136, 79 N. E. 847, 9 L. R. A. (N. S.) 483. The time within which an option is to be exercised is a constituent element of such a contract. It is just that which the parties have contracted for. To say, therefore, that time is not of the essence of such a contract, is but another way of saying that the parties did not mean what they have clearly expressed, and of making and substituting an essentially different contract for the one they made. "Maledicta expositio quæ corrumpit." Time is always of the essence of the contract, if the parties have expressly so treated it, or it necessarily follows from the nature and circumstances of the contract. 1 Story, Eq. Juris. § 776; 2 Chitty Cont. (11th Am. Ed.) 1068. "If it clearly appears to be the intention of the parties to an agreement that time shall be deemed of the essence of the contract, it must be so considered in equity." 1 Sugden Vend. (8th Am. Ed.) p. 410, c. 6, § 3, subd. 13. "And in all cases where by a contract an option is reserved to a party to accept a thing at a particular time, time is of the essence of the contract, as otherwise the vendor would be the trustee of the purchaser." 2 Whart. Cont. § 888. "Where by the terms of a contract for an option the exercise thereof is limited to a specified and definite time, it is necessary that the option be exercised before the expiration of such time; otherwise, the right is gone. Attempts to exercise the option after the expiration of the time limited, on the ground that in equity time is not of the essence of the contract, have been uniformly met with the answer that, where the parties have seen fit to regard time as an essential element, the courts must likewise so regard it. However true in regard to executed contracts in general, the principle has generally been regarded as having no application to an offer to make a contract which by express agreement is to remain open for a specified time. There is, moreover, a strong inclination on the part of the courts to view any delay with great strictness, on the ground that the party seeking to enforce performance was not bound, while the other party was bound." 21 Am. & Eng. Encyc. of Law (2d Ed.) 931, and cases cited in the notes to the text.

This rule may operate harshly in individual cases, but its soundness must be appreciated when the uncertainty and confusion are considered which would result in the conduct of the manifold affairs of business, were the rule stated not the guide for the observance of obligations contractually assumed. There must be judgment for the defendant for dismissal of the complaint upon the merits, with costs. Judgment for defendant, with costs.

(55 Misc. Rep. 608.)

FOERSCH et al. v. SCHMITT et al.

(Supreme Court, Special Term, New York County. August, 1907.)

1. CONVERSION-REAL ESTATE INTO PERSONALTY.

Testator devised all his property in trust, to be sold and certain legacies paid, and the remainder divided among his nieces and nephews. Held an equitable conversion, and that rents coming into the hands of the ex

and 140 New York State Reporter

ecutors pending such conversion into money are applicable to the purposes of administration, and do not belong to the residuary legatees. [Ed. Note. For cases in point, see Cent. Dig. vol. 11, Conversion, $$ 30-32.]

2. EXECUTORS-SALE OF REALTY.

Where a will provides for the sale of the realty, the court will not direct an immediate sale of the realty, in the absence of proof of a threatened abuse of powers by the executors.

Action by John Foersch and others, executors, against William Schmitt and others. Judgment rendered.

R. Gordon Mackay, for plaintiffs.

M. H. Winkler, for defendant Schmitt and others.

Eugene Smith, for defendant City Fireproofing Company.

BISCHOFF, J. The testator, Michael Schmitt, devised and bequeathed all his property to his executors, "in trust to sell and dispose of all or any part thereof either at public or private sale, and upon such terms and at such times as to them may seem to the best interests of my estate and after converting the same into cash to pay over the same as follows." A number of legacies are then provided for, and a further direction is made that the executors divide the remainder of the estate equally between the testator's nephews and nieces living at the time of his decease. Certain rents having come into the hands of the executors, and there being debts in a substantial sum, the question has arisen whether these rents belong to the residuary legatees, or whether the moneys are properly applicable to the purposes of administration.

This question turns upon the effect of the clause whereby the devise is made to the executors "in trust." There was no express trustmerely a power in trust. Real Prop. Law, § 77. And, if the real estate be viewed as having retained its character as such, the result would be that the parties entitled to the residue took it, and with it the rents, subject to the exercise of the power. Konvalinka v. Schlegel, 104 N. Y. 125, 9 N. E. 868, 58 Am. Rep. 494; Clift v. Moses, 116 N. Y. 144, 22 N. E. 393. In my opinion, the rents belonged to the executors, upon the theory of an equitable conversion. That a sale was to be had before any of the legacies were paid, and that the parties entitled to the residue were to share in it only in the form of a distribution in cash, after the sale and the payment of legacies, is the intention practically expressed in so many words. The clause preceding the provision for a devise "in trust" directs the payment of debts, and it is to be assumed that the testator was aware of the condition of his debts and assets. Without a sale as an incident to the substantial administration of the estate, and without the receipt of rents an incident. of an equitable conversion-by the executors, the will could not be carried out, in view of the condition of the estate; and it appears, therefore, that there was an intention, implied as well as expressed, that the real estate be treated as personalty. A construction favoring a conversion is to be resorted to upon such a state of facts. Dodge v. Pond, 23 N. Y. 69; Lent v. Howard, 89 N. Y. 169; Fraser v. Trustees, 124 N. Y. 479, 26 N. E. 1034.

I find no ground for an affirmative direction that the executors proceed to an immediate sale, or for any further defining of their duties in the matter of collecting the rents and of paying the debts. Their duties are clear; and they have some discretion as to the matter of sale (Lent v. Howard, supra), with which, in the absence of any proof of a threatened abuse of their powers, the court is not called upon to interfere.

Form of decision and judgment may be presented, in accordance with this memorandum, upon notice of settlement.

Judgment accordingly.

(56 Misc. Rep. 67.)

REYNOLDS v. BRITTON et al.

(Supreme Court, Special Term, New York County. September, 1907.) MORTGAGES-FORECLOSURE-DISTRIBUTION OF SURPlus.

Real estate of a decedent was sold under a judgment of foreclosure more than three years after grant of letters to his executrix. Held, that the property was not liable for the payment of decedent's debts, under Code Civ. Proc. § 2750, providing for sale of realty to pay debts within three years, and the surplus money could be distributed in the usual manner without being paid into the Surrogate's Court.

Action by Thomas L. Reynolds against Ruth Britton and others to foreclose a mortgage. On motion to vacate order of reference in surplus proceedings. Denied.

See 92 N. Y. Supp. 2, 102 App. Div. 609.

Charles F. Brandt, for creditor.

Robert J. Mahon, for claimants.

BRADY, J. This action was commenced to foreclose a mortgage upon real estate, and the premises were sold pursuant to decree of foreclosure and sale on the 24th day of July, 1906, resulting in a surplus of $1,021.81, which was deposited with the city chamberlain on the 2d day of April, 1907. By order of the court, entered herein on April 5, 1907, a referee was appointed to ascertain and report, etc., in the usual surplus proceeding. The mortgagor died seised of the mortgaged premises, and letters testamentary upon his estate were issued to the defendant executor by a surrogate of the county of New Jork, January 8, 1903. This motion is made to vacate said order of reference in surplus proceedings and to set aside all proceedings thereunder on the ground that this court had no jurisdiction over said surplus moneys under sections 2798 and 2408 of the Code of Civil Procedure.

Section 2408 refers to surplus moneys arising on sale of property in proceedings for foreclosure by advertisement, and has no application to the facts in the case at bar. Section 2798, as it existed at the time of said sale in July, 1906, read as follows, viz.:

"Where real property, or an interest in real property, liable to be disposed of as prescribed in this title, is sold, in an action or a special proceeding, specified in the last section, to satisfy a mortgage or other lien thereupon,

and letters testamentary or letters of administration, upon the decedent's estate, were, within four years before the sale issued from a Surro

gate's Court of the money must be paid

and 140 New York State Reporter state, having jurisdiction to grant them; the surplus into the Surrogate's Court."

To determine whether the property sold in this action was liable to be disposed of under title 5, c. 18, of the Code referred to in said section, we find that such liability is fixed by section 2750, which is included in said title, and which provides that at any time within three years after letters were first granted upon the estate of a decedent an executor or administrator may apply to the surrogate for a decree directing the disposition of the real estate of the decedent for the payment of his debts, etc. The decedent's real estate is, therefore, only liable to be sold, within the meaning of section 2798, during the three years next succeeding the issuance of letters testamentary, as provided in section 2750; and as the sale in this action was made more than three years after the issuance of letters on the estate of decedent, and no proceedings had been brought within that period for the disposition of the property pursuant to section 2750, it necessarily follows that at the time of the foreclosure sale herein the property was not liable to be disposed of under section 2750, and the surplus moneys arising thereon were not subject to the provisions of section 2798, and were properly paid to the city chamberlain in this court, which properly retains jurisdiction of their disposition. The order of reference in surplus proceedings was, therefore, properly made.

Motion denied, without costs. Settle order on notice.

(56 Misc. Rep. 45.)

In re HASTINGS.

(Supreme Court, Special Term, New York County. September, 1907.) CORPORATIONS-WHO ARE STOCKHOLDERS-EXECUTORS-INSPECTION OF Books.

An executor of a deceased stockholder is a stockholder, within Stock Corporation Law, Laws 1892, p. 1824, c. 688, and entitled to inspect the stock book during at least three business hours of the defendant, and to information as to the affairs of the corporation.

Application of George Gordon Hastings, executor of Rosalie Tousey Hastings, for an inspection of the books of Frank Tousey, Publisher, a corporation. Granted.

See 106 N. Y. Supp. 640.

Theron Davis, for petitioner.
James M. Hunt, for respondents.

BRADY, J. This is a motion for a peremptory writ of mandamus commanding the president, secretary and treasurer and directors of the corporation Frank Tousey, Publisher, to exhibit to the petitioner, as executor, etc., of Rosalie T. Hastings, deceased, his attorney and accountants, the stock book, stock ledger, transfer books, minutes of stockholders' and directors' meetings, by-laws, all books of account, records, and papers of said corporation from the date of organization, on or about June 9, 1905, to the time of such inspection, and to permit them to fully examine the same and take extracts therefrom. I think that the petitioner, as executor of a deceased stockholder, being

vested with the legal title to stock in the corporation, is a stockholder within the legal intendment of that word, and consequently entitled to make the application. He is entitled by the provisions of the stock corporation law (Laws 1892, p. 1824, c. 688) to inspect the stock book during at least three business hours of the day. People v. Railroad Co., 106 App. Div. 350, 94 N. Y. Supp. 555. I doubt, however, his right to the unlimited privileges demanded upon this motion. He is, however, the owner as executor of one-half of the entire capital stock, and thus vitally interested in the success and proper conduct of the affairs of the corporation.

The moving papers show that in July last he made upon the secretary and treasurer of the corporation a demand in writing, supplemental to a previous verbal demand, for certain information, which was not acceded to. I think he is entitled to much of the information, and an order will be granted directing the said president and secretary and treasurer to furnish to the petitioner, within ten days after the service of an order to be entered on the motion, the following: (1) The names of the directors and officers of the corporation and the amount of salary paid them. (2) A statement showing the net profits as appears from the books for the period from the 9th day of June, 1905, to July 1, 1907. (3) The name of the bank or banks in which the company deposits money, the amount in each bank on the 1st day of July, 1907, and the rate of interest, if any, allowed by the banks. (4) A statement showing the cash in hand, total of accounts and bills receivable on July 1, 1907, and also the actual liabilities outside of capital stock on said date. (5) A statement showing the total indebtedness due the corporation on said date from the largest and second largest debtor. (6) A statement of the changes, if any, in the salaries of any persons employed by the corporation since December 1, 1906, and the names of the employés increased, and the amount of such increase, and the reasons therefor. (7) A statement of overdrafts or loans, if any, from the corporation to any officer or employé, since the date of its organization. Said order may provide that, in the event of the failure of said president, secretary and treasurer to furnish the information aforesaid within the time specified, then the motion is granted in all respects.

Ordered accordingly.

(56 Misc. Rep. 61.)

COLTON v. SULLIVAN.

(Supreme Court, Special Term, New York County. September, 1907.) BAIL-EXONERATION.

Under Code Civ. Proc. § 601, the bail should be exonerated on the vacating of an order of arrest which works a legal discharge of defendant from the obligation to render himself amenable to the process with respect to which the bail was given.

Action by Frank S. Colton against Lawrence M. Sullivan, sued as "Larry M. Sullivan." Motion for exoneration of bail granted. Samuel M. Fischer, for John J. White and Antonio Cardone. James C. Lenney, for sheriff of New York county.