Case ID: ny-st-rep_62/html/0583-01.html
Source: Caselaw Access Project
Author: {"author": "Follett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James R. O’Beirne, App’lt, v. Spencer S. Bullis et al., Resp’ts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed October 12, 1894.)
    
    Specific performance—Damages.
    Where, if granted? 'a decree for specific performance will be unavailing-because of the defendant’s inability to perform, damages may be awarded.
    Appeal from a judgment dismissing the complaint <5n the -merits.
    
      Frank S. Smith, for app’lt; Adelbert Moot, for resp’t.
   Follett, J.

The facts found by the court upon uncontradicted evidence conclusively show that Spencer S. Bullis and Mills W. Barse perpetrated an atrocious froud upon I. B. Newcombe& Cothe trust company, and every person purchasing the bonds secured by the mortgage. It is found (findings 28 and 29) that the agents of I. B. Newcombe & Co. were escorted by Bullis, at the request of Barse, through large tracts of heavily timbered land in McKean county, near the railroads, who reported its value to the firm, by which report they were induced to attómpt to negotiate the bonds. A clear understanding of what the individual defendants intentionally accomplished cannot be better disclosed than to quote the findings of the court. Twenty-fifth finding: “That and before the making and execution and delivery of said several agreements the defendants Bullis & Barse pretended and represented to the said firm of I. B. Newcombe & Co. that the said 80,000 acres of land were timbered, free and clear of all incumbrances, and contiguous and adjacent to the line of the defendant railroad companjq as the same was then constructed and projected, and that said land was covered by a large quantity of merchantable timber, which would be. sufficient to, and would actually provide said railroad with at least seventy tons of freight' to the acre, for conveyance over said railroad at rates from 25 to 50 cents per ton in addition to the percentage accruing to said defendant railroad company from divisions with other lines.” Forty-sixth finding: “That of the lands mentioned and described in said mortgage, Exhibit D, 24,971.52 acres thereof, more or less, being warrants 3,708, 3,717, 3,719, 4,874, 4,872, 4,871, 4,917, 3,702, 3,710, 3,712, 3,718, 3,699, 4,335, 4,336, 3,722, 3,732, 2,396, 2,550, 4,913, 5,572, 5,556, 3,703, 3,422, 3,423, 4,875, 4,876, 3,706, 3,734, 3,711, 5,578, and lots 18 and 34, were not owned by said Bullis at the date of said mortgage.” Forty-seventh finding: “That the following warrants described in the mortgage annexed to the complaint herein were not timbered or had all timber removed off them, at the date of the execution of said mortgage, to wit : Warrants 3,734, 3,711, 3,702, ‘4,335, 4.336, 4,872, 4,875, 4,876, 3,422, 3,423, 5,573, 5,572, 3,703, 3,708, 3,717, 3,719, 3,699, 5,556, all in the county of McKean, state of Pennsylvania, and lots 41, 42, 43, 34, 35, 25, 27, 33, 18, and 26, located in the town of Red House, county of Cattaraugus, state of, New York.” Fifty-second finding: “That the defendant Bullis at the date of the execution of the mortgage above mentianed did not have the title to the soil of certain of the lands described in said mortgage, and the timber standing thereon, being warrants Nos. 3,708, 3,717, 3,719, 4,874, 4,872, 4,871, 4,917, 4,335, 4,336, 3,710, 3,712, 3,718, 3,699, 3,702, 3,722, 3,732, 2.396, 2,550, 4,913, lot 18, aggregating 15,800.92 acres, more or less.” Fifty-third finding: “That the defendant Bullis, at the date of the execution of the mortgage above mentioned, did not have free and unincumbered title to the following lands described in said mortgage, to wit: Warrants Nos. 5,572, 5,556, 5,573, 2.396, 2,550, 4,913, 3,706, 3,734, 3,711, 3,714, 3,731, 4,335, 4.336, 3,722, 3,703, 3,708, 4,817, 4,871, 3,717, 3,719, 4,872, 4,874, lot 34.” Fifty-fourth finding: “That of the lands mentioned and described in the said mortgage, Exhibit B, 1,900 acres thereof, being warrants 8,731 and 3,714, were owned by said Bullis at the date of said mortgage, and constitute a compliance with the covenants and agreements of the defendants Bullis & Barse.”

These findings are sufficient to show the magnitude and character of the fraud perpetrated by Bullis & Barse. By the forty-ninth and fiftieth findings it appears that much of the land mortgaged was of little value, and by the fifty-first finding, instead of such land being included in the mortgage, that land of at least $18 per acre should have been included -in order to constitute a compliance with the contracts of Bullis & Barse. These findings, in connection with the fact that 4,379 acres of land was valued by the appraisers at one dollar per acre, sufficiently show the value of the land included within the. mortgage. The learned trial court correctly held that a specific performance of the contracts could not be decreed because it did not appear that Bullis & Barse, or either of them, owned timber lands other than those described in the mortgage.

The ground on which the court refused to award damages, and dismissed the complaint, is not disclosed; but we assume it was on the theory that as equitable relief could not be granted the plaintiff was not entitled to legal relief—to damages. We take it to be too well settled to require the citation of many authorities that in case a plaintiff in an equitable action shows that he is entitled to equitable relief which, if granted, would be unavailing because of the defendant’s inability to perform, the damages sustained by the plaintiff may be recovered in the same action. Margarf v. Muir, 57 N. Y. 155-159. Miles v. Dover Furnace Iron Co., 125 N. Y. 294; 35 St. Rep. 14; Valentine v. Richardt, 126 N. Y. 272; 37 St. Rep. 12, It has been held in many cases brought to compel the specific performance of contracts that damages may be awarded to the plaintiff, though specific performance be refused. The right of this plaintiff, who purchased and owns. 10 bonds for $1,000 each, to maintain this action in behalf of himself and of all other bondholders is not seriously questioned, and was determined in Belden v. Burke, 72 Hun, 51; 55 St. Rep. 844.

It appears that the trust company on the 4th of April, 1893,— Three months before this action was begun,—declared, pursuant to article 3 of the mortgage, that the whole sum secured by it should become immediately due and payable. The plaintiff showed a sufficient demand upon the trust company to bring an action for the protection of the bondholders, and refusal, to entitle him to maintain this action. The judgment should be reversed and a new trial granted, with costs to appellant to abide the-event. All concur. . ' *