Opinion
July Term, 1896.
William A. Sutherland, for the appellant.
George F. Brownell, for the respondents.
The pleadings present an issue as to whether the lease between the Avon, Geneseo and Mt. Morris Railroad Company and the Erie Railway Company and the title of the successors of the latter corporation to the shares of stock, have been forfeited by the alleged failure of the lessee and its successor to operate the road of the lessor in accordance with the terms of the lease; but that issue has dropped out of the case. There is no finding of fact upon it, nor was there any request preferred by either party for a finding on this issue. None of the findings of fact are challenged by the plaintiff and no exception was taken in its behalf on the trial, and so this judgment must be reviewed upon the facts found by the Special Term.
However, this issue was determined adversely to the plaintiff when this case was before the late General Term on an appeal from an interlocutory judgment overruling a demurrer to the complaint. It was then held that there had been no forfeiture of the lease or of the right of the defendants to the shares transferred to their predecessor. (77 Hun, 18.)
The only ground for a recovery in this action presented by this record is, that the sale of the shares made December 26, 1871, by the commissioners of the town was void under the 5th section of chapter 907 of the Laws of 1869, because the sale was not for cash.
Among other defenses interposed as a bar to this action are the six, ten and twenty years' Statutes of Limitations. For the purpose of avoiding these defenses the position is taken in behalf of the plaintiff that this is an action to remove a cloud upon its title, and that so long as the cloud exists the Statutes of Limitations do not run.
In case a person is in the possession of property, claiming to be its owner, and another asserts that he has title thereto or a lien thereon, by virtue of a written instrument which, on its face, affects the title or creates a lien, such an instrument is a cloud on the title. A bill quia timet or an action to cancel the instrument may be maintained, which is an action to remove a cloud, but such an action is never an appropriate remedy for the recovery of property which the plaintiff has transferred, and surrendered the possession of, to the defendant or to his predecessor in title. Actions falling under the general head of equity jurisprudence known as quia timet actions — such as actions to cancel instruments and remove clouds — are purely preventive remedies for avoiding apprehended injuries which may be occasioned to the plaintiff's title by reason of some action which may be taken in the future by the defendant, under and by virtue of the instrument alleged to be a cloud. (Fonb. Eq. chap. 1, § 8; Snell's Eq. [9th ed.] 728 et seq.; Story's Eq. Juris. § 692 et seq.; Pom. Eq. Juris. § 1398; 2 Am. Eng. Ency. of Law, 298.)
The case at bar is in no sense an action to remove a cloud on title, but it is an action for the recovery of specific property, and it is barred by the lapse of twenty years since the cause of action accrued. If it be said, and it can be, that there are cases in this and other States brought for the recovery of property, and, incidentally, for the cancellation of instruments standing in the way of a recovery, which are called bills quia timet, and actions to remove clouds upon title, it may be answered that, upon an examination of those cases, it will be found that the names given to those actions were not important and that they were loosely called actions to remove clouds or bills quia timet, though in fact they were not such, but were actions for the recovery of property and for the cancellation of instruments standing in the way of a recovery.
Again, an action in the nature of a bill quia timet, like an action for the specific performance of a contract, is not maintainable unless the equities of the plaintiff are clearly established and the action is brought without unreasonable delay. There is no equity in the plaintiff's case. Before any steps were taken to sell the plaintiff's stock a town meeting was called which was largely attended, the terms of the sale were discussed, and it was voted with but one dissenting voice that the stock should be sold on the terms offered. After this an unquestioned majority of the taxpayers of the town, representing a majority of the taxable property thereof, petitioned the county judge of the county that the commissioners be authorized to sell the stock on the terms offered, which prayer was granted, and the sale openly and publicly made in pursuance of the order. After the lapse of twenty years five months and twenty-seven days from the date of the transfer this plaintiff brings this action to set aside its own voluntary transfer on the ground that it was not authorized by the terms of the statute. There was no fraud in the transaction, no concealment, and the situation has been known to the officers of the town and to all its taxpayers during all these years. If the plaintiff ever had a right to set aside this sale it has slept so long upon that right, and has acquiesced in the situation for such a length of time, that a court of equity will grant it no relief.
It is urged that the sale of the stock was void because it was not made for cash. Section 5 of chapter 907 of the Laws of 1869, the act under which the town was bonded, the stock taken and sold, provides:
"Such stock * * * purchased by said commissioners may be sold by them * * * only upon the order of the county judge of the county, made upon the petition of a majority of the taxpayers of said municipal corporation representing a majority of the taxable property thereof, as shown by the last preceding tax list or assessment roll; and the proceeds from such sale shall be forthwith paid by them to the treasurer (or other proper officer) of such municipal corporation, to be by him invested in the sinking fund, as hereinafter provided."
It is said that People v. Eddy (57 Barb. 593) is a controlling authority for the position asserted by the plaintiff that the sale was absolutely void and incapable of ratification. That case arose under a different statute, chapter 64 of the Laws of 1856, as amended by chapter 401 of the Laws of 1857, the 6th section of which provided: "They (the commissioners) may dispose of such stock in their discretion to any purchaser or purchasers for cash, but shall not sell or dispose of such stock at less than par, except upon the written consent of a majority of the taxpayers of said town, their heirs or legal representatives, representing a majority of the taxable property of said town appearing upon the last assessment roll, proof of which shall be by affidavits."
The section under which the sale in the case at bar was made, does not in terms require that the stock of towns shall be sold by the commissioners for cash; and, besides, in this case every interest in the town, the commissioners, the taxpayers and the officers of the town, assented to this sale, have acquiesced in it for twenty years, and if this question were an important one it would be necessary to consider the difference between the two statutes and the facts lying at the foundation of each case; also whether the statutory provision is simply a limitation on the power of the commissioners or is a limitation on the power of the town. The power to dispose of property is an incident of ownership, unless the owner is under some disability. Had the commissioners, with the assent of the taxpayers and of the county judge, exchanged these shares for a site for a town house, or for other property which the town was authorized to acquire, would it be clear that such a sale was void and could be set aside after it had been acquiesced in for twenty years and without restoring, or offering to restore, the consideration received? But as this case may be well decided upon other grounds it is unnecessary to consider the one last suggested.
The judgment should be affirmed, with costs.
All concurred.
Judgment affirmed, with costs.