Case ID: ad_125/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.: Ingraham, J. (concurring):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Bertha Schiefer, Respondent, v. Minna Freygang, Individually and as Administratrix, etc., of Oscar C. Freygang, Deceased, and Others, Defendants, Impleaded with The New York Central and Hudson River Railroad Company and The New York and Harlem Railroad Company, Appellants.
    First Department,
    April 10, 1908.
    Equity—fraud — demurrer to answer — action by grantor to cancel conveyance of easements by grantee — sufficiency of complaint.
    An allegation in an answer in a suit in équity that plaintiff has an adequate remedy at law without setting forth facts to support it merely states a legal conclusion, and is insufficient on demurrer if the complaint sets forth facts showing a cause of action in equity.
    A demurrer searches the record, and a demurrer to a had answer cannot prevail if the complaint be not good.
    In a suit in equity against certain individuals and railroad companies to cancel a conveyance of easements to the railroad companies by the individual defendants, plaintiff’s successors in title to the premises to which the easements were appurtenant, the complaint alleged the reservation in plaintiff’s conveyance to the individual defendant's ancestor, as part of the consideration thereof, of all claims and causes of action for rental and fee damages to the property, caused by the construction and operation of the elevated railroad of the defendant corporations; a covenant and agreement in said deed to allow the grantor to bring in the name of the grantee, or otherwise, actions to recover such damages; and an agreement by the grantee to execute all necessary conveyances of the easements taken by the railroad companies which might he presented by the grantor or his assigns, and in case of conveyance by the grantee before a settlement, then the insertion in the deed of conveyance of similar covenants and agreements; title in the individual defendants subject to said restrictions and covenants, and a request that the individual defendants bring an action as trustees for plaintiff’s benefit to collect such damages, and a request that they execute and deliver to plaintiff the conveyances and releases mentioned in the deed, and a failure and refusal so to do; that they violated the aforesaid covenants and agreements, and had settled the claims for damages with the defendant companies at one-fifth of the value, had appropriated the money to their own use and are financially irresponsible; that the railroad companies had knowledge of the rights of the plaintiff “ and of the intention of the other defendants to commit the fraudulent acts above described, but the said defendant railroad companies, nevertheless, co-operated with the other defendants in said fraudulent scheme, and procured the said conveyance of said easements for the inadequate consideration above mentioned in fraud of the rights of the plaintiff.”
    
      
      Held, that the railroad companies had the right to assume, in the absence of some notice to the contrary, that the settlement was made by authority of the plaintiff, who had intrusted it wholly to her grantee;
    That the allegations of the complaint were insufficient to show that the settlement was made in fraud of the rights of plaintiff.
    Bare allegations of fraud, unsupported by facts fairly tending to sustain the charge, are insufficient.
    Appeal by the defendants, The Hew York Central and Hudson ¡River ¡Railroad Company and another, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 16th day of ¡December, 1907, upon the decision of the court, rendered after a trial at the Hew York Special Term, sustaining the plaintiff’s demurrer to the fifth separate defense of new matter contained in the said defendants’ answer as insufficient in law upon the face thereof.
    
      Alexander S. Lyman, for the appellants.
    
      L. M. Berkeley, for the respondent.
   Laughlin, J.:

This is a suit in equity by the former owner of premises known as Ho. 1748 Park avenue in the borough of Manhattan, Hew York, to cancel a conveyance of easements appurtenant to said premises made by the individual defendants, the plaintiff’s successors in title to the premises, to the defendant railroad companies, to specifically perform the covenants of the plaintiff’s grantee to execute and deliver to the plaintiff conveyances and releases of the easements, to enable the plaintiff to collect the damages to the easements reserved in her conveyance, or in the alternative for damages and to enjoin the railroad companies from operating trains on the viaduct in the street in front of the premises until the damages to the easements are paid to the plaintiff, and to have it declared that the individual defendants are trustees for the plaintiff as to the easements and the damages thereto and to obtain other relief incident to these purposes. The defense to which the plaintiff demurred as insufficient in law upon the face thereof is as follows: For a further fifth and separate defense said defendants allege that for the alleged cause or causes of action set forth in the complaint herein plaintiff has an adequate remedy at law.”

Of course, if the plaintiff has an adequate remedy at law, that is a defense to this suit in equity, but the question as to whether she has an adequate remedy at law must depend upon the nature of the cause of action set forth in the complaint, because viewed in any other light this separate defense merely alleges a legal conclusion without facts to support it. If, therefore, the complaint sets forth facts showing a cause of action in equity to cancel the release of the easements and to enjoin the operation of the railroads until the damages to the easements are paid to the plaintiff, upon the theory that she reserved them in her conveyance and that the individual defendants, although not her direct grantee but the heirs of such grantee, have likewise taken title subject to such reservation and have become trustees of the easements for the benefit of the plaintiff and may be compelled to act in the premises, then it is manifest that the plaintiff would have no adequate remedy at law and the separate defense would be insufficient in law. Assuming, therefore, a cause of action of this nature to be well pleaded by the plaintiff, the separate1 defense is insufficient in law and the demurrer thereto should not have been sustained. The appellants, however, draw attention to the complaint and contend that it fails to state facts sufficient to constitute a cause of action against them, and that under the rule by which a demurrer searches the record, it should have been overruled upon the ground that a demurrer to a bad answer cannot prevail, if the complaint be not good. We are of opinion that this point is well taken. The complaint shows that the railroad companies and the individual defendants have adjusted the damages to the easements at about the sum of- $2,000, and that this settlement has been consummated by payment by the railroad com,pañíes and by conveyance of the easements. The settlement is challenged upon the ground that the amount paid was inadequate and that the fee and rental damages thus released amount to about the sum of $10,000. The plaintiff conveyed the premises to one Oscar C. Freygang on or about the 15th day of March, 1904. 1 The provisions of the deed, upon which the action is founded, are as follows:

“ The party of the first part hereby reserves to herself all claims and causes of action against the State of Hew York, and any corporation or persons for rental and fee damages to said property, caused by the construction, maintenance and operation of the elevated railroad through Park avenue as now maintained and operated. The party of the second part hereby covenants and agrees with the party of the first part, as part of the consideration thereof, to allow, and hereby does allow said party of the first part, at her own proper expense, however, to bring in the name of the party of the second part or otherwise, as she may be advised, any or all actions or suits at law or in equity, claims or proceedings to collect or recover said damages from the State or city of Hew York, or railroad company. Said party of the second part further agrees that he will execute any and all necessary conveyances of the easements in said premises taken by said railroad structure as now maintained and operated, that may hereafter be presented to him for execution by the party of the first part, her heirs, executors, administrators or assigns; and in case the said party of the second part shall convey said premises before the settlement of said claim, then said party of the second part shall cause this and similar covenants to be inserted in the deed or deeds of conveyances.”

The plaintiff alleges that the consideration which she received was adjusted and fixed at a much smaller sum in view of these provisions of the deed than she would have otherwise consented to accept. It appears that her grantee died intestate on the 29th of December, 1904, leaving the defendant, Minna Freygang, his widow, and the defendants, Ida Hodges, Clara Freygang and Antoinette Freygang, his children. Letters of administration were issued to the widow, who, on the 14th day of October, 1905, quit-claimed her interest in the premises to her three daughters aforesaid, the deed, however, containing a clause that it was made “ subject to the covenants, agreements, conditions and liens ” contained in the deed from the plaintiff to her husband. The plaintiff further alleges that she has requested the individual defendants to bring an action as trustees, for her benefit, for the purpose of collecting the damages so reserved in her deed and to join with her for that purpose, and has requested them to execute and deliver to her the conveyances and releases mentioned in the deed, but that they have failed and refused to do so and on the contrary they “ have violated the aforesaid trust and the aforesaid provisions of said contract and deed, and have settled the claims for said damages with the defendant railroad companies; ” and have not accounted to her for the money received in settlement, but have appropriated the same to their own • use and that they are pecuniarily irresponsible; that the railroad companies had notice and knowledge of the rights of the plaintiff “ and of the intention of the other defendants to commit the fraudulent acts above described, but the said defendant railroad companies nevertheless co-operated with the other defendants in said fraudulent scheme, and procured the said conveyance of said easements for the inadequate consideration above mentioned, in fraud of the rights of the plaintiff; and that the said defendants now wholly refuse to settle with the plaintiff and to pay the damages reserved as aforesaid.” The complaint contains no further allegations tending to show fraud on the part of the appellants in negotiating a release of the damages to the easements from the individual defendants. The complaint deals only with a cause or causes of action which vested in the grantee under the deed from the plaintiff. If the claim of the plaintiff were that the settlement was void upon the ground that the individual defendants were not authorized to make it, or was of a cause or causes of action that had not been assigned to or had not vested in them, then the plaintiff should have proceeded in disregard of the settlement, which, of course, could not be a bar to any cause of action which was vested in and retained by the plaintiff; but in that case the individual defendants would have been unnecessary parties. Joining them as parties characterized the action as one in equity based on the deed. If the cause of action vested in the individual defendants, as successors to the plaintiff’s grantee, then it follows that they were authorized to-compromise it. The complaint is framed upon the theory that the individual defendants had a right to compromise the cause of action and execute a release to the railroad companies, but it is claimed that the settlement was in fraud of the rights of the plaintiff and that a court of equity should annul it upon that ground. If the plaintiff wished to ratify th.e settlement, she could then sue the individual defendants for an accounting, irat since she proceeds in disaffirmance of the settlement, she must allege facts which fairly impeach it. Bare allegations of fraud, unsupported by facts fairly tending to sustain the charge, are insufficient. We have here merely an allegation that the amount paid by the railroads in settlement was only about one-fifth of the amount of damages which the plaintiff claims she sustained, and the pleader apparently assumes that this shows fraud on the part of the individual defendants. The only allegations on the question of fraud concerning the action of the appellants are those already quoted. There is no allegation that the individual defendants, by agreement or otherwise, conspired to defraud the plaintiff, nor is there any allegation that they realized and knew that the amount which they accepted in settlement was wholly inadequate to cover tne damages sustained by the plaintiff. The allegations quoted show sufficiently, perhaps, that the railroad companies were aware of the plaintiff’s rights in the premises and that her damages were far greater than the amount for which they were settling with the individual defendants “ and of the intention of the other defendants to commit the fraudulent acts ” described in the complaint. Inasmuch, however, as no fraudulent acts are described as such or shown by appropriate allegations, this charge is of little value in deciding the question now under consideration. The railroad companies had a right to assume, in the absence of some notice to the contrary, that the settlement was made by authority of the plaintiff, who had intrusted it wholly to her grantee. Having reached the conclusion that the allegations of the complaint are insufficient to show that the settlement was made in fraud of the rights of the plaintiff, the complaint fails to show a cause of action against the appellants upon any theory, and it is unnecessary to decide whether, where the grantee in a deed containing such a covenant fails to bring an action, the grantor may maintain it against the grantee and the railroad.

It follows that the interlocutory judgment should be reversed, with costs, and the demurrer overruled, with costs; but with leave to the plaintiff to withdraw the demurrer upon payment of costs of the appeal and of the demurrer.

Patterson, P. J., Clarke and Houghton, JJ., concurred.

Ingraham, J. (concurring):

I concur with Mr. Justice Laughlin that this judgment should be reversed upon the ground that the plaintiff by the conveyance to Oscar C. Freygang parted with her title to the property which included the easements appurtenant thereto, and the railroad companies had then the right to purchase the property from the grantee or his successors in interest for any price for which he was or they were willing to- convey. The railroad companies were guilty of no fraud as against the plaintiff because the owner of the property was willing to convey for a less price than the property conveyed was worth. In McKenna v. Brooklyn Union El. R. R. Co. (184 N. Y. 391) the Court of Appeals expressly held that these easements in the street were appurtenant to the abutting property and passed to the grantee, notwithstanding a reservation of the amount due to the abutting property in consequence of the trespass, and that after such conveyance the grantor had no cause of action against the railroad companies in equity. The railroad companies were not responsible for the price that the owner of the property was willing to accept, or for the disposition made by the owners of the property of the consideration paid to them. The case of Schomacker v. Michaels (189 N. Y. 61) recognizes the right of a railroad company to make the best bargain it could with the owners of property. The principles established in these cases show that the grantor had no cause of action in equity against the railroad companies; and as no facts are alleged that show any fraud as between the plaintiff and the railroad companies, the plaintiff was not entitled to have the conveyance set aside.

The judgment should, therefore, be reversed.

Judgment reversed, with costs, and demurrer overruled, with costs, with leave to plaintiff to withdraw demurrer on payment of costs.