Lewis v. Wilson — 43 N.Y. St. Rep. 34

Majority

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Thomas J. Lewis, Resp’t, v. Samuel Wilson, App’lt.

(Supreme Court, General Term, First Department,

Filed December 31, 1891.)

Headnote

1. Injunction—Fraud—Assignment of lease.

Where a complaint alleged that the plaintiff had through fraud and mistake assigned, for an inadequate consideration, to the defendant, a one-half interest in a lease of the premises he was occupying, Held, that equity would enjoin a transfer of the lease by the defendant.

2. Tender—No payment into court.

If appeared that the plaintiff had also assigned to the defendant the-other half interest in the lease as security. The complaint alleged a tender of the sum due the defendant, but this had not been paid into court. Held, that this did not defeat the. action, but only went to the question of interest and costs.

Appeal from an order continuing an injunction.

August Kohn, for app’lt; David M. Neuberget, for resp’t.

The injunction restrains the defendant from assigning or transferring a lease of premises known as 2220 Fifth, avenue, in the city of New York, and from interfering with, or preventing the plaintiff from continuing in the quiet and peaceable possession and occupation of the premises. The lease was made on or about the 28th of March, 1890, to the plaintiff as-lessee. And early in April he executed and delivered an assignment of a one-half interest in the lease to the defendant absolutely, and of the other half as security for the payment of any indebtedness which the plaintiff should owe to the defendant.. The absolute assignment of one-half of the lease to the defendant is alleged to have been produced by fraud, and without any understanding on the part of the plaintiff that the assignment contained that provision. So far as the assignment transfers an undivided half of the lease as security to the defendant, it has not been made the subject of complaint.

But it is to the assignment of the other half that the plaintiff' alleges himself to have been fraudulently deceived and overreached. And in his affidavit, as well as that made by Michael Casey, who accompanied him at the time as a friend and adviser,, he has stated that the desire of the defendant as it was expressed.

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was to obtain no more than an assignment of a half interest'in the lease by way of security for the payment of moneys he might advance and goods he might sell to the plaintiff. And that the assignment which was executed was represented to him as extending no farther than that; that he did not read it, but subscribed it upon that representation. It is also alleged that there was danger of the defendant’s assigning the lease to some other person, and in that way preventing the plaintiff from avoiding his assignment to the defendant And the principal object of the action was to prevent such an assignment during the pendency of the suit, and to obtain a judgment for the re-assignment of the lease to the plaintiff. And to secure that object, it 'has been stated and alleged that the plaintiff tendered and offered to pay the defendant the sum of $2,950 owing to him for money advanced and goods delivered. And that this was refused by the defendánt, who also refused to re-assign the lease to the plaintiff.

This statement.of the plaintiff’s case has been controverted by the defendant himself, and three other persons, whose affidavits were read upon the motion for the continuance of the injunction. In the affidavit of the defendant, it is stated by him that he was to have the absolute assignment of one-half of the lease for his services in its procurement, but the performance of which has been positively denied by the plaintiff. As to the other half, there is no substantial difference between himself and the plaintiff. But it has been stated further by the defendant that he was also to have one-half the profits of the business of the plaintiff in lieu of commissions, brokerage or salary. And the statement of these facts is, in substance, repeated in the affidavit of Cotton W. Bean, who is the person who drew the assignment, and in whose presence it was executed.

But the force and effect of his affidavit is greatly reduced, even if the affidavit itself should not be wholly excluded from consideration, by the additional circumstance mentioned on behalf of the plaintiff, that Mr. Bean was represented to him to be an attorney, and was consulted and employed- concerning the assignment in that capacity. And if he did sustain that relation to the business, it is certainly, to say the least, very doubtful whether his evidence could be added in this manner to that of the defendant as to these circumstances. As a matter of fact it appears that he was not an attorney. But where a person may be employed by another, or by others, in that capacity, and upon the understanding that that is the position and office of the person employed, the same disability should be applied to prevent the disclosure of what may have in that manner been elicited from either of the parties as it would be where the individual employed was in fact an attorney at law. At all events, this person was acting in the interest of the defendant in obtaining this assignment, and was identified to that extent with the interests and objects of the defendant. The affidavits of George St John and William BL Emerson, who were in the employment of the defendant, also tend to confirm his statements concerning the nature of the contract made with the plaintiff, and the extent of that contract But

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these statements of what is alleged to have been the agreement are not entirely probable, for there seems to be no good reason for-supposing that the plaintiff would have assigned absolutely one-half of this lease to the defendant as a compensation for his time,, trouble, brokerage and commission in endeavoring to obtain it, and in addition to that give him one-half of the net profits of the business for the same consideration. The interests agreed to be transferred and assigned are disproportioned to the compensation which could properly be claimed for any services performed by the defendant in this respect There is a striking inadequacy in the consideration mentioned for the concessions alleged to have been made by the plaintiff. And that circumstance has a decided tendency to reduce the credit of the persons making these-affidavits.

It is not probable, for the service alleged to have been performed, but absolutely denied by the plaintiff, that one-half of this lease, which is stated to have been valuable and for a term of five years, .with the privilege of another five, together with half the net profits of the business, would in this manner have been assigned and transferred to the defendant And as his position is affected by this degree of improbability there, was sufficient in the case, by way of proof, to sustain the continuance of the injunction. For this court, as a court of equity, under the circumstances disclosed in support of the action, has jurisdiction over it and to award the relief,,, if the evidence shall justify the-plaintiff’s right to it, which has been demanded in the complaint. Valentine v. Richardt, 126 N. Y., 272 ; 37 St. Rep., 12 .

The case is not only one where the remedy at law by way of' damages would be very likely to prove inadequate, but in addition to that it is for the redress of an alleged fraud on the part of the-defendant, as well as a mistake on behalf of the plaintiff leading to the execution of this assignment And that presents a familiar cause of action within the jurisdiction of a court of equity.

It has not been alleged in the complaint or stated in the affidavits-that the sum of money which was tendered to the defendant has-been paid into court, as'that was required by the regular course-of practice. Halpin v. Phenix Ins. Co., 118 N. Y., 165 ; 28 St. Rep., 788 .

But the omission of that allegation, or of the payment of the money into' court, will not necessarily defeat the right of the plaintiff to maintain the action. The object of the tender was to prevent the future increase of interest, and to charge the defendant, with costs. It was not indispensable that the money should be paid into court to entitle the plaintiff to succeed in the suit. He-may, on account of the failure to pay the money into court, be-charged with interest from the time of the tender, as well as with the-costs of the action if that in the end shall be determined to be-just and equitable. But he will still be allowed to maintain it in. case the proof concerning the facts shall substantially sustain them, as they have been charged and alleged. As the case now appears, the order was justifiable, although the defendant has denied any intention on his part to dispose of this lease. That does not abso

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lutely answer the application, for while he may, at the present time, have no such disposition, a change in this respect may take place producing such action hereafter, which would have the effect of defeating the plaintiff’s right to relief, even though the facts would justify the suit so far as it stands against the defendant. The order should be affirmed, with ten dollars costs and the disbursements.

Van Brunt, P. J. and Ingraham, J., concur.