even though the latter be without consid-| conveyed to it by deed, the plaintiff, relying eration. on said assurances and gift, "made various Passing by many introductory, explana- improvements on the premises at its own tory and evidentiary allegations, the com- expense and paid out moneys and incurred plaint alleges the following substantial facts: expenses to a large amount as the owners The plaintiff is a charitable institution. Mrs. of the property; that the managers, each Henry H. Rogers, Sr., was the president of and all relying on the said promises and asits board of managers, and in 1901 she com-surances, gave up their time and best work municated to said board the proposal of a to the charity, and have made it, by reason gift by her husband of the land in question, of such work and their contributions of monwith an offer to build thereon a "Home" for ey and other gifts at the commencement of its use. March 25, 1902, Mr. Rogers pur- the suit and now, a most efficient, solvent, chased the land, and a gift of the same "was and splendid charity." thereafter made to the plaintiff," and the said gift was accepted, and "at the end of May, 1902, the house and the premises on which it stood were delivered by said Henry H. Rogers, Sr., to and came into the possession of plaintiff." Thereafter the erection of a new building for the uses of plaintiff was commenced on said premises by Mr. Rogers, which was completed, and "thereafter and on the 4th day of March, 1908, the plaintiff, through its board of managers, entered into possession and accepted, dedicated, and held its first meeting in the new home which Mr. Rogers had thus built for and dedicated to the uses of the plaintiff on the said premises, into possession of which it had already entered, as aforesaid, and then and there such home was also delivered to them in accordance with the previous announcements and promises"; that "ever since that time the plaintiff has been and still is in undisturbed possession of said premises thus secured by gift to the plaintiff and dedicated to the purposes of its work, and the said Henry H. Rogers and his wife, so long as they lived, ratified the gift and also contributed to its support." The record title to the land was for a time left in the name of Mr. Rogers, on the assurance that the same would be transferred to the plaintiff when the new building was completed, and after such completion it was announced to the plaintiff by Mr. Rogers, through his wife, that the record title had been formally conveyed to the plaintiff. The plaintiff, relying upon this assurance, made no search of the records and did not learn until after the death of the grantor in 1909 of the mortgage now complained of. It then ascertained that just before this conveyance of said premises to plaintiff in 1909 Mr. Rogers conveyed the same to a "dummy," who executed the mortgage for $600,000 to the grantor's son, the present defendant Rogers, without consideration, and thereafter reconveyed the premises to Mr. Rogers, who with his wife then conveyed them to the plaintiff "subject to all liens." It is further alleged, under circumstances which imply knowledge on the part of the grantor, that when the plaintiff took possession of the premises in May, 1902, before the erection of the new building, it "incurred an increased budget of maintenance and expense"; that after the building was completed and it was [1-3] On the allegations of the complaint the mortgage which has been placed on the premises is without consideration, and the holder thereof is in no better position to assert a claim against the premises than would have been Mr. Rogers, the donor. The question, therefore, is whether Mr. Rogers in 1909, when he executed this mortgage, could have been compelled by plaintiff to execute to it a deed of the premises free and clear of any claims or incumbrances for his own benefit. The answer to this question will be settled by a definite and narrow test. The general rule, of course, is that execution of a proposed gift cannot be enforced, and obviously, if a proposed donor could not be compelled to carry out or perfect the proposed gift, he might incumber and reduce its scope and extent as much as he liked. There are, however, exceptions to this rule, and one is that where there has been a gift of real estate and the donee in reliance thereon and with knowledge of the donor has entered on the premises and made expenditures of a certain character, performance of the gift will be enforced, and, if necessary, a conveyance of the lands adjudged. It is within this exception that the plaintiff attempts to bring itself and under which it insists that it could have compelled a conveyance from Mr. Rogers, Sr., in 1909, and can now secure a cancellation of the mortgage held by his son without consideration. As I have indicated, the narrow and controlling question is whether it has sufficiently alleged expenditures and improvements on the premises in reliance on the gift, so that within the exception and principle stated it can secure this relief. My opinion is that it has done so, leaving it, of course, to be determined hereafter whether under these allegations the evidence which it may be able to produce will establish expenditures of a character and importance to uphold a judgment in its behalf. We have the allegations in effect that on the faith of the gift to it, it "incurred an increased budget of maintenance and expense," and also that, relying on the gift and on the assurances that title had been conveyed to it of the premises, it "made various improvements on the premises at its own expense and paid out moneys and incurred expenses to a large amount as the owners of the property." These allegations constitute a good consideration for a promise. Expenditures made upon permanent improve ments upon land with the knowledge of the owner, induced by his promise, made to the party making the expenditure, to give the land to such party, constitute in equity a consideration for the promise. * The statute of frauds has no bearing upon the case. If the promise reduced to writing could, under the circumstances, be enforced in equity, it may 2 Statutes at Large, be, although by parol. 139, § 10. does not render them demurrable. Within cial to the promisor in legal estimation will the cases hereafter to be referred to it seems to me to be quite clear that if the plaintiff had alleged that it had made permanent and substantial improvements and expenditures on the premises it would have stated a sufficient ground for compelling execution by Mr. Rogers of his gift. I do not, however, think that this exact formula is necessary to the sufficiency of the complaint, but that all of the allegations together on this subject are sufficient to permit the plaintiff to prove, if it can, that expenditure of money on the faith of the proposed gift which, within the authorities, will render it inequitable that it should be deprived of the same either by failure of the donor to consummate it or through impairment thereof by such a mortgage as is complained of. The leading case on this subject is Freeman v. Freeman, 43 N. Y. 34, 38 (3 Am. Rep. 657), where it was said by Judge Grover: "The question then is whether a parol promise by one owning lands to give the same to another will be enforced in equity, when the promisee has been induced by the promise to go into possession, and, with the knowledge of the promisor, make comparatively large expenditures in permanent improvements upon the land. It is, and must be conceded, that if the promise by parol was to sell the land for a valuable consideration to be paid therefor by the promisee, such promise under this precise state of facts would be enforced. The ground upon which this equitable jurisdiction is exercised, although sometimes said to be part performance, really is to prevent a fraud being practiced upon the parol purchaser by the seller, by inducing him to expend his money upon improvements upon the faith of the contract, and then deprive him of the benefit of the expenditure, and secure it to the seller by permitting the latter to avoid the performance of his contract. In the case supposed, there has been no part performance of the contract, strictly speaking, except the taking possession, no part of the purchase money having been paid, and yet the cases are numerous where performance of such contract has been decreed in equity, where possession has been taken under the contract and large expenditures upon permanent improvements made. In the present case, possession has been taken under the promise and the expenditures upon improvements made, yet it is insisted that equity will not enforce the promise for the reason that it was to give, instead of having been to sell, the land for a valuable consideration. Permitting the promisor to avoid performance operates as a fraud as much in the latter as in the former case, so far as expenditures upon improvements are concerned. The counsel for the appellant insists that there has been no part performance of the contract to give the land. The answer to this is that possession has been taken, and valuable improvements made, upon the faith of the promise. These acts constitute part performance by the respondents. It is true that the plaintiff has done nothing by way of performance on his part. It is not necessary that he should. Part performance by the party seeking to enforce the contract is sufficient. It is further insisted, that an executory promise, not founded upon any valuable consideration, is a mere nude pact, furnishing no grounds for an action at law, and that performance of such a promise will not be enforced in equity. This is true so long as the promise has no consideration. Anything that may be detrimental to the promisee or benefi In Young v. Overbaugh, 145 N. Y. 158, 162, 39 N. E. 712, 713, plaintiff brought ejectment to recover the possession of land and a dwelling thereon, occupied by the defendant and her husband. It was conceded that the legal title was in plaintiff's testator at the time of his death. Defendant claimed that she was the equitable owner by reason of promises made by plaintiff's testator to her and of acts done by her in reliance upon these promises. Judge Gray wrote: "Where there has been a parol promise to convey, a taking of possession under such promise and the making of permanent improvements upon the property upon the faith thereof, the mere value of the occupation during the time is not to be set off against the expenditures made. I think it would not be within the spirit of the rule in equity that its application should be made to depend, not upon the fact of a consideration for the promise being shown to have existed and to have been performed, but upon the question whether, when specific performance by the donor is claimed, the use has not compensated the donee and relieved the donor's obligation." After quoting from Freeman v. Freeman, supra, the opinion continues: "It was said by Parker, J., in Lobdell v. Lobdell (36 N. Y. at page 331): 'If the promisee, on the faith of the promise, does some act, or enters into some engagement, which the promise justified, and which a breach of the promise would make very injurious to him, this equity might regard as confirming and establishing the promise, in much the same way as a consideration for it would.' In such a case as this, to constitute a good consideration in equity, it is, of course, essential that it be substantial in the sense that the promise shall rest upon a performance by the promisee, which evidences acceptance of and reliance upon the promise, and consists in expending moneys in permanent improvements upon the land. * If there was the promise to give the property, accompanied by the delivery of possession to the defendant and expenditures in permanent improvements made, in reliance upon the promise, injury will be presumed to follow by a failure to perform it. In enforcing such a promise, equity aims at preventing a fraud upon the donee, and regards the case as taken out of the operation of the statute by the part performance.' In Miller v. Ball, 64 N. Y. 286, 291, Judge Earl used this language: "The principle upon which courts of equity hold that part performance is sufficient is that a party who has permitted another to perform acts on the faith of an agreement shall not be allowed to insist that the agreement is invalid because it was not in writing, and that he is entitled to treat those acts as if the agreement in compliance with which they were performed had not been made, in other words, upon the ground of fraud, in refusing to execute the parol agreement after a part performance thereof by the other party, and when he cannot be placed in the same situation that he was in | tained charges of fraud and dishonesty not covbefore such part performance by him. Taking possession under a parol agreement, with the consent of the vendor, accompanied with other acts which cannot be recalled so as to place the party taking possession in the same situation that he was in before, has always been held to take such agreement out of the operation of the statute." AT LAW. ered by, but which were claimed to affect the validity of, the settlement. Held, that as the issue whether the settlement relied upon by plaintiff was fair and valid could not be determined without passing upon the allegations of dishonesty and fraud set up in the action at law, plaintiff could obtain no relief in equity which he could not have at law, and hence could not resort to equity. Cent. Dig. 88 24-49, 54-61; Dec. Dig. § 26.*] [Ed. Note. For other cases, see Injunction, Appeal from Supreme Court, Appellate Division, Fourth Department. Action by John F. Burke against William H. Burke. A judgment overruling defendant's demurrer to the complaint and an order enjoining the prosecution of an action at law by defendant were reversed by the Appellate Division, Fourth Department (158 App. Div. 953, 143 N. Y. Supp. 1108), and defendant appeals by permission, bringing up for review questions certified by the Appellate Division (159 App. Div. 938, 145 N. Y. Supp. 1115). Reversed, motion for injunction denied, and complaint dismissed. James O. Moore, of Buffalo, for appellant. Charles Diebold, Jr., of Buffalo, for respond As a general rule, equity will not restrain an action at law unless special reasons demonstrate that full justice cannot be done in such action, and that an action in equity is necessary to secure to a party a more complete enjoy-ent. ment of the rights to which he is entitled than can be obtained at law. [Ed. Note.-For other cases, see Injunction, Cent. Dig. §§ 24-49, 54-61; Dec. Dig. § 26.*] 2. INJUNCTION (§ 26*)-RESTRAINING ACTIONS AT LAW. An action by one of the parties to an accounting and settlement of the transactions and interests of the parties thereto as copartners, in which it was alleged that the other party had been guilty of fraud in the business of the copartnership and of a corporation to which the partnership property was transferred, and which continued its business, and that the party bringing the suit was induced by fraud to unite in the conveyance to the corporation and to enter into such settlement, would not be enjoined in a suit by the other party, in which he alleged that the settlement was fair and honest, since he could secure in the action at law all the relief to which he would be entitled in equity. [Ed. Note. For other cases, see Injunction, Cent. Dig. §§ 24-49, 54-61; Dec. Dig. § 26.*] 3. INJUNCTION (§ 26*) RESTRAINING AC TIONS AT LAW. Plaintiff and defendant were partners and made a settlement in full of their transactions and interest as such, and transferred the partnership property to a corporation organized to continue the business of the partnership. Because of various claims by defendant against plaintiff, a new agreement, settling all matters between them, was subsequently made, but thereafter defendant brought an action for damages, in which he alleged that plaintiff was guilty of fraud in the business of the partnership and the corporation, and that he was induced by fraud to unite in the conveyance to the corporation, and to enter into the second agreement. Plaintiff brought suit to enjoin such action, alleging that the second agreement was made to secure peace and immunity from such charges of fraud, and to avoid the scandal, publicity, and notoriety incident thereto, and that the prosecution of such action would prevent him securing the full benefit of such agreement. The complaint in the action at law con HISCOCK, J. The parties are brothers. As appears by the allegations of the com. plaint, originally they were engaged as copartners in carrying on the business of dealing in real estate. Thereafter a settlement in full of their transactions and interests as copartners was made, and the property of the copartnership was transferred to a corporation organized for the purpose of continuing such business and the stock of which was substantially all owned by them. Later the defendant, notwithstanding said accounting and settlement, made various claims against the plaintiff in respect of their copartnership matters, and threatened to bring a suit against him to enforce said demands, "in connection with said demand and for the purpose of blackmailing and coercing the plaintiff into complying therewith and paying him a large sum of money fendant made certain false and scandalous accusations against the plaintiff, which were thereafter repeated and are set forth in the complaint of the defendant [in an action which will be hereafter referred to]; that for the purpose of avoiding the scandal, publicity, and notoriety incident to said false, fraudulent and scandalous charges of the defendant and to purchase his peace from said blackmail, this plaintiff, on or about the 20th day of January, 1912, entered into" an agreement settling in full all of their matters and interests as members of said copartnership and as stockholders and owners of said corporation. Still later defendant in this action brought an action at law against this plaintiff in substance and quite voluminously alleging that the latter had been guilty of de various frauds in the business of the copart-the scandal, notoriety, and discomfort innership and of the corporation above men- cident to the publicity of such charges, tioned, to the damage of his brother; that whether true or false. the latter was induced by fraud to unite in the conveyance transferring the property of the copartnership to the corporation, and that he was likewise induced by fraud and misrepresentation to enter into the agreement last made and above referred to; that by reason of being thus fraudulently misled he had been induced to enter into said settlement and agree to various propositions which he otherwise would not have thus assented to, and he asked a large sum on account of the damages suffered by him by reason of such fraud. The plaintiff then brought this action, and, claiming that the two settlements above set forth in the complaint were fair and honest, and that the defendant herein had agreed to refrain from making any further claims, he asks that the action at law be enjoined. His contention has been that one of the objects in making these settlements was to avoid an exploitation of the scandalous charges now being pressed against him in the action at law and that he cannot secure the full benefit of these settlements unless this relief is granted. The question is whether in his complaint he has alleged any sufficient ground on which may be rested this contention and this action, or whether on the facts stated he should be left to try out the issues which have arisen between him and his brother in the prior action at law brought by the latter. In considering this question some features incident to and springing from the two settlements alleged to have been made between the parties are to be noted. The parties in their respective claims as set forth in the complaint in this action and in the action at law differ somewhat as to what occurred at the time the partnership was transformed into a corporation. This plaintiff claims that a general accounting and settlement was made; the plaintiff in the other action alleges that he was induced by fraud to enter into a conveyance transferring the property of the partnership to the corporation. But which ever way the fact may be, it does not appear that at the time this adjustment took place any charges of fraud had been made by one party against the other, and therefore whatever instrument was executed must have been of the usual character assumed by instruments and releases settling ordinary business affairs, and it could not have been executed for the purpose of quieting scandalous charges. At the time of the execution of the second instrument, which in form was a general release and satisfaction of the claims of one party against the other, the defendant in this action had made accusations of fraud and dishonesty against his brother, and it is sufficiently alleged in this action that one of the purposes of this settlement was to avoid [1] The general rule of course is that equity will not entertain such an action as this to restrain an action at law unless special reasons demonstrate that full justice cannot be done in the latter action, and that an action in equity is necessary to secure to a party a more complete enjoyment of the rights to which he is entitled than could be obtained in the action at law. If the equitable action holds out no promise of relief which may not be secured in the other and more restricted proceeding, there is no occasion for interference, and it will be withheld. [2] It is plain that this action may not be maintained because the defendant in his action at law is attacking and repudiating the release or settlement made at the time the copartnership property was transferred to the corporation. As has been stated, that settlement was an ordinary transaction whereby two parties settled their property rights and claims. It was not made for the purpose of quieting charges of fraud and dishonesty, for it does not appear that any had then been made. The plaintiff can secure in the action at law all that he is entitled to by setting up and defending under such settlement. If it was fair and honest, it will be a bar to any attempt in the latter action to secure a readjustment of preceding transactions. If it was not fair and honest, its effect can be avoided by proper proof in this action as well as in the one at law. [3] But for the purpose of upholding the action and bringing it within an authority to be hereafter referred to, plaintiff urges that the second settlement is subject to other and different considerations. As already stated, it is claimed that one of the very purposes of that transaction was to secure peace and immunity from the scandal of charges like those set up in the action at law, and that he cannot secure the full benefit of his settlement if the present defendant is allowed to exploit those charges in his action at law even though he, the plaintiff in this action, shall finally establish his release as a defense against any ultimate recovery. If it were possible in this action to try the issue whether this settlement and release were honest and valid and covered the claims now being made against this plaintiff without going into the allegations of dishonesty and fraud set up in the action at law, there might be force in this contention. But, in my opinion, this cannot be done, and if it cannot be done, no such benefit is to be derived from this action as will justify its prosecution. In answer to the allegations in this complaint that this settlement was honest, just, and binding, the defendant can allege, and prove if he can, the exact oppositethat he was induced by fraud to make an unjust settlement which, therefore, is not binding. To this end he would be entitled to produce evidence tending to establish that his | the action at law. The judgment was reversbrother had secured improper advantages and profits, and then by suppression or misrepresentation of facts had induced him to make an adjustment of their affairs on a dishonest and unfair basis. That is precisely what is being claimed in the action of law, and demand is made for damages caused by such fraud whereby the plaintiff in that action was induced to settle on less advantageous terms than he was entitled to. In large measure, at least, the same charges set forth in the action at law can and undoubtedly will be utilized for the purpose of avoiding the release set up in this action. I do not overlook the allegation in the present complaint that this settlement included and satisfied the same charges of dishonest and fraudulent conduct now set forth in the action at law wherefrom the inference would be drawn that it could not be invalidated by anything covered by those charges. The complaint in this action, however, makes a part of itself the complaint in the action at law, and it clearly enough appears from the latter that there are charges of fraud and dishonesty which were not covered by, but which are claimed to affect the validity of, this settlement. As this latter complaint is read, it seems to be perfectly clear that it will not be possible to try in this action the validity of the release without going into some or all of the very issues framed in the action at law which the present plaintiff would avoid, and which the court might well help him to avoid if it could be separately ascertained that he had once made a fair settlement thereof. As long as this cannot be done, the prospect of any gain from this action fades away, and the plaintiff must rely on the establishment in the action of his adversary of his honesty and fair dealing, if such they be, as a bar not only against money damages, but also against the repetition of unfounded charges. ed by the General Term, but was affirmed in this court. The opinion of Judge Gray, predicated on the pretense of the woman, as set forth in her pleadings, that she had been induced by duress and fraud to make the settlement, expressly recognizes the possibility of trying the issue whether a valid release had been executed without going into the merits of the complaint set forth in the action at law as a reason for allowing the maintenance of the equity action. That case probably proceeded as far as any one ever decided by this court in upholding an appeal to equity for the purpose of staying a proceeding at law. It clearly stated the principle that the right to maintain an action of such a character must be largely determined by its peculiar facts, and in the respect indicated I think there is such a difference between the benefits to be derived from that action and from this one that the decision allowing the maintenance of the former fails to become an authority for the bringing of the latter. These views lead us to answer in the negative the question certified to us as to the sufficiency of the complaint, to a reversal, with costs, of the order enjoining the prosecution of the action at law, and to a denial, with $10 costs, of the motion for such injunction; also the order and judgment overruling defendant's demurrer should be reversed, and defendant should have judgment dismissing plaintiff's complaint, with costs in all the courts. WILLARD BARTLETT, C. J., and WER- (212 N. Y. 292) YAWGER v. AMERICAN SURETY CO. (Court of Appeals of New York. July 14, 1914.) 1. Towns (§ 33*)-OFFICERS LIABILITY ON It is in this respect, the impossibility of trying in the equity action the validity of the release and settlement without going more or less into the accusations and charges set up in the action at law, that this action differs from that of Bomeisler v. Forster, 154 N. Y. 229, 48 N. E. 534, 39 L. R. A. 240, on which plaintiff relies. In that case a woman made a claim against a man springing out of alleged unlawful relations, the birth of children, and services as a housekeeper. The man made two settlements with her, and then, notwithstanding these, she brought an action against him, and he brought an action in equity to restrain hers. In the latter action it was emphasized that the settlements had been made with the express purpose of avoiding the scandal and disrepute which would flow from the woman's claims, whether well founded or not. The trial court found all the facts in favor of the plaintiff in the The second surety, which paid the amount equity suit, and enjoined the prosecution of of the deficit only after its liability was ad [Ed. Note. For other cases, see Towns, Cent. Dig. §§ 60, 61; Dec. Dig. § 33.*] 2. PRINCIPAL AND SURETY (§ 194*)—LIABILOF PARTY SEEKING CONTRIBUTION PAYMENT UNDER COMPULSION. ITY |