author: Johnson, J. Davies, J.

text:
    Joel S. Oatman v. John Taylor and others.
    The defendants executed nine written instruments, variously dated from June 10, 1852, to Jan. 10, 1856, and all maturing July 10, 1856, by which they jointly and severally promised to pay to' the order of B. $700, with interest. Each of these instruments (except one) purported, on its face, to have been given for six months’ interest on a loan made by B. according to the conditions of a certain agreement made between the parties at the time of making the loan. On the trial, the plaintiff (who sued as indorsee) produced the instruments and proved the indorsements of B. The defendants moved to dismiss the complaint as to all the instruments except one, on the ground that the plaintiff .had given no proof that the conditions of the agreement mentioned therein had been complied with. The motion was denied. The defendants then proved that the instruments were given in pursuance of an agreement signed by B., and dated July 10, 1851. It recited that B. had received from the makers $60,000, par value of a certain stock, and the joint and several note of the defendants for $20,000, and interest, payable half-yearly; B. having paid the defendants $20,000, upon the agreement that at the expiration of five years B.- should have the election either to hold the stock and cancel the note and the interest notes, which it was agreed should be given for the interest on said $20,000, each six months, or he should be at liberty to enforce the payment of said note; and on payment of said note, and the several interest notes, the stock was to be re-transferred to the defendants; and it was agreed that joint and several notes for the interest, bearing interest, should be given as each semi-annual payment of interest fell due:

      Held, 1. That no question having been raised, on the trial, as to whether the plaintiff could obtain title to the instruments by the mere endorsement and delivery thereof by the payee, none could be raised on appeal.
    2. That payment was a condition precedent to B.’s obligation to re-transfer the stock, and¿ to the defendants’ right to have it, should the notes be enforced. That his right to enforce the notes, or to cause them to be enforced, was absolute and unconditional, and he was in no respect bound either to give notice of his election, or to offer to re-transfer the stock, to enable himself to enforce the notes.
    3. That evidence of the pledge of the stock by B. to a bank, as collateral, • before the maturity of the notes, and that it was still held in pledge, would not prove, or tend to prove, that he had elected to hold and.take the stock absolutely, so as to entitle the makers to have the notes cancelled according to the agreement.
    4. That by transferring the notes, absolutely, to a third person; B. had necessarily elected to have them enforced, and would be bound to re-transfer the stock to the defendants as soon as they should have paid the notes. But that the notes were not cancelled, and nothing which was proved nor the offer to prove that B. had given no notice of his elec-, tian, under the contract, nor offered to re-transfer the stock, constituted any defense to the action.
    The action was brought upon nine several notes or instruments1 in writing, of which the following are copies:
    $700. Albany, Jan. 10, 1852.
    Four years and six months after date, we jointly and severally promise to payPhineas T. Barnum, or order, the sum of seven hundred dollars, with interest at the rate of seven per cent, per annum, for value received, it being six months’ interest on a loan of said Barnum, and payable at the American Museum, in the city of New York.

      {Signed.) John Tatlob,
    H. B. Hewett,

      [Endorsed.) William Beach,
    P. T. Baencm. John C. Beach.
    $700. Albany, July 10, 1852'.
    Four years after daje, we jointly and severally promise to pay to the order.of P. T. Barnum, seven hundred dollars, at the American Museum, in the city of New York, it being for interest on a loan made of said Barnum according to the conditions of a certain writing' dated July 10th, 1851.

      {Signed.) John Taylob,
    H. B. Hewett,

      {Endorsed.) William Beach,
    P. T. Babnum. John 0. Beach.
    $700. Abany, Jan. 10, 1853.
    Three years and six months after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum, New York, seven hundred dollars, for value received, with interest.' This note is given for six months’ interest, according to the conditions of a certain agreement made between the subscribers and the said Barnum. . ■ •
    • (Signed.) John Tatlob,' ■
    H. B. Hewett,

      {Endorsed.) William Beach,
    P. T. Babnhm. John C. Beach.

      $700.
    Three years after date, we jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, with interest, at the American Museum, in the city of New York. This note is given for six months’ interest on money borrowed, according to the conditions of a certain writing made by and between all the parties.at the time of loaning.
    Albany, July 2d, 1853.

      (Signed.) John Taylor,
    John C. Beach,

      (.Endorsed.) H. B. Hewett,
    P. T. Barnum. William Beach.
    $700. ■ Albany, Jan. lsi, 1854.
    Two years and six months "after date, we jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, at the American Museum, New York, with interest. This note is given for six months’ interest on a loan made by us to said Barnum, according to the conditions of a certain stipulation made between the parties at the time of making the loan.

      (Signed.) John Taylor,
    H. B. Hewett,

      (Endorsed.) ' John C. Beach,
    P. T. Barnum. William Beach.
    $700. Albany, July 1st, 1854.
    Two years after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum; in the city of New York, seven hundred dollars, this being for six months’ interest on a loan made according to the conditions of a contract between the said Barnum and the subscribers. This note to bear interest at the rate of seven per cent, per annum.

      (Signed.) John Taylor,
    H. B. Hewett,

      (Endorsed.)' William Beach,
    P. T. Barnum. Jno. C. Beach.
    $700. Albany, Jan. 10th, 1855.
    Eighteen months after date, We jointly and severally promise to pay to the order of P. T. Barnum seven hundred dollars, at the American Museum, in the city of New York, for value received, with interest, according to the conditions of a certain agreement in writing between the said Barnum and the makers of this note.

      {Signed.) John Taylor,
    H. B. Hewett,
    William Beach & Co.
    700. Albany, July 10th, 1855.
    Twelve months after date, we jointly and severally promise to pay to the order of P. T. Barnum, seven hundred dollars,, at the American Museum, in the city of New York, for value received, with interest, according to the conditions of a certain agreement in writing between the said Barnum and the makers of this note.

      {Signed.) John Taylor,
    H. B. Hewett,

      {Endorsed.) William Beach & Co.
    P. T. Barnum.
    700'. Albany, January 10th, 1856.
    Six months after date, we jointly and severally promise to pay to the order of P. T. Barnum, at the American Museum, in the city of New York, seven hundred dollars, for value received, with interest according to the conditions of a certain agreement in writing made between the said Barnum and the makers of this note.

      {Signed.) . John Taylor,
    ' H. B. Hewett,

      {Endorsed.) William Beach & Co.
    P. T. Barnum.
    The defense was a denial of the indebtedness, and an averment that the several notes were- given to Barnum, the payee, under a contract between the defendants and Barnum, of which the plaintiff had notice, and that by the terms of said contract and the acts of Barnum, the said notes had become and were cancelled.
    Upon the trial at the circuit the plaintiff proved the endorsement of Barnum upon each of the notes, and rested. The defendants, by their counsel, thereupon moved to dismiss the complaint as to all the notes except the first, on the ground: 1st. That as to said notes the.complaint did not contain facts sufficient to constitute a cause of action. 2d. That the plaintiff had not proved that the condition of the contract mentioned in said notes had Been complied with. The court overruled the motion and the defendants excepted.
    The defendants then proved that the notes in question were all given under and in pursuance of a contract in the words and figures following:
    “ Phineas T. Barnum hereby acknowledges to have received from the makers of the note hereinafter named, sixty thousand dollars (nominal par value) of the stock of the Deep Biver Mining and Transportation Company, and also the joint and several notes of John Taylor, William Beach, John C. Beach and Henry B. Hewett, for twenty thousand dollars, with interest at the rate of seven per cent, per annum from date, payable half-yearly; the said Barnum having paid the said drawers of the said note for said company said sum of twenty thousand dollars in cash, upon the agreement that at the expiration of said five years said Barnum shall have his election either to hold and take the said stock and cancel the said note and the interest notes which it is agreed shall be given for the interest on the said twenty thousand dollars, each six months, or he shall be at liberty to enforce the payment of said note, and on payment of the said note and the several interest notes, the said stoch shall be re-transferred to the said persons; joint and several notes for said interest, carrying interest, shall be given by the makers of said note as each semi-annual payment of interest falls due.
    “ Phineas T. Barnxjm.
    “New York, 10th July, 1851.”
    The defendants then offered to prove that Barnum did not notify them of his election under the contract, before the commencement of this action; and, also, that Barnum never offered to transfer back the stock mentioned in the contract. They also offered to prove that Barnum, prior to the maturity of the notes in question, pledged the said stock described in the contract to the Pequ'onock- Bank at Bridgeport, Conn., as collateral, and that said bank still held the stock in pledge. These offers were severally overruled, and the defendants by their counsel duly excepted. The evidence being closed a verdict was rendered by the jury for the amount of the several notes, principal and interest. A judgment was entered upon the verdict, and the defendants appealed to the general term of the first district. The judgment was affirmed by the general term and the defendants brought their appeal to this court.

      John H. Reynolds, for the appellants.
    I. The court erred in refusing to dismiss the complaint as to all the instruments upon which the suit was brought, except the one dated January 10, 1852, and first described therein.
    1. All the instruments, except the one dated January 10th, 1852, bore upon their face, and as a part of the obligation, that they were made at the time or subsequent to another .contract between the same parties and mentioned therein, and that the obligation to pay was to be enforced according to the conditions of such other agreement, and not otherwise.
    2. It was therefore incumbent upon the plaintiff to show what the conditions of the agreement referred to were, and that such conditions had not been performed, or in other-words, that the defendants had not performed their obligations according to the conditions of the contract referred to.
    3. The instruments sued on and the contract referred to therein formed but one agreement, and the plaintiff could not recover except upon showing a breach of the whole contract taken together and as a whole.
    4. "And it appearing by the agreement that the obligations sued on were not absolute and unconditional promises to pay, but subject to the conditions and contingency mentioned, they were not promissory notes. (Story on Notes, sections 1, 2, 22, 23; Bayley on Bills, ch. 1, sec. 6; Story on Bills, sections 42, 48; Chitty on Bills, ch. 5, p. 154; Curtiss v. Fancourt, 5 T. R. 482; Palmer v. Pratt, 2 Bing. R. 185; Van Wagner v. Terrett, 27 Barb. 181; Seacord v. Burling, 5 Denio, 444.)
    5. They did not, therefore, pass to the plaintiff by delivery or endorsement, and he showed no title, as no proof that he had purchased these things in action of Barnum, was given on the trial.
    6. And the rules applicable to bona fide holders of commercial paper cannot be invoked in aid of the plaintiff.
    II. By the contract of which the obligations mentioned in the complaint formed a part, Barnum had of the defendant stock in a mining company representing $60,000 of its capital, which lie was at liberty to retain for five years, and at the expiration of that period he was to have his election to retain the stock absolutely and .cancel the obligations given for the loan and the interest, or enforce the payment of the notes, in which case the stock was to be re-transferred to the defendants.
    1. Upon the trial no proof was given by the plaintiff of any election by Barnum, but the defendants offered to prove that he had not given notice of any election, and that previous to the maturity of the notes he had transferred the stock to the Pequonock Bank, and that -it was held by it at the time of the trial, and this proof the court rejected.
    2. Under this contract Barnum was bound to make his election immediately on the expiration of the five years, or he was bound to keep the stock and give up the notes, or the right of election is with the defendants. (Sage v. Hazard, 6 Barb. 179; Eno v. Woodworth, 4 Comst. 249; McNitt v. Clark, 7 J. R. 465.)
    3. The stock having been transferred to him upon the condition that at the expiration of five years he might if he should so elect re-transfer it to the defendant and recover «the money paid for it, he was bound to promptly make his election at the appointed time, or lose his right to return the stock and recover the purchase money. (See cases supra.) '
    4. The commencement of a suit by Barnum upon the notes several months after the expiration of the five years would not be deemed such an election as would entitle him to recover on the notes, and the commencement of a suit by Oatman, does not, in the remotest degree, tend to prove any election by Barnum. As the case stands the law adjudges that Barnum determined to keep the stock.
    5. By the very words of the agreement he was to be “ ai liberty to enforce the payment of the note,” only in case of his election to do so at the time named.
    6. It appeared, or the defendant offered to prove, that Barnum could not control the stock himself at the time of trial as he had long before transferred it, and this furnishes the very best evidence of his election to retain it absolutely. Although the agreement is that he is to return the stock on payment of the notes, he was bound to tender the stools when payment of the notes was demanded,
    7. Or the plaintiff was bound to show on the trial that Barnum was able to return the stock. The defendants were not under any circumstances bound to pay the notes when it appeared that the stock was beyond Barnum’s control.
    8. It is submitted that under such a contract no court would compel, the defendants to pay these notes, unless as a part of its judgment, provision was made for the return of the stock by Barnum to the defendants; and when.it was offered to be shown that Barnum had put it out of his power to return the stock, the evidence should have been received and judgment given for the defendants.
    The judgment of the supreme court should be reversed and a new trial ordered.

      John K Porter, for the respondent.
    1. The motion for a partial dismissal of the complaint was properly denied.
    2. The plaintiff was a bona fide holder of the notes for value, by transfer before maturity. (Pratt v. Adams, 7 Paige, 616; James v. Chalmers, 2 Selden, 209, 216.)
    2. The defendants admitted that the action was sustained on the first note, and they were, therefore, not entitled to a non-suit, even if there had been a defect of proof as to the other notes.
    II. The only distinction the defendants at any time suggested on the trial, was between the. first note and the other eight as a class; and they were equally, with the first, negotiable promissory notes.
    1. The parties, for their own convenience, earmarked the notes, by stating that they were given for interest, according to the conditions of an antecedent contract; but the legal effect of a note is in .no manner varied or impaired by stating a lawful inducement to its execution.
    2. Thus it was held, in the case of Fairchild v. Ogdensburgh R. R. Co., that an order of the president of a company, on its treasurer, for the payment of a specific sum to the plaintiffs—“being the amount due them for work on section number eighteen, according to the engineer’s estimate for January, 1855, thereto prefixed,”—was in effect a promissory note, 'and could be declared on and enforced as such. (15 N. Y. R. 337.)
    3. There is a trifling variation in the form of expression m the different notes, but they all refer to one contract, and are to be read together; and their obvious import is, that they are given by the defendants according to the conditions of an independent contract, and not that they are themselves conditional,
    4. But if read with the contract, to which the plaintiff was a stranger, and to which he was not referred as affecting the terms of the promise, we, find that the notes for the interest were to be, as they were in fact, absolute and unconditional.
    5. It is true that under the collateral contract the payee had a right, at his election, “ at the expiration ” of five years, to acquire the defendants’ title to certain stock, by a surrender of all the notes; but the defendants had no such option, and their promise in respect, to each $700 was absolute.
    6. “An instrument by which a railroad corporation promises to pay, in Boston, to W. S. or order, $1,000, with' interest semi-annually, as per interest warrants hereto attached, as the same shall become due; or, upon the sur render of this note, together with the interest warrants not due, to the treasurer, at any time until six months of its maturity, to issue stock in exchange therefor, is a negotiable promissory note.” (Hodges v. Shuler, 22 N. Y. 114.) Judge Wright, in delivering the unanimous opinion of the court on this point, said: “We are of the opinion that the instrument wants none of the essential requisites of a negotiable promissory note. It was an absolute and unconditional engagement to pay money on a day fixed; and although an election was given to the promisees, upon a surrender of .the instrument six months before its maturity, to exchange it for stock, this did not alter its character, or make the promise in-the alternative, in the sense in which that word is used respecting promises to pay.” (22 New York, 118.)
    7. “A written promise to pay a sum certain, absolutely and unconditionally, is a good promissory note, although a memorandum at the foot of it states a different mode in which it may be discharged.” . (Pool v. McCrary, 1 Kelly, 319; U. S. Digest, 1847, 409, § 1.)
    8. “A statement in the written warrant of a municipal corporation, for "the payment of a sum certain at a fixed time to E. S. or order, that the same is payable out of any funds belonging to the city not before specially appropriated, and chargeable to general city fund, does not deprive the instrument of the character of a negotiable promissory note.” (Bull v. Sims, 23 N. Y. 570.)
    9. But the question whether these were negotiable promissory notes was not raised at the circuit; and, on the contrary, it was assumed by the defendants that they were, not only in the answer but on the trial.
    III. The offer to prove that, before this suit was brought, Barnum, the original payee, had not notified the defendants of his election under the antecedent contract, was properly overruled.
    1. It was an offer to prove precisely what the law would presume in the absence of proof.
    2. It was immaterial to the issue, and in harmony with the plaintiff’s right to recover.
    IV. The proposition to prove that Barnum never offered to re-transfer the stock, was properly over-ruled. -
    1. As there was'no proof that he did, the presumption •was that he did not.
    2. The fact that he did not, was wholly irrelevant to the issue;
    3. Even as between the defendants and Barnum, it was only on payment of all the notes that they would become entitled to a re-transfer of the stock they had pledged.
    V. The answer stated no facts “ constituting a defense,” and no affirmative defense was therefore admissible under it.
    1. At the end of a denial of indebtedness, the defendants append the allegation that the notes were given “under a contract ” with Barnum, “the terms of which these defendants are informed and believe the plaintiff well knew; and by the terms of said contract, and the acts of said Barnum, these defendants allege that said notes became and were cancelled.”
    2. The allegation is merely of the defendants’ conclusion • fiom acts of a third party, which they do not state, and a contract with a third party, the terms of which they do not disclose.
    3. It is settled that even under the code, facts proved but not pleaded are not available to the party proving them; and it clearly is not error to exclude proof of facts not pleaded, and relating to transactions inter.alios. (Field v. Mayor of New York, 2 Seld. 179; Brazill v. Isham, 2 Kern. 9.)
    4. “The requirement contained in section one hundred and forty-nine of the code, that an answer must contain a statement of any new matter constituting a defense, is imperative. Hence, if new matter is not set up in the answer, proof of it should be rejected, although such matter would constitute a full defense to the action.” (Button v. McCauley, 38 Barb. 413; Boyce v. Brown, 7 Barb. 85; Cruger v. Hudson River Railroad Company, 2 Kern. 201; Palmer v. Smedley, 18 How. Prac. Rep. 321; Carter v. Koezley, 14 Abbott, 147, 150; Van Schaick v. Winne, 16 Barb. 95.)
    VI. The offer to show that Barnum pledged the stock before the note matured was properly over-ruled.
    1. If any defense was alleged in the answer, it was that the notes had been cancelled under the contract by Barnum’s electing “at the expiration of the said five years” to take the stock and surrender the notes; not that before that time, and in defiance of the contract, he converted the stock, and gave the defendants a cause of action in trover.
    2. If such a defense would be available to them in any form in this action, it would be as a payment, and that is a defense unavailing under the code unless expressly pleaded. (McKyring v. Bull, 16 New York, 297, 309; Grosvenor v. Atlantic Insurance Company, 1 Bosw. 479.)
    3. Amendments in an appellate tribunal are authorized for the purpose of upholding judgments, but not for the purpose of reversing them. (Williams v. Birch, 6 Bosw. 674; Englis v. Furniss, 3 Abbott, 82.)

      4. Every intendment of law as well as fact, is as matter of legal right, to be made in support of judgments on appeal. (Carman v. Pultz, 21 N. Y. 547; Viele v. Troy & Boston Railroad Co., 20 N. Y. 184.)
    5. The defendants did not offer to show that the stock was pledged before the transfer of the notes to the plaintiff and his rights could be impaired by no subsequent wrong of Barnum.
    6. They did not even offer to show that the pledge was without their consent.
    7. They did not offer to show that the plaintiff took the notes with notice of any such pledge by Barnum; and even if he were chargeable with constructive knowledge of the agreement, that would only notify him that Barnum could not acquire under it a right to the stock, before the expiration Of the five years, and that by parting with the notes, he disabled himself from acquiring it at all by their surrender.
    8. If Barnum converted the stock, then* remedy against him is ample for the wrong.
    , 9. Unless they clothed him with false indicia of absolute ownership, their remedy is perfect against the bank; as title could not be acquired from a mere pledgee.
    10. But the defendants, until they comply with the contract by payment of the notes, are in no position to demand the stock, and the intendment is that the pledgee will be ready to re-transfer whenever they fulfill their engagement.
    The judgment should be affirmed, with costs, and damages for delay.
   Johnson, J.

The defendants’ motion to dismiss the complaint as to all the notes except the first, was altogether inappropriate, and the exception to. the refusal to dismiss is unavailing. It is conceded, on the part of the defendants, that a good cause of action was made out upon the first note. It is contended, however, in respect to the residue of the notes, that they are not negotiable promissory notes, but that they are part and parcel of the contract-between the defendants and the payee, and are subject to the terms and conditions of that contract in the hands of the plaintiff. It is not material, in my judgment, to determine whether these instruments are strictly negotiable promissory notes, unless it shall be found upon examination that the agreement proved and read by the defendants upon the trial, and the other matters offered to be proved by them, would constitute a defense in case the notes should be held to be not negotiable. Because no question was raised upon the trial as to whether the plaintiff could obtain title to the instruments by the mere endorsement and delivery of the same by the payee; and it cannot be raised here. , Had it been raised upon the trial, the plaintiff might, peradventure, have given other proof of his title.

Regarding the plaintiff, therefore, as having the legal title to the notes, and as the proper party to the action, let us see whether the matters proved, and offered to be proved, conceding the instruments not to be negotiable, would constitute any defense. By the contract it was stipulated that Barnum should have his election either to hold and take the stock and cancel the principal note and these interest notes, or to enforce the payment of said principal note and the interest notes. And in case he enforced the notes, and upon payment thereof, by the defendants, he was to re-transfer said stock to them, and.not otherwise. He could do either, at his option, at the expiration of the stipulated time, without any preliminary act, determination or notice. If he chose to enforce the notes, or cause them to be enforced, then he was bound to return the stock when the notes were all fully paid, find not before. Payment was most clearly a condition precedent to Barnum's obligation to re-transfer the stock, and to their right to have it, should the notes be enforced. His right to enforce the notes, or to cause them to be enforced, is absolute and unconditional, He was in' no respect bound either to give notice of his election, or to offer to transfer back the stock to enable himself to enforce the notes. This is very clear. The question then arises whether the evidence) had the defendants been allowed to give it, of the pledge of the stock as collateral) by Barnum, before the maturity of the notes, and that they were still held in pledge, would have proved, or tended to prove, that he had elected to hold and take the stock absolutely, so as to entitle the defendants to have the notes cancelled according to the agreement. Most, certainly not. Even if it was pledged, it was in a situation to be redeemed, and the law will presume that the party will do whatever is necessary to be done to fulfil his contract, so long as it can be plainly seen that performance is within his power. He had not, according to the offer, put it out of his power to perform, when the defendants should be entitled to demand it. He was not, therefore, either in default, or in such a situation that a default on his part would necessarily happen, when the-notes should be paid.

By transferring the notes absolutely to a third party, Barnum has necessarily elected to have them enforced, and will be bound to re-transfer the stocks to the defendants as soon as they shall have paid the notes. If he does not they will have their remedy upon the agreement.

But manifestly the notes are not cancelled, and nothing which was proved, or offered to be proved, would constitute any defense to the action.

If it were necessary, to determine the question whether these several instruments, with the exception of the first, were negotiable, so as to protect the holder, taking them before maturity, from the provisions of the contract without any other notice than what appears upon their face I should incline most, decidedly to the opinion, that they were not, but would be affected and controlled by the contract, in the hands of any holder. They are provided for in the contract, and the contingency upon which they are to be cancelled without payment, specified. In the three last, in the order of date, it will be seen that the promise is in express terms, to pay according to the conditions of this contract. And in all the others, except the first, while the promise to pay seems to be absolute and unconditional, there is yet in the body of eqch, incorporated as part of the instrument, a statement in substance that it is given in accordance with the conditions of this contract. To be in. accordance with the conditions of the contract they would of course be subject to be given up, or cancelled, without payment, in case Barnum should elect to hold and take the stock at the period of their maturity. And any one, would, I think, on taking them, be bound to take notice of the con ' ditions of the contract referred to. The statement, I think, is something more than a mere earmark by way of identification of the transaction in which the notes had their inception. It is a general principle that a cotemporaneoua contract in wilting may vary the face of a note where the two instruments are connected by cross reference, as they are here. (2 Parsons on Motes and Bills, 536.) See alsft the same volume, pages 534 to 544, inclusive, where the whole subject of the effect of collateral written contracta, npon notes, is treated of, and the authorities cited. I have not thought it necessary, however, that this question should be passed upon here.

My cdnclusion is that the judgment should be affirmed.

Davies, J.

The motion for a non-suit was properly overruled. It was conceded that the plaintiff was entitled to recover upon one of the notes mentioned and described in the complaint, and the request should have been, in form, to have the judge instruct the jury that the plaintiff was only entitled to recover on that note, and upon refusal, to have taken an exception.

The notes mentioned and set out were promissory notes, within the rules laid down by this court in the cases of Fairchild v. Ogdensburgh Railroad Company (15 N. Y. 337); Hodges v. Shuler (22 N. Y. 114); Bull v. Sims (23 N. Y. 570.) The possession of the notes by the plaintiff furnishes príma facie evidence that the endorsement of Barnum was made upon a good consideration before maturity. (Pratt v. Adams, 7 Paige, 639.)

The plaintiff, as the owner and holder of these notes, was entitled to recover the amount specified therein, unless the defendants established a valid and legal defense. By the terms of the agreement referred to in the notes, Barnum, the payee, at the maturity of the $20,000 note, was to have the election either to take said stock and cancel all of said notes, or enforce payment thereof. And upon payment of all of said notes, the defendants were entitled to a re-tranfer of said stock. The transfer of the interest notes, and the commencement of this action to recover the amount thereof, conclusively indicate that Barnum made the election to enforce payment of the notes. The defendants engagement to pay the same was absolute and unconditional, and they were not entitled to a return of the stock until they made payment of said notes. If they, therefore, wished such return, they should have made such payment or tender thereof, and demanded the stock; but not having done so, their liability on the notes remains;

The judgment should be affirmed, with costs.

Weight, Mullbst and Ingraham, JJ.,'were in favor of affirmance.

Selden and Hogeboom, JJ., and Denio, Ch. J., were for reversal, the latter thinking, however, that the instruments were promissory notes, but that the holder took them with notice of the agreement and the concurrent conditions.

Judgment affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    William Smith and another v. Henry Coe, impleaded with Joseph Naylor.
    Where the defendant’s liability depends entirely upon the fact of his indebtedness to a third person, and that is the issue, it is not necessary for the judge who tries the cause to state in his decision the finding of any fact other than the existence of the indebtedness; it seems,

    That, in such a case, is the, fact from which the legal conclusion of • the defendant’s liability to the plaintiff flows. ,
    In an action under the mechanics’'lien law, to enforce a lien against a building in the city of New York for materials furnished to the contractor, when the fact of. the indebtedness is found, the question of law arises whether by reason thereof the owner is liable to the plaintiffs.
    Where, in such a case, the judge finds as matter of fact that at the time the lien was filed there was due from the owner of the building to the contractor a larger sum than is demanded by the plaintiff, and as a conclusion of law he finds that a specified sum is due to the plaintiff, for which he has a lien on the premises, the conclusion of law is correct.
    The appeal alone does not bring up the question whether all the material , facts necessary to sustain the legal conclusion are contained in the finding of the judge.
    If the plaintiff wishes to have a finding of controverted facts between the defendants stated in the decision of the judge, he should apply to the court or judge to have the facts found, in respect to those questions, stated in the decision.
    He may apply to have the findings inserted and stated as the findings of fact, if there ismo statement of the fadts found;’ or that the facts which are found shall be stated in the decision.
    He cannot lie by and avail himself, on appeal, of the mere omission to make a statement of all the facts which he may regard as necessary or material. The presumption is that the judge found all the facts which are necessary to sustain the conclusion of the existence of the indebtedness; whether that conclusion is to be regarded as one of fact or of law.

      Appeal from a judgment of the Mew York Common Pleas.

    The action was brought to enforce a lien against a building in the city of New. York, belonging to the defendant, Coe, for materials furnished by the plaintiffs to Joseph Naylor, the contractor, who erected the building and used the materials in constructing the same. The proper notice and papers required to effect a lien were duly filed on the 24th of September, 1857, and served on the defendants, requiring them to appear, and have an accounting in respect to the amount due from the defendant, Coe, to Naylor. An order was duly entered that issue be joined between the parties. The plaintiffs, in their complaint, claim that the defendant, Coe, contracted with the defendant, Naylor, to erect and construct the ‘house in question, and that the plaintiffs furnished labor and materials to Naylor, at his request, which were used in the building, to the amount of $1,737.53; and that at the time of filing their lien there was an equal or greater amount due from Coe to Naylor on account of said building. The defendant,' Coe, in his answer admits that he contracted with Naylor to erect the said building for the sum of $14,000, and that he subsequently made a further contract with Naylor to erect an additional story for the sum of $5,500. He further alleged that before the filing of the lien he had paid Naylor the whole amount of $19,500, besides the additional sum of $3,563.76 for extra work on the- building, which was the full sum due; and that nothing was due Naylor at the time the lien was filed. He further alleged that the last payment was made for extra work on the 29th- of August, 1857, and that on that day Naylor abandoned the job, and did not complete his contract, which the plaintiff had been compelled to complete at an additional expense of $1,500. The cause was tried before Daly, F. J., without a jury. On the trial two written agreements were produced, signed by Naylor, by the first of 'which, dated May 28, 1857, Naylor agreed to erect the building as per plan and specifications, and make any alterations which might be suggested by Coe, provided the additional expense of the alterations did not exceed $300, and finish the same under the directions of Coe in a workman-like manner, for $14,000. By the second contract, dated July 7th, 1857, Naylor agreed to make an additional story to the building and finish the same in a workman-like manner, for $5,500, making the whole cost $19,500, as specified in the last contract. Naylor, who was a witness for the plaintiff, testified that he constructed the building not according to the original plan but wholly under the directions of Coe, and that the difference in the cost between the building first contracted to be built, and the building as finished, was about $12,000, on account of changes made from the original contract. That he had received over $23,000, and that there is still due him over $9,000. He admitted that he did not entirely complete the building, although ho denied that he abandoned it. He also admitted signing a receipt which was produced by the defendant, Coe, dated August 17, 1857, by which he acknowledged receiving previous to that day. $19,500 “ in full settlement for building store, corner East and Cherry streets, as per contract.'-' He also admitted, that he had testified on a previous occ.% sion, on proceedings supplementary to execution against him, as follows: “I have been Mr. Coe’s superintendent of building; I was to build for a certain amount, $19,500; he was to pay the bills; and anything less which I should-make. It has already cost between twenty-three and twenty-four thousand dollars. I have hopes he will givfl me something for my trouble, but he has not agreed to de so.” He explained generally the nature and extent of tho» changes from the original plan, and estimated the expense of the whole structure at about $31,000.
    The evidence on the part of Coe tended to show that ha had paid about $26,000 befóre the filing of the lien, and that Naylor agreed to accept- $22,500 for all demands fov building and extra work, which had all. been paid him before such filing; and that he afterwards abandoned the work leaving it unfinished. The facts that the work was not finished by Naylor but was finished by the defendant, were undisputed. There was no dispute as to the quantity and value of the materials furnished by the plaintiff.
    The judge found “as matter of fact, that on the 24th of ¡September, 1857, the day the lien in this case was filed, there was due from the defendant Coe to the defendant Naylor a larger sum than the plaintiff’s demand in this case. And as a conclusion of law that there was due to the plaintiffs the sum of §1,737.23, with interest from the 20th of August, 1857, for which sum the said plaintiffs had a lien upon said premises.” The defendant Coe excepted to the findings of fact and conclusions of law respectively. Judgment was entered accordingly, from which the defend- • ant Coe appealed to the general term of said court, where the judgment was affirmed, and he now brings his appeal to this court.

      J. H. Reynolds, for appellant.

      J. L. Jernegan, for respondent.
   Johnson, J.

It may be questioned, I think, in a case like this, where the. defendant’s liability depends entirely upon the fact of his indebtedness to a third person, and that is the issue, whether it is necessary for the judge who tries the cause to state in his decision the finding of any fact other than the existence of the indebtedness. That, in such a case, is the fact, from which the legal conclusion of the defendant’s liability to the plaintiff flows. In ordinary actions between debtor and creditor, the question of the indebtedness of the defendant to the plaintiff is rather a question of law, depending upon antecedently established facts, than a question of fact. In such.a case the conclusion of the indebtedness embraces the entire issue of fact and of law. Not so here. When the fact of the indebtedness is found, the question of law arises whether, by reason thereof, the defendant is liable to the plaintiff. This was evidently the view of the learned judge who tried the cause, and I am inclined to the opinion that he was quite correct.

But if we were to. hold that what the judge' has designated as a fact found, was in reality but a conclusion of law, and that his decision contained no finding of facts, I do not see how that is to aid the appellant. That is no ground for the reversal of a judgment, unless, perhaps, in a case where there was no evidence upon which any fact could have been found to justify the legal conclusion and the judgment. The appeal alone does not bring up the •question whether all the material facts necessary to sustain the legal conclusion are contained in the finding of the judge. Viele v. Troy & Boston Railroad Company (20 N. Y. R. 184), was a case where there was no statement oi any finding of facts, and this court held that nothing was to be presumed against the correctness of the judge’s deci sion from that circumstance, but that the party obtaining the judgment in such a case was entitled to that inference, from the facts proved, which was most favorable to him. It is not in itself a defect which affects the' validity of the judgment. If the appellant wished to have a finding of the controverted facts, between the defendants, Coe and Naylor, stated in the decision of the judge, hjs course* obviously was to apply to the court or judge to have the facts found in respect to those questions stated in the deci sion. He might have applied to have the findings, as he now insists they ought to have been, inserted and stated, as the findings of fact, if there was no statement of the facts found, or that the facts which were found should be stated in the decision. He can not lie by, and avail himself of the mere omission to make a statement of all the facts which he may regard as necessary or material on. appeal. The presumption is that the judge found all the facts which are necessary to sustain the conclusion of the existence of the indebtedness, whether that conclusion is to be regarded as one of fact or of law. And upon referring to the opinion of the judge who tried the cause, at general term, we see that he found a state of facts, from the evidence, which would abundantly sustain the conclusion of indebtedness. It can not be pretended that the case is entirely destitute of evidence tending to prove those facts. This court will not look into' the evidence, beyond that, to see what, in their opinion, the findings of fact ought to have been. The judgment is. therefore, right, and must be affirmed.

Davies, J.

This action was originally a proceeding instituted under the mechanics’ lien law relating to the city of New York, entitled “An act for the better security of mechanics and others erecting buildings and providing materials therefor, in the city and county of New York,.” passed July 11th, 1851. . Issue being joined pursuant to the provisions of the act, an action was thereupon pending, and the same came on to be tried before one of the judges of the New York common pleas, without-a jury. That issue was whether there was anything due to the contractor or builder, to whom the plaintiffs had furnished materials, from the defendant, the owner of the premises upon which the building was erected, and with whom the contract'was made, at the time the plaintiffs interposed their claim and filed their lien. The judge who tried the cause found,- as matter of fact, that on the 24th of September, 1857, the day the lien in this case was filed, there was due from the defendant, Coe, to the defendant, Naylor; (the contractor,) a larger sum than the plaintiffs demand in this case; and as a conclusion of law he also found that there was due to the said plaintiffs the sum of $1,737.53, with interest from August 20th, 1857, for which sum the plaintiffs had a lien on said premises. This conclusion of law was undoubtedly correct, upon the facts found by the court. The judgment having been affirmed at the general term, this court has no power to review the finding upon this question of fact. We are to assume it was authorized by the evidence, and as there is no. point made that any evidence was improperly admitted or rejected, no question of law is presented for our consideration.. We can not examine the evidence for the purpose of determining whether it warranted the ■ finding of facts made by the court.

The judgment must be affirmed, with costs.

All the judges concurring, judgment affirmed.


author: Davies, J. Hogeboom, J.

text:
    The President, Directors and Company of the Essex County Bank v. David Russell and others.
    Where the case, in this court, contains no statement of the facts found by the court which tried the action, as required by section 267 of the code, but only a statement of facts, signed by the presiding justice of the general term which heard the cause on appeal, the appeal should be dismissed
    Such a statement is not a compliance with the requirements of section 267 of the code, and" cannot be regarded as a substitute for the statement of facts required by that section.
    The only instance in which a general term is authorized to make a statement of facts is that mentioned in section 333 of the code, viz: when it renders a judgment upon a verdict taken subject to the opinion of the court.
    A promissory note for $800 was made by R and endorsed by F. & A. for his accommodation, to retire a previous note of like amount, made and endorsed by the same parties, at the Bank of W. The bank refused to discount the new note, or to receive it for the old one; whereupon W., .without the knowledge of the endorsers, put the note into the hands of C. to get the same discounted and remit the proceeds to the Bank of W. to retire the prior note. C. presented the note to the plaintiffs’ cashier, who discounted the note, giving C. for the proceeds a note for $500, made by B., which, though good and collectable, was past due and protested, and $285.93 in cash. No part of the proceeds of the discount were sent to the Bank of W., or ever came to the hands of the maker and endorsers, or either of them:

      deld, that notwithstanding the diversion of the note, the plaintiffs were bona fide holders and entitled to recover the amount, it not having been received under such circumstances as called upon the plaintiffs to institute any inquiries as to C.'s right to the possession of the note, or to procure its discount.
    This is an appeal by the defendants from a judgment of the supreme court, rendered in favor of the plaintiffs. The action was brought to recover the amount due upon a promissory note made by the defendant Bussell, payable to the order of the defendants Allen and Freeman, at the Bank of Whitehall, three months after date, and dated 22d day of April, 1854. The note was made by Bussell and endorsed by the other defendants for his accommodation, to retire another note of like amount made and endorsed by the same parties, at the Bank of Whitehall. The Bank of Whitehall refused to discount the note or to receive it for the one previously given; and thereupon Bussell, without the knowledge of the endorsers, put the note into the hands of one Peter Comstock to get the same discounted and remit the proceeds to the Bank of Whitehall, to retire the prior note held by that bank. Comstock presented the note in suit to the plaintiffs, and they declined to discount it. On the next day it was again presented to the plaintiffs’ cashier by Comstock, who proposed if the plaintiffs’ bank would discount it, to take in part payment of the proceeds a note made by one Brewster for $500, and endorsed by Colvin, Allen & Co., and one P. W. Ames, which had matured a few days previously, and' been protested, if the balance was paid in cash; and thereupon the plaintiff, on the 29th of April, 1854, discounted the note and gave Comstock for the proceeds the Brewster note and $285.9.3 in money. It did not appear that Comstock had any interest in the Brewster note. No part of the proceeds of the note in suit was sent to the Bank of Whitehall, or ever came to the hands of the defendants or either of them. Soon after the note in suit was discounted by the plaintiffs, Comstock sent to the defendant Bussell his check on the Troy City Bank for its amount, less the discount. This check was presented by Bussell for payment, but not paid, and has never been returned by Bussell, or offered to be returned. At the time the note was discounted, the plaintiff had no knowledge or information how it came to Com-stock’s possession, or that it did not belong to him as his own property. Comstock made two payments to the plaintiffs on the note, and this action was brought to recover the balance. The action was tried by the court without a jury, and judgment given for the plaintiffs for the balance due, which, on appeal, was affirmed at the general ter pa.

      John K. Porter, for the appellants.
    I. The Brewster note having been fraudulently obtained from the bank by Comstock, its title was not divested; and the endorsers having been already charged, it could still enforce payment, even though it had placed the cancelling mark on the paper. (Farrington v. Frankfort Bank, 24 Barb. 554; Watervliet Bank v. White, 1 Denio, 608.)
    II. The note in suit was not received in the ordinary course of business.
    1. The bank could undoubtedly make a valid transfer of paper which it held, either before or after dishonor; but it is an entirely different question whether, in the exercise of the power conferred by its charter—“ to carry on the business of banking by discounting bills, notes and other evidences of debt ”—a discount payable in protested paper is a transaction in the ordinary course of business, giving them the right under the law merchant of bona fide holders of embezzled paper. (Laws of 1832, 442, § 3.)
    2. On the assumption that Comstock was not a party to 'the Baldwin paper, the second presentation to the bank of >i rejected note for $800, and the extraordinary proposition "to take' the bulk of the proceeds in dishonored paper of third parties, was such a departure from the ordinary course of business as to put the bank on inquiry.
    3. Such a discount was, and should be, at the peril of the party making it, even in respect to the cash advanced. (Brown v. Taber, 5 Wendell, 566; 3 Hill, 277, 8, per Nelson, Ch. J.; Wiggin v. Bush, 12 Johnson, 310; Nixon v. Palmer, 4 Selden, 400; Stainer v. Tyson, 3 Hill, 279, 282; Gill v. Cubitt, 10 Comm. Law, 154.)
    4. The cases on this subject are reviewed, and the rule and its reasons defined with great clearness, in the case of Pringle v. Phillips (5 Sandf. Sup. Co. R. 157, 162 to 173). “ It is sufficient to prove that the circumstances known to him were such as ought reasonably to have excited his suspiciorts, and led him to inquire.” “A want of that caution and diligence which an honest man of ordinary prudence is accustomed to exercise in maldng purchases, is in judgment of law a want of good faith.” “Although the question of good faith is that which is commonly submitted to a jury, yet this question involves that of due caution; and he who discounts a bill without using due means to ascertain whether it has been honestly obtained by the holder, takes it at his own peril.” Citing" Ch. J. Paesons, Mr. Justice Duke says: “ Where the endorsee receives the note under circumstances which might reasonably excite suspicion, he ought, before he takes it, to inquire into its validity; and if he does not, he takes it subject to any legal defense that would defeat a recovery by the payee.” _
    5. But, in- this case, the judge not only held • that the plaintiffs were bona fide holders, but rejected the evidence offered, and struck out that introduced to show the contrary—held that it was inadmissible under the answer—and refused to permit the pleadings to be amended, on the ground that the plaintiffs were bona fide holders.
    TTT. The court erred in not permitting the defendants to prove the allegation in their answer, that the balance of the proceeds of the so-called discount was retained by the plaintiff on a precedent debt of Comstock.
    1. The fraudulent diversion of the note having been proved, the onus was upon the plaintiffs to show affirmatively that they parted with actual value for the full amount of the note. The evidence of the cashier and of Comstock ,had left the question in eguilibrio, whether Comstock was or was not a debtor on the Brewster note—and whether the amount was retained as payment of his precedent debt, or as the consideration of a transfer—and the judge held that on this state of facts the plaintiffs must be deemed bona fide holders.
    2. The Brewster note, at the time of the trial, had been more than four years under protest. What became of it after it was obtained by Comstock on the 29th of April, 1854, did not appear, beyond his presumption that it was at home. Comsto.ck, and Brewster the makers, were insolvent at the time of the transaction. Colvin, Allen & Co., who were endorsers, failed shortly after it matured. No attempt had been made to collect it of Ames, during the two years he remained solvent. The maker and endorsers were all insolvent at the time of the trial.
    3. Under these circumstances, the note being only collaterally in question, the court rejected paroi proof of the endorsements and the cancellation marks, on the ground that the instrument was not produced.
    4. The Baldwin note not being the foundation either of the action or the defense, and material only on a collateral question, it was proper; without producing it, to prove who were the maker and endorsers, and whether it bore the mark of the cancelling hammer. (McFadden v. Kingsbury, 11 Wend. 668-9; Lamb v. Moberly, 3 Monroe, 179.)
    5. In the case last cited, the action was for the price of a note of a third person, sold to the defendant. “ In such case, plaintiff need not produce, nor require defendant to produce the note sold, but may prove the existence and sale of it by paroi evidence. The distinction is between the contents of the instrument as evidence of a contract, and the existence of it as a thing and subject of the contract to be proved.” (3 Monroe, 180.)
    6. The purpose was not to show the contract embraced i i the note, for that had been already proved without objection by the cashier, but simply to prove who endorsed land whether it bore the bank mark of cancellation, of which there was no written evidence.
    IV. The court erred in also rejecting the evidence already received, and holding it inadmissible under the pleadings.
    1. The defendants in their answer denied that the note was transferred to the plaintiff for value, and alleged the fraudulent diversion. All else was surplusage; as this constituted a defense, and cast on the plaintiffs the burden of avoiding it, by proof that they parted with the full value in good faith before maturity.
    2. The plaintiff proved the fraudulent diversion; and that proof could not be rejected by reason of variance in the further prpof of allegations in the answer, not essential to the defense. (Rapalee v. Stewart, 27 N. Y. Rep. 310.)
    3. The variance, however, was immaterial, and there was no affidavit or pretense that the plaintiff was misled by it. . 4. If an amendment was necessary, the defendants were, under these circumstances, entitled to it on terms, as matter of right under the code. (Code, § 169; Catlin v. Gunter, 1 Kernan, 368.)
    5. The ground on which the judge rejected evidence tending to show that the plaintiffs were not bona fide holders, was that they were what the defendants sought to prove they were not. - .
    6. The learned judge, on appeal, resorted to the evidence which on the trial he held to be inadmissible, as avoiding the defense of fraudulent diversion, and showing that the plaintiffs parted with full value.
    Y. Assuming, as the defendants claimed, and should have been permitted to prove, that Comstock was a party to the Brewster note, and that the bank retained the bulk of the proceeds on a precedent debt then dishonored, the court erred in holding them in that regard, bona fide holders. (Cardwell v. Hicks, 23 Howard P. R. 281; Youngs v. Lee, 2 Kernan, 555; Stalker v. McDonald, 6 Hill, 93, 99; Rosa v. Brotherson, 10 Wendell, 86; Farrington v. Frankfort Bank, 24 Barbour, 554.)

      John H. Reynolds, for the respondent.
    1. The plaintiff was a bona fide' holder of the note in question, having discounted it in the usual course of business, without notice of, or having any ground for suspecting that there was any defect in Comstock’s title. It was not subject to any defense existing between the original parties, and the plaintiff was entitled to recover'the balance due upon it. (Youngs v. Lee, 2 Kernan R. 551; Stalker v. McDonald, 6 Hill, 93; Mohawk Bank v. Corey, Hill, 513; Bay v. Coddington, 5 Johns. Ch. R. 54; Bank of Salina v. Babcock, 21 Wend. 499; Bank of St. Albans v. Gilliland, 23 id. 311; Farrington v. Frankfort Bank, 24 Barb, 554; S. C. 31 Barb. 183.)
    1. The plaintiff had no notice or suspicion that Comstock was not the absolute owner of the note, and entitled to make any disposition of it that his interest or necessities should require.
    2. The plaintiff had full value for it in money, and by the transfer of the note of Brewster for $500, endorsed by Colvin, Allen & Co. and F. W. Ames, which was then good and collectable,
    3. If the plaintiff had paid the entire proceeds of the note to Comstock in money, no question could have been made against the right of the plaintiff to recover, even though he had misappropriated the whole of it,
    4. So far as the plaintiff is concerned, its rights are the same as if Comstock had possession of the note, without any restriction as to the use he should make of it or its proceeds. (Seneca County Bank v. Neass, 3 Comst. 443; Agawam Bank v. Strever, 18 N. Y. 502.)
    5. The Brewster note was at the time the property of the bank, which it had the right to sell and transfer. Com-stock was not a party to it, and its transfer to him in part payment of the proceeds of the discounted note, was not in any sense applying the proceeds in payment of a precedent debt, so as to impair the plaintiff’s title as a bona fide holder for value.
    6. Moreover, the Brewster note was good, and might by due diligence have .been collected. That it was not collected is no fault of the bank. The plaintiff had the right to deal "with Comstock, as the absolute owner of the note, upon the faith of his possession, and can not be made to suffer for aúy fraud he committed upon those who entrusted the note to him for the purpose of getting it discounted. There was nothing in the nature of the transaction calculated to excite any suspicion of the validity of Comstock’s title to the note, or which made it their duty to make further inquiry before dealing in the paper in any way thought consistent with their interest. (Davis v. McCready, 17 N. Y. R. 230.)
    7. The only question in respect to which it can be claimed the plaintiff should have been put upon inquiry, is as to Comstock’s title to negotiate and dispose of the note. If in that respect there is no infirmity in their position, the only other question is as to whether they paid value, and as to that there can be no doubt, for thw Brewster note was at the time worth all it-purported to secure.
    8. In the case of Youngs v. Lee (2 Kernan, 551), the note given up before maturity was of the makers merely, and by its surrender ho endorser or other security was lost. It is impossible to see why the decision in that case would not have been the same if the note of the makers had been given up after maturity for the note of the same makers endorsed by Lee.
    EE. The defendants were guilty of great neglect in not communicating to the bank the facts of the case before all the parties to the note of Brewster had become insolvent.
    1. The note in suit became due and was protested and endorsers notified July 25, 1854, and this action was commenced in 1857. The Brewster note could have been collected up to July, 1856.
    2. Russell knew that Comstock had diverted the note or its proceeds about the time that it was discounted by the bank, for his check for the proceeds, on the Troy City Bank was dishonored in June, 1854, and that check Russell still retains. The bank never had notice that there had been any diversion of the note or proceeds until about the time this suit was commenced.
    III. Parol evidence respecting the Brewster note, or any marks on it, was properly rejected until the note was produced. Moreover, it does not appear what was the evidence proposed to be given, or that it was in any respect material to any question in the case. A party relying on an exception to the rejection of evidence, must show that the evidence rejected was material, and that he was or might have been injured by its rejection, or the exception' will fail.
    IV. Whether the defendants should have been allowed to amend was matter of discretion at the circuit, and can not be reviewed on appeal, and if the plaintiff was a bona fide holder of the note the amendment would not help the defendants.
   Davies, J.

The case contains no statement of the facts found by the court which tried the action, as required by section 267 of the code. It contains a statement of facts, signed by the presiding justice of the general term, which heard the cause on appeal, but the code furnishes no warrant for inserting such a statement in the ’case. The only instance in which a general term is authorized to make a statement of facts, is that mentioned in section 333, where, when the general term renders judgment upon a verdict taken subject to the opinion of the court, the questions or conclusions" of law, together with a concise statement of the facts upon which they arose, shall be prepared by and under the direction of the court, and shall be filed with the judgment roll, and be deemed a part thereof, for the purpose of a review in the court of appeals. In this action no verdict was taken subject to the opinion of the court, and there was, therefore, no authority for the general term of the supreme court to make up the statement of facts contained in tMs case. It is not legitimately there, and, as we have frequently said, such a statement1 is not a compliance with the requirements of section 267, and cannot be regarded as a substitute for the statement of facts required by that section. It follows that the appellants have presented no such case as the code requires, and upon which this court would be authorized to review the judgment of the supreme court. The appeal should) therefore, be dismissed with costs. If, however, the court should be inclined to pass upon the merits as disclosed by the evidence adduced on the trial, and a correct synopsis of which is contained above, the only question arising is, whether the plaintiff was a bona fide holder of the note in suit. The case of Youngs v. Lee in this court (2 Kernan, 551), would seem to have definitely settled that question. There the note in suit had been diverted from its original purpose, by Bell and Goodman, the makers. Lee, who defended that action, was an endorser of another note made by Bell and Goodman, which was about falling due, and he endorsed the note in that suit for the accommodation of Bell and Goodman, to enable them with the proceeds on the discount thereof to take up the old note, which was about falling due. Bell and Goodman, instead of doing this, transferred the note in that suit to the plaintiff therein, who held their note for $943.31, not yet due, requesting' the latter note to be surrendered to them, and that the balance should thereafter be adjusted between them. The plaintiff thereupon gave an order on the Bank, with which Bell and Goodman’s note had been deposited for collection, to deliver the same to them, and it was accordingly delivered to them the day before it fell due. This court held the plaintiffs bona fide holders of the note endorsed by Lee, and that notwithstanding its diversion, the plaintiffs were entitled to .recover. In that case the plaintiffs only demanded the note of Bell and Goodman, the makers of the new note received on such surrender. In this case this plaintiffs- not only transferred and gave in exchange money, but an available and valuable note of other and third parties, not connected with or liable upon the note received on such exchange. The plaintiff was, therefore, a bona fide holder of the note in suit, and it was not received under such circumstances as called upon the plaintiff to institute any inquiries 'as to Comstock’s right to the possession of it, or to procure its discount.

On,the merits, therefore, I have no doubt the judgment should be affirmed.

Hogeboom, J.

The note in question was unquestionably diverted from its intended object, which- was to retire a previous note executed by the same parties. For this purpose it was immaterial whether the note in suit was discounted at the Bank of Whitehall or at plaintiffs’ bank. Either would have been a substantial compliance with the purpose of the parties to the note.

But Comstock, who received the note for this • purpose from Bussell, misapplied it, and negotiated it at the plaintiffs’ bank in part for cash and in part for the purchase of the Brewster note then held by the plaintiffs’ bank. This note, though good and collectable, was over due. The money he received on this negotiation of the note in suit ' Comstock also misapplied, appropriating it to his own use instead of -towards the payment of the note at the Whitehall Bank.

But of this intended misappropriation, the plaintiffs were not advised, nor had they good ground to suspect.it, or even to suppose that Comstock was not the bona fide owner of the note in suit. They were, therefore, on discounting this note, bona fide holders of it for value, at least to the extent of the sum advanced in cash on the discount; arid to that extent, at all events, they would be entitled to recover in this action, having the right as creditors to appropriate the payments made by Comstock upon the. note upon that part of the consideration for it which was composed of the Brewster paper. But as the Brewster paper exceeded the amount of the Comstock payments, and the amount advanced in cash to Comstock on the discount was less than the plaintiffs recovered in this action, it becomes necessary to determine whether the plaintiffs are bona fide holders of the note in suit, in such a sense as to exclude the defense of its misapplication, so far as respects that .part of the discount which was appropriated to the purchase of the Brewster paper.

There was no want of consideration on the part of thn plaintiff to the full atiiount of the note in suit, in the trans action in question. The Brewster note was, though over due, :good and available paper. It was worth its nomina* amount, and was collectable for two years afterwards. 1* was a chose in action which the plaintiffs had a right sell and transfer to Comstock. To the. full extent of it» value it was a valuable consideration. The circumstance of .its being over-due did not detract from this value. B was not a precedent debt in the sense of commercial paper. It was not a debt against any of the parties t*> the- present paper, nor, so far as appears, against Com-stock himself. For aught we can determine, it was papes quite as valuable to the plaintiffs as that now in suiL It was parted with absolutely, and left no remedy ia the hands of the bank against any of the parties to the Brewster note.

All this was, I think, parting with value, within the meaning of the cases on that subject. (See Youngs v. Lee 2 Kernan, 551; Boyd v. Cummings, 17 N. Y. 101.) Indeed it has been held in the superior court of Hew York that parting with value to the amount of the money advanced in cash, at the time of this transfer, makes- it a parting, with value so as to protect it for the full amount of this note from the defense of the accommodation endorsers. (Gould v. Segee, 5 Duer, 260.) When to this is added a sale of valid negotiable paper perfectly good and collectable to the amount "of the whole residue of the note in suit, I think the plaintiffs are entitled to hold the recovery to its full extent.

The judgment should be affirmed.

All the judges concurring. Judgment affirmed.


author: Loughran, J.

text:
    In the Matter of James H. Ricker, Appellant, against The Village of Hempstead et al., Respondents.
    Argued November 24, 1942;
    decided March 4, 1943.

      Manuel W. Levine, Ira G. Goodman and Alphonso M. La Pera for appellant.

      C. H. Tunnicliffe Jones and Albert B. Humphrey for respondents.
   Loughran, J.

By chapter 598 of the Laws of 1940, section 188-1 of the Village Law was amended as of April 18,1940, by the addition thereto of the following provision: Village policemen who are employed at the time this act, as hereby amended, takes effect, and who were employed at the time the rules of the state civil service commission were extended to the police department of the village in which they are employed, shall continue to hold their positions without further examination and shall be removed only upon compliance with the provisions of section one hundred eighty-eight-f of this chapter.” Section 188-f provides that — except in situations not here presented — no member of a village police force shall be removed until written charges against him have been heard. This proceeding under article 78 of the Civil Practice Act calls upon us to determine the constitutional validity of the exemption from examination so declared.

Petitioner joined the police force of the village of Hemp-stead as patrolman in 1918. He was given the rank of sergeant in 1922 and that of lieutenant in 1924. He was made chief of police on October 1, 1935. He never was examined respecting his fitness for any of these posts, in as much as the rules of the State Civil Service Commission were not extended to the village of Hempstead until January 5, 1937. On April 7, 1941, the trustees of the village summarily removed him from his position as chief of police and nullified his membership in the local police department.

On the undisputed facts, this summary termination of the petitioner’s employment was forbidden by the words we have quoted .from section 188-1 and the only question for decision is whether the Legislature thereby plainly transgressed the civil service principle of the State Constitution, as the courts below have held. The relevant text of the Constitution is found in section 6 of article 5. It is thereby provided: “Appointments and promotions in the civil service of the state, and of all the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, so far as practicable, by examinations, which, so far as practicable, shall be competitive.”

For many years after its adoption as part of the Constitution of 1894, this command was not brought to bear upon appointménts of village policemen. Not until 1939, was the State Civil Service Commission able to report that its rules had recently been extended to the police departments of all the villages of the ’State (56th Annual Report of the Commission, p. 3). The occasion of this delay in carrying out the fundamental law was not obscure. “ The Civil Service Commission had always believed that it was within their power and discretion to extend the jurisdiction of the Civil Service Law and Rules when it was ‘practicable’ to do so. And by ‘ practicable ’ the Commission meant, in taking an over-all view, whether there were fields of sufficient competition in a community, whether their budgetary appropriations were sufficient to defray the costs and whether the limited staff could possibly absorb the extra work load.” (59th Annual Report of the Commission, p. 22). Thus it came to pass that-the position of this petitioner was in effect within an exempt class of the civil service at the time of his appointment, because up to that time the State Civil Service Commission had found it impracticable .to order competitive examinations in that field.

The problem faced by the Commission stretched out to all the civil divisions of the State. Villages, of course, were not among the larger and more complex- units of government whose civil service needs were the most pressing. (Matter of Madden v. Reavy, 284 N. Y. 418.) Hot only so, but the immediateness of life in small communities was perhaps an adequate temporary guaranty against unfit appointments to a local police force. There is good reason, then, why we should not take it on ourselves to denounce the course adopted by the Commission as palpably arbitrary or an outright abuse. The reports of the Commission were matter of public record and furnished a basis for action by the Legislature. Against this background, the foregoing “ covering-in ” provision of section 188-1 cannot be said to have been such a clear usurpation by the Legislature of prohibited power as must be found before a statute can be pronounced unconstitutional and void. Thus regarded, the above words of section 188-1 are a valid enactment, and so we here adjudge.

Matter of Andresen v. Rice (277 N. Y. 271) was a different case. The Legislature had there made an unwarrantable attempt permanently to exempt the entire membership of the State Police from competitive examinations irrespective of the practicability thereof. The present case is closer to the implications of Matter of Fornara v. Schroeder (261 N. Y. 363) where this court gave effect to a finding by civil service authorities of the impracticability at one time of competitive examination as a test of fitness for the appointment of a superintendent of street cleaning, though no expressed legislative policy had indorsed such an exemption.

We have not overlooked section 188-c of the Village Law. Choice of the petitioner for head of the police department of the village of Hempstead apparently was not a promotion within the meaning of that section.

The orders should be reversed and the motion to dismiss the petition denied, without costs, and the matter remitted to the Special Term for further disposition not inconsistent with this opinion. (See 290 N. Y. 862.)

Lehman, Ch. J., Pinch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Ordered accordingly.


author: Rippey, J.

text:
    Berkshire Life Insurance Company, Appellant, v. Irving E. Weinig et al., Respondents.
    Argued January 4, 1943;
    decided March 4, 1943.

      Hartwell Cabell for appellant.

      Sidney J. Loeb for respondents.
   Rippey, J.

In reliance upon the truth of statements and representations by defendant Irving E. Weinig contained in an application, dated May 14, 1931, to plaintiff for a life insurance policy with double indemnity and disability benefit provisions, the plaintiff issued and delivered to said Weinig its policy, dated May 28, 1931, of insurance on his life for the face amount of $10,000, payable to his son, Sheldon Weinig, in the event that insured should die before May 28, 1978, otherwise payable to assured or to his estate, with a rider attached to and made a part of the policy providing for certain total and permanent disability and double indemnity benefits in certain eventualities named therein. The policy proper and attached rider was delivered to Weinig in consideration of a premium of $291.20 for the life policy, a premium of $48 for the disability benefits and a premium of $12.50 for the double indemnity protection. It was agreed that such premiums would be paid annually thereafter by the assured provided, however, that in the event of the total disability of the assured, thereafter plaintiff would waive the payment of all premiums by the assured during the continuance of such disability.

Upon the application for the insurance, Weinig underwent a medical examination. In answer to one of the questions by the medical examiner, the assured stated and represented that neither of his parents nor any of their brothers or sisters nor any of his brothers or sisters had died of or been afflicted with'tuberculosis, insanity or any hereditary disease. It has been found by the lower courts that one of the brothers of the assured had received treatment for a mental disorder or insanity in mental institutions to the knowledge of the assured prior to the signing of the application in which such representation was made and that the statement and representation of the assured to the contrary were false. Plaintiff asserts and it also has been found that it had no notice or knowledge of the falsity of the statement and representation at the time the application was made and the policy issued and that it was misled thereby.

In December, 1932, while the policy and supplementary disability rider were in force, the assured became, and has since continued to be, permanently and totally disabled within the purview of the provisions of the policy and rider from a stomach disorder diagnosed as ulcerative colitis and has been prevented from performing any work or engaging in any occupation for compensation or for profit. On January 24, 1933, the assured filed a claim with the plaintiff for disability benefits and for the waiver of future payments of premiums under the provisions of the supplementary disability rider, which claim was duly approved by plaintiff. The latter thereafter paid to the assured monthly disability benefits of $100 each to and through February 26, 1941, and waived payment of all premiums thereafter due to and including May, 1940. It has been found as a fact upon sufficient supporting evidence that, in giving notice of the claim and in filing papers respecting the same, the assured did not defraud, deceive or mislead the plaintiff into approving the claim or in making monthly disability payments or in waiving the payment of premiums under the policy or supplementary disability agreement attached thereto.

This action was commenced on February 27, 1941, within six years after plaintiff first became aware of the untruth and falsity of the statement of the assured in the application, for judgment canceling the disability agreement on the ground that it was null and void for fraud from its inception, requiring the assured to return to plaintiff all payments made as disability benefits, with interest, and adjudging the policy in its entirety terminated for nonpayment of premiums. It has been held that the incontestability provision in the policy bars such relief. We assume, for the purposes of this decision, that the finding of the trial court that the representation by Weinig above referred to was material to the risk was sustained by the evidence. Accordingly, its falsity would enable plaintiff successfully to maintain this action (Jenkins v. John Hancock Mut. Life Ins. Co., 257 N. Y. 289) unless suit is barred by the two year incontestability clause in the policy proper or by laches.

The life policy .proper contained the provision that This policy will be incontestable after it has been in force during the lifetime of the insured for a period of two" years from the date of its issue, except for non-payment of premiums; provided, however, that any provisions or conditions relating to benefits in event of total and permanent disability or accidental death contained in any supplementary agreement attached hereto shall become void for the causes and under the conditions stated therein.” The policy and supplementary agreement were in full force and in good standing with all required premiums fully paid more than two years after the date of issue thereof.» No grounds are stated in the policy proper by which liability under the supplementary agreement may be contestable after the period of two years after date of issue except the nonpayment of premiums. During disability, payment of premiums was agreed to be waived as above stated. The only “ causes ” and “ conditions ” stated in the supplementary agreement for and under which the " provisions or conditions relating to benefits in event of total and permanent disability * * * shall become void ” are: (1) failure of the insured to furnish proof of the continuance of the disability and to permit examinations by the company’s duly appointed medical examiner at such time or times as may be required by the company during the first two years after the receipt of proof of the disability; (2) recovery of the insured from his disability; (3) in the event the disability results “ from causes arising during military or naval service in time of war, or from self-inflicted injury, or from participation in underground work, or in aerial or submarine expeditions or operations, either as a passenger or otherwise.” None of those "causes ” and conditions ” have any applicability under the facts in this case. It thus appears that fraud in the inception of the contract is not stated to be one of the causes ” or "conditions ” for or under which the supplementary agreement shall become void. There is no reservation in the policy proper or in the so-called supplementary agreement of fraud in the inception of the contract as a ground for declaring the contract void if asserted more than two years after the date of issue of the policy. It is significant that the plaintiff stated at length and in detail the causes ” and “ conditions ” under which the supplementary agreement should become void. Had it been the intent of the plaintiff to except fraud in the inception of the contract from the operation of the two-year incontestability clause, it would have been a simple matter to have inserted a provision to that effect which it had the power to do; if there is any ambiguity in the meaning of the provisions of the contract, all doubt must be resolved in favor of the insured (Janneck v. Metropolitan Life Ins. Co., 162 N. Y. 574; Stroehmann v. Mutual Life Ins. Co., 300 U. S. 435, 439).

Not only do settled principles of construction require that the application for insurance, the policy proper and the supplemental rider must be read together and construed as a single instrument, but a reading of those instruments so indicates in unmistakable language. The incontestability clause applies to the pplicy as a whole. “ It is not a stipulation absolute to waive all defenses and to condone fraud. On the contrary, it recognizes fraud and all other defenses but it provides ample time and opportunity within which they may be, but beyond which they may not be, established. It is in the nature of and serves a similar purpose as statutes of limitations and repose, the wisdom of which is apparent to all reasonable minds” (Wright v. Mutual Benefit Life Assn., 118 N. Y. 237, 243). It “is not a mandate as to coverage, a definition of the hazards to be borne by the insurer. It means only this, that within the limits of the coverage, the policy shall stand, unaffected by any defense that it was invalid in its inception, or thereafter became invalid by reason of a condition broken” (Matter of Metropolitan Life Ins. Co. v. Conway, 252 N. Y. 449, 452). It is directed against a claim that the contract has been obtained by fraudulent misrepresentations or that there is a breach of a condition precedent or subsequent and absolutely bars rescission after the period within which liability may be contested (Columbian Nat. Life Ins. Co. v. Hirsch, 267 N. Y. 605; Killlian v. Metropolitan Life Ins. Co., 251 N. Y. 44, 49).

What Weinig bought, and what he had a right to understand that he bought, was a policy of life insurance with provisions for disability and double indemnity benefits, incontestable for any cause whatsoever after two years from the date of issue of the policy except for those reasons which were specifically stated and enumerated in the supplemental rider attached to and made a part of the policy.

The judgment appealed from should be affirmed, with costs.

Lehmak, Ch. J., Loughran, Finch, Lewis, Conway and Desmond, JJ., concur.

Judgment affirmed.


author: Per Curiam.

text:
    In the Matter of the Claim of Michael McGrinder, Respondent, against John F. Sullivan et al., Appellants. State Industrial Board, Respondent.
    Argued January 5, 1943;
    decided March 4, 1943.

      Floyd Coursen and Harry Wareham for appellants.

      William Doblin for claimant, respondent.
   Per Curiam.

An employer and his insurance carrier appeal from an order of the Appellate Division which (1) reversed a determination of the State Industrial Board dismissing a claim made under the Workmen’s Compensation Law and (2) remitted the matter to the Board for a decision to the contrary. ■

The claimant was employed as a bartender in premises at Lexington avenue and 121st street, Manhattan, city of New York. The hours of his employment were from 5 p. m. to 4 a. m. He stated his case as follows: “ A customer came in, and he started an argument, and there was a lady in the back and I told him to keep quiet, but he wouldn’t do it, and he was using filthy language, so I had to put him out, and when I put him out he says, ‘ I will see you again.’ I didn’t think anything more about it, and I closed the door at 3:15, and when I went to 125th street he met me up there, and he wanted to shake hands with me, with his left hand, and he smashed me in the left eye with his right hand.” When the claimant was thus assaulted, he was waiting to take a street car to his home.

The parties are agreed that the injury arose “ out of ” the employment. (Workmen’s Compensation Law, § 2, subd. 7.) The Board found that the injury did not arise “ in the course of his employment.” (§ 2, subd. 4.) The Appellate Division reversed this finding for the reason that the quarrel outside the bar room was merely a continuation of the quarrel begun within.

We are not free to adopt this conclusion of the Appellate Division. The question was whether continuity of cause was so combined with continuity in time and space that the quarrel from origin to ending should be taken to be one. (Matter of Field v. Charmette Knitted Fabric Co., 245 N. Y. 139.) The negative answer given by the Board was an act of judgment upon a debatable matter of fact. The Appellate Division was without power to direct the Board to decide the other way as matter of law. (Workmen’s Compensation Law, § 20; Matter of Dubinsky v. Kofsky, 266 N. Y. 631; Matter of Daus v. Gunderman & Sons, Inc., 283 N. Y. 459.)

The order of the Appellate Division should he reversed and the determination of the State Industrial Board reinstated, without costs.

Lehman, Ch. J., Loughban, Finch, Rippey, Lewis, Conway and Desmond, JJ., concur.

Ordered accordingly.


text:
    Lydia L. Querze, Appellant, v. Raoul Querze, Respondent.
    Argued November 30, 1942;
    decided March 4, 1943.

      George H. Berman and Samuel H. Ellmann for appellant.

      Benjamin Reass for respondent.
   Rippey, J.

Plaintiff brought this action for an absolute divorce. Defendant interposed an answer in which he denied the material allegations of the complaint and set up four affirmative defenses, to wit: (1) that plaintiff was estopped to claim that she was the wife of the defendant since she procured a decree of divorce in Mexico, valid under the jurisdiction where it was granted, which still remained in full force and effect; (2) that plaintiff was estopped to assert that she was the wife of defendant by reason of her consenting to the entry of an order in an action brought by her for a separation which dismissed the action on the merits when she knew that the defendant had remarried in reliance upon the said decree of divorce; (3) that plaintiff was estopped to assert that the marriage still existed between the parties since she consented to a dismissal upon the merits of an action for an injunction and declaratory judgment against the defendant, based upon the allegation that she was still his wife, and (4) that plaintiff was estopped to assert that a valid marriage existed between the parties since, after the marriage between himself and his second wife had been annulled, in reliance upon the aforesaid decree of divorce he married another woman and they were then living together as husband and wife.

After a trial of the issues at Special Term, the trial court made findings of fact and conclusions of law and entered a decree in which he sustained the affirmative defenses, held that the plaintiff was estopped to assert that her marriage to the defendant still existed and dismissed her complaint, with costs. The Appellate Division has unanimously affirmed and the case reaches the Court of Appeals by its own permission.

The facts which are not disputed establish that the parties to this action were married in the State of New York on February 9, 1923. At the time of said marriage the parties were and ever since have been residents of and domiciled within the State of New York. In May, 1933, plaintiff commenced an action for an absolute divorce against the defendant in the First Judicial Court of First Instance, at Cuernavaca, State of Morelos, Republic of Mexico. Both parties to the action purported to submit themselves to the jurisdiction of that court and consented to the entry of a decree but neither party ever.went to Mexico. Plaintiff attempted to show at the trial that the defendant had procured her signature to the complaint in that action by fraud by representing to her that she was merely consenting to separation from him and that the defendant himself paid and retained the attorneys who purported to represent her, but such evidence was excluded. Final judgment was rendered in the Mexican divorce action on June 10, 1933, and the plaintiff received a copy of the decree sometime in December of that year. On June 10, 1934, the defendant went through a ceremonial marriage with a woman in the State of New Jersey. On June 25, 1934, the plaintiff commenced two actions against the defendant upon complaints verified June 7, 1934, in which she (1) attempted to enjoin the defendant from remarrying and asked for a declaratory judgment declaring that she was still the wife of the defendant, and (2) sought a separation from the defendant. Those actions were not brought to trial and in the meantime the woman whifm defendant married in New Jersey commenced an action in this State for the annulment of her marriage with the defendant. An interlocutory decree annulling the marriage was made on May 29,1936. On August. 15, 1935, stipulations were entered into between the plaintiff in person and the defendant by his attorney, whereby it was agreed that the two actions which plaintiff had commenced and which were still pending should be dismissed “ on the merits ” and that an order to that effect might be entered without further notice to either party. Accordingly, an ex parte order was entered in each action and both orders recited that they were made upon the foregoing stipulations and they provided severally that the action for separation and the action for an injunction be dismissed upon the merits. There was no hearing or trial in those actions, no findings were made and no judgment was entered in either of them. After the annulment of defendant’s second marriage, he married one Alice Greenspan in the State of Connecticut on October 14,1939, since which time they have been living together as husband and wife:

The learned justice at Special Term relied upon Krause v. Krause (282 N. Y. 355) but there is nothing in that case which forms any authority for the decision which has been made in the case at bar. The facts in the instant case are such that the courts of this State can attach no validity to the Mexican decree of divorce (Vose v. Vose, 289 N. Y. 779). No one disputes the invalidity of the Mexican decree. This court has held that a void foreign divorce decree will preclude the spouse who obtains it from asserting in our courts a private claim or demand arising out of the marriage (Starbuck v. Starbuck, 173 N. Y. 503; Hynes v. Title Guarantee & Trust Co., 273 N. Y. 612). But we have consistently held that such a decree will have no effect upon the right of either spouse to a full adjudication in our courts upon the question of the existing marital status (Stevens v. Stevens, 273 N. Y. 157; Davis v. Davis, 279 N. Y. 657; Vose v. Vose, supra; Maloney v. Maloney, 288 N. Y. 532). Although there was no fact of remarriage in the Vose and Stevens cases, the fact of the subsequent remarriage or remarriages of the defendant in this case in reliance upon the Mexican decree does not change that rule (Krause v. Krause, supra). Nor is that rule affected by the fact that plaintiff is asking for alimony and counsel fees herein. That was the claim made by defendant in Vose v. Vose (supra) and we held that the claim was without merit. The wife’s right to alimony is not a private claim or demand ” arising out of the marriage of the parties. That right comes from the statute and not from the common law (Romaine v. Chauncey, 129 N. Y. 566, 571). Such a claim in itself furnishes no foundation for a cause of action; it is a mere incident of the judgment in a matrimonial action (Galusha v. Galusha, 138 N. Y. 272; Fox v. Fox, 263 N. Y. 68; Civ. Prac. Act, §§ 1169, 1170).

The orders entered in the actions for separation and for an injunction restraining the defendant from remarrying and declaring that the parties were still husband and wife, although made upon consent and reciting that they were made on the merits ” cannot operate to estop the plaintiff from the prosecution of this action. Attention has been called to the fact that there was no trial of the merits in either of those actions. There were no findings of fact and no judgments were entered. In effect, the consent of the plaintiff to a dismissal of the complaints in those actions resulted in nothing more than a voluntary nonsuit (Nelson v. Ryan, 222 App. Div. 754; Blott v. Rider, 47 How. Pr. 90, 91; Rules Civ. Prac. rule, 283). Dissolution of the marriage relationship may never result by default in appearance or pleading (Rules Civ. Prac., rules 282, 283; Redfield v. Critchley, 277 N. Y. 336, 341). Here, with or without the consent of the parties, the court was without power to enter the orders on the merits ” and to the extent that they purport to so adjudicate, they must be held void. The rule against collateral attack has no application here. The parties by themselves were without power permanently to fix or to alter their marital status or the scope of the obligations arising from the marriage relationship by consent, stipulation or their own conduct (Stevens v. Stevens, 273 N. Y. 157, 159; Goldman v. Goldman, 282 N. Y. 296, 299).

The judgments should be reversed and the case remitted to the Trial Court for further proceedings not inconsistent with this opinion. (See 290 N. Y. 765, 926.)

Lehman, Ch. J., Loughran, Finch, Lewis, Conway and Desmond, JJ., concur.

Judgment accordingly.