author: Selden, J.

text:
    Braman v. Bingham.
    The discharge of a mortgage of record, and the possession of the instrument, with the accompanying bond, canceled, by one not the mortgagor but the owner of land charged with its payment, is jprima facie evidence of the payment by such holder.
    A deed delivered to the grantee is not held as an escrow; such delivery either takes effect as absolute, or it is void and works nothing.
    Whether it makes any difference that the deed is handed to the grantee for the purpose of transmitting to a third person, to be held by him as ' an escrow, quaere, per Selden, J., questioning as to this the case of Gilbert v. The North American Fire Insurance Company (23 Wend., 43).
    A deed delivered to the grantee to be deposited by him with a third person until the return of the grantor from a journey, and on that event to be redelivered to the grantor, is not an escrow because in no event to be delivered to the grantee.
    Where such a transaction was had, in pursuance of an arrangement by which the original grantor, upon a contract for the exchange of lands, made a conveyance that his grantee might raise money by mortgage, and desired a reconveyance until he should be ready to accept the lands to be deeded to him in exchange, held, that the delivery took effect as absolute.
    The grantor covenanted that the land was subject to no incumbrance except mortgages to the amount of $12,400. In fact, there were mortgages to the amount of $12,800. The grantee, having paid one of them, exceeding $á00j is entitled to recover that sum, with interest, without paying off the remaining incumbrances, and is not confined to nominal damages.
    The complaint in this action stated the substance of a deed executed by the defendant to the plaintiff, bearing date July 25th, 1857, by which the defendant conveyed to the plaintiff eighteen lots in the city of Brooklyn, with a covenant on the part of the defendant, that the lots were free from any incumbrance, except three mortgages therein mentioned, amounting in the aggregate to $12,400; and it is alleged that at the time of the making and delivery of the deed the lots were incumbered by mortgages, amounting in the aggregate to $12,800, which remained unpaid; and that by reason thereof the plaintiff was obliged to pay and has paid the excess of $400, and judgment is demanded for that sum, with costs.
    The defendant in his answer denied that he conveyed the property in the complaint described, as therein alleged.
    Secondly. He denied that the plaintiff was obliged to pay and had paid the excess of $400, mentioned in the complaint, for the cause therein alleged.
    Thirdly. He denied that any deed of the property described in the complaint, was ever delivered by him to, or accepted by, the plaintiff, with the view or intent on the part of either to convey the said property from the defendant to the plaintiff ; and he set out an agreement between him and the plaintiff, dated May 27, 1857, by which he promised to convey to the plaintiff, forty-three building lots in Brooklyn, subject only to mortgages in the aggregate to the amount of $8,000; also to convey to the plaintiff two other lots. The plaintiff promised to convey to the defendant eighteen lots, subject to a mortgage held by the Hew York Life and Trust Company, for $8,000; and two other lots subject to two mortgages, amounting to $4,400; but the plaintiff was not to convey any of the lots on his part, until it should be ascertained that the title to the lots to be conveyed by the defendant was valid. [The agreement contained other provisions, but they have no bearing upon the present case.] The defendant then stated that one E. H. Nichols, desired that the $8,000 mortgage held by the Trust Company should be canceled, as it covered lots belonging to him which were not included in the contract; and for that purpose the plaintiff, at his own suggestion, conveyed to the defendant by deed dated July 9,1857, delivered to the defendant on or about the 25th of that month, the property which by said contract he had agreed to convey, and the defendant mortgaged the same to another party with the consent of the plaintiff for the sum of $8,400 (the sum of $400 being the premium which the defendant agreed to pay to the mortgagee for his aid and services in raising the money and for searches), and with the proceeds of that mortgage the Trust Company mortgage was paid. The defendant further alleged that when the deed of 9th July to him was made, he desired the plaintiff to accept the deed from him of the lands which by the contract he was to convey, but the plaintiff declined on the ground that he wished to complete some arrangements with another person before he took the title, and promised that he would himself obtain the making of the deed and present it to the defendant for execution, when he desired the title; to which the defendant assented. The defendant further alleged that when the deed of 9th July was delivered to him, the plaintiff stated that he was about making a journey and might be exposed to death from accident or otherwise, and as he had no deed of the lots which the defendant was by the contract to convey to him, and nothing to show for the lots conveyed by him to the defendant, he desired that the defendant should reconvey to him the last mentioned lots subject to said mortgage of $8,400, to be held as an escrow until he should return and it should be his pleasure to accept from the defendant the deed of the lots which by the written contract were to be conveyed to him; and to induce the defendant to execute it, the plaintiff, himself, drew the deed .and presented it to the defendant for signature, being the deed dated 25th July, on which the action is founded; that the deed of 9th July, and that of 25th July, were both written by the plaintiff, and both exchanged by delivery at the same time: that the mortgage to raise money to pay the Trust Company mortgage, was also executed at the same time, before the delivery of the deed to the plaintiff, which was subject thereto, the whole being one transaction for the pur& pose aforesaid; that the deed in the complaint mentioned was ¡delivered to the plaintiff only as an escrow, and was not delivered absolutely, or intended by either party so to be, for the purpose of passing the title to the lands therein described, or otherwise giving any effect thereto, and the plaintiff accepted said deed as such and for no other purpose. The defendant further alleged that since the return of the plaintiff from his journey, he had tendered to him a full covenant warranty deed of the lands described in the contract, which the plaintiff refused to accept, and the defendant then requested him to fulfill the terms of his contract (offering to fulfill the provisions thereof on his part), .which the plaintiff refused to do, and also refused to surrender the deed delivered as an escrow, but fraudulently caused the same to be recorded as a conveyance of réal estate, and commenced this. action on the covenants therein; wherefore the defendant insists that said deed is not his deed; that it has never been delivered as a conveyance, and that the plaintiff holds the same in fraud of the defendant’s rights. *
    Fourthly. For a further defence the defendant alleged, in addition to the facts stated in the third defence, which are referred to as making part of the fourth, that by the agreement respecting the object and purpose of the deed mentioned in the complaint, it was intended to be and should have been drawn subject to the mortgage of $8,400, and other liens amounting to $4,400; "but the plaintiff in drawing the deed, copied the amount of incumbrances from the deed of July 9th, and “ by such error, carelessness or wrongful intent of the plaintiff, the incumbrances in the deed were stated at $400 less than both the plaintiff .and defendant well knew at the time of drawing the deed, would in fact exist on said lots after the Trust Company’s mortgage should be paid; that defendant had no knowledge of such error, or of the fact that the total amount of incumbrances were stated in said deed at $12,-400, but believed the same was stated at $12,800, but charges that the plaintiff well knew of the error, and that the defendant was ignorant of it at the time of. the delivery of the deed, to the plaintiff as aforesaid; and he prays to have the deed reformed and the error corrected.”
    The cause was tried at the Kings' County Circuit in April, 1860, before Mr.. Justice Lott and a jury. The plaintiff introduced and read in evidence, the deed described in the complaint, and two mortgages for $2,200 each dated April 25, 1854, and four other mortgages executed by the defendant, one dated July 12th and the others July 25th, 1857, amounting in the aggregate to $8,400, each of which embraced some-portion of the premises described in the deed. The mortgage dated July 12th, 1857, was to Abijah Oakley for $3,000, and appeared to have been satisfied and discharged January 12th, 1859. It was produced by the plaintiff with the accompanying bond canceled. The plaintiff also gave in evidence the deed from himself to the defendant, dated July 9th, mentioned in the defendant’s answer.
    The defendant’s counsel objected to the introduction of the • mortgages, making in the aggregate $12,800, on the ground that they were not the Ijens covenanted against by the defendant in his deed. The'objection-was overruled and the defendant’s counsel excepted.
    . It was also objected that it was not proved that the plaintiff had paid the $3,000 mortgage. The court decided that there was prima facie proof that he paid it, to which decision there was an exception.
    The plaintiff having rested, the defendant proved the execution of the agreement of 27th of May set out in his answer, and offered it in evidence, which was objected to by the plaintiff’s counsel, and the objection was sustained. The defendant testified that the deeds of July 9th and 25th, were both in the plaintiff’s handwriting. That the deed of 9th July was delivered on the 25th. The question addressed to the defendant, “ Was the deed from Bingham to Braman, delivered to take effect ?” was objected to by the plaintiff’s counsel; the objection was sustained and the defendant’s counsel excepted.
    The question “ was the deed ever delivered,” was also objected to and the objection sustained by the court with the statement that evidence of facts showing what was done at the time the deed was taken by the plaintiff, would be admitted.
    The defendant’s counsel then offered to prove by the defendant that on or about the 25th of July, 1857, the plaintiff came to him, and stated that he had nothing to show for the land conveyed to the defendant, and as he was about to take a journey to Ohio, and might be killed on the cars and not return, he wanted a deed made back to him of the lots conveyed on the 9th July, to operate as an escrow until his return, and then to be given up to the defendant; that he promised to leave it with one of the clerks at the city hall; and that the defendant executed the deed on that express condition and no other; that it was handed to the plaintiff to be delivered and safely kept by one of the clerks of the register’s office, naming him; that he subsequently informed the defendant that he had done so; that the defendant never assented to the absolute delivery of the deed, but the same was put on record by the plaintiff, without the defendant’s knowledge or consent. The testimony was rejected, and the defendant’s counsel excepted.
    ■ The defendant’s counsel then offered to show what occurred and was said by the parties at the time when the deed was drawn by the plaintiff, for the purpose of showing that the deed was delivered as an escrow. The court refused to receive the evidence, and the defendant’s counsel excepted.
    The defendant’s counsel also offered to prove that the excess of $400, for which this action was brought, occurred as follows : A deed was made from the plaintiff to the defendant of these lands, dated July 9, 1859, and a deed back- from the defendant to the plaintiff of the same lands, dated July 25, 1857; that the several mortgages that had been proved making up the $12,800, were made and delivered between the dates of these transfers, to raise the money to pay off the $8,000 mortgage; that both deeds were delivered at the same time, although bearing different dates, and that this was done for the purpose that whoever should ultimately own the lots,should pay the mortgages; and that the contract between the plaintiff “ and the defendant in reference to the exchange of lands, had never been carried into effect.” The evidence was excluded, and the defendant’s counsel excepted.
    The defendant’s counsel asked the court to charge the jury that there was no evidence that the plaintiff had paid anything; and that he was only entitled to recover nominal damages, because it also appeared by the complaint that the plaintiff had not paid the incumbrances alleged in the complaint to be subsisting on the property. The court declined so to charge, but did charge that the possession by the plain tiff of the bond and mortgage, with satisfaction indorsed, was evidence that he had paid them. To which refusal and charge the defendant’s counsel excepted.
    The jury, under the direction of the court, found a verdict for the plaintiff for $476.80. Judgment was entered in accordance with the verdict, which was affirmed at the general term of the Supreme Court, and the defendant brought this appeal.
    The cause was submitted on printed briefs, by

      Capron & Lake, for the appellant.

      G. T. Jenks, for the respondent.
   Selden, J.

The mortgages which were given in evidence by the plaintiff were admitted to embrace, each, some portion of the premises conveyed by the deed from the defendant to the plaintiff, the covenants of which, if valid, bound the defendant to remove all incumbrances upon those premises, beyond $12,400. Any" mortgages, therefore, which were liens upon the premises, were within the terms of the defendant’s cove nant, and properly admissible in evidence against him.

The possession of the $3,000 mortgage, by the plaintiff, with its accompanying bond, canceled, together with the discharge of the mortgage upon the records, some months after the land covered by it was conveyed to the plaintiff certainly amounted to prima facie evidence that the plaintiff had paid the mortgage. ■He was not the mortgagor, but the terms of the deed to him charged all the incumbrances which appear in the case, with the exception of $400 in amount, primarily upon his lands. " The discharge of record is evidence that the bond and mortgage were paid; and their possession by him, canceled, together with the interest which he had in their payment, are circumstances quite sufficient to raise a presumption that he was the person- who made the payment. (Hilliard on Mortg., ch. 16, § 46; 1 Greenl. Ev., § 38; Garlock v. Goertner, 7 Wend., 198.)

The questions in regard to the delivery of the deed were properly overruled. The question, “ was the deed delivered to take effect ?” addressed to the party who signed the deed, I am inclined to think was objectionable, without reference to the circumstances under which the inquiry was made, as calling for a legal conclusion, or for the intention of the party, aside from what was said and done. The other question, “ Was the deed ever delivered ? ” would undoubtedly be proper where a delivery, in fact, was the matter in dispute. But here the defendant’s answer admitted the delivery in fact, and the question in controversy was as to the intention of the parties, or the legal effect of such delivery. The only competent evidence bearing upon that question was what was said and done at the time. This the court decided to admit. The questions addressed to the witness, under the circumstances, called for his opinion as to the legal effect of the conceded actual delivery. That was a question to be decided by 'the court, after all the facts attending the delivery should be proved.

The disposition of the exceptions taken to the rejection of the written agreement, and of the oral testimony offered to sustain the third and fourth divisions of the answer, depends upon the single question whether either of those divisions presents any material issue. The evidence offered would go far to sustain them, and if the issues were material, the evidence should have been received. The court, however, is not required to hear evidence to support immaterial issues. (Corning v. Corning, 2 Seld., 97.)

A fatal objection to the third division- of the answer, as a defence, is, that it shows that the deed was delivered to the grantee, to be held by him in escrow. It is well settled that such a delivery vests the title in the grantee, although it may be contrary to the intention of the parties. (Lawton v. Sager, 11 Barb., 349; Worrall v. Munn, 1 Seld., 229; Gilbert v. N. A. Fire Ins. Co., 23 Wend., 45.) The offer of evidence in support of this division of the answer embraced the additional fact, not alluded to in the answer, that the deed was handed to the plaintiff to be delivered to and safely kept by one of the clerks iñ the register’s office. Whether these facts, not pleaded, if material, were admissible in evidence may admit of some doubt, but I do not deem it necessary to decide that question. If the' answer, in addition to what it contains, had embraced those facts, it would not, in my opinion, have presented a defence. It has been held in one case, that a deed may be delivered to the grantee for the purpose of transmission to a third person, to be held by him in escrow until the happening of some event • when it should take effect as a conveyance, and that such delivery would not be absolute. (Gilbert v. N. A. Fire Ins. Co., 23 Wend., 43.) In that case, the grantee had deposited the deed with the third person in pursuance of the arrangement, the condition had not been performed, and the grantee made no claim under the deed. The case presented merely the ' question, whether the grantor still retained an insurable interest in the premises described in the deed, the nominal grantee tes- • tifying to the terms in which the deed was delivered to him. Limited to its peculiar circumstances, no fault can be found with the decision; but if the grantee had retained the deed, claiming that its delivery to him was- absolute, and in a contest between him and the grantor, parol proof of a conditional - delivery had been offered, I think the result would have been different. If I am wrong in this conclusion, the case discloses an avenue for the overthrow of titles, by parol proof, which • was supposed to be closed by the rule to which it would seem to form an exception. The reason given for the rule excluding parol evidence of a conditional delivery to the grantee applies to all cases where the delivery is designed to give effect to the deed, in any event, without the further act of the grantor. “ When the words are contrary to the act, which is the delivery, the words are of none effect.” (Co. Litt, 36 a.) “ Because then a bare averment, without any writing, would make void every deed.” (Cro. Eliz., 884.) If I seal my deed and deliver it to the party himself, to whom it is made, as an escrow upon certain conditions, &c., in this case let the form of the words be what it will, the delivery is absolute, and the deed shall take effect as his deed presently.” (Shep. Touch., 59; Whyddon's case, Cro. Eliz., 520; Cruise’s Dig. Title, 33, Deeds, ch. 2, § 80.) If a delivery to the grantee can be made subject to one parol condition, I see no ground of principle which can exclude any parol condition. The deed having been delivered to the grantee, I think the parol evidence that the delivery was conditional was properly excluded.

But there is also another ground on which the evidence was properly excluded. “ It is essential to an escrow that it be delivered to a third person, to be by him delivered to the obligee or grantee, upon the happening of some event, or the performance of some condition, from which time it becomes absolute.” (James v. Vanderheyden, 1 Paige, 238.) By the agreement, as offered to be proved, the deed of Bingham to Braman was to be held as an escrow until Braman’s return, “ and then to be given up to Bingham.” A deed thus delivered is not an escrow, although the parties may call it such, because there is no event in which it is to be delivered to the grantee. A deed so delivered, if not so intended, when deposited, to operate as a deed in presentí, could never have any validity, without a new agreement of the parties. (James v. Vanderheyden, supra) If' there were nothing in the case to aid in ascertaining the intention of the parties in making the delivery, beyond the parol proof which was offered, the deed would be held absolute on account of its delivery to the grantee, or it would be held void for want of any delivery: it could not be treated as an escrow. The effect to be given to the delivery, however, is not to be determined by the proof offered alone, but by that, together with the facts appearing in the answer, and the proof already given. From these, the conclusion is irresistible that the deed was intended to operate at once as a reconveyance of the lots to the plaintiff, the title to remain thus until his return, and the conveyance of the other lots' to him, when the deed was to be returned to the defendant. The parties appear to have supposed that the title could be vested1, by the deed, in the grantee, temporarily, to remain there as long as the deed was in the hands of the third person, and could then be re-vested in the grantor, by the return of the deed to him. As' this could not, in accordance with the rules of law, be done, the deed was either void or it took effect as an absolute deed, and vested the title in the grantee. The answer shows that the deed was intended to operate as a conveyance. It was executed in pursuance of the plaintiffs’ request “ that the defendant should reconvéy to the plaintiff the lots described in said-deed, subject to said mortgage of $8,400, to be held as an escrow, until he should return,” &c. The deed from the plaintiff to the defendant, and that from the defendant' to the plaintiff, though bearing different dates, were delivered at the same time, and were obviously both designed to take immediate effect,.the first to vest the title in the defendant, to make his mortgages good, which were also delivered at the same time and the other to revest the title in the plaintiff, subject to the mortgages. Nothing short of a reconveyance would be of any service to the plaintiff, and if the deed did not take effect as a reconveyance, the execution of it by the defendant was an idle ceremony. I am satisfied that the deed must be ■ held to have taken effect as a conveyance, at the time of its delivery, and that the defendant was bound by its covenants. The facts pleaded in the third division of the answer, and offered in evidence under it, therefore, constituted no defence, and the proof of them was properly excluded.

The fourth division of the answer sets up, as an equitable defence, that there was a mistake of $400, in the covenants as to the amount of incumbrances charged upon the property, and asks to have the deed reformed in that respect. The present practice authorizes the defendant to make such a case, and demand affirmative relief in his answer, and also to avail himself of the equitable circumstances as a defence. But neither the answer nor the facts offered to be proved to sustain it, nor both united, make such a case as would justify the Court in decreeing an alteration of the terms of the covenant.

The answer shows that th'e $400 in controversy was the sum paid as a premium for obtaining the loan of $8,000, and the expenses attending it. In the third division of the answer, ■which is referred to. in and made part of the fourth, the defendant says that he “ agreed to pay to the mortgagor ” that sum; and that statement accords with the covenant as it is in the deed. He nowhere alleges that the plaintiff assumed or pro-, mised to pay it, nor does that fact appear in the offer of testimony which was rejected. It is stated that both parties knew that the incumbrances charged - on the lands were $400 more than the sum mentioned in the covenant, but that fact is not at all inconsistent with the position that the defendant was expected to pay the excess. The most that can be claimed on the part of the defendant, in this respect, as the result of what is stated in the answer, and what was offered to be proved, is, that some doubt is thereby created .whether the $400 should not have been included in the exception to the defendant’s covenant. In such a case it is entirely clear that the defendant shows no equitable defence. Courts of equity will decree the reformation of a deed or tiontract, only, where there is a plain mistake, clearly made out by satisfactory proofs ” (1 Story’s Eq., § 157), and not then where, as in this case, the mistake, if one was made, resulted from the negligence of the party asking the relief. (Id., § 146, and note 3.) This was not a question for the jury, but for the court, and neither the evidence offered, nor the answer to sustain which it was offered, constituting a defence, the evidence was properly rejected.

The exception to the charge presents the question, whether the plaintiff was entitled to recover anything beyond nominal damages. The terms of the covenant were that the premises were free from incumbrances, except three mortgages, amounting in the aggregate to $12,400. The plaintiff proved that the incumbrances amounted to $12,800, and that he had paid-$3,000. The existence of $400 of incumbrances, in excess of the amount named in the covenant, constituted a breach of the covenant, and entitled the plaintiff to nominal damages, without having made any payment. Such covenant is broken as soon as made, if ever. When the plaintiff paid the excess of $400, he became entitled to recover that amount as damages for the breach. By the terms of the covenant it appears to have been contemplated that the lands were to remain, for a time at least, subject to the lien of $12,400, and it would' not be reasonable to require the grantee to pay that sum, as well as the excess, to entitle him to a substantial indemnity for the conceded breach of the defendant’s covenant. The judgment should be affirmed.

Denio, Ch. J., expressed no opinion; all the other judges concurring,

Judgment affirmed.


source: Caselaw Access Project

author: Wright, J.

license: Public Domain

text:
    Horton v. Davis.
    An execution creditor, who, at the sale ■ of his debtor’s chattel upon a •previous execution, purchased it subject to a mortgage which the officer making the sale assumed to be a valid lien prior to both executions, is estopped from disputing the validity of such mortgage.
    Appeal from the Supreme Court Action to recover $565, secured by mortgage of a vessel against parties who, as alleged, had bought the vessel subject to the mortgage, and disposed of the same to their own use. On the trial, the jury found, by consent, a verdict for the plaintiff for $425 damages, subject to the opinion of the court at general term on a Case. The court, in the second district, ordered judgment on the verdict, and the defendants appealed to this court. The facts are sufficiently stated in the following opinion:

      William Wickham, for the appellants.

      George Miller, for the respondent.
   Wright, J.

I think the view taken by the Supreme Court of this case was the correct one. The plaintiff had a mortgage on a vessel owned by one Wooster, which was'recorded in the office of the collector of the port of Sag Harbor, on the 8th August, 1857, and a copy thereof filed in the clerk’s office , of the town, in which the mortgagor resided, on the 19th October, 1857. William M. Betts, a creditor of Wooster, obtained an attachment from a justice of the peace, under which a constable attached the vessel on the evening of the last named day. The defendants had recovered a judgment against Wooster, on the 26th September, on which an execution, was issued and " -delivered to the sheriff of Suffolk county, on the 14th October, 1857; and the same was levied on the vessel after and subject, to the attachment by the same constable, who had been specially deputized by the sheriff for that purpose. Betts having obtained a judgment in his attachment proceedings, sold the vessel on the 2d November, 1857, subject to the plaintiff’s mortgage, for seventy dollars. The defendants became the purchasers. The proceeds of the sale satisfied Betts’ execution, and left an overplus of $20.81,- which was applied on the defendants’ execution. After the purchase of the vessel by the defendants, and on the same day, by their direction, the constable again advertised the vessel for sale, under their execution, and on the 9th NTovember sold her under such .execution, absolutely, to the defendants, for the sum of two hundred dollars, and they soon afterwards disposed of her.

The effect of the sale, under Betts’ execution, was to divest Wooster, the mortgagor and debtor, of all right or interest in the vessel, and the defendants, by their purchase, became the absolute owners of the property, except as against the mortgagee, the plaintiff in. this suit. As purchasers, they had notice of the plaintiff’s mortgage, and recognized its existence and validity, purchasing the vessel for a comparatively trifling sum, because of the incumbrance upon it.

The purchase of the vessel by the defendants, on .the sale under the justice’s execution, and the indorsement of the over-plus money on the execution which had been levied upon the vessel, extinguished the lien thereof and expended the execution upon that property. The second sale under the defend ■ ants’ execution was a nullity, as the prior sale under the justice’s execution, and the purchase by the defendants, extinguished all the title of Wooster, the debtor, to the vessel, and left the defendants the owners thereof, .as they were on the day of their first purchase, subject to the plaintiff’s mortgage. The defendants, as purchasers, were estopped from denying the validity of the mortgage. They could not purchase the vessel, subject to. the mortgage, for a trifling sum, and then turn round and treat .the mortgage as a nullity.

The plaintiff’s mortgage was not filed in the office of the clerk of the town in which the mortgagor resided; until the 19th October. It was, therefore, absolutely void, as against the creditors of the mortgagor, and as against subsequent purchasers in good faith, prior to that time. (Laws of 1833, chap. 279.) It was recorded, it is true, in the office of the collector, of the port of Sag Harbor, on the day of its date, but this did not supersede the necessity of filing it in the town clerk’s office, to give it any validity, as against the creditors of the mortgagor, or subsequent Iona fide purchaser: (The Ǣtna Insurance Co. v. Aldrich, decided at December term, 1862.) It was not invalid, however, as against Betts, the attaching creditor, for his attachment was not served until after it was filed; nor .was it invalid as against the defendants, as purchasers of the vessel, for they bought with notice of it, and treating it as good.

It was invalid as against the defendants, as creditors of Wooster, when their judgment was recovered and execution thereon issued to the sheriff; but I concur with the Supreme Court, that their relation to Wooster, as creditors, so far as the mortgaged property was concerned, ceased by the sale under the justice’s execution, and that consequently they do not stand in a position to test the validity of such mortgage.

There is nothing in the point now raised that the verdict being for the whole value of the property, it is erroneous. The parties consented to the amount of verdict, as rendered by the jury: whether it was for the whole value of the property can only be conjectured, as the fact does not appear from the case. But if it had been, and there had been no consent of the parties, it was not error, as the case showed that after the second sale, the defendants converted the vessel to their own use. They sold her absolutely to other parties, in repudiation of the claim of the plaintiffs.

The judgment of the Supreme Court should be affirmed.

Judgment affirmed.


author: Rosekrans, J. Wright, J., (dissenting.)

text:
    Graves v. Berdan.
    At common law, and independently of the statute (ch. 345 of 1860), the lessee of apartments in the, upper story of a building, where there is no covenant, by either landlord or tenant, to rebuild, is discharged from his covenant to pay rent 'hy the burning of the building so that his enjoyment of the space in air demised to him becomes thereby impracticable.
    Otherwise, it seems, where the demise is such as to give the tenant an interest in the soil, and to authorize him to rebuild, so that thereby, or otherwise, he may have some beneficial enjoyment of the demised premises.
    Appeal from the Supreme Court. Upon the trial in "the City Court of Brooklyn, before Judge Culver, without jury, he found these facts : In May, 1856, the defendant leased from the plaintiff, for the term of five years, certain rooms and-passage ways in the basement, the ground story, and on the second floor of a large building known as the City Central Hall, in Brooklyn, covenanting to pay, as rent therefor, yearly, the sum of $2,700, in equal quarterly payments. The building was also occupied by other persons, to whom apartments had been separately let. On the 6th May, 1857, the building was totally destroyed by fire. Soon after the casualty the plaintiff entered upon the land and removed the ruins of the walls of the building and other rubbish, and the defendant removed the machinery, brickwork and materials which had been introduced therein by him; and the plaintiff afterwards erected a building one story high, upon a portion of the ground formerly covered by the destroyed building, beneath a portion of the premises leased to the defendant, but not reaching up to the same; the new building not encroaching upon or including any portion of the space demised to the defendant. After the fire, the premises (except as above stated) remained vacant, and not used or occupied by either party. The lease contained no stipulation on the part 'of either landlord or tenant for rebuilding. The action was to recover the rent for a quarter subsequent to the fire. The judge ordered judgment for the plaintiff. Upon appeal to the Supreme Court, the judgment was reversed and the plaintiff appealed to this Court.

      John Winslow, for the appellant.

      E. H. Kimball, for the respondent.
   Rosekrans, J.

The opinion delivered by Justice Emott in this case, in the Supreme Court, is a correct exposition of the law applicable to it, and for the reasons stated therein, the judgment should be affirmed. The case of Stochwell v. Hunter (11 Metc., 448), may be added to the authorities cited by Justice Emott to show that alease of basement rooms, or chambers, in a building of several stories in height, without any stipulation, by the lessor or lessee, for rebuilding, in case of fire or other casualties, gives the lessee no interest in the land upon! which the building stands, and that if the whole building is ■ destroyed by fire, the lessee’s interest in the demised rooms is . terminated, and the lessor may, after the destruction of the - building, enter upon the soil and rebuild upon the ruins of . the former edifice.

It may be added that at common law, where the interest of the lessee in a part of the demised premises was destroyed by the act of God, so that it was incapable of any beneficial enjoyment, the rent might be apportioned. In Rolle’s Abridgment, 286, it is said that if the sea break in and overflow a part of the demised premises, the rent shall be apportioned for though the soil remains to the tenant, yet as the sea is open to every one, he has no exclusive right to fish there. A distinction is taken between an overflow of the land by the sea, and fresh water, because, though the land be covered with fresh water, the right of taking the fish is vested exclusively in the lessee, and in that case the rent will not be apportioned. In the latter case the tenant has a beneficial enjoyment, to some extent, of the demised premises, but in the former he has none, and if the use be entirely destroyed and lost, it is reasonable ' that the rent should be abated, because the title to the rent is ; founded on the presumption that the tenant can enjoy the ; demised premises during the term. (Com. Land, and Ten., 218; Gilb. on Rents, 182.)

Where the lessee takes an interest mthe soil upon which a building stands, if the building is destroyed by fire, he may use the land upon which it stood, beneficially, to some extent, without the building, or he may rebuild the edifice; but where he takes no interest in the soil, as in the case of a demise of a " basement, or of upper rooms in the building, he cannot enjoy the premises in any manner after the destruction of the building, nor can he rebuild the edifice. He cannot have the exclusive enjoyment of the vacant space formerly occupied by the demised rooms. The effect of the destruction of the building, in such a case, is analogous to the effect of the destruction of demised premises by the encroachments of the sea, mentioned in Eolle’s Abridgment; and the established rule for the abatement or apportionment of the rent, should be applied in the former as well as in the latter case. The same reason exists for its application in both cases.

But even if the lessee’s interest in the demised apartment, in a case like this, was not terminated by the total destruction of the building, it may be doubted whether the lessee- could recover ren< so long as he failed to give to the demised upper rooms the support necessary to them for special enjoyment. The rule seems to be settled in England, that where a house is divided into different floors or stories, each occupied- by different owners, the proprietor of the ground floor is bound, by the nature and condition of his property, without any servitude, not only to bear the weight of the upper story, but to repair his own property so that it may be able to bear such weight. The proprietor of the ground story is obliged to uphold it for the support of the upper story. (Humphrey v. Brogden, 12 Q. B., 739; S. C., 1 Eng. Law and Eq., 241; Rowbothem v. Wilson, 36 id., 236; Harris v. Roberts, 6 El. and Br., 643; S. C., 7 id., 625.) In the case last cited the duty of such support is recognized as a general common-law right. In a lease of upper rooms by the owner of the entire building, a covenant should be implied on the part of the lessor to give such support to the upper rooms as is necessary for their beneficial enjoyment. It has been decided in this court that the statute forbidding the implication of covenants in conveyances of real estate, does not apply to leases for years. (Mayor of New York v. Maybee, 3 Kern., 151; Vernam v. Smith, 15 N. Y., 332, 333.)

The judgment should be affirmed.

Denio, Ch. J., Selden, Balcom and Marvin, Js., concurred.

Wright, J., (dissenting.)

It has long been the doctrine of the English courts, as well as our own, that upon a lease for years, with a covenant to pay a stipulated annual rent, the rent is payable by the less^üto the end of his term, though the property be destroyed by fire (Paradine v. Jane, All., 27; Monk v. Cooper, 2 Stra., 763; Belfour v. Weston, 1 Term, 310; Weigall v. Waters, 6 Term, 488; Hallett v. Wyler, John., 44; 3 Kent’s Com., 612), and that the lessee has no relief against an express covenant to pay the rent, either at law or in equity, unless he has protected himself by a stipulation in the lease, or the landlord has covenanted to rebuild. (Gates v. Green, 4 Paige Ch., 355; Fowler v. Balt 6 Mass., 63; Philips v. Stevens, 16 Mass., 238.) Harshly as this rule operated in many cases, it was deemed so firmly settled in this State, that in 1860 the legislature interfered, and, by statute, provided, “ That the lessees or occupants of any building which shall, without any fault or neglect on their part, be destroyed, or be so injured by the elements, or any other cause, as to be untenantable and unfit for occupation, shall not be liable or bound to pay rent to the lessors or owners thereof, after such destruction or injury, unless otherwise expressly provided by written agreement or covenant; and the lessees or occupants may thereupon quit and surrender possession of the leasehold premises, and of the land so leased or occupied.” (Laws of 1860, ch. 345.) The foundation of the rule, as stated by Sergeant Williams, in his note to Walton v. Waterhouse (2 Saund., 422), is this: “ When the law creates a duty, and the party is disabled to perform it, without any default in him, and he has no remedy over, the law will excuse him; but when the party, by his own contract, creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract.” In a case where a lessee binds himself, by express covenant, to pay the rent during the term, and there is no exception in the lease of casualties by fire, notwithstanding the house should be burnt down by accident, he is bound to pay, for the simple reason that he has bound himself by an express covenant to do so.

But it is said that another principle controls where the demised premises (as in this case) consists of rooms in a building and not the whole building, viz.: that by a total destruction of the building containing the rooms, the lease itself, and all rights and interests under it, terminate. The argument by which the contract of letting is avoided, and the lessee is absolved from his express covenant to pay the rent during his term, is ingenious, but I think without authority to support it. The contract of the lessee, it is claimed, is distinguished from ordinary contracts by the peculiar character of the payment he undertakes to make, that is, to pay rent, which is defined to be certain profit issuing yearly out of lands and tenements corporeal, in retribution for their use; and when the estate, out of which the rent issues, is gone, and the thing demised no longer exists, nothing remains to support the covenant, or out of which the rent can issue. But if there can be any solid distinction between an express contract to pay rent for demised premises, and any other ordinary contract, growing out of the fact that the estate demised has absolutely ceased to exist, that would not be this case. It is conceded that if the defendant had been the lessee of the entire building, though it had been totally destroyed by fire, he would have been bound to pay the rent; and that, in such case it could not be said that the estate, from which the rent was to issue, had ceased to exist. Nor, when the demised premises consist of parts, and not of the entire building, can the lessee’s estate, in contemplation of law, be considered as gone. The building is a part of the land, and there may be several distinct tenements under the same roof; and tenements are as essentially distinct when one is under the other, as when one is by the side of the other. (Long v. Bacon, 4 Mass., 575; Cheesebrough v. Green, 10 Conn., 318; Proprietors of Meeting House in Lowell v. City of Lowell, 1 Metc., 538.) There can be no doubt that the subject matter of the demise, in this case, was, in the eye of the law, as much land as the soil on which the building stood. A lease of a distinct portion of a house is a conveyance of an interest in real estate. (Sprigg v. Cro. Car., 554; Inman v. Stamp, 1 Stark., 10.)f' Can it, therefore, make any difference that the land is leased in distinct portions to several instead of but one tenant, or because it may become physically impossible for each of the tenants to rebuild' or reconstruct his portion of the demised premises, he is exonerated from his covenant to pay the rent ? I think not. But whether one of several tenants of rooms in a single building is to be regarded as having any tangible interest in any portion of the land covered by the building or not, or whether a lease of rooms in a building carries only an estate in the particular rooms demised, and upon a total destruction of the building, no estate, in legal contemplation, remains, out of which rent can issue, still the tenant having covenanted to pay the rent, would be liable on his covenant. 3STo legal distinction, growing out of the peculiar character of the payment to be made, can be taken to relieve him from his express undertaking to pay. When the lessee of -demised premises covenants to rebuild, he is bound to do so, although the tenement be destroyed by the elements, without any default on his part, for he has, by his own contract, created the duty or charge upon himself. So also (says Sergeant Williams), he “ is bound to pay the rent during the term, though the house should be burnt or blown down, if there be an express covenant for payment of the rent, for the same reason and upon the same principles, that he is bound to rebuild, namely: because he has bound himself by an express covenant to pay the rent.” (Walton v. Water 2 Saund., 422, note 2.) This was undoubtedly the rule of the common law, and it was only competent for the legislature to change it, which has been done since this action arose.

The facts found do not show an eviction. The landlord removed the ruins of the walls of the building, and other rubbish, and the tenant removed the machinery, brickwork and materials which had been introduced by him, and this without objection from either party. The new building erected by the plaintiff ‘does not reach upon any portion of the space' demised to the defendant, but the same has remained vacant and unoccupied since the fire. The fact is not found that the landlord took possession of the ruins for the purpose of rebuilding, without the consent of the tenant; nor with his assent. Indeed, all that was done, so far as the demised premises were concerned, was the removal, by both parties, of a certain quantity of rubbish, &c., therefrom.

I think the judgment should be reversed, and that of the City Court of Brooklyn affirmed.

Davies, J., also dissented.

Judgment affirmed.


author: Davies, J. Cowen, J., Balcom, J.

text:
    The Exchange Bank v. Monteath et al.

    Where a principal authorized an agent to draw and negotiate commercial paper for his use, and by a course of dealing in the recognition of such paper, drawn for legitimate purposes, had accredited drafts having nothing on their face to discriminate them from such as the agent had the right to issue, he is responsible to a purchaser for value and without notice, though the paper was issued fraudulently for the accommodation of a third party.
    The doctrine of Aymar v. North River Bank (3 Hill, 263), reaffirmed for the fourth or fifth time, notwithstanding the known reversal of the judgment in that case by the late Court for the Correction of Errors—the reversal remaining unreported, except by such posthumous remembrances as the present.
    Appeal from the Supreme Court. Action upon three drafts made by the defendants, Joy and Monteath, as drawers to their own order and indorsed by them as agents of the Albany and Canal line of tow boats, dated at Albany, June v 20th, 22d and 23d, 1848, drawn upon and accepted by Alfred Hoyt, agent, 16 South street, Hew York, two for $3,500 each and one for $3,000. The drafts were discounted by the plaintiff in the usual course of business, and the proceeds remitted to the Canal Bank of Albany, from whom the draft had been received. The plaintiff had previously discounted a large amount of similar paper, all of which had been paid at maturity. At the time these drafts were drawn, all the defendants, including Joy and Monteath, and Hoyt were partners, doing business under the name and style of the Albany and Canal line of tow boats, and Joy and Monteath were the agents of the firm at Albany, and Hoyt was the agent at Hew York. ■ It had been the practice of the agents to raise money for the use of the partnership, by procuring the discount of paper like that in controversy in this action. It was admitted in the answer that Joy and Monteath were “ authorized to draw, indorse and accept such checks, drafts and bills of exchange for them, the said defendants, and such only as were necessary to the carrying on of the business and for the use and benefit of the said Albany and Canal line of tow boatsand the answer also admitted that the defendants had an agent in the said city of Mew York, the said Alfred Hoytj “who was authorized to transact and do business for said line, and was also authorized to draw, indorse and accept such checks, drafts- and bills of exchange for said defendants, and such only as were for the use, benefit and business purposes of said line.” It was proved on the trial that the drafts were not drawn for the use of the Albany and Canal line of towboats, but that Joy, who was a director of the Canal Bank, which was in a failing condition,, made them at the request of the cashier of that bank for its use and accommodation, framing them, at his suggestion, at such dates and in such form as would give th'em the appearance, of ordinary paper drawn in the legitimate business of the line, and similar to paper which the Canal Bank had previously procured to be discounted, ■ or re-discounted, by the plaintiff. The proceeds of the drafts were remitted by the plaintiff to the Canal Bank, and passed by that bank, in a pass book of the Albany and Canal line with it, to the credit of said Albany and Canal line. This credit would seem to have been made soon after the drafts were discounted, and on the ascertainment of the Canal Bank of the net proceeds of the discount. Upon the trial, by direction of the judge, a verdict was rendered for the defendants, and the exceptions taken having been directed in the first instance to be heard at the general term, judgment was there given for the defendants, and the plaintiff appealed to this court.

      Francis Fellows and John H. Reynolds, for the appellant.

      John K. Porter, for the respondents.
   Davies, J.

There are two grounds upon which, in my opinion, the plaintiffs can recover upon these drafts, and the defendant’s liability upon them is unquestionable.

1. The drafts were made and issued by the two partners, Joy and Hoyt, in the name of the partnership, and although the proceeds of the drafts did not inure to its benefit, it must be held liable.

2. The acts of Joy and Hoyt in making and issuing these ■ drafts, must, under the circumstances, be held as binding upon the defendants, their principals, for whom they acted as agents; and as such, clearly and undeniably, they had authority to make, issue and put in circulation, such checks, drafts and bills of exchange.

It is to be remarked that there is no controversy that the plaintiffs are Iona fide holders of the drafts, paying full value for them on an ordinary and accustomed discount. They had previously discounted large amounts of similar paper, made by the same parties and in the same form, and which had been regularly paid at maturity. These drafts came to them in the same way without any notice or circumstance leading or warranting or suggesting the suspicion that they were not of the same character as the paper previously discounted by them. How I suppose that the principle is familiar and incontrovertiblv settled, that in a copartnership firm each of the partners is the agent of the partnership, as to all matters within the scope of the partnership business, and can bind them effectually by making, indorsing and accepting bills and notes in such business. But such partner has no more authority than a mere stranger to make them a party to paper issued in his own business or for the accommodation of another person. If, however, he gives the partnership note or acceptance for his own debts or for the accommodation of a third person, it 'is void in the hands of the payee, who is necessarily cognizant of the consideration and of all the facts connected with its inception ; but when such note or bill is negotiated to a iona fide holder, the firm is precluded from questioning the authority of the partner and is effectually bound. The cases by which this doctrine is established and illustrated, are very numerous. (Livingston v. Hartie, 2 Caines, 246; Lansing v. Irvine, 2 Johns., 300; Laverty v. Burr, 1 Wend., 529; Williams v. Walbridge, 3 id., 415; Boyd v. Plumb, 7 id., 309; Gansevoort v. Williams, 14 id., 133; Joyce v. Williams, id., 141; Wilson v. Williams, id., 146; Steel v. Catskill Bank, 18 id., 466; S. C., 15 id., 364; Farmers’ Bank v. Butchers’ and Drovers’ Bank, 4 Kern., 627; S. C., 16 N. Y., 135.)

But if Joy and Monteath and Hoyt, had not been partners, it is admitted by the answer that they were the agents of the copartnership, and as such had authority to draw, indorse and accept such checks, drafts and bills of exchange, for them, the said defendants, and such only as were necessary to the carrying on of the business, and for the use and benefit of the said Albany and Canal line of tow boats. It is, therefore, conceded that the agents had the authority of. the defendants to issue drafts, notes and bills of exchange; but that such authority was limited to such drafts, notes and bills as were necessary to carry on the business of the defendants, and for their use and.benefit. These drafts being negotiable or commercial paper and the plaintiffs being bona fide holders, the same question arises as was presented in the case of the North River Bank v. Aymar (3 Hill, 263). The very learned and exhaustive opinion of Cowem, J., in that case, leaves little to be said. That case was very like the present in the aspect we are now considering it. There the notes were made by'an attorney, and the power under which he acted, authorized him to draw notes in the name of his principal “ to his use.” The notes then in controversy were not made or indorsed in the business of the principal, nor for his use or benefit, but for the accommodation of the payees therein who obtained them from the attorney, and who procured their discount by the plaintiffs in that case.

Cowen, J.,

thus correctly states the rule of law: That the power conferred by the letter of attorney, was limited to notes in the proper business of the testator, and that it would have been so independently of.the words “to his use.” That there is nothing in the nature or effect of such a power which, authorizes the attorney to use it for his own benefit, or for the benefit of any one except the principal And that if the limitation be such that an appointee would be bound to • notice the fact that the attorney overstepped it, then these plaintiffs were properly cut off by the court below from their claim upon the contested notes and indorsements. He further said, that in dealing with the agent or attorney they were not required to stop and ascertain whether the notes had been delivered out by him upon a consideration passing to his principal : that he, the principal, had put his agent in a condition which enabled him to impose upon strangers, by apparently pursuing his authority. The principal had given a discretion to speak for him both by words and actions. The neglect or falsehood of the agent, therefore, was legally imputable to the principal. The paper being issued without consideration, whether by the agent or by the principal, was indeed void as between the original parties; but there being in each case a power to issue paper valid in form, it could not be impeached in the hands of a bonas fide holder.'

When this present case was before the general term of the Supreme Court (17 Barb., 171), that court very properly and correctly held, that it was controlled by the decision in the case of the North River Bank v. Aymar; that it was a case directly in point and should be regarded as an authority, decisive of the question then presented. In the opinion delivered in this court, in the case of Mechanics' Bank v. New York and New Haven Rail Road Company (3 Kern., 633), in alluding to this case of North River Bank v. Aymar, the learned judge said, the decision of the Supreme Court in that case, was reversed in the Court of Errors, but the case in that court is not reported. The learned judge added, the reversal, however, proceeded, as he learned, upon a doctrine directly opposite to that held by the Supreme Court. This statement, and the decision by this court in the Mechanics’ Bank case, were held and generally regarded, as overthrowing the authority of the case of North River Bank v. Aymar, and when this present case again came before the Supreme Court at general term (24 Barb., 371), the same learned justice who had delivered the opinion of the court on the former hearing, gave the opinion then reported, and observed that when the case was before that court on the former application for a new trial, he was unable to find anything to distinguish it from the case of the North River Bank v. Aymar, and, upon re-examination, he still thought the two cases involved precisely the same question; that he thought the North River Bank case directly in point and decisive of the question. But he regarded the views expressed by this court in the Mechanics’ Bank case, as establishing a contrary doctrine, and as establishing the fact that the North River Bank case had been overruled by the Court of Errors. But this court subsequently, in the case of the Farmers' and Mechanics' Bank v. Butchers' and Drovers' Bank (4 Kern., 623; S. C, 16 N. Y., 125), had occasion to review the doctrine of the case of the North River Bank v. Aymar, and it received the emphatic approval of this court. Denio, Ch. J., in his opinion, says: “I am clearly of the opinion that- the case of the North River Bank v. Aymar, was correctly adjudged in the Supreme Court. If the Court of Errors laid down a different rule, in reversing that judgment, they ran counter, as I think I have shown, to a strong course of adjudication in that court and in the Supreme Court and overturned a legal position which was then well established in this State, and has since been repeatedly acted upon.” Selden, J., in his opinion, says : It is true that the decision in the case of the North River Bank v. Aymar, was reversed in the Court of Errors, but the opinions pronounced in that court have never been published, and consequently the views then expressed upon the point in question are unknown. Under these circumstances, the principal reasons against the reconsideration of a question, which has been passed upon by the court of last resort, viz., that the public needs a fixed and definite rule, upon which it can rely in the transaction of business, loses most of its force. The opinion of the Supreme Court, which is published at large in the reports, is more likely to be taken as the rule, than that of the Court of Errors, to which attention is rarely directed. The question, therefore, should, I think, be considered as still open for examination; and I have little hesitation in holding that it was properly decided by the Supreme Court.” The doctrine of the case of the North River Bank v. Aymar, was re-affirmed in this court, in the case of Griswold v. Haven (25 N. Y., 595), decided at the last December term, and must now be regarded as established on an impregnable basis. It is well sustained by authority,'sound reasoning and well-established principles, and it should be firmly adhered to by the courts. It receives my entire assent, and is entirely decisive of the plaintiff’s right of recovery on the three drafts involved in the present action.

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

Balcom, J.

There can be no doubt that Joy’s drafts, in the name of Joy & Monteath as agents of the Albany and Canal line of tow boats, for legitimate purposes in the business of the line, bound the defendants. Joy & Monteath were not mere joint agents; each had authority to do business for the line, and the signatures of both as agents, though written by one, bound the defendants. It is true that Joy testified on his direct examination, that he and Monteath were joint agents, and not partners, in transacting the business of the line; but on his cross-examination he said, he was in the habit of signing for the defendants; that the defendants got paper like the drafts in question, discounted at the Canal Bank, previously to these for years, whenever they wanted funds; that he and Monteath had been defendant’s agents twelve or' thirteen years, and that there was nothing in the form of these drafts different from those they had usually drawn in the business of the company or line. These drafts, therefore, must be regarded as executed in a manner that would' bind the defendants, if they had been used in the legitimate business of the line or company.

There is nothing on the face of these drafts to distinguish them from those properly used by Joy & Monteath, as agents, in the business of the defendants, and being negotiable, I am unable to see why they are not valid in the plaintiff’s hands, its cashier having discounted them before maturity in good faith, in the regular course of business, and the Canal Bank having received the proceeds thereof.

The plaintiff took the drafts before maturity and under circumstances that render it a bona fide holder thereof for value, within the decision of the Supreme Court in the North River Bank v. Aymar (3 Hill, 262); and this court held in The Farmers' and Mechanics' Bank v. The Butchers' and Drovers' Bank (16 N. Y., 125),. that that case was correctly decided by the Supreme Court, notwithstanding the fact that it had been reversed by the Court for the Correction of Errors.

I have never doubted that the Supreme Court properly decided the case of the North River Bank v. Aymar, and I am of the opinion we should now hold that their decision was correct, for the reasons assigned by Judge Selden in The Farmers' and Mechanics' Bank v. The Butchers' and Drovers Bank (supra).

In this view of the law, the fraudulent purpose for which the drafts in question were made by the agents of the defendants and negotiated by the cashier of the ■ Canal Bank, is not a defence to them in the hands of the plaintiff.

The rule which makes- the defendants liable upon the drafts is succinctly and clearly stated by Professor Parsons. (1 Parsons on Motes and Bills, ed. of 1863, p. 108.) He says “If an agent be authorized generally to execute notes in the name of and for the benefit of his principal, and he executes notes in his principal’s name for the fraudulent purpose of raising money for his own use, such notes will nevertheless be binding upon the principal in the hands of a bona fide holder.”

The defendants by employing Joy & Hoyt, and giving them authority to draw, accept and negotiate drafts in the business of the Albany and Canal line of tow boats, enabled them, in conjunction with the cashier of the Canal Bank, to make the drafts in question and negotiate them to an innocent person for value,' for a purpose outside of the business' of the line or company; and the defendants come within the rule, that when one of two innocent persons must suffer from the fraud of a third, he shall suffer who by his indiscretion has enabled such third person to commit the fraud. (13 Wend., 572; 7 Paige, 69; 1 Hill, 307; 2 id., 465; 6 Wend., 620; 23 id., 268.)

When the drafts were presented to the plaintiff, its cashier was authorized therefrom to believe they were drawn by Joy & Monteath, and accepted by Hoyt as agents, upon sufficient authority, in the regular business of the defendants, and that the cashier of the Canal Bank was duly authorized to indorse them and forward the same to the plaintiff to be discounted . in the regular course of business; and upon this state of facts the defendants were bound to pay the drafts, notwithstanding the fraudulent purpose for which they were made and negotiated, because Joy & Hoyt acted within the authority conferred on them by the defendants in drawing and accepting them.

There is no good ground for the position taken by the defendant’s counsel, that the cashier of the Canal Bank acted as the agent of the plaintiff in receiving the drafts from Joy or Hoyt, and forwarding them to the plaintiff. The opposite ground is the tenable one; and the cashier of the Canal Bank must be deemed the agent of the defendants in the transaction; for the plaintiff’s cashier had the right to suppose they had authorized and requested the Canal Bank to send the drafts to the plaintiff for discount, and that the cashier of that bank did so for the benefit of the defendants.

For the foregoing reasons I am of the opinion the judgment in the action should be reversed and a new trial granted, costs to abide the event.

All the judges were for reversal—Weight, J., on the ground that the question whether the plaintiff was a Iona fide holder of the draft, should have been submitted to the jury.

Judgment reversed, and new trial ordered.

       The doctrine of this case has lately received the sanction of the judicial committee of the Privy Council in two cases, viz., The Bank of Bengal v. Macleod, and The Same v. Fagan (7 Moore P. C. Cas., pp. 35. 61).


author: Selden, J. Emott, J.

text:
    Looney, Supervisor, &c., v. Hughes et al.

    The act (1 B. S., p, 400, § 13), requiring a county treasurer to issue a warrant against a delinquent town coEector in twenty days is directory merely; and the issue of such warrant-after the expiration of that time is valid as the foundation of an action against the collector’s sureties.

      B seems that the issue and return of such a warrant by the 'treasurer is a condition precedent to the maintaining a suit by the supervisor against the coEector or his sureties on his official bond.
    It furnishes no defence to the sureties of a collector that, if the warrant against their principal had been issued within the time prescribed by law, the amount due might have been coEeeted of him. The provision is for tile benefit of the public, and forms no part of the contract of the sureties.
    Appeal from the Supreme Court. In 1855 Osborn Jewell was collector of taxes of the town of Lancaster, in the county of Erie, and in November of that year, he, together with the defendants, as his sureties, executed to Eli H. Bowman, then supervisor of the town, the bond required by the statute (1 It. S., 346, § 19), in the penalty of thirteen thousand, one hundred and twenty-two dollars and twenty cents, conditioned as follows, viz.:
    “ Whereas, The above bounden Osborn Jewell has been duly chosen collector of said town of Lancaster; now, therefore, the condition of this obligation is such, that if the said .Osborn Jewell shall well and faithfully execute his duties as such collector, then the above obligation to be void, otherwise to remain in force.”
    The bond was delivered to and duly approved by the supervisor on the 30th November, 1855, and on the same day ' the assessment roll and warrant were put into the hands of Jewell, by .which he was directed to collect the sum of $6,561.20, and after paying to the town officers several sums specified in the warrant, to pay the residue of the tax, amounting to $4,860.40, to the treasurer of the county of Erie, on or before the 1st day of February next thereafter.
    The collector paid to the county treasurer a portion of the latter sum, but failed either to pay or to make a return as to the residue, either before, at or after the time required by his warrant. The sum thus left unpaid amounted to $2,259.91.
    On the 10th of April, 1856, the treasurer of Erie county, assuming to act under the statute (1 E. S., 400, § 13), issued a warrant to the sheriff of the county, directing him to collect the deficiency of the property of the collector, which warrant was returned by the sheriff on the 20th of May, 1856, wholly uncollected.
    Within a few days after the return of the warrant, the county treasurer gave notice of such return to the then supervisor of Lancaster, Henry L. Bingham, who afterwards brought this action upon the bond. After the commencement of the action, and before the trial, the present plaintiff, having succeeded Bingham as supervisor, was, by order of the court, substituted in his place upon the record.
    Upon the trial, it appeared that Jewell absconded about the 4th of April, 1856,- and evidence was given showing that at or about that time he had in his possession a sum in cash and county orders amounting to $1,500, or more. It was claimed, on the part of the defendants, that the issuing of the warrant by the treasurer, within twenty days after the failure of Jewell to pay, .was a condition precedent to the right to bring this suit upon the bond; and also, that under the proof in the case, the delay on the part of the treasurer exonerated the sureties.
    Some small sums having been realized and paid to the county treasurer, from sources not necessary to be particularized here, the court directed a verdict for the plaintiff for the balance remaining due, amounting to $2,118, subject to the opinion of the court at general term. The general term ordered judgment for the plaintiff, and the defendants ap- : pealed to this court.

      John L. Talcott, for the appellants.

      Johnson Parsons, for the respondent.
   Selden, J.

It is true, as claimed by the plaintiff’s counsel, that no express statutory provision was necessary to enable supervisors to sue upon bonds directed to be given to them by the collectors of towns, because, as was said by Bronson, J., in Supervisor of Galway v. Stimson (4 Hill, 136), as a general rule, “ all public officers, though not expressly authorized by statute, have a capacity to sue commensurate with their public trusts and duties.” It does not, however, follow from this, that the provisions of our- statute in relation to the prosecution of such bonds are entirely without effect upon this right of the supervisor, It is, without doubt, a well-settled principle, that where a right of action exists at common law, and an indefinite remedy is given by statute, the remedy at common law is not taken away, unless such an intention is clearly . manifested in the statute. In this case, the bond itself is the creature of the statute. Its form is prescribed and 'its effect controlled by the provisions of the statute. Independently of any statutory provisions on the subject, the obligors-in such a bond would only be liable to pay the damages which might accrue in consequence of any default upon the part of the collector; and if it could be shown, therefore, that the tax, or any portion of it, was not collectible, the responsibility of the obligors would be pro tanto reduced. Hnder our statutes, however, any sum left unpaid by the collector, unless properly returned as uncollectible, is regarded as a specific debt for which the collector and his sureties are liable. (Muzzy v. Shattuck, 1 Denio, 233.)

This conclusion is the necessary result of the provisions' of the statute concerning “ the manner in which taxes are to be collected, and. the duties of the collector.” (1 R. S., 400, §§ 13, 14, 15, 16.) Section 13 provides, that if the collector shall fail to pay the sums required by his warrant, or either of them, or to account for the same as unpaid, the county treasurer shall issue a warrant to the sheriff to collect such sum as shall remain unpaid, or unaccounted for, out of the property of the collector. Section 14 requires the sheriff to execute the warrant, and pay over the moneys collected to the county treasurer. Section 15 directs that the sheriff shall state in his return the sum collected upon the warrant, and if anything remains unpaid; that he shall also state that there is no property of the collector out of which the same could be levied. It then directs that the county treasurer shall forthwith give notice to the supervisor of the town of the amount remaining due from the collector. Then follows section 16, which provides as follows: “ The supervisors shall forthwith cause the bond of such collector to be put in suit, and shall be entitled to recover thereon the sum due from such collector, with costs of suit.”

Now, suppose the supervisor, as the plaintiff’s counsel contends he might, should bring a suit upon the bond immediately after the collector’s default, in not paying over the money without waiting for the issue and return of the warrant of the county treasurer. What would be the amount of recovery in such a case ? Could the supervisor, in such an action, founded purely upon his common-law right, avail himself of the provision in section 16, entitling "him to recover the “sum due” from the collector? What is the “ sum due” there referred to ? It is, of course, the sum appearing by the sheriff’s return of the warrant to remain unpaid. Can an action be commenced to recover this sum, before the amount is ascertained, or before it is ascertained that any sum whatever will remain uncollected? I think, clearly not. In such an action as I have supposed, therefore, the recovery must be according to the rule of the common law, a conclusion which appears to me inadmissible. The same instrument can hardly bear two different constructions, and be subject to two different rules of damages for the same identical breach. It would seem, therefore, that no action could be maintained upon the bond until after the issue and- return of the warrant authorized, by section 13. As, however, it is not requisite in the decision of the case, to dispose of this question, I do not assume to pass definitely upon it.

The next question, and that upon which the case mainly depends, is whether the issuing of the warrant by the county treasurer, within the twenty days mentioned in the act, and its return within the time prescribed, are conditions precedent to any right of recovery upon the bond; in other words, whether the power to issue the warrant at all is absolutely limited to the twenty days. If the statute is merely directory as to the time, then it would follow that the judgment appealed from is right, because section 16 authorizes the suit to be brought whenever the supervisor receives notice of the return of the warrant, and no time is Emited for commencing such suit, after the notice is given.

The general rule on this subject is, as stated by Marcy, J., in The People v. Allen (6 Wend., 486),. that where a statute specifies a time within which a public officer is to perform an official act, regarding th$ rights and duties of others, it will be considered as directory merely, unless the nature of the act to be performed, or the language used by the legislature, show that the designation of the time was intended as a limitation of the power of the officer.”

Most of the instances in which this principle has been. applied have been cases where the act directed to be done was required for the public benefit alone, and where no private interests were directly and necessarily, involved. There is apparent force in the suggestion, that the sureties here have an interest in the prompt performance of his duty, by the county treasurer; that cases might well arise in which the whole debt would be collected from the property of the collector, and the sureties be thereby saved harmless, if the warrant was promptly issued.

There is .nothing, however, in the terms of the act to indicate that it was intended absolutely to Emit the power of issuing the warrant to the twenty days. • The provision was intended, at least in part, for the benefit of the public, and it has been held with great uniformity, that the public interests are not to suffer by the laches of any public officer. (United States v. Kirkpatrick, 9 Wheat., 720; Same v. Van Zandt, 11 id., 184; Same v. Nicholl, 12 id., 505; Dox v. P. M. General, 1 Pet., 325; People v. Russell, 4 Wend., 570.)

The case United States v. Van Zandt was very similar to this. The action was against the surety, upon the official bond of a paymaster in the army. By the “ act for organizing the general staff, and making further provision for the army of the United States,” it was, among other things, provided in the most imperative terms, that if a paymaster should fail to render his vouchers to the paymaster general for settlement of his accounts, for more than six months after his having received funds, ,he should be recalled and another appointed in his place.” This provision had not been complied with. On the contrary, the paymaster had been furnished with additional funds, after he had made default, and was liable to be removed; and yet it was held that the surety was not discharged. I can see very little, if any, difference in principle between that case and the present.' The argument was quite as strong there as here, that compliance with the provisions of the act might have operated to save the surety from much of his responsibility. The Court, however, adhered to the general rule that the public is not to suffer by the laches of its officers.

Besides, if we are to look out of the act itself for reasons, growing out of its operation, why it should be held to be imperative, we must look at the whole act and at all the interests which it involves. The town has an interest here, entirely distinct from that of the public at large, or the people of the county. This interest is as much to be regarded as that of the' sureties. The county treasurer is in no respect the agent or representative of the town, and is not subject to its control. Section 13, above referred to, provides that no warrant shall be issued for the collection of any moneys payable to the officers of the town, “ without proof, by the oath of such town officers, of the refusal or neglect of the collector to pay the same, or account therefor.” Mow, suppose the collector to have made default in paying over the sums directed to be paid to the officers of the town, and that these officers have made the necessary oath to authorize the issuing of a warrant, and yet the county treasurer neglects to issue it within the twenty days. Upon the theory of the defendants here, the town is entirely, remediless, and must lose-the whole tax, if so much remains unpaid, although the town is in no respect in default, as it could not compel the treasurer to act. This consideration shows, I think, the propriety of adhering, in this case, to the well-settled rule on the subject. It follows, from these views, that the provision in section 13, as to the time of issuing the warrant, should be held to be merely directory, and that a strict compliance, in that respect, is not essential to the liability of the sureties upon the bond.

This question was before this court in the case of Post v. Wicks, decided in December, 1861, and was disposed of in accordance with the foregoing conclusion. My attention was not called to that case until since the above was written.

There is a further question, which was not presented in the case of Post v. Wicks, viz.: whether proof that the defendants have been actually damnified by the omission of the county treasurer to issue the warrant in time, would change the result. If it would, I think the defendants proved enough upon the trial to entitle them to the benefit of the rule; But the authorities and arguments already adduced are, I think, decisive of this question. Those authorities proceed upon the ground that the public interests will not be permitted to suffer in consequence of the laches of a public officer. There is no case which tends to support the position taken by the defendants, except The People v. Jansen (7 John., 332). This case does not appear to have been followed, and seems hardly reconcilable with some of the later cases to which I have referred. But, conceding it to have been correctly decided, the principle . cannot, I think, be applied to the present case, for the reason, among others, that there was in the case of The People v. Jan sen no collateral interest to be affected as that' presented by the towns in cases like this. It is no answer to say that there would be no loss by the town in this case, because the principle, if sound, must have a general application. The statute could not be construed as imperative in a case like this, and merely directory in a case where, otherwise, the town would be a loser.

My conclusion, therefore, is that the judgment of the Supreme Court should be affirmed.

Emott, J.

The case of Post v. Wicks, recently determined in this court, is decisive to show, if authority were needed, that the performance of the various acts, authorized or required of the county treasurer, for the recovery of moneys in the hands of a collector who had made default or refused to pay over taxes, collected by him, is not a condition precedent to the liability of the sureties in the collector’s official bond. Their undertaking is that the collector shall well and faithfully execute his duties as such collector, and not that they will make good his failure to pay over moneys which shall come to his hands, provided all the means for the collection of such moneys have been diligently and exactly used by the public officers entrusted with them. When Jewell, the collector of the town of Lancaster, failed to pay over the taxes which he had collected according to the exigency of his warrant, a breach occurred of the condition of his bond and his sureties were liable. ■ If that liability has been discharged, it must have been by matter subsequent, releasing them from their obligation.

In one of the opinions delivered in the case of Post v. Wicks, just referred to, some stress was laid upon the fact that there was nothing in that case to show that the delay or neglect complained of, had in any respect prejudiced the defendant. •In that particular, the present case differs from that, because there was here some evidence, that if the treasurer of Erie county had issued the warrant authorized by the statute against this collector, as soon as the law directed, he might have recovered some, if not the whole of his deficiency. But the other opinion in the case referred to, asserts the distinct, and I think the correct doctrine, that these and similar provision of law, in regard to public officers, are intended for the protection of the public, and not for the security of sureties of these officers, and form no part of the contract with such sureties. The rule in regard to ordinary sureties, is' that they will be discharged where the creditor, after notice and a proper request, has neglected to prosecute the principal, and by his delay the collection of the debt from the principal- has. been rendered impossible, or the surety has lost his indemnity or security. In no case is a surety discharged by mere laches of the creditor, unless after a request to prosecute the principal. In the case of the People v. Jansen (7 J. R., 332), the neglect of the supervisors to prosecute defaulting loan officers, for a long period, and their indulgence and delay in the prosecution when it had been commenced, were admitted as a defence, and the provisions of the statute imposing prompt supervision and prosecution in such cases, seem to have been regarded as equivalent to a request by the sureties. But the doctrine of that case has been overruled by repeated decisions in our own courts, and a contrary rule laid down in the courts of the United States. (People v. Russell, 4 Wend., 570; Seymour v. Van Slyck, 8 id., 403; Albany Dutch Church v. Vedder, 14 id., 165-171; United States v. Kirkpatrick, 9 Wheat., 720; Same v. Van Zandt, 11 id., 184; Same v. Nicholl, 12 id., 505; Dox v. Postmaster-General, 1 Pet., 325; Locke v. United States, 3 Mass., 446.) These authorities must be regarded as having established the reasonable rule, that the directions of the public laws in such cases are not to be assimilated to a notice and request by a private surety for the prosecution of the principal, and that laches cannot be imputed to the State or people, for a failure on the part of these officers, to comply with such directions. These provisions of law are intended, as I have said, for the security and protection of the .government, and not for the benefit of the surety. The sureties for one public officer , will not be allowed to plead, in .their own discharge, the neglect of another to discharge a duty to the public. The matter upon ' which evidence was given in this case constituted no defence to this bond, and the judgment in favor of the plaintiff must be affirmed, with costs.

All the judges concurring,

Judgment affirmed.


author: Marvin, J.

text:
    Chase v. The New York Central Railroad Company.
    The penalty imposed by chapter 185 of 1857 upon a railroad corporation for exacting a greater rate of fare than is allowed by law, is incurred where’its conductor illegally required five cents in addition to the legal fare because the passenger had no ticket.
    Chapter 228 of 1857 allows the charge of five cents for not having a ticket , only when the company has its ticket office, at the station where the passenger starts, open at the time of starting, though this be at midnight and the statute imposes no duty upon the corporation of keeping its ticket offices open after 9 p. m.
    Appeal from the Supreme Court. Action to recover the penalty of $50 under the act of 1857, chapter 185, for asking and receiving a greater rate of fare than that allowed by law.
    The trial was before a referee, who found these facts: That the plaintiff, June 7, 1857, at half past eleven o’clock p. M., at the Oneida station of the defendant, in Madison county, the office of the defendant not being open, entered the car of the defendant to be transported to Syracuse, without having purchased a ticket. The conductor demanded of the plaintiff sixty cents as and for his fare to Syracuse, claiming five cents in addition to the usual rate of fare. . The plaintiff objected to paying more than fifty-five cents, but, upon the demand of the conductor, paid the sixty cents, and was carried from the Oneida station to Syracuse, a distance of twenty-five miles and 4,500 feet. He found, as conclusions of law, that’ the fare demanded and received by the conductor was a rate of fare greater by five cents than that allowed by law; also, that the defendant was not entitled to demand and receive of the plaintiff sixty cents as the fare, under chapter 228 of the acts of 1857; also, that the defendant thereby forfeited fifty dollars, by virtue of chapter 185 of Laws of 1857; also, that the plaintiff was entitled to recover of the defendant $50, and also the .five cents, in all $50.05; also, that the defendant was liable to the penalty for the act of their agent, the conducto!, without proof of any express authority or power conferred on him by the defendants to ask and demand the said-five cents.
    The defendant took separate exceptions to each of these conclusions.
    Judgment was entered in favor of the plaintiff, pursuant to the decision of the referee, which, on appeal, was affirmed at general term, in the fifth district, and the defendant appealed to this court.

      Loomis & Randall, for the respondent. .

      Sidney T. Fairchild,

    for the appellant, contended, among other things, that, as it was not bound by the statute to keep its ticket office open after 9 P. M., it could exact the five cents penalty for not having a ticket, though a passenger arriving after that hour found the office closed.
   Marvin, J.

The- defendant was only allowed, by law, to exact and receive two cents a mile for the fare of a passenger, except as modified by the act of' 1857, chapter 228, by which it is declared that if any person shall, at any station where a ticket office is established and open, enter the cars of the said company, as a passenger therein, without having first purchased a ticket for that purpose, it shall be lawful for the said company to demand or receive from such person a sum, not exceeding five cents, in addition to the usual rate of fare for the distance such person may desire to be transported. The plaintiff’s case did not come within the provisions of this statute. The ticket office was not open at the station where, and the time when, the plaintiff entered the cars as a passenger. The defendant, therefore, had no, right to demand and receive from the plaintiff the five cents in addition to the usual rate of fare.

By the act of 1857, chapter 185, it is declared that “ any railroad company which shall ask and receive a greater rate of fare than that allowed by law, shall forfeit fifty dollars; which sum may be recovered, together with the excess so received, by the party paying the same.” The defendant was required to carry way passengers on its road “ at a rate not exceeding two cents per mile.” (Act of 1853, ch. 76, § 7.)

It was argued, with much ingenuity, that the conductor did not ask and receive a greater rate of fare than that allowed by law; that he only demanded and received the five cents in addition to the usual rate of fare, basing the claim upon the ground that the plaintiff had entered the cars as a passenger, without having first procured a ticket for that purpose; and that, although the claim may not have been well founded, still the money not being demanded and received as “ a greater rate of fare than that allowed by law,” to wit, two cents per mile, the defendant could not be made liable to the penalty given by statute, for demanding and receiving these five cents.

This position is attempted to be sustained by a reference to authorities in support of the rule that penal statutes are to be construed rigorously. The position and argument of the counsel are not satisfactory. The great, leading rule for the construction of statutes is, to ascertain fairly the intention of the legislature in enacting the statute. In statutes giving a penalty, if there be reasonable doubt of the case, made upon the trial or in the pleadings, coming within the statute, the party of whom the penalty is claimed is to have the benefit of such doubt. The criticism in this case is upon the words “ greater rate of fare,” as used in the statute giving the penalty. The requirement in the act of 1853 is, that the railroad company shall carry way passengers at a rate not exceeding, &c. Here the word rate means price, amount; and the adding of the words of fare ” after the word rate would have produced tautology, and, perhaps, ambiguity, and certainly a very inaccurate sentence, as will be perceived upon considering the meaning of the word fare. It is, the price of passage, or the sum paid or to he paid for carrying the passenger. The word itself included the idea of being carried as a passenger. This idea of carrying the passenger had found a place in the sentence, by the use of' the languagé, the “ company shall carry way passengers at a rate not to exceed,” &c. Had the words “of fare” succeeded the word rate, there would have been a repetition of the idea of carrying the passenger, and- the construction of the clause would have been, that the company shall carry way passengers on their road at a rate [price] of the price of passage, or, the sum paid for carrying the passengers not to exceed two cents per mile. If we should give to the word rate its primary meaning, “proportion,” or “standard,” it would then read, the company shall carry way passengers on their road at the proportion or standard of the price of passage, or the sum paid for carrying the passengers, not exceeding two cents per mile.” The language of the statute, giving to the word rate the meaning of price, is perspicu- • ous and well chosen.

It will be noticed that in the act of 1857, giving the penalty, there are no words other than the word fare, including the idea of the carrying of a passenger. The words are “any railroad company which shall ásk and receive a greater rate of fare than that allowed by law, shall forfeit fifty dollars.” The “party paying ” may recover the penalty. Unless we take the idea of the carrying of a passenger from the word fare, we shall not get it at all in this statute. And yet no one can doubt that the- design of the statute was to give a penalty for asking and receiving a greater rate or price for the carrying of a passenger than was allowed by law. We must, therefore, take the idea of carrying a passenger from the word fare. This statute has reference to the statutes in which the rate for carrying passengers is fixed and allowed, and the statute relating to the defendant, expressly required it to carry way passengers at a rate not to exceed two cents per mile. The words used in this statute “ greater rate of fare ” are not happily chosen, but there is no difficulty in construing them. As the word fare includes the idea of price and passage, the word rate to avoid tautology, may be construed as meaning proportion or standard, and the clause' read, a greater proportion or standard of the price of passage, or sum paid for carrying the passenger than that_ allowed by law, shall forfeit fifty dollars. The proportion of price to the mile, in the present case, was not to exceed two cents; the standard by which the value is fixed for carrying a passenger one mile, is the price or sum paid not to exceed two cents. Thus, by the most strict and rigid rules of construction, the statute means that any railroad company which shall ask and receive a greater price for the carriage of a passenger than that allowed by law, shall forfeit fifty dollars; and what is more, it cannot, by any reasonable construction, be made to mean anything else. And as this company was only allowed to receive a price for carrying a passenger not to exceed two cents per mile, the statute embraced the plaintiff’s case, provided the sixty cents were asked and received for his carriage as a passenger. It is argued that the usual fare, fifty-five cents only was taken, and that the five cents were received on a claim other than for fare, to wit: the want of a ticket, which claim may have been unlawful and the five cents may be recovered back. The referee found that the conductor demanded sixty cents as and for fare, and the plaintiff claimed that he ought to pay no more than fifty-five cents, the usual fare, and the conductor demanded sixty cents claiming five cents in addition to the usual rate of fare.” The entire sixty cents were claimed ás the price for carrying the plaintiff as a passenger, and there was no consideration other than carrying him as a passenger for the sixty cents. It is quite probable that the conductor supposed that he had the right, by the act then recently passed, to exact five cents in addition to the usual fare, and suppose he had been right and was entitled to receive the additional five cents, for what would it be received ? What would it be in the hands of the conductor ? Clearly it would be received as fare, and it would be fare money in his hands; and, as such, belong to the company. Under certain circumstances the company had a right to demand and receive fifty five cents fare, and under other circumstances, five cents in addition, making sixty cents.

It is insisted that the referee erred in deciding that the defendant was liable to the penalty for the act of the conductor without proof of any express authority conferred on him by the defendant, to ask and receive the five cents. The conductor was the agent of the defendant to demand and receive the fare, or price for carrying the plaintiff as a passenger and in making such demand and receiving the price, he acted within the scope of his employment, and the rule, respondeat superior, applies. (Story Ag., § 452, et seq.; Paley Ag., 294-298; Smith Mer. Law., 111, 127, 133.) The agent was employed to o collect fare, and it was within the implied scope •or course of this employment that he specified the sum he claimed as fare. There would be no safety to passengers, unless railroad companies in such á case, should be held responsible for the acts of their agents. The authorities carry this principle much further than it is necessary to go in this case. (Story Ag., 452; Jeffery v. Bigelow, 13 Wend., 518; Sandford v. Handy, 23 Wend., 260.)

The cases cited by the plaintiff’s counsel, are not in point. 'They relaté to cases of willful trespass committed by the agent, •or to acts done by him outside of the scope of his employment.

In this case the agent undoubtedly acted in good faith, supposing he had authority to demand and receive the whole sixty cents, instead of only fifty-five cents. The judgment should be affirmed.

Rosekrans, J,, expressed no opinion; all the other judges ■concurring,

Judgment affirmed.