source: Caselaw Access Project

author: Hogeboom, J. Denio, Ch. J.

license: Public Domain

text:
    The Bank of Cooperstown v. Jonathan L. Woods and others.
    Where the complaint described the noté sued on as being made by “ Orrin North,” and the note offered in evidence appeared to have been made by a firm, consisting of two persons, doing business under the name of “ Orrin North;” Held that an objection to the reading of the note and protest in evidence was properly overruled.
    An offer to prove other outstanding notes of the same amount as the one in suit, with the like majrer and indorsers, and place of payment as the one in suit, and maturing at various times between February and August, was held properly overruled; where the defendants had permitted the note in suit to be read without objection to the protest, and without a motion for a nonsuit, and without stating that the object of the proof was. to show . that the notice of protest was too indefinite, and might he applied to some one of the numerous notes thus offered to be proved; nor was there any request to charge the jury as to the effect of the notice of protest, or any objection made thereto. . ' •

      field, also, that the offered evidence did not go far enough to raise a question as to the sufficiency of the notice of protest; there being no proof, or offer to prove, that any one' of the several notes (other than the one in suit) was held by the plaintiff, or matured at or about the time of the one in suit,' or was ever protested, so as to be capable of being confounded with the one in suit.
    A notice of protest dated the day on which a note matures, stating that a promissory note drawn by O. N., for $1000, and indorsed by the person to whom the notice is sent, “is protested” for non-payment, is a sufficient description of the note, in connection with the facts that no .other note of similar amount fell due on that day; that no other notes were held by the plaintiff; and that no others were in fact protested. And will be construed as referring to the day of the date of the notice, as the day wÉen the note was protested.
    The true principle is, that if facts exist which render such a notice uncertain or equivocal, and the knowledge of these facts is confined to the indorser, or is not brought home to the holder of the paper, the notice is sufficient to charge the indorser. Per Debió, Oh. J.
    The principle of the case of Coolc v. Zitchjield, (5 Seld. 279,) ought not to be extended.
    The true rule is as stated by Judge Debio, in Some Insurance Co. v. Green, (19 If. T. Rep. 118,) that a notice of protest should reasonably apprise the party of the particular paper on which he is sought to be charged.
    A printed notice of protest, including the signature of the notary, is sufficient.
    Appeal from a judgment of the Supreme Court, in favor of the plaintiff. This action was against the defendant North, as the maker, and the defendants Woods and Dayton, as indorsers of a promisory note signed “Orrin North,” dated June 15, 1857, payable to the order of the defendant Woods, at the office of Townsend, Clark & Co., 180 Broadway, New York, sixty days from date, for $1000. The complaint alleged that the note was made by the defendant North. The defendants Woods and Dayton (who only have appealed,) answered separately, denying every allegation of the complaint, and each annexed to his answer his affidavit denying the fact of having received notice of the non-payment of the note. The action was tried at the Otsego circuit, December 25, 1857. On the trial the plaintiff proved that the signature “Orrin North” to the note was the handwriting of the defendant North, hut that at the time the note was made, North was engaged in business as a partner with one Elias B. Holmes, under the firm name of “Orrin North;” that the note was given in the business of that firnij and was intended as the note of the firm, and that the plaintiff was informed that it was so given and intended before this suit was commenced. The plaintiff further proved that the defendants Woods and Dayton indorsed the note for the accommodation of the makers; that, the note at its maturity was presented for payment at the place where it was payable, and payment demanded, and that notices addressed to the defendants at their respective places of residence were on the same day deposited in the post office in the city of New York, which notices were in the words and figures following:

      “New York, Aug. 17, 1857.
    Sie : Please take notice, that a promissory note drawn by Orrin North for 1000 dollars, indorsed by you, is protested for non-payment, and that the holders look to you for payment thereof.
    Your obedient servant,
    A. R. Rogers, Notary Public.”

    The notices were printed, and filled up in writing, and the name of “A. R. Rogers,” was printed at the bottom of each. The plaintiff thereupon offered to read the note in evidence, which was objected to by the defendants severally, on the ground that the evidence showed the note to be the note of the firm of “Orrin North,” and not the individual note of the defendant North, as set out in the complaint, which objection was overruled by the court, and the defendants severally excepted. The plaintiff having rested, the defendants Woods and Dayton, offered to prove that when the note in suit matured, two other notes were outstanding, of the same date, (June 15, 1857,) for $1000 each, made by North, and payable to the order of Woods, and indorsed for the makers’ accommodation by Woods and Dayton, both payable in New York; one maturing July 23, and the other August 2, 1857. To which the plaintiff objected, for the reasons set forth in the case, and the court sustained the objection and excluded the evidence, and the defendants Woods and Dayton excepted. The defendants Woods and Dayton further offered to. proved that from January 6 to July 16, 1857, they indorsed twenty-seven other notes made by. North, and for his accommodation, for $1000 each; six of which were dated on different days in January, six on different days in February, five on different days in March, seven on different days in April, three on different days in May, six on different days in June, and five on different days in July, all in 1857; thirty-three of which were payable in New York, and they matured on different days in said months, and in August o'f that year. To proving which the plaintiff objected as above, and the court sustained the objection and excluded the evidence, and the defendants Woods and Dayton excepted. The jury found a verdict for the plaintiff for $1025.58, the amount of the note. The defendants Woods and Dayton made a bill of exceptions containing the above exceptions among others, and judgment having been entered on the verdict, Woods and Dayton appealed therefrom to the general term. The appeal was first heard at a general term in the 6th district, before Justices Mason, Gray, Balcom and Campbell, in July 1858, and the court was equally divided; Justices Mason and Gray being for reversing, and. Justices Balcom and Campbell for affirming the judgment; and a re-argument was ordered. The appeal was again heard in the same district, in May 1859, before Justices Mason, Balcom and Campbell, (Justice Gray being then in the Court of Appeals,) when the judgment was affirmed, Justice Mason dissenting. From this judgment of affirmance the defendants Woods and Dayton appealed to this court. .

      Geo. O. Greene and John T. Murray, for the appellants.
    I. The court below erred in overruling the objection to the reading the note in evidence. The note set out in the complaint was one made by the defendant North, while the one proved and offered in evidence was made by Orrin North and Elias B. Holmes, being an entirely different note. The variance was a fatal one, and as the plaintiff did not ask to amend the complaint, the note should not have been received in evidence. n

    II. The court erred in excluding the evidence offered by” the defendants Woods and Dayton, that there were other notes outstanding at the time the note in suit matured, made by Orrin North and indorsed by Woods and Dayton as accommodation indorsers, each answering the description contained in the notice of protest, but differing from the note in suit in essential particulars, to wit, in date, time of payment, two of them bearing the same date with the note in suit, but differing ih times of payment, and the others differing both in dates and times of payment. A notice of the dishonor of commercial paper, to be sufficient to charge the indorser, must inform the indorser of all the facts requisite to make him liable. It must state that the identical note in question has been, on the day it matured, presented for payment, at the place where payable, &c. A notice which falls short • of this is defective on its face. It is as requisite that the' particular paper intended should be identified by the notice, as that the fact of presentment and non-payment should be stated therein. In this all the authorities concur. That this notice identifies any particular note can not be pretended, as it states no date, or place, or time of payment, each of which is equally with the amount, a distinguishing feature of every promissory note, and this notice would have been equally as good had it stated either, omitting the amount, (Cook v. Litchfield, 5 Seld. 279; Shelton v. Braithwaite, 7 Mees. & Welsb. 436; Story on Prom. Notes, § 349; Chit. on Bills, 8th Am. from 8th Bond. ed. 501, n. p.) It is true that in Youngs v. Lee, (2 Kern. 551,) it was held that an indorser was charged by a notice precisely similar to the notice in this case. It was not, however, so held on the ground that the notice was sufficient of itself, but because the facts stated in the notice in connection with the knowledge'that the law presumed the indorser had, independently of the notice, in the absence of proof to the contrary, gave him information of all the facts necessary to charge. him. «The court, in that case, in effect say, the notice informs the ' indorser that a note indorsed by him has been hishonored, and as, in absence of proof to the contrary, the law does not presume that he has indorsed any other note, the notice in connection with the indorser’s knowledge that but one note indorsed by him is in existence, informs him that the particular note in question is dishonored. But in this case the defendants offered to show that other notes were outstanding, differing from the note in suit, in various particulars, but which were each and all as perfectly described and identified by the notice as the note in question. The notice did not therefore identify to the mind of the defendants the note dishonored. In Shelton v. Braithwaite, supra, Park, B. says: “If there was another bill answering the same description, the defendant might have proved that fact, and then the notice would have, been uncertain.” In Cook v. Litchfield, supra, Ruggles, Ch. J. says: “One of the indispensable requisites of the notice to be given to the indorser, of the. dishonor of a note is, that it should, either expressly or by just and natural implication, contain in substance a true description of the note, áo as to" identify it to the mind of the indorser. * * A notice which is barely sufficient to ■ put the indorser upon inquiry is not sufficient. The note should be sufficiently described to enable the party to know what note it is. (Remer v. Downer, 23 Wend. 626; Story on Prom. Notes, § 349.)” In this case Buggies, Oh. J. quotes from and approves of the decision in Shelton v. Braithwaite, (supra,) and then says: “ There are several other cases in which an imperfect or erroneous description has been held sufficient, on the same ground that the party could not be misled or mistaken in regard to the meaning of the notice, and the indentity of the hill, because there was only one instrument of the kind to which the notice could possibly relate. But all these cases show that where there are more than one, the notice is had for uncertainty. (Mills v. Bank of U. S., 11 Wheat. 436; Stockman v. Parr, 11 Mees. & Welsb. 809; Cayuga Bank v. Warden, 1 Comst. 415; Bank of Alexandria v. Swan, 9 Peters, 33.”) See Hodges v. Shuler, (22 N. Y. Rep. 114.) This case can only be distinguished from Cook v. Litchfield by the fact that in the case cited the plaintiffs held the other notes answering the description in the notice of dishonor, while in this case it did not appear who held such other notes, and the court below, in affirming the judgment in this case, based its decision upon that distinction. But the Court of Appeals, in Cook v. Litchfield, recognized no such distinction; its decision is based solely upon the ground that the notice in that case failed to convey to the mind "of the indorser the information that the particular note in question was dishonored, without regard to whether the holder did, or did not know, of the existence of other facts within the knowledge of the indorser, which, in connection with the notice, would convey to the latter the requisite information. The general rule that a notice of dishonor to be good must give every distinguishing feature of the note, by stating its maker, payee, date, amount and time and place of payment, and that where the notice omits either, the risk is with the holder whether the requisite information is given to the indorser, is fully recognized and approved in the case above cited. Hodges v. Shuler, (supra,) recognizes the same rule. If the holder of a note gives a defective notice, he, and not the indorser, runs the risk of its not conveying the requisite information, and no authority can be found, in the least sanctioning the doctrine of the court below, that an indorser must, in order to protect himself against the consequences of a defective notice of protest, see to it, that the holder of every note indorsed by him is informed of the existence and description of every other note outstanding indorsed by him. It would be impossible for an indorser to do this, for he could not know who would be the holder of the notes when they matured. In this case the notice does not state the date of the note, where drawn, when or where, or to whose order payable, or that it was indorsed by any one except the person to whom the notice was given. All the authorities agree that such a notice is defective, and as it did not in this case convey to the indorsers the requisite information, the plaintiff and not the de-' fendants must suffer the consequences thereof. (Chitty on Bills, 8th Am. from 8th Bond. ed. 501; Story on Prom. Notes, § 349; Wynn v. Alden, 4 Denio, 163.) The plaintiff having the note in its possession could have given a particular description thereof, and had that been done the note in question would have been identified to the mind of the indorser.
    III. It was not necessary for the defendants to set up in their answer the want of due notice of the dishonor of the note. The complaint averred that such notice was given, and this averment was material and necessary, and the defendants, by denying each and evefy allegation in the complaint, put that averment in issue.
    IY. The notice of the dishonor of this note was bad for the reason that it was not signed by the notary, or by any one. The name of the notary being printed at the bottom, the notice had no authenticity. Any one might have filled it up.

      A. J. Parker, for the respondent.
    I. The notice of protest was sufficient on its face. The case of Youngs v. Lee, (2 Kern. 552,) expressly decides that a notice in precisely the same words as this is sufficient. (Also Cayuga Co. Bank v. Worden, 1 Comst. 413-419.)
    II. The evidence offered—that other notes were outstand- . ing of the same amount and with the same maker and indorsers, but due at different times, (none on the same -days as that of the maturity of this note,) was immaterial and ■insufficient to vary or affect this notice or the plaintiff’s rights. 1. The defendants did not offer to show that any of these other notes were held by the plaintiff. The plaintiff holding no other similar note, both the plaintiff and the notary had a right to presume that this was the only note answering the description given, and to frame the notice accordingly. In Cook v. Litchfield, (5 Seld. 280,) the. plaintiff himself held the four similar notes, which rendered the description uncertain, and he was thus called upon to distinguish between them. 2. The notice of protest in Cook v. Litchfield was materially different from the notice in this case. There were four notes in suit, all precisely alike, except that they matured at different times. The" notices of protest were all alike, except in date: each contained a description which was equally applicable to any of the four notes. .Bach notice stated that the note was, on the day when the same became due, duly protested, &c.—thus referring to so'me uncertain time prior to the date of the notice. This notice states that the note “ is protested,” and the notice bears date the day the note falls due. This indicates present time and the particular note due that day and no other; and “protest” in its popular sense includes all the steps necessary to charge the indorsers. (Coddington v. Davis, 3 Denio, 16; S. C. 1 Comst. 186.) The .Court of Appeals virtually so held in Youngs v. Lee above cited. Judge Johnson in delivering the opinion of the court, in .reference to this same notice, says: “A waiver of protest was held in Coddington v. Davis, (1 Comst. 186,) to include a demand and all other acts necessary to charge an indorser. Upon the same principle the statement in this notice, dated on the day when the note was.payable, that it.had been protested for non-payment, must be intended to mean that it has been demanded and payment refused, on.the day when it became due.” It is clear from this language of the court, (speaking of a notice worded precisely like those in this case,) that in their opinion the day when the note fell due, would be inferred from the terms of the notice, to he the day on which the notice bore date. The outstanding notes, therefore, which Judge Johnson thought might render the notice uncertain, could, only be notes due on the same day as the one in question. Our notices have thus been adjudged to mean that the note has been protested this day when due. Beals v. Peck, (12 Barb. 245,) adopts the same reasoning. The court say, “ the notice is dated December 13., 1849, and stated that the note was that day protested for non-payment. The indorser would therefore understand that it was a note which matured on that day.” This construction is strengthened by the rule of evidence, that official duty is always presumed to have been regularly performed. (1 Cow. and Hill’s Notes, 296, and cases •there cited.) The present tense—is protested—when “thus used by a public officer, who in the regular course of his official business, has possession of the note for one day only, and for a single purpose, can Only mean, that on this day the date of his notice, the note executed is protested, i. e., is presented, payment demanded and refused, and the indorser thereby notified. It has the same force and meaning as “is ordered” in an order of a judge of court, indicating a present act. ■ The defendants, if one of them had not been a counsellor at law, could not have been misled. The law charges them with knowledge, that they were indorsers of a note of that description due the day the nptice bore date. They knew also the notary’s duty, and could not have a doubt that this was the note referred to in the notice. The notice was not to a stranger, but to a party who knew what notes he had indorsed. The plaintiff was a stranger to all the notes except this. In the case of Shelton v. Braithwaite, (7 Mees. & W. 438,) cited by the appellant’s counsel, Baron Alderson says: “The notice must be construed with reference to thq defendant’s means of knowledge, and I think there is enough to show that he must have felt in his own mind that this was a perfect notice of dishonor of the bill in question.” It is by similar reasoning, in principle, that the notice in Cook v. Litchfield was held good for the note first due, although the description of it applied alike to three other notes. The judge says, that inasmuch as the notice speaks of a note which “was presented when due,” it must be intended to refer to that note which became due “before or on” the day the notice bore date. And as the note first due was the only one that had matured at the date of the first notice, that note alone could be intended, and was thus clearly designated in the first notice. So in this case, as our notice speaks of a note which “is protested”— that is, this day protested—it can only refer to that particular note due on the day that such notice bears date. The testimony offered for the purpose of showing similar notes outstanding, due on other days, was therefore clearly irrelevant and improper, and was properly excluded, or held insufficient for the purpose offered. 3. In GooJc v. Litchfield, every notice of protest was the same. In our case, the form of the notices on the other notes was not shown nor offered to be shown. For all that appears from the evidence offered by the defendants, they had received, and they must be presumed to have received, regular notice of protest, identifying every note previously due and not paid, and so they could not have been misled as to the particular note intended by this notice. ¡Nor did they offer to prove that they were misled. 4. The decision in Cook v. Litchfield, so far as it holds three of the four notices bad, is one the soundness of which is very questionable, and the court, we think, will not be disposed to extend it to any notice of protest not framed as the one in question there; nor to a case in which neither the holder nor the notary had any notice of the similar notes •outstanding. That decision was made by a bare" majority of the court, two judges dissenting and one not expressing any opinion. The comments on this decision made by the Superior Court, after the second trial, are certainly very forcible and convincing. (Cook v. Litchfield, 2 Bosw. 147.)
    5. The broad doctrine that a written notice per se sufficient on its face can be shown to be bad by proof of other notes to which it might apply, rests in obiter dicta only. It must, if allowed at all, he limited to cases iú which the holdei: has notice of the other similar notes, and is thus called upon to distinguish his note by a very special description, or to cases in which the notice relied upon misdescribes the note or does not describe it at all, as was the case in Shelton v. Braithwaite, before referred to. If the principle, contended for by the. appellants is sustained, then the rule for giving notice of the dishonor of a note is made so stringent that no notice is really sufficient unless it contains an exact copy of the note. Otherwise an indorser might always escape liability by indorsing similar notes, which could only be distinguished from each other by exact copies. But this is 'not the rule. On the contrary, it is settled by abundant authorities, that a designation of the note, with reasonable certainty, is all that the law requires. (Ransom v. Mack, 2 Hill, 587; Reedy v. Seixas, 2 John. Cas. 337; Gayuga Co. Bank v. Warden, 1 N. Y. Rep. 413, [1 Comst.] S. C. 6 N. Y. Rep. 19, [2 Seld.] Woodin v. Foster, 16 Barb. 146; Home Insurance Co. v. Green, 19 N. Y. Rep. 118.) In this case, Denio, J., says: “It is true that no precise form is necessary for these notices, but they must reasonably apprise the party of the particular paper upon which he is sought to be charged.” It holds, too, that the maker’s name is the most distinctive feature of a note, and refers to the notice in Youngs v. Lee (which is identical with ours) as sufficient. Our notice giving the amount of the note, and the name of the maker and indorser, bearing date the day the note matured, and using the present tense, “is protested,” is surely reasonably certain. If-such a notice is made uncertain by the act of the indorser in putting his name upon other notes all answering to the same reasonable description, it is his fault, and the law will not be guilty of the injustice of charging this uncertainty upon the innocent holder or notary. (Hodges v. Shuler, 22 N. Y. Rep. 114.) 6. The notice of protest could not apply to the two notes mentioned in the first offer of the defendants; for the last of them had matured fifteen days previously, and if no notice had been given before, the indorsers were discharged as to them. The notice of protest could not apply to either of the 38 notes mentioned in the two subsequent offers, for the defendants did not give the date nor time of payment " of either; nor did they offer to show that it would apply to either. 7. The object of the notice is “to enable the indorser to take measures for his own security.” (Edwards on Bills, 289.) Suppose there are two notes precisely alike as to amount, dates, parties, &c., and the notice would be equally applicable to either. The object of the notice is accomplished, by enabling the indorser to know the amount he must get secured to him by the maker. If the notices are served he must get double the amount. If notice of one note only is served, he has no occasion to get more than the amount of one note secured, being discharged as to the other; and it makes no difference to him to which note the notice applies, or whether he knows which note is intended in the notice.
    III. The objection that the notary’s signature is printed is ' clearly frivolous. Even a verbal notice communicated by any one acting on behalf of the holder is sufficient. (Cuyler v. Stevens, 4 Wend. 566.)
    IY. The judgment should be affirmed with ten1 per cent damages.
   Hogeboom, J.

1. The only objection made tó the reading of the note and protest in evidence, (the $1000 note,) to wit, that it was the -note of a firm by the name of “ Orrin North,” instead of an individual of that name, was properly overruled. The complaint described the note as made by Orrin North, and this was true, whether it was the firm or the individual.

2. The offer to prove other outstanding notes of the same amount as the one in suit, with the like maker and indorser, and place of payment as the one in suit, and. maturing at various times between the months of February and August inclusive, was properly overruled for several reasons. (1.) The defendants had permitted the note in suit to be read without objection to the protest, and without a motion for a nonsuit, and without stating at any time in the progress of the suit ' that the object of the proof was to show that the notice of protest was too indefinite and might be applied to some one of the numerous notes thus offered to be proved. Nor was there any request to charge the jury as to the effect of the notice of protest, or any objection made thereto. (2.) If the question of the sufficiency of the notice of protest was sufficiently made at the trial, the offered evidence did not go far enough to raise a question on this subject. There was no offer or proof that any one of these various notes (other than the one in suit) was held by the plaintiff. There was no' offer to show that any one of them matured at or about the time of the one in suit. And apparently such was not the fact. There was no offer to show that any one of these various notes, (other than the one in suit,) was ever protested. None of them, therefore, could be confounded with the one in suit. ,

31 The notice of protest, though much more general than a cautious and prudent notary public should ever give, has been held .sufficient within the adjudications of our courts. A similar notice was approved in Youngs v. Lee, (2 Kern. 552.) See also Cayuga Co. Bank v. Warden, (1 Comst. 413.)

The case of Cook v. Litchfield, (5 Seld. 279,) is notin point to sustain this defense. In that case all the notes were held by a single party; and the notices of protest were alike except in date, and apparently referred to á day past, (without specifying it,) as the day when the notes matured.

This notice uses the present tense; saying the note “is protested,” apparently referring to the day of the date of the notice as the day when the note was protested, and describes the amount of the note, and the name of the maker, and . is addressed to the indorser. Couple this with the facts (which for the purposes of this case we must assume) that no other note of similar amount fell due on that day; that none of the other notes were held by the plaintiff; that none of them were in fact protested, and the inference is irresistible that the indorser could not have been misled.

As the main object of the notice is “to enable the indorser to take measures for his own security,” (Edw. on Bills, 289,) it would appear to have been sufficiently subserved by this notice. The principle of the case of Cook v. Litchfield, (5 Seld. 279,) ought not to be extended. . The true rule is as stated by Judge Denio in Home Insurance Co. v. Green, (19 N. Y. Rep. 518,) that the notice should reasonably apprise the party of the particular paper on which he is sought to be charged. When the notice contains the particulars specified in this notice, it can never be known that it does not so apprise him, without proof of extrinsic facts. And when these are presented, we are entitled to look at all of them to see whether he could reasonably have been misled, or prevented from taking prompt and diligent measures for his own security. A printed notice was sufficient. (Cuyler v. Stevens, 4 Wend. 566.)

I think the judgment should be affirmed.

Denio, Ch. J.

The note on which this suit was brought matured, and was presented for payment, which was refused, on the 17th of August, 1857. The notice of protest sent to the indorser on the same day was in the same form as the one given in evidence in the case between the same parties on the note of $2000. Offers to prove the existence of other notes corresponding in amount and in the names of the parties, maker and indorser, were made and rejected. It was not proposed to show that any note corresponding in amount with the one sued on had ever been held by the plaintiff; but that there were thirteen other notes so corresponding, outstanding in the hands of some parties when this note was protested, all of which were past due. This involves the point lastly discussed in the other case, and nothing is necessary to be added to what is there said.

One of the offers embraced the statement that there were twenty-seven other corresponding notes issued bn different days in each month, from January to July, inclusive, in 1857; all of which matured in the same month, and in August. It was not offered to be shown that any of these last notes were outstanding when the note sued on was protested. The immateriality of such an offer was shown in the other .case.

The. note in question was dated on the 15th day of June, 1857; and it was proposed to show that two of the eleven notes first mentioned were dated on the same day. I do not perceive, that this circumstance raises a distinction favorable to the defendants. Bearing in mind that the plaintiff had no knowledge of the existence of these two similarly dated notes, it was under no obligation to regulate or vary its notice by the circumstance that there were such notes. One objection to the notice is, that it did not state the date of the note to which it related. Suppose the date had been stated, it would not have enabled the defendants to distinguish it from the two others which bore the same date. If it had stated the time of' payment, it might have been different, because it matured subsequently to the time embraced in the offer. But how was the plaintiff to know that the defendants were so situated, as the indorsers of North that such information would have been needed by, of would have been useful to them. It is not pretended that the bank knew that these defendants had ever indorsed another note for $1000 for any person', except the one which it held. The true principle, I think, is that if facts exist which render such a notice as was here given uncertain or equivocal, and the knowledge of these facts is confined to the indorser, or is not brought home to the holder of the paper, the notice is sufficient to charge the indorser.

I am for affirming the judgment.

All the Judges concurring,

Judgment affirtiied.

         See the next case, post.


author: Denio, Ch. J.

text:
    The Bank of Cooperstown v. J. L. Woods and E. A. Dayton, impleaded with Orrin North.
    A notice of protest, dated the day a note is payable, and which states the names of the maker and indorser, and the amount, is sufficient to charge the indorser, unless circumstances exist which would render the information it was designed to give equivocal and uncertain.
    Where, in an action against indorsers, upon a note made hy N. for $2000, dated July 6, 1857, and maturing on the 28th of August, 1857, under a notice of protest thus general, the defendants offered to prove that since the 6th of January, in that yéar, they had indorsed eleven other notes for N.’s accommodation, each for $2000, which notes respectively matured prior to the note sued on, and on different days In each of the months from January to August; and that for aught the indorsers knew, all of such notes were outstanding at the maturity of the note in suit; M'eld, that the former existence of those notes did not cast any additional duty upon the holder, in giving notice of the dishonor of the note sued on.

      Seld, also, that evidence showing that there were, at the time the note sued on matured, three other notes made hy ST. and indorsed hy the defendants, each for $2000, outstanding, maturing respectively in April, June and July, 1857, was properly excluded; such notes being past due; held by other parties; and the plaintiff, so far as appeared, having no knowledge of their existence.
    The obligation of the maker of a promissory note is to be present, either personally or by some agent, at the place of payment, prepared to pay. If the holder causes the paper to be presented, at that place, to the person ■ in charge, it is sufficient; whether the person making the presentment is personally acquainted with the man having charge of the office at which the note is payable or not.
    The signature of the notary, to a notice of protest, need not be in writing. It is sufficient if it be printed.
    Action on a promissory note made by Orrin North, for $2000, payable to the order of the defendant Woods, and' indorsed by him and by the defendant Dayton. It was dated at Cooperstown, July 16, 1857, and was payable at the office of Townsend, Clark & Co., No. 180 Broadway, New York, forty days after date. It matured the 28th of August, and was on that day presented by the clerk of a notary public, at the office of Townsend, Clark & Co., to a person in charge of the office and who attended to the books and-papers, who took it and examined it and replied that there were no funds there to pay it. The clerk did not personally know the man to whom he thus presented the note. A notice was, on the next day, sent by mail to the indorsers, addressed to them at their respective places of residence, at Lockport and Brock-port. The one sent to Woods was in the following words:

      “New York, August 28, 1857.
    Mr. J. L. Woods, Lockport, if. Y.,
    Sir: Please to take notice that a promissory note drawn by Orrin Worth, for $2000, indorsed by you, is protested for non-payment, and that the holders look to you for payment thereof. Your obedient servant,
    A. B. Bobees, Wotary Public.”
    The notice, including the signature, was printed, except that part of the former which contained the date and address, and the name of the maker of the note.
    The defendant offered to prove that there were, at the time the note sued on matured, three other notes made by Worth, and indorsed by the defendants' Woods and Dayton, each for the' payment of $2000, outstanding; that they matured, respectively, on the 30th of April, the 8th of June, and the 16th of July, 1857; that two of them were held by James C. Hamilton, and the other by the Exchange Bank of Lockport; that Woods and Dayton were accommodation indorsers on these, as they were shown to be on the note ■ sued on. The evidence was objected to by the plaintiff’s counsel as not material, and was excluded by the judge.
    The defendants then offered to prove that they had indorsed another note for the accommodation of said Worth, for the same amount as those above mentioned, which matured on the 24th of July, 1857; that it was payable in Wew York, and was discounted by the plaintiff; and that for aught the defendants knew, that note was outstanding at the maturity of the note sued on. That evidence was likewise excluded, on the plaintiff’s objection. The defendants further offered to prove, that since the 6th of January in that year they had indorsed eleven other notes for North’s accommodation, each for the same amount of $2000, which notes, respectively, matured prior to the note sued and on different days in each of the months of that year, from January to August inclusive; and that for aught the defendants Woods and Dayton knew, all the before mentioned notes were outstanding at the maturity of the note in suit. The.evidence thus offered was also excluded, on the plaintiff’s objection. The defendants’ counsel requested that the point whether a sufficient presentment for payment and refusal to pay had been shown, should be submitted to the jury, which the judge accordingly did; instructing them, however, that it was not. necessary that the individual making the demand should be personally acquainted with the man having charge of the office at which the note was payable. The defendants also claimed that tiie notice of protest was insufficient, because the signature of the notary was printed, instead of being written; but the judge overruled the point. The counsel for the defendants excepted to the several rulings adverse to them. The verdict was for the plaintiff, for the amount of the note, with interest; and the general term of the Supreme Court affirmed the judgment, upon which the defendants appealed to this court.

      J. K. Porter, for the appellants.

      A. J. Parker, for the respondent.
   Denio, Ch. J.

It was not shown, and the evidence which Was offered and excluded Would not have proved, that the plaintiff, at the time the note sued on matured, held another note made by Orrin North and indorsed by the defendants. The only other such note which the plaintiff is supposed .to have held .matured about a month prior to that time. It was not offered to be proved that it had been protested for nonpayment, or had not been. The offer was not to show that it was in fact outstanding when the note sued on matured; but only that the defendants did not then know but that it was' outstanding. The offer contains an implication that, at the time of the trial, it was known not to have been outstanding when the note sued on became payable. The facts which would have been disclosed, if the evidence offered had been received, would have been these: The plaintiff had formerly held a note corresponding with the one in suit, in the names of the maker and indorsers, and the amount and place of payment, but it became payable and was paid about a month before the note in suit matured. The question is, whether it was the plaintiff’s duty to so frame his notice of protest as to exclude the supposition that the former note was the one referred to as dishonored by non-payment. It would be impossible for him to conjecture that any such misapprehension would arise in the minds of the indorsers to whom the notice was sent. They, being parties to such former note, would be supposed to know that it was no longer on foot. If they were misled by confounding it with the former note, it was on account of their ignorance of the fact that such former note had been retired. That, I think, was their misfortune, and not the fault of the plaintiff. The fact that the plaintiff had before held a note of the same parties and amount, which had been paid a month before, would not suggest to them the necessity of any special description of the' note which they were causing to be protested.

The notice which was actually given was sufficient to charge the indorsers, unless circumstances, existed which would render the information it was designed to give equivocal and uncertain. This was so held, by this court, in Youngs v. Lee, (2 Kern. 551,) where the notice was precisely like the one given in this case. Then, as to the eleven notes mentioned in the last offer, it was not proposed- to prove that any of them were really outstanding when the note sued on was protested. They had all become payable before that time, and the only difficulty was that the defendants did not know but that they were outstanding dishpnored. The offer presents the same question which was raised in respect to the note above mentioned, except that the plaintiff had not been the holder of, or in .any way connected with them. The case is to that extent more favorable to the plaintiff than the- one which we have just considered. The observations made respecting that offer are at least equally applicable to the offer respecting the eleven notes. Their former existence did not cast any additional duty upon the plaintiff in giving notice of the dishonor of the note now in question.

The remaining question relates to the three notes mentioned in the first offer of proof made on the trial, It was proposed to show that' they were in fact outstanding when the note now in question matured. They each corresponded with this note in the names of the parties and the amount. But they were past due; they were held by other parties, and the plaintiff had no connection with them; and, so far as appears, had no knowledge of their existence. Whether the defendants had been charged as the indorsers upon them is not stated. The defendants’ point is, that the notice of protest in the present case was uncertain and insufficient, because the defendants may have mistakenly supposed that it referred to one of these notes, all of which had been for some time past due. The argument derives some countenance from the case of Cook v. Litchfield, (5 Seld. 279.) But I think it is not governed by that case. There the plaintiff held four notes, precisely alike as to parties, date and amount, but they matured in successive months. They • were protested as they respectively became payable, and the notices' specified the maker’s name, the date and amount accurately, but did not, in either instance, mention the time of credit mentioned in them, or the day they became payaMe; but they stated that they had been .protested for nonpayment the day they became payable. There was nothing in either of the notices which showed to which of the four notes it referred, unless it might be gathered from their dates, which were the date of the maturity of the respective notes. This court held the notices insufficient, except as to the note which first matured. The case differs from the one before us, in this: The, plaintiff there held all the four notes, and he therefore knew that there was a chance for misapprehension when he gave the second and succeeding notices, which each contained a description that would apply precisely as well to any one of the four notes as to any other of them. He was therefore, as the court held, without excuse in not adding some. discriminating statement which would enable the indorsers to know to which of the dishonored notes it applied. Here, the bank knowing nothing as to the other dishonored notes mentioned in the offer, could not be expected to frame its notice with any regard to them. If he sent a notice sufficiently descriptive to perfectly identify the note in the mind of one having only the knowledge which he had, I think he was not guilty of laches. It was the misfortune of the defendants, if their dealings of a similar nature with the maker of the notes was so extended that a notice of protest which would ordinarily he sufficient, did not, under these circumstances, suffice to acquaint them of .the dishonor of the note held by the plaintiff. A notice may be so defective that we can see that under ordinary or probable circumstances it would not identify any paper. Such was the case of The Home Insurance Co. v. Green, (19 N. Y. Rep. 518,) where the space for the maker’s name was left blank, and the name was not at all mentioned.

The other questions do not call for any extended remarks. The point as to the presentment for payment, and the refusal, was submitted to the jury, according to the defendants’ express request. The instruction which accompanied the submission was right. To require that the person making the presentment should have a prior personal acquaintance with the party in charge of the place of business at which the paper was made payable, would be imposing a condition which would often he difficult to fulfill. The obligation of the maker is .to he present, either personally or by some one on his behalf, at the place of payment, prepared to make the payment. If the holder causes the paper to he presented at that place, to the person in charge, it is sufficient, whether there is' a personal acquaintance between the agents or not.

We are not referred to any authority to show that the notice of non-payment must be signed manually by the notary. On principle I think it unnecessary, if his name appears at the foot of the notification. It as fully acquaints the indorser of the dishonor of the note as would the manuscript signature of a person whose handwriting he did not know; and it certainly is not expected that the indorser should know the handwriting of the notary.

The judgment must he affirmed.

Selden, J. took no part in the decision; and Mullin, J. did not' dissent.

All the other Judges concurring,

Judgment affirmed.


author: Mullin, J.

text:
    Richard G. Swinburne and others v. Albert Swinburne.
    A trust in respect to real estate may be established by parol evidence.
    S. having made a written contract with H. and others, for the purchase of 160 acres of land, on credit, died, leaving a widow and heirs. The widow, after her husband’s death, took in her own name for the benefit of the family, a contract for 60 acres of the land and paid money upon it. At her request, and without the knowledge or consent of the other heirs, A. S. took a new contract for the purchase of the same’ premises, in his own name, either for the benefit of the family or in fraud of their rights. He subsequently took a deed from the vendor, to himself, sold the land, and received and applied the avails to his own use, and refused to account.

      Held, 1. That it was competent for the plaintiffs (who were all of the heirs of S. except A. S.,) to establish a trust in favor of themselves, as against A. S., by parol.
    2. That on evidence showings the above facts, a valid resulting trúst was es-, tablished, and the plaintiffs were entitled to relief, in respect to their shares of the purchase money received by A. S. on the sale of the land.
    This action was brought by the plaintiffs, the children and • heirs at law of Peter Swinburne deceased, to recover of the defendant, their share of the purchase money of - a farm of land situate in Denmark in the county of Lewis, which had been purchased by said Peter in his lifetime and partially paid for by him, and of which land the defendant, without ■ the knowledge or consent of the heirs of the said Peter, (of whom the defendant was one,) obtained the title and sold and conveyed the' same and received and converted to his own use the proceeds.
    The facts were these: On the 1st of August, 1810, said Peter Swinburne entered into a contract with Richard Harrison and others, owners in fee, through Isaac N. Bostwick, their attorney, for the purchase of 160 acres of land in Denmark, Lewis county, and for which he agreed to pay the sum of $472.97; and to secure the payment thereof he gave an instrument in writing signed by him, obligating himself to pay for said lands in certain installments, but -the terms of said writing did not appear. Peter entered into possession of said land, cleared a part of it, put up buildings and fences and otherwise improved it. He paid for and obtained a deed of 100 of the 160 acres. Peter died in October 1822, leaving him surviving his widow, Artemisia, and several' children, his heirs at law. After his death, and in J anuary 1833, said Artemisia took from the said Bostwick, the agent of the owners, a contract for the 60 acres, for which she obligated herself to pay $475.87. She continued in possession of said 60 acres and made improvements thereon. The family lived on these 60 acres, and the last mentioned contract was taken for the benefit of the children of said Peter. About this time one of the sons and a daughter died with-out children and intestate, neither ever having been married. Something was paid by the said Artemisia while she held the contract.
    About the 1st of November, 1840, the defendant took a contract for said land, from the owners' in fee," obligating himself to pay for said 60 acres the sum of $511.20. The said Artemisia surrendered her contract for said land. During all the time from 1810 the family of said Peter had resided on and used and cultivated the land. In 1844 the defendant took a deed of said 60 acres in his own name, without the knowledge or consent of the other heirs of said Peter. The money paid for the land on said several contracts except the amount ($511.22) paid on the last contract, was raised from the farm by the joint labor and services of the several members thereof. In August 1845, he sold some 4 or 5 acres of said 60 to one Clark, for $50. In April 1847, the defendant sold the residue of said 60 acres to one Horace Rogers, for $1475, and received the purchase money paid therefor. Neither the contract to Peter nor the one to his widow were forfeited, but each new contract was given for the balance due on the preceding, and the new ones were given for the benefit of the widow and heirs of Peter Swinburne.

      The defendant’s counsel moved for a nonsuit, on the following grounds, viz:
    1st. The complaint does not contain facts sufficient to constitute a cause of action.
    2d. It is not averred that the evidence of the trust is in writing, nor any facts stated sufficient to show the existence of a trust.
    3d. From the proofs it appears that the defendant contracted and took a deed in his own name, and that no trust is fastened on the estate.
    4th. The defendant had sold the land prior to the commencement of the action, which was known to the plaintiffs and averred in the complaint.
    5th. It appears affirmatively that a deed was given for 100 of the 160 acres, and that would be a rescisión of the contract of 1810.
    The motion was denied, and the counsel excepted.
    The learned judge before whom the cause was tried found the facts substantially as stated above, and ordered judgment in favor of the plaintiffs for $839.64, being for five tenths thereof, which the plaintiffs owned in their own right, the widow’s life estate in the two tenths which belonged to the son and daughter who died, six eighths of ten tenths owned by the plaintiffs in their own right as heirs of said son and daughter, with interest on said share of the purchase money from the day of sale to the date of decision.
    Several exceptions to the reception of evidence were taken on the trial.
    The defendant had purchased the interest of one of the heirs in said premises, which, with his own share and that of the plaintiffs, represents the interest of all the heirs in the premises, or the proceeds thereof.
    Judgment being entered in the Supreme Court in accordance with the findings of the judge, the defendant appealed to the general term of the Supreme Court, which affirmed the judgment; whereupon he appealed to this court.

      L. Tremain, for the appellant.

      A. J. Parker, for the respondents.
   Mullin, J.

(After discussing various exceptions taken on the trial to the reception of evidence.) If a new trial should be granted, it will save expense to the parties if the court should now dispose of the question whether it was competent for the parties to prove a trust in this" case by parol, and if so, whether a trust has been established by the evidence.

The facts found are, that Mrs. Swinburne, after the death of her husband, took in her own name, for the benefit of the family, a contract for the 60 acres, and paid money upon it. That at her request, without the knowledge or consent of the other heirs, the defendant took a new contract for the same premises, in his own name, either for the benefit of the family or in fraud of their rights; that he thereafter took a deed to himself, sold the land and received and applied the avails to his own use and refuses to account.

It seems to me the case of Lounsbury v. Purdy, (18 N. Y. Rep. 515,) is decisive of this case. In that case Duncan purchased the premises of Merrill in trust for the plaintiff, a married woman, but the trust was not created or declared by writing. The plaintiff paid $100 of the purchase money down. Duncan and one Purdy gave a note for $423, which was to be and was afterwards paid out of the plaintiffs means, and the balance was paid by assuming a prior mortgage on the premises. The plaintiff did not consent to Q. taking the deed in his own name without declaring the trust. She knew and consented that the deed be taken in the name of either Q. or one Purdy. It was held that there was a valid resulting trust in favor of the plaintiff, and that the giving the note was to be regarded as equivalent to a payment by her.

The distinctions between the two cases are, that in that case, there was no interest in the plaintiff until the purchase by the trustee; in this, the heirs of Peter Swinburne had an interest prior to either the defendant’s contract or deed. In that case the plaintiff knew that her brother or Purdy was to take the title in his name; in this, the heirs did not know of any such intention. In this case, therefore, 'these important considerations are cleatly proved, and establish in connection with the other facts found, a resulting trust,

o The. consideration in the case cited was paid by the cestui que trust; in this case in part only by the cestuis que trust. But the only effect of such payment by the trustee 0is to give him a lien on the trust property till he is repaid. A trustee can not appropriate the trust property to his own use because he may pay out of his own pocket a part of the price, and thereby deprive the cestui que trust of his interest in the property, or limit that interest to the amount actually paid. This would be 'in violation of a well settled equitable rule that the trustee can not deal with the property for his own benefit. All profit made from it belongs to the cestui quctrust.

The vendor, before the deed to the defendant, held the title in trust for the heirs of Peter. The defendant purchased of him with full knowledge of these rights, and thus the trust which bound the property in the hands of the vendor followed it into the hands of the defendant. (Story’s Eq. § 1256.)

It was held in Van Horne v. Fonda, (5 John. Ch. 388,) that one tenant in common could not buy in an outstanding title for his own benefit and exclude his co-tenants from an interest therein. If he may not buy in an outstanding title, much less may he buy in a title that cuts off altogether the title under which he and his co-tenants hold.

In Burrel v. Bull, (3 Sandf. Ch. 16,) three joint owners of a lease deputed one of their number to obtain a renewal for their joint benefit, and in violation of the rights of his co-owners he took the new lease in his own name; it was held that he could not exclude the others from participating in the benefits of the new'lease.

The sáme principle was applied in Featherstonhaugh v. Fenwick, (17 Ves. 298,) where one partner clandestinely renewed a lease of the premises on which the partnership business was carried on, in his own name, he was held to account for it as joint property.

I entertain no doubt but that it was competent for the plaintiffs to establish a trust in this case by parol; nor but that on the evidence a valid resulting trust is established, and that the plaintiffs are entitled to relief. But competent evidence was excluded, and for that reason the judgment should be reversed and a new trial ordered.

The dower of the widow seems to be recoverable in this case by the plaintiffs without any assignment or transfer from her to the plaintiffs. The former judgment in this case was reversed because the plaintiffs recovered for the dower interest. The judgment should be reversed for this reason.

All the judges concurred on the point respecting the establishing of a trust by parol; and upon the point that dower was improperly allowed the plaintiffs; though the widow was entitled to dower.

Judgment reversed.


author: Ingraham, J. Denio, Ch. J.

text:
    Mariana Harris, Administratrix, &c. of Charles T. Harris, deceased, v. Hamilton Murray and others.
    A sheriff can not, upon an execution issued in an attachment suit brought against the members of a limited partnership, levy upon, and sell, the right, title and interest of a special partner in the goods, chattels, assets and accounts of the firm.
    The rule that a mere irregularity will not • render a sale upon execution invalid, provided the execution is valid, does not apply where a sale has been made of something which the sheriff had no authority to sell. In such cases the attempt to obtain possession of the thing sold may be resisted by showing that the sheriff had no authority to make the sale. The one is a want of jurisdiction; the other is a mere irregularity.
    Where a sheriff is selling the interest of a special partner, in the property of a limited partnership, the purchaser is hound to know that such sale is illegal. Hence it is not necessary for the special partner, though present, to give any notice.
    More especially is such notice unnecessary if the purchaser is himself a partner in the firm.
    A levy upon the interest of a special partner in the property of the firm, upon attachments, will not deprive such partner of his interest, or the right to an account, or prevent him from collecting any surplus remaining over and above such claims as the sheriff has, upon it. „
    In April, 1854, Mathaniel Dougherty, as general partner, and Eliza Harris, Charles T. Harris and Hamilton Murray, as special partners, formed a limited partnership to continue until 1857. At the same time another agreement was entered into between the same parties by which Charles T. Harris agreed to pay off certain notes theretofore given by him, as they matured, and not to incur any further obligation in the form of a note or other security, without the' written consent of the other partners, and in case of violating such agreement his right to an interest in the profits as special partner should thenceforth cease.
    In Hovemher, 1854, the sheriff, under two executions against Charles T. Harris, sold the right, title and interest of Charles T. Harris in the property of the firm. The sale was on the steps of the city hall, and none of the property sold was in view of the sheriff or parties, at the time. The defendant Hamilton Murray became the purchaser. All the partners except Eliza Harris were present at the sale, and the whole was sold in one lot or parcel. ¡ .
    The executions under which the sale was made were issued in actions commenced by attachment, one of which was produced on the trial.'
    The validity of the sale was denied, on the ground that the same was irregular and void because right's in action could not be sold, and because the property sold was not in view of the parties at the time of the sale, and was not sold in parcels.
    The defendant moved for a dismissal of the complaint, which was granted. The court found the facts as above stated, and as law that the sale was valid, and dismissed the complaint. This judgment was affirmed by the general term.

      George W. Parsons, for the appellant.

      S. S. Harris, for the respondent.
   Ingraham, J.

There is no finding by the court, nor was any evidence offered to warrant the conclusion that the sale was made on any understanding as claimed by the plaintiff. Such understanding and alleged agreement is denied by Murray in his answer, and if the plaintiff expected any benefit therefrom, evidence to prove the same should have been offered.

The main question in the case is, whether the sale under the executions was valid. The property sold was “the right, title and interest of Harris, which he had on the 31st of August, 1854, or at any time afterwards-, in the goods, chattels, assets and accounts of the firm of H. Dougherty at Ho, 101 Water street.”

The plaintiff presents two grounds of objection to the sale. 1st. That the sheriff could not sell under an execution an interest in choses in action. 2d. That the sheriff could not sell personal property under an execution unless the same was in view at the time of sale, and then he should have sold the same in parcels.

It must he remembered that this was not a general partnership, but was formed under the statute authorizing limited partnerships, and the interest sold Was that of one of the limited partners. This statute prohibits any interference by the special 'partner with the management of the property of the firm, or the withdrawal of any part of the original capital and even of the _ receipt of interest on his advances, if such payment would reduce the original amount of such capital.

As the special partners can not interfere with the property or take the control from the general partners, it follows that the sheriff on an execution has no such power. He can not, on an execution against such partner,, do any thing with the partnership property that the special partner could not do. He therefore would have no authority to take from the general partners the partnership property, for the purpose of selling the interest of the special partner in the property and assets of the firm; nor could he, ae in the case of other partnerships, sell the interest of one partner in the property of the firm and deliver the property in which such interest is sold to the purchaser. All that the sheriff, under such circumstances, could sell would be the interest of the special partner, if such interest could be sold under an execution. This question was fully examined in this court in Stief v. Hart, (1 Comst. 20,) in regard to property pledged by the debtor, so far as related to the right of the sheriff to take the property out of the possession of a party entitled to the exclusive possession. of it. In^ that case the property was pledged by the judgment debtor. The sheriff levied upon the interest of the. pledgor, and took the possession of. the property from the pledgee, who brought replevin. . The circuit judge charged in favor of the right of the sheriff to take such possession. The judges of this court were equally divided upon the question, and the judgment below was affirmed. Those judges who sustained the right of the sheriff to take the possession did so upon the ground that the 20th section of the statute (2 R. S. p. 366) expressly authorized a levy on and sale of the right and interest of the' pledgor in the goods pledged, and that the 23d section required the same to be present at the time of sale. From the opinions delivered by the judges, I think it may fairly be inferred that none of them held the rights of the sheriff to take the property out of the possession of a party having the exclusive right of possession would-have existed indejiendent of the authority conferred by the 20th section, and as that authority is limited to the case of goods pledged, the law as to taking such property out of the possession of a party entitled solely thereto remains unchanged.

And in Mattison v. Baucus, (1 Comst. 295,) Gardiner, J. while admitting that the interest of a mortgagor in personal property was subject to levy and sale under an execution, placed his decision upon the ground that the right to the possession for a limited period was in the mortgagee. But where by the express terms of the mortgage the mortgagee was entitled to the possession, he held the interest of the mortgagor to be a mere chose in action, not the subject of levy and sale under execution. (See also Marsh v. Lawrence, 4 Cowen, 467.) In Hull v. Carnley, (11 N. Y. Rep. 501,) the same "distinction is recognized, and the cases which ' hold that possession in such cases is necessary to give validity to the levy are approved.

It must be conceded that under the law as it was before-the code, mere choses in action were not the subject of levy and sale under execution. The interest of Harris in the property of a limited partnership can hardly be said to be an interest in the property of the firm. He advanced to the firm a sum of money which he is entitled to receive hack with interest at the termination of .the partnership. He is also entitled to a share in the profits. But he is to no further extent the owner of the property. Upon payment of these claims the property would belong to the general parties.

By the 291st section of the code the existing provisions of law relating to property liable to sale on execution are made applicable to the executions issued by virtue of that act, except when in conflict therewith. There is nothing in the code which would be in conflict with the law on this subject. The code, it is true,' (§ 234,) provides for a levy 'by attachment on all species of personal property, but the 235th section prescribes the mode of enforcing such attachments; and the 237th section directs how choses in action are to be applied to the payment of judgments by the sheriffs. In no case does it specifically provide for the sale of any such right of action.

There are many reasons why such a sale should not be sanctioned. The value of such an interest can never be known or disclosed to purchasers at the time of sale, and if the law directs that personal property shall not be sold under execution, except the same is present and can be seen by the purchasers, surely the same principle requires a different mode of disposing of an unsettled claim against a firm than to sell it by sheriff's sale. Ho purchaser, unless one interested in the partnership, could know or ascertain its value, and such a mode of disposition would be a sacrifice of an interest in a firm very inconsistent with a due administration of justice.

It is said, however, that whether the sale was regular or irregular is immaterial, because the executions were valid. That would undoubtedly be so if it was a mere irregularity in the sale, and the remedy would be by motion to set. aside the sale. But that rule does not apply where the sale has been made of something which the sheriff had no authority to sell. In such cases the attempt to obtain possession of' the thing sold may be resisted by showing that the sheriff had no authority to make the sale. The one is a want of jurisdiction ; the other a mere irregularity.

It is also, insisted that Harris was estopped from objecting to the validity of the sale because he was present and suffered the sale to proceed without objection. There are two sufficient answers to this objection. The one is that Harris had no knowledge which he withheld so as to induce others to act who would not have done so if he had communicated the same at the sale. It was apparent on the face of the sheriff's notice. He was selling an interest in partnership property. The purchaser ought to. have known, as well as Harris, that such sale was illegal; and it was therefore unnecessary for Harris to give any notice. The other reason is that Murray, who seeks to avail himself of the sale, was a partner, and had all the knowledge which Harris had. There was nothing to communicate to Murray on this subject, which would have prevented his action", in purchasing at the sale, and which was not known to him at the time.

Mor did the fact of a levy having been made under the attachment deprive Harris of his interest in the firm. There had been no appropriation of that interest by the sheriff. The accounting would of course be subject to any claim which the sheriff could make upon it, but did not deprive Harris of his interest, or prevent him from collecting any surplus over such claims as the sheriff had upon it.

I am of the opinion that the judgment should be reversed,' and a new trial ordered; costs to abide the event.

Denio, Ch. J.

The judgment appealed from can not be sustained on the ground on which it was placed by the general term of the Supreme Court in the opinion of Mr. Justice Clerke. His position was that there was a fatal variance .between the statements of the complaint and the position on which the plaintiff sought to recover; that the complaint counted solely on a trust arrangement by which the defendant Murray agreed to use the judgment for the benefit of C. Í. Harris, the original plaintiff, and that this alleged agreement not having been proved, the plaintiff could not avail himself of the nullity of the sale if it were really void. The scope of the complaint was that the plaintiff had an interest as a special partner in the firm of Dougherty; that the copartnership had expired by its own limitation; that Murray claimed that he had purchased the interest of the plaintiff and was not therefore bound to account to or pay him anything, and that the defendant Dougherty acquiesced in that view and denied the plaintiff’s rights. The principal ground relied on in the complaint no doubt is that the defendant Murray was estopped from purchasing on his own account by reason of that agreement; but it was not admitted that any sale had in fact been made, but only that the defendant pretended that' there was one. If it appears that the alleged sale was void so that no title passed thereby, there is nothing to preclude the plaintiff from having an account of the copartnership, or the value of his interest. The conceded fact entitled him to an account or to the money he had invested and the interest, unless the plaintiff had been divested of that property by a valid sale. Whether the former sale was inoperative on account of its inherent invalidity, or on account of an estoppel growing out of the alleged trust agreement, was not material. His suit was for an account and payment of his interest, and he was clearly entitled to that relief, unless Murray had acquired his rights by a sale legally and equitably operative. The suit was tried on the theory that the result depended on the validity of the sale. This is apparent from the defendant’s motion to dismiss the action on the ground that the complaint admitted a sale, and from the finding of the referee that the sale passed all the interest of the plaintiff to Murray. The interest of the plaintiff, in the firm of Dougherty was not tangible property, and could not be sold under an ordinary writ of fieri facias. It was in the nature of a thing in action which may be subjected to the payment of the debts of the owner by a proceeding adapted to such a case; and the sole question is whether such an interest was vendible under an execution except in a suit commenced against an absent debtor by attachment. The subject of attachments against foreign corporations, and against non-resident, absconding or concealed and fraudulent debtors, is regulated by chapter 4 of title 7 of the code of procedure, embracing sections 227 to 243 inclusive. Besides the special provisions made by these sections, there is a direction that the sheriff shall proceed on the warrant of attachment in all respects in the manner required of him by law in the • case of attachments against absent debtors. But the sale on which the defendants rely was not made pursuant to the warrant of attachment, but it was made subsequently to the issuing of execution on the judgment, and by virtue of such execution. The provisions of the code on this subject are singularly confused and obscure, owing apparently to an attempt to embrace in a few brief sentences a subject requiring much detail, and to assimilate the duty of the sheriff under the attachment and the duties of trustees under the provisions respecting trustees in attachment ca'ses, contained in the several statutes. Upon a careful reading of this part of the case, I am inclined to the opinion that it was never intended to expose interests of the nature of that which the plaintiff had in the special copartnership to a peremptory sale by the sheriff on execution. The sheriff can perform certain acts under the warrant of attachment before an execution shall be issued, but after the issuing of execution his duties are regulated by the second and succeeding subdivisions of section 237 of the code. He is directed to sell under such execution so much of the attached property, real and personal, “except as provided for in subdivision four of this section,” as may be necessary to satisfy the balance of the judgment. Provision is made that where the saléis “of any rights or shares in the stock of a copartnership or association,” the sheriff shall execute to the purchaser a certificate of sale which is to vest in him all the rights and privileges which the debtor had. The fourth subdivision referred to as excepting certain property from the liability of a sale is as follows: “ Until the judgment against the defendant shall be paid, the sheriff may proceed to collect the notes and other evidences of debt, and the debts that may have been seized or attached under the warrant of attachment, and to prosecute any bail he may have taken in the course of such proceedings, and apply the proceeds thereof to the payment of the judgment.” As the code existed when this sale took place, it contained no provisions for the sale of such interests in any way; but by an amendment enacted in 1859, apparently to supply a' material omission, the subdivision was made to proceed thus: “After six months from the docketing of the judgment, the cóurt shall have power on the petition of the plaintiff, accompanied by a certain affidavit which is to state, among other things, that he has used diligence and endeavored to collect the evidences of debt in his hands so attached, and that some part of them remains uncollected, to order the sheriff to sell the same upon such terms and in such manner as shall be deemed proper.” If the interest in question was embraced under the denomination of evidences of ‘debt or of debts, there was a positive inhibition against selling it on the execution. If it was a right or share in the stock of a corporation or association, it might be thus sold. In my opinion it was in the nature of the interest first mentioned, and not of corporate stock. It was a sum of money invested in the partnership enterprise, to be reimbursed, if not lost in the business, at the end of the period during which the partnership was to continue, with any profits which had been earned, and which had not been divided. It was not payable in presentí, and probably not, in strictness of language, a debt at all. But it was merely held in trust for the special partner to be employed in the business mentioned in the articles, and finally returned to the special partner unless lost by the exigencies of the business. It was not a right or share in a corporation or association. The term association is never used in legal proceedings to define a commercial partnership, general or special. But it is known that a large proportion of the banking institutions of the state are formed as associations under the general banking law, and the statutes uniformly speak of them as associations. There would be a manifest impropriety in disposing of such'an interest at auction to the highest bidder. No party other than the remaining partners or their clerks would be likely to know anything respecting-the solvency or the condition of the concern, and it would be likely always to ‘fall into the hands of those parties at whatever amount they might choose to bid. The present case is an example of what would usually take place if this proceeding could be upheld. The plaintiff invested $15,000 in the copartnership on the third day of April, and in November following that money and the accumulated profits passed into the hands of his copartner Murray for $2625.00. But if I am not right respecting the general liability of this interest to a sale on execution, there is another ground upon which I feel satisfied that this purchase by Murray can not be upheld. By the instrument signed by all partners at the same time the articles for copartnership were executed, it was agreed that if the plaintiff should fail to pay his outstanding private obligations, which included the notes to Abbott, his interest in the profits as a special partner was to cease from the date of his failure to discharge such obligations, and thereafter the money contributed was to be a debt against the other partners, payable with annual interest at seven per cent on 31st of December, 1856. This instrument was given in evidence on the trial, and it showed that the plaintiff’s interest was a debt in the strictest sense, and that the sheriff should have retained the evidence of it and collected the interest as it accrued, and the principal when it fell due.

In whatever light, therefore, we regard the circumstances, I am of opinion that the auction sale W'as a nullity, and that it passed no interest to Murray, the purchaser. The suit was not for an accounting upon the precise footing of a debt in numero against the other partners; but it claimed the benefit of the plaintiff's interest in the concern, and if it was in the nature of a debt instead of the share of a partner, the plaintiff should not have been turned out of court for a variance which did not surprise or mislead any body. The plaintiff sets out the agreement under which the interest was turned into a debt, and that instrument was given in evidence on the trial without objection, and the facts which produced the conversion were proved. There is no valid pretense that Harris, the original plaintiff, was estopped by being present at the sale. He neither said or did any thing to waive his rights, or to entrap Hurray, the purchaser. That person knew all the facts which went to show the invalidity of the sale, as well as the plaintiff, and both are chargeable with, a knowledge of the law. It was a sale in invitum under pretended legal process, and the purchaser bid at his peril. If he could sustain it he got the plaintiff's money for less than one-fifth part of its amount. If the proceeding was illegal or inoperative he failed to make a great speculation. He took his chance and must abide the result.

I am of opinion that the judgment should be reversed, and a new trial awarded.

Selden, Weight and Johnson, JJ. concurred in the above opinions.

Davis and Htjllin, J J. were for affirmance. Hogeboom, J. took no part in the decision.

Judgment reversed.


text:
    Charles A. Manning v. Patrick Monaghan and others.
    A mortgagor of chattels, remaining in possession, before default, under a clausa in the mortgage entitling him to do so, has an interest in the property, which is the subject of levy and sale on execution against him, or to seizure by a receiver appointed in proceedings supplementary to execution.
    Although the interest 'which passes to the purchaser at such sale is only such an interest as the mortgagor had, yet the sheriff, and the parties promoting the sale, are not trespassers if the sale is in general terms, without any notice being taken of the existence of the mortgage.
    In an action by the mortgagee, against a receiver appointed in supplementary proceedings, for seizing, selling and converting mortgaged chattels, the damages should be assessed as in an action on the case for an injury to the plaintiff’s reversionary interest, by confining the damages to the loss he has sustained by the dispersion of the property among the several purchasers.
    After the new trial ordered in this case, upon a former appeal, (23 N. T. Eep. 539,) the issue was again tried before Mr. Justice Monell, in January, 1862, when the plaintiff recovered by the verdict of the jury $1368.06 damages. The action was brought against the present defendants and one Gosling for the seizing, selling and converting certain furniture, pictures, &c., which one Edward Schenck had mortgaged to the plaintiff, and which had been taken by the defendant Cavenagh as a receiver appointed in certain proceedings supplementary to execution, at the instance of the defendant Monaghan, who had recovered a judgment against Schenck, the mortgagor, after the date of the mortgage and before the time of credit mentioned in it had expired; and after the return of an execution unsatisfied, had instituted these proceedings. The mortgage was for $1070, and was dated October 5, 1854, and was conditioned for the payment of the above mentioned amount in twelve months from, that date. It contained the following provisions: “And until default be made in the payment of the said sum of money, I [the mortgagor] am to remain and continue in the quiet and peaceable possession of the said goods and chattels, and the full and free enjoyment of the same.” A copy was filed in the clerk’s office on the day of its date, but was never again filed.’ The property mortgaged consisted of a valuable rosewood piano, and expensive tables, chairs, pictures and ornaments, and constituting the parlor and dining room furniture of a well furnished house in New York. The goods were sold at auction under the direction of Cavenagh, the receiver, on the 21st of -April, 1855, and the action was brought in January, 1856. The goods were sold in parcels to several purchasers, and Gosling was a buyer of several articles, amounting at the auction price to $261.75, and at the plaintiff’s valuation, to $380, The plaintiff discontinued the suit, as against him, during the trial. It appeared that the defendants Moneghan and Cavanagh were aware of the existence of the'plaintiff’s mortgage and that the plaintiff knew of the' sale, and that he and his counsel were present some part of the time during which it was going on, but did not give any notice to the bidders or claim that the sale should be made subject to it. The defendants did not mention the existence of the mortgage, but the property was sold without regard to it. It appeared that after the year’s credit had expired, the plaintiff had made a written demand of Gosling.qf the portion of the furniture purchased by him, a list of which was appended to the writing. He also demanded the whole from the defendants. The defendants’ counsel moved for a nonsuit, on many grounds not subsequently insisted on, and upon some which were made on the argument. Among these was the general position that the defendants were justified under the proceedings which had been taken under Monaghan’s judgment, to sell the property as they had done. They also insisted that the presence of the plaintiff at the sale was evidence of his assent to it, and moreover that the lien of the plaintiff’s mortgage was lost by his omission to refile it. The motion was denied. The defendants, after excepting, requested the judge to charge the affirmative of a number of positions, and among them the following: “ That the plaintiff could only recover for such damages as he could prove resulted to him by reason of the taking away, selling and scattering of the property, such as the expenses in traveling for and getting possession of the property, and the value of the same if not found.” They also insisted that the defendants were entitled to be credited with the value of the property purchased by the defendant Gosling, as to whom the action had been discontinued. The judge declined to so charge, and the defendants excepted. He instructed the jury that the taking and selling the property by the defendants in the manner it was sold, was a violation of the plaintiff’s rights for which he was entitled to recover. He charged that the measure of damages was the amount of the mortgage debt and interest, provided the property taken by the defendants was of that value; but as it appeared that property included in the mortgage, of the value of $119, had not been taken by the defendants, that amount was to be deducted from the mortgage debt and from the recovery. The defendants’ counsel excepted to the part of the charge which held that the action was sustainable, and to the rule of damages which the judge had laid down. The judgment on the verdict was affirmed at the general term, and the defendants thereupon brought this appeal.

      F. Byrne, counsel ex parte for the appellants.

      W. Stanley submitted points for the respondent.
   Denio, Ch. J.

Certain positions respecting actions of this character are perfectly well established in this court, viz. (1.) That a mortgagor of chattels remaining in possession before default, under a clause entitling him to such position, like the one in this mortgage, has an interest in the property which is the subject of levy and sale on execution against such mortgagor. The seizure by the receiver was in the. nature of a levy on execution so far as this case is concerned. (2.) That although the interest which passes to the purchaser at such sale .is only such an interest as the mortgagor had, yet that the sheriff and the parties promoting the sale are not trespassers if the sale is in general terms, without any notice being taken of the existence of the mortgage. These points were involved in Hull v. Carnley, which- was twice before this court, and were settled upon good deliberation. (1 Kern. 501; S. C. 17 N. Y. Rep. 202.) Goulet v. Asseler, (22 N. Y. Rep. 225,) reaffirms the doctrine in Hull v. Carnley, and applies it to a case precisely like the one before us. The complaint in that case and the one we are .examining, seem to have been substantially identical. They s6t out the mortgage as the foundation of the plaintiff’s title, and charge the defendants with the wrongful act of seizing the goods and selling them, and appropriating the proceeds to. their own use. There is no mention made in this complaint of the legal process which the defendants had, authorizing them to take and sell the property, or any complaint of an abuse of the process of law. The grievance is not any malfeasance or misfeasance in the manner of the sale, but the complaints, both in this case and in that of Goulet v. Asseler, count on the seizure and sale as alone conferring the cause of action. ■ There is a good deal of other language in this complaint, but nothing which qualifies that which I have stated. The last mentioned case cited seems to me a precise authority for reversing the judgment which we are reviewing. It may be added that this case was tried by the learned judge as though it was an action of trespass or trover. The de-* fendants’ counsel, after his main position that the action could not be sustained was overruled, sought to have the damages assessed upon the footing of an action on the case for an injury to the plaintiff’s reversionary interest, by confining the damages to the loss he had suffered by the dispersion of the property among the several purchasers; but' the judge refused to charge the jury to that effect, and finally laid down the rule of damages precisely as though the plaintiff had a present right of possession, and the action had been trespass or trover for an immediate injury to that possession. In any view that can be taken of the case, this was an erroneous direction. If the action had been case, for an injury to the plaintiff’s reversionary interest, which is, upon •all the cases, the only action that could be maintained, the rule of damages indicated in the request would have been the true one. For this error in the charge I am of opinion that this judgment can not be sustained. I am of opinion that the exceptions based upon the supposed assent by the plaintiff to the sale and upon the omission to refile the mortgage, were not well taken.

It remains only to mention, that upon the former appeal in this case, the judgment was reversed solely because there had been a mistrial in the Superior Court, and that no other point was adjudged or attempted to be. This is explicitly stated in the report. Some of the judges were of opinion that where a sale on execution against a mortgagor (the instrument containing the provision found in the one before us) has been made, the mortgagee may maintain an action in the nature of trespass on the case, for an injury to his interest as a reversioner. I did not participate in that view, as may be seen from my observation in that case, (23 N. Y. Rep. 539.) I forbear to enlarge upon that question because the present case does not present it, and because I have already sufficiently explained my views upon that question, in the cases to which I have referred. I am in favor of reversing this judgment.

Weight, Johnson, Hogeboom and Ingbaham, Justices, concurred. Mullin and Davies, Justices, were for affirmance. Selden, J. was not prepared to vote.

Judgment affirmed.