Sweet v. Merry — 14 N.Y. St. Rep. 804

Majority

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William A. Sweet, Resp’t, v. Edmund Merry, Applt.^[1]

(Court of Appeals,

Filed April 10, 1888.)

Headnote

OoNTBACT—CONSTBTJCTION OF—AGBEEMEHT OF SALE.

The plaintiff’s assignors owned eight-twentieths of a certain water power which had been damaged by the act of the state, and efforts were in progress to recover such damages. Plaintiff's assignors sold and assigned to-the defendants, by a written transfer, absolute on its face, their claim for damages. This transfer was made at the request of the defendants, and upon an agreement by the latter that they would prosecute the claim before the proper tribunal, in connection with their own, and upon receiving an award would pay over to the assignors their just and full proportion of' any and all sums which might at any time be allowed by the board of appraisers, and paid by the state, for or on account of the injuries and damages to said property. Held, that it was an agreement of sale for a contingent consideration to be paid in the future. That there was no attempt to-create a trust. The defendants having recovered for nine-twentieths of the damages to the Sturgis mill, and the award having been paid them by the state, the contingency has happened upon which they became liable to-pay to their vendors the purchase price.^[1]

Appeal from a judgment and order of the supreme court, general term, fourth department affirming a judgment in. favor of plaintiff, entered upon the verdict of a jury rendered at the Onondaga circuit, and an order denying a motion for a new trial made on the judge’s minutes. The following are the material facts;

On May 2, 1864, the legislature passed an act authorizing the canal commissioners to rebuild the dam on the Oswego river, at Phoenix, N. Y., and the Horse Shoe dam on that river, connected with the Oswego canal. The object being to improve the navigation of the Oswego canal. This work, occupied part of 1864 to 1866, inclusive. In three years the defendant, Merry, and his deceased partner, George G. Breed, owned a flouring mill property at Phoenix, N. Y., which was located along the Oswego river, and supplied, with water from the dam in question. In the same years, said Merry and Breed owned a one twentieth interest, and plaintiffs assignors, viz: Addison E. Sweet, John G. Gillette, Gay Candee, G. M. Sweet, Julia A. Sweet and Samuel Avery, owned an eight-twentieth interest in a saw mill property at Phoenix, known as the Sturgis mill, which was-also located along the Oswego river, and supplied with water from this dam. It was claimed by the above named

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persons that the rebuilding of the dam injured and resulted in substantial damages to both of the above properties. There being no law then in force under which their claim could be filed, on April 27, 1868, the legislature passed a special act for the relief of persons who sustained damages by the rebuilding of this dam, naming the persons, among whom were said Edmund Merry and George G. Breed. Prior to the passage of this act, an instrument in writing, and under seal of which the following is a copy, was executed and acknowledged by- the plaintiff’s said assignee and recorded

For value received, we, and each of us, sell and convey and assign all our right, title and interest and claim in and to all damages to property and water power against the state of New York growing out of the building of the Phoenix dam and lowering the height thereof. The claim for damages hereby sold and assigned is upon the property and water power at Phoenix, Oswego county, N. Y., known and designated as the Sturgis mill property. This sale and assignment is made to Edmund Merry and George Breed, under the firm name and style of Merry & Breed, who are hereby authorized to prosecute said claim against the state of New York in their own name, and receive and receipt for all moneys awarded on account of said claim. Witness our hands and seals this 23d day of October, 1865.”

The actual consideration for this assignment was a subject of litigation on the trial, the testimony of plaintiff’s witness being to the effect that the consideration was an agreement that the claims should be prosecuted together, and that each property should share in the expense of the prosecution in proportion to the amount awarded on each claim, Merry & Breed to pay over to the assignors of the claim eight-ninths of the sum awarded on account of the Sturgis mill property, less the part of the expenses charged upon that property.

M. M. Waters, for app’lt; E. Nottingham, for resp’t.

A correct construction of the agreement sought to be enforced in this action will furnish an answer to the principal objections urged to defeat the recovery. The assignors of the plaintiff owned eight-twentieths of what is called the Sturgis mill property and the defendants one twentieth. The water power had been damaged by the act of the state, and efforts were in progress to recover such damages. As well to simplify the proceedings as for other reasons, the plaintiff’s assignors sold and assigned to the defendants, by a written transfer absolute on its face, their claims for damages to the mill property, which were,, of course, commensurate with their owner

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ship, and were eight-twentieths of the whole loss sustained ■ by the injury to that mill and water power. The defend- • ants thereby became the absolute owners of nine-twentieths of the damage suffered by the property. This transfer was certainly not a gift, for, although the complaint speaks of it as made “wholly without consideration,” the evident ' meaning is that no present consideration was paid at the date of the transfer, for it is explicitly alleged that the assignment was made at the request of the defendants, and upon an agreement by the latter that they would prosecute the claim before the proper tribunals in connection with their own, and upon receiving an award, would pay over to the assignors their just and full proportion of any and all sums which might at any time be allowed by the board of appraisers and paid by the state for or on account ' of the injuries and damages to the Sturgis mill property.

It was not' necessarily or naturally an attempt to create a trust. It was an agreement of sale for a contingent consideration to be paid in the future. Whatever question - there may have been as to the existence of this contract as a matter of fact, is settled for us by the verdict of the jury. The benefit to the defendants of this bargain and the motive for making it are apparent. To recover from the state their own one-twentieth of the damages sustained by the mill property would cost them in the expenses of the litigation just as much as to recover nine-twentieths. By their purchase, they threw upon the assignors and so saved to themselves eight-twentieths of that proportion of the expenses chargeable to the saw-mill property. There was thus value to them in the bargain over and above the purchase price which they had agreed to pay.

They did recover for nine-twentieths of the damage to . the Sturgis mill, and the award has been paid them by the state. The contingency has happened upon which they became liable to pay to their vendors the purchase price and which has fixed and determined the amount of that price. The question of what was embraced in the award, and for what items of damage it was rendered, was also submitted to the jury. That was a proper inquiry. The award as formally made was in one gross sum, but making reference to other papers for its foundation and details. Those papers were somewhat informal and open to possible ambiguity of construction, and evidence was given tending to remove those difficulties.

It was not an effort to change or contradict the award, but to show what in fact was embraced in it, and that, relatively to the Sturgis mill, it covered and gave to the defendants not only the one-twentieth of the damages belonging to them as. owners of the land but also the eight-

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twentieths which was theirs by purchase. The evidence given established that fact and put it beyond any reasonable doubt. So that, under their contract, they became liable for the purchase money which they had agreed to pay and which was the consideration of the assignment.

It is now said that they ought not to have recovered for the eight-twentieths since the appraisers had no jurisdiction of that part of the claim and to save their judicial consistency and the sacredness of the judgment, it must be construed to have been wholly awarded to the defendants for their one-twentieth. But it was not so awarded; and passing by the peculiar character of the claim now made, it is enough to say that it cannot succeed for two reasons. The. defendants agreed to pay if the state paid, as a fact; not if the state ought to have paid as matter of law or morality. Mo such contingency or reservation was thought of or em-. braced within the terms of the agreement and the precise thing has happened, which was the object of both parties-, and through the effort and action of the defendants themselves, and it is with an ill grace that in order to keep all that they have won, they see fit to allege that they ought not to have won it.

They seek, however, to give to the position some strength and to infuse into it some merit, by suggesting that what they have received may be recovered back by the state, because the award is without jurisdiction. Whatever Of possibility there ever was of- that result has disappeared with the lapse of time; but there never was adequate foundation for the suggestion. The appraisers did have jurisdiction, both of the parties and subject matter. The special statute authorized them to hear the claims of the defendants who were named for damages “alleged to have been sustained by them” by reason of among other things “diverting the water from the mill property of said persons or either of them” and also “by reason of changing the location and height of the state dam.” The authority was to hear and determine the claims, the causes of action, .which the persons named alleged they had growing out of the acts of the state which were specified. The defendants presented their claims. They were owners of an interest in the Sturgis mill; and so, at least, had a right to be heard, and the appraisers had jurisdiction to hear and determine. Merry and Breed, in their claim as filed, insisted as they had a right to insist, that they were entitled to recover not only the one-twentieth of the damages to the saw mill, but also the eight-twentieths which they owned by purchase.

That was a question for the appellants to decide; not of jurisdiction, for jurisdiction they had; but of the amount of damages which Merry and Breed could lawfully claim.

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The appraisers awarded the damages asked. I think their decision was correct and within the fair and reasonable construction of the act. But, if otherwise, the case is not ■ altered. v If the tribunal erred, the error did not make their award void. It was simply erroneous, and to be corrected if at all on appeal.

In Hunt v. Hunt ( 72 N. Y., 229 ) it was said, “jurisdiction of the subject matter is power to adjudge concerning the general question involved, and is not dependent upon the state of facts which may appear in a particular case arising, or which is claimed to have arisen, under that'general question.” And how far we have gone in sustaining a- jurisdiction in spite of a judicial error in the determination of facts upon which the jurisdiction depended, will be quite apparent to any one who studies carefully the case of Roderigas v. East Biver Sav. Inst. ( 63 N. Y., 460 ).

Concededly Merry and Breed were entitled to recover some damages for the injury to the saw mill. If they claimed too much that did not oust the jurisdiction; if they were awarded too much that was an error to be corrected on appeal. For all the damages claimed were within a possible and reasonable construction of the act, and if the construction was erroneous it was, nevertheless, within the jurisdiction, and to be remedied by an appeal.

Of course, in this view of the case, there is no question of trust, or of transforming an absolute assignment into something different, or of an illegal contract. The defendants are simply compelled to do as they agreed.

Other questions have been examined, but, we think, need not be discussed.

The judgment should be affirmed, with costs.

All concur.