text:
    WILLIAM L. BOYD, Executor, etc., of CAROLINE C. DE LA MONTAGNIE, Appellant, v. JOHN DE LA MONTAGNIE, Respondent.

      Hmba/nd and wife — Contract between—when set aside because of false representations.

    A transfer of property, made by a wife to her husband because of representations that a debt, in reality due by the husband, could be enforced against and collected out of such property, when such was not the fact, will be set aside by a court of equity.
    An act done or contract made under a mistake, or in ignorance of a material fact, is avoidable and relievable in equity.
    Appeal from, a judgment in favor of defendant.
    The action was brought to set aside a transfer of a Sailor’s Snug Harbor lease of property in the city of New York, made by the plaintiff’s intestate to her husband, the defendant, as alleged and proved on the trial, because of misrepresentations made by defendant, as to the liability of the intestate for certain debts, and for the purpose of relieving this property from the payment thereof.

      Aug. P. Smith, for the appellant,
    insisted, that in transactions between husband and wife, a court of equity will throw the burden upon the person benefited, of showing perfect fairness and honesty. (Taylor on Ev., vol. 1., 6th ed., § 129 ; Grigby v. Cox, 1 Ves., Sr., 517; Hoghton v. Hoghton, 15 Beav., 278.) A fraudulent concealment is a sufficient ground for avoiding a conveyance. (Whelan v. Whelan, 3 Cow., 537, 576, 577; Summers v. Griffiths, 35 Beav., 27.) A misapprehension will work an avoidance. (Gee v. Spencer, 1 Vernon, 32; Young v. Peachy, 2 Atkyn, 255; 1 Story Eq. Jur., §§ 307, 308.) In case of gift, donee should be able to show that it was voluntary. (Cooke v. Lamotte, 15 Beav., 234, 239, 241.) That the conveyance was in fraud of creditors, would not be an answer to a claim by a wife upon her husband for a retransfer; the parties are not upon an equal footing. (Freelove v. Cole, 41 Barb., 318 ; affirmed, 41 N. Y., 619; Ford v. Harrington, 16 N. Y., 285 ; Osborne v. Williams, 18 Ves., 379).

      E. W. Stoughton, for the respondent.
   Daniels, J.:

This action was brought by Caroline De La Montagnie, the defendant’s wife, to annul the assignments, made of a leasehold estate by her to A. Oakey Hall, and from him to the defendant. She intermarried with the defendant in December, 1847, and the} lived together as husband and wife until the year 1860. Ho formal separation then, or afterward, took place, but it is plain, from the evidence, that the preceding ardor of his affection for his wife, after that time very sensibly declined, until the present action was commenced, in 1867. Since that time, their relations were hostile and unfriendly, up to the time of her decease, which occurred after the recovery of the judgment and talcing the appeal in this action. According to her letters, forming a portion of the case, she continued to regard the defendant with affection and esteem, up to the year 1866. On the 23d day of September, 1851, the assignments of the leasehold estate were executed, which it was the primary object of this action to annul and set aside.

After that time, the lease was renewed to the defendant, and he has received and enjoyed the rents and profits of the premises, ever since the assignments were made. They were each made for the nominal consideration of one dollar, and constituted a gift of the estate by the wife to her husband.

The learned judge, presiding at the trial, found that the gift proceeded from the love and affection which she entertained for her husband. But the statement that such was the consideration, either wholly or partially, the evidence showed, and the judge found, was omitted from the assignments by the express direction of the wife herself.

Before the assignments were made, the relations existing between aerself and her husband were very affectionate and confiding in their character, and there is nothing in the evidence from which it can be inferred that there was the least simulation, in that respect, on the part of the husband. It was claimed that the subsequent subsidence of his affection, warranted, and, indeed, required such an inference. But as that seems to have happened quite a number of years after the assignments of the estate, no such conclusion can properly be drawn from that circumstance. There is nothing in the case, involving the genuineness of his affection for her in doubt, at the time when the estate was assigned, or for several years after that time. Before the assignments of the leasehold estate, she made a will, devising that estate to her husband, and then designed he should receive it in that way. And both her own evidence, and that given by the defendant, as witnesses in the case, contain no indication that she intended he should become the recipient of the estate, in any other way, until near the time when the assignments were made. And if no change had been produced, through the agency of the defendant, in her intentions, there is no reason for supposing that hé would ever have received the title to the estate in any other way. For that reason, it is probable that their subse7 quent estrangement would have deprived him of the estate altogether, if his only chance of receiving it had been confined to the will of his wife. For, after such an event, she not only probably would, but actually did, change her will, so as to give what property she had the power to dispose of, an entirely different direction. It may therefore be safely and properly assumed, that if the husband had not received the estate as he did, that he probably would never have received it at all. For no other circumstance arose after the assignments were made, from which it can be inferred that she would have voluntarily parted with it, in his favor. And she seems to have been restrained by fear of the censure of her friends, from disposing of it in his favor, during the period of her life, without the existence of some cogent reason requiring that to be done. They had opposed her marriage, and, as the defendant was nearly twenty years younger than herself, they seem to have suspected that her property was the motive lead7 ing to it, upon the part of the defendant. And she seemed anxious to avoid what might confirm the propriety of that suspicion. It is highly probable, therefore, that the defendant never would have received the title to the estate, if that had not been acquired by means of the assignments. For that reason, the validity of his title’ must depend upon the circumstance, whether they can be equitably maintained against the claim which was made to the estate by his wife. The evidence showed, and the judge found the fact as proved, that in May, 1850, the defendant, while in the State of California, bought two shares in the steamer, called Gold Hunter, and paid the purchase-price, partly by money sent him by his wife, and partly by money supplied by himself. • The contract of purchase was taken in his own name, and for his own account, but the title, so far as it was taken, was transferred in the name of his wife. By August of that year, the adventure in which the steamer was engaged, proved to be a failure, and debts existed against the persons engaged in it, to a considerable amount. But the defendant’s wife was not liable for their payment, either directly, or by means of their being chargeable upon the property owned by her. The defendant, however, exhibited a letter to her, from his brother, who thought an attempt would be made to collect the debts from her, and containing the expression of apprehension upon that subject. And the defendant himself also expressed his opinion or apprehension to her, that she and her property were liable for the payment of those debts. These seem to have been her only sources of information upon the subject of the liability of herself and her property for the payment of those debts, and, from what was communicated to her in that manner, she believed that herself and her property were liable for the payment of such debts, and that if she assigned the lease to the defendant, it would be more secure in his hands than her own, and might at least delay the creditors; and she executed the assignment made by her, under that belief. That conviction seems to have changed her purpose as to the time of transferring the lease, and induced her to do so, by means of the assignments, instead of leaving her purpose, that her husband should ultimately have the lease, dependent upon the provision made by her will. These facts are sustained by the evidence, and in substance were found by the judge, before whom the trial was had. Besides that, in 1860, she asked the defendant for a reassignment of the lease, or to assign her the renewal of the term taken by him, and he promised to comply with the request, but stated that he would take his own time for it. This circumstance is not entirely consistent with the conclusion, that, by the transfer, it was designed that the defendant should become the absolute owner of the estate. For, if that had been the intention, he would have insisted upon his title, instead of promising the surrender, or return of it again to his wife. But it is not necessary in the disposition of the case, to determine which conclusion is the most probable. For, it very clearly appears that she was induced to part with the title to the estate, by means of the conviction produced in her mind by the representations made to her, that both herself and her property were liable for the debts contracted in the adventure of the “ Gold Hunter,” and that by making the assignments, she hoped to delay and embarrass the creditors, and perhaps save her property. This purpose was not expressed to the counsel who drew the assignments, and it was not necessary that it should be, as long as its existence, and the representations producing it, so clearly appear from the evidence of the parties themselves. And both have been found as facts by the judge. These representations were untrue, and they produced a false impression in the mind of the wife, inducing her to part with an estate, which she would have otherwise continued to own, until after all disposition to bestow it upon the defendant had ceased to exist; and that, under the well settled principles of equity, was sufficient to render the assignment invalid, both upon the ground o.f mistake, and fraud. The general rules upon that subject, are, that “ an act done, or contract made, under a mistake or ignorance of a material fact, is voidable and relievable in equity.” “ The fact may be unknown to both parties, or it may be known to one party and unknown to the other. In the latter case, it will sometimes afford a solid ground for relief as where it operates as a surprise or fraud, upon the other party. But in all such cases, the ground of relief is not the mistake or ignorance of material facts alone, but the unconseientious advantage taken of the party by the concealment of them.”

It was not found that the defendant knew the representations, made by him to his wife, to be untrue. But where such a relation exists, as did between these parties, that is not necessary to constitute a fraud, which courts of equity will relieve parties from the consequences of. For, in equity, fraud may be committed by “ acts, omissions and concealments, which involve a breach of legal or equitable duty, trust or confidence, justly reposed, which are injurious to another, or by which an undue and unconcientious advantage is taken of another.” Where the relations of attorney and client, guardian and ward, principal and agent, husband and wife, and other similar confidential cases, exist, “ the law, in order to prevent undue advantage, from the unlimited confidence, affection, or sense of duty, which the relation naturally creates, requires the utmost degree of good faith in all transactions between the parties. If there is any misrepresentation, or any concealment of a material fact, or any just suspicion of artifice, or undue influence, courts of equity will interpose, and pronounce the transaction void, and, as far as possible, restore the parties to their original rights.”

The facts proved and found, clearly bring the present case within these principles, and, from the confidential relations existing between the parties at the time, entitled the wife to be relieved from the consequences of the transfer made by her of her estate, although a leading motive inducing it, was improper and unlawful. She acted under the influence of the misrepresentations made to her by, and through the agency of, the defendant, as her husband. And as she then confided fully in his statements, it was perfectly natural that she should yield her property to what was then regarded as the only chance of its safety. The law will not permit him to profit by an apparent advantage secured in that way, because it regards her, under the circumstances shown, as acting under his controlling and governing influence. Under this presumption, a client has been relieved from the effect of his act, in transferring his property to his attorney, in order to avoid the claims of his creditors. And that was done, for the reason that the relation existing between the parties, required the application of the general equitable principles already mentioned, The present case is within the spirit of that authority. Instead of being denied relief, the facts proved required that judgment should be pronounced in favor of the wife. The statute of limitations was not applicable to the case, because of the coverture of the plaintiff, and the continued absence of the defendant from the State. No facts were found, and the evidence proved none, rendering that defense a proper one. The judgment should be reversed, and a new trial ordered, with costs to abide the event.

Davis, P. J., and Beady, J. concurred.

Judgment reversed, and a new trial ordered, with costs to abide the event.

       1 Story’s Equity, 9th ed., § 140.

       Id., § 147.

       Id., § 187.

       1 Story’s Eq. (9th. ed.), § 218; Sears v. Shafer, 2 Seld., 268, 272; Jaques v. Methodist Church, etc., 17 Johns., 548; Fry v. Fry, 7 Paige, 461.

       Ford v. Harrington, 16 N. Y., 285.


source: Caselaw Access Project

author: Daniels, J.: Beady, J.

license: Public Domain

text:
    THE CHATHAM NATIONAL BANK OF THE CITY OF NEW YORK, Respondent, v. THE MERCHANTS’ NATIONAL BANK OF WEST VIRGINIA, Appellant

      Act of 1789, sea. 13,1 U. S. Statutes at La/rge, page 79—residence of National Bank ■ within the meaning of— “Sintering of am appearance ” of defendant—what constitutes—Motion papers — defects in copies disregarded, when they do not exist in originals.

    A national bank, organized under the acts of congress, is a resident of the State in which it is located and does business, within the meaning of the act of 1789, authorizing the removal of causes into the United States courts.
    The plaintiff’s attorneys opposed a motion, made by the defendant, for the removal of this cause into the United States court, on account of certain defects in the copies of the papers served upon them. Held, that as the defects did not exist in the papers themselves, on which the application was made, that they were properly disregarded.
    On the 15th of December, 1873, a notice of the defendant’s appearance in this action was served upon the plaintiff’s attorneys. Held, that the mere notice of an appearance was not the entering of an appearance required by the act of congress, nor a sufficient compliance with Rule 7 of this court.
    The petition, filed by the defendant for the removal of the cause, contained the statement that it then entered its appearance and had not done so before; and the order requiring the plaintiff to show cause why the application should not be granted, recited the fact that the defendant, on the day of its date, had entered its appearance; held, that these statements sufficiently showed an entry of appearance, and that, even if they did not, procuring the order and making the motion, were equivalent to the entry of an appearance within the technical meaning of the term. (Brady, J., dissenting.)
    Appeal from' an order made at the Special Term, denying a motion made by the defendant to remove the cause into the Circuit Court of the United States. The facts are stated in the opinion.

      William H. Scott, for the appellant,
    cited Stevens v. Phœnix Ins. Co. (41 N. Y., 149); Barney v. Globe Bank (2 Am. L. Reg. [N. S.], 221; Field v. Blair (1 Code Rep. [N. S.], 292); Ex parte Isaacs (12 Wend., 193); Norton v. Hayes (4 Den., 245).

      B. F. Watson, for the respondent,
    cited Ayres v. Western R. R. Co. (32 How., 351) ; Bowen v. First Nat. Bank (34 How., 408); Manufac. Nat. Bank of Chicago v. Baack (40 How., 409).
   Daniels, J.:

The sworn petition of the defendant stated that the plaintiff was a corporation or banking association, created and existing under and by laws of the State of Hew York and of the United States, located and doing business at the city of Hew York, in the State of Hew York, and at the time of bringing the suit, was and is still a citizen of the State of Hew York. This was not denied on the part of the plaintiff, and should, for that reason, be accepted as the truth ; and, as such, it was sufficient to present a case within the act of congress, providing for the removal of causes into the Circuit Court of the United States, so far as the right depended upon that circumstance.

It is claimed, however, that the name by which the plaintiff has been incorporated, indicates it to be an association formed for banking purposes under the laws of the United States, providing for the creation and circulation of a national currency; and that circumstance, added to the fact stated in the petition, that it is a corporation or banking association, created and existing under the laws of the United States as well as of this State, sufficiently warrants that conclusion.

But that does not divest the defendant of the right to insist upon the removal of the cause into the Circuit Court of the United States, even though it may have been withheld, where each of the parties to the action is shown to be a foreign corporation. These associations have been held liable to the attachment laws of this State, although existing and transacting their business within its boundaries, because the remedy they provide for, includes such associations, on account of the circumstance of their creation under the laws of another government than that of the State, But that does not justify the conclusion, that they are foreign corporations within the ordinary signification of those terms. That certainly cannot properly be said to be their character; for, when they are organized and located within this State, they are as completely citizens of the State, within the signification of the act of congress, providing for the removal of causes into the.Circuit Court, as though they were incorporated exclusively under its laws.

The act of congress upon this subject, constitutes, under the Constitution of the United States, a portion of the laws of the State, paramount even to those enacted by its own Legislature. It exists through, and extends over, the State, as completely and entirely as any legislation can by possibility do; and it is a portion of the positive law, required to be observed and maintained by all its citizens and inhabitants. When an association for banking purposes is formed within the boundaries of the State, for the purpose of being located and transacting business within its limits, it necessarily becomes an inhabitant of the State. This is clearly implied by the provision of the act requiring the certificate, under which the association may be formed, to state the place where its operations of discount and deposit are to be carried on; designating not only the State, territory or district, but the particular county or city, town or village. Besides that, the names and residences of the shareholders are also required to he stated; and the general power is conferred upon it, of suing and being sued in any court of law and equity, as fully as natural persons; and its usual business is required to be transacted at an office, or banking-house, located in the place stated in its organization certificate, The association, when formed, has no other residence or domicil, than that designated, under the provisions of the act, in the certificate; and that substantially and effectually renders it a corporation of the State, within which it may be located, formed under that portion of its laws, which, under the Constitution, have been enacted for its inhabitants by the general government. As such, it is to be presumed, under the construction given to the act of congress providing for the removal of causes, to he created and formed by citizens of the State in which it may exist, and for that reason to he a citizen ®i the State within the meaning of that act. The act of congress, of July 27, 1868, does not deprive the defendant, although itself a hanking association, organized under the United States banking laws, of the right to insist upon the removal of the cause. That act provides for the removal of actions, brought against corporations, organized under a law of the United States, or any of their members, in a new class of cases, not within the other provisions of congressional legislation on this subject. And it permits that to be done when the defendant states in the petition that a defense exists, arising under or by virtue of the Constitution, or any treaty, or law of the United States. From this privilege, banking associations, organized under the laws of the United States, are excluded by an exception contained in the act. But the exception, by its terms, extends no farther than the subject-matter of the act-in which it is contained, and, consequently, can have no effect upon the provision made for the removal of causes in other cases by the preceding law. It simply left these associations unaffected by its provisions, and entitled to the privileges provided in this respect for suitors by other acts of congress; and among them, the right of removing the action into the Circuit Court of the United States, when the circumstances of the case appear to be such as are required to justify that proceeding. By the act under which the application was made in this case, the petition was required to be filed at the time of entering the defendant’s appearance in the action; and that, it was claimed, was not done. Other objections of a mere formal nature were relied upon by way of answer to the application. They were predicated upon defects in the copies of the papers served upon the plaintiff’s attorneys; but as they did not exist in the papers themselves on which the application was made, they were very properly disregarded upon the hearing. The more substantial objection was placed upon the circumstance, that a notice of the defendant’s appearance was served, in the action, on the 15th of December, 1873, while the petition itself was not presented until the seventh of the following January; and, for that reason, the court denied the application for the removal of the cause, holding that the appearance was entered, within the meaning of the terms used in the law, at the time when the notice itself was served.

But this was a mistaken view of the provision requiring the petition for the removal of the cause to be filed at the time of entering the defendant’s appearance; for the mere notice of appearance was not the entering of an appearance required by the act of congress. That, by Rule 7 of this court, is something more than the mere service of a notice. It contemplates an act to be performed on the filing of the notice with proof of its service. Upon that being done, the rule authorizes the defendant’s appearance to be entered as of the time when the notice itself was served.

The notice was simply a notice of the defendant’s appearance, without an entry of it, and was no more than the notice of retainer, which, under the preceding practice, the defendant was authorized to serve in the action, which was held insufficient to constitute the entry of appearance required by the act of congress, providing for the removal of causes into the United States Circuit Court, on the ground on which the right is claimed in this action,

No other act appeared to have been performed on the part of the defendant, before the filing of the petition, from which it could be claimed that an appearance of the defendant had been entered; while the petition contained the statement, that it then entered its appearance, and had not done so before. And the order requiring the plaintiff to show cause why the application should not be granted, recited the fact that the defendant, on the day of its date, had entered its appearance, and at the same time filed its petition for the removal of the cause, and offered the security required by the act, by a bond then filed. And, as there was no contradiction of this statement, it should be accepted as true, as long as the mere service of the notice was not the entry of an appearance. No appearance appeared, by the papers, to have been previously entered; and this statement, as well as the other to the same effect contained in the petition, sufficiently showed its entry at the time when the order was made, to constitute a performance of what the act of congress required to be done in that respect. But, if it did not, procuring the order and making the motion were equivalent to the entry of an appearance, within the technical meaning of those terms; for by such acts the defendant, of necessity, appears in court. They could not be performed without an appearance in court, as well as an appearance in the action. . This was substantially held in the case of Ayres v. Western Railroad Company ; where, obtaining an order extending the time to answer, was considered to be the entry of an appearance, and, for that reason, sufficient to justify the denial of a motion, afterward made for the removal of the cause. The provisions of the act of congress were complied with in all other particulars, and an order should therefore have been directed for the removal of the cause.

The order appealed from should be reversed, with costs, and an order entered, directing the removal of the cause into the Circuit Court of the United States.

Beady, J.

(dissenting):

The twelfth section of the judiciary act, which relates to the removal of causes from the State to the federal courts, provides, that if the defendant, among other things to be made apparent, shall, at the time of entering his appearance in such State court, file a petition, etc., it shall then be the duty of the State court to accept the surety, and proceed no further in the cause. The right of removal, however, is purely statutory, and when the defendant attempts to exercise it, he must show that he has complied with the law in its requirements. He must, at the time of entering his appearance, which is the first step, file his petition; and the question which is suggested m limine, on this appeal, is, whether the defendants’ appearance was entered in this action, in the manner provided by the rules and practice of this court. It is not pretended that anything more was done on that subject, than the service of a notice of retainer on behalf of the defendants, and the presentation of the petition, containing a statement that the petitioners do now enter their appearance in this action, but have not done so before. The notice of retainer, however, was not claimed by the defendants to be an appearance. The defendants aver their appearance when the petition was signed or presented, and not before. It is not pretended, either that any rule was entered by the defendant on the subject, either on their own behalf, or by the plaintiffs’ attorney, under Rule 14 of this court. The appearance of the defendants was not entered, therefore, when the petition was presented. In Bristol v. Chapman, the defendant went into court at Special Term, and caused his appearance to be entered in the minutes of the court. The appearance was held to be irregular. The court said, Morgan, J., delivering the opinion: The rules of this court have prescribed the manner in which the defendants may appear, and what shall be deemed an appearance. This is by service of notice of retainer, on filing which, the defendant may, doubtless, enter his appearance in the clerk’s office, and at the same time file his petition.” In Norton v. Hayes, it was held that notice of retainer was not entering his appearance, within the terms or meaning of the act of congress, but that entering an appearance with the clerk, at the time of filing the petition, was a compliance; and Beardsley, J., said: “ These being done at one and the same time, the application for the removal was made in due season.” The case of Redmond v. Russell (supra), was cited by -him to sustain the proposition just stated. In the latter case, Spencer, J., said: This is not a case in which the comity of the court is to be exercised; if this defendant is not strictly entitled to have his cause removed, we are bound to maintain our jurisdiction. The plaintiff has as strong a claim to have his cause retained here, as the defendant-can have to remove it. The whole question turns upon the point, when did the defendant enter his appearance?” The court declared that the entering an appearance, and filing the petition, are to be simultaneous acts. In Durand v. Collins, it was held that the execution of an undertaking upon arrest, was not, in theory or in fact, an act done in court. That the party’s appearing by - the filing of special or common bail, which prevailed prior to the Code, had no application to proceedings under the Code, and that no appearance was formally or actually entered in the action, until the defendant entered his appearance with the clerk of the court, which he had done at the time he filed his petition to remove the cause. In Cooley v. Lawrence, the question, what is an appearance in a State court, is considered somewhat elaborately, and it is said that what is held in such court to be a submission to its authority in the cause, whether coerced or voluntary, must be deemed an appearance ; and further, when such submission has once been made, it cannot be retracted. The appearance of the defendant in that case, was declared perfected by his submission to the court of a material question upon affidavits and argument, namely, the continuance of an injunction against him. The result of these considerations, is, that in order to enable a defendant to remove his case from this court to the federal court, he must enter his appearance according to the rules and practice of the court, and, at the same time file, or at least present, his petition. The defendants, not having entered such an appearance, were not regular in their proceeding to remove the cause; and the motion in the court below was properly decided. If the defendants claimed that the service of a notice of retainer was an appearance within the act of congress, under the practice which prevails in this court, then their application was too late, as it was not made until several days after such notice was served. They make no such claim ; they insist, on the contrary, as already suggested, that it was not an appearance, and rely, therefore, on the incident of the proceeding to remove, indicated by the statement, they now enter their appearance,” contained in their petition. The petition was not, nor was- anything contained in it, an appearance such as contemplated, nor did it amount to an appearance. It was of no greater significance than the service of a notice of retainer, which, for the general purposes of an action, is, under our Code, a sufficient appearance ; or of the execution of an undertaking, which, as we have seen, is not an appearance. It was not entermg an appearance, either in theory or in fact, and was in form a proceeding unknown, and, by analogy to the case of Bristol v. Chapman, irregular. It follows, therefore, that the defendants’ proceedings were premature, and the order made at special term should be affirmed.

Davis, P. J., concurred with Daniels, J.

Order reversed, with costs, and order entered removing the cause into the Circuit Court.

       Ayres v. Western Railroad Co., 48 Barb., 132.

       Bowen v. First National Bank of Medina, 34 How., 408.

       13 U. S. Statutes at Large, 101, § 6, sub. 2.

       Id., § 6, sub. 3; also, § 8.

       Louisville, etc., Railroad Co. v. Letson, 2 How. (U. S.), 497; Stevens v. Phœnix Ins. Co., 41 N. Y., 149, and cases referred to in the opinion.

       15 U. S. Statutes at Large, 226, 227.

       1 U. S. Statutes at Large, 79, § 12.

       Norton v. Hayes, 4 Denio, 245.

         Porter v. Bronson, 29 How., 292.

       This is Rule 14 of the rules adopted Dec. 20, 1870.—[Rep.

       48 Barb., 132.

       See, also, Cooley v. Lawrence, 12 How. P. R., 176.

       Redmond v. Russell, 12 Johns. Rep., 153 ; Norton v. Hayes, 4 Denio, 245 ; Bristol v. Chapman, 34 How. Pr. Rep., 141; Field v. Blair, 1 Code R. (N. S.), 292. Durand v. Hollins, 3 Duer, 686 ; Cooley v. Lawrence, 5 Duer, 605. See also 8 Abbott Pr. Rep., 305, note.

        Supra.


author: Brady, J.:

text:
    JOHN G. C. TADDIKEN, Respondent, v. MARY A. CANTRELL, Appellant. MARY McVEY, Respondent, v. MARY A. CANTRELL, Appellant.

      Attachment—granted at time of issuing the summons —Effect of (mission to procure order for publication of summons or personal s&roiee thereof within thwty days.

    Where an attachment was granted against the property of the defendant, as a non-resident, at the time of issuing the summons, and no order of publication was obtained within thirty days thereafter, and the defendant was not personally served with the summons during said period, held, that the attachment was thereby invalidated, and should be set aside.

      Waffle v. Goble (53 Barb., 517) followed.
    Appeals from orders of the Special Term, denying motions to set aside attachments issued in these cases, and continuing the same in force.
    The facts in each of these cases are the same. In each of them, an attachment was granted on the ground that the defendant was a non-resident of this State. The moving papers were, in each case, the summons, bearing date June 2d, 1874, an affidavit of the same date, and the usual undertaking. The attachments were granted on the thirteenth of January. The summonses and attachments were placed in the sheriff’s hands on the twenty-seventh. No personal service of the summons was made. On the twenty-sixth of February, an order directing the publication of the summons was obtained. The defendant moved to set aside the attachments under an order to show cause. On the seventh of March, these motions were heard, and orders granted setting aside the attachments. On the twenty-fifth of March, the plaintiffs procured orders to show cause why the motions should not be reheard; and on April first, orders were made vacating and setting aside the orders of March seventh, and restoring the attachments. From these orders the defendant appealed.

      Beardslee & Cole, for the appellant.

      William G. MoCrea, for the respondents.
   Brady, J.:

The order of publication, in this case, was not obtained within thirty days after the attachment was granted, and no personal service during that period was made upon the defendant. The effect of that omission was to invalidate the attachment, and it should have been discharged on motion. The point has been decided. In the case of Kerr v. Mount, it was determined that, in order to warrant the granting of an attachment, an action must be depending ; and that the issuing of a summons against a non-resident defendant, was not, within the statute, the commencement of an action. The Code, section 227, was subsequently amended, and it was declared that, for the purposes of the section, an action should be deemed commenced when the summons was issued, “ provided, however, that personal service of such summons shall be made, or publication thereof commenced within thirty days.” It was upon due consideration of the effect of this amendment, that Waffle v. Goble, was decided. The process of attachment issues upon the presumption that the defendant has property, which may be seized to secure the payment of the debt alleged to be due. It is in its nature a proceeding in rem. It is also to be presumed, when it is applied for, that the property of the defendant is then within reach of the process of the court whose aid is invoked, and that it will be given out to the proper officer for execution. It often happens that perishable property is seized, and that merchandise is taken, which, though not perishable, is of such a character as to require immediate care to prevent its destruction. It also happens that property is seized, which is injured by removal, and storage in places, sometimes not well adapted to its character. It was in view of these things, of the harsh nature of the proceeding, and of the justice of at once setting in motion the means to be employed of advising the defendant of the seizure of his property, and of preventing the plaintiff from holding the process until such time as he might think proper to place it in the hands of the sheriff, that the legislature imposed upon the plaintiff the duty of effecting personal service, or commencing publication, within thirty days; and if it had been limited to ten days, it would perhaps have been a better provision. If the proposition be that the plaintiff, after obtaining the attachment, may retain it and issue it when he chooses to do so, then he may keep it for an indefinite period, and, it might be, issue it when the defendant, by a change of domicil, had become a resident of this State. Such a course, however, is not within either the letter or the spirit of the statute. The action is commenced when the summons is issued, and upon it the attachment rests; provided, however, that within thirty days from the day of granting the attachment, the defendant is personally served with the summons, or its publication is commenced. This is within the letter and the spirit of the statute, and the provision was designed to prevent the abuse of the writ, and the injustice which delays might occasion when it was granted.

The orders made at Special Term should be reversed.

Davis, P. J., and Daniels, J., concurred.

Orders reversed.

       Waffle v. Goble, 53 Barb. Rep., 517.

       28 N. Y. Rep., 659.

         Supra.


text:
    ISAAC N. DEVOE, Respondent, v. DAVID R. NUTTER, Appellant.

      Referee's report—motion to set aside.

    Two actions were pending between the same parties, one in the Court of Common Pleas, and the other, the present action, in this court, both of which were referred to the same referee. An order was made by the referee that the issues in the action in the Common Pleas should be tried first, and that if they were decided against the defendant, that then an accounting should be had to determine the amount due.
    The actions were tried before the referee who, subsequently filed his report, and directed that judgment be entered for the plaintiff in the action in this court. The defendant applied to have the report set aside, claiming that he had been misled, that he understood the order to apply to both actions, and that he had therefore failed to introduce proof as he had intended to do at the proper time, to reduce the amount of plaintiff’s demand. The motion was denied. Upon appeal to the General Term, held, that its denial was error. That as it appeared that defendant had been misled, that an order should be entered vacating the report so far as it related to the amount of the recovery, and directing the referee to proceed to try and determine the question as to the amount plaintiff is entitled to recover.
    Appeal from an order made at the Special Term, denying a motion made by the defendant, to set aside the report of a referee.

      Mudgett & Nutter, for the appellant.

      W. L. Flagg, for the respondent.
   Opinion by Davis, P. J.

Beady and Daniels, JJ., concurred.

Order reversed.


text:
    GIBBONS L. KELTY and others, Respondents, v. SARAH A. LONG, Appellant.

      Married woman—Separate estate of—when debt is contracted for benefit of—Corroplaint, in action against.

    Under the statutes of this State a complaint against a married woman need only contain those averments which are requisite in an action at law, and if the defense of coverture be interposed by answer, it may be controverted, or avoided by evidence, under § 168 of the Oode, without alleging the facts proposed to be proven for that purpose in the pleading.
    The defendant purchased of the plaintiffs certain articles which were used in furnishing a house in the city of New York, of which she was the owner. She claimed that she acted as agent of her husband in making the purchase, but the referee found that the sale was made to her upon the faith of her representations that she owned the house and was herself buying the furniture to furnish it. Held, that the debt was contracted for the benefit of her separate estate, and that she was liable therefor.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee..

      Orlando L. Stewart, for the appellant.

      Wm. Henry Arnoux, for the respondent.
   Opinion by Daniels, J.

Davis, P. J., and Brady, J., concurred.

Judgment affirmed.


text:
    JOHN WOOD, Appellant, v. HANNAH E. LOCKWOOD, Impleaded, etc., Respondent.

      Mortgage to secure debts of third party— liability under.

    Where a married woman executed a mortgage on her property as security for goods to be sold by A. to her husband, and A., being the member of a firm, directs that firm to send goods to the husband, and becomes himseif liable to the firm for the payment therefor; held, that, notwithstanding the goods were consigned by the firm, the transaction was one within the terms of the mortgage, and that the property was liable for the value of the goods so furnished.

      Appeal from a judgment entered on the report of a referee, in an action for foreclosure.

      W. Id. Scott, for the appellant.

      Moses Ely, for the respondent.
   Opinion by Daniels, J.

Davis, P. J., and Bbady, J., concurred.

Judgment reversed, and new trial ordered, with costs to abide the event.


text:
    EDWARD H. LUDLOW and others, Respondents, v. NATHANIEL DOLE, Appellant.

      Quantum meruit.

    Action by plaintiffs to recover commissions for services rendered in selling certain real estate for defendant. The complaint was in form upon a quantum meruit, the allegation being that the sum named the plaintiffs reasonably deserved for their services. The court instructed the jury that they could not find a verdict for less than the full amount claimed, io which instruction the defendant excepted. Held, that as the evidence showed that a price was agreed upon, and there was no other evidence on the subject of what the services were worth, the instruction was proper. The specific price for the services became the qua/ntv/m, •meruit.

    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury.

      W. W. Niles, for the appellant.
    «7. H. & B. F. Watson, for the respondents.

       King v. Brown, 2 Hill, 485 ; Nones v. Homer, 2 Hilton, 116; Fells v. Vestvali, 2 Keyes, 152.

   Opinion by Bbady, J.

Davis, P. J., and Daniels, J., concurred.

Judgment affirmed.


text:
    ANNA MARIA RAPP, Respondent, v. WILLIAM WILLIAMS, Appellant.

      Injunction—Summary proceedings.

    The court will not grant an injunction preventing a landlord from instituting summary proceedings against his tenant, on the ground that the landlord has extended the tenant’s lease. The question of the extension of the lease is one that can be properly determined in the summary proceedings.
    Appeal from an order of Special Term, continuing an injunction restraining a landlord from taking out summary proceedings on the 1st day of May, 1874, to dispossess his tenant (the plaintiff) whose term expired on that day, on the ground that a verbal promise was given that she should have the premises for another year. This action was brought for the purpose of obtaining a temporary injunction, and restraining the defendant from interfering with plaintiff’s possession till the end of the alleged extended term.

      W. G. Mg Orea, for the appellant.

      D. Thornton, for the respondent.
   Opinion by Davis, P. J.

Daniels and Brady, JJ., concurred.

Order reversed, and motion to continue the injunction deniedj with $10 costs of this appeal, and $10 costs of the motion in the court below.


text:
    JAMES L. ENGLISH and another, Executors, etc., of PATRICK RILEY, Deceased, Respondents, v. FRANKLIN STEELE, Appellant.

      Evidence—documentary — Timo proved.

    A party plaintiff examined on the trial was not questioned in regard to certain letters written by him which conflicted with his statements made on such examination. The plaintiff died during the course of the trial, and defendant’s counsel, after his death, offered the letters in evidence. They were excluded on the ground that the plaintiff should have been questioned in regard to them and allowed to explain them on his examination. Held, that this was error; that “the omission to present the letter to the testator when he was examined as a witness» did not prevent it from being afterward proved and read in evidence on the trial of the action.” “No principle of evidence requires a party to prove and authenticate his documentary evidence by any particular person unless he be a subscribing witness to it.”
    Appeal from a judgment in favor of the plaintiffs, entered on the report of a referee.

      Titus B. Eldridge, for the appellant.

      Sherwood & Howland, for the respondents.
   Opinion by Daniels, J.

Present — Davis, P. J., Beady and Daniels, JJ.

Judgment reversed and a new trial ordered, with costs to abide the event.


text:
    HENRY H. BUTTERWORTH, as Collector, etc., Respondent, v. HENRY VOLKENING and another, Appellants.
    Lease— Covenant of quiet enjoyment—liaMlity of landlord under.

    Under, a covenant of quiet enjoyment contained in a lease, the landlord is not liable for the expenses incurred by the tenant in defending a suit brought by a third person claiming an interest in the leasehold premises, which claim the court, in such suit, decides to be unfounded.

    Appeal from a judgment, in favor of the plaintiff, entered upon the report of referee.

      Nelson Smith, for the appellants.

      Edgar 8. Van Winkle, for the respondent.

       Kelly v. Dutch Church (2 Hill, 105, 111).

   Opinion by Daniels, J.

Davis, P. J., and Beady, J., concurred.

Judgment affirmed.


text:
    JOSIAH CALDWELL, Appellant, v. THE COMMERCIAL WAREHOUSE COMPANY OF NEW YORK, Respondent.

      Usury—sale of collaterals—when restrained.

    This court will continue an injunction granted to restrain a party from, selling securities pledged as collateral to a loan, the complaint averring, and the answer denying, that the contracts in relation to commissions were designed to he, and were, mere covers for usury, when it appears that, in addition to seven per cent for interest and all expenses and disbursements attending the care and custody of the collaterals, and eight per cent on the gross proceeds of a sale, if one was made, a sum equal to twenty-four per cent per annum on the loan is charged for the care and custody of the bonds and stock certificates pledged, and this under an agreement which devolves all risk of loss on the borrower. It is impossible to say that the jury would not be justified in finding that this transaction was a cover for usury.
    Appeal from an order of the Special Term vacating an injunction, but the order not to take effect till the hearing of this appeal, made in an action brought to compel the surrender of securities pledged for what were alleged to be usurious loans.

      Gr. W. Gotterill and J. K. Porter, for the appellant.

      E. W. Stoughton, for the respondent,
    insisted that the court could not know judicially what would be a proper compensation for services. (Smith v. Marvin, 27 N. Y., 137 ; 40 id., 252.)
   Opinion by Davis, P. J.

Daniels and Beady, JJ., concurred.

Order reversed, with costs, and an order entered continuing the injunction


text:
    WILLIAM McDonald, Respondent, v. THE MAYOR, ALDERMEN and COMMONALTY OF NEW YORK, Appellants.

      Gontraetfor puiblie work—mXhority io make.

    Appeal from a judgment, in favor of plaintiff, entered on the report of a referee.
    This action was brought to recover the value of materials furnished and used in repairing the public streets. The court were of opinion that if the several cargoes were to be treated as separate items, the superintendent of roads had no authority to make the contracts of purchase without the necessity therefor being first certified by the head of the appropriate department to the common council, and the expenditure being upon such certification ordered by the common council. (§ 38, chap. 446, of 1857.)
    If the plaintiff’s demands were to be treated as arising under one contract, and thus constituting a single item exceeding $250, the proposal should have been made upon sealed bids or proposals invited by public advertisements. (§ 38, chap. 446, of 1857.)

      H. Delafield Smith, Counsel to the Corporation, for the appellants.

      Henry Pa/rsons, for the respondent.
   Opinion by Davis, P. J.

Daniels and Bbady, JJ., concurred.

Judgment reversed, and a new trial ordered, costs to abide the event.


text:
    JOSEPH H. WILLIAMS, Appellant, v. JAMES IRVING, Respondent.

      Judgment—Diseha/rge of—when will not he ordered, on confieting affidavits.

    Appeal from an order setting aside supplementary proceedings, and ordering a judgment to be discharged.
    The plaintiff in this case recovered a judgment against defendant for $14,449.11, bn July 19, 1862, which, with interest, amounted on this hearing to more than $25,000. It was not denied that the judgment was regularly recovered.
    The affidavits, on the part of the defendant, showed that the judgment was compromised. This was most positively denied by the affidavit of the plaintiff. The justice, at Special Term, thought the preponderance of evidence decidedly with the defendant, and ordered the judgment to be discharged, and supplementary proceedings commenced thereon to be set aside.
    The court, at General Term, did not think it provident to order the absolute discharge of so large a judgment upon conflicting affidavits, and modified the order by striking ■ out the provision directing that the judgment be discharged, and in place thereof inserted an order that a referee be appointed to take the evidence in regard to the alleged compromise, and report thereon.

      Thos. Stevenson, for the appellant.

      Garvin, Fellows áa BrooTce, for the respondent.
   Opinion by Davis, P. J.

Daniels and Ready, JJ., concurred.

Order, as modified, affirmed, costs to abide event.


text:
    AUGUSTUS HEMENWAY, Appellant, v. WILLIAM S. WILSON and others, Executors, etc., Respondents.
    Appeal from a judgment, entered on the report of a referee, dismissing the plaintiff’s complaint.
    The appellant claimed that the findings of the referee were not sustained by the evidence, but the General Term were of opinion that they were, and that the judgment should he affirmed.

      F. B. Candler, for the appellant.

      Charles Tracy, for the respondents.
   Opinion by Davis, P. J.

Daniels and Brady, JJ., concurred.

Judgment affirmed.


author: Yan Brunt, P. J.:

text:
    Henry Harbeck, Respondent, v. Sarah K. Pupin and Others, as Executors, etc., of Frederick K. Agate, Deceased, Appellants.

      Partnership indebtedness — individual liability — general release, except as to one partner — dormant partner — intent of the releasing creditor.

    An instrument, purporting to be made pursuant to section 1942 of the Code of Civil Procedure, executed, for a good consideration, by a creditor of a dissolved partnership, which does not in terms run to the benefit of any particular individuals, but which by its operative words releases and discharges “ the said members of the firm ” other than one member specified, and which expressly declares that it “shall operate to release and discharge all and every person or persons other than” the member specially excepted “of and from any and all liability and obligation growing out of the indebtedness,” will release the individual liability of a dormant partner, although the creditor did not know at the time of executing the release that such dormant partner had been a member of the partnership and did not intend to release him, but it was so intended by the parties who received the release.
    The creditor, after having given such a general release to all the world except one and received good consideration therefor, cannot be heard to say that, as he did not intend that the instrument should operate as broadly as its terms provided, therefore it did not release anybody except those persons whom he had in mind at the time of its execution.
    If, in such a case, there was no release because of a mutual misunderstanding, the creditor is bound to put the other parties, from whom he has received the consideration for the instrument, in the position in which they were before the execution of the release, before he can withdraw himself from the effect of the instrument and claim exemption from its terms.
    No rule has ever prevailed to the effect that a release is to be limited to the intent of only- one of the parties to it.

      Appeal by the defendants, Sarah K. Pupin and others, as executors of Frederick K. Agate, deceased, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on the 7th day of March, 1893, upon a verdict rendered at the New York Circuit, and from an order entered in said clerk’s office on the 27th day of February, 1893, denying the defendants’ motion for a new trial made upon the minutes.
    The action was begun in November, 1888. The defendants originally demurred to the complaint for insufficiency; the demurrer was overruled at Special Term (ZTarbecle, v. Pupin, 23 Abb. N. C. 190), at General Term {Id., 55 Hun, 335), and in the Court of Appeals {Id., 123 N. Y. 115). The defendants then answered, and the action was tried at the Circuit, resulting in a verdict for the plaintiff, upon which the judgment now appealed from was entered.
    Section 1942 of the Code of Civil Procedure is as follows; “A joint debtor may make a separate composition with his creditor, as prescribed in this section. Such a composition discharges the debtor making it, and him only. The creditor must execute to the compounding debtor a release of the indebtedness, or other instrument, exonerating him therefrom. A member of a partnership cannot thus compound for a partnership debt until the partnership has been dissolved by consent or otherwise. In that case the instrument must release or exonerate him from all liability incurred by reason of his connection with the partnership. An instrument, specified in this section, does not impair the creditor’s right of action against any other joint debtor, or his right to take any proceeding against the latter, unless an intent to release or exonerate him appears affirmatively upon the face thereof.”

      G. G. U<M, for the appellants.

      J. T. Pichards, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover a balance due upon a promissory note made by the firm of W. H. Whittaker & Co., upon the ground that Frederick K. Agate, the defendants’ testator, was, in his lifetime, a member of tbe firm. The answer consisted in substance of a general denial, and an allegation that the defendants’ testator had been released by the plaintiff.

Eor the purpose of the consideration of the question which seems to us to determine this appeal, it will be necessary to state but a few of the many and complicated facts which were brought out upon the. trial of this action.

It is claimed upon the part of the plaintiff that the defendants’ testator, Agate, was a dormant partner in the firm of "Whittaker & Co., the ostensible partners being W. A. Whittaker, Sanford W. Battershall and John E. I. Grainger, and that at the time of the release, to be hereinafter mentioned, the plaintiff had no knowledge of the fact that Agate had been a member of the firm, or was a member of such firm at the time of the giving of the promissory note which formed the basis of this action.

It has been argued at considerable length by the counsel for the appellants that there having been no rescission of the release in question no recovery can be had against the defendants. The respondent meets this argument by the concession that there is no question of rescission in the case ; that the plaintiff’s action does not proceed upon any rescission, nor upon any right to rescind, but that it goes upon the theory that giving to the release its full effect it did not operate to discharge the liability of Agate on the note, because the release did not in terms discharge him, and the intent to discharge the liability of Battershall and Grainger only, affirmatively appeared on the face of the instrument, and at common law the effect of the release will be limited to the intent. The question presented upon this appeal is whether this position of the respondent, in view of the conceded facts, can be maintained.

It appears that in March, 1886, several months after the failure of W. H. Whittaker & Co., one Henry A. Root, on behalf of Agate, entered into negotiations with the attorneys for the plaintiff, which resulted in the execution and delivery by him of a release which is hereinafter set out in full. The consideration for this release was the sum of $8,000 furnished by Agate, and the delivery of four notes, two of which were signed by Battershall and two by Grainger, for amounts aggregating $1,500. At this time the plaintiff was unaware that there was any possibility of his having any claim against Agate for the indebtedness of Whittaker & Co. to him upon the ground that he had been a partner in said firm or that Root was acting upon his behalf.

The release in question is as follows:

“Whereas, the late copartnership firm of W. H. Whittaker & Co., of the city, county and State of New York, are indebted to me, the undersigned, Henry Harbeck, of the city, county and State of New Yoi’k, in the sum of thirty thousand seven hundred and fifty-four and thirty-three one-hundredths dollars ($30,754.33), with interest from the twenty-first day of September, 1885, by virtue of a judgment recovered in the Supreme Court of the State of New York, held in and for the city and county of New York, in an action wherein said Henry Harbeck was the plaintiff and the said late firm were defendants. ,
“ And whereas, such firm has been dissolved;
“ And whereas, I have agreed with the members of the said late firm of W. H. Whittaker & Co., other than said W. H. Whittaker, to compound or compromise my claim on them individually, in respect of the said indebtedness to me of the said late firm;
“ Now, therefore, this agreement witnesseth, that in consideration of the sum of one dollar and other good and valuable considerations to me, the said Henry Harbeck, paid by the said members of the said late firm of W. H. Whittaker & Co., other than the said W. H. Whittaker, at or before the time of subscribing this release, I, the said Henry Harbeck, do hereby, according to the statute in such case made, release, acquit and forever discharge the said members of the late firm of W. H. Whittaker & Co., other than said W. H. Whittaker, and their estate or estates, and that of each of them, of and from all individual liability, claim and demand whatsoever, for or in respect of the said indebtedness to me of the said late firm. Provided, however, that this present release is made pursuant to section 1942 of the Code of Civil Procedure, and shall have no greater or other effect than as by the said act and by this release is provided; and shall not release or discharge said W. II. Whittaker or his estate, but shall operate to release and discharge all and every person or persons other than the said W. H. Whittaker of and from any and all liability and obligation growing out of the indebtedness aforesaid.
“ Nothing herein contained shall affect or impair a certain agreement dated August 20, 1885, by which certain claims and demands due the firm of W. H. "Whittaker & Co. were to be held in trust for the said Harbeck; all the terms and provisions of the said agreement to remain in force notwithstanding this agreement.
“ In witness whereof, I have hereto set my hand and seal this 18th day of March, 1886.
“H. HARBECK. [l. s.]”

It is to be noticed that throughout this release there is no mention whatever made that it is to run to the benefit of any particular individuals. By its operative words, the plaintiff released and forever discharged the members of the firm of Whittaker & Go. other than Whittaker, and it expressly declares that it shall operate to release and discharge all and every person'or persons other than said Whit-taker of and from any and all liability and obligation growing out of the indebtedness.

This language is certainly sufficiently broad to cover all the world except Whittaker, and it was certainly so intended by the parties receiving the release.

Now, can the plaintiff, after having given a general release to all the world except one man, and received money and notes as a consideration for such a release, be heard to say that, as he did not intend that it should operate as broadly as its terms provided, that, therefore, it did not release anybody except those persons whom he had in mind at the time of the execution thereof ? It seems to us that this question is too plain for argument.

If there was no release because of a mutual misunderstanding, then he was bound to put the other parties in the position in which they were, before he can claim exemption from its terms.

The argument of the learned counsel is that at common law the effect of the release is to be limited to the intent. But certainly no rule has ever prevailed that it is limited to the intent of only one of the parties. K

It is further claimed that because the release did not in terms discharge Agate, and the intent to discharge the liability of Batter-shall and Grainger affirmatively appeared, that, therefore, it did not operate to discharge Agate. But the difficulty with the respondent’s position in this respect is that by the very terms of the instrument all and every person or persons other than Whittaker were expressly declared to be discharged. If the plaintiff chose to execute an instrument in the general terms which were employed in the release in question, and he has thereby discharged obligations which he had not in mind at the time of its execution, certainly the party who has been paying for that discharge is not in fault.

It is to be observed upon an examination of that release that there is not a single word said about Battershall and Grainger. It would seem as though the plaintiff had consented to release all the world except Whittaker; that he was willing to do so for the consideration which he was to receive.

It is undoubtedly true that he did not know or suppose that he-was discharging anybody but Battershall and Grainger, but he took the risk of that, and it was because of this very general language in the instrument that he got the money which he received. Now, having made his bargain and received the consideration, he claims that because he did not know that _ he was giving for the consideration he received as much as he did actually give, he is not to be bound by it.

We are of opinion that, upon the conceded facts, in the face of the release in question, the plaintiff cannot recover against the defendants ; that the terms of the release were broad enough to cover the obligation of the defendants’ testator, and that the consideration was paid in order that he might be released, and he having relied upon the same, the plaintiff cannot now successfully contend that he did not intend to release him although by the words of the instrument executed he did so release him.

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

Follett and Parker, JJ., concurred.

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


author: Van Brunt, P. J.:

text:
    In the Matter of the Application of the Broadway and Seventh Avenue Railroad Company, Respondent, for the Condemnation of the Leasehold Estate and Property of The Acker, Merrall & Condit Company, Appellant, Impleaded with Another.

      Condemnation of land — proper procedure — pleadings — necessity of proof of the existence of a corporation.

    Proceedings for the condemnation of land under the Condemnation Law (Code Civ. Proc. §§ 3357 et seq.) must be taken in court; a judge out of court has no power in respect thereto.
    It is too late for the defendant in a condemnation proceeding to raise for the first time on appeal the objection that the Special Term erred in compelling him to answer the petition in five days and in setting the jnroceeding down for trial before an issue had been joined, where the defendant went on with the trial without dissent and took the chances of a decision in his favor without giving notice of any such objection.
    Allegations in a petition for the condemnation of land by a street surface railroad corporation, that the premises occupied by the petitioner are inadequate for the carrying on of its corporate business and that with the addition of the property sought to be condemned the premises would be adequate and sufficient, constitute a sufficient showing of the necessity of its acquisition for the use of the corporation, under the requirements of the Condemnation Law.
    The provision of section 1776 of the Code of Civil Procedure, that “In an action brought by or against a corporation the plaintiff need not prove upon the trial, the existence of the corporation, unless the answer is verified and contains an affirmative allegation that the plaintiff: or the defendant, as the case may be, is not a corporation,” has no application to a proceeding instituted bj' a corporation for the condemnation of land; but, by force of section 3365 of the Code, an answer in such a proceeding which contains a denial of any knowledge or information by the defendant sufficient to form a belief as to the allegation of the petition in regard to the petitioner being a corporation, raises an issue which the petitioner must meet by proof.
    The issue as to the existence of the petitioner as a de jure corporation, so raised by the answer, is not to be deemed waived by the mere admission by the defendant on the trial that the officers of the petitioner were as stated in the petition.
    Appeal by the defendant, the Acker, Merrall & Condit Company, from an order entered in the office of the clerk of the city and county of New York on the 23d of June, 1893, overruling objections of the Acker, Merrall & Condit Company to the petition herein, and allowing the plaintiff to amend the petition herein, and directing the defendant to answer in five days; also, an appeal from an order entered on said twenty-third of June, setting down for trial on June twenty-ninth, the issues raised by the amended petition, and the answer thereto; also, an appeal from an order entered on the 30th day of June, 1893, appointing commissioners to appraise the property sought to be condemned.

      H. G-. Atwater, for the appellant.

      J. Chandler, for the respondent.
   Van Brunt, P. J.:

This proceeding was brought under, the Condemnation Act to condemn for the use of the plaintiff the leasehold interest of the Acker, Merrall & Condit Company in certain real estate known as Nos. 155 and 157 West Fiftieth street, New York city.

The petition was presented on the 7th of June, 1893, and the Acker, Merrall & Condit Company appeared and filed objections to the petition, upon the ground that it did not state any facts showing the necessity for the acquisition by the plaintiff of the property sought to be taken for the purposes of the corporation, or for any public use. These objections were overruled, and before anything further was done the plaintiff applied for leave to amend the proceedings by adding the Metropolitan Traction Company as a party defendant.

On the twenty-third of June an order was entered upon this motion allowing the amendment, and directing the Acker, Merrall & Condit Company to serve its answer to the amended petition on June twenty-eighth. On the same day a separate order was made setting down the issues raised by the petition for trial on the 29th of June, 1893. The trial was had before Mr. Justice Ingraham on said twenty-ninth of June, and was concluded the same day. A decision was made and the order appointing commissioners entered on the same day.

It is urged upon the part of the appellant that the answer to the petition denied and put in issue nearly all the material allegations of the petition, and that on the trial no proof was given of many of the allegations so denied; and, also, that at the time of the commencement of this proceeding other proceedings had been pending, and that no documentary evidence was offered by the petitioners except an order dismissing and discontinuing the former proceedmgs, and that only a few witnesses were examined, some of whom testified as to certain negotiations had by the plaintiff with the defendant as to the purchase of the property, and one of whom gave some slight evidence that the property sought to be condemned was needed for storing cars, etc.

The point is also raised that the learned justice, although holding a Special Term on the 13th of. June, 1893, the day on which the order was returnable, on the twenty-third of June, when the order to show cause was disposed of, was not sitting in court; neither was he so sitting on the twenty-ninth of June, the date of the trial, and that, therefore, the order of June twenty-third, although it appears to have been made at Special Term, was in point of fact not a Special Term order, but a judge’s order, and that the trial was had before a judge and not before the court.

It is undoubtedly true that proceedings for the condemnation of land must be taken before the court and not before a judge.

Section 3360 provides for the institution of the proceedings by the presentation of a petition by the plaintiff to the Supreme Court. And section 3367 provides that the court shall try any issue raised by the petition and answer at such time and place as it may direct, or it may order the same to be referred to a referee to hear and determine, etc. Thus showing that whatever proceedings are taken must be taken in court, and that a judge out of court has no power in respect to the same. But in the record presented to us there is no evidence whatever that Mr. Justice Ingraham was not holding a Special Term of the Supreme Court at the time he made the order complained of, and also when he tried the issues. There seems, therefore, to be no ground whatever for this objection.

It is further urged that the court erred in compelling the defendant to answer the petition in five days, and in setting down the issues for trial before an issue had been joined. But the difficulty about this objection, raised for the first time upon this appeal, is that the appellant went on and tried the issues without objection, submitted itself to the jurisdiction of the court, took the chances of a decision in its favor, and now that it is beaten claims that the court exceeded its power in compelling it to go on with the trial when it did, when it does not appear from the record presented that there was any compulsion about it, but that the appellant went to trial willingly and without dissent.

If the appellant had raised this objection at the proper time there might have been serious question as to the regularity of the proceeding, but not having in any way dissented from the action of the court, but having gone on with the trial as already stated, and taken the chances of a favorable decision without notice of any such objection, it is too late now to raise the same.

It is further urged that the petition disclosed no facts showing the? necessity of the acquisition by the plaintiff of the property sought to be condemned. It seems to be conceded that under the old Railroad Act of 1850 the allegations of the petition were amply sufficient. But it is urged that in consequence of differences existing in the provisions of the present Condemnation Act, the petition herein was not sufficient to confer jurisdiction, in this, that the petition did not set forth with the certainty required by the act, the public use for which the property was required and a concise statement of the facts showing the necessity of its acquisition for such use.

This objection, it does not seem to us, is well founded. The allegation in the petition is that it now owns the whole block, with the exception of the property in question, and which “ is now used, by it for, and is necessary and convenient for its stables, offices, power houses, stations and buildings, and for its corporate business, machinery and fixtures, and for the accommodation and use of its machinery and passengers, freight and business, and the operation of its said cable line of railroad. That said real property so owned and used by plaintiff, petitioner as aforesaid, is inadequate and insufficient for the uses aforesaid, and for the accommodation and use of its machinery, passengers, freight and business, and for its corporate purposes now and as a cable railroad; but that, with the addition of the property sought to be condemned, it would be for the present adequate and sufficient for plaintiff’s said uses. That the particular lot described, and which is sought to be condemned, is the only lot in said parcel or square of which the petitioner has not possession, and that the necessities and convenience of transacting its business for the benefit of the public require that it shall have possession of the entire parcel.”

It will be seen that the requirements of the statute are complied with. The facts which show the necessity of its acquisition for the use of the plaintiff are that the premises now occupied by them are inadequate for the carrying on of its corporate business, and that with the addition of the property sought to be condemned the property would be adequate and sufficient. Therefore, the necessity for the acquisition is the want of present accommodation and the fact that by the acquisition such accommodations will be afforded. These are all the facts necessary to appear to show the necessity of acquisition. It certainly was not the intention that the petitioner should be required to spread out a detailed statement of all the uses to which the property was intended to be applied; but simply to apprise the court and the persons against whom they were proceeding of the facts upon which they claimed to exercise the right of eminent domain.

It is further urged that the plaintiff did not prove that it was a corporation de jure, or that it had any right to acquire real estate for its use. The allegations of the petition are that the plaintiff petitioner is a street surface railroad corporation organized and existing as such under and by virtue of the laws of the State of New York; “that as such corporation aforesaid, it is authorized by law, in addition to the real property owned by it, to acquire and hold title to the real property hereinafter described for its use, by condemnation. That the object, corporate right and puiq>ose of petitioner is to own a street surface railroad, and the appurtenances and 'lands necessary and convenient for operating the same for a public use.”

The answer of the defendant denies that it has any knowledge or information sufficient to form a belief as to any of the said allegations. On the trial no evidence of any kind was introduced to show that the plaintiff was a corporation de jure.

It is urged upon the part of the respondent that this is not necessary, because of the provision of section 1776 of the Code, which declares that “ in an action brought by or against a corporation, the plaintiff need not prove, upon the trial, the existence of the corporation, unless the answer is verified, and contains an affirmative allegation that the plaintiff or the defendant, as the case may be, is not a corporation.”

And our attention is called to the case of In re N. Y., L. & W. Ry. Co. (99 N. Y. 12). The facts in that case were that it was claimed that the railroad company had not legally established its corporate existence. In its petition, by which the proceeding was initiated, and which was verified, the due incorporation of the company was affirmatively alleged. The counter affidavit of the owner did not deny the allegation of the petition in that respect, but simply stated that such owner had no knowledge or information sufficient to form a belief upon the subject. And the court held that treating the answer simply as an affidavit, it failed to contradict the positive averment of the petition, and results only in saying that the affiant did not know, and had not learned whether the sworn assertion of the petitioner was true or not, which was clearly insufficient in an affidavit. And the court held that if there was nothing in the case but the two affidavits touching the question of corporate existence, the court would be justified in acting upon the affirmative averment of the one not effectively disputed by the other. It is then suggested that if these affidavits ought to be treated as pleadings, and assimilate the proceedings to an action, as had been done in the case of The Rensselaer & Saratoga Ry. Co. v. Davis (55 N. Y. 145), even then the result is not changed.. Treated as an answer, there is no sufficient contradiction of the petitioner’s pleading viewed as a complaint, for the Code provides, reproducing the amendatory act of 1875, that the corporation need not prove its existence unless the answer is verified and contains an affirmative allegation that the plaintiff is not a corporation, so that in either aspect of the proceeding the issue of corporate existence was not raised, and the court was entitled to proceed upon the uncontradicted assertion of the moving petition.

If, therefore, this provision of the Code is to apjfiy as to the fact of incorporation, no issue wras raised by the averment of want of knowledge or information sufficient to form a belief. But upon an examination of section 3365, it seems to us it will be seen that section 1776 cannot apply to these proceedings, because by that section it is expressly provided what an answer is to contain, and how an issue is to be raised. It says : “ Upon presentation of the petition and notice with proof of service thereof, an owner of the property may appear and interpose an answer which,

“ Must contain a general or specific denial of each material allegation of the petition controverted by him, or of any knowledge or information thereof sufficient to form a belief.”

Now, it is clear tliat it was the intention of this section that where a denial is made in the form prescribed the right to proceed must be established by proof. And it is apparent when we consider the nature of these proceedings, why this difference between pleadings in an action and pleadings in these proceedings should be made. In ordinary civil actions a de facto corporation may recover. In actions for the condemnation of real property a de facto corporation, unless it is able to prove that it is also a de jure corporation, cannot succeed. And, therefore, it was intended by the denial' of want of knowledge or information as to corporate existence, to put the corporation to proof of its right to take the property of another, for its purposes, against his will. It was not intended to leave the question as it had been left by the decisions which existed at the time of the passage of this section.

It was intended plainly to introduce a new system, and to provide what the pleadings should contain, and how issues should be raised. It seems to us, therefore, that the provisions of section 1776 have no application, and that an answer in the form prescribed by section 3365 raises an issue, and the corporation seeking to proceed must meet it by proof.

It is urged, however, by the respondent that by the admissions contained in the record as to the plaintiff’s officers, the appellant waived the averments of its answer. The question was asked by the court: “ State who are the officers of the Broadway and Seventh Avenue Railroad Company,” and the defendant’s counsel admitted that the officers were as stated in the petition. But that admission would apply to a defacto as well as to a de jure corporation, and it was not the intention to waive the averments contained in the answer, and was not so understood.

It would seem, therefore, that without proof of the allegation in the petition to which reference has been made, the plaintiff cannot succeed in these proceedings.

The order appointing the commissioners should be reversed, with costs, and a new trial had of the issues involved.

Eollett and Parker, <TJ., concurred.

Order appointing the commissioners reversed, with costs, and a new trial had of the issues involved.


text:
    William Campbell, Respondent, v. Joseph Hughes and Job W. Harris, Appellants, Impleaded with James H. Temple.

      Partnership accounting — set off of damages for a breach of the partnership agreement — Statute of Limitations.

    When, in an action in equity between copartners for an accounting and a settlement of the partnership transactions, a claim is made against the defendant based upon the partnership agreement, he may offset against such claim damages arising to him by reason of a breach of the partnership agreement by the plaintiff, although such breach may not have occurred within six years.
    Appeal by the defendants, Joseph Hughes and Job W. Harris, from an interlocutory judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 16th day of June, 1893, upon the decision of the court rendered after a trial at the New York Special Term.

      J. Larkin, for the appellants.

      Spink & Martin, for the respondent.
   Yan Brunt, P. J.:

This action was brought to obtain an accounting upon the part of the members of the firm of Harris, Hughes & Co. in respect to their copartnership transactions. The defendants, Harris and Hughes, set up the defense of a release and a counterclaim against the plaintiff and their codefendant Temple, seeking to recover damages because of a breach of the copartnership agreement.

Upon the trial of the action the court found that the counterclaim was barred by the Statute of Limitations, and awarded judgment for an accounting, appointing a referee to take and state' such accounts. And from such interlocutory judgment this appeal is taken.

Yarious points have been raised upon this appeal which it is not at all necessary to consider in view of the conclusion at which we have arrived upon the question of the Statute of Limitations.

The ground upon which the decision of the learned court below was placed in respect to this issue seems to have been that the counterclaim alleged in the answer was simply an action at law to recover damages for a breach of contract, and as it did not occur within six years the Statute of Limitations ran.

In arriving at this conclusion, it seems to us, the court failed to recognize the relations between the parties and the true nature of the defense. It may possibly be that the defendants, Harris and Hbghes, could not have maintained an action for damages against their copartners unless the same was brought within six years from the time of the accruing of such cause of action. But when a claim is made against them, based upon the partnership agreement, there seems to be no reason why they may not offset against such claim damages arising to them by reason of a breach of the partnership agreement by the claimants in such an action.

This action was brought to obtain a settlement of the partnership transactions of Harris, Hughes & Co., and such settlement must take place under the partnership agreement. Now the defendants, Harris and Hughes, seek to recover damages by reason of a breach of the copartnership agreement; and those defendants have the undoubted right to offset against any claim which may be established by the plaintiff under the' agreement, such damages as they have sustained by reason of the breach of such copartnership agreement by the plaintiff, as both causes of action arise out of the same transaction, viz., out of the partnership agreement.

In this view the facts set up as a counterclaim do not constitute an independent cause of action, having no relation to the cause of action set out in the complaint, because both arise out of the same instrument, one to enforce its provisions and the other seeking damages because of the breach of its provisions. Certainly the plaintiff cannot have the same rights under the partnership agreement if he has violated its provisions to the damage of his copartners, as though he had complied with its terms and had been guilty of no wrong. All the rights of the partners under the agreement must be settled in this action, and the rights of one partner cannot be cut off by the Statute of Limitations and those of another under the same instrument be enforced against him.

It should be borne in mind that this action is an action in equity, and the question involved is: “ What in equity are the rights of the parties, and what in equity should the defendants be compelled to pay the plaintiff ? ” And if, because of any equitable considerations, the plaintiff should not be allowed to use the process of a court of equity for a recovery, such relief must necessarily be denied him.

The maxim which is the foundation of all equity jurisprudence is that he who seeks equity must do equity.

We are of opinion that the court erred in denying the defendants, Harris and Hughes, any relief on their plea of a violation, by the plaintiff and their codefendant Temple, of the copartnership agreement between the parties to. the action.

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

Follett and Parker, JJ., concurred.

Judgment reversed and new trial granted, with costs to appellants to abide event.