
    International Paper Company, Respondent, v. Hudson River Water Power Company, Morton Trust Company and the Trust Company of America, Appellants, Impleaded with Kanes Falls Electric Company and Hudson River Electric Company, Defendants.
    
      Equity — action for specific performance of a contract and in default thereof for its revocation, and the restoration of the parties'to their previous condition — it rests in the discretion of the court—who are proper parties to such-an action — when the complaint states a cause of action—allegation as to inadequate remedy at law. T-presumption on demurrer—offer to pay money payable on specific performance.
    
    The complaint in an action brought by the International Paper Company against the Hudson River Water Power Company, the Morton. Trust Company, the Trust Company of America, the Kanes Falls Electric Company, and the Hudson River Electric Company, alleged that the plaintiff, desiring to develop a waterpower for use in connection with its pulp and paper, mills, purchased' certain properties and river rights along the Hudson river; that during the same time the defendant the Kanes Palls Electric, Company and one Ashley, the president of that company, had acquired and were attempting to acquire other property along the river in hostility to the plaintiff; that the plaintiff and the defendant Kanes Palls Electric Company entered into a contract by which they agreed to co-operate in purchasing and acquiring all the property rights necessary to the development of the water power between certain points,- and to divide said properties ánd the cost of obtaining, them between the partiés in certain specified proportions; that there should be conveyed to the Katies Palls Electric Company that part of the properties known as the “upper power,” arid that there should he conveyed to the plaintiff that parti of the premises known as the “lower power;” that in November, 1889, the parties to the contract had acquired all the properties connected with the “ upper power ” and the greater portion of the properties connected with the “lower power,”1 and that the money, required for purchasing said properties had been chiefly, if not entirely, advanced by the plaintiff; that the Hudson River Electric Company and the Hudson River Water Power Company were thereafter organized by Ashley, and that Ashley desired to obtain title to the “upper power ” in order to convey it to the Hudson River Water Power Company; that a further contract was made between the Kanes Falls Electric Company and the plaintiff which recited that the Kanes Falls Electric Company was about to deliver to the plaintiff a deed of the “lower power,” and that the plaintiff was about to deliver to the Trust Company of America a deed to the Kanes Falls Electric Company of the “upper power,” said last-mentioned deed tobe held by the trust company subject to the payment of $125,000 by the Kanes Falls Electric Company; that $90,000 of said §125,000 should be, upon its receipt, paid by the trust company to the plaintiff, and that the remainder of §85,000 should be held by the trust company until the accounts between the parties were settled; that pursuant to the contract, and in reliance upon the agreement on the part of Ashley and the Kanes Falls Electric Company to assist the plaintiff in procuring the remainder of the properties necessary to complete the “lower power,” the plaintiff executed a deed conveying all of the “upper power” to the Kanes Falls Electric Company, and that the latter company thereupon conveyed the same to the defendant Hudson River Water Power Company, which received the conveyance with full knowledge of the agreement to assist the plaintiff in acquiring the properties necessary to complete the “ lower power; ” that at the time of the conveyance by the plaintiff to it, the Kanes Falls Electric Company executed a conveyance to the plaintiff of the properties then owned by it connected with the “lower power;" that the plaintiff was unable to procure the properties necessary to complete its title to the “lower power” by reason of the fact that the Kanes Falls Electric Company and Ashley wrongfully and in disregard and violation of their contracts, acquired such properties and conveyed them to the Hudson River Electric Company, which last-mentioned company refused to convey the same to the plaintiff; that the Hudson River Electric Company had executed a mortgage to the defendant Morton Trust Company, by which it conveyed to said trust company, together with other properties, the properties connected with the "lower power” as security for the payment of certain bonds; that none of the bonds had been actually issued for value; that the Hudson River Electric Company took title to the properties connected with the * ‘ lower power ” with full knowledge of the contracts between the plaintiff and the Kanes Falls Electric Company; that it refused to convey such properties to the plaintiff, although the plaintiff had offered to repay to it the consideration paid for said properties, and that the properties in question were necessary to a full development of the “lower power.”
    The relief demanded was as follows :
    
      First. That the court ascertain the cost to the defendant Hudson River Electric Company of the properties described in the complaint.
    
      Second. That the Hudson River Electric Company be decreed to convey the properties described in the complaint to the plaintiff upon payment by the plaintiff of its proportion of the sums actually paid therefor.
    
      Third. That the Kanes Falls Electric Company be required to pay the remainder of the amount so paid for said properties.
    
      Fourth. That the amount so paid by the plaintiff and by the Kanes Falls Electric Company be paid to the Morton Trust Company and that said trust company on receipt of said amounts be required to execute and deliver to the plaintiff a release of :said properties from the lien of their said mortgage.
    
      Fifth. That in lieu thereof the defendants the Hudson River Water Power Company and the Trust Company of America, as trustee, be decreed to reconvey, to this plaintiff all the property connected with the upper power, conveyed to the Kanes Falls Electric Company by the plaintiff, upon- the payment into court by'the plaintiff of said sum of §90,000, with interest thereon, and the conveyance by it to the defendant the Kanes Falls Electric Company of such properties as had been acquired by it prior to the making of said deed.
    
      Sixth. For such other relief as may be just and proper in the premises.
    The defendant's the Hudson River Water Power Company, the Morton Trust Company and the Trust Company of America interposed separate demurrers to the complaint on the following grounds:
    
      First, That it does not state facts sufficient to constitute a cause of action against the defendant demurring.
    
      Second, That causes of action are improperly joined in this action.
    
      Feld, that the demurrers should have been overruled;
    That the complaint set forth with Sufficient definiteness facts enabling a court of equity to grant equitable relief;
    That it appearing from the facts alleged- that an action at -law would give-but an inadequate and imperfect remedy to the party aggrieved, it, was not necessary that the complaint should allege that the plaintiff had no adequate remedy at law;
    That tie Morton Trust Company, which was the trustee mentioned in the mortgage given by the Hudson River Electric'Company, was a proper party to the (action, although none of the bonds secured by the mortgage had been issued for value, as the mortgage Was an outstanding incumbrance and some of the bonds might have been issued, although not for value;
    That the defendant- the Trust Company of America, to whom the deed to the Kanes Falls Electric Company had been delivered in escrow, and which still held §5,000 subject to the direction of the plaintiff and the Kanes Falls Electric Company, was a proper party to the action, although no specific relief was asked against it;
    That the Hudson River Water Power Company would not be a, necessary or proper p^rty defendant if the action were brought solely to secure specific performance of the contracts, but that, as it was also brought to obtain a rescission of the contract and a reconveyance of the property transferred pursuant to the contracts, if, for any reason, specific performance could not be decreed, the Hudson River Water Power Company was a proper party;
    That there was no reason, why such alternative relief should not be demanded in the same action, and why the persons affected by either relief shokld not be made parties thereto, it appearing that the same transactions were to be considered, and that the principal part of the proof for the purpose of obtaining either relief was the same. (Parker, P. J., dissented.)
    In an action for specific performance all persons having or claiming an interest in the land derived from the vendor after the contract and with notice thereof are necessary defendants in a suit brought by the vendee or his representative.
    
      Ia equity all persons materially interested, either legally or beneficially, in the subject-matter of a suit are to be made parties to it, so that there may be a complete decree which shall bind them all.
    It is not essential in a suit in equity that all the parties should be interested in the same way or affected alike by the judgment demanded. It is proper to unite all the parties interested to avoid a multiplicity of suits and have an adjudication that will determine the question as to all parties interested in the subject-matter.
    In considering a pleading demurred to it should be held to allege all facts that can be implied from the allegations by reasonable and fair intendment.
    Where in an action in equity the amounts to be paid by either party to the other are uncertain and subject to an accounting between the parties, it is enough to offer in the complaint to pay or to perform whatever obligations rest upon the party bringing the action.
    The right to specific performance of a contract or its rescission rests in judicial discretion, and may be granted or withheld upon a consideration of all the circumstances and in the exercise of sound discretion.
    Appeal by the defendants, the Hudson River Water Power Company and others, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Saratoga on the 20th day of January, 1903, upon the decision of the court, rendered after a trial at the Montgomery Special Term, overruling the said defendants’ separate demurrers to the plaintiff’s complaint.
    The plaintiff’s complaint is very long. The following is a summary of the allegations thereof, so far as material, on this appeal: The plaintiff in or about February, 1898, became the owner of certain pulp and paper mills, situated at Glens Falls and Fort' Edward, N. V., and elsewhere, and for the purpose of enabling it to develop a water power for use in connection with its mills at Glens Falls and Fort Edward, it also purchased various properties and river rights scattered along the Hudson river between a point soiith of Sherman’s island and the south boundary of property formerly owned by the Hudson River Pulp and Paper Company at Palmer’s Falls, N. V., which property of the said Hudson River Pulp and Paper Company was also conveyed to the plaintiff. The various properties, and river rights of the plaintiff’s predecessor in title had been purchased largely through the agency and assistance of one Ashley; „ ■
    Thereafter the plaintiff purchased from other persons properties and river rights along said river, and attempted to obtain title to. all property and river rights which it deemed necessary for the full development of the water power between the points named. During the times aforesaid the plaintiff discovered that the defendant the Kanes Falls Electric Company and said Ashley had acquired, and were attempting, to acquire, 'other properties along said river in hostility to the plaintiff. Negotiations thereupon ensued which resulted in a contract dated the 1st day of May, 1899, between the plaintiff and the defendant Kanes Falls Electric Company, which contract recites that the parties thereto are respectively the owners of or that they control by agreement to purchase or Otherwise, in their own names or in the names of other persons representing them, various properties adjoining the Hudson river between the points mentioned, and that the parties had agreed to co-operate in purchasing and acquiring all the properties between the said points necessary for the full ownership, development and protection of all power which can be developed between said points and to complete the titles to said properties and divide said properties together with the costs thereof between the parties thereto in certain specified proportions, Said contract then provides for co-operation between the parties thereto in securing the titles to all of the properties not then owned by them or one of them by persons representing one of them at the lowest cost possible, so as to obtain and complete the titles to all of said properties and for sharing in the costs thereof as in and by the contract provided. And said contract also provides for the conveyance to the Kanes Falls Electric Company of that part of the property along said river front in said contract specified and known •as the “ upper power ” and for the conveyance to the plaintiff of that part of the property along said river front in said contract specified and known as the “ lower power.” And said contract also provides that the titles to said properties shall be completed as soon as possible and that conveyances thereof shall be made not later than August 1, 1899, and that if the title to any of said properties shall not be fully perfected by August first, it shall be completed thereafter as soon as possible at the joint expense of the parties thereto to be divided between them in the proportions in said contract provided. And said contract also provides that several of the properties, which will form portions of each power when fully assembled, stand either in title or by option of purchase in different persons for the benefit of said paper company and that it is the intention of the agreement that persons holding the same shall at once convey the same, and that the options then existing in favor of the paper company or of the electric company or of any one for their benefit shall be completed, with a view of fully completing the entire title to all the properties in order that the same may be divided as in the contract specified. Said contract was made nominally with the Kanes Falls Electric Company, but the negotiations were had with said Ashley, the ■ president of said company. The Hudson River Electric Company and the Hudson River Water Power Company were thereafter organized by said Ashley and the stock is substantially owned and controlled by him. The parties to the contract had not acquired all of the properties upon said river and were not ready to exchange.deeds therefor on August 1, 1899, and the time so to do was extended. In November, 1899, the parties to the contract had acquired -all the properties connected with the upper power and the greater portion of the properties connected with the lower power. At that time the defendant the Hudson River Water Power Company had been organized with Ashley as the president thereof, and it and said Ashley desired to obtain title to the properties connected with the upper power, by said contract to be conveyed to the Kanes Falls Electric Company, that they might be conveyed to said Hudson River Water Power Company. The money required for purchasing said properties had been chiefly if not entirely advanced by the plaintiff.
    Upon request a further contract was made between said Kanes Falls Electric Company and the plaintiff, which recited that the Kanes Falls Electric Company is about to deliver to the paper company its deed of the lower power, and that the paper company is about to deliver to the Trust Company of America a deed to the Kanes Falls Electric Company of the upper power, to be by the trust company held, subject to the payment of $125,000 by the Kanes Falls Electric Company, and it was in said contract further provided that certain properties connected with the lower power were still to be acquired, and that there appeared to-be outstanding of record certain mortgages on certain properties upon said river, and that there might be outstanding titles in both of said powers not at the time of making said contract known. It was agreed that the deed from the paper company to the Kanes Falls Electric Company should he delivered to the trust company and held by it subject to the payment of $125,000, of .which '$90,000 should be upon its receipt paid by the trust company to the paper company, and that the remainder of $35,000 should be held by the trust company until the accounts between the parties for the properties theretofore acquired and the property thereafter to be acquired in order to complete the said powers should be adjusted in accordance with the contract of May 1, 1899, and that after said adjustment of accounts the parties should unite' in k certificate to the trust company as to a division of said $35,000.
    It was further agreed that the title should be obtained and completed as speedily as possible of the properties connected with the' lower power that had 'not been acquired. In pursuance of said contract and in reliance upon the agreement on the part of said Ashley and the Kanes Falls Electric Company to assist and co-operate with the plaintiff in acquiring the remainder of the properties necessary to complete the lower power, and in the belief that the defendants would carry out such agreement in good faith the plaintiff executed and delivered on the 9th day of November, 1899, a deed conveying all of the upper power to the Kanes Falls Electric Company and the Kanes Falls Electric Company thereupon conveyed the same to the defendant Hudson River Water Power Company. The Hudson River Water Power Company took and received such conveyance with full knowledge of the agreement and of the obligation resting upon said defendants to co-operate with the plaintiff in acquiring the title to the remaining properties-necessary to complete the lower power. The Kanes Falls Electric Company at the time of the execution of the deed to it executed a conveyance to the plaintiff of the properties then- owned by it connected with said lower power. Subsequently the parties to said contracts adjusted the accounts between them, and at the time of such adjustment- it was agreed that there remained due the Kanes Falls Electric Company from the plaintiff a balance of $634.35. ■ On January 18, 1900, the parties to said contracts united in a direction to the defendant the Trust Company of America to pay over to the Kanes Falls Electric Company $30,000, and authorized it to retain in its hands the sum of $5,000 to be held as security for the repayment of the said Kanes Falls Electric Company’s proportion of the cost of the acquisition of the property still remaining to be acquired in order to complete the lower power. The plaintiff thereafter in consultation with the Kanes Falls Electric Company and said Ashley and in co-operation with them proceeded to acquire additional properties necessary to complete the lower power and complete its title to all of said properties, except to certain properties in the complaint described which it has been unable to acquire by reason of the fact that the Kanes Falls Electric Company and said Ashley wrongfully, and in disregard and in violation of said contracts, have through their agent acquired and conveyed to the Hudson River Electric Company, which last-mentioned, company refuses to convey the same to the plaintiff.
    On April 23, 1901, the Hudson River Electric Company was incorporated. On April 25, 1901, the said properties were by the defendants, in disregard and violation of said contracts, conveyed to said Hudson River Electric Company. On December 18,1901, the Hudson River Electric Company executed a mortgage to the defendant Morton Trust Conrpany, by which it conveyed to said trust company the said properties so connected with the lower power among others as security for the payment of certain bonds thereafter to be issued to an amount not exceeding $3,000,000. None of said bonds have yet been actually issued for value. When the properties in the complaint described were acquired by the Kanes Falls Electric Company the Hudson River Water Power Company and said Ashley or either of them, or for account of either of them, the defendants were bound by the said contracts to convey the same to the plaintiff and the title acquired by them became and was subject to and impressed with a trust in favor of the plaintiff. / The Hudson River Electric Company took title to said properties with full notice and knowledge of said contracts and with full knowledge of said trust and obligation on the part of the defendants named. The Hudson River Electric Company has refused and still refuses to make such conveyance to the plaintiff, although the plaintiff has duly demanded the same and offered to repay to the said defendant the consideration paid by it for the said properties. Said properties are not connected with other properties of the defendants and they are in nowise essential to their operation. The Kanes Falls Electric Company well knew that the whole purpose and intention on the part of the plaintiff in making the contracts mentioned in-the complaint and in executing and delivering the conveyance to the Kanes Falls Electric Company was to enable the plaintiff to. acquire title to the property necessary to a full development of the water power known as the lower power, and that by reason of the wrongful failure on the part of the Kanes Falls Electric Company and the Hudson River Water Power Company and said Ashley to convey or cause to be conveyed to the plaintiff the pieces of property- described in the • complaint, in disregard and violation of the agreement, the principal consideration for the conveyance by the plaintiff to the Kanes Falls Electric Company of the properties Connected with the upper power has wholly failed, and plaintiff is entitled to have the deed vacated and set aside on payment of $90,000 received as stated and on reconveying to it the properties received at the time of the exchange of deeds, and the plaintiff offers to-repay the said amount and reconvey said property upon receiving a reconveyance of the properties connected with the upper power from said Kanes Falls Electric Company.
    All the defendants have, or claim to have, some right, title or interest in or to the said property, but that the said right, title or interest, if any, is subject and subordinate to the rights of the plaintiff. The complaint demands judgment:
    
      First. That the court ascertain the cost to the defendant Hudson River Electric Company of the properties described in the complaint.
    ■ Second. That the Hudson River Electric Company be decreed to convey the properties described in the complaint to the-plaintiff upon payment by the plaintiff of its proportion of the sums actually paid therefor.
    
      Third. That the Kanes Falls Electric Company be required to pay the remainder of the amount so paid for said properties.
    
      Fourth. That the amount so paid by the plaintiff and by the Kanes Falls Electric Company be paid to the Morton Trust Company and that said trust company on receipt of said amounts be required to execute and deliver to the plaintiff á release of said properties from the lien of their said mortgage.
    
      
      Fifth. That in lieu thereof the defendants the Hudson River "Water Power Company and the Trust Company of America, as trustee, be decreed to reconvey to this plaintiff all the property connected with the upper power, so called, conveyed to the KanesFalls Electric Company by this plaintiff by the said deed dated November 9, 1899, upon the payment into court by this plaintiff of said sum of $90,000, with interest thereon, and the conveyance by it to the defendant the Kanes Falls Electric Company of such properties as had been acquired by it prior to the making of said deed.
    
      Sixth. For such other relief as may be just and proper in the premises..
    Each of the appellants separately demurred to the complaint on two grounds:
    
      First. That it does not state facts sufficient to constitute a cause of action against the defendant demurring.
    
      Second. That, causes of action are improperly joined in this action.
    The issues of law joined by the service of the demurrers were tried and ah order was entered overruling the demurrers, upon which orders interlocutpry judgments have been entered.
    
      Hand & Hale, for the appellant Hudson River Water Power Company.
    
      Winthrop <& Stimson, for the appellant Morton Trust Company.
    . George F. Mott, for the appellant The Trust Company of America.
    
      Hichard Lockhart Hand, for the appellants.
    
      Bell <& Want and Lewis F. Oarr, for the respondent.
   Chase, J.:

In an action for specific performance all persons having or claiming an interest in the'land derived from the vendor after the contract and with notice thereof are necessary defendants in a suit brought by. the vendee or his representatives. (Pom. Spec. Perf. Cont. [2d ed.] § 493.)

This is an action in equity. The equitable doctrines with respect to parties and judgments are wholly unlike those which prevailed at the common law, different in their fundamental conceptions, in their practical operation, in their adaptability to circumstances and in their results upon the rights and duties of litigants. “ The governing motive of equity in the administration of its remedial system is to grant full relief and to adjust in the one suitthe rights and duties of all the parties, which really grow out of or are connected with the subject-matter of that suit. Its fundamental principle concerning parties is, that all persons in whose favor or against whom there might be a recovery, however partial, and also all persons who are so interested, although indirectly, in the subject-matter and the relief granted, that their rights or duties might be affected by the decree, although no substantial recovery can be obtained either for or against them, shall be made parties to the suit. * * * The primary object is, that all persons sufficiently interested may be before the court, so that the relief may be properly adjusted among those entitled, the liabilities properly apportioned and the incidental or consequential claims or interests of all may be fixed, and all may be bound in respect thereto by the single decree.” - (Pom. Eq. Juris. [2d ed.] § 114.)

It has always been held as a general rule in equity .that all persons' materially interested, either legally or beneficially, in the subject-matter of a suit are to be made parties to it, so that there may be a complete decree which shall bind them all. (Townsend v. Bogert, 126 N. Y. 370.)

It is not essential in a suit in equity that all the parties should be interested in the same way or affected alike by the judgment demanded. It is proper to unite all the parties interested to avoid a multiplicity of suits and have an adjudication that will determine ' the question as to all parties interested in the subject-matter. . This has been and is the practice in equity actions. (Hall v. Gilman, No. 1, 77 App. Div. 458.)

A party demurring to a pleading admits the facts alleged in such pleading, and in considering the pleading it should be held to allege all facts that can be implied from the allegations by reasonable and fair intendment. (Sage v. Culver, 147 N. Y. 241.)

By the demurrers herein "the demurring defendants have admitted, among other things, that the plaintiff in purchasing the properties and river rights which it purchased prior to February, 1898, between the points named on the Hudson river, did so for the purpose of developing a water power for use in connection with its mills and other property; that the defendant Kanes Falls Electric Company acquired various properties between the said points on the Hudson river in hostility to the plaintiff and that such antagonistic holdings of property and water rights so affected their respective schemes for the development of water power that it caused tíie plaintiff and said Kanes Falls Electric Company to enter into a contract to co-operate in dividing the said properties and in obtaining such other properties as were deemed necessary in the interest of each, and that each might obtain and hold severally the properties and water rights necessary to a complete water power, each independent of the other; that the properties to complete the upper power which by the terms of the contract were to be conveyed to the Kanes Falls Electric Company were first obtained and on request they were conveyed to it without waiting to obtain all the properties to complete the lower power which were to be conveyed to the plaintiff, and a further agreement was entered into on the part of the Kanes Falls Electric Company upon which the plaintiff relied, that said Kanes Falls Electric Company would continue to co-operate in obtaining the title to the properties not then conveyed to the plaintiff in accordance with the terms of said contracts ; that the defendants, the Hudson River Water Power Company and the Hudson River Electric Company, knew of said agreements and the terms thereof, and the reason why the same were executed and in part performed; that the president of the Kanes Falls Electric Company is the president of the Hudson River Water Power Company and said companies, acting through said president, either directly or indirectly, obtained titles to the properties specifically described in the complaint, and transferred or caused the same to be transferred to the Hudson River Electric Company, which company received the same with full knowledge of the said agreements and all the circumstances connected with the execution thereof and of the consideration therefor, and that such company refuses to convey the same to. the plaintiff; that the properties so conveyed to the Hudson River Electric Company are essential to the development of power for the benefit of the plaintiff and for carrying out the purpose for which the contracts were executed; that the failure to obtain such title prevents the carrying out of the purpose of the execution of the contracts and destroys the principal consideration therefor. From the situation of the pieces of property specifically described in the complaint, the consideration and reason for executing said contracts and in partially performing the same and the essential character of said pieces of property in carrying out the "purposes of the plaintiff, it is apparent that money damages would not be as complete and beneficial to the plaintiff as relief in equity, and that there would be serious if not insurmountable obstacles in attempting to estimate in- money the plaintiff’s damage if it fails to obtain title to pieces of property which are essential to it in completing the water power designated as the lower power. The properties mentioned in the complaint are essential links in a chain, the value of which as a chain depends entirely upon those particular links being included and used therewith. The Kanes Falls Electric Company obtained every benefit secured to it under said contracts while the plaintiff seems to have been deprived of the' only real consideration for their execution.

A general statement in a complaint in an action of this character that there is no adequate remedy at law is not essential where it is manifest from the facts alleged that an action at law would give but an inadequate and imperfect remedy to the party aggi’ieved. ' The properties which the plaintiff desires should be decreed to be conveyed to it are specifically and definitely described in the complaint, and other allegations in the complaint admitted by the demurrers show that such properties are necessary for the full ownership!, development and protection of the lower power as stated in the contracts made by and between the Kanes Falls Electric Company and the plaintiff. The complaint, including said contracts, shows an agreement sufficiently definite to enable the court to grant equitable relief. The time for performing the contracts is not of the essence thereof. "We are of the opinion that the complaint contains sufficient on the face thereof to set a court of equity in motion.

The defendant the Morton Trust Company holds as trustee a mortgage given by the Hudson River Electric Company upon properties described in the complaint among other properties to secure the payment of bonds to an amount not exceeding $3,000,000, and while it is alleged that none of said bonds have been issued for value, the fact remains that the mortgage is outstanding of record and that bonds may have been issued, although not for value. Such mortgage is an incumbrance affecting the marketableness of the title to said properties and such mortgagee is a proper party that the court may determine and protect its rights as well as the rights of the other parties to the action.

The defendant the Trust Company of America is the corporation to which the deed to the Kanes Falls Electric Company was delivered and which held such deed in escrow pursuant to the terms of the contract under which it was delivered and subsequently delivered the same to the Hudson River Electric Company. It received the $125,000 from the Kanes Falls Electric Company, pursuant to the agreement and has paid out $120,000 thereof, and stills holds $5,000 subject to the direction of the plaintiff and said Kanes Falls Electric Company. No specific relief is asked as against said defendant, but its presence as a defendant will bind it as well as the other parties to the action in any relief that may be granted, and in any direction that the court may make, in regard to the $5,000 still remaining in its possession.

If the only purpose of this action was to obtain specific performance of the contracts, the Hudson River Water Power Company would not be a necessary or proper party defendant. While the action is for specific performance, it is also brought for a rescission of the contracts and a reconveyance of the property which' has been transferred pursuant to the contracts, if for any reason specific performance thereof cannot be decreed. In an action for the rescission of the contracts the Hudson River Water Power Company is vitally interested. An action either for specific performance or for the rescission of contracts is distinctly an equitable one. The very foundation of the jurisdiction of equity in either case is the inadequacy of the remedy at law. The evidence in this case will not be changed in any particular by reason of the prayer for alternative relief, except so far as it relates to circumstances affecting the power of the court to decree. specific performance.

It is said in the Encyclopaedia-of Pleading and Practice (Vol. 20, p.499): “ Generally, when the specific. performance of a written contract to convey land is denied, a rescission of the contract will be decreed; ” and the same authority (Id. pp. 461, 462) states that a bill may pray for specific performance or in the alternative for a rescission. We can see no reason why such-alternative relief should not be demanded in the same action, and why the persons affected by either relief should not be made parties thereto where the same transactions are to be considered, and the principal part of the proof for the purpose of obtaining either relief is the same.

So far as appears by the record before us the properties conveyed to the Kanes Falls Electric Company and by the Kanes Falls Electric Company to the Hudson River Water Power Company, as well as all other properties' referred to in the complaint, remain* in the same situation, and the legal and equitable rights of the parties are the same now as they were at the time the contracts were made, except so far as they have been changed by the conveyance mentioned.

Where in an action in equity relief is sought to be obtained and the amounts to be paid by. either party to the other are uncertain and subject to an accounting between the parties, it is enough to offer in the complaint to pay or to perform whatever obligations rest upon the party bringing the action. (Zebley v. F. L. & T. Co., 139 N. Y. 461.)

The right to specific performance of a contract or its rescission rests in judicial discretion, and may be granted or withheld upon a consideration of all the circumstances and in the exercise of sound discretion i ( Winne v. Winne, 166 N. Y. 263.)

-We cannot say as a matter of law that the complaint in this case should be dismissed for insufficiency as against either of the defendants. The court,, after a trial of the issues that may be framed and a consideration of any contemporaneous equities or equities arising by reason of subsequent, events, can grant such relief as, >may be dictated by a sound discretion or dismiss the complaint as to all or any of the parties defendants.

The interlocutory judgments should be affirmed, with one bill of costs to the respondents.

All concurred, except Parker, P. J., dissenting; Smith, J., con* . curring in result.

Interlocutory judgments affirmed, with one bill of costs to the respondents.  