Case Name: James G. Wilson, Administrator, etc., Appellant, v. C. S. Maltby et al., Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1874-11-24
Citations: 59 N.Y. 126
Docket Number: 
Parties: James G. Wilson, Administrator, etc., Appellant, v. C. S. Maltby et al., Respondents.
Judges: 
Reporter: New York Reports
Volume: 59
Pages: 126–131

Head Matter:
James G. Wilson, Administrator, etc., Appellant, v. C. S. Maltby et al., Respondents.
Defendants M. and T. J. H. purchased of defendant Gr. H. the wood growing upon certain lands owned by and in the possession of the latter, but covered by a mortgage held by plaintiff. After plaintiff was advised that the wood was being cut, upon the promise of Gr. H. to apply the purchase-money upon a prior mortgage, he allowed the work to proceed. After all the wood was cut, hut before it was paid for, plaintiff notified M. and T. J. H. of his claim (prior to which time they were ignorant thereof), informed them that Gr. H. threatened to violate his agreement and requested them not to pay the purchase-money to him. This, how ever, they did. In an action wherein plaintiff sought to recover the purchase-price, held, that the title to the wood vested in the purchasers, upon its being severed, which title was not affected by the fact that the land was mortgaged at the time of the purchase and of the cutting; and although the cutting impaired the security, they having done it in ignorance of the lien and without intent to injure plaintiff in respect thereto, were not responsible for theresulting injury; also, that the permitting the work to proceed under the arrangement with G. H. operated as a license, and estopped plaintiff from questioning such title; and that the vendees owed no duty to plaintiff to defer the payment of the debt, and no legal proceedings having been taken to prevent it, the payment was a valid discharge of such debt.
(Argued November 13, 1874;
decided November 24, 1874.)
Appeal from order of the General Term of the Supreme Court in the third judicial department, affirming an order of Special Term denying a motion for a new trial.
This action was brought for the foreclosure of a mortgage made by the defendant George Hubbard and wife. Plaintiff sought to recover of defendants C. S. Maltby and Thorn J. Houston, in case the mortgaged premises should not realize, upon sale, sufficient to pay the mortgage debt, the value of certain wood cut upon the mortgaged premises, the complaint alleging fraud and collusion between them and the mortgagor.
Hubbard purchased the premises in question, being mostly woodland, of plaintiff’s intestate, in 1867, subject to a mortgage thereon held by one Knapp, giving the mortgage in suit for part of the purchase-money. In 1871, Hubbard entered into a contract with Maltby and Houston, by which he sold to them the wood growing on the mortgaged premises, the same to be cut by the purchaser, measured and paid for March 1, 1871. Plaintiff', learning that the wood was being cut, called upon Hubbard, and threatened to stay the cutting by injunction; but upon Hubbard agreeing to pay over the money received for the wood on the Knapp mortgage, he abandoned the intent. On the 27th February, 1871, after the wood was all cut, plaintiff, being apprehensive that Hubbard would not do as he agreed, notified the purchasers of the wood of his lien, of the agreement with Hubbard, and communicated to them his fears, requesting them to delay paying over the purchase-money; this they declined to do, but paid the same to Hubbard, as agreed, on the first of March. Up to the time of such notice, they had no knowledge that there was aisy mortgage upon the premises, and the allegations of fraud were not proved. Hubbard did not pay it over, as agreed, but absconded therewith. The mortgaged premises were insufficient to pay the mortgages.
S. L. Magoun for the appellant.
The judge erred in not directing a verdict for plaintiff for the value of the wood against defendants Maltby and Houston. (Field v. Mayor, etc., 2 Seld., 179; Van Pelt v. McGraw, 3 Barb., 347; 4 Comst., 110; Bk. of Auburn v. Roberts, 45 Barb., 407; Cromwell v. Bklyn. F. Ins. Co., 44 N. Y., 42; Yates v. Joyce, 11 J. R., 136; Newton v. Porter, 5 Lans., 416.) Plaintiff’s security was lessened by the cutting of the wood, and it presented a proper case for an injunction. (Badrus v. Waldron, 2 J. Ch., 148; 2 Story Eq. Jur., § 915.) This action is maintainable as an action on the ease. (Van Pelt v. McGraw, 4 Comst., 110; Yates v. Joice, 11 J. R., 136; Lane v. Hitchcock, 14 id., 213; Gardner v. Heartt, 3 Den., 232.) If one does a wrongful act, knowing his neighbor will suffer thereby, he is liable. (People v. Felly, 35 Barb., 462 ; 3 Robt., 201.) A mortgagee may follow and sue for money in the hands of parties who are not bona fide holders thereof. (Bk. of Auburn v. Roberts, 45 Barb., 401; Story’s Eq. Jur., § 1258.)
E. W. Simmons for the respondents.
On a motion upon a case where the only material question is one of fact, which was properly submitted 'to the jury, no previous mistakes of law in the charge can influence the verdict and they will be disregarded as grounds for anew trial. (Stoddard v. L. I. R. R. Co., 5 Sandf., 180; Mackey v. N. Y. C. R. R. Co., 27 Barb., 528; Flaning v. Smith, 44 id., 554; Goodrich v. Walker, 1 J. Cas., 250.) Where there is competent evidence upon the question whether a fraud has been committed, it is a question of fact. (Erwin v. Voorhies, 26 Barb., 127; Gardner v. McEwen, 19 N. Y., 123; Thompson v. Blanchard, 4 Comst., 303.) After hearing evidence on both sides, there is no rule of law allowing the court to interfere with or disturb the verdict. (1 G. & W. on N. T., 353; Jarvis v. Hathaway, 3 J. R., 180; Ward v. Centre, id., 271; Hurtin v. Hopkins, 9 id., 36.) The finding of a jury or referee on a question of fact (e. g., fraud) cannot be disturbed by the Court of Appeals. (Lockwood v. Thorn, 11 N. Y., 170; Griscomb v. Mayor, etc., 12 id., 586; Newton v. Bronson 13 id., 587; Griffin v. Marquart, 17 id., 28; Dane v. Wyckoff, 18 id., 45; Cady v. Allen, id., 573.)

Opinion:
Andrews, J.
The contract for the purchase of the wood was . made by the defendants Maltby and Houston, with Hubbard, the owner of the land from which it was taken. Hubbard was in possession of the premises, and, by the contract, the defendants were to cut the wood and to pay Hubbard a certain price per cord on the 1st of March-,, 1871. The defendants did not know until on or about the-24th of February, 1871, of the plaintiff's mortgage, or that. there was any incumbrance on the land. The wood had then, been cut, and nothing remained to be done by the defendants, under the contract, except the payment of the purchase-price.. There can be no doubt that the title to the wood vested in the defendants upon its severance from the land. They weretbe owners of the wood by purchase from the owner of the; land, and were debtors to Hubbard for the agreed price-. The fact that the land was mortgaged when the contract was made, or when the wood was cut, did not affect the defendant's title to the severed property, and although the cutting of the wood impaired the security of the mortgage, the defendants were not responsible to the mortgagees for the resulting injury, unless they cut the wood, knowing of the lien, and with intent to injure the plaintiff in respect to his security. (Van Pelt v. McGraw, 4 Comst., 110.) There is an additional reason in this case why the plaintiff is precluded from treating the act of the defendants, in the wood, as tortious, or as a violation of his rights or equities. After he was informed that the defendants were cutting the wood, he took no proceeding to prevent a continuance of the waste, but allowed the work to proceed upon the promise of Hubbard that he would apply the money he should- receive from the defendants upon the Knapp mortgage. The promise was made in December, and it was not .until the following February that he notified the defendants of his claim on the premises, and at that time they had completed the work under the contract with Hubbard. This transaction operated as a license to Hubbard to sell the wood to the defendants, and estopped the plaintiff from questioning their title. The question then comes to this: Could the defendants lawfully pay their debt to Hubbard, against the protest of the plaintiff, after being informed that Hubbard threatened to violate his agreement to apply the money on the prior mortgage ? There can be but one answer to this question: The defendants' contract was with Hubbard alone, and their debt was owing to him. The promise of Hubbard to. apply the amount he should receive from the defendants on the Knapp mortgage, did not make the plaintiff the assignee of the debt. It gave to the plaintiff at most a right as against Hubbard to intercept the payment upon proceedings taken, based upon evidence that he threatened to dispose of the money in violation of his agreement.
We express no opinion whether such an action could be maintained, but we think it is clear that until prevented by the order of the court, the defendants could lawfully pay the debt to Hubbard, and that if they had refused, he could have maintained an action to recover it.
The defendants were neither parties or privies to the agreement between Hubbard and the plaintiff, as to the application of the fund, and they owed no legal duty to the plaintiff to defer the payment of their debt at his request. That agreement recognized Hubbard's right to receive the payment, and no legal proceedings having been taken to prevent it, the.payment to him was a valid discharge of their obligation. In view of the finding of the jury, it cannot be claimed that they colluded with Hubbard in the transaction, or misled the plaintiff, or induced him to institute legal proceedings against Hubbard, upon.the promise to retain the money until an injunction should be procured.
The judgment should be affirmed.
All concur.
Judgment affirmed.