author: Ingraham, J.

text:
    Benjamin F. Metcalf et al. v. Burdett Stryker.
    When a sheriff, after arresting a debtor on mesne process, stands as bail for his appearance, in an action subsequently brought against the sheriff for not producing the body of the debtor to be taken in execution of the judgment recovered against him, he cannot give evidence of the debtor’s insolvency in mitigation of damages.

      It seems, that in an action against' the sheriff for an escape, such evidence would be admissible; but it is otherwise where the sheriff stands as bail for the debtor’s appearance.
    The defendant, as sheriff, had process for the arrest of George 0. Heinman, at the suit of the plaintiff. On the 20th of August, 1857, he arrested Heinman, and took from him an undertaking, with sureties, who justified before the sheriff. On the 25th of August, the defendant served on plaintiffs’ attorney a copy of the undertaking and justification. On the 26th of August, the plaintiffs’ attorney served on the defendant notice that they did not accept the bail. The bail did not justify, nor did the defendant serve any notice of justification. Judgment was obtained in August, 1858, and execution issued against the property of Heinman on the 12th of August, 1858, which was returned unsatisfied. On the 27th of August an execution was issued against the body, which was returned “ defendant not found.”
    Hpon the trial of this action, the defendant offered to prove that Heinman, at the time of his arrest in the original action, and for a long time before, was, and ever since had been, utterly insolvent and unable to pay said judgment, or any part thereof, and had no property, real or personal, liable to execution. This evidence was objected to and excluded, and defendant excepted. The jury rendered a verdict for the plaintiffs, under the direction of the court. The General Term ordered judgment for the plaintiffs on the verdict.

      John K. Porter, for the appellant.

      E. C. Benedict, for the respondents.
   Ingraham, J.

The decision of the question raised upon the trial of this action depends upon the question whether the defendant is liable in this case for an escape, or whether he is to be considered as bail for the defendant Heinman, and liable as such bail. If the action is one against the sheriff for an escape, it is well settled that the insolvency of the debtor may be given in evidence in mitigation of damages. (Patterson v. Westervelt, 17 Wend., 543; Potter v. Lansing, 1 Johns., 215; Russell v. Turner, 7 id., 189.) In the latter case, Thompson, J., says: It was admitted by the plaintiff’s counsel, and, indeed, could not be denied, that the insolvency of the prisoner could be given in evidence in mitigation of damages. And the principle of all the cases is, that the plaintiff can only recover to the extent to which he has been damnified by the sheriff’s negligence. In 2 Revised Statutes, page 437, the 62d section provides for an action on the case for an escape where the prisoner is committed on mesne process, and in such case gives the plaintiff a right to recover to the extent of the damages sustained by him; and this would admit evidence of insolvency in such an action. It is true, where debt was brought for the escape, this evidence was not admissible, and the reason for it is that that action was given by the statute (2 R. S., p. 437, § 63), in case of escape from arrest on final process, and in such cases fixed the amount of damages at the debt and costs. The same rule has been adopted in Connecticut, Massachusetts, and other States, in favor of admitting this evidence in mitigation of damages. (Palmer v. Gallup, 16 Conn., 555, reversing a contrary rule in Clark v. Smith, 9 id., 387; Weld v. Bartlett, 10 Mass., 470; Rich v. Bell, 16 id., 294; Young v. Hosmer, 11 id., 89.) In fact, this rule was extended to all actions for damages for escapes, where the form of the action was case. (Stevens v. Rowe, 3 Denio, 327; Bank of Rome v. Curtis, 1 Hill, 275.)

The 201st section of the Code of Procedure provides, “ If, after being arrested, the defendant escapes or be rescued, or bail be not given or justified, &c., the sheriff shall himself be liable as bailand provides for discharging such liability by putting in and justifying bail.

In the present case there can be, therefore, no doubt that the sheriff, by neglecting to put in sufficient bail, became liable, in the same manner and to the same extent, as the bail would have been if bail had been put in and had justified. It has been suggested that an action for the escape might have been brought against the sheriff, notwithstanding the liability imposed by the statute, and in such a case the insolvency of the defendant in the execution might be shown. Whether the statutory liability imposed by the Code in these cases does not take the place of the action for an escape from mesne process, admits of some doubt; but it is not necessary to decide that question here, because the complaint is not founded.on the escape, but on the neglect to put in and justify bail, and leaves the sheriff to the liability imposed upon him by the Code as bail. It sets out the facts necessary to claim defendant’s liability as bail, and asks judgment for the amount of debt and costs.

We must, therefore, inquire what is the liability of bail. This is not declared or altered by the Code, and remains the same as it was before the Code. Bail, under the old system, undertook to produce the body of their principal, so that he should be amenable to final process in the action in which they became bail, whenever such process was issued. The theory upon which they became bail was, that the body of the debtor was delivered into their custody, and, carrying out that theory, bail were invested with full powers by the law to seize their principal at any time and deliver him up, in discharge of their liability. This they were authorized to do without process, and by virtue solely of the relation existing between them as principal and bail. The Code (§ 191) provides the mode in which this liability might be discharged. 1st, by death; 2d, by imprisonment in a State prison; 3d, by legal discharge from his obligation; or, 4th, by surrender to the sheriff of the county. Insolvency does not discharge the liability, and the only question is, whether it diminishes it.

I had occasion to examine this question, as to the sheriff’s liability, some years since, and then held the sheriff subject to the same liabilities and entitled to the same rights and powers as special bail. (Sartos v. Merceques, 9 How. Pr., 188.) This was followed by Davies, J., in adopting a similar conclusion in Seaver v. Genner (10 Abb. Pr., 256).

I have been unable to find any case in which the insolvency of the principal has ever been considered a defense to the action against bail. In Beddome and another v. Holbrook (1 B. & P., 450), a plea that the principal had become bankrupt was held to be bad. So if the bankrupt is discharged after the bail became fixed, they were not relieved, even on motion. (Maurice v. Partridge et al., 14 East, 599.) And it must be apparent, if a discharge from all indebtedness does not relieve the bail after they are once fixed, it can be no answer to the action that the defendant was insolvent, and, therefore, the plaintiff should not recover. It does not enter into the engagement of bail that they shall be relieved if the debtor is unable to pay the debt. On the contrary, the engagement is to produce the body of their principal so as to be amenable to process, or, in default thereof, to pay the judgment. The sheriff, by neglecting to put in sufficient bail, assumes this liability, imposed on him by the statute. Unless the debtor is amenable to the execution against the body when issued, he becomes liable to pay the judgment. It would virtually repeal the statute, which allows of the arrest of the defendant in certain cases, to hold that the sheriff might assume the right to release from imprisonment any who, in his judgment, he should consider insolvent, and to excuse him from paying damages for that act, on proof that the debtor was unable to pay.

The judgment appealed from should be affirmed.

All concur, except Mullust, J., who is for reversal.

Judgment affirmed.


source: Caselaw Access Project

author: Davies, J. Johnson, J.

license: Public Domain

text:
    Emanuel Bidenlac, Appellant, v. James E. Smith et al., Respondents.
    Where the owners of a vessel employ a master for a voyage, and by parol authorize him to exercise his best judgment in the disposal of the cargo, and also in the purchase of a return cargo, they constitute him their general and special agent for such purpose.
   Davies, J.

This action is prosecuted by the present plaintiff to recover the balance of an account of $1,241.58, with interest thereon at 9 per cent per annum, claimed to be due from defendants to the firm of Deane, Toule & Co., merchants, doing business at Pernambuco. The defendants were the owners of the schooner Draco, and employed, in the year 1850, one Anthony Thatcher, as master on a voyage to California. The vessel was loaded with articles for the port of San Francisco, and the master went on the usual course of the voyage, and stopped at Pernambuco. He stopped there because the cargo was perishing, and it became so offensive to the smell that persons could not live on board with it. He entered the port and consigned the vessel and cargo to Deane, Toule & Co., at the suggestion of the American consul. The cargo was unladen there, and Deane, Toule & Co., took charge'of it, and they procured a return cargo with which the schooner came back to the port of Hew York. That firm paid them the duties and custom house charges upon the outward cargo, and during the time the schooner laid there, that firm also paid all the expenses for port charges, provisions, vessel and mariners. The firm sent by the master to defendants, an account of the sales, as far as made, and a notice of the general condition of the part of the cargo unsold. The master saw the letter and account sales in the defendants’ possession, and on his return gave the defendants a verbal account of the voyage. The master testified that he informed the defendants of the character and standing of the firm, that they were first class merchants, and that the defendants approved of his action on the voyage. He informed them particularly of all his transactions with the firm of Deane, Toule & Go. The same master took charge ,of the schooner for another voyage, and another cargo was purchased for the vessel for the second outward voyage. He testifies that the defendants told him to go with the vessel to South America and sell the cargo; go to Pernambuco and sell the balance of what was left on the first voyage, and, if necessary, to draw on them for $8,000, or sell the vessel for $8,000, and do the best he could for all concerned; to exercise his own judgment as to purchase of a cargo, and employment of the schooner on their account. He had no written instructions. That his authority was general and special, or special and general. That he had all possible authority to trade, sell, and buy cargoes for the defendants. That he was expressly authorized to pinchase a cargo of sugar, if in his judgment the sugar was cheap enough. The defendants told him to purchase a cargo on their account, with the proceeds or value of the cargo out there, and to draw on them for $8,000, for the balance. That he understood that he was to draw on them not to exceed $8,000, in addition to the proceeds of the cargo. One of the defendants told him that if he went to Pernambuco, the firm of Deane, Toule & Go. were to- have the management of the cargo there to be taken out by him on the second voyage. He had instructions if he could not purchase sugar, to purchase any other cargo. When he arrived at Pernambuco a part of the first cargo remained unsold. The firm then sold a part of the second cargo, but' as the residue could not be sold there, it was concluded to ship it to Bio. The captain requested the firm to purchase a cargo of sugar, which they did, at a cost of about $3,000. The captain, on his return, settled with the defendants; they had the account sales of Deane, Toule- & Go., and in the settlement reference was had to them. He testified that he gave to the defendants a fall detailed statement of all the proceedings at Pernambuco with Deane, Toule & Co., respecting the sugar purchased, and all other matters relating to the voyage. They thought it rather a hard trade, but made no objections to any of those accounts. The witness further testified that the provisions of the outward cargo, in both instances, were bad and unwholesome. He also said he had authority to deposit the cargo and pledge it, and had authority to buy independent of the cargo, and that no restriction whatever was put upon his authority in respect to the disposition of the outward cargoes. The account sales of Deane, Toule & Co. showed the balance claimed. There was no contradictory or other testimony on the trial, and the judge charged the jury that Thatcher, on the law arising on his testimony as to his authority, had exceeded his instructions and authority in the transaction, and that the jury must consider-this as the law applicable to the case before them.” To this charge the plaintiff’s counsel excepted. The jury returned a verdict for the defendants, and judgment thereon was affirmed at General Term.

The charge of the judge was equivalent to a direction to the jury to render a verdict for the defendants. It seems to me that the learned judge entirely misapprehended the character and force of the evidence, in charging that Thatcher had exceeded his instructions and authority in the transaction. As that testimony should be read, it presents a clear case, and one where the defendants’ responsibility for the acts of their agent is indisputable.

At the time the second voyage was contemplated, it is clear that the defendants fully apprehended the state of things at Pernambuco. It was expected, and the accounts show that expectation was well founded, that the sale of the cargo of the first voyage by Deane, Toule & Go. would furnish funds towards the purchase of a return cargo. Thatcher had fall authority to sell the second cargo. He was to sell the balance of the first cargo remaining at Pernambuco, and then to purchase the return cargo, and if necessary, to draw on the defendants to the extent of $8,000. Ho other construction can reasonably be given to this language than that, after exhausting the proceeds of the two cargoes, Thatcher was to draw on the defendants for any balance which might remain due on the purchase of the return cargo, not exceeding the sum of $8,000. Instead of drawing for this balance, as he clearly might have done, and thus presently have reimbursed Deane, Toule & Co. for the moneys advanced by them to purchase such return cargo, over and above the amount then realized by them on sales of the two outward cargoes, Thatcher- gave them a lien on the residue of these two cargoes unsold, and the proceeds, when realized, were to be applied in liquidation of said balance. Such residuum being unsaleable in Pernambuco, it was shipped to Eio, and there sold by Maxwell, Wright & Co., and the proceeds remitted by them to Deane, Toule & Co., and by the latter firm credited to the defendants, in their account current with them. There is not the slightest evidence that everything was not done, in. good faith, and for what was deemed by all parties for the best interests of the defendants. But for the bad condition of the provisions shipped, it is manifest there would not have been any balance due to Deane, Toule & Co. The moneys advanced by them were so advanced for the purpose directed by the defendants, and applied according to their directions, namely, in the purchase of the cargo of sugars. It is difficult to see upon what principle their claim for reimbursement can be resisted. Their money has been used by the defendants’ agent in the precise way indicated by them, and it is no answer to their claim to say that the defendants expected they would be paid from the proceeds of the two outward cargoes. It is manifest that the defendants contemplated that some advance would he necessary to be made towards the purchase of the return cargo, by the authority given to their agent to draw on them not exceeding the sum of $8,000. They must, therefore, have contemplated such purchase would have exceeded the proceeds of the two outward cargoes by that sum, and if their agent purchased to a less extent than he had authority from them to do, such circumstance affords no reason for repudiating his acts.

Dpon the -testimony adduced on the trial, the plaintiff was .clearly entitled to recover the balance of the advances by Deane, Toule & Co., and the learned judge was in error in charging that the agent exceeded his instructions and authority in the .transaction, and that, therefore, the defendants were not liable. The judgment must be reversed, and a new trial ordered, with costs to abide the events.

Concurring, Ingraham, Mullin, Weight and Selden, JJ.; Johnson, J., dissenting; Hogeboom, J., and Denio, Ch. J., not voting.

Johnson, J.

Thatcher, as master of the vessel and agent of the defendants, had no general authority to purchase a cargo for the vessel on the defendants’ credit. His authority plainly was, according to his own statement, to purchase with the proceeds of his cargo out, and upon credit only for the balance, for which he was authorized to draw bills not exceeding $8,000. Contrary to his instructions, he placed his outward cargo in the hands of Deane, Toule & Co., without selling it, leaving it to be sold by them; and purchased -the sugar in question wholly on the defendants’ credit. This he was not authorized to do, and although he informed Deane, Toule & Co. that he had the necessary authority to make such purchase, and they believed it, and acted in good faith in making the sale of the sugar on the defendants’ credit, it can make no difference in respect to their liability. He was a special agent, and the firm of Deane, Toule & Co. were bound to know what his authority really was. If they chose to .rely upon his representations as to the measure of his authority, it was at their own risk. He could not bind his principals by claiming authority which had never been conferred. As no part of the property thus purchased, or its proceeds, ever came to the defendants’ hands, they are not bound unless they have in some way ratified the transaction since it took place.

Thatcher was, most clearly, I think, a special agent in this business, under instructions, though having large discretionary powers in some particulars. He was, however, limited and restricted in respect to making purchases on the credit of his principals. He had the right to purchase as he might see fit with the proceeds of his outward cargo, and in addition to such proceeds on the credit of his principals to an amount not exceeding $8,000, for which addition he was authorized to draw upon the defendants. This gave him no authority to leave his outward cargo unsold, and purchase another wholly on the defendants’ credit. Being a special agent, he could only hind the defendants by pursuing his authority strictly. (Paley on Agency, 202; 1 Parsons on Contracts, 41, 42, 43.)

It is manifest that the authority was not pursued strictly, nor even substantially. The outward cargo did not enter into the purchase of the sugar at all. The purchase corresponded in amount with the amount of the cargo remaining unsold, according to the inventory and a portion of a previous cargo, but according to the evidence, it was no part of the bargain that either cargo or the proceeds should apply upon the purchase. So that the cargo of sugars was not purchased in any sense with the proceeds, or upon the credit even, of the outward cargo. The- judge at the circuit was clearly right, therefore, in instructing the jury that Thatcher had exceeded his instructions, as matter of law. The exception to this ruling and instruction to the jury presents the only question in the case. Ho question was raised in respect to a ratification by the defendants afterward, nor was there any request to submit anything to the jury. There was no conflicting evidence. The whole case in respect to the point raised depends upon the testimony of Thatcher, and from that, it is quite clear that his instructions were special, and his authority limited on the subject of making purchases, and that he was bound by such special instructions, and neglected to follow them, seem to me clear propositions, as matter of law, arising upon the uncontroverted facts of the case. If this view is correct the judgment is right, and should be affirmed.

Judgment reversed, &c.


author: Hogeboom, J.

text:
    The Board of Commissioners of Pilots, Plaintiffs and Appellants, v. Cornelius Vanderbilt, Defendant and Respondent.
    The law requiring the board of commissioners of pilots to give notice to persons erecting structures beyond the exterior line defined by the commissioners for the preservation of New York harbor, under the law of 1860 (ch. 522, § 2), is not complied with when the notice is made out and served by the president of the board.
    The law requires such notice to be given by the board itself. When given by the president, though verbally authorized by the board, it is not sufficient.
    Such defective notice will not charge the person notified with the penalty imposed by law for continuing such structures after notice.
    The appeal is from a final judgment of the General Term of the Superior Court of the city of New York, entered June, 15th, 1864 (overruling exceptions taken by the plaintiffs at the trial, and ordered to be heard in the first instance at the General Term), dismissing the plaintiff’s complaint and adjudging $284.57, costs and disbursements to the defendants.
    This action was brought to recover a penalty of $25 per day from November 10, 1860, to the day of trial, for a violation, by defendant, of section 2 of the act “To prevent encroachments and obstructions in the harbor of New York, and to authorize their removal,” &c., passed April 27, 1860, being chapter 522 of the Session Laws of 1860, page 1063.
    The section is as follows:
    § 2. “It shall not be lawful for any person to build, erect or maintain any pier, bulkhead, or other structure, or to fill in with earth, or other material, in the waters of the harbor of New York, beyond the exterior line defined and recommended by the commissioners for the preservation of the harbor of New York, and established in and by chapter seven hundred and sixty-three of the Session Laws of eighteen hundred and fifty-seven; and in case of the building or erection of any such pier, bulkhead, or other structure or of maintaining of any such pier, bulkhead, or other structure, whether now existing or hereafter erected, the board of commissioners of pilots shall notify the person or persons building; erecting or maintaining the same, within a time to be prescribed and specified in their notice; and in case of failure to comply with such notice, the said board of commissioners of pilots shall have the power to cause so much of such pier, bulkhead or structure, as is beyond the exterior line so defined and established, to be forthwith removed, and the person or persons who built or maintained the same shall be liable to pay all expenses of such removal, to be recoverable by and in the name of the board of commissioners of pilots, and shall also pay a fine of twenty-five dollars a day for each and every day which such obstruction shall remain after such notice, and until such pier, bulkhead, or other encroachment shall have been removed, as herein provided. This section shall not apply to piers or bulkheads built before the establishment of said exterior line.”
    The complaint alleged that the defendant, in the year 1860, built and maintained a certain structure, being the section of a pier, in the waters of the harbor, at a point south of pier No. 1, North river, wholly outside of the exterior line established in the aforesaid act of April 27, 1860. That the plaintiff, on the 10th day of November, 1860, notified defendant, pursuant to the act, to remove the said structure within five days from the date of the notice; that the defendant wholly failed and neglected to comply with the notice; judgment demanded for the penalty, &c.
    The answer set up several separate defenses, alleging that the structure complained of was built under authority of the mayor, aldermen and commonalty of the city of New York, denying that it was an obstruction, denying the constitutionality of the law, &c.; and in respect to the allegations of the complaint touching the notice, denied any knowledge or information sufficient to form a belief respecting the same* or any of them. The answer contained no other allegation or statement of defense touching the notice.
    The cause was tried before Hr. Justice Kobebtsow and a jury, November 20, 1863. At the close of the plaintiff’s evidence, the judge granted a motion for the dismissal of the complaint, and refused to submit any question of fact to the jury. On the exceptions to these rulings, the plaintiffs moved for a new trial at Q-eneral Term, when the exceptions were ordered to be heard in the first instance, judgment being suspended in the meantime. The exceptions were overruled and final judgment ordered for defendants, June 15, 1864. The plaintiffs appealed to the Court of Appeals.
    The leading facts established at the trial were as follows: The defendant, in November, 1860, entered on the waters of the harbor of New York, and sunk the structure in question, being a “ crib,” or section of a pier, at a point 150 feet south of pier No. 1, and 160 or 170 feet west of the Battery line and of the pier line, as established by law. It was a block 40 feet square, extending 17 or 18 feet above the bed of the river. It was wholly outside of the pier line. It was unauthorized by law and was a public nuisance. It was so adjudged by this court in The People v. Va/nderbilt (26 N. Y., 287).
    The board of commissioners of pilots, constituted under the pilot act of June 28, 1853, and holding regular meetings as provided by section 7 of that act, on the first Tuesday of every month, are the board of commissioners empowered to prevent and remove encroachments of the harbor under the act of 1860. The board, at a regular meeting held December 7, 1858, being apprised that this invasion of the harbor was threatened in advance of the sinking of the pier, condemned it by resolution as illegal and directed it to be resisted to the extent of the law. The board from that time watched the progress of the proposed pier with vigilance. It was a constant subject of discussion at their meetings. As soon as the crib was sunk the board acted promptly to remove it. At a regular meeting the board determined to have the defendant notified to remove it. The matter was discussed, and, after discussion, the unanimous action of the board was to order the defendant to be notified to have the obstruction removed. No entry was made on the minutes, and no written resolution or order showing the determination of the board was made. The president was especially directed by the board to fix the time within which the structure was to be removed. This was according to the general rule and practice of the board. The question of time was always left to the president. He fixed what he considered .a reasonable time.
    In pursuance of this authority, the president of the board did give notice in writing, in his own name, which notice prescribed and specified five days as the time within which the structure should be removed. It was served personally on the defendant on the 10th Hovember, 1860, and shortly afterwards on the contractor who was building the pier, The defendant made no objection to the time specified in the notice. He paid no attention to the notice, but proceeded in the erection of the pier. He took his ground on the question of right.
    The board, on the 4th December, 1860, directed. the president to advertise for proposals for the removal of the structure, and after receiving and rejecting, as informal and unsatisfactory, various bids, finally, September Y, 1861, accepted proposals of Morris & Cummins, and entered into a contract with them for its removal, to be done and performed pursuant to section 2 of chapter 522 of the Laws of 1860, The defendant opposed their action, enjoined their proceedings, and it was not until after the decision of the Court of Appeals, in the suit of the people of the State of Hew York against him, April 11, 1863, adjudging the pier a nuisance, that it was removed.

      W. Allen Butler, for the appellants.

      W. Curtis Noyes, for the respondent.
   Hogeboom, J.

The action is for a penalty prescribed by a positive statute; and the conditions upon which the penalty-attaches must, therefore, be shown to have existed. The penalty imposed by the act is a fine of twenty-five dollars for every day which the obstruction shall remain after a notice from the board of commissioners of pilots to the person erecting or maintaining the obstruction. The object of the notice, and the act to be performed under it, are very imperfectly described in the statute—so imperfectly, indeed, that I have great doubts whether the act is of any legal effect in regard to the imposition of a penalty. The person offending is to be notified; and it is obvious that he is intended to be notified to do something, and to do this something within a time to be prescribed and specified in the notice; but what this something is, is not stated, and can only be conjectured from other parts of the section. It is inferable that he is to be notified to remove the obstruction, because the fine of twenty-five dollars attaches every day until it is removed. But I doubt very much whether the inference or implication as to the act to be done is as clear as if it were expressly written in the statute; and unless the implication exists to nearly that degree of certainty, I think the act is radically defective. In case of failure to comply with the notice, the board of commissioners may cause the obstruction to be removed, and the offender becomes liable for the expenses of the removal, and to the fine in question. But to subject a party to consequences so highly penal, the contents of the notice should be plainly prescribed in the act, so as to make a compliance with it, and the consequent avoidance of the penalty, practicable. I have, therefore, great doubt whether there is not a radical and fatal omission in the terms of the act in regard to the contents of this notice.

But, waiving this question, and assuming that the notice is to require the removal of the obstruction, I am of opinion there is another difficulty in the plaintiffs’ case which is insuperable. The board of commissioners have never given the notice required by the act. There was a notice from the president of the board, and that did not purport to be the act of the board, nor pursuant to their direction, nor was it given in their name; and, possibly, it might have been disregarded for that reason. But, if we may presume, in the absence of evidence, that it was given under the authority of the board, in the manner required by the law, the presumption is effectually repelled by the positive proof in the case. It affirmatively appears, not only that there was no written resolution or order of the board directing the notice, and no record of their proceedings, but that, while the board verbally ordered a notice to be given by their president, they did not, verbally or otherwise, prescribe the form or substance of the notice, and especially they did not prescribe or specify the time, or any time, foi removal, which was contained, or to be contained, in the notice. I am of opinion that this was a fatal defect in their proceedings. The act required it to be their notice, and not the notice of the president. They were to prescribe the time, and not their president. The time w;as discretionary with them, and their judgment in regard to its period and duration was exacted by the act. The notice was, by law, to be reasonable, and susceptible of being obeyed. The obstruction could not be removed in a minute or an hour, probably not in a day. These circumstances—the nature of the obstruction, the time required for its removal, the impediments to navigation arising from its continuance — were all proper for their consideration, and the consideration of them in effect vested in them by the terms of the act. This was, in its nature, a judicial act, that is, one calling for the exercise of judgment and sound discretion. It was, therefore, to be exercised personally by them, and could not be delegated to a third person, or one of their own number.

It is no sufficient answer to this view of the case, in my judgment, to say that the defendant had no legal rights and no lawful property in this structure which were capable of violation by a short or insufficient notice, and, therefore, that he has no right to complain in regard to the nature, terms or origin of the notice. The contrary is plainly to be gathered from the terms of the act. It was designed that the notice should be reasonable, in view of all the circumstances of the case—the magnitude of the structure, the time it would take to remove it, the dangers or inconveniences arising from its presence in the river, and, perhaps, the good or bad faith under which it had been erected. We may infer that a considerable amount of labor and a considerable quantity of valuable material had been expended in its construction; that these were of some value to the defendant, and were not intended by the legislature to be needlessly or arbitrarily sacrificed. And, whatever may be our opinion of the motives which induced the erection of this nuisance (and we are not here sufficiently in possession of all the facts of the case intelligently to judge of them), the construction of the act must be determined upon general considerations growing out of its language and apparent spirit and intent.

I am of opinion that the complaint was properly dismissed; that the judgment of the court below was right, and should be affirmed.

Denio, Ch. J., Wright, Johnson, Selden, and Mullin, JJ., affirm on the last ground stated; all concur in affirming the judgment.

Judgment affirmed.


author: Davies, J.

text:
    The New York Exchange Company, Respondent, v. David R. De Wolf, Appellant.
    Where subscriptions are made under an agreement that they are not to be binding unless a specified sum is subscribed, it is essential that there should be no conditions as to the liability of any of the subscribers not applicable to all. Confidential subscriptions, made for the purpose of making up the required sum, are a fraud upon the other subscribers; and should not be treated as valid subscriptions.
    ’ Where, by deducting such confidential subscriptions, the required sum is not subscribed, the contract of subscription does not become operative, so as to bind the subscribers.
    Farol evidence is admissible to show that certain of the subscriptions were confidential in character, and therefore fraudulent.
    The facts will sufficiently appear in the opinion of Davies, J.

      J. A. Ruthven, for the appellant.

      J. E. Parsons, for the respondent.
   Davies, J.

This is an action upon a promissory note, made hy the defendant, dated November 8,1855, payable six months after date, to the order of the Atlas Mutual Insurance Company, for the sum of five hundred dollars, for value received. On the 1st of February, 1856, the Atlas Insurance Company was indebted to the plaintiff for a quarter’s rent due on that day, amounting to the sum of $1,125, which not being paid, on the 1st of March following, the company transferred to the plaintiff three notes held by it, among which was the note of the defendant, amounting, in the whole, to $1,250, “ the sum to be credited to the account of the Atlas Mutual Insurance Company, against the bill of this company for rent,” as per the receipt of the plaintiff given on that day, on receipt of said notes. The note of the defendant was indorsed by the president of the Atlas Mutual Insmance Company. This company was incorporated by special act, to transact the business of insurance on the mutual principle. (Laws of 1843, ch. 92, p. 67.) Certain sections of the act, to incorporate the Atlantic Insurance Company, passed April 11, 1842 (Laws of 1842, ch. 217), were incorporated into and made part of the charter of the Atlas Insurance Company. Among the sections so adopted was the 12th section of the act of incorporation of the Atlantic Company, which is in these words: “ The company, for the better security of its dealers, may receive notes for premiums in advance of persons intending to receive its policies, and may negotiate such notes for the purpose of paying claims, or otherwise, in the course of its business.”

On the 12th of October, 1855, a subscription was started for the benefit of said company, bearing date on that • day, in the words following: “We the subscribers, hereby agree to give our notes for the amount opposite our names, at four months, in advance of premiums to the Atlas Mutual Insurance Company; notes to be given when $40,000 is subscribed.’’ Several persons affixed their names to this subscription, amounting in all to the sum of $40,000. At a meeting of the trustees of the company, held on the 30th of October, 1855, the following resolution was adopted: “That any arrangement made by the finance committee in paying, or arranging for funds to pay the pressing liabilities of the company, and to sustain the institution till other means can be provided, if they shall make themselves, or their friends personally liable, the same shall be considered and treated as confidential in any event, equal in all respects to the $40,000 already subscribed by the friends of the company for its relief.” On the 8th of November, 1855, certain trustees of the company entered into the following engagement: “ The trustees of the Atlas Mutual Insurance Company, in order to show their desire and determination to place the company in an independent position, do subscribe the amount set opposite their names, on the same conditions set forth in the resolution of the board of this date, to be paid in cash or notes at thirty, sixty, ninety days, or four months, provided that the amount of three hundred thousand dollars is subscribed %mder that resolution” Then follow the names of thirteen trustees, Mr. Ambrose Snow using his firm name of Snow & Burgess, and the total amount of the engagements was $50,000. The resolution referred to, adopted by the board of trustees on that day., was in these words: “ On motion, it was resolved that a subscription in the sum of $400,000 in premium notes to be written against, be obtained, subscriptions to be binding when $300,000 is subscribed, including the $40,000 already subscribed.”

The trustees then prepared subscription books, containing, first, the engagement of the trustees to subscribe to the extent of $50,000, of November 8, 1855 ; then the subscription of the $40,000, of October 12, 1855; then a subscription in these words, bearing date November 8, 1855: “We, the subscribers hereto, agree to give to the Atlas Mutual Insurance Company our notes, in advance of premiums of insurance at six and twelve months, in equal amounts, for the sums set opposite our names respectively, it being understood that, in consideration thereof, the subscribers are to be allowed by the company at the maturity of their notes, five per cent on the amount thereof. This subscription is towards the $400,000 subscription, authorized by a resolution of the board of trustees of this date, and is not binding until the sum of $300,000 is subscribed.” To this subscription, the persons engaging to take the $50,000, in pursuance of the engagement of November 8, 1855, subscribed to the extent of that amount; and others subscribed, among whom was the defendant, in various sums, to the amount of $210,000 and a fraction over, so that the subscriptions made on and after the 8th day of November amounted to the sum of $260,000, and including that made on the 12th of October, of $40,000, the total amount was $300,000 and over. On the 30th of November, 1855, at a meeting of the trustees of the company, it was declared, that it being understood that $300,000 is now subscribed under the resolution of the board of November 8th, it was therefore resolved, that the officers commence at once to collect the notes to that amount, and proceed in liquidating the liabilities of the company therewith. Also resolved that the effort be continued to obtain the other one hundred thousand dollars as soon as possible. It was proven on the part of the defendant, that, at the túne he gave his note, it was represented to him by Osgood, the president of the company, that the $300,000 had been subscribed. The minutes of the meeting of the trustees of October 30, 1855, were offered in evidence by the defendant’s counsel and objected to by plaintiff, and the same were excluded, and the defendant’s counsel excepted. Charles W. Ogden, a witness on the part of the defendant, testified that the subscription of $5,000 in the name of the International Insurance Company, was subscribed by him, and that there was no resolution of the board of directors authorizing the subscription. The witness was then asked, at the time of such subscription was there any arrangement made with you, by the Atlas Mutual Insurance Company, in reference to such subscription and the notes to be given under that subscription, and, if so, state what it was ? The counsel for the plaintiff objected to the question, and the same was excluded by the judge, and the defendant excepted.

Richard Bainbridge, a witness on the part of the defendant, testified that he subscribed to the subscription of the 8th of November. He was then asked to state, whether any, and, if so, what inducements were offered you to induce you to make such subscription ? This was objected to by the plaintiff’s counsel, and the objection was sustained by the judge, and the defendant’s counsel excepted.

Augustus W. Whipple, a witness on the part of the defendant, testified that he was the marine agent of the Philadelphia Insurance Company, and, as such, subscribed $2,000; that there was no authority of the board of directors of that company to subscribe. He was then asked, if there was any arrangement between Mm and the Atlas Mutual Insurance Company, in reference to that subscription; if so, to state what it was. This was objected to by the plaintiff’s counsel, and the objection sustained, and the defendant’s counsel excepted. These objections were sustained, on the ground that the questions put sought to alter the subscription by proof of a parol arrangement.

The judge was requested to charge the jury, that the $40,000 subscription, made on the 12th of October, was not to be included in and taken as part of the $300,000, which, by the terms of the subscription of November 8th, was to have been subscribed before that subscription was to be binding.

2. That the subscription of the insurance companies, to the subscription of November 8th, were void, because such companies had no power or authority to take stock in said Atlas Insurance Company.-

3. That even if such companies had power to become such subscribers, the said subscriptions were void, because not authorized by their respective boards of directors. The judge refused so to charge, and the defendant’s counsel excepted.

The jury found a verdict for the plaintiff for $593.55, the amount of the note and interest, and judgment thereon was affirmed at the General Term.

The evidence conclusively establishes that the total amount of all the subscriptions, including those of the $40,000 subscribed on the 12th of October, amounted to a fraction over the sum of $300,000.

By the terms of the subscription of November 8th, that was not to be binding until the sum of $300,000, towards and as a part of the subscription of $400,000, authorized by the resolution of the hoard of trustees of that date, should be subscribed. It is true, that the resolution of the board of trustees declared that the $40,000 already subscribed was to be deemed and taken as part of the $300,000, but such was not the terms of the subscription, and it did not appear that the defendant had any notice of that resolution, or ever assented to its terms. By the terms of his subscription, the notes were agreed to be given at six and twelve months in equal amounts, and it was expressly declared that that subscription was towards the $400,000 subscription, authorized by a resolution of the board of trustees on the 8th day of November, and the same, that is, the subscriptions to make up said sum of $400,000, were not to be binding until the sum of $300,000, as part and parcel of said sum of $400,000 was subscribed. It is true, that such subscription was preceded by the subscription of October 12, which showed on its face that on that day $40,000, the amount stated in that subscription, had been subscribed in notes at four months. There is nothing on the subscription papers, carrying the slightest intimation that the $40,000 was to form any part of the $400,000 authorized to he subscribed by the resolution of November 8. It is apparent it was placed at the head of the subscription list, to inform the subscribers that previous to the date of the resolution of November 8th, that sum had already been obtained in advance premium notes, and as inducements to fill up the subscription of $400,000, authorized by the resolution of November 8th. The subscription declares on its face that the resolution of November 8th called for a subscription of $400,000, and the terms clearly import that it was in addition to the subscription theretofore made. The agreement of certain trustees under date of November 8, to subscribe to the extent of $50,000, may be regarded as made with reference to the subscription of $400,000, called for by the resolution of that date. It is clear that it was so regarded, as it is seen by reference to such subscription, that that agreement was supposed to have been fulfilled by the parties to it subscribing to the subscription of $400,000 the said sum of $50,000.

If this construction of. the subscription and agreement of the defendant is correct, it follows, indisputably, that the subscription of $40,000, made on the 12th of October, formed no part of the subscription of $400,000 authorized by the resolution of November 8, and could not rightfully be estimated as part of the subscription of $300,000 required to make that subscription binding. Another circumstance of controlling influence, as sustaining this view, is the action of the board of trustees on the 30th of October. In the resolution adopted that day, it is declared that the $40,000 had already been subscribed by the friends of the company for its relief. The trustees also declared that said sum of $40,000 had been subscribed under an arrangement that the same was to be treated and considered as confidential. It is true that the judge excluded this resolution or declaration of the trustees on the trial; but in this he clearly erred. It "should have been admitted, for, 1st. It pointed distinctly to the engagement, entered into by certain of the trustees, of November 8, by which they agreed to advance the sum of $50,000, in cash and notes, at thirty, sixty, ninety days, or four months, and which was consummated by these parties subsequently signing the subscription of November 8 to that amount. 2d. It conclusively showed that the subscription of $40,000 was made under an agreement with the company that the same was to be considered and treated as confidential. Assuming, for the disposition of this question, that the present plaintiffs stand in no better position than the Atlas Insurance Company, and that any defense is available to this defendant in this action which would have been if the note had never been transferred by that company, how would the question present itself? The defendant’s subscription was not to be binding until $300,000 had been subscribed. The plaintiffs contend that such condition precedent had been fulfilled, and adduce this $40,000 and this $50,000 subscriptions as evidence, and they, with the $210,000 of other subscriptions, show the full amount called for. To rebut this state of facts, the defendant desires .to show that these subscriptions were made under such arrangements as forbid their being availed of for such a purpose. To lay the foundation for such testimony, he offers the book of minutes of the corporation to show under what circumstances and agreements these two sums were procured. That they were competent testimony, is abundantly sustained by authority. (Phil. Ev., Edwards’ ed., vol. 2, p. 295; Stewart v. Trustees of Hamilton College, 2 Denio, 403.)

The defendant’s subscription was made upon the condition-that it should not be binding upon the subscribers unless the aggregate of their subscriptions should amount to at least $300,000. The plaintiff properly assumed the burthen of showing that this condition had been complied with, and to this end he found it necessary to include the $40,000 subscription of October 12, as forming part of the $300,000 to be subscribed under the subscription of November '8. The difficulties which are deemed insurmountable, in including this subscription for such a purpose, have already been adverted to; but assuming it may properly be so considered, then the resolution shows, as did the resolution of the trustees of Hamilton College (cited siupra), that all the subscript tions to the fund of $300,000 did not stand upon the same footing. This resolution, as already stated, showed, I think, that the subscribers, under the agreement of November 8, who subscribed $50,000 in pursuance thereof, were to be considered and treated as confidential, on the same terms as the subscribers to the $40,000 confidential subscription. In the case of Hamilton College, the terms of the subscription were, that the subscribers were not to be holden to pay the sums respectively subscribed by them, unless the aggregate of the subscriptions should, by the 1st of July, 1834, amount to $50,000. It was proven on the trial that Stewart, the defendant, had subscribed the sum of $800, and that the total amount of the subscriptions, on the 30th. June, 1834, was $50,460.39; that, to make up this sum, $700 were subscribed by unincorporated benevolent associations, $2,000 by married women, $2,000 payable in land, and $500 subscribed by the president of the college, which the board of trustees had paid out of the general funds of the college. To meet this conceded deficiency in the total amount necessary to make the subscriptions binding, the college produced the agreement of fourteen persons, of undoubted respectability, dated 19th June, 1834, by which they undertook to pay to the corporation the amount of any deficiency in the subscriptions to the fund of $50,000 which might exist on the 30th of June then next. The defendant offered in evidence, and was permitted to prove, that, on the day on which the fourteen individuals signed the undertaking, the board of trustees passed a resolution pledging itself to save harmless those persons who might pledge themselves to make good-any deficiency which might be found to exist on the last day of June then instant. The chancellor, in delivering the opinion in the Court of Errors, remarked, that it was evident from the testimony that many of the subscriptions were from those not competent to contract, and that, of course, they must be laid out of the question. A resort was therefore necessary to the agreement of June 19, to makeup the required sum to make the subscription binding. In reference to that, the chancellor observed that it was apparently a subscription, upon the same terms of equality and mutuality as the subscriptions of the other persons. But he held that the legal effect of the subscription, apparent on its face, was entirely changed by the resolution of the board, and that the signers to it were entirely mistaken in supposing that their subscription was a compliance with the condition of the agreement that the total of the subscriptions should amount to the sum of $50,000 by the 1st day of July. He said: “ The essence of every agreement of this kind is, that there should be perfect equality among the subscribers as to the nature and extent of their respective liabilities for the several sums subscribed by them respectively. To have made this general subscription valid, so as to fill up the sum of subscriptions and contributions to the amount of $50,000, within the terms of the agreement, it should have been an absolute donation of the amount of the deficiency, to be paid at the same time as the other subscriptions, and no part of it to be restored or refunded to them upon any contingency or in any event, other than such as was common to the subscriptions of all the other subscribers.” The court decided that the general subscription of the 19th of June, 1834, was entirely invalid as a compliance with the terms upon which the subscriptions were to become payable, and that Stewart never became liable upon his subscription. The doctrine of this case is apparent in reference to the liability of this defendant. The agreement in the resolution ineontrovertibly shows that the $40,000 subscription was confidential; and if it is to be taken as a part of the $300,000 needful to be subscribed before any portion of the subscriptions under the authority of the resolution of November 8 should become binding, it cannot be invoked for that purpose. The subscriptions for such sum of $40,000 were not made upon the same terms as the defendant’s subscription. The same vice inhered in that subscription as did in that of the fourteen persons in the Stewart case; and it follows that the defendant’s subscription was not binding upon him, the condition precedent to that liability not having been fulfilled.

The same considerations apply with equal force to the subscriptions of the individuals who signed the agreement of November 8 to subscribe to the subscription authorized that day to the extent of $50,000. I cannot read the resolution of October 30, and the agreement of November 8, in any other light than that the sum mentioned was to be considered and treated as confidential in any event.

■ If these views are correct, it necessarily follows that the fundamental condition of the defendant’s liability never was performed.

It remains to consider the rulings of the judge, excluding the testimony proposed to be given by Ogden, Bainbridge and Whipple. The questions put to these witnesses pointed to the fact that arrangements had been made with them touching their subscriptions, and the notes given there-, for. That such inquiries were legitimate cannot, I think, be denied. Arrangements were authorized to be made by the resolution of October 30th, and I cannot see upon what ground it might not have been shown that the subscriptions and notes of these witnesses had been taken and given under the authorized arrangement to make them confidential in any event. This evidence was excluded by the learned judge upon the theory that the contract of the defendant was sought to be varied or altered by parol. But this was not the ground upon which it was offered, but to show the fraud which had been practiced upon the defendant. By the terms of his contract, his subscription was not to be binding unless the sum of $300,000 was subscribed. The fair interpretation and meaning of this, are, that subscriptions to this amount should be subscribed on the same terms as the subscription of the defendant, and that all the subscriptions making up this amount should be on terms of perfect equality. If any of them were made on different terms, then a fraud was practiced on the defendant, and this rendered his engagement void. The resolution of October 30 was an authorization by the corporation to its agents to make arrangements with subscribers, whereby certain subscriptions were to be confidential; that is upon different terms than the subscription of the defendant. The defendant had a clear right to show what arrangements, if any, had been made with the parties giving their notes, or any of them, and if they had been of the character indicated by the resolution of October 30, then it is equally clear a fraud had been practiced upon the defendant, which absolved him from any liability on his subscription. A similar rule of evidence has been recognized, in reference to agreements for procuring the execution of a composition deed. When there is in a composition deed an express agreement between the parties thereto to discharge the debtor upon receiving a ratable proportion of their respective debts, any private agreement or understanding between the debtor and any particular creditor, that the latter shall at any time, or in any contingency, receive a greater sum than the amount of his debt as specified in the composition deed, is held to be void as a fraud upon other creditors. (1 Anst., 202; 3 id., 910.) Parol evidence may be given to show the fraud in obtaining the notes or subscriptions, and such evidence, in no just oi proper sense, varies or alters the contract of the defendant. It shows, if anything, that no contract was ever entered into. (Chester v. Bank of Kingston, 16 N. Y., 336.) The plaintiff is not a bona fide holder of the defendant’s note, and he is not therefore precluded from availing himself of his defense in this action. (Coddington v. Bay, 20 Johns., 637; Rosa v. Brotherson, 10 Wend., 86; Stalker v. McDonald, 6 Hill, 93; Young v. Lee, 2 Kern., 551; McBride v. The Farmers' Bank, 26 N. Y., 450.) The defendant can therefore avail himself of every defense which he could have done if the suit had been in the name and for the benefit of the Atlas Mutual Insurance Company. It is well settled law in this State, upon the facts proven on the trial, or which were offered to be proven, and improperly excluded, that the company could not recover upon this note. If the company could not maintain an action upon it, it follows conclusively that the present plaintiffs cannot.

The judgment should be reversed and a new trial ordered, costs to abide the event.

All the judges concurring,

Judgment reversed, and a new trial ordered.


author: Porter, J.

text:
    Daniel Blauvelt, Respondent, v. William W. Woodworth, Appellant.
    A mechanic, who furnishes materials or labor in the construction of a building in the county of Westchester, acquires under chapter 384 of the Laws of 1852, a specific statutory lien on the interest of the existing owner, which may be enforced by judgment as in a personal action.
    This lien may be lost by omitting to comply with the conditions prescribed in the act.
    The law in question, in its application to future contracts, is free from constitutional objection.
    The owner of the building cannot defeat the lien, or relieve himself from contingent liability, by subsequent conveyance of the property to a third party.
    Appeal from the Supreme Court. This was a proceeding to enforce a mechanic’s lien under the act of April 16, 1852. (Laws of 1852, p. 611.)
    The referee found, in substance, as matter of fact, that the appellant contracted with Bobinson & Clough to build the house in question for the sum of $1,675. The respondent contracted with them to do the mason work for $307, he furnishing the necessary materials. The work was completed and the contracts fulfilled in the early part of June, 1853. At this time there was due from the appellant to Bobinson & Clough over $500 on account of the contract. The respondent, on the 23d of June, 1853, and within twenty days after the materials were furnished and- the services performed, served on the appellant the specification provided for in the 2d section of the act.
    On the 13th of June, and in the interval between the completion of the work and the service of the specification, the appellant conveyed the premises to one Bell, who is not a party to this proceeding, and the conveyance was recorded on the same day the specification was served by the respondent.
    On the 4th of June, 1853, the appellant accepted a draft of $868.50, made on him by Bobinson & Clough, who were then engaged in erecting other buildings for the plaintiff and for others at Biverdale, to relieve them from a threatened levy on their building materials. ¡Robinson & Clough gave him, in exchange, a draft on other parties, payable some ten days afterward; and which was dishonored and protested for non-acceptance.
    The appellant owned the premises in fee when the materials were furnished and the services were performed; but when the specification was served, he had ceased to be such owner. When the service was made, he had not paid the contract price, but Robinson & Clough were indebted to him on the exchange of drafts.
    The referee held, that the respondent was entitled to judgment for the amount of his lien, and for its enforcement by sale of the interest of Woodworth at the time it attached.
    The judgment was affirmed at the General Term, the opinion being delivered by Judge ¡Brown, and Strong, J., dissenting.

      R. W. Van, Pelt, for the appellant.

      Amasa J. Parker, for the respondent.
   Porter, J.

The proceeding was by a sub-contractor to enforce a mechanic’s lien against the owner, under chapter. 384 of the Laws of 1852.

By the provisions of the act in question, the mechanic, who furnishes materials or labor in the construction of a building in the county of Westchester, in conformity with a contract with the owner, has a specific statutory lien to a .limited extent, on the interest of the existing owner, and this may be enforced by judgment as in a personal action. He may lose, this lien by omitting to comply with the conditions prescribed by the act; but in the case at bar, no fact is found by the referee inconsistent with the claimant’s right.

It is insisted by the appellant, that the lien did not attach until the specification was served, on the 24th of June, 1853; and that it did not attach then, as against the defendant, because he had previously conveyed the property to one Bell, after the completion of the work.

In this view we cannot concur. The lien took effect, as the materials were furnished and the work was done. In this respect there is an obvious distinction between the effect of the act of 1852, and that of the act of 1851. (20 N. Y., 247.) The services were performed while the defendant was the owner, and he could not relieve the property from the lien, nor absolve himself from his contingent liability, by a subsequent conveyance to a third party.

It is insisted that if this be the effect of the act, it is unconstitutional and void; as it may enable the claimant to reach the property of a third party without due process of law. There is no provision of the Constitution which precludes the legislature from declaring a statutory lien, in respect to future contracts, in favor either of the contractor, the sub-contractor or the laborer, upon the land of the owner, at whose instance and for whose benefit the services are performed. The act of 1852 was in force when the contract in question was made; and every contract is presumed to be executed with reference to existing laws, and subject to such modification, in respect to the remedies of the parties, as may result from subsequent legislation, if free from constitutional objection.

The question as to the rights of Bell, the grantee, is not legitimately involved in the present appeal; but as he purchased property, which was subject to an existing statutory lien, it is to be presumed that the price was fixed with reference to the incumbrance, or that he secured himself from loss by appropriate covenants. Be that as it may, the statute is free from constitutional objection, and the defendant cannot complain that he is not permitted, by his own act, to extinguish a subsisting lien without payment.

It is also insisted, that, on the 4th of June, 1853, the defendant, who then owed between five and six hundred dollars on the work in question, made an advance to ¡Robin son & Olough, the original contractors, of the sum of $868.50, which should inure as a payment and extinguishment of the lien. This claim cannot be sustained on the facts found by the referee. Such a payment, if made, would have been at the peril of the defendant, as the lien of the sub-contractor had already attached, and the time had not expired, within which he was at liberty to serve his specification. Indeed, the work was still in progress, as appears by the bill of particulars, the correctness of which was admitted by stipulation on the trial.

The advance in question was not intended as a payment on the work in question, for it considerably exceeded the whole amount remaining unpaid. It consisted simply of an exchange of drafts for $868.80, between the owner and Bobinson & Clough, who were at the same time engaged in erecting a number of buildings for the defendant at Biverdale. The purpose of the accommodation was, to enable the contractors to avert a threatened seizure, by the sheriff, of materials prepared for the buildings at Biverdale. It is true that the draft received by the defendant from Bobinson <& Clough was never paid, and that they still remain his debtors in that regard, so far as the case discloses.

But the referee finds, as matter of fact, that at the time the specification was served, the defendant had not paid the contract price of the work now in question, and as we have no authority to disregard the findings, they are conclusive against the claim that the defendant has paid the debt.

It is insisted that the judgment is incongruous, as it operates m personam as well as m rem. It is sufficient to say that it is such a judgment as the statute authorizes; and it is no ground of objection to the validity of a remedial statute, that the remedy it provides is ample and complete.

The judgment should be affirmed.

All the judges concurring,

Judgment affirmed.


author: Potter, J.

text:
    William S. Holmes, Respondent, v. Alanson Carley, Appellant.
    Where a justice of the peace of another town in the same county, next adjoining the residence of the plaintiff or defendant, has jurisdiction to try the action (3 R. S., 226, § 8, 3d clause), Held, that two towns contiguous at either of the corners thereof are adjoining towns, within the meaning of the statute.
    Appeal from a judgment in the Supreme Court, sixth district, which reversed a judgment in the County Court of Cortland county, and affirmed the judgment of a justice’s court. The only question presented for review in this case, is the question of jurisdiction of the justice to try the action. The provision of the statute (3 R. S., 5th ed., p. 427, § 6, marg. pag., 226, §8) is as follows: “ Every such action shall be brought before some justice of the .town wherein either, 1. The plaintiffs, or one of them reside; or, 2. Where the defendants, or any one of them reside; or, 3. Before some justice of another town in the same county, next adjoining the residence of the plaintiff or defendant.” It is claimed that this action was not brought before a justice of another town, in the same county of Cortland, next adjoining the residence of the parties. There seems to be no dispute about the facts. Both parties resided in the town of Marathon. The justice resided in the town of Virgil, in the same county.

      John H. Reynolds, for the respondent.

      D. S. Dickinson, for the appellant.
   Potter, J.

Within the spirit and intent of the statute in question, is the town of Virgil, in which the justice resides, next adjoining the town of Marathon, the residence of the parties? These two towns, in fact, are “next adjoining ” in no other sense than that of touching at the corners. The words of a statute, if of common use, are to be taken in their natural, plain, obvious and ordinary signification (1 Kent Com., 462); and it is an established rule of the courts, in giving construction to a statute, first to ascertain its intent. This may be determined, not only from the language of a part, but from the language of the whole and every part of the statute; and the real intention, when accurately ascertained, ■ will always prevail over the literal sense. The intention of the law maker is sometimes to be collected .from the cause or necessity of making the statute; and however the intent may be ascertained, it should, be followed with reason and discretion, though such construction may seem contrary to the letter of the statute, for it is the intent which often gives meaning to words otherwise obscure and doubtful. A thing which is within the intention of the makers of a statute, is as much within the statute as if it were within the letter, and a thing which is within the letter of the statute, is not within the statute, unless it be within the intention of the makers; and such construction ought to be put upon it as does not suffer it to be eluded. (Bac. Abr., Statute 1, §§ 5, 10, and authorities cited; The People v. Utico Ins. Co., 15 Johns., 380, 381; 11 Co., 73 b; Straddling v. Morgan, Plowd., 205; 11 Mod., 161.)

The same idea of the rule of constructing a statute, is very quaintly expressed by Plowden in his commentary upon the case of Eyston v. Studd (2 Plowd., 465). He says, it is not the words of the law, but the internal sense of it that makes the law, and our law (like all others) consists of two parts, viz., of body and soul; the letter of the law is the body of the law, and the sense and reason of the law is the soul of the law, guia ratio legis est anima legist And -the law may be resembled to a nut, which has a shell and a kernel within, the letter of the law represents the shell, and the sense of it the kernel; and as you will be no better for the nut if you make use only of the shell, so you will receive no benefit from the law if' you rely upon the letter, and as the fruit and profit of the nut lies in the kernel, and not in the shell, so the fruit and profit of the law consists in the sense more than in the letter. And it often happens, that when you know the letter,- you know not the sense, for sometimes the sense is more confined and contracted than the letter, and sometimes it is more large and extensive.” This authority, it seems to me, is peculiarly applicable to a case where books of science and the literary lexicons are cited to prove the definitions and meaning of words, or in the language of Plowden, to prove what is the body, rather than what is the reason and intent of the statute.

Applying the principles of construction we have collected to the statute in question, it is clearly seen that the intent is to restrict the power of justices over parties to actions in those courts in the particulars mentioned. Before the act for the better and more speedy recovery of debts of the value of $50 (ch. 238 of Laws of 1824), the power of justices over parties was coextensive, with the limits of the county of which he was a justice. The 30th section of that act introduced the provision in question as a new feature, and as a limitation of their power in this respect. This limitation has been continued ever since. Viewed in the light of a limitation of power, its object most obviously is to prevent inconvenience, expense, and, perhaps, sometimes oppression to a defendant, whose attendance might otherwise be, at the caprice of a plaintiff, compelled at distances remote and inconvenient from his place of residence, to litigate (as often happened) in relation to some trifling difference, in regard to which justice could be as justly administered in the town of the residence of the parties, or one of them, or in some town approximately near to them. The simple reading of this provision instinctively points not only to its object, but demands respect for its propriety and good sense. If there are other reasons than those we have assumed for the enactment in question, those suggested are abundant for the purpose. The object and intent of this provision being so clearly apparent, we are to suppose that the legislature intended to employ such language as would carry out that object. And it is but fair to assume that in the adoption of language to express that intent, a case of such remarkable technicality as that before us did not occur to them as a casé to be provided for by the use of more descriptive words than those employed. It is clear that they intended to limit the distance that defendants should be compelled to attend; it is clear they intended this distance should not be more remote than the next town to that of the residence of one of the parties. This idea could only be expressed by such appropriate words of limitation as would naturally be suggested to the mind of the legislator at the time. The question, then, distinctly is, are the words next adjoining,” in this statute, under the circumstances, sufficient to express the intent of the legislature, and confer jurisdiction upon the justice to try this action ? Construing this statute by the rules we have laid down, it appears to me that the town of "Virgil was not only next to Marathon, but also that it “ adjoins ” it. To pass diagonally from Marathon to Virgil, from the northwest corner of the former to the southeast corner of the latter the towns are next to each other—-and at the corners they actually touch each other, and we have no legal definition to show what distance the junction between two towns must continue, in order to adjoin. A person standing at the nearest point of proximity of Marathon and Virgil could at a step, without an effort at a stride, stand with one foot in Marathon, where both the parties reside, and the other in Virgil, where the justice resides, and it might be, for aught that the case shows to the contrary, upon the threshold of the justice’s office. But distances upon a scale have nothing to do with the interpretation of this statute, except in so far as they are measured by the limits of towns lying “next adjoining.” If we are right in the interpretation of this statute as to its intent, it is not material whether the words employed in it for this purpose, are literally, and according to the standard lexicons of our language, the best that could be selected. • Mor is it a question controlled or demonstrated by the rules of mathematics, or any other science. Though theoretical geometry may demonstrate that the line between these two towns, like all other lines* is without magnitude—has only a mental existence, dwells only in the imagination, and yet is, in effect, such a separator as to prevent contact between these corners of the town, yet such a demonstration, however true in theory, is also only true in imagination; it is quite too destructive of the law of physics, or material substances, to be practically useful in the interpretation of a statute; indeed it is destructive of the argument upon that side of the question, and of giving any meaning whatever to the words of this statute; it even proves that towns that lie side by side do not adjoin. According to the ordinary understanding of men, and physically and materially, these towns, by touching and coming in contact with each other, are next and adjoining each other, and come within the meaning and intent of this statute. I think, therefore, the judgment of the Supreme Court should be affirmed.

Judgment affirmed.


author: Davis, J. Denio, Ch. J.

text:
    James H. McWilliams, Respondent, v. John M. Mason, Appellant.
    Where the maker of a promissory note, by falsely representing that the payee is to advance to him the money thereon, procures a third party to guarantee the same, the payee taking such note in good faith, and for value, may enforce the guaranty.
    The law imposes the loss upon the party who, by his misplaced confidence, has enabled another, on the faith of his obligation, to obtain money or property from an innocent third party.
    Appeal from: judgment of the Superior Court of the city ■ of Hew York, affirming judgment entered on verdict. The action was brought upon a guaranty of the payment of a bond, made by one Carlile to one Townsend (the plaintiff’s assignor), dated the 28th day of March, 1848, and conditioned to pay $1,-500 within two years, with semi-annual interest. The guaranty was indorsed upon the bond, and executed simultaneously therewith. On the delivery of the bond and guaranty to him, Townsend delivered to Carlile a note for $231.74, principal and interest, which he then held against him, and assigned to one Strong, to whom Carlile had sold the same, a mortgage on which was due the sum of $1,293.55. Carlile realized on the mortgage only the sum of $1,075, out of which he paid Townsend the difference between the note and mortgage, and the bond and several other items of borrowed money, and expenses for taxes paid on the mortgaged premises by Townsend.
    On the part of the defendant it was averred, and evidence was given on the trial tending to show, that he executed the guaranty, relying on the representations of Carlile, that Townsend was to lend him on the bond so guaranteed $1,500 in cash, for the purpose of enabling him to go into the milling business at some place in Ohio, and that Townsend knew that defendant made the guaranty for that purpose, relying on such representations. On the part of the plaintiff' it was claimed, and evidence was given tending to show, that there was no negotiation or promise of a loan of money by Townsend, on said bond and guaranty, but that it was agreed before the same were made that the consideration therefor should be the note and mortgage, and that Carlile was informed by Townsend of that fact. As to the facts the evidence was conflicting. The court, at the close of the evidence, was asked to charge the jury: 1. That if the jury believe that Mason entered into the guaranty for the purpose of raising $1,500 in money, to assist Carlile to go into business, and Townsend, instead of advancing that amount, or anything in money, gave Carlile only the Little mortgage and the $197 note, and did not communicate to Mason the fact that he was advancing the mortgage and the note, the plaintiff cannot recover anything. 2. That if the jury believe that there was an interview between Mason and Townsend, prior to the consummation of the transaction between Carlile and Townsend, and that Townsend then omitted to inform Mason what he had agreed to give Carlile upon the bond and guaranty, the plaintiff cannot recover. The court refused so to charge, and defendant’s counsel duly excepted as to each proposition.
    The court, in its charge, presented the case to the jury in “ three aspects.” The first of which was in substance, that if they found that Carlile applied to defendant to become a guarantor of his bond for $1,500, on a representation that Carlile wished the money for the purpose stated, and that Townsend would advance that amount on the bond of Carlile thus guaranteed, and that Carlile informed Townsend that he had made this application to defendant, and that defendant had agreéd to become a guarantor for a loan of $1,500'in money, and that subsequently, without any communication with Mason on this subject, an arrangement was made between Carlile and Townsend, by which, instead of the money, he took the mortgage and note, then defendant Mason was not liable. To this there was no exception.
    The second aspect was in substance, that if the jury found that defendant, before executing the guaranty, was informed by Townsend of the arrangement between him and Carlile, that the consideration for the bond and guaranty was to be the mortgage and note, and executed the same with such knowledge, then plaintiff was entitled to recover the whole amount of the bond so guaranteed; and to this there was no exception.
    The third aspect was in substance, that if the jury should believe that Carlile did make the representations to defendant, that Townsend was to loan on the bond and guaranty $1,500 in money for the purpose stated, and thereby induced defendant to execute the guaranty, yet, if they found the fhet to be that the agreement between Carlile and Townsend was that the bond and guaranty should be given for the note of Carlile and the Little mortgage, and that there was no agreement that Townsend should advance or loan money on the bond and guaranty, and that he took the same in pursuance of the agreement, and “ acted in perfect good faith in taking the guaranty and bond without any notice of misrepresentation on the part of Carlile, or reason to suppose that there was any,” but believed in good faith that the arrangement and the nature of it was understood by defendant, then plaintiff was entitled to recover what he actually advanced on the bond and guaranty, which would be the amount that Carlile realized on the mortgage, or if the jury found that the mortgage was in fact worth the whole amount secured by it, then the amount thereof with interest. To this part of the charge the defendant excepted.
    The jury found a verdict for the plaintiff for the amount of the mortgage, with interest.

      J. W. Edmonds, for the appellant.

      A. R. Dyett, for the respondent.
   Davis, J.

There is no difficulty in determining under which “ aspect ” of the charge the jury found their verdict and of course none in discerning what facts were found by them and what allegations were negatived. The case states that “the jury found a verdict for the plaintiff for $2,369.59, being the principal and interest of the mortgage on March 28,1848, viz., $1,293.55, and the interest due thereon.” If the jury had found the facts to be as hypothetically presented by the first aspect of the charge, their verdict must have been, as directed by the court, for the defendant. The verdict, therefore, finds that it was not true that Carlile applied for and Townsend agreed to make a loan of $1,500 in money upon such a bond and guaranty, and that defendant made the guaranty to carry out that arrangá z and that afterward Townsend and Carlile changed the agreement without defendant’s consent, by substituting the mortgage and note for the money to be loaned. So if the jury had found the facts as supposed by the second aspect of the charge, then, in accordance with the direction, they must have found a verdict for the plaintiff for the whole amount of the bond, with interest; and, therefore, their finding has negatived the allegation of the plaintiff that defendant executed the guaranty with full knowledge that the consideration for the bond was to be the note and mortgage. The verdict is found under the third aspect, and it involves as the finding of the jury, these facts : that the arrangement between Townsend and Carlile was, that for the bond of the latter to be guaranteed by defendant, Townsend would assign the mortgage and give up the note of Carlile; that Carlile, to induce defendant to make the guaranty, represented to him that Townsend was to advance on the bond and guaranty $1,500 in money to enable Carlile to go into the milling business in Ohio; that Townsend received the bond and guaranty without any knowledge that such representations had been made by Carlile, but believing in good faith that defendant understood the actual arrangement between him and Carlile, and under which they were to be made; and, in pursuance of that arrangement, in good faith, assigned the mortgage and gave up Carlile’s note for the bond and guaranty.

The court, at the trial, held that, upon these facts, the plaintiff was entitled to recover the amount actually advanced by Townsend on the bond and guaranty, to wit, the value of the mortgage assigned, at the time of making the assignment, with interest. As we have seen, the jury gave their verdict for that value only. It is not necessary to discuss whether this limitation of amount was right. If erroneous, it was so far to the benefit of the defendant, and he has no cause to complain. It is the law, that the rights of a surety are sirioHssimi juris, and, consequently, in any case where the surety can say, non Tubo feeder a veni—this is not the precise contract I made—the law attaches to him no liability. This is the principle applied with uniform strictness in the numerous authorities cited by the learned counsel for the appellant. If it be applicable to this case, there is no reason why it should not afford protection to the defendant. But in this case, the agreement which the jury have found to have been made between the principal and Townsend, has been, as they also have found, carried out in good faith by the latter. The bond and guaranty brought to him are such as the agreement required; and there is nothing about them to indicate that they were not designed for the exact purposes of the agreement. It is not, therefore, the case of a departure from or change in any respect of the agreement between the principal and the party with whom he was dealing, without the knowledge or consent of the surety. Neither is the guaranty nor the bond changed from the exact form in which it was made, so that really, as it appears to me, the question in this case steers quite clear of the principles upon which the courts so vigilantly guard the rights of sureties. The real question is, which of two innocent parties shall suffer by a fraud perpetrated by another. Townsend contracted to sell his mortgage and cancel his note, upon receiving a bond from Oarlile for their amount payable in two years, and guaranteed by defendant. Such a bond and guaranty, properly executed, are brought to him, and in good faith he receives them and transfers the mortgage and delivers the note. But it turns out, when the guaranty is sought to be enforced, that Garble induced defendant to make it by a false misrepresentation as to the consideration Townsend was to give for it. This is no defense; because, in such case, the law imposes the loss upon the party who, by his misplaced confidence, has enabled another, on the faith of his obligation, to obtain the money or property of a third person, who has dealt in good faith, relying on such obligation. The doctrine of estoppel steps in to prevent the assertion of such a defense, because it is more consonant with public policy as well as sound morals, that he, who by permitting himself to be deceived, has put it in the power of another to defraud an innocent third party, should himself suffer rather than the latter. It is upon this principle, as I understand it, that this court proceeded in Van Duzer v. Howe (21 N. Y., 531), rather than upon any distinctive rules applicable to commercial paper. In that case the defendants wrote their acceptance upon a bill and intrusted it to Webb, in blank as to the amount, relying on his promise that it should not be filled up for more than $1,000. Webb violated his promise by inserting a greater amount, for which the plaintiff, without knowledge of the fraud, discounted it, paying the proceeds to Webb. The court held that defendant must suffer the consequence of his misplaced confidence. One of the cases cited by Denio, J., in his opinion, is strongly illustrative of the principle. (Montague v. Perkins, 22 Eng. Law and Eq., 516.) In that case defendant intrusted one Swinburn with blank acceptances to take up other bills which he had accepted for his accommodation. Twelve years afterward Swinburn wrote a bill of exchange for £200 on one of the blank acceptances, payable to his own order, and it was negotiated to plaintiff. The jury found that the blank was not filled up within a reasonable time, and gave their verdict for the defendant. The plaintiff moved for leave to enter a verdict in his favor, and, after elaborate argument, the court granted the motion. It was argued that the authority to Swinburn was to fill up .the bill within a reasonable time, but the chief justice said this was not a case with reference to the rights of a bona fide holder for value and that the rules applicable 'to the question of authority on this bill of exchange do not differ from those which ought to govern the question if it arose in the ordinary case between principal and agent.” (See opinion of Denio, J., in Van Duzer v. Howe, sufra, and the numerous cases there cited by him, 4 Kern., 623.)

There was no error in refusing to charge as requested by defendant’s counsel. The first proposition involved nothing more than the effect of a failure on the part of Townsend to communicate to defendant the facts as to the consideration he was giving for the bond and guaranty. If Townsend was acting in entire good faith in the transaction, and in the belief that defendant knew its character and object, there was no occasion or obligation to communicate the consideration to him. The mere omission to do so would not affect his legal rights independently of any question of fraud or concealment. The second proposition presents the same idea strengthened by the suggestion of an interview in which the opportunity to make the communication might have been improved. The same answer applies. Ho legal results necessarily follow from the facts supposed by the requests, and their force as evidence tending to show bad faith or collusion, were, we must assume, rightly presented to and disposed of by the jury.

The elaborate arguments of the counsel for the appellant, upon the questions of fact involved in the case, are not proper for our consideration; but as they are based chiefly or to some extent on a supposed conclusive admission of the pleadings, it is proper to advert to that question. Obviously for the first time in the progress of the cause, it is now discovered and insisted that the important fact of Townsend’s knowledge that Oarlile was deceiving defendant, is admitted by the failure to deny it in the reply. The parties have litigated this question with great vigor through two trials, by witnesses and proofs, and through appeals reaching once before to this tribunal; and it may with some force be said, in the language of the counsel on another point, “it is error for a court to determine a case on a point not raised.” If the point were fairly raised upon the pleadings, I should think it disposed of by Sibley v. Waffle (16 N. Y., 180). In that case the original pleadings were made at the time when a reply to new matter was necessary under the Code. There was no reply, but before the trial the amendment of the Code requiring a reply to new matter constituting a counterclaim only, was passed. This court held that the answer was at issue by force of the amendment. A fortiori should that ruling apply to a case where there is a reply which is supposed to put in issue the new matter, and which certainly does so indirectly by averring facts totally inconsistent therewith.

I have looked carefully into the pleadings, and taking the whole of the answer and reply into consideration, I think it is a forced construction that can wring an admission out of them of the character claimed.

I am of opinion that the judgment should be affirmed.

Denio, Ch. J.

I think there was no error in the part of the charge excepted to, prejudicial to the defendant, or in the refusal- to charge as requested.

The evidence showed that the defendant signed the guaranty at the time Carlile signed the bond, and that they were then delivered to or left with Mr. Townsend, with the defendant’s knowledge and assent, without any communication between Townsend and defendant. It also appeared that the understanding between Carlile and the defendant was that the former was to borrow of Townsend $1,500; and that such was the transaction which, according to the understanding between them, the defendant was to guarantee as the surety of Carlile. If this understanding between Carlile and his surety was communicated to Townsend before he received the bond and guaranty, and he, notwithstanding such knowledge, advanced, not the money, but the assignment of the bond and mortgage and the note of Carlile, he ought not to hold the defendant responsible, because the engagement was diverted from the purpose for which it was given, with the knowledge of the party receiving it, which would be a violation of good faith. Carlile testified, in effect, that the negotiation with Townsend commenced by an understanding that a loan of money was to be made, and that Townsend knew that it was for that purpose that the defendant signed the guaranty. Townsend, as a witness, denied that he ever agreed to loan the money or ever entertained that proposition, and, substantially, that he had no knowledge or suspicion that there was any diversion of the defendant’s undertaking from the purpose for which it was intended. The part of the charge to which exception was taken affirmed that if the account thus given by.Townsend was true, the plaintiff was entitled to recover the value of the Little mortgage; and if it was not worth as much as it was sold to Oarlile for, then as much as the latter received upon the sale and assignment of it to Strongbut that he was in no event entitled to recover the amount of the note which Townsend had held against Oarlile, and which he then surrendered, because it was worthless on account of Oarlile’s insolvency. As the plaintiff has not appealed, it is of no importance to examine the ground upon which a recovery was denied for that part of the bond which represented the amount of the note, or why the recovery should have been limited in any event to the amount for which Oarlile disposed of the bond and mortgage. Surely a person, though he may be insolvent, has a right to pay or secure a debt which he owes, and procure a friend to become security for it, if he will consent; and in the absence of fraud or imposition, a man may lawfully sell and another may buy a moneyed security for the amount due upon it, and secure the consideration of the purchase in any way in which he may secure any other purchase. But the rulings against the plaintiff are, as I have said, immaterial- upon this appeal; and as to the deduction to be made upon the mortgage in one contingency, for the further reason that the jury have found that the mortgage was worth all that the defendant sold it for.

The position, that if one sign a note, bond or guaranty running in terms to another person by name, as the creditor, and intrust it to a third person, to negotiate for his own purposes with the person so named as creditor, and the person so intrusted does deliver it to the party named as the creditor, upon a lawful consideration as between those parties, the creditor so receiving is bound to inquire further as to the understanding or agreement between the surety and the person for whom he became surety, at the peril of losing his security if it turns out that the party intrusted has violated the promise of his surety, cannot be sustained. It would destroy all confidence in such transactions, and enable dishonest men to commit all manner of frauds. The authorities cited in Van Duzer v. Howe (21 N. Y., 531), and the principle of that case itself, show that one who enables another to commit a fraud of this kind is the party to suffer, and not the innocent person who has taken the surety at his word; and are quite sufficient for the decision of this case.

The judgment must he affirmed.

All the judges concurring,

Judgment affirmed.