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and 114 New York State Reporter the $9,369.67 must be withdrawn from the fund which was to pay the legacies provided for in the codicil of each? Clearly not. The intention is .plain, and effect must be given to that intention. In this respect the decree of the surrogate must be affirmed.

It is complained that the surrogate erred in holding that upon the husband's death all this business and property passed at once to the wife, and must be administered by Peck as her property. In my judgment, it matters little whether that view is or is not correct. If erroneous, the interests of the contestants are in no way affected thereby. Whether treated as the property of the husband or of the wife, the fund in question, under the above views, would be applicable to the payment of the legacies named in the codicils, and so the same result would follow.

The decree of the surrogate should be modified in each case in accordance with the suggestions herein contained, and the executor's commissions should be adjusted accordingly, and, as so modified, affirmed, with costs of appeal to the executor, to the contestants, and to the guardian ad litem, payable out of the estate. But one bill of costs to each of such parties should be allowed for the two appeals. All concur.

(79 App. Div. 130.)

MILLER V. CARPENTER. .(Supreme Court, Appellate Division, Second Department. January 30, 1903.) 1. PLEADING-AMENDMENT-NEW CAUSE OF ACTION-Costs.

Where plaintiff, in an action to procure the reassignment of stock on the ground that the original assignment was in pursuance of an oral agreement that the stock should be held as collateral only, amended his complaint so as to allege fraud and mutual mistake, and prayed for a reformation and cancellation of the original assignment, he did not plead a new cause of action, so as to necessarily be obliged to pay

all costs before the granting of the amendment. 2. SAME-EVIDENCE-FAILURE TO OBJECT-RETRIAL.

In an action to procure à reassignment of stock on the ground that the original assignment was in pursuance of an oral agreement that the stock should be held as collateral only, defendant offered no objection to the introduction of parol evidence of the oral agreement until he appealed, where he succeeded because the evidence, even if competent, would not support the relief granted. Held, that on a retrial plaintiff might reasonably be allowed to amend, and allege fraud and mistake; and pray for reformation, without first paying all the costs of the

action. Appeal from special term, Westchester county.

Action by Joseph O. Miller against Reese Carpenter. From an order granting plaintiff's motion to amend the complaint, defendant appeals. Affirmed.

Argued before GOODRICH, P. J., and BARTLETT, WOODWARD, and HIRSCHBERG, JJ.

Isaac N. Mills, for appellant.
W. J. Townsend, for respondent.

HIRSCHBERG, J. The practical question presented by this appeal is as to the sufficiency of the terms imposed. The action is brought to procure the reassignment of certain stock which the plaintiff transferred to the defendant by a written instrument absolute in form, but, as the plaintiff claims, in pursuance of an oral agreement that the assignment was to be as collateral security only. Upon oral testimony of the prior understanding, the plaintiff procured a judgment, which was reversed by this court, and a new trial granted. Viller v. Carpenter, 68 App. Div. 346, 74 N. Y. Supp. 231. In the opinion then delivered Mr. Justice Jenks said (page 350, 68 App. Div., and page 233, 74 N. Y. Supp.):

"There is no allegation or proof that the written contract was made under a mutual mistake, nor is there any finding of fraud or other inequitable conduct on the part of the defendant. If such testimony could be admissible under the pleadings without amendment, and the learned special term had found that there was an oral contract, wbich, by mutual mistake, was not expressed in the written contract, then it might have decreed reformation; or if the learned special term had found that the defendant, by any ineq. uitable conduct on his part, had brought about the execution of the written contract, then it might bave interfered (Haviland v. Willets, 141 N. Y. 35, 50, 35 N. E. 958; Greene v. Smith, 160 N. Y. 533, 55 N. E. 210; Griswold F. Hazard, 141 U. S. 260, 11 Sup. Ct. 972, 999, 35 L. Ed. 678); but, in view of the fact that the plaintiff testified that he executed the written contract, and also testified that the minds had previously met on a different oral contract, I think that the learned special term could not, under the findings that the written contract was duly executed and delivered, and that the minds of the parties never met, proceed virtually to reform the contract so as to make it express the intention of the plaintiff alone, or annul it merely upon the principle that the plaintiff could be relieved under a mistake of law."

The amendment which has been allowed consists in the insertion in the complaint of allegations charging fraud and other inequitable conduct on the defendant's part, and also asserting that the written contract was executed by mutual mistake, and in the additional prayer for relief that the contract be either reformed or canceled. A new cause of action is not substituted, nor is the character of the cause of action changed. The purpose of the action still is, as it always has been, to redeem the shares of stock, and to procure their return to the plaintiff upon payment by him of the alleged loan, and the amendment seeks to destroy the bar which the absolute assignment imposes to that purpose. As was said by Mr. Justice Bradley in a very similar case (Marsh v. McNair, 40 Hun, 216, 219):

"The plaintiff's proposed amendment is to insert that the assignment was, by mutual mistake of the parties to it, drawn and executed in absolute form, and some other matters incidental to such allegation. The purpose of the action and the character and intent of the relief will not be changed by the proposed amendment; but it is, nevertheless, of vital importance within the holding of the court, because without amendment the plaintiff can have no standing with her action in court.

In the case at bar do change in the subject of the action, its purpose, or relief is sought by the amendment, but the new allegations are necessary to permit the introduction of evidence to establish the cause of action."

The learned counsel for the appellant claims that the motion could be granted only upon condition that the plaintiff pay all the taxable costs and disbursements to date. This was the ruling in Bates v. Bank, 43 App. Div. 321, 60 N. Y. Supp. 313, and in Thilemann v. City of New York, 71 App. Div. 595, 76 N. Y. Supp. 132; but the and 114 New York State Reporter cases differ from the one at bar. In the Bates Case, after a trial upon one theory failed, the litigant sought by amendment to present a new issue and to retry the case on a different theory. The result was, in the court's opinion, to require two trials upon entirely different causes of action. The court said, in reference to the rule that all costs and disbursements should first be paid (page 324, 43 App. Div., and page 315, 60 N. Y. Supp.) :

"The justice of this rule is well illustrated in this case. The defendants were forced to make the fight on the lines laid down by the plaintiff, and the court of appeals has held there can be no recovery on that cause of action. The defendants have been put to the costs in the effort to vindicate their position, and, if the plaintiff desires to try another cause of action, then be should first make the defendants whole for what they have already incurred to the extent of the taxable costs and disbursements."

So in the Thiiemann Case the effect of the amendment was to present a new cause of action. The court said (page 597, 71 App. Div., and page 134, 76 N. Y. Supp.):

"The amendment allows an entirely new cause of action, based upon the negligence of the officers of the defendant, of which the defendant had no notice in the complaint as originally served. The defendant should be placed in the same position as to costs as if this action had been discontinued and a new action commenced."

In this case the defendant made no objection to the receipt of oral evidence of the facts and circumstances under which the written assignment was executed, and of the previous oral agreement that it was to be as collateral security only, and took no exception to the admission of such evidence. The issue tendered by the amended complaint is, therefore, the same in substance as that which has already been tried. The plaintiff succeeded at the trial presumably because the defendant saw fit to reserve until the appeal the objection that the evidence was inadmissible under the complaint as then framed, and he succeeded on the appeal only because the relief afforded to his opponent at the trial was not justified by the evidence, even assuming such evidence to be competent. The rule, therefore, applicable, is the one which was applied in Marsh v. McNair, supra, where, after a careful collation of the authorities, the costs of the first trial and of the appeal therefrom were excluded from the terms imposed upon the ground that the parol evidence of the negotiations which led to the assignment in that case, and to the effect that the assignment was made as security, was given without objection. In this respect the case differs from Lesser v. Manufacturing Co., 72 App. Div. 147, 75 N. Y. Supp. 486, where the objection to the evidence was promptly taken, and full costs were required as the condition of an amendment designed to obviate its force.

In Baylies, Code Pl. & Forms, 320, the general rule is stated as follows:

"The question as to what terms are to be imposed upon granting leave to amend a pleading depends for its solution upon the circumstances of the particular case at bar, and is a matter resting in the discretion of the court. The authorities are nearly all to the effect that, where the amendment to a complaint substantially changes the nature or subject of the cause of action, such terms should be imposed as will indemnify the defendant for all his taxable costs incurred in the action, provided he has raised the objection to the defect in the pleading at the first opportunity; but when the litigation has proceeded without reference to the character of the pleadings, that fact is considered in the imposition of terms, and then such rule is not deemed the governing, nor necessarily the guiding, one for the discretion of the court.”

The terms herein imposed seem reasonable and sufficient, and the order should be affirmed.

Order affirmed, with $10 costs and disbursements. All concur.

(79 App. Div. 183.) PEOPLE ex rel. METROPOLITAN ST. RY. CO. V. STATE BOARD

OF TAX COM’RS. (Supreme Court, Appellate Division, Third Department. January 23, 1903.) 1. TAXATION-ASSESSMENT OF CORPORATE FRANCHISES-COMMISSION TO STATE

AUTHORITY-VIOLATION OF CONSTITUTION.

Laws 1899, c. 712, amends Tax Law, § 2, subd. 3, by adding to the subjects of taxation therein specified the franchise to construct, maintain, or operate over or under streets or public places of any municipality the tangible property thereon which was previously assessible as realty, and provides that the value of such tangible property, plus the value of the franchise, shall be assessed together, under the designation of a “special franchise," by the state board of tax commissioners, which shall report such assessment to the local assessor, to be placed on his roll; taxes to be levied and collected against it as against other property. Held to violate Const. art. 10, $ 2, guarantying the local selection of local officers, in so far as it withdraws the tangible property from the jurisdiction of the local assessors, though the amount of property thus withdrawn is relatively small.

Smith and Chester, JJ., dissenting. Appeal from special term.

Certiorari by the people of the state of New York, on the relation of the Metropolitan Street Railway Company, against the state board of tax commissioners. From an order modifying and sustaining a tax assessment on relator's property, it appeals. Affirmed on the facts, and reversed on the law, and assessment vacated.

The relator herein seeks to review and vacate the assessment made against it by the state board of tax commissioners under the provisions of the socalled special franchise tax act; and the proceedings are taken under the provisions of article 2 of the tax law, as amended by chapter 712 of the Laws of 1899. A certiorari was issued, and the issues made by the return thereto were duly referred. Upon the coming in of the referee's report, the special term approved and adopted the same, and made an order modifying the assessment in some particulars, and, as so modified, sustaining the same.

Argued before PARKER, P. J., and SMITH, KELLOGG, CHASE, and CHESTER, JJ.

Henry A. Robinson and Sheehan & Collin (Wm. H. Page, Jr., of counsel), for appellant.

John C. Davies, Atty. Gen. (J. Newton Fiero, of counsel), for respondent.

PARKER, P. J. The first question presented by this appeal is whether the provisions of the law which authorize the assessment

and 114 New York State Reporter and tax complained of are violative of section 2 of article 10 of our state constitution. Such act (being chapter 712 of the Laws of 1899) first amends subdivision 3 of section 2 of the tax law by adding to the subjects of taxation therein specified, the right or franchise to construct, maintain, or operate upon, over, or under the streets or public places of any town or municipality in the state, the tangible property thereon, which was already specified in the section as being real estate, and therefore assessable. The value of such tangible property, plus the value of the right to maintain and operate the same, are thereafter to be assessed and taxed together, and is denominated in the act as a “special franchise.” No criticism is made that this addition to the taxable property named in the section violated any provision of the constitution, but the act further provides that the assessment of such special franchise shall be made by the state board of tax commissioners. That board is required to fix the valuations of all such special franchises, wherever found in the state, and to report such assessment or valuation to the proper local assessor; and such local officer is required to place such special franchise upon his roll of the taxable property in his district, at the valuation so received, and the tax is thereupon levied and collected against the same in the same manner and for the same purposes as against the other property on such roll. This provision, it is claimed, violates the above-cited section of the constitution, for the reason that it deprives the local assessors of a portion of their duties as such assessors, and directs the performance of the same duties by officers who are not chosen by the electors or any authorities of such locality. In the Raymond Case, 37 N. Y. 428, this section, which is familiarly known as the "Home Rule" provision of the constitution, received judicial construction in its application to the subject of assessment for the purposes of taxation. In that case the legislature, by chapter 410, Laws 1867, sought to transfer the duties of the commissioners of taxes and assessments for the city of New York, who were officers appointed by local authorities, to a board of three commissioners appointed by the governor, by and with the consent of the senate. At the time of the adoption of the constitution of 1846, such duties of assessment were, and for a long time had been, performed by district assessors. By various acts passed in 1850, 1857, and 1859, the ·legislature had regulated the performance of such duties, and changed the officers who were to perform them. But in each instance the selection of such officers was left to local authorities. The act of 1867, however, sought to change the selection of such officers from the city to the state, and it was at once challenged as being violative of the home rule provision of the constitution. The question came before the court in the case above cited, and it was there distinctly held as follows: That, beyond controversy, the office in question was exclusively a city office; that the duties imposed by the act upon the new board, although broader in their extent, were essentially the same as those exercised by the city assessors in 1846; that the plain intent of the section of the constitution in question "was to preserve to the localities the control of the official functions of which they were then possessed, and this control was carefully preserved

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