196 N.Y. 487 | NY | 1909
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *491 Opinion in Action No. 2: The defendants had acquired by devise certain lands in the city of New York subject to a lien of $9,953.83 for assessments imposed by the city for regulating and grading an avenue. Being the owners of such lands, they agreed to sell the premises free and clear of all liens and incumbrances. Under the contract of sale, payment was made in three installments. Before the last payment, the assessments were paid, not by the defendants, by means of a check for the amount thereof drawn upon the plaintiff corporation to the order of the collector of assessments and arrears of New York city. The check purported to be signed by William O. Green, trustee, who had authority to draw checks against a deposit with the plaintiff to the credit of the estate of Andrew H. Green. The signature was a forgery but the plaintiff paid the check believing it to be genuine. There is no evidence as to the identity of the forger or that the defendants had any notice or knowledge of the payment of the assessments by means thereof until after the event. After ascertaining the forgery, the plaintiff restored to the credit of the estate of Andrew H. Green in its deposit account the amount of the forged check which had previously been charged against it.
Upon these facts, the plaintiff brought this suit praying judgment that upon the payment of the assessments the plaintiff became subrogated to the lien of the assessments upon the *492 lands subject thereto and that such lien remains in full force as between the parties to the action; that the lien attached to the moneys received by the defendants as the purchase price, which in equity represents the land; and that the plaintiff recover the amount of the assessments from the defendants.
The answer denied all the allegations of the complaint except the ownership of the lands, the contract to sell the same and the conveyance thereof under the contract. It further averred that the premises were devised to the defendants by Marianna A. Ogden of Newport, R.I., subject to the assessments which were confirmed and levied during her lifetime; that Andrew H. Green, for many years prior to his death, was her agent and personal representative in reference to the management and care of her real estate; that the said Marianna A. Ogden sent him $9,953.83 for the purpose of paying the assessment but he never paid the same; and that all these matters were known to the plaintiff corporation when it restored to the credit of the Andrew H. Green estate the amount paid out on the forged check.
The issues were referred to a referee to hear and determine. He found the facts substantially as set forth in the pleadings, except that there is no finding of the receipt of any money by Andrew H. Green from Marianna A. Ogden with which to pay the assessments. The Appellate Division, by a divided court, has affirmed the judgment in favor of the defendants which was entered upon the referee's findings.
Both the referee and the judge who wrote the prevailing opinion below thought that the case was controlled by section 112 of the Negotiable Instruments Law which provides that the acceptor of a negotiable instrument admits "the existence of a drawer, the genuineness of his signature, and his capacity and authority to draw the instrument." This enactment is merely declaratory of the common law. The leading English case in which it is enunciated isPrice v. Neal (3 Burrow, 1354), decided by Lord MANSFIELD in 1762. The leading New York case to the same effect is NationalPark Bank v. Ninth National Bank (
There being nothing in the law of commercial paper which constitutes an obstacle to a recovery by the plaintiff, it remains to consider whether the court below (all the judges concurring in this respect) were right in holding that no equitable remedy was available to the plaintiff under the doctrine of subrogation.
Upon the facts as found by the referee we have here the case of a purely gratuitous payment of assessments, constituting at the time a lien in favor of the city of New York upon lands owned by the defendants, which payment was clearly induced by the fraud and forgery of some party unknown. *494 The money thus paid without any request or authority from the defendants is not recoverable in an action at law. "No one can thus make himself the creditor of another by the unsolicited payment of his debts." (Kelley v. Lindsey, 7 Gray, 287;Homestead Co. v. Valley Railroad, 17 Wallace, 153, 167.) The payment, however, operated as between the defendants and the city to discharge the city's lien which rested upon the defendants' land; and the theory upon which the plaintiff has brought the present suit in equity is that this lien under the circumstances is to be deemed still alive for the benefit of the party who actually paid the assessments and inasmuch as the defendants have conveyed away the land the lien is transferred to the proceeds in their hands.
It is argued in the brief of counsel for respondents that subrogation to the lien of a state or city for assessments is discountenanced by the law and reference is made to the case ofMercantile Trust C. v. Hart (76 Fed. Rep. 673) where THAYER, J., intimated that it might well be doubted whether a person could ever claim subrogation to the rights of the state as respects a lien for taxes. The doubt thus suggested finds little support in the cases which we have been able to find bearing on the question. On the contrary, the cases are not infrequent in which such liens, although discharged as to the taxing power, have been kept alive to do justice between third parties. InCockrum v. West (
We think that justice demands its application here. Subrogation is not permitted (1) where the party seeking it has intermeddled with the affairs of the defendant; or (2) where it would prejudice the rights of innocent third parties. Here the plaintiff did not officiously interfere with the affairs of the defendants, but acted in fullfillment of what it supposed to be an obligation towards one of its depositors with the result that it relieved the defendants' land from the assessment lien thereon. Far from disturbing the defendants' affairs it aided the defendants to perform their contract to convey the premises free from incumbrances. The case, therefore, can hardly be called one of officious interference. The right of subrogation is denied because it is said that the money was advanced solely upon the personal credit of the depositor and it was a mere accident that it went to discharge the lien. But this last feature is the characteristic of the case which entitles the plaintiff to equitable relief that might otherwise be unavailable. It is suggested that another rule stands in the way of the plaintiff, namely that "a subrogee acquires no remedies different from those which might have been enforced by the parties to whose place he succeeds;" and the plaintiff here seeks a personal money judgment *496 which, of course, the city could not have had against the landowner upon the assessments, inasmuch as they did not subject the landowner to any personal liability but merely created a charge upon the land. The answer to this objection is that the demand for a personal money judgment is only incidental and that the principal prayer of the complaint is for subrogation to the lien of the city, which is to be deem transferred to the proceeds of the land in view of the fact that the land has been conveyed away by the defendants. If the defendants still retained the land upon which the assessments were paid, the plaintiff succeeding to the rights of the city would have acquired its lien thereon for the amount of the assessments. Although the lien of the city of New York was terminated as to the city by the payment of the assessments it could be regarded as still existent for the purpose of doing justice between the party who had paid them and the owners of the land. The land having been converted into money in the pockets of the defendants the lien attaches to that money and is enforceable against it.
It must be distinctly understood that this view is predicated upon the assumption that the payment of the assessments was purely gratuitous and in nowise in discharge of any real or supposed obligation upon the part of the estate of Andrew H. Green or of the unknown forger, but was brought about solely by mistake induced by the forgery. Upon this assumption we think that the plaintiff on proof of the facts stated in the complaint would be entitled to be subrogated to the lien of the city as against the proceeds of the sale of the land in the hands of the defendants. If, however, it should be made to appear that the payment was not thus gratuitous, we are of opinion that the right of subrogation could not successfully be asserted.
The judgment should be reversed and a new trial granted, with costs to abide the event.
CULLEN, Ch. J., GRAY, EDWARD T. BARTLETT, HAIGHT, WERNER and HISCOCK, JJ., concur.
Judgment reversed, etc. *497
Addendum
Opinion in Action No. 1: This action in its character and the facts developed upon the trial is in all respects similar to Action No. 2 between the same parties and similarly entitled except that the forged check in the present case was used to pay taxes (instead of assessments) upon the lands of the defendants. Inasmuch as these taxes had been levied during the lifetime of the defendants' testatrix and were her personal debts chargeable against her estate the money represented by the forged check cannot be regarded as having been applied to relieve the devised premises from a lien. This fact differentiates the case from Action No.2 and prevents the equitable doctrine of subrogation from being available to the plaintiff. There being no other theory which will sustain a recovery, the judgment in favor of the defendants was right and was properly affirmed by the Appellate Division.
The judgment of the Appellate Division should be affirmed, with costs.
CULLEN, Ch. J., GRAY, EDWARD T. BARTLETT, HAIGHT, WERNER and HISCOCK, JJ., concur.
Judgment affirmed. *498
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