App. Div.] Second Department, March, 1920. agreement into the wrong place, and the very fact of its having been misplaced is a sufficient ground to ask a court of equity to put it in the right place, where it can be validated through an amended certificate of incorporation. Under the existing law, the absence of the provision in the articles of incorporation being discovered, all of the parties interested assenting, there would be no difficulty in correcting the certificate. An amended certificate might be filed to rectify the error. (Gen. Corp. Law of 1892, § 7; Gen. Corp. Law of 1909, §7; Stock Corp. Law [Gen. Laws, chap. 36; Laws of 1892, chap. 688], § 32, as amd. by Laws of 1901, chap. 354, and Laws of 1905, chap. 751; Stock Corp. Law [Consol. Laws, chap. 59; Laws of 1909, chap. 61], § 18.) And the General Corporation Law (supra) contains this significant language: "The Supreme Court may, upon due cause shown, and proof made, and upon notice to the Attorney-General, and to such other persons as the court may direct, and upon such terms and conditions as it may impose, amend any certificate of incorporation which fails to express the true object and purpose of the corporation, so as to truly set forth such object and purpose.' So, if all of the parties interested were not in accord, here is an express grant of power to the court to amend a certificate so as to truly set forth the lawful intentions of its organizers. In the case at bar every one interested is before the court. It is true that the AttorneyGeneral has not been made a party, but it is impossible to perceive how any public interest is involved in the controversy. The power of the court to grant relief in case of errors and irregularities in corporate organizations has been frequently exercised. In People ex rel. Columbia Co. v. O'Brien (101 App. Div. 296) Mr. Justice CHASE, writing for the court, said: "Where a certificate is filed with the same name as that of an existing corporation, or where the name so nearly resembles that of the existing corporation as to be calculated to deceive, the action of the Secretary of State is not conclusive and the courts have frequently by a judgment in equity granted relief to a prior corporation aggrieved. (10 Cyc. 153; 7 Am. & Eng. Ency. of Law [2d ed.], 689; Society of 1812 v. Society of 1812, 46 App. Div. 568; Hygeia Water Ice Co. v. N. Y. Hygeia Ice Co., 140 N. Y. 94; Higgins Co. v. Higgins Soap Co., 144 id. 462.) First Department, March, 1920. [Vol. 191. (See, also, Lord v. Equitable Life Assurance Society, 109 App. Div. 252.) The opinion of the learned trial judge discusses the facts and resulting equities in greater detail. We concur with him in his conclusion that the attempted exercise of voting power by the preferred stockholder is clearly contrary to the purpose and intention of the original founder of the corporation, and of the incorporators and stockholders evidenced by their conduct of the corporate affairs for twenty years. The judgment registers the justice of the case, and although it may be a new exercise of equitable jurisdiction to rectify articles of incorporation, it is according to equity and good conscience and should be affirmed. The judgment is, therefore, affirmed, with costs. Present―JENKS, P. J., RICH, PUTNAM, KELLY and JAYCOX, JJ. Judgment unanimously affirmed, with costs. ELKHORN VALLEY COAL-LAND COMPANY, Appellant, Respondent, v. EMPIRE COAL AND COKE COMPANY, Respondent, Appellant. First Department, March 19, 1920. Landlord and tenantsuit to rescind renewal clause in lease brought before expiration of term-such suit may not be maintained as one to remove cloud upon title. A suit in equity does not lie to rescind and cancel a renewal privilege contained in a recorded lease upon the ground that such privilege constitutes a cloud upon the title because the lessee has not performed conditions precedent to the right of renewal, where the suit is brought before the term of the original lease has expired and no attempt is made to rescind the original lease. It seems, however, that if the suit were brought to rescind and forfeit the existing lease an entirely different question might arise. It is immaterial that the lessee is already in possession and at the end of the term might defend an action of ejectment by an answer in the nature of a cross-action to compel the lessor to execute a new lease and thus withhold possession, for should such answer be taken at the expiration of the present lease the courts of the foreign State where the lands are situated could protect the lessor by requiring security, or by a receivership. App. Div.] APPEAL by the plaintiff, Elkhorn Valley Coal-Land Company, from that part of an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of August, 1919, granting defendant's motion for judgment on the pleadings and dismissing the complaint. Appeal by the defendant, Empire Coal and Coke Company, from that part of an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of August, 1919, granting leave to the plaintiff to amend its complaint upon the payment of costs. Walter C. Noyes of counsel [Joseph M. Gazzam with him on the brief], for the plaintiff. Thomas D. Thacher of counsel [Adrian L. Foley with him on the brief], Simpson, Thacher & Bartlett, attorneys, for the defendant. SMITH, J.: Both parties to this action are West Virginia corporations. The plaintiff executed and delivered to the defendant a lease of certain coal lands in West Virginia for the term of thirty years, with the right to the defendant to demand a renewal of the lease, provided the defendant had complied with all conditions of the lease binding upon it during the first term of thirty years. This action was brought in 1917. The lease was executed in June, 1891, so that at the time the action was commenced the original term of the lease would not expire for four years. This action is brought by the plaintiff to rescind and cancel the renewal privilege given in the lease on the ground that the conditions precedent to the right of renewal had not been. complied with. The amended complaint and the amended answer thereto were served in 1918. The defendant then moved for judgment upon the pleadings which was granted, dismissing the complaint, but giving leave to the plaintiff to amend its complaint upon payment of costs. The plaintiff appeals from so much of the order as dismisses the complaint First Department, March, 1920. [Vol. 191. and the defendant appeals from so much of the order as grants leave to amend the complaint. In Washburn v. Burnham (63 N. Y. 132) it is held: "An action cannot be maintained to cancel, as a cloud upon title, a recorded executory contract for the sale of land, executed by one claiming to act as agent for the owner, upon the ground that the person executing it had no authority; the defect would necessarily appear in any proceeding by one claiming under the contract to enforce it, as he would be required to prove the authority of the agent.” Further, "Such a contract, however, even if executed by the owner, is not, of itself, an incumbrance or lien upon the lands or a cloud upon the title thereto, and the record of it does not add to its force or validity as such." 66 Further, "The effect of the statutory provision providing for the recording of contracts for the sale of land (1 R. S. 762, § 39), is simply to preserve evidence and facilitate proof thereof. The record is not constructive notice to subsequent purchasers or incumbrancers, and no action can be maintained to cancel it as a cloud on title."The opinion in part reads: Considering the agreement alone and of itself, it comes far short of establishing any right to a conveyance of this land, which it purports to contract to sell. Perhaps it may be valid as far as it goes, but it contains only a portion of the facts essential to establish a contract of binding force, and is ineffective and insufficient for the purpose of transferring any title of the owner to the purchaser. It is an imperfect, incomplete agreement, and an action brought for a specific performance of it could not be maintained without proof to establish that the attorneys claiming to act on behalf of the principal had power and authority to execute the instrument." Clark's Equity, § 414.) (See As I construe the instrument executed between these parties, it constitutes a lease of these lands for thirty years with a contract to grant a new lease for another thirty-year term upon certain conditions precedent. The plaintiff does not seek to rescind the contract for the first term of thirty years, but only seeks to rescind and have canceled such part of the agreement as requires the execution of a new lease for thirty years at the termination of the first term, upon the App. Div.] ground that the conditions precedent have not been complied with. I am wholly unable to distinguish the principle in this case from the principle in the case cited. If a recorded contract requiring the grantor to convey lands upon conditions named cannot be removed as a cloud upon title, it is difficult to see how a recorded contract requiring an owner to grant a lease for thirty years upon conditions. named can constitute a cloud upon title. Every argument which may be urged here to support the right of the court to grant this relief was pertinent to the contention in the case cited. The owner was embarrassed in his sale of the land with this outstanding contract. So here, the owner is embarrassed in the sale or lease of its coal land with this outstanding renewal contract. Extrinsic proof was necessary in the case cited to establish the fact that the contract was of binding force. So here, extrinsic proof is necessary to establish the fact that the conditions precedent to the right to the renewal of the lease have been complied with by the lessee. If the embarrassments to the owner of the land in the case cited were not sufficient to move a court of equity to action, I am unable to see what greater right the owner of the land in the case at bar has to ask a court of equity to intervene in its behalf. The plaintiff insists, however, that this rule in the Washburn case has been to an extent modified by subsequent cases, but the case has never been overruled, although it has been distinguished in cases involving somewhat different questions. Among these cases to which reference is made is the case of St. Stephen's Church v. Church of Transfiguration (201 N. Y. 1). In that case a sale was made by the defendant, a religious corporation, by order of the court to an individual upon the understanding that the property was to be by him conveyed to the plaintiff, another religious corporation. In defendant's deed was inserted a covenant to the effect that the premises should not be occupied or used for any purposes other than church purposes, and it was further provided that said covenant should attach to and run with the land. This covenant was not authorized by the resolution directing the conveyance of the land and was inserted by the officer of the church directed to execute in behalf of the church of his own motion. |