other side was to pay the brokerage of the testator for effecting the sale. A contract was written and was about to be executed by the plaintiff. It made no reference to the brokerage, giving the amount of consideration to be paid as $127.500. The plaintiff knew that this was to be net. The contract was signed. The plaintiff made the first payment. The testator presented to him the following bill, which the plaintiff paid: “ Mr. C. M. Roof to Homer Morgan, agent, Dr., for commission on sale of premises “ No. 34 Broadway, for $127,500 and 1 per cent., to E. H. Emerson, $1,275. Received payment from E. H. Emerson, Esq.”

The plaintiff soon afterwards discovered that the house was only twenty-eight feet and not thirty-four feet in breadth.

On the facts the contract was binding upon the plaintiff, and has not been set aside or avoided in fact. The testimony tends to show that the plaintiff has accepted a conveyance, under the contract.

The plaintiff claims that there was a mutual mistake as to the breadth of the house, and asserting that the brokerage was paid to the testator under that mistake, demands a return of it, as money had and received to the plaintiff’s use. It is not claimed that the representation was fraudulently made. The plaintiff rests upon it being made negligently. On the trial the plaintiff recovered.

The case might have such a shape as to require an examination of the question of what was the legal duty of the testator to the plaintiff, at the time the representation was made. The grounds of the decision to be made, will not involve this question.

In my opinion, it is not in accordance with the facts, to say that the money Avas paid by reason of the mistake as to the breadth. 'Granting that the plaintiff would not have made the offer, if he had known that the house was twenty-eight feet in breadth, his mistake as to this led him to make the bargain he did, and part-of that was his agreement to pay the brokerage. It Avas part of the consideration to the owner, that the plaintiff should pay the brokerage that the owner Avould have been liable to pay, otherwise. It Avas paid to the testator as broker for the owner, as the bill rendered shows. So that the plaintiff paid because he was bound by the contract and not merely from a mistake. So long- as the contract Avas binding upon the plaintiff he could n'ot, by setting up the mistake, prevent an enforcemént by the testator, of his right to the brokerage. If he would be bound to pay, he can have no right to recover it back.

The plaintiff’s testimony sIioavs that he understood that he was under an obligation to the owner to pay the amount, for he testified that he deemed it to be a part of the consideration.

■ It will have been seen that the action was not for damages for losing a good bargain. The brokerage Avhich is demanded back, was fairly due, in so far as the plaintiff enjoyed the advantage of the contract.

What has been said, refers to exceptions of the defendant, which it is not important to specify.

The judgment and order should be reversed, and a neAv trial had, with costs to abide the event.

Trajan, J., concurred. •


text:
    PATRICK SHANAHAN, Plaintiff v. JOHN J. SHANAHAN, Defendant.

      Landlord and tenant—Election of landlord to treat tenant holding over as tenant for new term, when it accrues—Posting notice to let, not inconsistent with election to hold as tenant—Notice of election to hold as tenant (if in any event necessary) not inefficacious because given after complete removal.

    Where a tenant after the expiration of his lease, supposing there is no particular hurry in getting out, remains in possession of the demised premises four days after the expiration of the term, leisurely removing his goods to other premises previously hired by him, which could have been removed in a much shorter time, but giving instructions to his employee in charge, to move the things out at once, if any one from the landlord asked for the keys, Held, that these facts showed an intentional act of using the premises for a time for Ms benefit; and that the landlord had a right to elect to treat him as a tenant, upon the conditions of the first letting.
    The posting on the premises by the landlord, pending negotiations for a new term commenced before the expiration of the old one, of a bill “To Let,” and allowing it to remain after the expiration of the term, Held, not inconsistent with an election to treat the tenant, as a tenant for a new term.
    After the right of election has accrued, Held, that the giving of a notice to insist on the right (even if in any event necessary) was not inefficacious, because not given until after the tenant had completely removed.
    Before Sedgwick, Ch. J., Tritax and Dugro, JJ.

      Decided March 6, 1888.
    Exceptions of defendant, ordered to be heard in first instance at general term.
    The facts appear in the opinion.

      Charles H. Dyett, attorney, and Anthony R. Dyett of counsel for defendant, argued:

      I. We concede the general rule that if a tenant holds over after the expiration of his term, the landlord has his election to treat him as a trespasser or as tenant for another year, and that the tenant has no such election. Schuyler v. Smith, 51 N. Y. 309; Conway v. Starkweather, 1 Den. 113. But we contend that this holding over must be an intentional holding over, or at least an intent to take to himself the beneficial use of the premises, or against the express will of the landlord, and that a mere continuance in possession without such intention, and not against the express will of the landlord, is not such a holding over, especially where the landlord purposely remains silent and omits to demand possession or to express to the tenant his dissent to his continuance in possession in order to entrap the tenant into a tenancy for another year. The principle of the maxim “ volante non jit injuria ” applies. In all the cases on the subject, the tenant intended to hold over or continue to use and occupy the premises beneficially, intending to do so. We do not contend that the tenant if he intends to do either of these things, can escape a tenancy for another year because he did not intend to become such a tenant —that intention we concede to be immaterial and to that effect are the cases of Schuyler v. Smith, 51 N. Y. 309, and Conway v. Starkweather, 1 Den. 113. But it is the intention to hold over or to take the beneficial use of the premises in violation of the landlord’s rights, which is material, and where it exists is a wrong to the landlord. It is the tortious holding over which gives the landlord this election. Smith v. Alt, 7 Daly 492, 407; 51 N. Y. 309, supra; 1 Den. 113, supra.

    The leading case in this state on the subject is Conway v. Starkweather, supra, which is similar in its facts to Schuyler v. Smith, supra, which is based upon it, and the same proposition of law was involved and decided, and at page 115 the court say: “If he holds over, though for a very short period, without any unequivocal act to give his holding' the character of a trespass, he is not cafterwards at liberty to deny that he is a tenant/ if the landlord chooses to hold him to that relation.” In other words, the tenant, by holding over, commits a wrong against his landlord and is a trespasser unless the latter elect to treat him as a tenant. This necessarily implies the intent of the tenant to hold over or continue to occupy the premises beneficially, and cannot apply to a tenantwho, though remaining in possession technically, has substantially removed and never had any intention to do either to the knowledge of the landlord. In such a case his acts unequivocally indicate that, if he be a trespasser or a tenant, he is the former and not the latter. In the case at bar, it was not the intent of the defendant to hold or continue to use and occupy the premises beneficially, intending so to do. Prior to Conway v. Starkweather, supra, decided in 1845, no case can be found in this state containing the doctrine there laid down. In Taylor's Land and Ten. (Ed. of 1844), no such doctrine is stated. But at page five the author says: “ If a tenant for years holds over after the expiration of his term, with the landlord’s consent, it implies a tacit renovation of the contract for another year.” Citing 1 T. R. 159; 15 Johns 505; 4 Cow. 350, the last two of which are cited in Conway v. Starkweather. In Conway v. Starkweather the only cases cited, either by the court or by counsel for the landlord, arguendo, are the following: Sherwood v. Phillips, 13 Wen. 479, in which the lease was for two years and the tenant occupied the premises for nine years, without any new agreement. Bradley v. Covell, 4 Cow. 349, in which the only question was whether the tenant holding over should pay the same rent or what the premises were worth, and the court held he should pay the same rent. Doe v. Bell, 5 Term Rep. 471, in which all that the court says on this subject is: “ So where a tenant holds over after the expiration of his term, without any new contract he holds upon the former terms.”
    II. The court erred in not submitting the question to the jury whether the plaintiff continuing to offer the premises to let after the first of May, and finally letting them is not evidence that the plaintiff did not consider the defendant as his tenant after the first of May.
    III. The court erred in refusing to hold that the plaintiff not having given the defendant notice of his intention to hold him as a tenant until after the defendant had entirely removed from the premises, it was too late to do so. If the defendant did hold over within the meaning of the rule, it was presumptively a tortious act and he was a trespasser if the plaintiff made no election. The election was necessary only to create the new tenancy. It is a settled and elementary rule that where a party has an election he must not dally with his rights and Avait to make up his mind, he must act promptly.

      Hornblower & Byrne, attorneys, and James Byrne of counsel, for plaintiff, argued:
    I. Where a tenant holds over after the expiration of his term the law will imply an agreement to hold over a yea,r upon the terms of the prior lease. Schuyler v. Smith, 51 N. Y. 309; Conway v. Starkweather, 1 Den. 113 ; Langarar v. Smith, 75 N. Y. 205; Witt v. Mayor, 5 Robt. 248; S. C., 6 Robt. 441; Philips v. Fogarty, Daily Reg. Feb. 21, 1884. Opinion of McAdam, C. J.
    II. Defendant asked to go to the jury Upon the question whether the defendant did hold over after the expiration of his term.
    In view of defendant’s oavh testimony that he did not finish moving out till the 4th of May, we have some difficulty in imagining Avhat plaintiff means by this request. Possibly he means that inasmuch as he only held over to remove his goods, he didn’t hold over at all. This claim, howeA’er, Avas passed upon in Witt v. Mayor, supra.

    III. Defendant also asked to go to the jury, “ upon the question whether the defendant intended to hold over after the expiration of his term.” But it has been held time and again that the intention of the tenant has nothing to do with the question. Schuyler v. Smith, supra ; Conway v. Starkweather, supra ; Witt v. Mayor, supra.

    IV. Defendant asked to go to the jury also upon the question whether the landlord acted in good faith in keeping away from the premises and not notifying the defendant that he intended to hold him. Plaintiff owed no duty to defendant. There was no reason why plaintiff should have gone to the store on the first or second of May. His rent had been paid for April in advance. He had no reason to suppose defendant would hold over, and it was defendant’s business to send the keys to him. Moreover, the law notified defendant that if he held over he was liable to he treated as a tenant.
    V. Defendant asked to go to the jury upon the question whether the plaintiff continuing to offer the premises to let after the first of May, and finally letting them, is not evidence that the plaintiff did not consider the defendant as his tenant after the first of May. “A surrender of the premises by the tenant and an acceptance by plaintiff, or an eviction after the minute that this first month’s rent became payable, would be no defense to this action.” Defendant’s idea probably is that there is some inconsistency in plaintiff’s action in electing to treat defendant as a tenant and afterwards trying to relet the premises. There is no inconsistency in his conduct. When defendant refused to pay the rent due the 1st of May and claimed that he was not bound to pay, it was not merely plaintiff’s right, but it was his duty, to let the' premises and to credit defendant with whatever rent was received. Winant v. Stanley.
    YI. The defendant’s claim that notice should have been given defendant of plaintiff’s intention to hold him as a tenant before defendant had removed from the premises is utterly unfounded. As we have said before, plaintiff was under no obligation to serve any notice on defendant. No such notice was served in any of the cases we have cited. Plaintiff’s only object was to make his intention definite and clear and to prevent defendant claiming at some future time that plaintiff had told him orally that he was a trespasser.
   By the Court.—Sedgwick, Ch. J.

The defendant had been the tenant of the plaintiff for a term of one year that expired on May 1, 1887. The plaintiff sued for one month’s rent for the month from May to June, in 1887, on the claim that after the expiration of the term, the defendant had continued in possession of the premises, and by election of the plaintiff had become his tenant for a renewed term of one year. The rent under the first letting was payable in advance. The rent in question was claimed to be payable in advance on the first of May, and there is no dispute as to this, if the defendant was liable for rent at all.

The defendant’s testimony as a witness in the case, shows that there was in the fact of holding over by him, the ground of liability Avhich exists in such cases. Before May 1st, he had hired another store. May 1st was a Sunday. On May 2d he. moved partly from the premises. He did not suppose there was any particular hurry in getting out. On the morning of the 3d he was ill and left the place, instructing his book-keeper to give ■ the keys to the landlord, if he came, and to move the things out at once if anybody from the landlord asked for the keys. The book-keeper referred to, testified that beginning from afternoon of May 2d, two days were occupied in removing the goods and fixtures, at the same time insisting that the contents of the store might have been removed in a much shorter time.

There is here an intentional act of using for a time, for the plaintiff’s benefit, premises belonging to the landlord. The law empowers the landlord to treat this use during this time, as the use of defendant as a tenant, and on the conditions of the first letting. There is not in the facts, any unavoidable delay in moving. The delay was intentional, the use of the premises was intentional, and there was no intention to remove at the end of the first year. There was an intention to remove after the lapse of a certain time, that would be convenient to the defendant.

It is argued however, that the plaintiff, upon the term ending, and through the time the defendant remained, expressed or made his election not to treat the defendant as tenant; or that it was a question for the jury of whether the plaintiff had not made such an election. The fact on which the defendant bases this is, that before the term had ended, and after the parties to this action had failed to agree for a new term, the plaintiff posted upon the building of wdiich the premises were a part, a bill i£ To Let, etc.” After May 1, the plaintiff allowed this bill to remain where it had been posted.

In view of this state of facts it is not necessary to say more than that the full significance of the bill being posted was not inconsistent with the defendant becoming a tenant, through his holding over, as it would not be with any other person becoming a tenant on an expressed agreement. In law, the holding over was as to the landlord, the tenant’s offer to become tenant for another year. When the offer was accepted, the bill would have no further operation. The posting of the bill and suffering it to remain, was certainly not an election to treat the holding over as a trespass.

An exception to be considered is to the court refusing to hold that the plaintiff not having given the defendant notice of his intention to hold him as a tenant, until after the defendant had entirely removed from the premises, it was too late to do so.

Of course it could not be held that the landlord must give express notice of election, at some point of time when the actual occupation continued, or at the exact point of time when it ceased. No act of removal would alter the right of the landlord based upon the earlier occupation, nor would it alter the character of the occupation, while it endured. An express notice would not be inefficacious, therefore, because given after the actual occupation had been ended. In this case notice was prompt. There is no intention to intimate that express notice was necessary, or that prompt notice is required by law.

I am of opinion that the defendant’s exceptions should he overruled, and that the plaintiff should have judgment on the verdict with costs.

Truax and Dugro, JJ. concurred.


author: Truax, J. By the Court.—Sedgwick, Ch. J.

text:
    ELIZA CULLEN, Respondent v. WILLIAM CULLEN, , Appellant.

      Alimony—After judgment, court has no power under any form of proceed- ‘ ing, either to grant alimony, if the judgment gives none, or to change that ivhich is given, without opening or modifying the judgment as to the issues that concerned the separation—A provision in the judgment that a motion may be made on its foot for its modification as to plaintiff's support,will not give jurisdiction to the court in that behalf.

    This action was commenced by plaintiff to obtain a separation a mensa et thora. It resulted in a judgment adjudging a separation, but not adjudging the payment of any alimony. It contained, however, a clause permitting that, in a certain event, an application might be made on its foot by any party interested, for a modification of the judgment touching the support of the plaintiff. The plaintiff, claiming that the event had occurred, moved on the foot of the judgment, for a modification of the judgment, so as to direct the defendant to pay her a suitable amount as alimony for her support and maintenance and also counsel fees. The court at special term granted the morion, and ordered a reference.

      Held, the court had no jurisdiction to make the order.
    Before Sedgwick, Ch. J. and Dugro, J.

      Decided March 6, 1888.

      Appeal by defendant from an order directing the defendant to pay alimony.
    The following opinion was delivered at special term:

      Howe & Hummel, attorneys, and of counsel for appellant, argued:
    I. The defendant cannot now be brought into court by notice of motion or order to show cause. Kamp v. Kamp, 50 N. Y. 216.
   Truax, J.

This motion differs from the motion in the case of Erkenbrach v. Erkenbrach, 5 Civ. Pro. Rep. 188, and 96 N. Y. 456. That was a motion for alimony made after judgment, while this is a motion for leave to modify the judgment. It is true that the judgment was entered some time ago, but it has been frequently held that a court has control over its own judgment and may modify it when cause is shown for so doing. Hatch v. Central National Bank, 78 N. Y. 487 and cases there cited. Besides, the decree in this action provided that either party may apply at the foot of the decree for further judgment. I think that opening this judgment and granting the relief asked for by the plaintiff is in the interests of justice. The motion is granted, and a reference is ordered to Stephen B. Brague, Esq., to ascertain the amount of defendant’s property and income, and to report the same to this court with his opinion as to the alimony that should be allowed plaintiff, and counsel fee that should be allowed for services rendered by the plaintiff’s attorneys after the entry of the judgment. The attorneys for the plaintiff cannot have any allowances for the services that have already been rendered by them. They are, however, entitled to an allowance for such services as they will render the plaintiff in obtaining alimony and in modifying the judgment. Beadleston v. Beadleston, 103 N. Y. 402.

II. The court has no power or. jurisdiction to allow alimony in a suit for limited divorce after the entry of final judgment: § 1766 Code Civ. Pro., Sub. 2, § 1759, Code; Kamp v. Kamp, 50 N. Y. 212; Erkenbrach v. Erkenbrach, 96 N. Y. 456; Griffin v. Griffin, 47 N. Y. 134.

III. The next question is whether the court had jurisdiction or power by reason of that clause of the decree granting permission to either party to modify it. Judge Truax, in his opinion, based his right to make the order in consequence of the permission granted by this clause of the decree. The answer to the proposition is that there was no power in the court to make such a provision in the decree; hence it can have no force. The statute nowhere permits the granting of such relief; but, on the contrary, it especially provides that regard should be had to the circumstances of the respective parties, and provision should be made in the final judgment for the support of the plaintiff. We have shown that no change can subsequently be made in the alimony as fixed in the final decree, so that the only power the court possessed, being purely statutory, was, in entering final judgment, to decree the separation and to make provision for the support of the plaintiff in accordance with the circumstances of the parties. There is no provision of law which authorizes a final decree in a matrimonial action and at the same time permits the court to leave any subject whatever dependent on the happening of a subsequent event. Besides, the court can never obtain for itself a power or jurisdiction, which the statute does not give, by merely inserting a clause in a final decree providing for the exercise of such power. But aside from the question of power and jurisdiction, the statute provides that the alimony should be fixed according to the circumstances of the. respective parties at the time of the entry of the final decree. By the final decree in this action it was decided that no alimony should be granted, and in express terms it was declared that the circumstances of the defendant did not warrant the granting of any alimony.

Joseph B. Reilly, attorney, and of counsel for respondent, argued:

I. The court had'full power to make the provision in the decree in this action, and the order granted was entirely proper. A decree for permanent alimony should reserve the right to make a further application in case of a change of circumstances, Lamport v. Lamport, 4 Alb. L. J. 190.

II. A judgment in an action for divorce may reserve the right for a reference to fix alimony and direct its payment. Cooledge v. Cooledge, 1 Barb. Ch. 77. After judgment alimony may be granted pending a reference to determine amount of permanent alimony. Forrest v. Forrest, 3 Bosw. 650; Forrest v. Forrest, 25 N. Y. 501. In distinguishing the case of Kamp v. Kamp, 59 N. Y. 212, the court of appeals held: “Where the action is by the wife,.....if no provision in the decree is made for her, it is to be presumed that the court decided adversely to her claim.”.....In the case at bar, a provision was made in the decree under this provision in the decree, the order appealed from was made. In the case of Kamp v. Kamp, the action was one for an absolute divorce, in which the plaintiff, if successful, was at liberty to re-marry, thereby forever relieving the defendant (if liable at all) from all liability to pay alimony. In this case the judgment was one separating the parties from bed and board, thus giving no right to the plaintiff to re-marry. Plaintiff still has a right of dower in the property he acquired after the judgment, and he is bound in law to support her. This judgment thus differs in its effect from a decree of absolute divorce.

III. A court has control over its own judgment, and may modify it when cause is shown for so doing. Hatch v. Central National Bank, 78 N. Y. 487.

IV. In the case of Erkenbrach v. Erkenbrach, 96 N. Y. 456, the motion made was not to modify the judgment or to comply with any of the provisions contained in the judgment, but was an independent motion asking for additional alimony and counsel fee after the same had been fixed by the court and provided for in the decree. In the case at bar the decree did not fix any amount as alimony or counsel fee, but instead thereof it contained the provision authorizing the plaintiff, on the foot of the judgment, at any time subsequently, to ask for an order modifying the said judgment with reference to the support and maintenance of the plaintiff.

By the Court.—Sedgwick, Ch. J.

This is an action for separation, under section 1762 of the Code of Civil-Procedure. The issue was tried and a judgment of separation was entered. It did not adjudge the payment of any alimony, but contained the following clause:— “ It is further ordered and adjudged that, in the event of the pecuniary circumstances and conditions of the defendant becoming materially changed, touching his ability to support the plaintiff, an application may be made on the foot of this judgment, by any party in interest, for such modification of said judgment, touching the support of said plaintiff, or any other matter, as may be just.”

Four years after the judgment was entered, the plaintiff applied for an order modifying the judgment and directing the defendant to pay' suitable sums of money for the maintenance of the plaintiff. The court below granted the motion and ordered that “the said judgment is opened and modified and the plaintiff is allowed alimony and counsel fee, to be fixed and ascertained as hereinafter directed,” and further that a “referee be appointed to take testimony as to the property of the defendant,” etc.

The appeal is from this order, and the ground of the appeal is, that the court was without power to entertain a proceeding to fix alimony, etc., after the entry of the judgment.

There is no doubt that the court has, in respect of such an action, the powers given by the statute and has no other power. Kamp v. Kamp, 59 N. Y. 212 ; Griffin v. Griffin, 47 N. Y. 134; Erkenbrach v. Erkenbrach, 96 N. Y. 456. Under these cases, the construction of § 1766 is that, in an action by the wife, the court may in the final judgment of separation, compel the defendant to provide suitably for the support of the plaintiff, having regard to the circumstances of the respective parties, as such circumstances exist at the time of the final judgment.

The question then is, was the judgment when it was entered the final judgment of separation. I think it must be said that as to the issues that concerned separation, the judgment was final.

It is answered that the proceeding after the judgment was in the nature of a carrying out of the provisions of the judgment. That proceeding, however, did not attempt to modify the adjudication as to the separation. As to that the judgment was final, and therefore the power of the court was confined as to alimony, to a determination upon the facts then existing.

In Kamp y. Kamp it was held that the court was without jurisdiction to grant alimony after final judgment, and this should be recognized whenever the question arises.

I am of opinion that the order should he reversed, with $10 costs, and the motion below should be denied, without costs.

Dugbo, J., concurred.


text:
    ANN PALMER, Plaintiff and Respondent v. THE MUTUAL LIFE INSURANCE CO. OF NEW YORK, Defendant. In the Matter of the Application of CHARLES EBERLIN, as Assignee, Appellant.

      Code, § 452, what does not constitute an interest in the subject of the action, within its meaning.

    A claim by a third party that he is entitled to receive apart of the proceeds of a recovery upon a cause of action constituting a personal claim in favor of the plaintiff against the defendant, the legal title to which cause of action is conceded to be in the plaintiff in the action,

      Held, not to constitute an interest in the subject of the action within the meaning of § 452 of the Code.
    Before Sedgwick, Cli. J., and Dugro, J.

      Decided March 6, 1888.
    This action is to recover on two policies of insurance upon the life of George H. Palmer, issued by the defendant, one for $2,500, and the other for $10,000.
    George H. Palmer in his lifetime made a general assignment, for the benefit of his creditors, to Charles Eberlin. Charles Eberlin on the complaint and his affidavit, moved to be brought in and made a party defendant to the action. The case made by him in support of his motion, by his affidavit, is in substance, that Palmer, before his general assignment, assigned to and left with one Wadsworth the two policies as collateral security for a promissory note for $3,575, made to said Wadsworth by him, Palmer; that Palmer died, and at the time of his death, Wadsworth still held the policies, as such collateral security; that after Palmer’s death, plaintiff and her brother, who acted as her agent in respect of the policies, Were notified by him, said Eberlin, that he would claim the money on the policies, that shortly thereafter plaintiff’s brother procured said Wads-worth to come on from Bar Harbor, Maine, and obtained from him without the knowledge or consent or privity of him, said Eberlin, an assignment of said policies, and delivery of said promissory note, to the plaintiff upon the payment to him, said Wadsworth, of the amount due on said promissory note, and the expenses of coming to New York, and that he, said Eberlin, “ as such assignee for the benefit the creditors, is interested in the subject of this action to the extent of recovering for such creditors the amounts of said policies of insurance, or so much thereof as he is entitled, which, as deponent demands, claims and insists, is the whole thereof, less the amount which was due to Wadsworth and interest.”
    The plaintiff by her complaint claimed to recover the entire amount of the policies as belonging to her solely. The complaint contained the following allegations: “ That on or about July 20, 1881, the said George H. Palmer duly assigned the $10,000 policy of insurance to the plaintiff, who then became, and ever since has been, and now is, the absolute owner of the same.” This allegation was not denied by Oberlin. In the affidavits used in opposition to the motion, it was alleged that the $10,000 policy was assigned to plaintiff in July, 1881; that it and the $2,500 policy were wrongfully taken by George H. Palmer and pledged with Wadsworth; that plaintiff did not know where the policy was until after the death of George H. Palmer, and first learned of its wrong! 1 use on the day of the funeral.
    The motion was denied, the judge before whom it was • made writing as follows:
   Truax, J.

The moving party, Mr. Eberlin, does not show any interest in the policies of insurance that is superior to the interest of the plaintiff. He states that the $2,500 policy is held as collateral security for the payment of the sum of upward of $8,500. The plaintiff alleges in her complaint that the $10,000 policy was assigned to her in 1881, and that notice of that assignment was given to the defendant.

F. F. Marbury, attorney, and Charles Fox of counsel for appellant, argued :

I. It is only through the assignment from Wadsworth that plaintiff can maintain her action upon these policies. This being so, she can obtain no better title than Wads-worth had, which was subject to the claim of the assignee for the amount of the policies over and above the amount of the debt due to Wadsworth.

This allegation of the complaint is not denied, for I do not consider the affidavit submitted by Mr. Fox as evidence of any fact. It is simply an affidavit of something that was told to Mr. Fox by somebody. It is true that the person making, this motion says that he “ is interested in the subject of this action,” but he does not state how he is interested, nor does he show that he has in law an interest in the policies—the subject of the action. A defendant who has an interest in the subject of the action has a right to be made a party to that action, and may be made such party on his own motion. But it must be made to appear on the motion that he has, as a matter of fact, an interest in the subject of the action. He has not shown that by alleging that he “is interested in the subject of this action to the extent of recovering for such creditors the amounts of said policies of insurance, or so much thereof as he is entitled to, which, as deponent demands, claims and insists is the whole thereof, less the amount which was due to Wadsworth and interest.” This allegation does not rebut the allegations made by the plaintiff above referred to. On the papers it appears that the policy was duly assigned to plaintiff, and as such assignment is not disputed, the moving party can have no legal interest in the subject of the action.

From the order entered on the denial, this appeal was taken.

II. If it should be conceded that the plaintiff could revest herself of this policy by an assignment from Wads-worth, so far as she has ratified and confirmed the assignment to Wadsworth by Palmer, she should be bound by it. By her present action she seeks to make the $2,500 policy pay Wadsworth’s debt, and the $10,000 policy be relieved from all liability for the payment of it. This she cannot do. The $10,000 policy must bear its proportion of the loan, and if there was a wrongful use of it by Geo. H. Palmer, she can make her claim against his estate. She seeks here to marshal these securities without respect to the rights of the creditors of George H. Palmer, who ought to have an opportunity through the assignee to present theiy interest for the determination of the court.

III. George H. Palmer could have had a property in the policy, although he had assigned it to the plaintiff without a re-assignment from her. The policy does not require a written assignment. It could be assigned by parol with manual delivery. U. S. v. White, 2 Hill 59 ; Briggs v. Dow, 19 Johns 95; Freund v. Importer’s Bank, 76 N. Y. 356.

IV. Upon the facts stated, the assignee showed that he had an interest in both policies, unquestionably in the $2,500 policy. The plaintiff, as against the assignee, should be compelled to litigate the question as to her right to the whole of the moneys upon the policies; and it was not proper upon a motion of the kind in question, to be made a party to an action, to pass upon the merits of the controversy and try the question upon affidavits. Johnston v. Donovan, 106 N. Y., 269.

V. Section 452 of the Code provides that where a person not a party to the action has an interest in the subject thereof, and makes application to the court to be made a party, it must direct him to be brought in by the proper amendment, and a person so interested in the subject of an action has an absolute right to be made a party thereto if he elects so to do. Earle v. Hart, 19 Hun 75; Haas v. Craighead, 20 Ib. 398; Lee v. Pfeiffer, 25 Ib. 97; Chandler v. Powers, 1 Civ. Pro. Peg. 315.

Maclay & Forrest, attorneys, and Michael M. Forrest of counsel, for respondent, argued :

I. The only construction of the last sentence of this section which will avoid the extreme on the one hand of maintaining that an undisputed interest in the subject of the action is necessary to bring a person within the terms of this sentence of the section, or, on the other hand, that a mere claim of interest will entitle one to be made a party, is that the person invoking this provision must show, by competent evidence, either a practically undisputed interest in himself, or, if his interest is disputed, he must present competent evidence tending to make a case showing him to be entitled to some interest in the subject of the action. Mr. Eberlin is not before the court as possessed of an undisputed interest, and the burden is upon him to present competent evidence of such facts as will furnish a logical basis for the conclusion that he is indeed so interested. Gunther v. Greenfield, 8 Abb.’s N. S. 191; Chandler v. Pierce, 1 Civ. Proc. Rep. 355; Hornby v. Gorton, 9 Bos. 657; Johnston v. Donovan, 12 Civ. Proc. Rep. 315.

II. The plaintiff has alleged under oath “ that on or about July 20, 1881, the said George H. Palmer duly assigned the $10,000 policy of insurance to the plaintiff, who then became, and ever since has been, and now is, the absolute owner of the same.” This allegation, which is contained in the complaint, one of Mr. Eberlin’s moving papers, is not denied by him, and, in the absence of denial, concludes him, and will necessitate an affirmance of the order denying his application to be made a party; for, if this allegation is true, Mr. Eberlin cannot have any interest in this policy.

III. The allegation in the complaint of the assignment of the $10,000 policy to the plaintiff not having been contradicted by the assignee, and no facts having been shown from which it can be inferred that Mrs. Palmer ever re-assigned this policy to her son, the legal presumption is that she still continues to hold the policy in her original right. The law presumes that a fact continuous in its character, still continues to exist; a party having title at one time is presumed to continue to hold it, in the absence of evidence to the contrary. 1 Stark. Ev. 34, 4 I. D., 1252; Wolrod v. Ball, 9 Barb. 271; Wilkins v. Early, 44 N. Y. 180.

IV. Mr. Eberlin shows no interest in the, subject of the action. The allegations of interest are : “ Deponent is advised and believes deponent was entitled, as against the said Wadsworth or his assignee or successor in interest, to the amount of said policies less the amount owed to the said Wadsworth and interest.” What the allegation would amount to, if positively and competently expressed, is, that as against Wadsworth’s assignee Mr. Eberlin is entitled to all over the amount of the $3,575 note. This Mrs. Palmer has always admitted, but she is not Wadsworth’s assignee as to the $10,000 policy. She obtained that by an absolute assignment from the assured himself, and the amount of the $2,500 policy, of which she is Wadsworth’s assignee is not sufficient to pay the $3,575 note.

V. Upon the argument of the motion Mr. Eberlin’s attorney, finding his case needed support, obtained leave to read the affidavit of Mr. Charles Fox. It is impossible to determine from Mr. Fox’s affidavit where he picked up his information. But he swears that the facts set forth in the'paper he verifies were furnished by Mr. Eberlin’s attorney, who is not Mr. Fox, as being correct. This is unprecedented and utterly incompetent for any purpose. Bennett v. Edwards, 27 Hun 388; Yates v. North, 44 N. Y. 273 ; Steuben Co. Bank v. Allenberger, 78 Ib. 258; Mawry v. Sanborn, 65 Ib. 584; Gribben. v. Schellinger, 30 Hun 248.

VI. The case of Gunther v. Greenfield, 8 Abb. N. S. 191, if considered an authority, is decisive against this motion.

By the Court.—Sedgwick, Ch. J.

The action is upon two causes. Each is to recover an amount payable by a policy of life insurance upon the life of George H. Palmer. The plaintiff claims by assignment. The complaint has not been answered.

The appellant claimed that he was owner of the policies, by assignment. As to one he virtually admitted that it was held validly by the plaintiff, as pledgee, having the right of a former pledgee who assigned to the plaintiff.

The learned judge examined the right of the appellant as against the plaintiff, and upon sufficient ground held that he had no right to recover against the defendant superior to the plaintiff.

I am of the further opinion that the interest of the appellant, whatever its nature, and however valid, was not an interest in the subject of the action. The subject of the action was not a fund, or a res of any kind. It was a personal claim of the plaintiff. The issue when formed would be as to the plaintiff’s right to recover. In this, the appellant had no interest of a legal kind. The action did not involve any claim of the appellant against the defendant on the policies, or a'gainst the plaintiff, as to her duty to the appellant in respect of the proceeds, should the plaintiff recover in this action. In fact, the appellant’s position exhibits a claim of having a cause of action, distinct and separate from the cause of action here.

Order affirmed with $10 costs.

Dugro, J., concurred.