author: Brown, J.

text:
    Farmers and Mechanics’ Bank of Kent County, Maryland v. The Butchers and Drovers’ Bank.

    Appeal from a judgment of the Superior Court of the city of New York. The action-was to recover the amount of five checks drawn upon the defendant by one Green, and certified by the defendant’s paying teller on their face to be good. The checks were not drawn against funds, and the teller, in fact, had no authority to certify such checks. The jury found that the plaintiffs were bona fide holders for value of the checks, and they had judgment for their amount. The defendants appealed to this court.

      John H. Reynolds, for the appellants.

      Henry A. Oram, for the respondents.

      This case is reported in 16 N. Y. Rep. 125, where Judge Selden’s opinion, alone, is given. It appears, however, from that report (p. 142) that Denio, Ch. J., and Brown, J., also delivered opinions. That of the Chief Judge has since been published in 14 N. Y. Rep. (p. 623,) and to make the record complete, the opinion of Brown, J. is here given.

   Brown, J.

The judge charged the jury, upon the trial of this action, that there was no doubt of the authority of Peck, the teller of the defendant, to certify checks in the manner in.which the checks in question were certified, so as to bind the defendant to pay them to holders taking them bona fide and for value, in the usual course of business. The defendant thereupon excepted. The proposition involves the main question in the action, and I will return to it presently. He also charged, that if the jury found that the plaintiff had previously held similar checks certified by Peck, the teller, in the same manner as the checks in controversy, which had been paid by the bank on presentation and without objection,, and if they also found that the plaintiff took them in good faith for value and without notice of the agreement between Green, the,drawer, and Peck, the teller, that they were to be returned to and not paid by the bank, and without notice that Peck in certifying them had exceeded his authority, the plaintiff was entitled to recover. To this also the.defendant excepted. The instruction was in effect that the jury might infer Peck’s authority from previous transactions and acts of the same kind, which had been accepted and approved by the defendant without objection. In this I see no error, because the agent's authority might have been proved by an express direction, or by the usual and customary cojirse of business at the bank. The residue of the proposition, that they must also be satisfied the plaintiff had no notice of the agreement between Peck and Green, or that the former accepted, in violation of his" duty, before they could give the plaintiff a verdict, was certainly unexceptionable and needs no further notice. The jury were also told, and I think correctly, that the plaintiff was a holder for value", if it took the checks in payment and satisfaction of the installments of stock sold to or subscribed for by Green and others, and not as collateral security for the payment of such stock subscriptions. The verdict for the plaintiff must therefore be deemed to establish the facts, that the plaintiff took the checks in good faith, in the usual course of business, for value, and without notice of any want of authority by Peck, or of the agreement between him and Green, that the checks were not to be paid by the defendant. There is no conflict of evidence and no dispute about the facts. We are therefore left to consider whether Peck had authority under the proof to certify the checks for the bank, and if so, what was the duty and obligation which it incurred thereby.

Checks upon banks have most of the qualities of inland bills of exchange. They are drawn for a sum certain upon a person or corporation usually having funds of the drawer sufficient for their payment, and are payable on presentation. If payable to bearer they pass by delivery, and if to the order of the payee by indorsement, in the usual form. They are not payable on time, and are'therefore not presented for or subject to acceptance, and in this particular they differ from bills of exchange. The drawer may be made liable as the drawer of a bill of exchange upon presentation within a reasonable time and notice of non-payment. Most of the rules repeating bills of exchange and promissory notes affect checks on banks. (Chitty on Bills, 515; Harker v. Anderson, 21 Wend. 372.) I assume that the practice of having the drawee mark and certify upon the face of the check, that it is good for the sum therein expressed, is of recent origin, for I find nothing said of it by the early writers, and but few reported cases where the practice is' referred to. It is, however, at the present day a prevalent custom. Checks drawn upon banks or bankers thus marked and certified enter largely into the commercial and financial - transactions of the country. They pass from hand to hand in the payment of debts, the purchase of property, and in the transfer of balances from one house and one bank to another. In the great commercial centers they make up no inconsiderable portion of the circulation, and thus perform a useful, valuable, nay, an almost indispensable office. They are enabled to perform these important functions, mainly upon the faith and credit given to the certificate of the drawee that they are good. It is this that gives them credit and currency with commercial men. The object of the drawer who obtains the certificate, and the purpose of the drawee in giving it, is to impart strength and credit to the paper, and to assure all who accept it in the course of trade, that it will be paid on presentation. The certificate is an. undertaking—a contract—and in determining its legal effect we must ascertain, if we can, the intent of the parties; that is. the party who makes and the party who accepts-it. The makef of the certificate puts his name to it with a view to its circulation, and to assure those to whom the paper may be offered, that it will be paid on presentation; and the party who accepts it does so upon the faith and credit of this representation and assurance. The paper upon which the certificate is impressed is negotiable by delivery, or by indorsement, and designed for circulation, and in respect to all the subsequent holders the party making and uttering the certificate stands in the position-of an acceptor, with all the responsibilities incident to that relation. The certificate means nothing less than this, but it means something more. It imports that the drawer has funds, or means convertible into funds, in the hands of the drawee at the time, which shall be retained and devoted to the payment of the paper on presentation. If it does not mean this, the certificate is a sham and a snare. The learned judge who delivered the opinion in Massey v. The Eagle Bank, (9 Metcalf, 309,) says: “Unless the word good carries with it a binding evidence of the fact that the .money is in the bank to meet that particular check, and that it will be paid to bearer at any time when. presented, it is of no practical utility.” (Vide also Willets v. The Phœnix Bank, 2 Duer, 121.) This view leaves no doubt of the liability of the defendant to respond to the plaintiff for the amount of the checks, provided the certificates are its acts or made by its authority.

This brings me to consider what is doubtless the main question; that is, the authority of Peck, the teller, to make the certificates. He was an officer of the Butchers’ and Drovers’ Bank, a monied corporation with banking powers, and, like all other corporate officers, was its servant and agent, having power to bind his principal within the scope of his 'authority. I shall not stop to distinguish between a general agent with power to act for and represent his principal in all his business transactions, and a special agent empowered to do a particular act or a series of acts in regard to a particular subject; nor between those agencies created by written instruments or express words, or those which arise by implication, from recognition, acquiescence or otherwise, because the power of a bank officer generally seems to be sufficiently well known, and the distinctions to which I refer are not material to the present inquiry. It is well, however, to notice that the term agency implies the power to do just what the principal has authorized, and no more, and this though a brief is quite a .sensible definition. The difficulty mostly is to know what acts the principal has authorized, and what power is fairly within the terms of the commission, for when that is ascertained there is no longer any trouble in applying the rule. If the power to act is conferred by writing, then the instrument will define what the power is and the. extent of it, and if by parol instructions to do a particular act or a series of acts relating to a particular business or subject, then the authority must be ascertained from the 0express instructions given, and such implied authority as may be necessary to' give them effect. But if the agency arises—■ as it must in many cases—where there is no written authority and no express parol instructions, from the relation which the agent maintains towards his principal and the nature of the employment, it is obvious that the extent of the power to bind the principal must depend upon other elements than those to which I have referred. The character of the relation, the nature of the employment, the custom and usage of the business, the recognition and acquiescence, must each of them enter largely into the consideration of the extent of the agent’s authority. These remarks are peculiarly applicable to the class of agencies represented by the officers of corporate companies. They are artificial creations and can not think, act or speak for themselves. • In all their communion and intercourse with the world, their officers must think, act and speak for them.. The authority given to their officers is not contained in written instruments nor in express verbal instructions, but much of it must be implied from the nature of their business, its necessities, its customs and usages. It is well and wisely said in the Mechanics Bank v. The New York and New Haven Rail Road Co., (3 Kernan, 599,) that “whoever deals with a security of any kind, appearing on its face to be given by one man for another, is bound to inquire whether it has been given by due authority, and if he omits that inquiry he deals at his peril.” The power to make the note or other security, or to execute the deed, release or other instrument, by one man for another, exists in some form where it can be submitted to the observation and inspection of the person dealing with the agent, and if he accepts the security or the instrument without examining the commission, he confides exclusively in the representations of the agent and must take upon himself the hazard. :But in those innumerable agencies of which clerks, tellers, cashiers and other officers of corporations are examples, where the power and authority rests in usage, custom and necessity, and arises by implication, it is obvious the dealer can not satisfy himself „ by examination and inquiry, because there is no written authority and no principal capable of speaking, and the inquiry can only be made and the answer obtained from the representative himself. In determining the nature and extent of the authority which ¡this class of agents may rightfully exercise, there are some things of which the courts may take judicial notice. They must recognize, I think, the general course of the banking, business as it is' now conducted, and the universal practice of those employed to conduct it. They may know that the circulating notes are signed by the presidents and cashiers; that the deposits are received and paid out by the clerks, tellers and cashiers, and the certificates of deposits and the certificates upon the face of checks drawn by the dealers and depositors are signed by the same class of officers or by one of them. These duties make' up a large part of the business daily" transacted at every bank. The authority of this class of agents to do these acts-within the walls of the banking institutions, and at their counters, is never the subject of inquiry or examination. It is never doubted or questioned, but is presumed from the nature of the employment and the necessities of the business.

The checks in controversy are dated on the 16th day of February, 1852, drawn and signed by T. A. C. Green, payable to the order of S. W. Spencer, cashier, directed to the Butcher’s and Drovers’ Bank, and certified as good for $1000, and signed under the certificate, B. Peck, teller. Both before and after the date of the checks, Green was a dealer and depositor of the bank, and had an account upon its books. In July, 3,851, the plaintiff received a similar check from Green, certified in the same manner, for $3400, and in December of the same year a similar check certified in like manner for $1500, both of which were paid by the defendant to the plaintiff before the checks in controversy wrere received. Subsequently to the 16th of February, 1852, and before the checks in question were presented for payment, Green deposited with the defendant, at various times and in various sums, $6000, which he drew out upon his certified checks. The proof showed that Peck had express authority to certify the checks of dealers, and he was furnished with a book in which he entered the checks so certified. Robert Buck, a witness in the employment of the defendant tgn or fifteen years, testified: That “ the paying teller was in the habit of certifying checks. They would be presented to pay debts and take up notes. They were substituted for bank bills. The teller would sometimes write good upon them, and sometimes merely his name. It was then charged in the certification book, and was considered as charged against the account of the person in whose favor it was certified. It is customary in some instances for the paying teller to certify checks of customers when they have no funds, if they have confidence in them.” Jacob Ames, the president of the bank, testified: “We don’t give our teller liberty to certify checks when the drawers have not sufficient funds in the bank, without special permission. I have told Peck to be careful not to certify checks unless the drawers had funds in the bank, to cover them.” This limitation upon the teller’s authority not to certify unless the drawers have funds in the bank, or the bank has confidence in the drawers, according to the evidence of Buck, or not to certify in the absence of funds without special permission, is not very absolute or stringent. But give it all reasonable effect, and" we can not evade the force of these considerations. If the limitation is to be operative at- all, it must operate to defeat every certificate made in the absence of funds. So that an error in making up the drawer’s accounts or the omission of some subordinate clerk to charge a voucher previously received, would prove fatal to the validity of a certificate in the hands of an innocent holder for value. The limitation not to certify in the absence of funds, is not contained in any written instrument or resolution which may be seen and examined, but is a mere parol direction dependent upon the existence of a fact—the possesssion of funds—which can not be known to those who accept the security upon the faith of the certificates.

The rule that he who deals with the agent of another is bound to look into the agent’s commission for the measure of his authority, must have a qualified application to an agent with a general power coupled with a limitation not patent or open to common observation. Such a limitation, if it could operate, would be destructive of the power. Suppose that Spencer, to whose order these checks were payable, had desired to assure himself that Green had funds in the bank to cover them, of whom would he have made inquiry ? Of the bank officers certainly, and they or one of them had already said that the checks were good for the sums expressed in-them, and what could be said more? It is evident, therefore, that the limitation' is inconsistent with the power, or at least deprives it of all practical value, because, as the checks would lose all credit and currency if their validity depended upon the existence of the funds required by the condition, the authority to certify would have no real value. Let us look at the subject in another aspect. The act of paying a dealer’s check is an act of quite as much moment to the bank and may be subject to the same limitation as certifying, the same check. Indeed we may safely assume that the teller of every bank has directions not to pay unless the drawer has funds. How the officer by inadvertance or in the confidence that the drawer’s account will be made good pays to a holder for value. He has clearly transgressed his directions. Can the bank repudiate the act of the officer and recover the money back upon the ground of want of power ? The case of Sail v. The Bank of the State, (Dudley’s So. Car. Bep. 259,) is an authority against the recovery. The officer had general power to pay the checks of its dealers at its counter in the usual course of business, which he was in the daily habit of exercising, and that was enough to protect a holder for value to whom the check had been paid, notwithstanding the want of funds. Any other rule would destroy confidence and put the interests of those who deal with such institutions in constant peril.

There are several authorities múch relied upon by the counsel for the defendant, which I think right to notice. Grant v. Norway, (10 Com. Bench, 665) was a case where the master of a vessel in the East Indies had signed a bill of lading in the usual form, declaring that certain goods had been shipped on board his vessel, to be delivei'ed in London to the order Biale Kock & Co., their order or assigns, who afterwards indorsed it, for value received, to the plaintiffs. The goods in fact were never shipped, and the action was brought by the plaintiffs against the owners of the vessel for the injury they had sustained in giving credit to the bill. Bills of lading are regarded, in some sense, as negotiable instruments, and the right to the property mentiond in them passes by indorsement. In signing bills of lading the master acts for and has power to bind the owners. The sole question was, the liability of the owners upon the signature of the master. The court of common pleas held they were not liable. Jervis, Oh. J., in delivering the judgment, says: “Is it usual, in the management of a ship carrying goods on freight, for the master to give a bill of lading for goods not put on board ? For all parties concerned-have a right to assume that an agent has authority to do all which is usual. The very nature of a bill of lading shows that it ought not to be signed until the goods are on board, for it begins by describing them as shipped.” He concludes by observing that, “the general usage gives notice to all people that the authority of the captain to give bills of lading is limited to such goods as have been put on board, and the party taking a bill of lading, either originally or by indorsement, for goods which have never been put on board, is bound to show some authority given to the master to sign it.” Coleman v. Riches, (29 Eng. Law and Eq. Rep. 323,) arose upon -a receipt given for grain which had never been delivered, and is similar in principle. (See also Hubbersty v. Ward, 8 Excheq. Rep. 330.) In the case of the Schooner Freeman v. Buckingham and others, (18 How. U. S. R. 182,) the Supreme Court of the United States held the same opinion, and the reasons were assigned by Mr. Justice Curtis, who says: The master “has an authority, if the ship be a general one, to sign bills of lading for cargo actually shipped, and he has also authority to sign a bill of sale of the ship when in case of disaster the power of sale arises. But the authority in each case arises out of and depends upon a particular state of facts. It is not an unlimited authority in the one case or in the other, and his act in either case does not bind the owner, even in favor of an innocetít purchaser, if the facts upon which the power depends did not exist. And it is incumbent upon those who are about to change their condition upon the faith of his authority, to ascertain the existence of all the facts upon which his' authority depends.”

I have extracted thus largely from these cases, because I desire it may be seen how little analogy there is between a bill of lading and a certified check designed to pass from hand to hand, and to some extent to supply the place of currency. The primary purpose of a bill of lading is to furnish written evidence that the goods have been actually put on board the vessel, with their quantity and marks, the name of the consignor and consignee, the places of departure and discharge, with the price of the freight, &c. . And when it is said that a bill of lading passes by indorsement and delivery, it means that the indorsement and delivery of the bill transfers the property in the goods therein described; (3 Kent. Com. 207,) and not that it passes from one person to another as a chose in action for the payment of a sum certain. . The master’s connection with and power over the property, and to bind the owner in respect thereto, depends upon the fact of its being shipped; and persons intending to acquire title to it by indorsement and transfer of the bill, know, by the universal usage as well as by the terms of the bill, that' the act of the master'is of no force unless the goods have been put on board the vessel. The North River Bank v. Aymar, (3 Hill, 262,) was also referred to on the argument. The defendants were executors of Pexcel Fowler, and were sued on certain promissory notes, some of which were signed by Jacob D. Fowler as follows: Pexcel Fowler, by Jacob D. Fowler, attorney; and others of them were indorsed in the same form. They were not made and indorsed in the business of the principal, but in that of David Rogers & Son; and it is worth while to notice that the written power under which Jacob D. Fowler acted was executed by Pexcel Fowler and left with the plaintiffs. The Supreme Court held the defendants liable, Oh. J. Nelson dissenting; and the ground of his dissent is given in the first paragraph-of his opinion as follows: “The attorney's power was limited in express terms to the business of the principal, and the use of his name for the accommodation of ,D. Rogers & Son was without authority, and therefore void. The plaintiffs are, moreover, to be deemed cognizant of the special limitation contained in the letter of attorney, for it was deposited with them and remained in their possession to the time of discounting the notes in question; and evén without this, as the notes were signed by an attorney, it was their duty, to inquire into his authority.” The judgment was reversed in the late court for the correction of errors, and nothing remains to show the grounds of the reversal. They could be none other, however, than those given in the dissenting opinion of Oh. J. Nelson., Now, I can perceive but little resemblance between the written authority which is open to inspection, to do an act or a series of acts in relation to the business of his principal, and the general unwritten authority of an officer of a banking incorporation representing and acting for his principal at its place of business, with the usual power to certify the checks of its dealers, coupled with private instructions not to certify in the absence of funds, without special permission..

The defense in this action is not aided by the. decision of this court in the Mechanics’ Bank v. The N. Y. and New Haven Rail Road Co. I notice two of its leading principles: 1st. By the charter of the rail road company the capital was limited to $3,000,000, divided into 30,000 shares of $100 each. “The entire capital was represented in the franchises of the corporation, and the owner of each share was entitled to a fixed and unalterable proportion of that capital. And it follows.that any attempt to create a greater number of. shares, by the issue of additional certificates, is not only a violation of .the organic law of the corporation, but a direct invasion of the contract between it and each holder of its original stock.” 2d. The by-laws of the company declared that all transfers of stock should be made in the transfer book kept in the proper office, and when a certificate of stock should be issued the same should be surrendered prior to the transfer being made. All certificates had this condition written upon their face. “The bank, in making their loan to Kyle, took from him an assignment and power of attorney in blank, but paid no regard to the fundamental conditions on which alone a legal title to stock could be transferred. Of these conditions - of course they had notice. The certificate was void in the hands of Kyle, because issued by an agent without authority, there being no surrender of a previous certificate and no transfer to him on the books of actual stock; and this want of authority was known to him.” I see no sort of resemblance between that case and the one now under consideration.

I therefore adopt the conclusion that where the teller or other proper officer of a banking corporation, representing it and doing its business at the counter, certifies the checks of its dealers and depositors drawn upon it in the usual form, under a general power to certify, such .banking incorporation is responsible to holders in good faith and for value, notwithstanding private directions not to certify in the absence of funds without special permission.

The judgment should be affirmed.


source: Caselaw Access Project

author: Balcom, J.

license: Public Domain

text:
    Albert Hosley v. James W. Black and Wm. B. Gardner, Trustees of School District No. 12 in the towns of Almond and Hornellsville.
    Although the technical rule is, that under a complaint setting out a contract, and averring its performance by the plaintiff, evidence in excuse for nonperformance is not admissible, this rule is of Very little consequence; for the* plaintiff may amend his complaint, and then give the evidence.
    The count, of indebitatus assumpsit for work and labor, used prior to the code of procedure, was always sufficient to authorize a recovery for work and labor performed under a contract not under seal; unless the party performing the work and labor had failed to fulfill the contract. And the code has not changed the former rule of pleading, that a party who has wholly performed a special conti'act on his part may count upon the implied assumpsit of the other party, to pay the stipulated price, and is not bound to declare specially upon the agreement.
    Where a complaint showed upon its face that the action was brought against only two of three trustees of a school district, but the defendants did not demur to it on that ground, or raise the objection in their answer; Seld, that the objection that the third trustee should have been made-a defendant was therefore waived.
    The rule is, that if an offer of evidence contains any' matter not admissible as evidence, the whole maybe rejected.
    This action was brought to recover for nine months’ services, rendered by the plaintiff (his wife assisting him) in teaching a school, in school district Ho. 12, in the towns of Almond and Hornellsville, at the price of fifty dollars per month for the first three months, and sixty dollars» per month for the last six months. It was tried at the Allegany circuit in March, 1858, when the plaintiff proved that he first taught the school thirteen weeks, (his wife acting as assistant teacher,) commencing April 21, 1855, not opening the school, however, on any Saturday except the first, at the price, verbally agreed upon, of $50 per month, and that he then closed the school for a vacation, and made out a rate hill for that term for the trustees, and at their request; that he (his wife acting as assistant) taught the school six months more, at $60 per month, pursuant to an agreement in writing, signed by the trustees. He commenced .the last six months on the first of September, 1856, and kept the school twenty-six weeks, Saturdays excepted. He gave evidence which authorized the conclusion that the trustees consented that his time should go on, counting Saturdays, though he did not open the school on those days. This evidence was objected to by the deféndants on the ground that it was not competent to show a waiver of the performance of the contract under the allegations of the complaint. But the judge overruled the objection (the complaint containing the common counts,) and the defendants’ counsel excepted.
    It appeared that the plaintiff’s wife was absent Monday mornings, washing until ten or eleven o’clock in the forenoon, and “a few days while sick;” that the plaintiff himself was absent one day, attending a Buchanan mass meeting, and two days before the board of supervisors as a candidate for county commissioner of common schools, his wife keeping the school in his absence.
    The defendants and one Osgood were trustees of the school district (as appeared by the testimony of the latter) until the last Tuesday of September, 1856, when Washington Eichardson succeeded Osgood as trustee. But at the time the action was commenced, Eichardson had moved to the state of Ohio, and the defendants were then the trustees of the district.
    The nonjoinder of Eichardson as a defendant in the action was not set up in the answer; nor was any objection taken in the answer that two trustees were suéd alone, without the presence of a third one.
    When the plaintiff rested, the defendants moved for a non-suit, on the ground that the plaintiff had failed to fulfill his agreement to teach either the first three months or the last six months; and also “demanded a dismissal of the action on the ground that Thomas Eichardson, the present trustee in the district, should be brought in as defendant.” The judge denied the motion, and the defendant’s counsel excepted. ¡No evidence was given that Thomas Eichardson was a trustee of the district; and the case does not show that the plaintiff conceded that he was a trustee. The plaintiff testified, on his cross-examination, that the verbal agreement to teach the school the first three months was made about the' 15th day of April, 1856; that after it was made, and before he commenced the school, a subscription paper was circulated by him and others about the district; which paper was as follows:

      “ Whereas it is necessary that a district school should be supported in school district number 12, in Almond village, the ensuing summer; and whereas the trustees of said district propose to employ A. Hosley and a competent assistant to teach said school, for three months, at $50 per month for said teacher and' assistant, applying the remainder of the public moneys in payment thereof—remainder by rate bill; and whereas it is apprehended their attendance at said school may cause the said rate bill to be unreasonably onerous upon those who send regularly during said term; now, therefore, we the undersigned, inhabitants of said district, in consideration of the establishment of said school and the signing of this instrument, hereby agree with said trustees and with each other, that the.rate bill may be made out against us for the regular daily attendance of the number of scholars, set by us opposite each of our respective names, during the whole of said term. This agreement to be of no effect unless scholars to the number of eighty be subscribed to this agreement. Dated April 20, 1856. Names. Scholars.”
    . This agreement was signed by different inhabitants of the district; but only sixty-four scholars were subscribed for.
    The defendants, under allegations in their answer, first offered to prove that the plaintiff admitted that he was not to have the school and no school was to commence until eighty scholars were signed to the written agreement for scholars circulated by him; that the terms of a scholar should not he over $1.25 for said first term of three months; that he represented to each one of the patrons of the school, that such should he the price; there was to he no school until eighty scholars were signed; that in order to commence his school he had himself signed and would he responsible for eleven scholars to make up the number; that he stated to others while circulating the agreement, they need only to sign and he would clear- them from any liability for the said subscription; that he only desired their names so as to induce others to sign. The case states, that “to each and every of which propositions, and each part thereof, the plaintiff objected severally, and each of said objections was sustained, and the defendants duly and severally excepted 'to said rulings and each of them.”
    The defendants secondly offered to show that it was a condition of the contract for the last six months that the teacher should keep up the school to eighty scholars for the first three months, and that by reason of the plaintiff’s representation that the scholars attending had averaged eighty for the first three months, the trustees were induced to sign the written agreement to employ him for six months, arid that in fact the number of scholars during three months was but thirty. This evidence was objected to by the plaintiff’s counsel and excluded; and the defendants’, counsel excepted.
    The defendants’ third offer was to prove that the said rate bill amounted to three dollars per scholar; that the plaintiff, in conversation with each of the patrons of the school, being inquired of by them as to the reason of their being compelled to pay $3 instead of $1.25 per scholar, as stated by him to them before the commencement of his second term, stated to them and each of them that when he procured their support to the school and signature to said paper for that purpose, that he did not intend fo regard the same or carry out his said promises, but to induce them to support said school by any means whatever; that he intended to deceive them; that he intended to be smart enough for the citizens of Almond, and. meant to get them tight; that he had got their written contract, and they might help themselves; that all he intended was to get them fast, and he had got them; that the plaintiff, when called upon in public school meeting in relation thereto, made each of the above statements publicly to the patrons of said school; that in consequence of the conduct and language used by the plaintiff in relation to said inhabitants, they refused to - send to the last term of said school, and thereby said school was of no benefit or advantage to said district; that each of said trustees, at the end of the plaintiff’s first month, offered him. payment for the time taught, and $50 besides, if he would discontinue the school; that he then stated to them and each of them that he was going according to law, and asked no odds of them. The case states, that to each and every of which propositions, and to every part thereof, the plaintiff objected ; that the judge sustained the objections, and the defendants excepted to each of said rulings.
    . The counsel for both parties concurred that there was no question of fact for the jury, except as to the performance of the agreement, and no conflict of evidence as to that ; and the defendants’ counsel waived the right to submit that question to the jury, and the parties agreed that $404.38 was the amount remaining unpaid according to the agreement respecting the plaintiff’s compensation; and the judge directed a verdict for that sum in favor of the plaintiff. To which direction the defendants’ counsel excepted.
    The defendants’ counsel made a case containing the exceptions, on which he moved for a new trial at a general term of the Supreme Court in the eighth district; which motion was denied, and judgment was there rendered against the defendants for the amount of the verdict, with costs. The defendants appealed from the judgment to this court.
    The case was submitted upon printed points and briefs.

      M. H. Wygant and E. Peshine Smith, for the appellants

      John K. Porter, for the respondent.
   Balcom, J.

The objection to the evidence given by the plaintiff, to show that the defendants consented that Saturdays should be counted in ascertaining the length of time the plaintiff taught the school, was placed upon the ground that it was not competent to show a waiver of the performance of the contract to teach the school, under the allegation of the complaint.

The technical rule undoubtedly is, that under a complaint setting out a contract and averring its performance by the plaintiff, evidence in excuse for non-performance is not admissible. (Oakley v. Morton, 1 Kern. 25.) But this rule is of very little consequence; for the plaintiff may amend his complaint and then give the evidence. (Code, § 173; Dauchy v. Tyler, 15 How. Pr. R. 399.) It is true that he must submit to such terms “as may be proper;” but terms are not often imposed, for they 'are seldom necessary in the furtherance of justice.

In-this case no amendment of the complaint was necessary to entitle. the plaintiff to give the evidence excusing him from opening the school on Saturdays. The complaint contains seven distinct claims or counts, three of which are similar in substance to the count of indebitatus assumpsit for work and labor, used prior to the code of procedure. That count always was sufficient to authorize a recovery for work and labor performed under a contract not under seal, unless the party performing the work and labor had failed to fulfill the contract. (4 Wend. 285; 11 id. 479; 22 id. 576; 1 Cowen’s Tr. 2d ed. 124; 2 id. 635, 1128.) This court held, in Farron v. Sherwood, (17 N. Y. Rep. 227,) that the code has not changed the former rule of pleading; that a party who has wholly performed a special contract on his part may count upon the implied assumpsit of the other party to pay the stipulated price, and is not bound to declare specially upon the agreement. The same rule was held in the following cases: Allen v. Patterson, (3 Seld. 476; Keteltas v. Myers, (19 N. Y. Rep 231;) Moffet v. Sackett, (18 id. 522.)

The plaintiff taught the school thirteen weeks for the first three months, and twenty-six weeks for the last six months. This was time enough to make the two terms, construing the word month to mean a calendar and not a lunar month, as the statute seems to require. (1 R. S. 606, § 4.) The fact that the plaintiff’s wife was absent Monday mornings washing till ten or eleven o’clock in the forenoon, and a few days while sick, and that the plaintiff himself was absent one day attending a Buchanan mass meeting, and two days before the board of supervisors as a candidate for county commissioner of schools, his wife keeping the school in his absence, was not a substantial breach, by the plaintiff, of the contract to teach either three months or six.. This was a trifling matter. The school was kept during the time either the plaintiff or his wife was absent. Both were not away at the same time, and the attention of the judge was not particularly called to these absences at the trial; nor was it shown during which term they occurred. I am therefore of the opinion the judge was right in holding that the plaintiff performed the contracts on his part.

The defendants were the only trustees of1 the school district at the time the action was commencedand there was no evidence given that Thomas Eichardson had become a third trustee at the time of the trial, and it was not conceded by the plaintiff that he was such trustee. The complaint showed upon the face thereof that the action was brought against only two trustees. But the defendants did not demur to it on that ground, or object in their answer on that ground to the plaintiff maintaining the action. The objec- -" tion that a third trustee should have been made a defendant was therefore waived. (Code, § 144; id. 147.)

The first offer of evidence by the defendants embraced matters which were clearly inadmissible. That the plaintiff stated to others, while circulating the .agreement in regard to , the number of scholars, that they need only to sign and he would clear them from liability for signing, and only desired their names so as to induce others to sign, was matter that did not concern the defendants. Every person who signed that agreement bound himself, if at all, according to the terms of it. But a sufficient number of scholars was not subscribed' for, to make it operative. The representations therefore made to the person who signed it were wholly immaterial to thq defendants. And the rule is, if an offer contains any matter not admissible as evidence, the whole may be rejected.

The second offer contained the proposition that it was a condition of the contract for the last six months that the plaintiff should keep up the school to eighty scholars for the first three months. The contract for the last six-months was in writing, and no such condition could be engrafted upon it by parol evidence.

The third "and last offer contained this matter, namely: That each of the trustees, at the end of the plaintiff’s first month, offered him payment for the tijne taught and fifty dollars besides, if he would discontinue the school. This certainly was not legal evidence against the plaintiff.

It is unnecessary to determine whether any portion of the matter contained in the three offers made by the defendants would have been admissible, if the same had been separately offered; for. each offer, as we have seen, contained matter which was not legal evidénce against the plaintiff. And this is a sufficient reason for sustaining the decisions of the judge rejecting the whole of each offer.

I will add, that it does not appear by the case, nor was there any offer to prove, that the defendants did not know the number of scholars actually subscribed for upon the agreement of April 20th, 1856, at the time they made each of the contracts with the plaintiff to teach the school; and without ignorance on their part respecting the number of scholars actually subscribed for, no fraud could have been practiced on them by any false representations of the plaintiff as to the number so subscribed for. , .

My conclusion is, that no error was committed on the trial, and that the judgment of the Supreme Court in favor of the plaintiff should be affirmed, with costs.

Denio, Ch. J., Marvin, Wright, Davies, Rosekrans and Emott, JJ, concurred.

Selden, J., read an opinion for reversing the judgment and granting a new trial, in which he held that some of the evidence offered by the defendants’ counsel was improperly excluded.

Judgment affirmed, with costs.


author: Wright, J.

text:
    Kerr, adm’r, &c. v. McGuire.
    Where, upon a plea of payment, the referee, on conflicting evidence, finds the defendant to be indebted to the plaintiff in a specified amount, his conclusion, upon that question of fact, is not the subject of review in this court.
    A witness who has acted as a book-keeper in breweries for several years, and is necessarily acquainted with the market price of beer and ale, is competent to testify as to the market value of those articles, during certain specified years.
    The general rule of practice, requiring a written notice to produce papers, has reference to the preliminary preparations for trial. The reason of the ■ rule does not apply to a notice given in the presence and hearing of the court, while the trial is in progress, from day to day.
    .Thus, where, at a previous meeting before the referee, the plaintiff had given the defendant verbal notice to produce all bills rendered and receipts given to him relating to the subject of the controversy, or that parol evidence of their contents would be given; it was held that the notice was sufficient.
    Appeal from a judgment of the Supreme Court, entered on the report of a referee. The action was brought to recover a balance of account alleged to be due to the plaintiff's testator for a large quantity of goods and merchandise purchased prior to the 3d day of August, 1861. The plaintiff's bill of' particulars showed the claim to be for a balance of an entire account extending through a period of four months, viz. April, May, June and July, 1861. The defendant claimed to have paid the whole amount mentioned in the-bill of particulars, except $20.
    The questions to be reviewed arose on exceptions taken on the trial. The referee reported in favor of the plaintiff.

      Ira D. Warren, for the appellant.
    I. There was' no evidence of the sale and delivery of any ale to the defendant. The “general price of ale at that brewery in 1860 and 1861,” is not evidence of the market value of ale "or beer alleged to have been purchased in April, May, June and July, 1861. It might have been 'much higher during other periods of the two years. (Dana v. Fiedler, 2 Kern. 40.) The price of ale and beer at Harrison’s brewery is not evidence of the market value of ale and beer in the city of Hew York, and was improperly admitted. It is certainly improper to inquire the market price at a particular store or brewery.
    II. The question put to the witness Boardman, “Do' you know the general market price of ale and beer in the city of Hew York during the years 1860 and 1861 ?” was improper. It should have been confined to the months of April, May, June and July, 1861, when the beer was bought.
    The next question, at fol. 35, was also improper. The witness was a book-keeper. He never bought or sold ale or beer, and never saw any bought-or sold, and he was incompetent to testify to its value. The question put to the witness Kerr, at fol. 37, was improper, for the reason before stated. The beer was purchased in April, May, June and July, 1861. The question is, what was its value in 1860 and 1861, including a period of two years. (Dana v. Fiedler, 1 E. D. Smith, 462; S. C. 2 Kern. 40; Lamoure v. Caryl, 4 Denio, 370.)
    III. The 'plaintiff, on cross-examination of the defendant, proved the delivery to the defendant hy the plaintiff’s testator of sixty hogsheads of stock ale, and then •proved hy the defendant that he paid the plaintiff’s testator for those sixty hogsheads. The plaintiff then moved to strike out- this testimony, which the referee did. In this the referee erred. The plaintiff called out new matter to charge the defendant with sixty hogsheads of stock ale. He had a right to discharge himself by proving payment, the plaintiff having called it out in answer to a direct question. The plaintiff went on and further cross-examined this witness, and then moved, to' strike it out, which the referee did. In this the referee also erred. “A party’s declarations in his own favor, though generally inadmissible,, are evidence in his favor when called out hy his opponent.” This rule should he strictly applied in a case like this, wher„e the defendant can not he a witness in his own behalf unless the plaintiff chooses to call him. (Oowen & Hill’s ¡Notes to Phillip’s Evidence, latter part of note 117, and cases cited; 1 Starkie on Evidence, 144, 145, § 27.)
    IY. The plaintiff, under the defendant’s ohjection, was allowed to prove the contents of a hill alleged -to have been left with the defendant. Ho written notice to produce the hill was ever given. Where a notice is required, it must he a written notice in all cases. (Code, § 408.) Had the nQtice given verbally been in writing, it would not have been sufficient. It calls for all hills and receipts, without specifying any. (Grim v. Hamel, 2 Hil. 434; Willard v. Germer, 1 Sand. 50.)
    Y. The finding of the referee was against the weight of evidence. ,

      S. W. Robinson, for the respondent.
   Wright, J.

The answer of the defendant admitted the purchase from the plaintiff’s testator of the ale, beer and stock ale mentioned in the complaint, and in the bill of particulars furnished by the plaintiff, but alleged that he had paid the deceased in his life time for all of the same, except a balance of about twenty dollars. No issue was raised by the pleadings except the single one of payment. The allegation in the answer that the price of the goods set out in the bill of particulars was more than the defendant agreed to pay the testator, and his denial of the charges, as therein stated, are not addressed to any allegations in the complaint, and are of no avail. Upon the question of payment there was a preponderance of proof against the defendant. At least it was a fair question presented to the referee upon conflicting evidence, whether the defendant was indebted in the amount claimed of $600, or as admitted by himself, in the sum of $20. The referee found the indebtedness to be $600, and his conclusion upon that question of fact is not the subject of review in this court.'

Various objections were interposed on the trial to questions propounded to the plaintiff’s witnesses, which will be briefly «noticed. One Martin, a brewer, who was in the employ of the deceased at "the time of his death, and had been for six or seven years prior thereto; who made sales and collections for deceased, who knew of the defendant’s purchasing ale and who was acquainted with the prices of Harrison’s ale in 1860 and 1861, was asked the question, “ Did you know the. general price of ale at the brewery in 1860 and 1861 ?” The question was objected to, as being too general and as incompetent and improper. No objection was made to the subsequent statement of the witness as to the principal fact, or that it was too general as to time. The exception was not available. The question was proper .enough in itself. The ground of the objection was that it was too general, meaning that, the inquiry as to time extended over too great a period of time; but it was not shown or even suggested, that the price varied during the time, two years; and this answer, to which no objection was taken, showed that it was the same for 1860 and 1861. It is now claimed that there was no evidence of sale and delivery of any ale to the defendant, but this ground was not urged on the trial. It would indeed have availed nothing if it had been. It was substantially admitted by the pleadings, that Harrison in his life time, and before the 3d day of August, 1861, sold and delivered to the defendant divers large quantities of ale, and beer and stock ale.

A further question was put to the same witness, viz. “Did you • know the general market value of ale and beer during those periods ?” The ground of objection to this question was that the price of ale sold to the defendant can not be proved by proving its general market value. The objection, was frivolous. It would have been equally so had it been made' to the answer elicited. There was no proof of any express contract as to the price of the ale sold to the defendant, and it was clearly competent to show the market value of the articles. The same answers will apply to a similar question put to the plaintiff, Kerr. A witness named Boyd, who was a brewer, and who was in the employ of Harrison in May, 1861, made sales, and having the general superintendence of the business was asked, “Did you know the general price of ale and beer at Wm. Harrison’s brewery during May, 1861, while you were there ?” The objection here was that the price of ale sold to the defendant can not be proved by preying the general price at that brewery. ■ The answer was not objected to. The question was not improper for the reason assigned. It was merely preliminary to other .points, and the witness’ knowledge or want of, knowledge on this subject might have been immaterial unless the defendant could also be charged with act or knowledge in relation to the subject inquired of. .The question was not objected to on this ground, and no objection was made to the answer of the witness.

A witness named Boardman testified that he had been a book-keeper in a brewery over four years, a part of the time in Harrison’s brewery, and knew of the defendant’s purchasing ale of Harrison. He was asked, “Do you know the general market price of ale and beer in the city of Hew York during the years 1860 and 1861 ?” The question was objected to by the defendant on the ground that the witness was not competent to testify to the market value. Here again the exception was pointed to the question whether the witness had knowledge of the general market price. He had acted as a book-keeper in the breweries of the city for over four years, and was necessarily acquainted with the market price of beer and ale.

The defendant was sworn as a witness on his own behalf. The bill of particulars furnished by the plaintiff was placed in his hands, and he was asked to state whether or not he had paid for the goods therein mentioned. In the bill there was a charge under the dates of 18th and 20th May, 1861, of sixty hogsheads of stock ale at $10 per hogshead, amounting to $600. The plaintiff’s counsel objected to the question as tending to inquire of the witness, who is party defendant, as to transactions had between himself and the deceased concerning which the witness was incompetent to testify.

The referee decided to hear the answer, reserving the right to the plaintiff to move to strike out the testimony if improper. The defendant answered that he had paid the whole of the bill except twenty'dollars. On cross-examination the witness answered that he received the sixty hogsheads of stock ale set forth in the bill of particulars, and that he paid Harrison himself personally for them in his own store, about a week after he received them. The motion was then made to strike out all the testimony of the witness relating to transactions he had personally with the deceased, which was granted. This was not error.-

The code provides that a party to an action may be examined as a witness in his own behalf, except as against parties who are representatives of a deceased person, in respect to any transactions had personally between the deceased jjerson and the witness. (Code, § 395.) The witness was inquired of whether he had paid for the goods mentioned in the bill of particulars. There was nothing in the question indicating a transaction had personally between the defendant and the deceased, and the testimony was allowed to be taken, reserving to the plaintiff the right to move to strike out if not approved. The answer of the witness, that he had paid for all the goods, except twenty dollars, showed no transaction had between the witness and the testator. But, when the cross-examination elicited, the fact that the witness, on his direct examination, as to payments, had been speaking of transactions had by himself personally with the deceased, the inadmissibility of the testimony given on the direct examination becomes apparent and was properly stricken out. The defendant’s counsel does not claim that the testimony of the defendant, in respect to a transaction personally between Harrison and the witness, is admissible, but insists that the plaintiff, on cross-examination, 'called out new matter to charge the defendant with sixty hogsheads of stock ale, and that he had the right to discharge himself by proving payment, the plaintiff having called it out in answer to a direct question. But the plaintiff called out no new matter. The sixty hogsheads of stock ale formed part of the goods which, on direct examination, the witness testified that he had paid for; so that his" attention was properly called to that item on cross-examination; and it then appears that the payments he had mentioned were transactions had personally by himself with the deceased. The motion to strike out was- properly made and granted. Indeed, if it had been improperly granted, it would not necessarily have followed that^ 'there should be a new trial. It fully appears from the case that the only item in the controversy was the sixty hogsheads of stock ale, valued at $600. It was conceded that the ale had been received by the defendant, he claiming that $580 had been paid thereon, whilst the administrator claimed the whole amount to -be due. The defendant was allowed to testify that he owed the estate of Harrison twenty dollars for stock ale, and no more, and generally that all he owed the estate was twenty dollars. So that the defendant had the «full benefit of the testimony stricken out on.motion in the early stage of the trial.

A witness testified that he was in Harrison’s employ at the time of his death, and was also employed by the executor after his death. That he presented a bill to the defendant after Harrison’s death, and left it with him. The plaintiff’s counsel called for the production of the bill, and the defendant stated that he had not the bill present. The witness was then asked, “For what and for what amount was that debt'?” This was objected to by the defendant, on the ground that he had no notice to produce the bill, and that the contents can not be proved by parol. The counsel for the plaintiff showed that at a previous meeting before the referee, on the reference he had given the defendant verbal notice to produce all bills rendered and receipts given to the defendant, relating to the ale in controversy, or that parol evidence of their contents would be given; the objection was overruled and the defendant excepted.

This ruling is now claimed to be erroneous, on the grounds, 1st, that the notice was verbal, a written notice being required by the code in all cases; 2d, that the notice given was not sufficiently specific. On neither ground is the exception available. The notice referred to in § 408 of the code has reference only to notices required by its provisions; and no objection was made on the trial that the notice given was not sufficiently specific.

The general rule of practice requiring a written notice to produce papers has reference to the preliminary preparations for trial. The reason of the rule does not apply to a notice given in the presence and hearing of the court while the trial is in progress, from day to day, and the materiality and pertinency of the document is apparent, and each party is at least presumed to have present all papers hearing on the case.

I am of opinion that no legal error was committed by the referee to the prejudice of the defendant, and the judgment should he affirmed.

All the Judges Concurring,

Judgment affirmed.


author: Davies, J. Balcom, J.

text:
    Thomas Chambers v. George Lewis, jun. and Augustus Cleveland, executors, &c.
    A defendant, setting up in Ms answer, by way of counter-claim’, the liability • of the plaintiff as a stockholder, under section 32 of the general manufacturing act, must aver that the plaintiff held an amount of stock in the company equal to the amount of the debt of the defendant for which the plaintiff is sought to he held personally liable.
    To constitute a liability on the part of a trustee of a corporation, under section 3.5 of that act, for a failure to make and publish a report, it is essential to aver, in pleading, that the debt for which he is sought to he made liable was existing at the time the default was made, or that it was contracted afterwards and before the report was published.
    To render a trustee liable, under the 46th section of the act, on the ground that he has assented to an increase of the company’s indebtedness beyond the amount of its capital, the party seeking to fix a personal liability upon Mm must allege, in pleading, that such excess of indebtedness was equal to, or exceeded the amount of his debt. It is not sufficient to allege that such excess exceeds the amount of the capital.
    Where one claims the ownership and possession of property, actual possession of it by him is not necessary before he can he charged, by the true owner,' with the conversion of it. The possession of his agent is his possession ; and if, on demand, he refuses to permit his agent to deliver the goods, he is liable for a conversion, the same as if the goods had been in his own possession, and he had refused to deliver them himself.
    The title to goods of A., wrongfully sold on execution as the property of B., does not pass to the purchaser, to the exclusion of the title of A. in possession; although the purchaser may have acted in entire good faith.

      Appeal from a judgment of the Hew York Common Pleas. The action was brought against George Lewis, since deceased, to recover the value of certain barrels of soapstone and redstone, and a quantity of vulcanized gutta percha, alleged to have been the property of the plaintiff, and to have been converted by the defendant. Lewis, the- defend^ ant, having died, the action was continued against George Lewis, jun. and Augustus Cleveland, his executors.
    The answer denied that the plaintiff owned the articles in question, or that the then defendant had converted them ; and averred that certain articles (but whether those in question the defendant did not know) had been left in the store Ho. 66 Liberty street by the United States Vulcanized Gutta Percha Belting and Packing Co., who were the original owners of the goods; that the store was not the property of the defendant, nor ever had been; and that the goods were still there, and that they had' never been appropriated or interfered with by the defendant. That the articles had been sold to the defendant by virtue of an execution under a judgment against the company, and that the defendant was the owner of the same, and entitled to the possession of them, although he has never taken .possession thereof. The answer also contained a counter-claim against the plaintiff, as a member, stockholder and director of said company, and seeking to hold him liable on a judgment against the company, assigned to the plaintiff.
    The counter-claim was as follows:
    “And the said defendant further, and by way of counterclaim to the demand of the plaintiff, says that the said plaintiff is a member, stockholder and trustee of the United States Vulcanized Gutta Percha Belting and Packing Co. above mentioned—a corporation created for manufacturing purposes, under the laws of the state of Hew York, on or about the 27th day of February, 1857—and was, on the 1st day of February, 1859, and some time prior thereto, the president of said company.

      And this defendant, further answering, by way of counterclaim, says, that on the 15th day of March, 1859, a judgment was recovered by the above mentioned Augustus Cleveland, against the said United States Yulcanized G-utta Percha Belting and Packing Co., in the Marine Court of the city of New York, for the rent of the aforesaid store No. 66 Liberty street,, due February 1st, 1859, which said judgment was duly docketed with the clerk of the city and county of New York, and execution issued thereon to the sheriff of the city and county of New York; and that said execution has been returned unsatisfied; and that the, sum of three hundred and ninety-six dollars and' sixty-one cents, with interest from the 15th day of March, 1859, is now actually due thereon; and that said judgment was, on the 2d day of May, 1859, duly asssigned by the said Augustus Cleveland, for a valuable consideration, to this defendant.
    ■And, this defendant, further answering, says that he is entitled to recover the amount due on said judgment from the plaintiff, and to counter-claim the same against him for the causes, following:
    That by the certificate of incorporation of the United States Vulcanized Gutta Percha Belting and Packing Co. aforesaid, filed in the clerk’s office of the county of Queens, the capital stock of said company was fixed at one hundred thousand dollars; but that the whole of said capital stock has not been paid in, as this defendant is informed and believes. And the. defendant claims and insists thát the plaintiff, as stockholder of said company, is thereby rendered liable for the debts of said company, under section 32 of article 2 of title 12 of chapter 18 of part 1 of the revised statutes.
    That the said company -have neglected, as this defendant is informed and believes, to make and publish, within twenty days from the 1st day of January, 1859, the report required by section 34 of the article of the .revised statutes above referred to; and this defendant insists that, by reason of such neglect, the plaintiff, as a trustee of said company, became, and is, individually liable for the debts thereof.
    That the said company, as this defendant is informed and believes, has become indebted to various persons to an amount exceeding the amount of the capital stock of said company, with the consent of said plaintiff. Wherefore, the defendant insists that the plaintiff, as a trustee of said company, by reason of such consent, became, and is, liable for the debts of said company, to the extent of said excess, under section 46 of the said article.
    And the defendant claims that, by reason of the premises, the plaintiff is indebted to him in the sum of,” &o.

    A demurrer to the counter-claim was sustained, on the ground, among others, that the action was in the nature of tort, and that the summons (which was for a money-demand on contract, and was claimed by the defendant’s counsel to amount to a waiver of the tort) could not he referred to as determining that the plaintiff had elected to waive the tort, and rely on an implied contract. (10 Abb. Pr. Eep. 206; affirmed, 11 id. 2l0.)
    The facts established on the trial were as follows: The articles in question were originally the property of "the company, and by them deposited in the store hired by them from Mr. Cleveland. On the 24th day of December, 1858, they made a general assignment of all their effects to Mr. J. 0. Sargent; the plaintiff, who was president of the company, continued to occupy the store as agent of the assignee. The property in question, and other property, was sold at the store, under an execution, January 7, 1859, and the greater part bought in by the plaintiff. The goods still remained in the store, and were left there when the company vacated it, February 1, 1859. ' On the 30th of March, 1859, the same goods were sold under another execution against the company, and purchased by the defendants’ testator, who also left them in the store.- The plaintiff subsequently demanded the goods of the defendants’ testator, who did not deliver them, saying that he understood they were the property of the company.
    The jury found a verdict for the plaintiff for $724.58. The appeal was on exceptions to the refusal to nonsuit, to the judge’s charge, and to his refusal to charge; also from the order sustaining-the demurrer to the answer.

      John Pyne and Peter Y. Cutler, for the appellants.

      John T. Hoffman, for the respondent.
   Davies, J.

It will he most convenient first to examine the correctness of the judgment sustaining the demurrer to the defendant’s counter-claim. 'Assuming that the testator of the defendants was the owner of the judgment, under such cirqumstances that, if the plaintiff was liable to pay it, it was a legitimate counter-claim upon the facts spt forth, it will be necessary to inquire whether the matters so stated in fact show any liability on the part of the plaintiff to pay that judgment. In my opinion, they clearly do not. •

By the 32d section of the general manufacturing act, it is provided that all the stockholders of the company shall be severally and individually liable to the creditors of the com-r pany, to the amount of stock held by them respectively, for all debts and contracts made by such company, until the. whole amount of its capital stock is paid in. Now it is not averred in the answer that the plaintiff held an amount of stock in the company equal to the amount of the debt held and owned by the defendants. He was not liable to pay that debt unless he held an amount of stock equal to it, and that is not averred. ' No amount of stock is alleged to be held by him, nor is the number of shares he held alleged, nor the nominal amount of each share. It is only averred that he was a stockholder, and this averment might well be true if he held one share of stock,' to the amount of five dollars; but it would not follow from this that he was liable individually to pay the debt due by the company to the defendants' testator.

In relation to the second ground of counter-claim, the same fatal deficiency of proper and necessary averments is found. By the 35th section of the same act, it is declared that such company shall annually, within twenty days from the first day of January, make and publish a report as therein prescribed; and if the company shall fail to do so, all the trustees of the company shall be jointly and severally liable for all debts of the company then existing, and for ■ all that shall be contracted before such report shall be made. To constitute a liability on the part of the plaintiff under this section, it was essential to have averred that the debt was existing at the time the default was made, or that it was contracted afterwards, and before such report was published. This omission is fatal, and the facts alleged create no liability to pay the debt referred to, on the part of the plaintiff.

The same difficulty arises upon the matters stated in the third ground of counter-claim. By the 46th section of said act, it is declared that if the indebtedness of any such company shall at any time exceed the amount of the capital stock, the trustees of such company assenting thereto shall be jointly and individually liable for such indebtedness to the creditors of the company. It is not stated in the answer what excess of indebtedness has been incurred over and above the capital stock. It is said to be an amount exceeding the capital stock. It may be only one dollar, and the averment of the complaint be satisfied. If the defendant had desired to make the plaintiff liable for his debt, it was incumbent on him to have averred that such excess was equal to, or exceeded the- amount of his debt. The plaintiff was liable, as is truly stated in the complaint, only to the extent of such excess; but clearly he was not indebted to the defendant in the amount of his judgment, if such excess did not equal or exceed the amount thereof.

The judgment of the Common Pleas, sustaining the demurrer to the counter-claim, was clearly correct.

It remains to inquire whether there was any error in the refusal to charge, and in the charge as made. The first request to charge assumes that there can he no conversion, unless the party is in the actual possession of the goods at the time of the demand and refusal. The possession of the agent of the defendant was his possession; and the conversion was equally as effective by his refusal to permit his agent to deliver the goods, as if they had been in his actual possession, and he had refused to deliver them himself. The defendant in his answer claimed to be the owner of the goods, and entitled to the possession thereof. In Cobb v. Dows, (10 N. Y. Rep. 335,) the question was, whether the defendants had been guilty of a conversion of a quantity of wheat. It is said, in- the opinion delivered in the Supreme Court, that if they had taken it into their own hands, or disposed of it to others, or exercised any dominion over it whatever, they were guilty of the conversion, and their liability to the plaintiff was established; and this court held, if they availed themselves of the act of their agent, who refused to deliver the wheat, it was a conversion on their part. In this case, the defendant claimed the ownership and possession of the property; and actual possession of it by him was not necessary before he could be charged with the conversion of it.

The second request to charge has no soundness in it. It was of no importance whatever whether the defendant had acted bona fide in making the purchase by himself at the sale on the 30th of March. The question was, whether the plaintiff had a better and prior title to the property, and this fact was to be determined without any reference whatever to the conduct or motives of' the defendants in purchasing the same property at the subsequent sale on the 30th of March. The plaintiff, on a sale upon one execution, issued upon a judgment against the said company, docketed on the 2d of December, 1858, became the purchaser of the goods, and paid to the sheriff making the sale the amount of his hid, and took possession of the property thus sold. This sale was made on the 7th of January, 1859, and the property remained in the same store, and was still there at the time of the demand made by the plaintiff. The company had made an assignment on the 24th of December, 1858, and after such assignment the assignee took possession of the store, and continued such possession until February 1, 1859. On that day Mr. McMartin took possession of the store, and with his assent the goods of the plaintiff were carried there, and were there at the time of the sale to the defendant, who requested the witness to keep the possession of them, and he refused to give them up.

The judge charged the jury, to which the defendant excepted, that if the property purchased by the plaintiff at the sheriff’s sale was the same property afterwards purchased by the defendants, and which was left in McMartin’s possession, the plaintiff, in virtue of such prior sale, was the owner. This proposition left fairly to the jury the question whether the property purchased by the plaintiff and that purchased and claimed by the defendants was identically the same. The jury found that they were, and that disposes entirely of that question. I find no difficulty in sustaining the other portion of' the charge. It was a conceded fact that the goods originally belonged to the company; that a valid and regular judgment was recovered against it; and that an execution was issued upon it, by virtue whereof the goods were levied upon and sold, and the plaintiff became the purchaser, and paid to the sheriff the amount of his bid. The plaintiff testified that he immediately took, possession thereof; and if it can be argued that the company had still the possession thereof, by reason of its occupancy of the store up to the 1st of February, that occupancy ceased on that day, and any possible presumption of possession of the goods by the company then ceased. The judgment under which the defendant claimed was not recovered till the 15th of March, at which time, beyond all question, the goods were in the possession of the plaintiff or his agent. There was no error, therefore, in this part of the charge.

The other portion of the charge is unquestionably correct. If the jury found the facts as stated by the cdurt, no doubt remains of á conversion by the defendant. If he had not intended to enforce his rights, which he deemed he acquired by the sale, when the demand was made on him for the goods he would naturally have disclaimed any right or title to them. His conduct then, and his claim in his answer to be the owner of the goods and entitled to the possession, coupled with the facts found by the jury, remove all doubts of the convei’sion of them made by him.

The judgment should be affirmed, with costs.

Balcom, J.

dissenting. The counter-claim set up in the answer was not a cause of action arising out of the transaction set forth in the complaint as the foundation of the claim, or connected with the subject of the action. Hence the demurrer to the same was properly sustained. (Code, § 150.) It was also properly sustained, for the reason that the counterclaim did not belong to the original defendant in the action at the time the same was commenced. (Rice v. O’Connor, 10 Abbott’s Pr. Rep. 362; Gage v. Angell, 8 How. Pr. Rep. 335; Van Valen v. Lapham, 13 id. 240; Pattison v. Richards, 22 Barb. 143.)

The judge properly refused to nonsuit the plaintiff. There plainly was sufficient evidence to require the judge to submit to the jury the question whether the defendant Lewis had converted the gopds. It, also justified the judge in refusing to charge the jury that unless they found the goods to have been in the actual possession of the defendant at the time of the alleged demand and refusal, such demand and refusal would not authorize them to find a conversion by the defendant.

I am also of the opinion that the judge properly refused to charge the jury that if they found there was a bona fide purchase by the defendant at the sheriff’s sale they should find a verdict for the defendant. A verdict for the defendant would have been erroneous, unless the jury had found, that the plaintiff’s title was fraudulent against the defendant’s purchase; and the judge was not asked to submit that question to them. It was. not so clearly fraudulent, if fraudulent in fact, as to have justified the judge in holding that as matter of law it was fraudulent. He must have so held if he had authorized the jury to render a verdict for the defendant if they found he was a bona fide purchaser of the goods.

All that the judge charged- the jury respecting the demands and refusals, was, that such demands and refusals were “ evidence of a conversion” by the defendant. He did not charge that those acts were conclusive evidence of a conversion ; and, as I understand the- charge, he submitted to the jury the question whether the evidence, established a conversion by the defendant. This was correct.

But I am constrained to say I think the judge erred in charging the jury “that if the property purchased by the plaintiff at the sheriff's sale was the same property after-wards purchased by the defendant, and which was left in McMartin’s possession, the plaintiff, in virtue of such prior sale, was the owner.” The plaintiff was not in the actual possession of the goods at the time the defendant- purchased them and assumed to control them. He could only show that he was entitled to the possession, by proof that he owned them. And the evidence established that they were assigned by the defendants in the executions to Sargent on the 24th day of December, 1858,- which was before either party to the action purchased them; and no évidence was given to show that Sargent’s title was not good as against the plaintiff. The judge ignored this fact when he told the jury they might find the plaintiff owned the goods, if they found the goods were those purchased by him at the sheriff’s sale. It seems to me the plaintiff should have shown that Sargent did not acquire any title to the goods under the assignment of the company to him oh the 24th day of December, 1858, before he could claim that he obtained title to the same by his purchase under the execution against the company on the 7th day of January, 1859.

I am also of the opinion that this part of the charge was erroneous, for the reason that it prevented the jury from determining whether the plaintiff’s title was not fraudulent as against the judgment and execution under which Lewis purchased. If the assignment of the 24th of December, 1858, was a nullity, the store in which the goods were must be deemed to have been in the possession of the company until the 1st day of February thereafter, which was twenty-four days after the plaintiff purchased the goods. The plaintiff was a member of the company, and had been its president; and when it was claimed that Sargent was in possession- of the store, as assignee of the company, the plaintiff was there as his agent. It can not be said that the plaintiff’s purchase of the goods was accompanied by an immediate delivery thereof to him, and followed by an actual and continued change of possession. They remained in the same store in which the company deposited them, until they were seized by the execution creditor of the company, under whose process the defendant purchased the same. I think the true rule is, that the continuance of possession by a defendant, after the sale of his property under an execution, is prima facie evidence of fraud, as well where the property is bid in by a third person as where it is struck off to the plaintiff in the execution. The Supreme Court so held in Fonda v. Gross, (15 Wend. 628;) and that court decided, in Gardenier v. Tubbs, (21 id. 169,) that where property is bought at a sheriff’s sale by the plaintiff in an execution, and left in the possession of the defendant, "without any good excuse shown, the sale is void as against the creditors of the defendant, notwithstanding that the plaintiff subsequently, and before the levying of an execution on the part of other, creditors, reduces the property to his actual possession. But as the rule now is, the judge could not have pronounced the plaintiff’s title fraudulent 'as against the creditors of the company, under whose execution the defendant purchased the goods; but he should have submitted the question to the jury, whether the plaintiff’s title was not fraudulent as against that creditor and the defendant. (2 R. S. 137, § 4; Gardner v. McEwen, 19 N. Y. 123.)

For the error in the charge of the judge to the jury, the judgment of the court of Common Pleas should be reversed, and a new trial granted, costs to abide the’ event.

Deeio, Ch. J. and Rosekraes, J. expressed no opinion.

Judgment affirmed.

      2 R. S. 5th ed. 660.