Case ID: ny-super-ct_17/html/0491-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court—Bosworth, Ch. J. Hoffman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Minister, Elders and Deacons of the Reformed Protestant Dutch Church of the City of New York, Appellants, v. William H. Parkhurst, Defendant and Respondent.
    1. Where, by the terms of an indenture of lease, it is agreed that, at tne expiration of the term thereby granted, the lessor shall either grant a new lease upon terms stated, or shall pay the value of any buildings then standing on the premises which the lessee may have erected conformably to provisions contained in the lease, and that such value shall be “ascertained by appraisers,” one to be nominated by.the lessor, and the other by the lessee, and if such two appraisers cannot agree, that they “ shall nominate an umpire or third person,” and that the valuation of the three, or any two of them, shall be conclusive; and where such lessor, in the January preceding the expiration of the term, elected not to give a new lease, and he and the lessee thereupon severally nominated an appraiser of the value of the buildings, and the two appraisers so selected could neither agree upon the value, nor upon an umpire, and thereupon other two appraisers were, selected with a like result, and thereupon the lessor selected a third appraiser, and the lessee insisted upon the one whom he had secondly nominated, to act as appraiser on his part, and refused to nominate any other, and the parties themselves could not agree upon the value, it was held, that the lessor could institute an action against the lessee, to have the extent of the liability of the former ascertained and determined, and the liability itself extinguished by the payment by the lessor of such sum as should be ascertained to be the just value of such buildings.
    Before Bosworth, Ch. J., and Hoffman, Slosson, Pierrepont and Moncrief, J. J.)
    Heard, February 26;
    decided, April 30, 1859.
    This is an appeal by the plaintiffs from a judgment rendered against them, on a demurrer to their complaint.
    The plaintiffs, by an indenture of lease dated the 1st of February, 1836, demised certain real estate therein described to Wm. H. Parkhurst, Administrator, for a term of years, to wit: for twenty-one years from the 21st of May, 1836; which lease, with all the covenants contained in it, was subsequently extended and continued in force until the 1st of May, 1858.
    It was stipulated in the lease, that “ at the expiration of- the term thereby granted,” the plaintiffs,. “ at their election,” should either grant a new lease, upon terms stated, to the lessee, his executors, administrators or assigns; or should pay “ the value, in good and lawful money of the United States of America, of all such stone and brick buildings as shall or may be erected on the same demised premises by the said party of the second part, his executors, administrators or assigns, agreeable to such plan orplansas may be approved by the said parties of the first part, their successors or assigns, or by any committee by them to be appoint ed, and which shall then be standing on the hereby demised premises, and that the value of such stone and brick buildings shall in such case be ascertained by appraisers, one to be nominated by the said parties of the first part, their successors or assigns, and the other by the said party of the second part, his executors, administrators or assigns.
    “ And if the two persons so nominated shall not agree respecting the value of the said buildings, that then the said two persons shall nominate an limpire, or third person, which said three persons, or any two of them, shall make such valuation or appraisement in writing, under their hands and seals, and that the valuation or appraisement so to be made, shall «be conclusive- and binding upon the parties to these presents, and upon all others interested or concerned therein.”
    In 1847, the defendant became the owner in his own right of the indenture of lease, and of the term thereby granted.
    By a written agreement between him and the plaintiffs, made on the 3d of March, 1857, “ the said lease all the covenants therein contained,” * *' “were renewed and continued for one year” from the 1st of May, 1857, at a rent of $900, to be paid quarterly. '
    The plaintiffs, before the 1st of May, 1858, elected not to grant a new lease, and so notified the defendant. Thereafter, and in January, 1858, the plaintiffs and defendant being unable to agree on the value of buildings which had been erected on the demised premises, selected William R. Tucker and Peter R. Stelle to value them; the plaintiffs selecting the former and. the defendants the latter. They were , unable to agree upon the value, or to agree upon an umpire. ■
    Subsequently, and on the 23d of January, 1858, the plaintiffs selected William A. Thompson, óf the city of Hew York, and • the defendant selected David S. Manners, of Jersey City, to value the buildings. They could not agree upon the value, nor upon an umpire.
    On the 15th of February, 1858, the plaintiffs offered to make a third attempt to obtain a valuation, and selected Wyllis Blackstone to act as an appraiser for that purpose, provided the defendant would select, on his part, another. The defendant met the offer by naming the said David S. Manners as the appraiser on his part, and expressed no willingness to name any other.
    The plaintiffs own the demised premises in fee, and in their complaint, after setting forth the facts before stated, aver a willingness, and wish, and the ability to pay to the defendant “the just, true and fair value of said buildings,” and that they “have been also always desirous to have the said buildings appraised, and their true value ascertained, and to pay the same to the defendant.” The prayer of the complaint read thus:
    “ And the plaintiffs pray that this Court may decree the value, or appoint a suitable person or persons to appraise the value of. the- brick buildings on the premises above described, and known as number ninety-seven Fulton street, and that the defendant be adjudged to accept the sum which shall be fixed by this Court as the value of said brick buildings, in full for the same, and for all and singular any right, title, interest, and claim which he may have in said buildings, under said lease, or otherwise; and that he, the defendant, be adjudged to pay to the plaintiff the whole, or a just and equitable proportion of the costs and expenses of this action.”
    This action was commenced on the 12th of March, 1858. The defendant demurred to the complaint, on the ground “ that the same does not state facts sufficient to constitute a cause of action.”
    The demurrer was' argued at Special Term before Mr. Justice Hoffman, who, on the 3d of October, 1858, gave judgment for the defendant, dismissing the complaint with costs.
    From that judgment the plaintiffs appealed to theGeneral Term.
    
      Daniel Lord, for appellants (the plaintiffs).
    I. The value of the buildings is due in equity, although not in law, from the plaintiffs to the defendant; the buildings were erected and the lessors adopted and offered to pay for them under the conditions in the lease.
    
      1. The case, therefore, is not liable to the objection that the plaintiffs show that there is no claim on them. This was the objection in Field v. Holbrook, and on which .alone it was determined. (6 Duer R., 602.)
    2. It is not the case of a proposed bargain on the valuation of eithef the parties themselves or strangers, which valuation was to precede the vesting of property; as in the cases cited in the latter part of the opinion in Whitlock v. Duffield. (1 Hoffman Ch. R., 118.) But here the tenant’s erections had been made, the landlord had approved them, and offered to pay their value, as it should be determined under the lease.
    3. Eor is it the case of a covenant void for uncertainty, as in the principal case in Hoffman’s Reports.
    Those cases do not affect this decision.
    . II. The complaint' does not show a case where the defendant can recover at law; there has been no valuation, nor any default in the plaintiff, defeating one. ' .
    1. The plaintiff was bound only to one effort to value, which was fairly made, and was ineffectual. He, therefore, is not liable on the covenant in an action at law.
    2. But even if the third nomination had been the one to be considered, that was defeated without the plaintiff’s fault. They were not bound to take a nominee of the defendant who had formed an opinion on a previous disagreement. He was not an impartial man as between- the parties, and it was, in law, a fraud on the covenant to nominate him.
    3. The time for the appraisal was not premature; since it was only a reasonable time before the end of the term, the payment was then demandable, and the buildings might have been destroyed the day after the end of the term, and so the valuation become impracticable by actual examination.
    III. The case was one of a merely equitable liability, to the defendant, for a. sum to be ascertained in a mode which the Court should decide to be just. The defendant could have sustained a complaint in equity for the value, on the ground that his remedy at law had been lost by the accident of the appraisers’ disagreement
    1. The possession by ns of the buildings, or offer to pay previous to suit, and our complaint, show an equitable right.
    
      2. The defendant, in analogy to a claim for specific performance of the covenant, had a right to go' into equity; such right is mutual. (5 Price Ex. R., 526.)
    IY.—1. The defendant having a right to apply for equitable relief, the plaintiff has a like right, according to the law of the mutuality of equitable remedies.
    2. Also, because the state of the buildings to be valued is daily changing, so that the valuation cannot be made at any time so justly as at the nearest time to the end of the term.
    3. It is a case for the cancellation of a .claim; for the plaintiffs' defense becomes more uncertain and difficult by lapse of time.
    Y. The complaint is not analogous to one for the appointment of arbitrators, and substitute another tribunal than a Court of Justice. It is the reverse: the resort to a Court of Justice to have that done which has been defeated by the accident; that the appraisers have been unable to agree.
    YI. The judgment allowing the demurrer should be reversed, remitting to the Special Term for a judgment to be rendered according to the complaint, unless the defendant shall answer.
    
      James R. Whiting, for respondent (the defendant).
    ■ I. The plaintiffs, by their own showing, are in the possession of the premises in controversy, and show no injury; therefore, no action lies in their favor.
    II. If, indeed, the plaintiffs had shown, by their complaint, that they had sustained damage by the acts of the defendant, their only remedy is on the covenant. (The Mayor of New York v. Butler, 1 Barb. S. C. R., 325.)
    III. Conceding that the defendant had neglected to name an arbitrator under , the covenant, if the plaintiffs, as they did, reentered the demised premises and ejected the defendant, the relief demanded is not within the powers of the Court.
    IY. The complaint does not show that the plaintiffs, subsequent to the granting of the renewed lease for one year, had elected not to grant a new lease of the premises in the complaint described.
    Y. The action is premature, having been commenced before the expiration of the renewed term.
    YI. The defendant fully complied with the terms of his covenant. The plaintiffs are in fault. They have no right to refuse to permit their arbitrator to proceed with the person named by the defendant. What evidence is there that Mr. Blackstone and Mr. Manners would not have agreed?
    YH. This is, in fact, a suit by a debtor against his creditor. No such suit has ever been maintained; at least, we have not as yet found any such reported in the books.
   By the Court—Bosworth, Ch. J.

There can be no doubt that the plaintiffs are liable to the defendant, for the value of the buildings in question on the 1st of May, 1858.

I think there is no doubt of the right of the defendant to maintain an action at law to recover such value, inasmuch as the mode provided by the covenants in the lease to ascertain such value has failed to accomplish that result, without any fault of either party.

Thompson v. Charnock, (8 T. R., 134,) Haggart v. Morgan, (1 Seld., 422,) Greason v. Keteltas, (17 N. Y., 491,) Cooper v. Shuttleworth, (34 Eng. L. & Eq., 551,) Clarke v. Westrope, (37 id., 313,) and Avery v. Scott, (20 Eng. L. & Eq., 327, 8 Exch. R., 487, and S. C., 36 Eng. L. & Eq,, 1,) seem to support this proposition, and leave its accuracy free from doubt.

If this be so, then it follows that the plaintiffs may be sued for such value at any time before the statute of limitations will operate as a bar. They must pay the costs of such action. (Code, § 304, sub. 4.) The defendant may select his own time of litigating the question of value, with the certainty that the plaintiffs must pay the expense of the litigation.

If the facts, that the value of the buildings, on the 1st of May, was payable on that day, and that the plaintiffs have, at all times since, had the use of such value, in the rents and profits of the buildings, shall be held to make them liable to pay interest, then they must occupy the position of borrowers against their will, so long as the defendant chooses to be their creditor. ' -

The plaintiffs and defendant cannot agree upon the value of the buildings. Two several sets of appraisers have been unable to agree. It is, therefore, evident, (assuming, as we must, all the appraisers to have acted honestly,) that it is a matter of difficulty, even now, to ascertain such value. That difficulty has, thus far, proved to be insuperable, while the buildings are standing and'in the very condition in which their value is to be determined, and at the very time fixed to ascertain it. It is obvious that the difficulty must be, in reality, greater, when the buildings shall have been destroyed or Materially changed, and when an inspection of the buildings as they were when their value was to be ascertained cannot be had to aid witnesses in forming a judgment or to make it practicable for them to state the actual facts to enable a jury to determine it.

The plaintiffs are not in a condition to know what sum is the just valúe, so that they may tender it, and thus relieve themselves from all hazards as to liability for interest, and from the costs of any'suit the defendant may bring.

This difficulty is produced, not because they have improvidently made a contract which, by its terms, places them in this disadvantageous position, but because, notwithstanding provisions were inserted in the contract for ascertaining the value, which, according to common experience, have proved sufficient and effectual in like cases, those provisions have become spent, without accomplishing, in any respect, the purpose intended.

No action at law, and no remedy which the law has provided, is adequate to relieve them. Their right to pay, and thus terminate their liability, is as absolute and perfect as the right of the defendant to be compensated for the value of the buildings.

There can be no doubt of the accuracy of the general principles, (whatever difficulty may be experienced occasionally in making their true application,) that a court of equity has jurisdiction in cases of rights recognized and protected by the municipal jurisprudence, where a plain, adequate and complete remedy cannot be had in the courts of common law. The remedy must be plain; for, if it be doubtful and obscure at law, equity will assert a jurisdiction. It must be adequate; for if, at law, it falls short of what the party is entitled to, that founds a jurisdiction in equity. And it must be complete; that is, it must attain the full end and justice of the case. It must reach the whole mischief, and secure the whole right of a party in a perfect manner, at the present time and in future; otherwise, equity will interfere and give such relief and aid as the exigency of the particular case may require. (Story’s Eq., § 33.)

Bills in the nature of writs of prevention, commonly called bills in equity quia timet, are entertained to accomplish the ends of precautionary justice. They are ordinarily employed to prevent wrongs or anticipated mischiefs, and not merely to redress them when done. The party seeks the aid of a court of equity because he reasonably fears some future probable injury to his rights or interests, and not because any injury has already occurred ■ which requires any compensation or other relief. The manner in which this aid is given by courts of equity is, of course, dependent on circumstances. (Id., § 826.)

Hence, when one party has a defense valid in law, but which rests upon evidence which he is in danger of losing, if the adverse party is suffered to delay the prosecution of his claims, he may, on this ground, invoke the interposition of a court of equity to secure a determination of the controversy, and an exemption from the hazards of a purposed delay to prosecute.

It is asserted, not as a mere rhetorical expression, but as in itself just, that “ the beautiful character, or pervading excellence, if one may so say, of equity jurisprudence is, that it. varies its adjustments and proportions, so as to meet the very form and pressure of each particular case in all its complex habitudes." (Story’s Eq., § 439.)

We think it is unjust that a man should be compelled against his will and without his fault, to have a demand continually hanging over him.

This injustice is more marked and severe, when without fault on his part, or any neglect in not inserting in his contract provisions suitable, according to the common course of human ' experience, to put it in his power to discharge himself from liability by tendering full performance, he is left in the condition, that the law has provided for him no means to ascertain the extent of his liability, nor furnished him with any remedies which he can employ to make satisfaction.

The injustice is aggravated, when in addition to the embarrassments already suggested, lapse of time is rendering it, from year to year, more difficult to ascertain the measure of his just liability, and when even a few years may destroy the property, itself, the fair value of which, on a given day, in the condition it then was, is the sole measure of liability.

We think it no answer to this objection, that the difficulty of the defendant, six, or twenty years after the day when the value was to be ascertained, to show what it in truth then was, and his risk of losing by such delay will be as great as that of the plaintiffs.

The plaintiffs, unless guilty of some wrong or default deserving such a punishment, should not be exposed to such hazards.

The ends of justice cannot be promoted, human rights cannot be protected, nor can tribunals instituted to enforce rights, and prevent and redress wrongs, commend themselves to the esteem of mankind, by acting on the principle, that one party will stand as good a chance as the other by speculating on the issue of a suit, the trial of which is purposely delayed, until the best evidence attainable is impaired or destroyed, and acting on it because one party is willing and determined to take such chances, and on the further ground that the Courts have no power to relieve the bther from the perils of such a trial.

We cannot but think it would be a reproach to the- administration of justice, if the Courts by reason of their constitution and powers were coerced to hold that they were incompetent, on such a state of facts to relieve a party who desires and offers to do justice, but is unexpectedly and without fault placed in a condition that he cannot know what, in judgment of law, it is his duty to do, and has no means by any aid a court of law can extend to him, to ascertain the extent of that duty, or to perform it.

If these plaintiffs had entered into a contract like the present, without providing a mode of ascertaining the extent of the liability they were incurring, which, according to the ordinary course of human experience, would be adequate and effective, their claims to the interposition and aid of a court of equity might be different.

However that may be, it seems to us but a just and reasonable application of the rules we have stated, to a case of such peculiar facts and circumstances as the one before us, to hold, that the plaintiffs are entitled to relief; that it is strikingly unjust that the defendant should be permitted to compel the plaintiffs to litigate the question of the value of these buildings at a period so • remote that no vestige of them may then be left, instead of litigating it when they can be seen by persons competent to determ'' e their value, and who can thus determine such value, by a thorough examination of them, (the true value of which cannot be reached in any other manner,) and who can speak of that value not only on such inspection, but with their present, and a more perfect knowledge of such property, than they can be supposed to possess after the lapse of years, during which the opinions of all competent judges of value may vary from time to time, with the change of circumstances, and the constantly recurring depression and increase in values of such property generally, as well as in particular localities.

The great hazard of loss and injustice to which the plaintiffs would be exposed by subjecting them to such a necessity, in connection with the facts that they are utterly without any remedy at law, and that they are placed in this condition without fault, or neglect on their part, either by having made an unreasonable contract, or by omitting to do all that was reasonable in the premises, is sufficient, in our opinion, not only to justify the Court in taking jurisdiction of this action, but makes the exercise of jurisdiction a duty.

The judgment must be reversed and judgment entered in favor of the plaintiffs,- but with liberty to the defendant to withdraw his demurrer, and answer in twenty days, in which event, the plain.tiffs’ costs of the demurrer at Special Term, and of this appeal, are ordered to abide-the event of the action.

Hoffman, J.

I concur in the conclusion that the order made below should be reversed, upon a course of reasoning which has resulted in the following propositions:

1. It is perfectly clear that the defendant has a right to' an action at law for the value of his buildings, and that the covenants or stipulations in the lease as to an arbitration, could not interfere with such an action, with or without the fact of their having proven unavailing. (Thompson v. Chamock, 8 T. R., 139; Haggart v. Morgan, 1 Seld., 422; Greason v. Keteltas, 17 N. Y. R., 491; Cooper v. Shuttleworth, 31 Eng. L. & Eq. R., 551; Clarke v. Westrope, 37 id,, 313; Coffin v. Talman, 4 Seld., 465.)

2. I consider it doubtful whether the plaintiffs can sustain any action at law, in any-form, for breach of covenant or otherwise, against the defendant. It may be, that under the case of Livingston v. Ralli, (30 Eng. L. & Eq. R., 280,) an action at law could be so shaped as to be tenable. But if so, it would be incomplete, inadequate, and leave the main controversy between the parties undetermined. It would not drive the defendant to assert his right to the value of the buildings, by way of counter-claim. He is not compelled to do this by an answer, but may subsequently resort to his action. (Halsey v. Carter, 1 Duer, 667.) Whatever could be attained, if anything, by an. action at law, would be inconclusive and inoperative upon the main question as to the rights and relations of the parties.

3. The plaintiffs are therefore without any legal redress, or mode of asserting any right upon the case they make, or without any appropriate, fuE and adequate mode of redress, unless they possess it through an equitable action—what could have been the subject of a bEl in Chancery before the Code.

4. The next question then is, Is there any admitted head or doctrine of a court of equity which wiE entitle the plaintiffs to its interference upon the case as made in the complaint?

After a careful study of the lease in question, I find in it a contract, by which the buddings were to be valued at the expiration of the term. I find an obligation on both parties that this shall be done at that period, and- an equal impEed obligation to unite previously in any measure necessary to accomplish this. The method pointed out, viz., by arbitration, could not be enforced in equity, and would not bar an action at law, but it is evidence of the intention and meaning of the contract, that the valuation shall be made at or by the prescribed period. The duty of the defendant to concur in aE legal means to effect this, is as clear to my mind as the duty of the plaintiffs to pay such value.

If the agreement had been in expEcit terms, that the buddings should be valued on or before a designated day, and the parties would unite in any measures for procuring it to be done by the arbitration of A and B,.or a suit in a competent Court, there can be no question that, after demand and refusal to arbitrate, an equitable action could be sustained. I find enough of agreement in the lease to make the same rule applicable.

“ Courts of equity wiE interpose in many cases to decree a specific performance of express and even of imiplied contracts where no actual injury has as yet been sustained, but only is apprehended from the peculiar relations of the parties. This proceeding is commonly caEed a bill quia timet"- (Story Eq. Jur., vol. 2, § 730.) The remark is true, that the principle of a hill of this nature is contract. The ordinary example of a surety compelling the debtor to pay the demand when due, illustrates this position.

5. -It is suggested that, upon this view of the case, there must' be mutuality of obligation. The one party, (the defendant here,) must have a right to go into a court of equity, or the other, (the plaintiffs here,) have no such right.

The doctrine of the necessity of a mutuality of legal obligation in its broad sense, as applicable to contracts, once asserted by Chancellor Kent, is indisputably wrong. Under the' statute of frauds, one party may be bound when the other is wholly freed. (Willard’s Eq. Jur., and cases, p. 267; Woodward v. Aspinwall, 3 Sandf. S. C. R., 272.)

In another sense, the proposition is strictly right. In the meaning that, in cases out of the influence of the statute of frauds, one party may not have an equitable remedy upon a contract, when the other cannot have any remedy at all, it is a rule intelligible and well warranted. But I do not understand that, in order to get relief in equity within this rule, it is essential to show that each party has redress in equity, and no redress at law; or to show that each party has some, but an inadequate, redress at law, and, therefore, a remedy in equity.

On .the contrary, when mutuality consists in the right of one party to get full relief and satisfaction of his contract, yet only through equity, and of the other to get all he can demand, but only at law, I cannot see why the law of mutuality, or reciprocal obligation, is not fully satisfied. The law gives redress. Some human tribunal administers it. It is unimportant which performs the office, or in whose favor. (Story Contr., vol. 2, § 741.)

But suppose this view is unsound, then the rule laid down • by Sir John Leach in Adderly v. Dixon, (1 S. & St., 607,) covers the whole case. He says “ that it has been settled, by numerous decisions, that the remedy in 'equity must be mutual, and that where a bill will lie for a purchaser, it will also lie for the vendor.” This was applied to the case of a seller of rights to future dividends upon a bankrupt’s estate, which debts had been proven. The price was 2s. 6d. in the pound. The purchase money was therefore definite, but damages at law would not accurately represent the value of the future dividends.

6. If I am warranted in deducing from the lease in question, an agreement, such as I have stated, to have the buildings appraised and paid for at or by a definite time, wholly irrespective of the method of doing this pointed out, then the power of the Court to enforce such a contract is indisputable. (Story, § 729.)

Judgment reversed, with liberty to defendant to answer.