
    New York Water Company, Respondent, v. Elizabeth H. Crow and Others, Defendants, Impleaded with Americus F. Callahan and Others, Appellants.
    Second Department,-
    December 29, 1905.
    Evidence — hearsay ^ declarations of landowner against interest—. exceptions in equity — suit in equity to impose trust on lands — corporate resolution no release — laches.
    In an action in equity, to .change -lands with .a trust against, heirs and, judgment , creditors of one who contracted to .convey the lands to a.covporation,. the declarations of such person, since deceased, showing that he considered lands to. which he then held an unrecorded, title belonged to said corporation, are admissible as declarations by a deceased landowner in disparagement of his 'title. - • . ■ . '
    In such equitable action, exceptions to. evidence,'though well taken, aflord no obstacle to au affirmance of judgment, if such evidence did not', substantially affect the result. ' '
    Resolutions of a corporation which are merely in, the nature of receipts of payment under a contract are not formal releases.
    Title acquired under foreclosure of a mortgage which .covers'after-acquired prop - . erty is sufficient to support an equitable action by the purchaser to impose ,a trust upon the lands, although the same were not specifically described in the . mortgage. . -
    The court will hesitate to upset a decree in equityi solely on- the ground of laches . raised for the first time oh appeal. ■.
    Appeal by the defendants, Americas- F. Callahan and others, from a judgment of thp Siipreme Court in favor of the plaintiff,, entered in the office of the clerk of the county of Westchester on the 9th day of February,-1905, upon the decision of the court rendered after a trial'at the Kings County Special Term.
    
      Arthur. C. Hume, for the appellants Callahan and Hume.
    
      John J. Crawford, for the appellant American Surety Company.
    
      Henry H. Pierce [William C. Prime with him on the brief],for the'respondent.
   Jenks J.:

I think that there is evidence sufficient to support the judgment. The action is in equity against the heirs and judgment creditors of Moses R. Crow,,-to fasten a trust upon two lots of land whereon are situated a source of. supply and a pumphouse of a water company. Crow made a contract with that company, organized in 1890, to establish and to turn over a complete water system in exchange for substantially all of its bonds and capital stock. Both parties substantially performed the contract, and the plant has been in the continuous possession of the company and its successors since 1891. This plaintiff is the successor of the original'corporation. .

The two lots in question are part of the tract in the said system. Between the fall of 1891 and .1893 there was no other source of water supply, and the other thereinafter built was to meet the additional demands by consumers. Crow acquired these particular premises through Bard in his scheme of establishing and equipping this system, and although an essential part of the system was set up thereon and the company entered into the immediate possession and use of these lots in connection with the system and has continuously been in such possession and use, Crow never transferred the legal title to these two lots.

The judgments represented by the defendants were recovered during the period intervening 1894 and 1898. The learned counsel for the judgment creditors attacks certain testimony of declarations by Crow to the effect that the lands in suit were the property of the water company, on the ground that it does not clearly appear that they were made at times when they would be binding on such lienors, that they were not made against interests, and that they related to other matters than the character of the possession. The court found that these lots were conveyed by Bard to Crow by deed dated October 29,1891, and that after the erection of a pump-house, the installation therein of an engine and appliances and the driving of wells thereon, the prertiises were delivered to the water company in or about the latter part of the year 1891. The declarations of Crow were to the effect that he had said that this was the property of the water company and had referred to it as the company’s pumphouse; that the company had acquired this property, and further, that he had bought the property for the water' works. Some of these declarations were made about the time of the purchase and the day before the improvements on the premises were made, and some in 1892.

... I think that the exceptions are not: well taken. In Greenleaf on Evidence (Vol. 1 [16th ed.], § 189), as enlarged by Wigmore, it is said“ (4) Under the Hearsay exception for declarations against proprietary interest (ante, § 152c), statements in disparagement of title may be received. The marked differences between this principle and that'of admissions are that it is broader, in that, the states ments may be offered in evidence by or against any one, and that it is narrower, in that the declarant must be deceased and he must have been speaking distinctly against his interest.” In. Wigmore on Evidence,(§ 1780) the author writes: “Statements of .facts against proprietary interest (ante, § 1458). For these an Exception to the -Hearsay rule is conceded. The marked limitations are that the declarant must be deceased (or otherwise unavailable), ■ and that the declaration must. be. in disparagement of title. On the other hand, whether the declarant was at the- time in possession or not,' and whether lie is a party or privy or not, is immaterial.” (See, too, § 1458.) At section 1459 the author writes: “ There has been in some jurisdictions much confusion through a failure to distinguish certain principles, distinct in themselves, but -all finding an application to declarations about land-possession and having only that superficial feature, in common. * * ■ * In statements offered under the present exception to the Hearsay rule, the declarant must be deceased. Moreover, there must have been an interest at- the time to say the contrary, but the statements may be used in any controversy,, without regard to the parties concerned.” In' Chadwick v. Fonner (69 N. Y. 404) Earl, J., for the court says: “ I entertain no doubt that the admissions of Locke while he -held, the title to the land were competent evidence against, his heirs and all persons claiming title under or through him. .If he had.been living and defendant in this action, they would have been competent against him. And whenever the admissions of one having or claiming title to real estate would thus be competent against him, they are competent against person's subsequently deriving title through, or from him. (Jackson v. Bard, 4 J. R. 230; Pitts v. Wilder, 1 N. Y. 525; Abeel v. Van Gelder, 36 id. 513; Vrooman v. King, 36 id. 477.) It matters not in this case that Locke had agreed to convey this land to Johnson before the declaration was made. The declarations are made competent by- the fact that they were made while Locke held all the title which the defendants can claim, or which they obtained. The principle upon which such evidence is received is that the declarant was so situated that he probably knpw the truth, and his interests were such that he would not. have made the admissions to the prejudice of his title or possession unless they were true. The regard which one so situated would have to his own interest is considered sufficient security against falsehood. In some of the States of the Union and in England the admissions of a prior owner of choses in'action and other personal property characterizing or affecting his title are also admitted ift evidence upon the same principle against those subsequently taking title from him. But in this State, after some uncertainty as to the -rule, it was finally settled in the case of Paige v. Cagwin (7 Hill, 361) that such, admissions in controversies about personal property are not admissible. But in controversies as to real estate, the rule remains in this State as above stated.” In Lyon v. Ricker (141 N. Y. 225) the court, per Peckham, J., say: “If the action, were brought against the heirs at law of the grantor to obtain possession, or if the plaintiff here were defending his possession of the land described in the deed against the claims of the heirs at law, the evidence of declarations such as these in questio'n would. be competent.” (Citing authorities.) Also :■ “ The distinction is taken between declarations against interest and those made by one in privity of estate. In the first case the evidence is admissible without privity of estate, and hence declarations must be not only against interest, but the declarant must be dead, while in the case of declarations by one in privity of estate, the declarations are admissible whether the declarant be alive, or dead,” etc. It is to be noted that the rule as stated by Earl, J., (supra) is that “ the declarations are made competent by the fact that they were made while Locke held all the title which the defendants can claim, or which they obtained; ” and the reason for the rule is “ that the declarant was so situated that he probably knew the truth, and his interests were such that he would not have made the admissions to the prejudice of his title or possession unless i they were true.” I' think under the discussion of the text writers and the expressions of the courts, the rule and principle made the evidence competent against the subsequent judgment creditors.

The. case is not complicated by the fact that at the time Crow held the record title, inasmuch as the deed from Bard to him was not recorded until a much later period. The other exceptions to the rulings on evidence, even if some were well taken) would not substantially affect the judgment, and, therefore, under the old Chancery rule, afford no obstacle to an affirmance, (de St. Laurent v. Slater, 23 App. Div. 70; Townsend v. Bell, 167 N. Y. 462, 470; Young v. Valentine, 177 id. 347, 358.) The learned counsel for the appellants in his discussion referring to these declarations virtually concedes that the salient exceptions are -those which I have discussed.

I think that the resolutions, of the corporation are not to be construed as of the formal character of releases, but are merely in the nature of receipts of payment in performance of the contract, or recitals thereof. It does not appear that aught was done by. either party upon the faith of them.

The contention that .inasmuch as the lots were not named or specifically described in the mortgage under which the plaintiff acquired the property of the old ■ corporation, this plaintiff cannot bring this action, cannot prevail. The mortgage was made prior to the construction of the system and before the mortgagor held any interest in these premises, but it specifically covered after-acquired property, and the judgment, of foreclosure expressly included these lots of land. Such a mortgage was valid and these premises come under it. (Washington Trust Co. v. Morse Iron Works, 106 App. Div. 195.)

It .does not appear that the question of laches was raised prior to this appeal. Otherwise the plaintiff being apprised of the point . might have offered evidence to meet it. Under such circumstances the court could not be astute to upset the judgment upon that ground. In any event it cannot be inferred that the delay in ’ beginning this suit in any way prejudiced the defendants. How can any of them contend that they did aught or omitted aught.in reliance'upon Crow’s title to these lands? Crow was not in possession after the fall of 1891 when the water company came into such possession. And he had no title of record prior to June 20, 1898, when the confirmatory deed from Bard, the purchaser of the lands, and his wife to Crow was. recorded. It does not appear that the unrecorded title of Crow caused the defendant'judgmen,t creditors to extend credit or to forbear. In Cox v. Stokes (156 N. Y. 491) it is said: Whether the equitable doctrine of laches, as distinguished from the Statute of Limitations, now exists in this State,, is open to serious doubt.” The plaintiff’s equitable right to a conveyance was superior to the general lien of the judgment creditors. (Rodgers v. Bonner, 45 N. Y. 379.)

I advise an affirmance of the judgment, with costs.

Hirschberg, P. J., Bartlett, Hooker and Miller, JJ., concurred.

Judgment affirmed, with costs.  