author: Ingraham, J.

text:
    CHARLES E. HOVEY, et al., Appellants, v. JOHN ELLIOT, Impleaded, &c., Respondent.

      Lien not raising a trusteeship—Trusteeship of receiver ceases on his discharge and payment over■—Equitable lien not enforceable after bona fide sale of the property in hostility to it—Destruction of lien by such sale—Lien on right of action—Statute of limitations, subdivision 3 of section 382 applies —Equitable lien is property—Bevei'sal of a judgment dismissing the complaint in an action brought to establish and enforce a lien, followed by a judgment establishing it, effect of as to cause of action against persons not parties to the action, who, with notice of the claim to the lien, purchased the property on which it was and sold it to a purchaser in hostility to the lien, between the first judgment and its reversal.

    One owning and in possession of personal property subject to an equitable lien therein is not a trustee for the lienor.
    The trusteeship of a receiver appointed by a court, ceases on his discharge and payment, or delivery over by him of the property in his hands, pursuant to the order of the court appointing him.
    The holder of an equitable lien on negotiable personal property cannot enforce such lien, after the party who owns the property and holds it subject to such lien, disposes of it, in hostility to the lien, to a bona fide purchaser without notice of the lien. Such a disposition of the property destroys the equitable lien, and the only remedy remaining to the lienor is an action at law against the destroyer for damages for such destruction ; or, perhaps, an action in the nature of an action for money had and received for the proceeds of his interest; to either of which actions the six years’ limitation prescribed by subdivision 3 of section 382 applies, the cause of action accruing at the time of such destruction.
    An equitable lien is property, and an act destroying the lien is one lessening the estate of the lienor therein and an injury to his property.
    Plaintiffs brought an action against parties (not the defendant herein) for the establishment and enforcement of a lien claimed by them on an award made on a claim pending under a treaty between this country and Great Britain ; a receiver was appointed for one half of the award, and he was directed to invest the money in certain bonds, which he did; the complaint was dismissed and the judgment directed the receiver to pay the funds belonging to the cause to the defendants in that action, and that he should thereupon be discharged. The receiver turned over the bonds to such defendants, who sold them to the defendants in this action, they being chargeable with notice of plaintiffs’ claim to a lien; defendants here sold them to bona fide purchasers in hostility to the lien. Thereafter the judgment of dismissal was, on appeal, reversed; and thereafter judgment was entered adjudging that plaintiffs have a lien upon said award, and upon any draft, money or evidence of indebtedness issued thereon or on the proceeds thereof,—Held, that the last named judgment did not create the lien; that it merely declared its existence; that plaintiffs had no right of action against the defendants here on said judgment; that plaintiffs’ right to enforce the lien had been destroyed that the only causes of action they had or might have were causes of action at law arising out of the action of defendants in so selling the bonds; that such causes of action accrued at the time of such sale, and werp barred by the six years’ limitation prescribed by subdivision 3 of section 382.
    Before Sedgwick, Ch. J., Freedman and Ingraham, JJ.

      Decided May 12, 1886.
    Appeal from a judgment entered on the report of a referee.
    The referee found as facts I. In or about the month of June, 1873, one Augustine B. McDonald had a claim pending before the mixed commission on British and American claims, under the treaty of May 8, 1871, for the value of certain bales of cotton ; and in the said month of June, 1873, he made an agreement with Charles E. Hovey and William P. Dole, the plaintiffs in this action, by which said parties were to aid him in the prosecution of said claim before the said commission, and he was to pay to them or their order, as their compensation, a sum equal to twenty-five per cent, of any amount allowed on said claim, and by the terms of said agreement, the pay6 ment of said sum of twenty-five per cent, was to be made a lien upon the said claim, and upon any draft, money, or evidence of indebtedness, which might be paid or issued thereon.
    II. In the month of September, 1873, the said mixed commission on British and American claims, awarded to the said Augustine B. McDonald the sum of $197,190 in gold, to be paid by the government of the United States to the government of Her Britannic Majesty, in respect to the said claim of the said Augustine B. McDonald.

      III. On or about October 2, 1874, the said Hovey and Dole, the plaintiffs herein, filed their bill in equity in the supreme court of the District of Columbia, against Augustine R McDonald and William White ; and in the said bill they alleged, among other things, that by reason of the agreement set forth in the first of these findings of fact, the defendant McDonald was indebted to them, the complainants, in the sum of $49,297.50 in gold, being an amount equal to one-fourth of the sum allowed on the claim of said McDonald by the said mixed commission, and that they had a lien upon the said claim, and upon the certificate of the amount allowed thereon, and upon all moneys which might become due and payable in respect thereof. That in the month of August, 1874, the said McDonald had assigned to the defendant White, the whole of said award, and that the said White, at the time of taking the assignment, had notice of the said hen and claim of the plaintiffs, and took with notice of the claim of the lien of said complainants ; and that, at the date of the filing of the said bill, the amount of said award was still in the hands of the diplomatic representatives of the British government, and they therefore prayed, among other things, that the defendants, McDonald and White, be restrained from assigning, disposing of, receiving or collecting, more than three-fourths of the said award, and that the lien of the complainants upon the said funds, and their interest in the same, be established by the decree of the said court. An injunction was issued in said action by the court in which the same was pending. On or about February 16, 1875, in another suit pending in the supreme court of the District of Columbia, wherein Thomas J. Phelps, assignee, was complainant, against Augustine E. McDonald and William White, and on the consent of Charles E. Hovey and William P. Dole, it was ordered that White, as the assignee of the said McDonald, receive from the agents of the British government one-half of the net amount of the award, free and discharged of all claims of Hovey and Dole, and Phelps, assignee, and that the remaining half of the net amount of the said award should be paid to George W. Riggs, as receiver, and that the said George W. Riggs should hold the said one-half of said award subject to the claims, liens and rights of the said Charles E. Hovey and William P. Dole, and of the said Phelps, assignee, to be determined by the court. And it was further ordered that the said receiver be directed to invest the money so placed in his hands in bonds of the United States, or in 3.65 bonds of the District of Columbia, guaranteed by the United States, as he might deem best for the interests of the parties concerned.
    IV. George W. Riggs, as receiver, did make the investment of the funds referred to in the last foregoing finding of fact, in 3.65 bonds of the District of Columbia, and the said bonds were retained by him in his possession, as receiver, until the time mentioned in a subsequent finding of fact made herein.
    V. On or about April 7, 1875, the defendants McDonald and White filed a demurrer to the bill of the complainants in the action, in the District of Columbia above mentioned, which demurrer was sustained, with leave to the complainants to amend. On April 27, 1875, the complainants in said suit filed their amended bill, and on May 7, 1875, the defendants demurred to said amended bill. On June 24, 1875, the said supreme court of the District of Columbia made a second decree, in and by which it. was ordered, adjudged and decreed that the demurrer to said amended bill of the complaint be sustained, and the bill be dismissed with costs. On June 24, 1875, the plaintiffs Hovey and Dole appealed to the general term of the supreme court of the District of Columbia from the decree sustaining the said demurrer. On June 28, 1875, the said supreme court of the District of Columbia, in the same action of Hovey et al. v. McDonald et al., made and entered another decree, in and by which it was ordered, adjudged and decreed that the demurrer to said bill of complaint be sustained, and the bill of complaint be dismissed at the cost of the plaintiff, and the receiver appointed in said cause, and in Phelps, Assignee, v. McDonald & White, be directed to pay the funds belonging to said cause, to the defendants, McDonald and White, or order, and thereon said receiver should be discharged.
    VI. On said June 28, 1875, and after the entry of the decree of that date referred to in the last foregoing finding of fact, Augustine B. McDonald, one of the defendants in said suit, applied to George W. Biggs, receiver, for the surrender and delivery to him of the bonds of the District of Columbia, held by the said Biggs, as receiver, and in which the amount of money paid into his hands had been invested. The said George W. Biggs, receiver, made personal application to the judge holding the court, in which the decree was made, for instructions as to the delivery of the said bonds to said McDonald, and was informed by said judge that the delivery should be made. And thereupon the said Biggs, receiver, did deliver the said bonds, and all of them, to said McDonald. And upon the same day, the said McDonald sold the said bonds to the firm of Biggs & Co., of Washington, of which firm the said George W. Biggs, was a member, and the defendant in this action, John Elliot, was also a member. The said bonds were sold for the market value thereof, and purchased by Biggs & Co. from the said McDonald after they had been surrendered to the said McDonald by the said receiver; but the said firm of Biggs & Co., by reason of the said receiver being a member of said firm, had knowledge at the time of the said purchase of the claim made to the said bonds by the said Hovey and Dole. The said bonds of thec,District of Columbia were all registered bonds, with the exception of $300 thereof, which were in coupon bonds. Immediately after the purchase by Biggs & Co., aforesaid, the said bonds were taken to the treasury of the United States, and the title to said bonds was changed, the said bonds were surrendered to the said treasury department, and subsequently other and new bonds were issued to the said firm of Biggs & Co. And in the month of December, 1875, the same firm of Eiggs & Co. re-sold the said reissued bonds in the market, and the same parted from out their possession, and were dispersed among the purchasers thereof.
    VII. On or about July 2, 1875, the complainants in the suit in the District of Columbia, aforesaid, to wit., Hovey and Dole, appealed to the general term of the supreme court of the District of Columbia, from the decree mentioned in the preceding finding of fact as having been made and entered on June 28, 1875. On July 12, 1875, a supersedeas bond was filed by the complainants on said appeal; and such proceedings were had upon the appeal thus taken, as resulted in a decree of the said general term of the supreme court of the District of Columbia, in said suit on March 4, 1876, reversing the judgments or decrees of June 24, 1875, and of June 28, 1875, and ordering and decreeing that the cause be remanded to the special term, with leave to answer the complainant’s bill within the time allowed, under the general rules of the court. On or about May 1, 1876, the defendants, McDonald and White, answered in the said suit in the supreme court in the District of Columbia.
    VIII. On or about May 5, 1876, an application was made in the said supreme court of the District of Columbia, by Hovey and Dole, the complainants in the said suit, for an order requiring the defendants therein to pay into court a certain sum of money, to wit., the sum of $49,297.50, in gold, the decree of June 28, 1875, directing the receiver to pay the fund in his hands to McDonald, having been reversed by the decree of the said court at general term. On or about September 15, 1876, the said motion was transferred to the general term of the said supreme court of the District of Columbia ; and on June 15, 1877, the said Augustine E. McDonald and William White were ordered and required to pay into the registry of the said supreme court of the District of Columbia, the sum of $49,297.50, which said order was not complied with, and on December 8, 1877, a decree was made ordering the said defendants to pay the said money into court within six days, or their answer would be removed from the files of the said court, and said last mentioned order not having been complied with, on December 29,1877, the said supreme court of the District of Columbia, sitting in general term, made a decree in the said suit, in which it was ordered, adjudged and decreed that the answer filed in said cause by the defendants Augustine R. McDonald and William White, be stricken out and removed from the files of the court, and that the cause do proceed as if no answer therein had been interposed, and that all proceedings on the part of the defendants be stayed in the cause until said orders requiring the deposit in the registry of the court of the sum aforesaid were complied with. And on February 12, 1878, the said supreme court of the District of Columbia, sitting in general term, made an order that the bill of complaint of Hovey and Dole against McDonald and White be taken pro confesso against the defendants. And on April 17, 1878, the said supreme court, sitting in general term, made the said decree absolute, and ordered, adjudged and decreed, that the defendants, McDonald and White, pay to the complainants the sum of $49,297.50 in gold, and that the complainants have a lien upon the claim of Augustine R. McDonald against the United States, as awarded by the mixed commission on British and American claims, and upon any draft, money, evidence of indebtedness or the proceeds thereof, with legal interest from said April 17, 1878.
    IX. That this action was commenced by the delivery of the summons herein to the sheriff of the city and county of New York on April 16, 1884.
    And as conclusions of law that specific relief could not be afforded in equity for the enforcement of the lien, claim, interest or property right, in the said bonds of the District of Columbia, or in any other bonds or securities into which they were transmuted, or the proceeds of any such other bonds ; and that the only remedy which could be accorded to the plaintiffs would be for a recovery of money for the damages sustained by the destruction of their lien ; and that such action for damages was barred by subdivision 3 of section 382 of the Code of Civil Procedure, more than six years having elapsed since the time at which the right of action for such damages accrued.
    And, in support of his findings the referee wrote as follows :
    ° “ Edward Patterson, Referee.—It appears that Riggs & Company purchased from McDonald the bonds in which the fund had been invested by the receiver, surrendered them to the treasury, received a reissue, and shortly afterwards sold the reissued bonds in the market. Thus it is established that the lien which the plaintiffs held on the securities in which a part of the award had been invested by the receiver was utterly destroyed, and a recourse to those securities for the enforcement of that lien rendered impossible.
    “In this state of the proof the point is made on behalf of the defendant, that the real cause of action inhering in the plaintiff, and arising out of Riggs & Company’s relations to the bonds, is one at law, and not one in equity ; and, therefore, under the provisions of the Code of Civil Procedure, is barred by the six years limitation prescribed by subdivision 3 of section 382 ; and, moreover, that the cause of action accrued at the time Riggs & Company purchased from McDonald, or from the time they resold the bonds, which seems to have been in December, 1875, or at the furthest from the time of the reversal of the two decrees of June, 1875, referred to in the evidence.

      “ If the form of the action as framed by the draughtsman of the complaint, is to be the test of the application of the statute, then this case is a suit in equity, a limita tion as to which is not provided for specifically in the Code, and, therefore, the ten years’ bar of the statute would apply. But Ido not understand that such is the test. Whether the statute of limitations, pleaded as a defense, applies or not, must be ascertained from the whole case, with all of the evidence before the court. Then it may be determined what the cause of action arising from the proof and the facts, really is.
    “If the facts as established by evidence, authorize both a legal remedy and equitable relief, then the rule is that the statute bar affecting the legal cause of action, would control. At all events, whatever may be the structure of the action, when the proof shows that the ultimate recovery can be but for a sum of money, and that a court of law has jurisdiction to give judgment on the facts for money, the bar of the statute applying to legal actions would control. Such are the rulings in Drake v. Wilkie (30 Hun, 537); Borst v. Corey (15 N. Y. 505); Peters v. Delaplaine (49 Ib. 362); Loder v. Hatfield (71 Ib. 92); Carr v. Thompson (87 Ib. 160); Pierson v. McCurdy (33 Hun, 520).
    “It is obvious that no specific relief for the enforcement of the lien against the bonds cap be awarded here. All that could be done, would be to render a money judgment against the defendant, and the question then arises whether an action at law existed against Riggs & Co. in favor of the plaintiffs, and upon the facts developed upon the record, and if so, when that action arose. That leads to the inquiry as to what was the attitude of the plaintiffs to the bonds in the hands of the receiver. They had a lien by contract on the money which was awarded by the mixed commission and which was placed in the hands of the receiver, and invested in District of Columbia bonds. Strictly speaking, it was not a common law lien, depending for its maintenance on the possession of the res. It was something more than a mere equitable lien, specifically enforceable only in a court of equity. It was a lien by contract, that is to say, by the agreement of the parties, and in whatever shape the fund might be held, and in whatever securities it might have been invested, it and the securities were to be charged with the amount of the plaintiffs’ interest therein. That agreement gave to the plaintiffs a direct interest in all the bonds in which the receiver had invested the money, and although called a lien, it was, in my judgment, very clearly a property right which they possessed in the bonds. But it will be considered technically as a lien and as an equitable lien.
    “ It is not necessary to inquire whether a common law lien, or a mere equitable lien is a jus in re, or a jus acl rem. Although it is said that a lien depending wholly on contract, is a jus ad rem (1 Duer on Insurance, note 538).
    “ The interest Hovey and Dole had in the bonds was property. The word ‘ property ’ describes any estate, whether goods, money or lands, and its general signification includes anything capable of ownership (People v. N. Y. & Manhattan Beach Ry. Co., 84 N. Y. 565).

      “ The term ‘ property ’ embraces every species of valuable right and interest, including real and personal property, easements, franchises and hereditaments. Property consists in the right to the use and enjoyment of the thing owned. An easement over the land of another is property (People v. Haines, 49 N. Y. 587; Arnold v. Railroad Co., 55 Ib. 661). The lien of a mortgage is property (Astor v. Hoyt, 5 Wend. 6,03). A contested claim to unliquidated damages is property (Irwin v. U. S., 7 Otto, 392). The right to a lien is a right of property (31 Ken. 559). A mechanics’ lien is property (13 Otto, 30).
    “ A lien is an interest in the nature of a charge on some specific thing, as lands, merchandise, goods, bonds, &c. That charge is property the same as an incorporeal hereditament is property; it is something which may be owned exclusively, which may be assigned, and the title thereto vested in the assignee. It is a clear, exclusive right, and may be enforced against that to which it attaches. Its legal status in the present instance, is analogous to a mortgage, and in this respect is like the lien upon the cattle referred to by Chief Justice. Waite, in Gregory v. Morris (6 Otto, 619). The lien, therefore, existing in favor of the plaintiffs upon the bonds, being property, Riggs & Company, by their purchase of such bonds from McDonald, by their surrender and cancellation of such bonds, by the procurement of others in their place, and the subsequent dispersion of those bonds by sale in the market, destroyed the lien of the plaintiffs upon the particular securities held by the receiver. Their conduct in so doing was actionable. A cause of action at law accrued to the plaintiffs at the time these things were done by Riggs & Co. Their acts constituted an injury to property within the meaning of subdivision 3 of section 382 of the Code. It is not necessary to inquire what the measure of damages in such an action would be, whether they would be nominal or substantial, though probably the latter, for there was a complete destruction of the lien. The wrongful act and the special injury give rise to a remedy which the law affords (Yates v. Joyce, 11 Johns. 136 ; Lane v. Hitchcock, 14 Ib. 213 ; Van Pelt v. McGraw, 4 N. Y. 110 ; Manning v. Monaghan, 23 Ib. 539).
    “An action for damages lies for the destruction of an equitable lien (Husted v. Ingraham, 75 N. Y. 251).
    “I consider that the lien, charge or interest which the plaintiffs had upon the bonds, was property within the meaning of subdivision 3 of section 382 of the Code, referring to an action to recover damages for an injury to property, not only because such charge falls under the signification of the word as hereinbefore given, but also because in the Laws of 1876, chapter 449, the words ‘ injury to property ’ have received a definition. It is stated therein that ‘ an injury to property is an actionable act whereby the estate of another is lessened, other than a personal injury or a breach of a contract.’ The word £ estate,’ as used in that definition, has a broad meaning. In 1 Preston on Estates, 20, the word is defined as ‘ the interest which any one has in lands or in any other subject of property.’
    “ I do not go quite so far as the plaintiffs’ counsel does in defining the right which the plaintiffs had in the bonds. He requests me to find that the plaintiffs actually owned one-half of the bonds in the receiver’s hands. I do not think it can be said that they owned any particular number of the bonds, but merely that they had a right in the bonds to the extent of their agreed compensation, and that that right was property.
    “It having been established that a cause of action at law existed against Eiggs & Go., it remains to be considered when that cause of action arose. In actions of trespass or on the case for wrong-doing, the cause of action arises at the time the wrong is done; the action may be instituted .when the wrong is done, and it is from the time the action might have been instituted that the bar of the statute begins to run (Granger v. George, 5 B. & C. 149 ; Kelsey v. Griswold, 6 Barb. 436; Read v. Markle, 3 Johns. 523 ; Howell v. Young, 5 B. & C. 259 ; Morgan v. Plumb, 9 Wend. 287; Argall v. Bryant, 1 Sandf. 98).
    “And this is so, whether the plaintiff knew or was ignorant of the wrong-doing (Troupe v. Smith, 20 Johns. 33; Leonard v. Pitney, 5 Wend. 30 ; Humbert v. Trinity Church, 24 Ib. 587 ; Allen v. Mille, 17 Ib. 202).
    “ It is true that in this case the action might not have been maintainable while the decrees of June 24 and June 28, 1875, remained in force. But those decrees were reversed in March, 1876, and, immediately they were reversed, the right of action was restored.
    “It is insisted by the plaintiffs that they could not have sued, even assuming that they had an action at law and not in equity (or concurrently with a suit in equity), until after the rendition of the decree of April 17, 1878. If this be so, their action was begun within the six years’ limitation. But I cannot accept the view that the lien of the plaintiffs depended upon the decree of April 17, 1878. Their lien was not created by that decree; it merely declared that such a lien then existed, and had existed ; it merely established judicially that that lien might be enforced. Their rights are not due to the decree ; they are due to the agreement which gave to them their sfcipulated compensation, and made that compensation a charge upon the award which the commissioners should make upon McDonald’s claim.
    “ I am of the opinion that the plaintiffs were in a condition to sue, and might have brought the suit against Riggs & Co., after the reversal of the two decrees of June 24 and June 28, 1875, namely : immediately upon the entry of the decree of March 4, 1876, and that, not having brought their suit within six years after that date, then’ claim in the present action is barred by the terms of subdivision 3 of section 382 of the Code of Civil Procedure.
    “Upon the two remaining questions earnestly discussed in the case, of the effect of the judgment rendered in the District of Columbia, upon striking out the answer of McDonald, and of the negotiable or non-negotiable character of the bonds, I do not consider it necessary, in the view I have taken of the defense of the statute of limitations, to give any expression of my views other than to say, that for the purpose of this action, I shall hold, with very great misgiving, that the judgment is a valid and enforceable one, and that the bonds were not negotiable instruments, my intention being to dispose of the case altogether upon the defense of the statute of limitations.”

      Thomas M. Wheeler, attorney, and IT. B. Titus, of counsel, for appellants.

      JR. JD. Harris, attorney, and Wm. G. Choate, of counsel, for respondents.
   By the Court.

Ingraham, J.

The referee directed judgment for the defendants on the ground that the cause of action proved on the trial was barred by the statute of limitations, and the question to be determined on this appeal is which of the sections of the Code providing for the limitation of the time in which actions shall be commenced, applies to the cause of action proved on the trial.

It is clear that plaintiffs have no cause of action against the defendants on the judgment rendered in the action in the supreme court of the District of Columbia. The defendants were not parties to that action. Plaintiffs’ cause of action against defendants arises out of the act of the defendants after the commencement of that action. Taken in the most favorable view for plaintiffs, the judgment in the supreme court of the District of Columbia was conclusive as against the defendants in that action and all parties claiming under them, as to the plaintiffs’ lien upon the award of the commissioners and on the securities in which such award had been invested ; but the judgment itself imposed no liability upon defendants in this action to pay any sum of money to plaintiffs. Nor did a trust relation exist between plaintiffs and defendants, that would justify the plaintiffs in treating the defendants as trustees. On the appointment of George W. Eiggs, as receiver, by the supreme court of the District of Columbia, Eiggs became trustee for the plaintiffs. Such award was paid to him as receiver, and he, under the direction of the court that appointed him,, invested such award in bonds of the District of Columbia. Such bonds in the hands of the receiver became trust property. The receiver was the trustee, and as long as such trust continued, he was liable as a trustee to the owners of the bonds or any one having an interest in them.

The court that appointed him such receiver granted a judgment in the action in which he was appointed, by which it was adjudged that the complaint be dismissed, and that the receiver be directed to pay the funds held by him as such to the defendants in that action, and thereupon said receiver should be discharged.

In pursuance of said decree the receiver delivered the bonds, in which the award had been invested, to the defendants in that action as directed by said decree. He reported the same to the court, and such report was confirmed.

It is clear that by this action the trust came to an end. The trustee was discharged and the bonds were no longer trust property. The bonds, having been purchased with the proceeds of the award, stood in the place of the award, and the plaintiffs having a lien on tire award the lien attached to the bonds, and as long as the bonds remained in the hands of the defendants" in that action, they were subject to such lien.

The defendants there, however, were not trustees for the plaintiffs. They had agreed that the plaintiffs should have a lien upon the award, not that they were to act as trustees for plaintiffs in collecting the award and paying them the amount thereafter to which they were entitled, or to hold it in trust for them.

On the delivery of the bonds to the defendants in the action in the supreme court of the District of Columbia, under the decree of the court such defendants became the owners of the bonds, subject to the lien of the plaintiffs, and as such owners, subject to that lien, had a right to sell the bonds ; and as long as these bonds remained intact in the hands of the defendants in that action, or in the hands of any one receiving them with notice of the lien, such lien could be enforced in equity.

The defendants in that action, therefore, had the right to sell the said bonds to Biggs & Co., the defendants in this action, who having received them with notice of such lien, became the owners of the bonds subject to the lien ; so, as long as the bonds remained in the hands of the defendants in this action, plaintiffs could have enforced their lien in equity. Plaintiffs could not recover a judgment against the defendants at law, as defendants were under no obligation to pay the plaintiffs any money. They simply owned property upon which the plaintiffs had a lien.

The defendants could sell the bonds subject to such lien, and so long as the hen was not destroyed or affected by such sale, defendants would not be liable to plaintiff. There was no agreement by defendants, express or implied, to pay the amount of the lien to plaintiffs, and the mere fact of the ownership of the property on which the hen existed imposed no obligation on the owners to pay the amount of the hen. •

Up to the time, therefore, that the bonds were sold to bona ficle purchasers without notice and for value, plaintiffs could not have recovered any personal judgment against the defendants. Prior to the sale of the bonds by the defendants there was no obligation on the part of the defendants to pay plaintiffs anything, and if there is any cause of action against the defendants it arises from the acts of the defendants in selling the bonds. The bonds being negotiable, however, a sale to a bona fide purchaser without notice for value, would convey a good title to the purchaser, discharged of the lien, and would prevent plaintiffs from enforcing their hen against the bonds. Defendants, being the owners of the bonds, subject to such hen, sold them to such bona fide purchasers and thus destroyed the plaintiffs’ hen thereon.

It is well settled in this state that this act of the defendants gave the plaintiffs a right of action against defendants for the destruction of such equitable lien.-

In Hale v. Omaha Nat. Bank (49 N. Y. 626 ; S. C., 64 N. Y. 655), it was held that such an action could be maintained, and in Husted v. Ingraham (75 N. Y. 251), it was held that where the defendant had sold property subject to an equitable hen, in hostility to the hen, or in such a way that the hen was destroyed, plaintiff had a cause of action against the person selling the property.

I think it clear that plaintiffs’ hen on the bonds was personal property. Subdivision 7 of section 3343 of the Code defines the words “personal property” to include money, chattels, things in action, and evidences of debt, and by subdivision 10 of the same section, an injury to property is an actionable act whereby the estate of another is lessened, other than a personal injury, or a breach of contract.

The plaintiffs’ lien upon these bonds was, under this definition, clearly personal property, and the act of the defendants in destroying that lien was an act whereby the estate of the plaintiffs was lessened, and it was thereby an injury to his property.

By subdivision 3 of section 382 of the Code it is provided that an action to recover damages for an injury to property must be commenced within six years after the cause of action accrued. I think it clear that the cause of action accrued at the time the lien was destroyed. That lien was not created by the judgment of the supreme court of the District of Columbia, but was created by the agreement between the parties, and the moment the award was made, the lien attached to such award.

On the payment of the award to the receiver and his investing the amount paid in the bonds, the bonds stood in the place of the award, and the lien attached to those bonds. The judgment of the supreme court did not create the lien, but it established that such lien had existed by agreement between the parties, and the act of the defendants in destroying the Hen when they sold the bonds in December, 1875, gave plaintiffs an immediate cause of action against them for such wrongful act. The cause of action, therefore, accrued in December, 1875, and was barred by the provisions of the section above referred to, in December, 1881. This action not having been commenced until April, 1884, such cause of action was barred by the statute.

We do not think that plaintiffs had a cause of action against the defendants to which the ten years’ Hmitation contained in section 388 of the Code would apply. Plaintiffs had no cause of action against the defendants for the enforcement of the equitable lien. The property upon which the Hen had existed was not in possession of the defendants, nor did the defendants have at the commenceinent of this action any thing upon which the plaintiffs’ lien existed.

There can be no lien upon the proceeds of the bonds in the hands of the defendants. Defendants were the owners of the bonds subject to plaintiffs’ lien, and as such sold the bonds and received from the purchasers the price for which they were sold. As before stated, plaintiffs had their action for any damages sustained by them in consequence of the wrongful act of the defendants, and that right of action is based upon the act of the defendants in destroying the lien. If the lien was not destroyed the right of action would not exist.

The defendants sold their interest in the bonds and received the proceeds, and it does not appear that such proceeds were held by them as a fund to which the lien could attach, but the sale was made by them as owners, and the proceeds used by thepi as their own.

This subject was exhaustively discussed by Mr. Justice Daniels in the case of Pierson v. McCurdy (33 Hun, 520), and it was there held that where trust property was received by a third person with notice of the trust, the remedy was either an action for money had and received, or for a conversion of property lawfully belonging to another, and that to such causes of actions the six years’ statute of limitations applies.'

It might be that on the facts in this case, plaintiffs would have a cause of action against the defendants for the proceeds of the plaintiffs’ interest in the bonds received by defendants, in the nature of an action for money had and received, but if such a cause of action existed it was barred by the statute.

We agree, therefore, with the referee, that plaintiffs’ cause of action against defendants was barred by the statute, and the complaint was properly dismissed.

The exhaustive examination of the authorities by the referee renders a further review of them unnecessary. Judgment should be affirmed, with costs.

Sedgwick, Ch. J., and Freedman, J., concurred.


source: Caselaw Access Project

license: Public Domain

text:
    HELEN C. JEWETT, Respondent, v. WILLIAM P. EARLE, Appellant.

      Tender to discharge mortgage lien, insufficiency of—Waiver not established.

    A tender, coupled with an express or implied demand for a satisfaction-piece before the money would be paid, is insufficient to discharge the mortgage lien.
    A tender to a servant girl at the mortgagee’s residence, without proof that she was actually or apparently authorized to receive the money, is insufficient.
    Production of the money, and an unconditional offer to pay it to the mortgagee or some one authorized by him, thereby affording an opportunity of either taking the money or deliberately refusing it, are essential to constitute such a tender.
    The mortgagor, having notified the mortgagee by letter, that he desired to pay off the mortgage, and appointed a time and place for such payment, received from the mortgagee a letter in which he claimed that he was entitled to ninety days’ notice of an intention to pay; and notified the mortgagor that as he had no immediate use • for the money, he should expect “ the said notice to be given before the payment will be received and satisfaction given.” The mortgagee was not entitled to ninety days’ notice, and the mortgage, at the date of this t letter, was overdue.— Meld, this did not constitute an absolute refusal to receive the money, but merely one to give a satisfaction-piece without the notice ; and that as subsequent to this letter, a proposition had been made looking to the removal of the objection to the receiving the money, and the matter had been left in that form, there was nothing to show that the defendant would have refused the money if unconditionally tendered to him at that'time, and consequently there was no waiver of a tender.
    Before Sedgwick, Oh. J., Freedman and Ingraham, JJ.

      Decided May 12, 1886.
    Appeal by defendant from judgment entered on decision of the court at special term.
    The facts sufficiently appear in the opinion.

      Hamilton Odell, attorney and of counsel for appellant,
    on the questions considered in the opinion, argued :—I. The rule which subjects a mortgagee, who refuses to accept payment of the mortgage debt when tendered, to loss of both interest and security, is a harsh and severe rule, and the party who invokes it should be required to show a tender ‘ ‘ legal ” in the strictest sense (Tuthill v. Morris, 81 N. Y. 99; Harris v, Jex, 66 Barb. 238; Chenango Bridge Co, v. Paige, 8 Hun, 296). The facts here utterly fail to show a lawful or proper tender. There was no actual offer and presentation of the money so that defendant could take it. This is necessary (Holmes v, Holmes, 12 Barb. 144 ; Strong v. Blake, 46 Barb. 227 ; Bakeman v. Pooler, 15 Wend. 637 ; Hoag v. Parr, 13 Hun, 100). Nor was it made to any person who represented defendant or who was authorized, actually or apparently, to accept it (2 Fisher on Mortgs. 790 ; Grussy v. Schneider, 50 How. 134 ; Hale v. Patton, 60 N. Y. 237). Cases are found where a tender made by one contracting party at the house of the other, to a member of his family, has been held sufficient (Smith v. Smith, 25 Wend. 405 ; S. C., 2 Hill, 351; Judd v. Ensign, 6 Barb. 258 ; Southworth v. Smith, 7 Cush. 391). But in each of these and other cases, the tender was necessary to save contract rights, and there was aJ plain attempt on the part of the absentee to avoid tender, and produce a forfeiture, and it was held that what was done was all that could be reasonably required of the party doing it to save his contract rights from forfeiture. A tender, to be valid, must be unconditional. The alleged tender, in this case, was, in effect, accompanied by a demand of a satisfaction-piece. This utterly avided it (Roosevelt v. Bull’s Head Bank, 45 Barb. 583 ; Howard v. Hayes, 47 Super. Ct. 102; Wood v. Hitchcock, 20 Wend. 47; Brooklyn Bank v. De Grauw, 23 Wend. 342 ; Wilder v. Seelye, 8 Barb. 408 ; Cashman v. Martin, 50 How. 337 ; Richardson v. Boston Laboratory, 9 Met. 42, 52).
    II. Many authorities lay down the general proposition that where one party to a contract is unable to perform at the appointed time, or gives notice that he will not perform or accept performance, the other party is excused from tendering performance on his part (Shaw v. Republic Life Ins. Co., 69 N. Y. 292; Hayner v. American P. L. I. Co., 69 Ib. 439; Hartley v. James, 50 Ib. 38; Blewett v. Baker, 58 Ib. 611; S. C., 36 Super. Ct. .320 ; Nelson v. Plimpton Co., 55 N. Y. 480 ; Cornwell v. Haight, 21 Ib. 462; Crary v. Smith, 2 Ib. 60; Gray v. Green, 9 Hun, 337; Anderson v. Sherwood, 56 Barb. 66 ; Crist v. Armour, 34 Ib. 378 ; Traver v. Halsted, 23 Wend. 66 ; Franchot v. Leach, 5 Cow. 506 ; Lawrence v. Millar, 86 N. Y. 132 ; Morange v. Morris, 3 Keyes, 51). It is believed that all the authorities which hold this doctrine have to do with cases of _ executory contracts. The law does not require the doing of an unnecessary thing. Tender of performance by a vendor is an unnecessary thing when the vendee gives notice that he will not perform on his part. Omission to offer performance under such circumstances, does not impair the vendor’s rights, nor does it discharge the vendee’s liability. Both are preserved. Here the reason of the rule stops, and the rule stops with it. No penalty is imposed upon the vendee, and no benefit or advantage is secured to the vendor, which is not stipulated in the contract. In other words, notice by a party to whom performance is due that he will not accept performance, if tendered, renders an offer to perform unnecessary, but does not operate to destroy or take away any right of property belonging to him, or relieve the other party from any contract obligation. To effect such results, there must be an actual tender, “ fairly made and deliberately and intentionally refused ” (81 N. Y. 99). The defendant’s letter does not amount to a notice that he would not receive payment of the mortgage, if tendered. Under the circumstances, it should be construed rather as expressing his unwillingness to waive a right given him, as he thought, by the bond, than as an absolute refusal to receive the money and discharge the mortgage.

      Donald McLean, attorney and of counsel for respondent,
    on the questions considered in the opinion, argued L The debt being payable, a tender on July 1, 1885, of the amount due, and a refusal to receive the same, removed the lien of the mortgage and entitled plaintiff to have it canceled of record (Jackson v. Craft, 18 Johns. 110 ; Edwards v. Farmers, &c., Co., 21 Wend. 467; Arnot v. Post, 6 Hill, 65 ; Kortright v. Cady, 21 N. Y. 343 ; Miner v. Beekman, 50 Ib. 337 ; Frost v. Yonkers Saving Bank, 70 Ib. 553 ; Tuthill v. Morris, 81 Ib. 99 ; Cass v. Higenbottom, 1 Cent. Rep. 315 ; S. C., 8 Civ. Pro. R. 329).
    II. Defendant waived tender by his letter of June 29 (Stone v. Sprague, 20 Barb. 509 ; Shaw v. Republic Life Insurance Co., 69 N. Y. 286 ; Petit v. Turner, 2 T. & C. 608 ; Selleck v. Tallman, 87 N. Y. 106 ; Blight v. Ashley, 1 Peters, 15 ; Meserole v. Archer, 3 Bosw. 376 ; 6 Abb. N. S. 224; Vaupell v. Woodward, 2 Sandf. Ch. 145). A tender of the money was not necessary. The offer and readiness to pay were sufficient, and by failing to respond to that offer the defendant dispensed with the necessity of a formal tender (Currie v. White, 45 N. Y. 830 ; Holmes v. Holmes, 12 Barb. 138 ; affi’d, 9 N. Y. 525 ; Selleck v. Tallman, 87 N. Y. 106).
    III. Plaintiff made a good tender. If no place is mentioned in the mortgage, the mortgage debt may be tendered at the dwelling of the mortgagee (1 Chan. Cas. 26 ; 6 Bacon, 450, Title “ Tender”). And it has been held, that no place of payment being mentioned, the mortgagor may give notice to the mortgagee that he will make payment at a particular place, and, unless objected to at the time, tender there -would be good (3 P. Wms. 378; Smith v. Smith, 25 Wend. 405). The defendant did not avoid the tender by .absenting himself at the appointed time and place (2 Greenl. on Ev. § 600; 2 Pars, on Contr. 640, note 7, and cases cited; Gilmore v. Holt, 4 Pick. 258; Southworth v. Smith, 7 Cush. 393).
   By the Court.

Ingraham, J.

This action was brought to compel defendant, on the receipt of $9,500, to deliver up to the plaintiff the bond and mortgage on premises owned by plaintiff, and that said mortgage be discharged and canceled of record.

The action cannot be held to be an action in equity to redeem, but is based upon a claim that the plaintiff tendered to the defendant the amount due on the bond and mortgage, and that by such tender the lien of the mortgage on the premises was discharged.

No offer is made to pay what the court would find due on the mortgage.

The court below found as facts that on the first of ' July, 1885, the plaintiff offered to pay the principal due on said mortgage, viz., the sum of $9,500, together with three dollars as a fee for the satisfaction-piece, and on the same day tendered the plaintiff the said sum of money, viz: $9,503 in legal-tender notes of the United States; that defendant refused to receive said money and refused to give a satisfaction-piece of said mortgage; and as conclusions of law, that prior to the first day of July, the defendant waived the right to or the necessity for tender by plaintiff, on that day, of the amount due on said mortgage ; that plaintiff made a lawful tender to defendant on the first day of July, 1885, of the whole amount due on said mortgage on that day; and that the lien of the said mortgage was extinguished on the first of July, 1885.

The only questions to be determined in this action are whether or not there was evidence to sustain the finding of fact that a tender was made, or the conclusion of law first above referred to.

As to the first question to be determined—whether or not the finding of the trial judge, that a tender was made on the-first day of - July, 1885, can be sustained—it appeared that about June 25, the attorney for the plaintiff informed defendant that he would pay the mortgage, prior to the 2d or 3d of July following, and on June 26, he wrote fixing a time and place at which the said mortgage would be paid, viz., at the attorney’s office on July 1 at 12 o’clock. On June 29, the attorney for plaintiff again wrote to the defendant referring to his previous letter, and stating that he forgot to ask him to bring the insurance policy with the bond and mortgage and satisfaction-piece, and asking whether the hour, day and place, named in the previous letter, for making payment, would suit his convenience.

The defendant did not answer the first letter. But to the second he sent an answer, dated June 29, the main portion of which is: “Your favor of to-day received. .... I find on looking at the bond, I am to have ninety days’ notice of the intention to pay off the mortgage. Having no immediate use for the money, shall expect the said notice to be given before the payment will be received and satisfaction given.” This letter was received by plaintiff’s attorney June 30.

The defendant did not appear on July 1, at the time and place named, and in the afternoon of that day the plaintiff’s attorney went to the" residence of the defendant and was told by the servant girl he was not in. The plaintiff’s attorney then stated : “I handed the bills ■—showed the bills to the servant with three dollars added for a satisfaction-piece.” It is not stated that the bills were tendered to the servant, or that the attorney offered to leave them with the servant, but on the contrary, it would appear that the tender of the three dollars for the satisfaction-piece was an implied demand for a satisfaction-piece before the money would be left. This, therefore, was not an unconditional tender of the money to the servant. On the same evening Mr. McLean, the plaintiff’s attorney, went to the defendant’s house, saw the defendant, and told him what had transpired at his former visit. The parties then had a dispute as to the right of the plaintiff to pay off the money without notice. No tender of the money was made at that time to Mr. Earle, and there was not an absolute refusal on the part of Mr. Earle to accept the money in payment of the mortgage. What was said was in relation to the transaction with the servant girl, which did not amount to a tender of the money, and the interview ended by Mr. Earle saying, that on Monday, July 6, he would see Mr. Young, another attorney who had acted for a person making a new loan on the property, to see if an arrangement could not be made. On July Y, this action was commenced.

It was said in Tuthill v. Morris (81 N. Y. 95): “In view of the serious consequences resulting from the refusal of such a tender, the proof should be very clear that it was fairly made and deliberately refused by the mortgagee, or some one duly authorized by him. At all events, it should appear that the same was absolutely and unconditionally tendered, and was sufficient to cover the whole amount due. The burden of that proof is on the party alleging the tender.”

The proof in this case falls short of establishing a tender within the rule above laid down. There was no unconditional offer of the money to any one. There was no tender of the money to the mortgagee. There was no time at which he had an opportunity to accept the money. The tender that was made to the servant was coupled with an implied condition that the mortgagee should execute a satisfaction-piece, and there was no opportunity for the servant to accept the money. Defendant was told that the money had been shown to the servant girl, but it was never shown or tendered to him. There is no evidence that the servant girl was authorized by him to receive the money, nor could it be held that a payment to her would have been a payment of the mortgage.

The proof of what took place on July 6 was insufficient to establish a tender on that day.

It appears that Mr. McLean went to the defendant’s house with the $9,500 and interest up to that day, and three dollars fee for a- satisfaction-piece; that he again showed the servant girl the money and told her to tell Mr. Earle that he desired to get the satisfaction-piece then, and leave the money with him. There was no absolute tender made, but McLean wanted to get the satisfaction-piece and then to leave the money, and in addition there is no evidence that defendant knew that McLean was there to make the tender at that time. At none of the interviews was the money absolutely and unconditionally tendered, nor did defendant at any time deliberately or unconditionally refuse to receive the money, and the finding of fact, therefore, that there was such a tender cannot be sustained.

The only remaining question in the case is whether or not the defendant waived the right to or the necessity for a tender. I have examined the testimony, and I am clearly of the opinion that on the facts as proved, the court was not justified in finding that there was any waiver.

As before stated, there never was an absolute and unconditional tender of the money to any one. The defendant claimed his right to a notice of ninety days before he was bound to receive the amount due on the mortgage, but at no time did he absolutely refuse to accept the money, and he never had an opportunity of taking it.

Before he can be said to have waived the tender, he must have placed himself in such a position as would make a tender to him an idle and unnecessary ceremony. I do not think he did so. His first letter to the plaintiff’s attorney simply said, “Have no immediate use for the money. Shall expect the said notice to be given before payment will be received and satisfaction given.” There was no absolute refusal to receive the money, but a refusal to give the satisfaction-piece without the notice, and in the conversation between McLean and Earle on the first of July, the proposition was made by Mr. McLean that Mr. Earle should see Mr. Toung, the attorney for the party making the new loan, and see if he could not remove the objection, and the matter was left in that form. There was nothing here to show that the defendant would have refused the money if unconditionally tendered to him at that time.

I am of the opinion, therefore, that the plaintiff’s proof failed to show either a tender or a waiver, and the judgment must be reversed and new trial ordered; costs to abide the event.

Sedgwick, Oh. J., and Freedman, J., concurred.


text:
    LEVI APGAR v. JOHN N. HAYWARD, et al.

      Assessed valuation for purposes of taxation, no power to increase after a certain time, except upon a prescribed notice—an increase otherwise made is void—Bank stock, this applies thereto— One from whom the amount of a tax fixed on a void increase of valuation has been collected under a warrant to a marshal suffers damages, and in an action therefor may recover the sum collected with interest—Remedy by certiorari not necessarily a bar — Chapter 761 of laws of 1866 does not repeal chapter 302 of laws of 1859.
    Under the consolidation act (chap. 410, Laws of 1882), and chapter 302 of the Laws of 1859, the deputy tax commissioners of the city of New York, cannot, after the first day of May succeeding the opening of the books of the assessed valuation of real and personal estate, for correction, increase the assessed value as shown by the books on that first day of May, except upon notice being given to the party to be affected by such increase, twenty days before said first day of May.
    There is nothing in chapter 761 of the Laws of 1866, which changes the law in this respect, and that chapter does repeal chapter 302 of the Laws of 1859.
    Any action of the deputy tax commissioners increasing the assessed valuation after such first day of May, without giving such notice, is unauthorized and void.
    This rule applies as well to bank stocks as to any other property.
    The fact that the commissioners had, for good reasons, reduced, pursuant to the provisions of law in that regard made, the assessed valuation of the real estate of the bank, will not authorize them to increase the assessed valuation of its stock after such first day of May, without giving the proper notice.
    The stockholders are not affected by the delay of the bank in making its application for a reduction of the assessed valuation of its real estate.
    Those from whom a city marshal, under a warrant issued to him, based on the assessment-roll made up and returned by such commissioners to the board of aldermen acting as supervisors, collects a tax upon an unauthorized and void increased valuation contained in such roll, suffer damages, which may be recovered in an action against the commissioners individually, where they do not become aware of the void act in time to review it by certiorari.
    In such an action, the amount collected by the marshal, with interest thereon, may be recovered as damages.
    Before Freedman and Ingraham, JJ.

      Decided May 12, 1886.
    Exceptions ordered to be heard at general term.
    The action was brought to recover damages sustained by reason of the collection by a marshal, under a warrant issued to him for the collection of the taxes of 1881, of certain taxes assessed against certain persons. The claims of the various parties were all assigned to the plaintiff. The total sum collected amounted to $2,365.93, and was collected on or prior to March 2, 1882.
    The court directed a verdict for plaintiff for $2,932.40. Numerous exceptions were taken on the trial which were ordered to be heard in the final instance at general term.
    The other facts sufficiently appear in the opinion.

      Nelson Smith, attorney and of counsel for plaintiff,
    on the questions considered in the opinion, argued: —After May 1, the defendants had no jurisdiction whatever to increase or in any manner tamper with the assessed valuation as it appeared in the annual record, except to grant applications for a decrease during May, under chapter 134, Laws of 1881, in cases where the application had been filed prior to May 1 (Clark v. Norton, 58 Barb. 434 ; S. C., 3 Lans. 484 ; affirmed 49 N. Y. 243 ; Westfall v. Preston, 49 N. Y. 352 ; Overton v. Foote, 65 Ib. 263 ; Mygatt v. Washburn, 15 Ib. 316; Overton v. Foote, 43 Ib. 290 ; People ex rel. Chamberlain v. Forrest, 96 Ib. 544).
    II. Any excess in the amount of an assessment beyond that stated in the annual record, would make the whole tax imposed upon it void (Huse v. Merriam, 2 Greenl. 375 ; Stone v. Bean, 15 Gray, 42; Libby v. Burnham, 15 Mass. 144 ; Cooley on Taxation, 295).

      III. Trespass is the appropriate remedy to recover for an injury occasioned by an illegal tax, and the assessor or other officer who exceeded his authority, is liable (Huse v. Merriam, 2 Greenl. 375 ; Westfall v. Preston, 49 N. Y. 349 ; Agry v. Young,. 11 Mass. 220 ; Ware v. Percival, 61 Me. 391;. Inglee v. Bosworth, 5 Pick. 498 ; Mygatt v. Washburn, 15 N. Y. 316).
    IV. Chapter 269 of the Laws of 1880, does not affect this case, because (a.) That is an act relating to procedure upon certiorari for the review and correction of assessments. The courts possessed such power prior to this act, but in a more limited degree. (6.) It does not affect the powers of assessors or of the commissioners of taxes and assessments in this city, nor change the statutes for the imposing of taxes, (c.) It does not undertake to validate an illegal assessment roll or tax, or correct it, nor, unless invoked, to confer authority upon any court to do) so. (d.) The power given by that act cannot be exercised, except pursuant to its provisions, nor can it be exercised after a right of action in favor of any person injured in consequence of an illegal assessment has accrued, nor after the tax upon an illegal assessment has been imposed.
    V. Before a tax upon an illegal assessment has been imposed, the court, even where the assessors have acted without jurisdiction in increasing the assessment, may correct it by reducing it to the proper amount, on the application of the person affected by it (People ex rel. Chamberlain v. Forrest, 96 N. Y. 544).
    VI. Here, neither the plaintiff nor any of his assignors had any notice that this assessment had been illegally increased, and hence could not have invoked the act of 1880. The proceedings of the defendants depriving the plaintiff of an opportunity of being heard against the assessment, make the assessment void, and render them hable as trespassers (Cooley on Taxation, 266, 267).

      E. Henry Lacombe, counsel for the corporation, and Arthur H. Mastín, of counsel for defendants,
    argued :—

      I. The plaintiff was assessed on the value of his shares, in conformity with the special provisions of law regulating the subject, found in chapter 761 of the Laws of 1866 (McMahon v. Palmer, 11 Daly, 214; Foster v. Van Wyck, 2 Abb. App. Dec. 167).
    II. The increase in the assessed valuation of the shares was the necessary result of a compliance with the foregoing provisions of the act of 1866.
    III. The provisions of the act of 1866 were controlling, and the assessment was therefore legal, notwithstanding it resulted in an apparent violation of the provisions of an earlier statute. The statute of 1859 (chapter 302), it will be seen, was broad in its scope, covering the entire subject of assessment and levying of taxes in the county of New York. It prescribed the manner in which assessments should be made on all property, both real and personal, and provided methods for the correction and review of such assessments if deemed erroneous. The act of 1860 related to personal property alone, and to a single variety of that class of property, its object being to provide more specific directions for the assessment of that particular variety than were afforded by the general laws then in existence. The act of 1866, therefore, being the latest expression of legislative will, and covering a particular branch of a general subject in greater detail than former statutes, must under well settled rules be considered as controlling (Excelsior Petroleum Co. v. Lacey, 63 N. Y. 422; Heckmann v. Pinkney, 81 Ib. 211 ; People, &c. v. Gold & Stock Telegraph Co., 98 Ib. 67; People v. Commissioners of Taxes, 95 Ib. 554; People v. Asten, 100 Ib. 597). It may well be urged, therefore, that under this rule any provision in the act of 1859 which conflicts with the act of 1866, or prevents its full application, must be deemed to be abrogated, so far as the particular subject covered by the act of 1866 is concerned. If there is no necessary inconsistency in the two acts, they will be so construed that both will stand, as far as possible, for the law does not favor repeals by implication (Chamberlain
      v. Chamberlain, 43 N. Y. 424; McCartee v. Orphan Asylum Society, 9 Cow. 437 ; People ex rel. Van Nest v. Tax Commissioners, 80 N. Y. 573). There is nothing in the act of 1866 which is necessarily repugnant to the provisions of the act of 1859. It is possible for the assessed value of the real estate of the bank, which by the latter act is to be deducted in assessing the holders of bank shares, to be definitely ascertained and fixed without any conflict with the act of 1859. If the statutes be considered as forming parts of one act, the provisions of both will stand—the act of 1859 being so interpreted as to keep in force in ordinary cases the prohibition against increase of valuations after a given date, but to exclude from its operation the valuation of bank shares in all cases where the bank shall have so delayed making application for the reduction of its real estate, that action upon it would cause a violation of the prohibition (People ex rel. Twenty-third Street R. R. Co. v. Commissioners of Taxes, 95 N. Y. 554). By a fundamental rule of construction statutes are to be so construed as to carry into effect the intent of the legislature. In the present case, such intent is only to be carried out by holding the act of 1866 to be controlling. If, however, section 11 of act of 1859 were given the force which the plaintiff claims for it, the result would be to permit the collection of taxes on the bank’s real estate on a valuation of only $56,000, while providing for a deduction from each shareholder’s taxable property of his proportionate share of that real estate on a valuation of $96,000, thus leaving property to the amount of $40,000 practically exempt from taxation. Such a result would also defeat the evident purpose of the act of 1866, which was to provide a £1 system of taxation of the stockholders of banks, by which they should be assessed for their shares in the same method and bear the same burdens as are assessed upon other property, and thus be compelled to pay their fair and just proportion of taxes to be levied.” (People, &c. ex rel. Tradesmen’s National Bank v. Commissioners Taxes, 69 N. Y. 91).

      IV. It does not appear that any right of the plaintiff has been infringed, or that he has suffered any damage by the action of the defendants. The nature of the case is such, that even if the desired notice had been given, and the plaintiff had been heard, it could have made no difference in the amount of his assessment. The want of notice is therefore immaterial. Removals, under such circumstances, are accordingly sustained, though it appears that no notice was ever given to the clerks of their proposed removal, as required by the statute (Phillips v. Mayor, 88 N. Y. 245 ; Langdon v. Mayor, 92 Ib. 427). It does not appear that the person who seeks to enforce the prohibition is a “party affected” by the increased valuation. The plaintiff could not have shown the commissioners, even if he had appeared before them, that the ultimate result of their action was to affept him injuriously. The fact was apparent, that while the sum of $40,000 was added to the value of the shares, an equal sum was deducted from the value of the real estate. The bank would thus be enabled to save the taxes on $40,000, and the amount of this saving, inuring pro rata to the benefit of the shareholders, would offset to each of them the amount by which the assessment of his shares had been increased.
    V. Even assuming that damages did result from the action complained of, the plaintiff cannot recover, because such action was made necessary by the delay of the bank in presenting its application for reduction. The statute thus constitutes the bank corporation the agent of the shareholder, so far as concerns the question of determining the amounts of this particular element of the value of his shares. The deliberate postponement by the bank of the presentation of its petition until the last day allowed for the purpose, made it impossible for the defendants to act upon it, as it was their duty to do under the statute on a proper state of facts, without, at the same time, committing the act upon which this suit is based. Under such circumstances the maxim volenti non

      fit injuria will apply, and the party who, by his own act, permitted or promoted the action of which he complains will be deemed to have waived his right to recover (Hilton v. Fonda, 86 N. Y. 340).
    VI. The plaintiff having failed to avail himself of any of the methods provided by law for reviewing illegal, excessive or erroneous taxation, it would be contrary to the policy of the law to permit him to recover in this action. “The assessed stockholders in this case had ample opportunity to make their application to the tribunal provided by statute, and on showing the true value of the stock or any other good reason, to have had the assessments reduced accordingly. Their failure to do this is conclusive against them and against all parties. The proceedings for that purpose, so far as this city is concerned, are controlled by statute (see Consolidation Act, §§ 817, 822 ; Laws of 1859, chap. 302; Laws of 1880, chap. 269 ; Laws of 1867, chap. 410, § 4 ; Laws of 1870, chap. 382, § 2). Where a person taxed has failed to avail himself of these opportunities he cannot subsequently ask to have his taxes reduced ” (People v. Wall St. Bank, Gen. Term, 1st Dept., March, 1886 ; Smyth v. International Ins. Co., 35 How. Pr. 126; McMahon, Receiver, v. Fowler Bros., 66 Ib. 190 ; McMahon, Receiver, v. Jones & Fairchild, 1 Ib. [N. S.] 271; Ontario Bank v. Bunnell, 10 Wend. 186 ; Boyd v. Gray, 34 How. Pr. 323 ; Genesee Valley v. Supervisors, 53 Barb. 223 ; Bank of Commonwealth v. Mayor, 43 N. Y. 184 ; People ex rel. Condert v. Tax Commissioners, 31 Hun, 235 ; Manley v. Mayor, Gen. Term, 1st Dept., March, 1886 ; People ex rel. Mut. Union Telegraph Co. v. Commissioners Taxes, 99 N. Y. 254).
   By the Court.

Ingraham, J.

Section 814 of the Consolidation Act (chapter 410, Laws 1882), provides for the assessment of the taxable property in the city of Hew York. The deputy tax commissioners are directed to commence to assess real and personal property on the first Monday of September, and to report to the commissioners the sum for which all taxable property under ordinary circumstances will sell.

Section 817 provides that the tax commissioners shall keep in their office books to be called “The annual record of the assessed valuation of real and personal estate,” in which shall be entered in detail, the assessed valuation of such property in the city of New York, and such books shall be opened for correction from the second Monday of January to the first day of May, in each year, but on said last-mentioned day the same shall be closed to enable the commissioners to prepare assessment rolls.

Section-819 provides that the commissioners may at any time before the second day of April in each year, increase, or may diminish at any time before the closing of the books of annual record on the first day of May in each year, the assessed valuation of any real or personal estate in said city, as in their judgment may be necessary for the equalization of taxation, but they shall not increase such valuation after such books are opened for correction and review, except on notice being given to the party affected by such increase twenty days before the closing of said books.

Acting under the authority conferred by the laws embodied in these sections, prior to the second Monday of January, 1881, the defendants as commissioners of taxes in the city of New York, caused eight hundred and eighty-four shares of the capital stock of The North Biver Bank, owned by plaintiff, to be valued at $20,332, and which assessed valuation was entered by the defendants in the book kept in their office as directed in § 817 before referred to, and such valuation remained unchanged until after May 1, 1881.

No notice was given to plaintiff or to the owners of the other stock that the value of such stock would be increased at any time before May 1. About the middle of May, 1881, without notice to plaintiff, defendant caused the value of the stock to be increased from twenty-three dollars per share to twenty-eight dollars per share, which would increase the assessed valuation of plaintiff’s stock from $20,332, to $24,752, and of the other stockholders in the same proportion.

That the sections above cited apply to the stock of banks as well as to other personal property cannot be disputed. No statute is cited that makes any other provision for the time at which the value of the capital stock of banks shall be assessed, or that thé provisions above cited shall not apply to them. The value of the shares of stock having been assessed and entered in the book to be kept by defendants, their valuation could only be changed in accordance with the provisions of the sections above cited, and the change in the valuation, in violation of the express prohibition contained in the sections, was unauthorized and void.

No authority for the change can be found in section 1 of chapter 761, Laws of 1866. That act provided a method by which the value of the shares of stock of banks can be ascertained. Nothing is said about the time at which the valuation is to be made.

The value of ' the shares of stock mentioned was assessed by deducting the proper proportion of the assessed valuation of the. real estate of the bank at the time the assessment was made, and on that assessment being made, the provisions of the act in relation to the change of the values of real and personal property apply.

The fact that the commissioners subsequently reduced the valuation of the real estate of the bank could not give the commissioners the right to increase plaintiff’s assessed valuation without the notice to him which the law requires. The fact that for any reason the assessed valuation of the real estate of the bank was so changed, would authorize the commissioners to increase the assessed value of the shares on giving the proper notice and complying with the law, but would not authorize them to do what the law expressly prohibits them from doing.

As the act of 1859 has been re-enacted in the Consolidation Act, it cannot be said to be repealed by the act of 1866. They are not, however, inconsistent, but by this construction may apply and furnish an entirely consistent system, by which the value of the shares of stock of banks can be ascertained, and the valuation thereof proportionately corrected.

It cannot be said that plaintiff was not injured by the increase, because on the second day of April the value of the plaintiff’s property became fixed and he could not be compelled to pay taxes on any increased value. The unlawful act of the commissioners did compel him to pay a tax on such increased value.

The claim of the bank for a reduction of its real estate was made within the time allowed by law. We are of the opinion, therefore, that the acts of the defendants as tax commissioners in increasing the valuation of the shares of stock of the North River Bank was illegal and void.

In National Bank v. City of Elmira (53 N. Y. 49), the court say : “ They (the assessors) were subordinate officers possessing no authority except such as is conferred by statute, and it is a well settled and salutary rule that such officers must see that they act within the authority committed to them, and where the right to act depends upon the existence of some fact which they erroneously determine to exist, their acts are void.

The right of the commissioners to act depended upon the existence of the fact that notice had been given to the owners of the property. Such notice not having been given, they had no jurisdiction to act, and the act was void.

Nor do I think a party can have his property taken from him by the act of a public officer which is without authority and void, and then have his action to recover his property so taken defeated by reason of the fact that if such person had known of the void act in time, he could have reviewed the act of the officer by certiorari. It was said by the court in National Bank v. City of Elmira (supra): “ The property of the plaintiff has been forcibly taken from it in violation of law, and it would be discreditable to the proper administration of justice not to give an effectual remedy.” It does not appear that the plaintiff or the other stockholders knew of the illegal acts of the commissioners until after the time in which they could have reviewed such act by certiorari had expired (See Westfall v. Preston, 49 N. Y. 349).

We are of the opinion that on the facts as proved, plaintiff was entitled to a verdict. No question is made as to the amount of the verdict, and the exceptions should therefore be overruled and judgment ordered for plaintiff on the verdict, with costs.

Freedman, X, concurred.


author: Sedgwick, Ch. J.

text:
    THE NATIONAL PARK BANK OF NEW YORK, Respondent, v. THE GERMAN AMERICAN MUTUAL WAREHOUSING & SECURITY CO., Impleaded, Appellant.

      Promissory note, discount procured by maker, liability of indorser. —Corporation, indorsement by, what necessary to hold it—Incidental power to borrow, when vested in corporation.—Restrictions on power of corporation, when violation of affects party dealing with it— Want of knowledge of directors and their belief, effect of— When corporation not affected by knowledge of a director.

    When the indorser of a promissory note authorizes the maker to take it and procure it to be discounted, the indorser is liable to him who discounts it in good faith.
    When an indorsement is on behalf of a corporation, unless it is in a form authorized by the corporation itself, or in a form that the conduct of the company has justified the belief that it was authorized by the corporation, the corporation will not be liable on the indorsement.
    When a corporation has in many instances of discounts by a party of paper made or indorsed by its president on its behalf in a certain manner, recognized that the president was its competent agent to sign its name in that manner, it is estopped from taking against a holder for value, the position that the president had not the power to sign the name of the company in that manner, in subsequently indorsing a note discounted by that party.

      When a part of the business of a corporation under its charter is to make advances on merchandise consigned to, or stored or on deposit with it, it has incidental power to borrow money for the purpose of making its advances.
    When a corporation gives to its president general power to transact its business, his acts done within the scope of the general powers of the corporation, although against certain restrictions in its charter and bylaws on. its powers and that of its president, will be binding on it in favor of one dealing in its securities without notice that such restrictions have been violated.
    The fact that the directors of a corporation do not know, and have no reason to think that its president is carrying on its usual business, and believe that it had ceased doing its usual business, will not affect the right of a party who deals with its president in that usual business without notice of such cessation.
    A corporation discounting paper is not infected with the knowledge which the president of the corporation whose paper is discounted may have, by reason of such president being a director in the discounting corporation, when he takes no part in the discounting.
    In the case at bar, the business of the defendant, according to its charter, was in part to advance on merchandise consigned to, or stored or on deposit with it. It gave its president general power to transact its business. A certain firm made their promissory note to their own order payable at the National Park Bank (the plaintiff here) at four months for the payment of the sum therein specified ; the note contained the words “ having deposited with said bank as collateral security for the payment of this or any other liability, etc., the following property, viz : in the stores of the German American Mutual Warehousing and Security Company, one hundred and twenty hogsheads of tobacco, with power to sell on note not being paid.” The note after indorsement by the makers was indorsed by the president of defendant as follows : ‘‘ German American Mutual Warehousing and Security Company, Robert Squires, president.” The makers paid the president of defendant for the indorsement a commission of one per cent., which went into the funds of - the company. The makers presented the note to the plaintiff for discount. It was accompanied by the following document: “National Tobacco Inspection, German American Warehouse, etc. Received for inspection one hundred and twenty hogsheads of tobacco, marked, etc., which on payment of charges will be delivered to them. Berry & Bryan, Inspectors.’’ The bank discounted the note. The defendant had previous to this, in many instances of discount by the plaintiff recognized that its president was a competent agent to sign its name in this manner. The charter and by-laws of defendant contained restrictions on its power and that of its president ; hut notice of the restrictions was not brought home to plaintiff. The directors of defendant did not know, or have reason to think that its president was doing any business of this kind for it, but plaintiff had no notice of any cessation of defendant’s usual business. Defendant’s president was one of plaintiffs directors, but he took no part in the discounting of the note. The security of the tobacco was insufficient at the maturity of the note, but there was no proof that there was an apparent insufficiency at the time of the discount.
    Held, that the transaction was in substance a borrowing by defendant on the note indorsed by it the amount paid by plaintiff, and then advancing the money so borrowed to the makers, upon the tobacco, taking the tobacco for the plaintiff's and its own security, and so came within the general power of defendant and its president; that plaintiff was not affected either by any violation of restrictions on this general power, by the want of knowledge of defendant’s directors as to its president continuing the usual business of the company, or by the insufficiency of the security, or by any knowledge that defendant’s president may have had ; and that plaintiff was entitled to recover against defendant on its indorsement.
    Before Sedgwick, Oh. J., Freedman and Ingraham, JJ.

      Decided June 8, 1886.
    Appeal by defendant from judgment entered on report of referee.
    The facts sufficiently appear in the opinion.

      William H. Ingersoll, attorney, and of counsel, for appellant.

      Barlow & Wetmore, attorneys, and Francis Barlow, of counsel, for respondent.
   By the Court.

Sedgwick, Ch. J.

The action is against the makers and indorser of several promissory notes. It is necessary to consider the facts that concern only one of the notes. All of them are in like case. The indorser was an corporation called “The .German American Mutual Warehousing & Security Company.” The referee ordered judgment against the company, and it appeals.

At the time of the occurrence under examination, Robert Squires was the president of the Warehouse Company. Its charter (ch. 701, Laws 1872), empowered it to receive upon storage or deposit, all kinds of personal property, and to make advances upon such property, upon such terms “as maybe established by the directors of said company,” and for such rates of commission, as shall be agreed upon by and between “the parties to the respective transactions, or otherwise as may be determined and established'by said board of directors.”

By the by-laws, the president “had the general direction, superintendence and supervision of the affairs, and of the officers of the company.”

Another by-law was, “It shall be his duty to sign all bonds, deeds, checks, drafts, debentures, contracts, or other instruments in writing entered into by or on-behalf of the company, when the executive committee so direct or approve, or authorize the same to be done .... And generally he shall perform all the acts incidental to the office of president, and all and any acts, which the majority of the board may request by vote at any meeting.” There were six directors, and four of them formed the executive committee. During all the time under inquiry, the referee found that the directors left to the president the entire keeping and management of its books and papers, and the entire management and conduct of its .affairsand the referee found particularly that the directors turned over the whole conduct and management of the affairs of said company to its president, without restriction, restraint or supervision.

The firm -of Squires, Tayler & Company, the president of the defendant not .being a partner of the firm, made a promissory note to their own order, payable at the National Park Bank at four months, for the payment of $12,000. This note contained the following words: “ having deposited with said bank as collateral security for the payment of this or any other liability, etc., the following property, viz : In the stores of the German American Mutual Warehousing & Security Company, 120 hogsheads of tobacco, the market value of which is now $15,000, with power to sell on note not being paid.” This note, after indorsement by the maker, was indorsed by the president of the Warehouse Company as follows : “German American Mutual Warehousing & Security Company, Robert Squires, President.” The maker paid the president, as compensation for this indorsement, a commission of one per cent., which was placed by the president in the funds of the company.

The makers presented the note to the bank of the plaintiff for discount. The note was accompanied by a document, headed: “Rational Tobacco Inspection,

German American Warehouse, &c. Received for inspection 120 hogshead of tobacco, marked, &c., which on payment of charges will be delivered to bearer. Berry &, Bryan, Inspectors.”

The bank discounted the note. In this action the warehouse company denies its liability to respond to the indorsement, on the ground that the president had no authority from the company to make it, and that the indorsement was without consideration to the company, the plaintiff having presumptive or constructive notice of these things. It is not necessary to deny, that as the note was in the hands of the makers when it was discounted, the plaintiff took it subject to the risk that in fact the indorser had not authorized the indorsement to be negotiated, as it was in fact (Stall v. Catskill Bank, 15 Wend. 478 ; Fielden v. Lahens, 6 Abb. N. S. 347). The maker has no authority, because he is maker, to make representations for the indorser (Jackson v. Fassitt, 33 Barb. 645). It is another case, however, if the maker make representations upon which the note is discounted and which the indorser has authorized to be made. If the indorser authorize the maker to take the note after its indorsement, and to procure it to be discounted, and it is then discounted, the indorser is liable as if he had taken the note, had it discounted, and paid the amount he received over to the maker. '

In the present case, Mr. Robert Squire, assuming to act for the company of which he was the president, made the indorsement of the company’s name, handed the note to the maker and authorized him to do and represent all the maker did and represented, when the discount was' made afterwards. The questions of the case, therefore, are the same as if the president in person had procured the discount, acting as agent of the cofnpany.

To hold the company it would, of course, be necessary to show, apart from any representation of the individual who was president, that the indorsement was that of the company ; that is, that it was made in a form authorized by the company itself or in a form that the conduct of the company justified the plaintiff in believing was authorized by the company. There can be no doubt, on the testimony, that the company had recognized in many instances of discounts by the plaintiff of paper made or indorsed by the company, that the president was a competent agent to sign its name, in the manner presented in this case. This at least estopped the company from taking, against a holder for value, the position that the president had not the power to sign the name of the company in indorsing the note.

The testimony shows that the company had given to its president general power to manage its business. Its business, according to its charter, was in part to advance upon merchandise consigned to it, or stored or on deposit with it. To the bank, the transaction appeared to be in such a business, especially from the form of the collateral security given with the note. That appeared to represent that the tobacco was stored in the warehouse of the defendant. It was an incidental power of the company jto borrow money for the purpose of making its advances. The negotiation of the indorsement was a representation rby the general agent that it was made in the course of the company’s business, and the company was bound by that, especially when the transaction had the appearance that has been specified, and would have been bound by it if there had been, no such appearance if the contrary did not appear in the transaction.

It was argued that in the charter and by-laws of the company were certain restrictions of the power of the company, and of its president. The company, however, had a general power to incur indebtedness, and give evidences of that. In such case, it was held in Ellsworth v. St. L. A. & T. H. R. R. Co. (98 N. Y. 553), that a person dealing in its securities, may in the absence of notice to the contrary, assume that restrictions upon its power have not been violated.

It is not necessary to examine the facts upon an assumption that the company received no consideration for their indorsement. It was proved that the makers paid one per cent, for it. In truth, the transaction was the same in substance, as if the company had borrowed on the note indorsed by it the amount paid by the plaintiff, and then lent or handed the money to the makers, and taken for the plaintiff’s and its security, the tobacco represented by the warehouse certificate. The only way in which the company could have been injured was in a possible insufficiency in the security. It was proved in the case that at the maturity of the note, there was such an insufficiency, but there was no proof that at the making of the discount there was then an apparent insufficiency. If it were otherwise, this would not prevent the plaintiffs recovering upon the indorsement.

It is further argued, that the directors of the company did not know or have reason to think that its president was doing any business for the company of this kind. It is nevertheless the fact, that the. company received and has retained the consideration upon which the indorsement was made. It may be true that when the storehouses of the company were rented, the directors believed that the company ceased to do any business, excepting to receive the rentals of the stores. Of this, the plaintiffs had no notice, and of right they might rely upon the implied representation of the general agent of the company, its president, that the company was doing its usual business.

It is further supposed that the plaintiff was infected with the knowledge of the president of the company, because he was a director of the plaintiff, On this point it is enough to say, that the company’s president took no part for the bank, in the discounting of any of the notes.

The testimony does not call for the reversal of any of the findings of fact made by the referee, and on those findings the judgment should be affirmed, with costs.

Freedman and Ingraham, JJ., concurred.