Lally v. New York Cent. & H. R. R. Co.

The plaintiff appeals from a judgment dismissing her complaint at the opening of the trial at Special Term. Both parties concede that the action is in equity to remove a cloud upon the plaintiff’s title. The question turns upon the extent and the validity of certain letters patent from the people of the state. The learned court dismissed the complaint, upon the ground that the court did not have jurisdiction, that such a grant, could only be attacked by a suit brought directly by the sovereign, either by the people themselves through the Attorney General to set aside the entire grant, or, where it affects a private individual, as in this case, by the people on the relation of the owner to sét aside the grant. My discussion is limited to the question whether an action of this nature lies.

It is well settled that, where evidence dehors the patent is required to show the invalidity thereof, the patent can be avoided “only in a direct proceeding to review the action of the commissioners, or by action in equity to vacate the patent.” Blakslee Mfg. Co. v. Blakslee’s Sons Iron Works, 129 N. Y. 155 , 29 N. E. 2 , and authorities cited. But I think that this rule does not prohibit an action by an individual to remove a cloud on his title. The distinction is clearly shown by Stephen J. Field, C. J., in Biddle Boggs v. Merced Mining Co., 14 Cal. 279 , and especially at pages 363, 364, and 365. The learned judge first says:

“The proceeding by bill in equity, which an individual is allowed to take, to set aside a patent, or control its operation, is in the nature of a bill to quiet title—to determine an estate heldi adversely to him—to remove what would otherwise be a cloud upon his own title, or is in the nature of a bill to enforce a transfer of the interest from the patentee, on the ground that the latter has, by mistake or fraud, acquired a title in his own name, which he should in equity hold for the benefit of the complainant. The individual complainant must, therefore, possess a title superior to that of his adversary, and, of course, to that of the government through whom his adversary claims, or he must possess equities which will control the title in his adversary’s name.”

After discussion of Gaines v. Nicholson, 9 How. (U. S.) 364, 13 L. Ed. 172 , the learned judge proceeds:

“Here the trustees asserted a title, which upon their allegation was superior to that of the government at the time the patent issued, and, though the suit

is stated In the opinion oí the court to be to set aside and annul the patent, it was, in fact, as appears from the pleadings and judgment, only to stay proceedings at law and remove the cloud upon the title. In that particular case the effect of the suit, had the decree been sustained, would have been the same upon the rights of the patentees as if it had been brought to annul the patent absolutely. But in many cases the effect would be very different. A decree annulling a patent destroys it absolutely. A decree setting aside or restricting its operation to the premises in controversy still leaves it unimpaired in other respects. To annul a patent absolutely, proceedings can only be taken by the government, or some individual in its name, and that by scire facias, or by bill, or information. Individuals can maintain no proceedings to that effect; the question being one exclusively between the sovereignty issuing the patent and the patentee.”

See, too, Peabody Gold Min. Co. v. Gold Hill Min. Co. (C. C.) 106 Fed. 241 ; Duluth & Iron Range R. R. Co. v. Roy, 173 U. S. 587 , 19 Sup. Ct. 549 , 43 L. Ed. 820 ; Van Wyck v. Knevals, 106 U. S. 370 , 1 Sup. Ct. 336 , 27 L. Ed. 201 .

I think that section .1957 of the Code of Civil Procedure refers to actions to vacate and to annul, and is not prohibitive of this action. Such an instrument as is described in the complaint may be said to create a cloud upon title. Van Wyck v. Knevals, supra. This defendant is certainly a necessary party. Sanders v. Saxton, 182 N. Y. 477 , 75 N. E. 529 , 1 L. R. R. A. (N. S.) 727, 108 Am. St. Rep. 826 .

The question of any defect of parties defendant is not raised on this appeal. Whether there is such a defect in this action which is in personam (Hart v. Sansom, 110 U. S. 151 -154, 3 Sup. Ct. 586 , 28 L. Ed. 101 ; Pomeroy’s Eq. Jurisprudence, 5 [1 Pom. Eq. Rem.] §12), needs not now to be considered.

I recommend that the judgment be reversed and a new trial be granted, costs to abide the final award of costs. All concur, except HIRSCHBERG, P. J., not voting.