New York Law Review

Tag: equitable estoppel

  • Rector, Church Wardens & Vestrymen of St. Bartholomew’s Church v. Committee to Preserve St. Bartholomew’s Church, 56 N.Y.2d 71 (1982): Estoppel Based on Prior Agreement in Church Dispute

    Rector, Church Wardens & Vestrymen of St. Bartholomew’s Church v. Committee to Preserve St. Bartholomew’s Church, 56 N.Y.2d 71 (1982)

    A party cannot challenge the validity of an election based on procedures they previously agreed to and actively participated in, especially when a court-approved process was followed to resolve a dispute.

    Summary

    A committee of church members sought to invalidate a church election authorizing the sale of church property, arguing that the election procedures violated the law. The church had initially sued the committee regarding the use of a name, and the committee counterclaimed to require a vote on a by-law amendment restricting property sales. Both sides agreed to have a judge resolve disputes concerning the election. The election proceeded under the judge’s guidelines, and the property sale was approved. The Committee then challenged the election based on alleged statutory violations. The New York Court of Appeals held that the Committee was estopped from challenging the election since they agreed to the procedures and participated in the election based on those procedures. The Court emphasized that parties cannot change the rules after being disappointed with the outcome.

    Facts

    St. Bartholomew’s Church sought to sell or lease a portion of its property. A group of parishioners formed the “Committee to Preserve St. Bartholomew’s Church Inc.” to oppose the transaction. The church sued the Committee to enjoin the use of the name and to impress a constructive trust on solicited funds. The Committee counterclaimed, seeking to impress a constructive trust and to compel a special meeting to vote on a by-law amendment requiring member approval for property sales. The church agreed to a letter of intent with a developer, contingent on timely approval of the leasehold. The church then scheduled a vote on the proposed sale.

    Procedural History

    The Supreme Court initially granted a preliminary injunction against the Committee’s name use and later granted summary judgment to the defendants, ordering the church to hold an election on the by-law amendment. The Appellate Division denied a stay but expedited the appeal. Justice Greenfield approved a by-law amendment requiring a vote of the parish for authorization of the disposition of church property. Justice Greenfield vacated the order enjoining the election and set guidelines for voter qualifications. The Appellate Division found no basis for setting aside the election, and granted the Committee leave to appeal.

    Issue(s)

    Whether a party that actively sought and agreed to a court-ordered election procedure can later challenge the election’s validity based on alleged violations of the Religious Corporation Law after being disappointed with the election results.

    Holding

    Yes, because the Committee actively sought the court’s intervention, agreed to abide by the court’s ruling, and participated in the election under the court’s prescribed guidelines. The Committee is estopped from challenging the procedures after the election’s outcome disappointed them.

    Court’s Reasoning

    The Court of Appeals emphasized that the parties had jointly sought Justice Greenfield’s intervention to resolve the election dispute, agreeing to comply with his determination. The election was then conducted according to the procedures prescribed by Justice Greenfield. The Court stated, “In this case it is clear that all parties were mindful of the fact that a determination had to be reached as soon as possible. In order to insure an expeditious resolution of their dispute they agreed to submit the controversy to Justice Greenfield prior to any sale or election and to comply with his determination.” The Committee’s challenge arose only after losing the election. The Court invoked the principle that parties cannot change the rules of the game after being disappointed by the outcome, citing Stevenson v News Syndicate Co., 302 NY 81, 87; Cullen v Naples, 31 NY2d 818, 820; Martin v City of Cohoes, 37 NY2d 162, 165-166. The Court effectively applied a form of equitable estoppel, preventing the Committee from asserting a claim inconsistent with their prior conduct. The court found that “the parties charted their own course and the Committee cannot now seek to change the rules merely because it has been disappointed by the outcome of the election”. There were no dissenting or concurring opinions.

  • Faymor Development Co. v. Board of Standards & Appeals, 45 N.Y.2d 563 (1978): Equitable Estoppel Against City In Zoning Disputes

    45 N.Y.2d 563 (1978)

    A municipality may be equitably estopped from enforcing a zoning change to deny a building permit when the permit holder was prevented from acquiring vested rights due to a combination of community interference and the municipality’s own actions or inaction.

    Summary

    Faymor Development Co. sought to reinstate a building permit that was automatically revoked due to a zoning change. Faymor argued that it was prevented from completing construction and acquiring vested rights because of illegal interference by area residents and delaying tactics by municipal officers. The New York Court of Appeals held that the city was estopped from denying reinstatement of the permit because Faymor’s failure to complete construction was a direct result of the combined actions of protesting residents and the city’s own actions and inaction. The court emphasized that a municipality cannot benefit from its own inaction when it contributes to preventing a permit holder from vesting their rights.

    Facts

    Faymor owned land in Far Rockaway, NY, and obtained a building permit in December 1972 to construct a six-story multiple dwelling, a permitted use under the existing zoning (R3-2). In the summer of 1974, before construction began, the building department revoked the permit based on community objections. The Board of Standards and Appeals (BSA) reinstated the permit in July 1974. Area residents then obstructed construction by physically blocking access to the site beginning August 16. Despite court orders directing them to cease, the protesters continued their obstruction. Faymor requested police assistance, which was not effectively provided. On October 10, the property was rezoned to R3-1, which only allowed one- and two-family homes. On October 11, the building department revoked Faymor’s permit under a zoning resolution stating permits lapse if the foundation is not completed before a zoning change.

    Procedural History

    Faymor appealed to the BSA, which denied reinstatement of the permit. Faymor then filed an Article 78 proceeding to annul the BSA’s determination. The Supreme Court dismissed the petition. The Appellate Division reversed and directed the permit to be reinstated for 103 days, representing the time lost due to the improper revocation, court-ordered stays, and resident actions. The City appealed to the Court of Appeals.

    Issue(s)

    Whether a municipality can be equitably estopped from asserting a landowner’s failure to complete construction as a basis for denying reinstatement of a building permit, when the landowner’s failure to complete construction was caused by a combination of community interference and the municipality’s own actions or inaction.

    Holding

    Yes, because the city’s actions and inaction, combined with the illegal actions of area residents, prevented Faymor from completing its foundation and vesting its rights under the permit. The city cannot now benefit from this failure to complete construction.

    Court’s Reasoning

    The Court of Appeals reasoned that while the BSA typically lacks the power to reinstate a permit after a zoning change unless the foundation is complete, a court can estop the city from asserting this requirement when the city itself contributed to the failure to complete construction. The court distinguished this case from situations where the failure to complete construction was solely the fault of the landowner. Here, Faymor was ready and willing to build, had incurred significant expenses, and was prevented from doing so by a combination of factors. These included the initial improper revocation of the permit, the delaying lawsuits and illegal blockades by area residents, and, critically, the city’s failure to adequately enforce the law and protect Faymor’s right to build. The court highlighted the city’s initial revocation of the permit on technical grounds only after community opposition arose, and the police’s inaction while protesters blocked construction. Quoting the Appellate Division, the Court stated, “[T]he rule of law must prevail. The right to proceed pursuant to a valid building permit, no less than any other civil right, is not to be lost because others resort to the streets, or because governmental authorities have improperly placed hurdles barring the appropriate exercise of such right.” While municipalities typically aren’t liable for damages for failure to provide adequate services (citing Riss v. City of New York), they can be estopped from claiming the benefits of their own inaction (citing Matter of Pokoik v. Silsdorf and Matter of Our Lady of Good Counsel v. Ball). The Court concluded that it would be unfair to allow the city to benefit from Faymor’s failure to complete construction when that failure was a direct result of the combined actions of the community and the municipality’s actions and neglect. The Court emphasized a party can be ordered to do equity and a court’s equitable power to order the board to grant relief does not depend on the existence of statutory authority.

  • Develco Associates, Inc. v. Spa Realty Corp., 42 N.Y.2d 687 (1977): Enforceability of Oral Modifications to Contracts with Anti-Oral Modification Clauses

    Develco Associates, Inc. v. Spa Realty Corp., 42 N.Y.2d 687 (1977)

    Partial performance of an oral modification to a contract containing an anti-oral modification clause is enforceable only if the partial performance is unequivocally referable to the oral modification; additionally, equitable estoppel may bar a party from invoking the anti-oral modification clause where the other party has significantly relied on the oral modification.

    Summary

    Develco Associates sought specific performance of an oral agreement modifying a written land sale contract with Spa Realty. The modification involved reducing the amount of land to be conveyed. The contract contained a clause prohibiting oral modifications. The New York Court of Appeals held that partial performance of the oral modification, if unequivocally referable to the modification, avoids the statutory requirement of a writing. Furthermore, equitable estoppel may prevent a party from relying on the anti-oral modification clause if the other party significantly relied on the oral modification. The court ultimately determined that the buyer was required to pay cash for the reduced land purchase.

    Facts

    Develco (buyer) and Spa Realty (seller) entered a written agreement for the sale of land for a housing development. The agreement allowed conveyance in stages and contained an anti-oral modification clause. The initial plan involved the construction of 800 units on 76 acres. After encountering sewage problems, the buyer requested the seller to seek approval for only 96 units instead of the originally planned 150. The seller agreed to seek approval for the lesser quantity. The buyer invested substantial sums into the development, including constructing model homes and signing purchase agreements with prospective homeowners.

    Procedural History

    The trial court ordered specific performance, requiring the seller to convey the lesser quantity of land upon full cash payment. The Appellate Division modified the judgment, allowing the buyer to purchase the land on credit terms. The seller appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether partial performance of an oral modification is sufficient to overcome a contractual clause prohibiting oral modifications.
    2. Whether equitable estoppel prevents a party from relying on a contractual clause prohibiting oral modifications when the other party has relied on the oral modification.
    3. Whether the buyer was required to pay cash or could use credit terms for the modified transaction.

    Holding

    1. Yes, because partial performance of an oral modification avoids the statutory requirement of a writing only if the partial performance is unequivocally referable to the oral modification.
    2. Yes, because a party may be estopped from disputing an oral modification, notwithstanding the statute, when the other party’s conduct induces significant and substantial reliance on the oral agreement to modify.
    3. Yes, because the seller conditioned the reduction in land quantity upon full cash payment, and the buyer, by proceeding with the project, impliedly accepted the seller’s payment term.

    Court’s Reasoning

    The court reasoned that while the General Obligations Law protects parties who include a proscription against oral modification in their written agreements, this protection is not absolute. The court distinguished between executory and executed oral modifications. An executed oral modification, where the agreement has been fully performed, is enforceable. Additionally, partial performance of an oral modification may be sufficient to overcome the anti-oral modification clause if the performance is unequivocally referable to the oral modification. This ensures that the conduct is clearly linked to the alleged modification, reducing the risk of fraudulent claims.

    The court also invoked the principle of equitable estoppel. If a party induces another’s significant and substantial reliance upon an oral modification, the party may be estopped from invoking the statute to bar proof of that oral modification. The conduct relied upon to establish estoppel must not otherwise be compatible with the agreement as written.

    In this case, the court found that the buyer’s actions were unequivocally referable to the oral modification. The seller’s conduct in seeking approval for the reduced quantity of units, evidenced by the Schlesinger letter, was inconsistent with the original agreement. The court noted, “Nowhere in the written agreement was conveyance of land for 96 units treated.” Therefore, the partial performance was sufficient to validate the oral modification.

    Regarding the payment terms, the court found that the seller had consistently insisted on cash payment. The buyer’s failure to expressly agree to the cash term did not invalidate the agreement. “To repeat the words of the Trial Judge, in calling for performance, purchasers ‘impliedly and necessarily’ accepted the terms imposed.” The court applied the general rule that in the absence of agreed-upon credit terms, cash is required. The court reasoned, “the option to take title to the land required for 48 home sites was to be for cash. Nor are land transactions requiring cash payment to the seller unusual”.

  • Bender v. New York City Health & Hosps. Corp., 38 N.Y.2d 662 (1976): Estoppel Against Government Entities in Notice of Claim Cases

    Bender v. New York City Health & Hosps. Corp., 38 N.Y.2d 662 (1976)

    A governmental entity can be estopped from asserting a defense, such as failure to file a timely notice of claim, if its wrongful or negligent conduct induced reliance by a party, who then changed their position to their detriment.

    Summary

    This case addresses whether the New York City Health and Hospitals Corporation (HHC) could be estopped from asserting a lack of notice of claim in two separate personal injury cases. The plaintiffs initially filed notices of claim with the City of New York instead of the HHC, which had recently been created as a separate entity to operate municipal hospitals. The Court of Appeals held that a governmental entity like the HHC can be estopped from raising a defense if its actions misled the plaintiff. The court reversed the Appellate Division’s orders and remanded the cases for further fact-finding to determine if estoppel applied based on the HHC’s conduct and the plaintiffs’ reliance.

    Facts

    In Bender, the plaintiff was injured in an automobile accident and received allegedly improper treatment at two municipal hospitals, resulting in the amputation of his leg. He filed a notice of claim with the City of New York. The Corporation Counsel, representing both the City and the HHC, conducted a hearing and physical examination without informing the plaintiff that the notice was filed with the wrong entity. In Economou, the plaintiffs were painters injured at Bellevue Hospital due to exposure to ultraviolet lights. They also filed notices of claim with the City, and the Corporation Counsel examined them before they realized the HHC was the proper entity to notify.

    Procedural History

    In Bender, Special Term granted leave to serve an amended notice on the HHC, but the Appellate Division reversed, finding the failure to serve notice of claim as required by statute was a fatal defect. In Economou, Special Term granted the plaintiffs’ application to serve notices nunc pro tunc on the HHC, and the Appellate Division affirmed. The Court of Appeals consolidated the appeals to address the estoppel issue.

    Issue(s)

    Whether the New York City Health and Hospitals Corporation can be estopped from asserting a defense of failure to comply with the notice of claim provisions, based on the conduct of the city and Corporation Counsel, when the plaintiffs initially filed their notices of claim with the City of New York instead of the newly formed HHC.

    Holding

    Yes, because a governmental subdivision can be estopped from asserting a right or defense when it acts wrongfully or negligently, inducing reliance by a party who is entitled to rely and who changes their position to their detriment or prejudice.

    Court’s Reasoning

    The court recognized the importance of notice of claim statutes but emphasized that they should not be a trap for the unwary. The court formally adopted the doctrine of equitable estoppel in the context of notice of claim requirements, stating that “where a governmental subdivision acts or comports itself wrongfully or negligently, inducing reliance by a party who is entitled to rely and who changes his position to his detriment or prejudice, that subdivision should be estopped from asserting a right or defense which it otherwise could have raised.” The court noted that estoppel can arise from positive acts or omissions where there was a duty to act. The court remanded the cases to Special Term for further fact-finding to determine whether the HHC’s conduct, or the conduct of the City and Corporation Counsel attributable to the HHC, warranted the application of estoppel. Specifically, the court wanted more information about whether the HHC and City refrained from strictly applying the new statute, whether the transfer of responsibility to the HHC was publicly discoverable, and whether the HHC adequately indicated its autonomy. The court considered this rule “a fair and just accommodation of competing interests.”

  • Bunge Corp. v. Manufacturers Hanover Trust Co., 31 N.Y.2d 223 (1972): Equitable Estoppel and Employee Misconduct

    31 N.Y.2d 223 (1972)

    When one of two innocent parties must suffer due to the actions of a third party, the loss falls on the party who enabled the third party to cause the loss.

    Summary

    Bunge Corp. sued Manufacturers Hanover Trust Co. to recover the value of cashier’s checks that were diverted by a Bunge employee. Manufacturers issued the checks to Allied Crude Vegetable Oil Refining Corp. at the request of North Bergen Bank. An employee of Allied, situated in Bunge’s office, returned the checks to Manufacturers without Bunge’s endorsement, and North Bergen’s account was recredited. However, Bunge’s head cashier had switched these checks with ordinary checks, which were later returned for insufficient funds after Allied’s bankruptcy. The court held that Bunge was estopped from recovering because its employee’s actions enabled the loss, applying the principle that the party whose misplaced confidence enabled the wrongdoing must bear the loss.

    Facts

    Manufacturers Hanover Trust Co. issued cashier’s checks totaling $3,040,386.60 at the request of its correspondent bank, First National Bank of North Bergen, for Allied’s use in a bidding process.
    Manufacturers delivered the checks, payable to Bunge, to an Allied employee who had a desk at Bunge’s office.
    The Allied employee returned the checks unused and without Bunge’s endorsement to Manufacturers, which then recredited North Bergen’s account.
    Bunge’s head cashier, Caterina, switched the official checks with ordinary checks also payable to Bunge, delaying the deposit of the ordinary checks.
    When the ordinary checks were deposited, they were returned for insufficient funds due to Allied’s bankruptcy, resulting in a loss to Bunge.

    Procedural History

    Bunge sued Manufacturers for conversion in the Supreme Court, New York County, and was initially awarded $4,484,151.81.
    The Appellate Division, First Department, modified the judgment and dismissed the complaint.
    Bunge appealed to the New York Court of Appeals.

    Issue(s)

    Whether Bunge should be equitably estopped from maintaining an action against Manufacturers, given that Bunge’s employee was the primary actor in diverting the checks.

    Holding

    Yes, because Bunge’s employee, Caterina, facilitated the diversion of the checks, enabling the loss; thus, Bunge is equitably estopped from recovering from Manufacturers.

    Court’s Reasoning

    The court applied the doctrine of equitable estoppel, stating, “where one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss, must sustain it”. The court emphasized that cashier’s checks are freely returnable to the issuing bank when in the hands of the remitter (Allied).
    The court distinguished this case from situations involving theft, highlighting that Caterina merely diverted the checks. It noted that Bunge, by entrusting the checks to Caterina, enabled the diversion to occur. No forgery or unauthorized endorsement was necessary.
    The court cited National Safe Deposit Co. v. Hibbs, stating that “the principles which underlie equitable estoppel place the loss upon him whose misplaced confidence has made the wrong possible.”
    The court rejected Bunge’s argument that Caterina could not transfer title to the unendorsed checks, reiterating that official checks are freely returnable when held by the remitter.
    The court also addressed Bunge’s contention that Manufacturers assumed a risk by accepting the checks back, clarifying that banks are generally permitted to accept official checks from the remitter, absent notice of improper delivery. Manufacturers was specifically instructed the checks may be returned unnegotiated if Allied’s bid was not accepted or the checks were drawn in the incorrect amount.

  • Matter of Hacker v. State Liq. Auth., 19 N.Y.2d 175 (1967): Statute of Limitations Tolling in Liquor License Revocation Proceedings

    Matter of Hacker v. State Liq. Auth., 19 N.Y.2d 175 (1967)

    A disciplinary proceeding by the State Liquor Authority is timely commenced, and the statute of limitations is tolled, when formal notice of a hearing is given for a violation occurring in the immediately preceding license period, even if the final determination extends into a subsequent license period.

    Summary

    This case addresses the application of the one-year statute of limitations in Section 118 of the Alcoholic Beverage Control Law to disciplinary proceedings against liquor licensees. The court held that the statute of limitations is tolled when the State Liquor Authority commences a disciplinary proceeding with a formal notice of hearing for violations occurring during the immediately preceding license period. The court further found that a licensee’s fraudulent misrepresentation on an original application and the act of allowing an unapproved person to benefit from the license are continuing violations, and equitable estoppel does not apply to prevent the Authority from acting on these violations, even after a license renewal.

    Facts

    Alexander Hacker obtained a restaurant liquor license on November 1, 1961, renewed on March 1, 1962. On September 4, 1962, the State Liquor Authority initiated proceedings to revoke Hacker’s license, alleging that he violated Section 111 by allowing his son, a convicted felon, to benefit from the license, falsely stated in his application that he would terminate outside employment, and failed to maintain adequate records. Hacker’s license was renewed again on March 1, 1963. On December 10, 1963, the Authority cancelled Hacker’s license, sustaining charges one and two.

    Procedural History

    The licensee sought review of the Authority’s determination. The Appellate Division, Second Department, annulled the Authority’s determination, finding that the action was time-barred and that the Authority was equitably estopped from pursuing the charges due to the license renewal.

    Issue(s)

    1. Whether the one-year statute of limitations in Section 118 of the Alcoholic Beverage Control Law applies to fraudulent misrepresentations made in an original liquor license application.

    2. Whether the statute of limitations may be tolled under certain circumstances in administrative proceedings.

    3. Whether the doctrine of equitable estoppel bars the Authority from revoking a license for violations occurring in the immediately preceding license period when the license has been renewed.

    Holding

    1. Yes, because the “fraud” perpetrated upon the Authority is subject to the one-year time limitation contained in section 118.

    2. Yes, because the normal attributes of a Statute of Limitations must be applicable to the limitation contained in section 118, e.g., a tolling provision similar to that contained in CPLB 203 (subd. [a]).

    3. No, because, according to Williston, “The fundamental basis for the estoppel is the justifiableness of the conduct of the party claiming the estoppel,” and the licensee’s conduct was not justifiable.

    Court’s Reasoning

    The court reasoned that while a fraudulent misrepresentation in the original application is subject to the one-year limitation, the statute is tolled when the Authority initiates disciplinary proceedings by formal notice of hearing within the preceding license period. The court likened administrative inquiries to legal proceedings, noting the time required for investigations, hearings, and formal dispositions. “It would be unreasonable to state that the entire inquiry, commencing with an investigation of alleged violations, proceeding through hearings and reports, and culminating in a formal disposition by the Authority, must all be concluded within the short period of limitation.” The court also determined that allowing an unapproved person to benefit from the license is a continuing violation of Section 111, not merely a misrepresentation at the time of application. This ongoing violation occurred within the preceding license period, making the proceedings timely. Finally, the court rejected the application of equitable estoppel, emphasizing that the licensee’s conduct (fraudulent misrepresentation and allowing a felon to benefit from the license) was not justifiable and that the licensee did not demonstrate a detrimental change in position in reliance on the license renewal. The court emphasized that Section 118 empowers the Authority to discipline a licensee “Notwithstanding the issuance” of a renewal license, thus knowledge of a violation at the time of renewal does not estop the Authority from continuing disciplinary proceedings. The court referenced Williston’s Contracts, stating “‘The fundamental basis for the estoppel is the justifiableness of the conduct of the party claiming the estoppel.’”

  • General Stencils, Inc. v. Chiappa, 18 N.Y.2d 125 (1966): Equitable Estoppel and the Statute of Limitations

    General Stencils, Inc. v. Chiappa, 18 N.Y.2d 125 (1966)

    A defendant may be equitably estopped from asserting a statute of limitations defense if the delay in bringing the action was the result of the defendant’s affirmative wrongdoing or concealment.

    Summary

    General Stencils sued its former bookkeeper, Chiappa, for conversion of petty cash funds. Chiappa asserted the statute of limitations as a defense. General Stencils argued that Chiappa should be equitably estopped from asserting this defense because she fraudulently concealed her defalcations. The lower courts limited the recovery based on the statute of limitations, rejecting the equitable estoppel argument. The New York Court of Appeals reversed, holding that Chiappa’s alleged affirmative wrongdoing and concealment, if proven, could estop her from using the statute of limitations as a defense. This case clarifies that a defendant’s fraudulent concealment can prevent them from using the statute of limitations to shield their wrongdoing, provided the plaintiff was not negligent in discovering the fraud.

    Facts

    General Stencils, Inc. (plaintiff) employed Chiappa (defendant) as its head bookkeeper.
    During her employment (January 1953 to July 1962), Chiappa allegedly converted $32,985.63 from the company’s petty cash funds.
    General Stencils alleged that Chiappa fraudulently concealed her actions, preventing the company from discovering the defalcations until November 1962.

    Procedural History

    General Stencils sued Chiappa to recover the converted funds.
    Chiappa asserted the three-year statute of limitations for conversion as an affirmative defense.
    The jury awarded General Stencils $8,500.
    The trial court reduced the award to $2,951, holding that claims prior to 1961 were time-barred.
    The Appellate Division affirmed the trial court’s decision.
    The New York Court of Appeals reversed the Appellate Division’s order and granted a new trial.

    Issue(s)

    Whether a defendant’s affirmative wrongdoing and fraudulent concealment of a conversion can equitably estop the defendant from asserting the statute of limitations as a defense.
    Whether funds previously returned to the plaintiff as a result of the defendant’s criminal conviction should be applied to the portion of the debt barred by the statute of limitations.

    Holding

    Yes, because a wrongdoer should not benefit from their own misconduct that caused the delay in discovering the cause of action.
    The funds should be applied to the debt outstanding prior to the statutory bar, as this is the most equitable determination under the circumstances, and the plaintiff wishes it so applied.

    Court’s Reasoning

    The Court of Appeals reasoned that the doctrine of equitable estoppel prevents a wrongdoer from taking advantage of their own wrong. Citing Glus v. Brooklyn Eastern Term., 359 U.S. 231, 232-233 (1959), the court stated, “To decide the case we need look no further than the maxim that no man may take advantage of his own wrong. Deeply rooted in our jurisprudence this principle has been applied in many diverse classes of cases by both law and equity courts and has frequently been employed to bar inequitable reliance on statutes of limitations.”
    The court distinguished the cases relied upon by the lower courts, finding that they did not address the specific issue of equitable estoppel arising from the defendant’s affirmative wrongdoing. The court emphasized that New York courts have the power to prevent a defendant from using the statute of limitations when the delay was caused by the defendant’s carefully concealed crime.

    The court noted that the defendant could present evidence at the new trial that the plaintiff’s negligence contributed to the delay in discovering the conversion, which could negate the equitable estoppel argument. Regarding the $940 already repaid, the court held that it should be applied to the debt outstanding prior to 1961. Since the debtor did not stipulate how the money should be applied, the creditor had the option to allocate the payment, and if the creditor fails to do so, then the court must equitably determine the allocation. “The creditor, plaintiff herein, wishes it applied to the debt outstanding prior to 1961, and in our opinion this is the only equitable determination allowed by the circumstances.”