Argued before KRUSE, P. J., and LAMBERT, HUBBS, CLARK, and ROWLAND L. DAVIS, JJ.

John P. Hennessey, of Syracuse, for appellant.

George W. O'Brien, of Syracuse, for respondent.

HUBBS, J. On March 25, 1918, Hannah Egan Murphy died, leaving a last will and testament, which was admitted to probate in the Surrogate's Court of Onondaga County. Within 18 months after her death an action to partition the real property of which she died seized was commenced by her husband, John Murphy. An interlocutory judgment in such partition action was entered, which directed a sale by a referee of the real estate free and clear of all liens and incumbrances. Thereafter a report of sale was made and a final judgment was duly entered. After providing for the payment of liens, taxes, costs and expenses, the final judgment provided as follows:

"(5) That said referee, after making the payments aforesaid, divide and apportion the residue among the parties entitled thereto, according to their respective interest therein, as adjudged in said interlocutory judgment herein, and as hereinafter provided. That said referee pay into Surrogate's Court the proceeds of the sale of said real property and the moneys received by him as referee herein, after deducting the fees and disbursements as hereinabove provided, by paying the same to the county treasurer of the county of Onondaga to the credit of the several parties to this action according to their respective shares in pursuance of and in compliance with the provisions of the interlocutory judgment herein, to wit:

"(a) That he pay to the plaintiff, John Murphy, in the manner above provided, a one-third thereof, being the sum of $1,825.37."

The final judgment then provided for the distribution of the balance of said fund to the other parties in interest. In accordance with said final judgment there was deposited with the county treasurer of Onondaga county the sum of $5,476.05, the net proceeds of the sale of the real property.

After entry of the interlocutory judgment in said partition action, and within 18 months after the probate of the will in question, James W. Egan, the executor thereof, commenced a proceeding in the Surrogate's Court of Onondaga County, under chapter 18, title 4, article 3, of the Code of Civil Procedure to sell said real property to pay debts. and funeral expenses. As a result of such proceeding, debts and expenses to the amount of $617.44 were allowed by the surrogate in the order here appealed from, which order also provided that "the amount of the costs and expenses of administration be reserved until a further hearing herein," and that, for the purpose of paying said claims and "the reasonable expenses of administration," the funds deposited with the county treasurer be brought into the account on the judicial settlement, to be disposed of by the decree. The county treasurer was directed to pay to the executor said fund of $5,476.05 and interest upon the filing of a bond for $6,000 by the executor, to be approved by the surrogate.

John Murphy, the surviving husband, has appealed from said order to this court, and urges that the surrogate had no authority to direct

(188 N.Y.S.)

the county treasurer to pay over to the executor the fund of $5,476.05 deposited with said county treasurer under the final judgment in the partition action.

[1] Section 1538 of the Code of Civil Procedure provides as follows:

"When the action is brought before eighteen months have elapsed from the granting of such letters of administration or letters testamentary, as the case may be, upon the estate of decedent from whom plaintiff derived his title, and the interlocutory judgment directs, as above provided, that the premises shall be sold, free from the lien of debts, the final judgment shall direct that the proceeds of the sale remaining after the payment of the costs *be forthwith paid into court by the referee making such sale by depositing the same with the county treasurer of the county, in which the trial of the action is placed, to the credit of the parties entitled thereto, to await the further order in the premises."

The final judgment in the partition action directed that the net proceeds of the sale be paid into the Surrogate's Court. In a partition action there seems to be no authority for the direction to pay said money into the Surrogate's Court, although such authority did exist prior to 1896 under said section 1538 as it then read. The final judgment herein so provided, however, apparently upon consent of all the parties.

The final judgment in the partition action fixed the rights of the appellant and of all other parties in interest. It established the amount which the appellant was entitled to receive at $1,825.37. The manner in which he could withdraw that sum from the hands of the county treasurer was fixed by section 1538 of the Code of Civil Procedure. He might withdraw such money at any time, by filing a bond and procuring an order as provided in said section, or, upon a certificate of the surrogate showing that 18 months had elapsed since the issuing of letters upon the estate of the decedent, and that no proceeding for the mortgage, lease, or sale of the real property of said decedent was pending, and upon the certificate of the county clerk as provided in said section, he might apply to the court wherein the final judgment was rendered for an order directing the county treasurer to pay over the sum to which he was entitled under said final judgment.

Where a proceeding to sell, lease, or mortgage real property for the payment of debts and funeral expenses, commenced within 18 months after letters were issued, is pending in Surrogate's Court, the fund deposited under a final judgment in a partition action cannot be paid out until the, determination of such proceeding, as such fund stands in place of the real property sold in the partition action and is subject to the lien of the decedent's debts. Matter of Dusenbury, 34 Misc. Rep. 666, 70 N. Y. Supp. 725.

[2] The appellant concedes that his share of such fund established. by the final judgment in the partition action is subject to its proportionate share of the debts of decedent established in the proceeding in Surrogate's Court. It is urged by the appellant, however, that the total amount which is a legal charge against said fund under section 2703 of the Code of Civil Procedure should be fixed and determined by the surrogate and deducted from the amount on deposit with the county treasurer, and that the balance should be paid over to the appellant and

to the other parties entitled thereto. It is insisted that the surrogate had no authority, when the debts were established at $617.44, to order the payment of the whole sum of $5,476.05 to the executor, thereby depriving the appellant of his right, under section 1538 of the Code of Civil Procedure, to apply to the court for an order permitting him to withdraw his share upon furnishing a bond as required by said section, and making his share subject to a reduction for executor's commissions.

If the surrogate had authority to order the county treasurer to pay over to the executor a fund of $5,476.05, to enable him to pay debts of $617.44, he would have had the same authority, no matter how large the fund might be. If the final judgment had directed that the fund be paid into the Supreme Court, the procedure for the distribution. thereof would have been according to section 1538 of the Code of Civil Procedure and the decisions construing that section. Lichtenberg v. Lichtenberg, 156 App. Div. 535, 141 N. Y. Supp. 356; Matter of Dusenbury, 34 Misc. Rep. 666, 70 N. Y. Supp. 725. Under that practice the Supreme Court could not, in a partition action, order the fund paid over to an executor. The order in question was made by the surrogate on the authority of section 2707 of the Code of Civil Procedure, which provides, in part:

"The proceeds of the sale of any real property sold by judgment of another court, which directs said proceeds to be paid into the Surrogate's Court subject to its order, may be directed by such order of the surrogate to be paid to the executor or administrator to be brought into the account on such judicial settlement and disposed of in accordance with the decree made thereupon." The language of that section, standing alone, is broad enough to justify the order in question. It will be noted that said section reads: "Judgment which directs said proceeds to be paid into the Surro

gate's Court."

Prior to 1896 said section 1538 provided that:

"Such court may direct such money to be paid into the proper Surrogate's Court."

Said section 1538, as it now reads, does not provide for paying surplus funds in a partition action into Surrogate's Court. In an action to foreclose a mortgage upon real property, it is provided, in section 1633 of the Code of Civil Procedure, in certain cases mentioned in said section, where the claims of creditors of the deceased mortgagor may be enforced against a surplus fund, that "the surplus money must be paid into the Surrogate's Court." It will be seen, by comparing said section 1633, relating to an action to foreclose a mortgage on real property, and said section 1538, relating to an action in partition, that the Legislature has provided different methods in the given cases for paying out surplus money. This difference was pointed out in Matter of Dusenbury, 34 Misc. Rep. 666, 70 N. Y. Supp. 725. The statute governing the distribution of surplus moneys in actions for partition of real property is said section 1538; the practice under said section has been laid down by the courts, and should not be departed from without clear and expressed authority.

(188 N.Y.S.)

That part of said section 2707 above quoted would very likely justify the order appealed from, if the surplus fund had arisen from an action to foreclose a mortgage upon real property; but, as the fund in question was deposited in a partition action, the surrogate was without authority to make an order directing that the whole fund be paid to the executor. While it is true that the final judgment in the partition action did direct that said surplus fund be paid into the Surrogate's Court, such judgment did not bestow upon the Surrogate's Court power and authority to make an order which the Supreme Court could not. make under said section 1538, and did not authorize the Surrogate's Court to apply to such proceeding the provisions of said section 1633 applicable to a proceeding to distribute surplus funds resulting from the foreclosure by action of a real property mortgage.

The order appealed from affected a substantial right of the appellant, and he is aggrieved thereby. The order, so far as appealed from, should be reversed, with $10 costs.

Order, so far as appealed from, reversed, with $10 costs and disbursements. All concur.

(196 App. Div. 628)

MALIS v. KNAPP & BAXTER, Inc.

(Supreme Court, Appellate Division, First Department. April 29, 1921.) 1. Contracts 23-Unqualified acceptance of offer is necessary.

To constitute an agreement, there must be an unqualified acceptance of the terms of the offer.

2. Sales 22 (4)-Seller's offer held not accepted, where acceptance referred to discount not mentioned in offer.

A letter confirming a sale of goods at "81 cents, and down as with the previous lots. Terms cash on arrival, subject to usual inspection"-did not authorize any discount for cash, and was not accepted by the buyer's letter stating that "we accept same at the price you make of 81 cents per foot and down, terms 5 per cent. discount, cash on delivery."

Appeal from Special Term, New York County.

Action by Jacob K. Malis against Knapp & Baxter, Incorporated. From an order denying its motion for judgment on the pleadings, consisting of a complaint and answer, defendant appeals. Reversed, and motion granted.

Argued before DOWLING, LAUGHLIN, PAGE, MERRELL, and GREENBAUM, JJ.

Shearman & Sterling, of New York City (Charles A. Vilas, of New York City, of counsel, and Chauncey B. Garver, of New York City, on the brief), for appellant.

Seligsburg, Lewis & Rothschild, of New York City (Joseph M. Proskauer, of New York City, of counsel, and Walter N. Seligsberg, of New York City, on the brief), for respondent.

GREENBAUM, J. The complaint alleges that on or about June 16, 1919, plaintiff and defendant entered into an agreement in writing,

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

embodied in two letters annexed to the complaint and marked Exhibits A and B; that the defendant failed to make deliveries as required by said agreement, and that thereby plaintiff was damaged in the sum of $75,000.

Exhibit A read as follows:

"Dear Mr. Malis: This will confirm our conversation just now concerning the purchase of glazed kid by you from Knapp & Baxter, whom I represent. There are 48 cases in one lot and 35 in the other. There are no 705's in this lot, only 701-2-3-4, and the price as per telephone to Mr. Petrocelli is 81¢ and down, as with the previous lots. Terms cash on arrival, subject to usual inspection.

"Sincerely yours,

The following is a copy of Exhibit B:

C. E. Bosworth."

"Dear Sir: We have received your confirmation on the lot of Blumenthal black glazed kid Nos. 701, 702, 703, and 704, altogether 2,666 dozen, and we accept same at the price you make of 81¢ per foot for the 701 and down; terms, 5% discount cash on delivery in New York City, subject to regular discount inspection.

"Yours respectfully,

Jacob K. Malis."

[1] To constitute an agreement there must be an unqualified acceptance of the terms of defendant's offer. This rule is well stated in the following excerpt from the opinion of the court in Poel v. BrunswickBalke-Collender Co. of New York, 216 N. Y. 310, 318, 110 N. E. 619,

621:

"If the intention of the defendant had been to accept the offer made in the plaintiffs' letter of April 4th, it would have been a simple matter for the defendant to have indorsed its acceptance upon the proposed contract which the plaintiffs' letter of April 4th had inclosed. Instead of adopting this simple and obvious method of indicating an intent to accept the contract proposed by the plaintiffs, the defendant submitted its own proposal and specified the terms and conditions upon which it should be accepted. The defendant's letter of April 6th was not an acceptance of this offer made by the plaintiffs in their letter of April 4th. It was a counter offer or proposition for a contract. * The plaintiffs did not acknowledge the receipt of this order and the proposal remained unaccepted. As the party making this offer deemed this provision material, and as the offer was made subject to compliance with it by the plaintiffs, it is not for the court to say that it is immaterial. When the plaintiffs submitted this offer in their letter of April 4th to the defendant only one of two courses of action was open to the defendant. It could accept the offer made, and thus manifest that assent which was essential to the creation of a contract, or it could reject the offer. There was no middle course. If it did not accept the offer proposed it necessarily rejected it. A proposal to accept the offer, if modified, or an acceptance subject to other terms and conditions, was equivalent to an absolute rejection of the offer made by the plaintiffs."

[2] The plaintiff's letter, Exhibit B, did not unqualifiedly accept the offer expressed in Exhibit A, in that it injected, after the word "terms," the words "5% discount," which were not in the remotest sense mentioned in the offer either directly or remotely. The deduction of 5 per cent. of the purchase price fixed in Exhibit A would amount to upwards of $7,000. The learned Special Term justice in his opinion states:

"That the inclusion of the 5 per cent. discount term was not in fact an additional element, but a perhaps superfluous act of caution by the plaintiff in