author: Balcom, J. Davies, J. Emott, J.

text:
    Goulding v. Davidson.
    A married woman, carrying on trade as an unmarried woman, in her own name, after the passage of the acts of 1848 and 1849 relative to the rights of married women, bought goods for her trade and gave her own notes for part of the bill to the sellers, who were ignorant of her coverture. After her husband’s death, she promised the sellers to pay the notes and the residue of the price of the goods: Held, that the consideration sufficed to support the express promise, and that the action could be maintained.
    Appeal from the Supreme Court. Action brought in the year 1857. The complaint showed that the firm of McCreery & Groulding, sold and delivered goods to the defendant at different times and at her request, for which she gave them three promissory notes, described in the complaint, for the several sums of $200, $374.98 and $176.78. That such firm, at another time, sold and delivered goods to her and at her request, of the value of $10.50. The qomplaint contained the following allegations : “ And the said plaintiff further shows on information and belief, that the aforesaid promissory notes, and each and every of them, were made and delivered to the said McCreery & Groulding, for merchandise sold and delivered by the said McCreery & Goulding, to her at her request, and solely on her credit and responsibility, she being then a trader doing business in her own name, and for her own personal benefit and advantage, and holding herself out to be an unmarried woman; but she nevertheless, as the plaintiff has been informed and believes, alleged that she was, at the time such goods were sold and delivered to her, and all the said contracts in this complaint mentioned entered into, a married woman, and was then intermarried with one Davidson, of which the said McCreery & Goulding were ignorant. But the plaintiff says, that after the sale and delivery of the said goods, and after the making of the said notes and all the said contracts named, and on or about the 1st of September, 1854, her said alleged husband died, and she has not since intermarried; that after the death of her said alleged husband, and she being then sole, to wit, in or about the month of September, 1855, she, in consideration of the premises, and of her duty in that behalf, and of the moral obligation resting upon her to pay for the said goods and merchandise, and to pay the said promissory notes and expenses aforesaid, undertook and promised to and with the said McCreery & Groulding to pay the same, and every part .thereof.”
    The complaint contained allegations, showing that the plaintiff had become the sole owner of the several alleged causes of action therein set out; and concluded with a demand of judgment.
    The defendant demurred—assigning, as the only ground, that the complaint did not state facts sufficient to constitute a cause of action.
    Judgment was given upon the demurrer in favor of the defendant at the special term, which judgment was affirmed at a general term of the Supreme Court in the first district.
    The plaintiff appealed therefrom to this court.

      Andrew Boardman, for the appellant

      John H. Reynolds, for the respondent.
   Balcom, J.

As this action was commenced in 1857, it muss be determined by the rules of the common law, irrespective of the alterations made by our recent statutes in the laws affecting husband and wife.

It cannot be said that the husband of the defendant was ever liable ex contractu to pay for the goods. They were not necessaries, and there is no allegation in the complaint that he knew of the purchase of the goods by his wife, or that they ever came to his possession.

There was, therefore, no implied promise on the part of the husband to pay for the goods. Story says: “ If credit be given solely to the wife, the husband is not liable, although they live together, and although he see her in possession of the goods bought. If, therefore, the tradesman should take her promissory note in payment, which would plainly indicate a reliance on her personal credit, the husband would not be liable for the price of the goods, nor on the note, nor need he prove that the goods were not necessaries.” (Story on Contracts, 4th ed., § 103; 2 Bright, on Husb, and Wife, 17, 18.)

But the vendors could have maintained an action against the defendant and her husband jointly in the lifetime of the latter to recover possession of the goods, or for a conversion thereof by the former, on the ground that the goods were fraudulently obtained by the wife by falsely holding herself out to be unmarried and doing business as a trader in her own name and for her own personal benefit and advantage; and I will not say but an action on the case for damages for the fraud would have lain against the husband and wife jointly. Kent says: “ The husband is liable for the torts and frauds of the wife, committed during coverture. If committed in his company or by his order, he alone is liable. If not they are jointly liable, and the wife must be joined with the husband." (2 Kent’s Com., 9th ed., 138; 2 Bright. on Husband and Wife, 79, 80; 1 Story on Con., 4th ed., § 109; Reeve’s Dom. Rel., 2d ed., 72, 73.) By reason of the fraud of the wife the title to the goods remained in the vendors, and the possession or conversion thereof by the wife was wrongful. (Cary v. Hotailing, 1 Hill, 311; Nichols v. Michael, 23 N. Y., 264.) Hence the right of the vendors to maintain either of the actions formerly called replevin and trover for the goods.

When the wife commits a tort by order of her husband, or in company with him, he alone is liable; and in case of his death, the cause of action does not survive against the wife. (Reeve’s Dom. Rel., 2d ed., 72.) But if the tort be not committed in the presence of the husband, or by his order or request, the wife is also liable and must be joined in the suit with her husband. The wrong is in such a case considered as her wrong, and the husband is answerable with the wife, for a similar reason to that of his liability for her contracts before marriage. (Reeve’s Dom. Rel., 2d ed., 72.) I am of the opinion, a cause of action for such a wrong survives against the wife on the death of her husband. It was held by Lord Ellenborouh in Woodman v. Chapman, (1 Camp., 189), that a debt contracted by the'wife before marriage, survives against her, upon the death of her husband; and such holding was undoubtedly correct. It is laid down by Macqueen on Husband and Wife, (Law Library, 4th series, vol. 34, p. 123), that “causes of action survive against-the wife, which accrued during the coverture in respect of her real estate, or for any personal wrongs done by her when sole.” The only authority cited by him for this rule is the note by Lord Campbell to the above case of Woodman v. Chapman, and the language of that is, that “ causes of action survive to the wife, which accrued during the coverture in respect of her real estate or for any personal wrong done her.” But whether the doctrine laid down by Macqueen is or is not supported by the authority cited by him, it rests upon the same principle that makes the debts of the wife contracted before her marriage, which are not recovered of the husband and wife during the life of the former, survive against the latter, and therefore is good law. The personal representatives of the husband cannot be charged with such debts; and on similar principles they must be exempted from liability for torts of the wife committed in the absence of her husband, and not in his business, and without his concurrence or knowledge; for such torts, as has already been seen, are considered her torts. (Cox v. Kitchin, 1 Bos. & Pull., 338.)

The only authority I have found, which seems to militate against any of the foregoing conclusions, is the decision of the Court of Exchequer in Fairhurst & Wife v. The Liverpool Adelphi Loan Association (26 Eng. Law and Eq., 393), where it was held that an action will not lie against á husband and wife, for a false and fraudulent representation by the wife to the plaintiffs, that she was sole and unmarried, at the time of her signing a promissory note as surety to them for a third person, whereby they were induced to advance a sum of money to that person. The opinion of Judge Reeve is to the contrary. (Reeve’s Dom. Rel., 2d ed., 72, 73.) But if the decision of the Court of Exchequer be correct, it is placed on the same ground on which an infant is exempted from liability for damages in actions for wrongs, when founded on contract; and when goods are sold to an infant on credit, and he avails himself of his infancy to avoid payment, the vendor may reclaim the goods as having never parted with his property in them. (Badger v. Phinney, 15 Mass., 359.) Either what was formerly called trover or replevin, may be maintained for the goods in such a case. (Wallace v. Morss, 5 Hill, 391.) In such a case the action is . brought in disaffirmance of the contract, and on the ground that the vendor still retains the title to the goods. Upon the same principle, either an action to recover possession or one for conversion could have been maintained against the defendant and her husband for the goods sold to the former in this case. And should we concede that .thé vendors could not have recovered in an action against them for damages merely, for the fraud of the wife in obtaining the goods, there still remained two kinds of action, either of which could have been maintained against her as well as her husband; and the cause, therefor, survived against the defendant on the death of her husband.

If these views are correct, the promise of the defendant after the death of her husband to pay for the goods, and to pay the notes given for them, was an undertaking by her to pay, a demand for which a cause of action existed against her, -from the time she purchased the goods, and therefore was founded on a good and sufficient consideration, and is clearly obligatory upon her.

There is another view of the case which shows the promise ■ of the defendant to pay for the goods and pay the notes she gave therefor, was founded upon a sufficient consideration. .

I am aware the general rule is that a moral obligation is not alone a sufficient legal consideration to support a promise. (1 Story on Cont., 4th ed., §§ 465-469; Chitty on Cont., 9th Am. ed., pp. 48, 49; 24 Wend., 97; 1 Hill, 532; 5 id., 306.) And the Superior Court of New York City went so far in Watkins v. Halstead (2 Sand. S. C., 311), which case was followed by the Supreme Court in 1^his, as to adopt the language of a note to Wennall v. Adney (3 Bos. & Pul., 252), where it was.said that “ an express promise can only revive a precedent good consideration, which might have been enforced at law through the medium of an implied promise, had it not been suspended by some positive rule of law; but can give no original right of action, if the obligation on which it is founded never could have been enforced at law, though not. barred by any legal maxim or statute provision.” But this rule is too broad, or at least there are exceptions to it. For there are cases where a moral obligation, that is founded upon an antecedent valuable consideration is sufficient to sustain a promise, though the obligation on which it is founded, never could have been enforced at law. In other words, a moral obligation is sometimes a sufficient consideration for an express promise, if at some time or other, a good or valuable consideration has existed, although there never was a time prior to such express promise when any portion of the precedent consideration could have been enforced at law or in equity through the medium of any promise. To illustrate: If money be loaned upon usury, and usurious security taken therefor, such security is absolutely void and no action can be maintained upon it; nor is it evidence of an indebtedness, upon the strength of which the law will imply a promise on the part of the borrower, to repay the amount actually received by him. The express contract being absolutely void, no implied obligation can spring from it. The lender cannot waive or- abandon the usurious agreement so far as it is illegal, and enforce it for the residue. The contract is one; no matter what the nature or numbers of the securities may be, all are void. The contract cannot be broken up and resolved into its original parts or elements, so as to get rid of the illegal taint, without the consent of both parties. But if it is mutually abandoned, and the securities are canceled or destroyed, so that they can never be made the foundation of an action, and the borrower subsequently promise to pay the amount actually received by him, such promise is legal and binding. It is founded upon an equitable and moral obligation, which is sufficient to support an express promise. • The money actually lent when legally separated from the usurious premium, is a debt in equity and conscience, and ought to be repaid. (Per Sutherland, J., in Hammond v. Hopping, 13 Wend., 511, 512; Miller v. Hull, 4 Denio, 104; Chitty on Cont., 9th Am, ed., 712, 713; 1 Story on Cont., 4th ed., § 603; 2 Pars. on Con., 3d ed., 397; Parson’s Mercantile Law, 257; Barnes v. Headly, 2 Taunt., 184.)

In Lee v. Muggeridge (5 Taunt., 35), a feme covert, having an estate settled to her separate use, gave a bond for repayment, by her executors, of money advanced at her request, on security of that bond, to her son-in-law; and after her husband’s decease, she' wrote, promising that her executors should settle the bond, and it was held that assumpsit would lie against the executors on such promise of the testatrix. That case was not .overruled by the decision in Meyer v. Haworth (8 Adol. & Ellis, 467); though it must be conceded it was very much weakened as an authority in England, by Eastwood v. Kenyon. (11 Adol. & Ellis, 438.) And Littlefield, Executrix, &c., v. Shee (2 Barn. & Adol, 811), was put mainly upon the ground that the price of the goods originally constituted a debt from the husband, though Lord Tenterden in deciding it said he must also observe, that the doctrine, that a moral obligation is a sufficient consideration for a subsequent promise, is one which should be received with some limitation.” Lee v. Muggeridge has never been overruled in this State. Smith v. Wane (13 Johns., 257), does not do it; for that, was a case to recover back money the plaintiff had paid the defendant for land, the former claiming there was a deficiency in the number of acres; and Judge Spencer, in delivering the opinion of the court, said: It cannot be pretended that the defendant was under any moral obligation to pay for the deficiency in quantity of land sold and conveyed to the plaintiff.” All that was decided in Ehle v. Judson (24 Wend., 97), was that a mere moral or conscientious obligation, unconnected with a prior legal or equitable claim, is not a sufficient consideration to support a promise; and Judge Bronson, who gave the opinion of the - court, said: “ The moral obligation to pay a debt barred by the statute of limitation, or an insolvent’s discharge, or to pay a debt contracted during infancy or coverture "and the like, "will be a good consideration for an express promise.” In Wilson v. Burr (25 Wend., 386), it was held the plaintiff would recover his claim of $200, counsel fees; and the- court said: “ It is true, at the time of the retainer the defendant was a feme covert; but-she was soon after divorced, and it is to be presumed subsequently recognized the services rendered.”

There are some, perhaps many, broad assertions in our reports going to show that the promise of the defendant in this case is not obligatory; and the reasoning tends that way in the following cases: (Geer and Wife v. Archer, 2 Barb., 420; Nash v. Russell, 5 id., 556; and Ingraham v. Gilbert, 20 id., 151.) But there are equally broad expressions in our reports the other way; and the reasoning in such case's as Doty v. Wilson (14 Johns., 378), and others I might mention, certainly tends to the conclusion that such promise is binding, as, in justice, it clearly ought to be.

The goods were sold and delivered by the vendors with -the expectation on their part, that they would receive pay for the same, and upon the defendant’s express promise that she would pay for them, -and under such circumstances that the vendors had no claim therefor against her husband. The goods were valuable and the defendant personally received the benefit of them; and the price she agreed to pay therefor, is a debt which, “ in equity and conscience,” she ought to pay. In other words, she ought in conimon honesty to pay for the goods. Her promise so to do was made for value actually received by her personally; and it was to discharge a moral obligation founded upon an antecedent valuable consideration, created for her own personal benefit, and at her special instance and request; and I am of the opinion the law makes such promise obligatory upon her.

It seems to me that the defendant’s moral obligation to pay this debt is so interwoven with equities as to furnish a good consideration both upon principle and authority for her promise to pay it. I will add that the fact is controlling with me, that the defendant personally received a valuable consideration for the money she has promised to pay, and this distinguishes the case from some that seem to weigh against the conclusion that the defendant’s promise is valid.

It is unnecessary to notice any of the recent changes made . by the Legislature in the law, • affecting husband and wife as they are all inapplicable to, the case, which must be determined as the law was when the alleged cause of action accrued.

For the foregoing reasons, I am of the opinion the complaint states facts sufficient to constitute a cause of action, and that the judgment of the Supreme Court should be reversed, and judgment given for the plaintiff on the demurrer with costs; but with liberty to the defendant to apply to the Supreme Court for leave to answer on terms.

Davies, J.

A natural or moral obligation is one which cannot be enforced by action, but which is binding on the party who incurs it, in conscience and according to natural justice. (2 Bouv., 200.) And the instance of such an obligation is given, as when the action upon the contract is barred by the statute of limitations, a natural or moral obligation still subsists, although the civil obligation is- extinguished. A natural obligation is a sufficient consideration for a new promise. (5 Binn., 33; 2 id., 591; Yelv., 41, a. n. 1; Cow., 289; 2 Bl. Com., 445; 3 B. & P., 249, n.; 2 East., 506; 3 Taunt, 311; 5 id., 36; Yelv., 41, 6 n.; 3 Pick., 207, and other cases hereinafter referred to.)

The very able note to Wennall v. Adney (3 Bos. & P., 249), contains a review of all the cases, and a criticism upon the decision of Lord Mansfield, and the writer says that the instances adduced by him as illustrative of the rule of law, do not carry that rule beyond what the older authorities seem to recognize as its proper limits, for in each instance the party bound by the promise, had received a benefit previous to the promise.- Indeed, it is' said, it seems that in such instances alone will an express promise have any operation, and there it only becomes necessary because though the consideration was originally beneficial to the party promising, yet inasmuch as he was not of a capacity to bind himself when he received the benefit, or is protected from liability by some statute provision or some stubborn rule of law, the law will not as in ordinary cases imply an assumpsit against him. Again, it is remarked that Lord Mansfield appears to have used the term moral obligation, not as expressive of any vague and undefined claim arising from nearness of relationship, but of those imperative duties which would be enforceable by law, were it not for some positive rule, which with a view to general benefit exempts the party in that particular instance from legal liability. Were it not for the legal disability in the party making the contract at the time it was so made, the law would imply a promise. But by reason of such disability the contract cannot be enforced unless there be an express promise to fulfill, after the disability ceases. And the moral obligation thus to perform the contract made under disability, has been held to be a good consideration to support the express promise. Thus, Judge Bronson said, in Ehle v. Judson (24 Wend., 97), that the moral obligation to pay a debt barred by the statute of limitations or an insolvent discharge, or to pay a debt contracted during infancy or coverture, and the like, will be a good consideration for an express promise. But a merely moral or conscientious obligation unconnected with any prior legal or equitable claims, is not enough. The doctrine' thus laid down and stated with great precision and accuracy is fully sustained by the authorities. Buller, J., in Hawkes v. Saunders (Cowp., 289), says, the point is whether an obligation in justice, equity and good conscience, to pay a sum of money, be or be not a sufficient consideration in point of law, to support a promise to pay that sum? If such a question, he says, were stripped of all authority, it would be resolved by inquiring whether law were a rule of justice, or whether it were something that acts in direct contradiction to justice, conscience and equity. He says the matter has been repeatedly decided and refers to numerous authorities.

In Bonner v. Hedley (2 Taunt., 184), a promise to pay a void and usurious debt was held binding on the party making it; and although the promisor was not and never had been under any legal obligation to pay the debt, yet it was held that in conscience and equity he was bound to pay the money actually borrowed, and that such moral obligation formed a good consideration for a promise to pay it.

Lee v. Muggeridge (5 Taunt., 35), is a case often referred to, and was regarded as a controlling authority until a late period, when its soundness has been in some degree questioned. There a feme covert, having a separate estate, gave a bond for the repayment by her executors of a certain sum of money advanced at her request on the security of that bond to her son-isslasr. After her husband’s decease, „she wrote promising that her executors should settle the bond. It was held that assumpsit would lie against the executors upon the promise of their testatrix. Mansfield, Ch. J., said that it had long been established that where a person is bound morally and conscientiously to pay a debt, though not legally bound, a subsequent promise to pay will give a right of action. And the judges say that the case is not distinguishable from Bonner v. Hedley (supra): that in that case certainly Hedley was never for a moment legally bound to pay a farthing of that money for which he was sued. Bentley v. Morse (14 Johns., 468), is a case similar m principle to Hedley v. Bonner. In that case a debt had been paid and a receipt taken therefor, as evidence of the payment. A suit was brought to recover the same debt, and the receipt not-being produced a recovery was had, and the amount paid the second time. There was, therefore, no legal liability on the- part of the creditor to refund the money, but a moral and conscientious obligation to do so, as he had no claim morally to the money paid the second time. It was held that a promise to repay on production of the receipt, was founded on a good consideration.

The Court says, “ The debt having been paid, the recovery in the former action was clearly unjust. And though in consequence of his neglect the defendant in error lost all legal remedy to recover back his money, yet there was such a moral obligation on the part of the plaintiff in error to refund the money, as would be a good consideration to support an assumpsit, or express promise to pay it. The moral obligation is as strong as any in the cases in which it has been held sufficient to revive a debt barred by statute or some positive rule of law. It is like the promise of an infant to pay a debt contracted during his non-age, or of an insolvent or bankrupt to pay a debt from which he is discharged by his certificate. Littlefield v. Shee, 2 Barn. & Ad., 811, was decided in 1831, and on the ground that in that case the debt which the wife promised to pay after she became discovert, was thd debt of her husband, and that she was under no moral obligation to pay the same. Butcher’s meat had been furnished to the wife for the space of about six months, while her husband was absent abroad, and after his death she promised to pay it. Lord TEMTERDEEr held that the plaintiff had failed to show that he had supplied the defendant with the meat, but that it appeared it was furnished to her while her husband was living, so that the price constituted a debt due from him. They were, therefore, of the opinion that the declaration was not supported by the proof, and the nonsuit was right." Lee and Muggeridge is referred to, and it is remarked that all the circumstances in that case showed that the money was .in conscience due from the defendant. In Eastwood v. Kenyon (11 Adol. & Ellis), 438, the broad doctrine assumed to be laid down in Lee v. Muggeridge, is criticized by Lord DEMAN, and it is said that that doctrine would annihilate the necessity for any consideration at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it. And he quotes with approbation the note to Wennall v. Adney, supra, “ that an express promise can only revive a precedent good consideration, which might have been enforced at law through the medium of an implied promise, had it not been .suspended by some positive, rule of law; but can give no original cause of action, if the obligation on which it is founded never could have been so enforced at law, though not barred by any legal maxim or statute provision. And he thought the case of Barnes v. Hedley, was fully consistent with the doctrine of this note. Watkins v. Halstead (2 Sand. S. C.), was a case of goods sold under such circumstances that ‘the husband was clearly liable for them, and that no moral obligation rested upon the wife to pay for them. The promise after she was divorced from her husband to pay for them, was but a promise to pay the debt of another person ; and the court held, following Littlefield v. Shee, that there was no good consideration to support the promise. I should judge from the statement of the case that the goods were originally charged to the husband and sold on his credit, with the understanding that if he did not pay for them, the wife would.

Geer and Wife v. Archer (2 Barb. S. C., 420), was a case when it was held that a mere moral or conscientious obligation, unconnected with a.prior legal or equitable claim, is not sufficient to support an express promise, and the rule as laid down in the note in Bos. & Pull. (supra), is cited as containing the true test.

In the present case, can there be any doubt, but that the defendant, if she had been a single, woman, would have been under both legal and equitable obligation to pay for these goods ? The law would have raised, in that event, an implied promise to pay for them; an express promise therefore, revived a precedent good consideration, which might have been enforced at law through the médium of an implied promise. The inability of the wife to contract, is precisely the same as that of an infant, and cannot be distinguished from it. If a sale and delivery of goods to an infant, imposed a moral obligation upon him to pay for them, it is not perceived why a sale and delivery of goods to a married woman, as in the present case, solely on her credit and responsibility, she being a trader, doing business in her own name, and for her own personal benefit and advantage, and holding herself out as an unmarried woman, does not impose upon her the same moral obligation to pay for them. This case is distinguishable therefore, from those of Littlefield and Shee, and Watkins v. Halstead, in that the debt in the present case, was never that of the husband. The wife here was a sole and separate trader, on her own account and for her own personal advantage, and not by permission of the husband. He was not therefore liable for the debts contracted by her, neither would the property so purchased by her, be liable to the payment of his debts. (Sherman v. Elder, decided at March term, 1862, 24 N. Y., 381; 2 Bright. on Husband and Wife, p. 300, Smith v. Silliman, 11 How. Pr., 368.) This is not in conflict .with the case of Lovett v. Robinson (7 How. Pr., 105), as that case was put on the ground that the wife was living and cohabiting with the husband, and it was held there that the goods then purchased by .her, became those of her husband, and the title thereto was vested in him.

It follows from these views, that the debt referred to in the complaint, under the circumstances therein detailed, was not the debt of the defendant’s husband, but that morally and equitably, she ought to pay the same. That but for the rule of law, prohibiting a feme covert from entering into or making a legal contract, the law would have implied a promise on her part to pay for the same, and that after such disability ceased she having made an express promise to pay the price of such goods, the moral obligation or duty resting on her, to make such payment, formed a good consideration for such promise, and she is consequently liable to pay for the same. ■ The judgment of the Supreme Court should therefore be reversed, and judgment should be given for the plaintiff on the demurrer, with costs.

Emott, J.

The action of the plaintiff must, of course, rest •upon the express promise of the defendant, made after her coverture ended, to pay the debts, or the notes which represent them. The question js whether the previous sale and delivery of the goods to the defendant during coverture was a sufficient consideration to sustain the promise. The authorities upon the subject of a promise by a married woman after coverture to pay a debt incurred or an obligation given by her during coverture are not uniform either in their reasoning or their conclusions. One of the earliest cases is Lloyd v. Lee (1 Strange, 94), where a married woman, gave a note as a feme sole, and after her husband’s death promised to pay it. It was held that the note was void, -and forbearance to sue it constituted no consideration for a promise to pay it. It will be observed that there is nothing in this case to show what was the original consideration of the note. On the other hand, in Lee v. Muggeridge (5 Taunt., 35), a married woman gave- a bond, while married, to a person for money advanced by him to her son-in-law at her request. After her husband’s death she promised to pay that bond, and assumpsit was sustained upon that promise. The language of Sir Jambs Mansfield, and of all the other judges of the .Court of Common Pleas, was very strong in this case to the sufficiency of a mere moral obligation as a consideration for a subsequent promise. But this language has been questioned, and the authority of the decision weakened, by the later English authorities. Thus in Littlefield v. Shee (2 B. & A., 811), Lord Tenterden, delivering the judgment of the Court of King’s Bench, held that a promise by a married woman to pay for goods which had been previously supplied to her during coverture was void, because the goods were in law supplied to her husband, and the price was a debt from him, not her. Lord Tentebden observed in his judgment that the doctrine that a moral obligation is a sufficient consideration for a subsequent promise, is one that should be taken with some limitation. Again in Meyer v. Haworth (8 A. & E., 467), Lord Denman and all the other judges of the King’s Bench adhered to this doctrine upon demurrer in a similar case. The Lord Ch. Justice said: “ The record states that goods were supplied to a married woman who, after her husband’s death, promised to pay. This is not sufficient. The debt was never owing from her.” The cases were again, adverted to, and the law upon the subject of a moral obligation as a consideration for a promise, discussed at some length by Lord Denman, in Eastwood v. Kenyon (11 A. & E., 438). The action there was against the husband of a woman who had inherited lands. The plaintiff had voluntarily ' expended money in the improvement of the lands, while she was sole and an infant. After she came of age she assented to it, and promised to pay the account, and after marriage the defendant assented to the account, and promised to repay the plaintiff, and the suit was brought on this express promise. It was held that the consideration shown was past and executed, and not at the request of the defendant or of his wife, and therefore was a mere voluntary courtesy and would not sustain the action. The case of Lee v. Muggeridge was again questioned in this judgment. In our own courts there are dicta in many cases to the effect that the moral obligation to pay a debt com' tracted during coverture will be a sufficient consideration for an express promise after the disability is removed. (24 Wend., 99; 25 id., 386-388.) The question, however, was never distinctly presented, as far as I am avfare, until the case of Watkins v. Halstead (2 Sand. S. C., 311), where it was determined by the Supérior Court of New York adversely to the doctrine advanced by the plaintiff. The decision is approved by Parsons, in his work on Contracts (vol. 1, pp. 358-361), and was followed by the court below in this case..

There is a distinction taken in some of the cases between obligations which are void, and such as are only voidable, and it is said that where the original undertaking was void, it cannot form the basis or consideration for a new promise, although it may where it is only voidable. Thus, in Meyer v. Haworth (8 A. & E., 467), Patterswon, J., says, speaking of a supposed promise of the defendant while a married woman, upon the. sale of the goods: “Such promise was not like that of an infant voidable, but was void.” This distinction, however, applied to the original express contract alone, when there is one, will not explain all the cases. Thus, where money is lent upon an usurious contract which is totally void, yet, if the borrower subsequently promise to repay the money, that promise will be enforced by the courts. (2 Taunt., 182; 19 John., 147.) On the other hand, where a creditor obtained from the debtor a promissory note for the residue of his demand, as a condition of his joining with the other creditors in a composition deed acknowledging satisfaction by the receipt of a part of their debts, the note is void in law as a fraud upon the other creditors, and a subsequent promise to pay it was held without conside-. ration. (2 T. R., 763.).

Where the original contract or promise is in itself the whole consideration upon which'the new promise rests, the distinction which has now been adverted to is. sufficient to dispose of the case. If that contract was wholly void, it alone will not sustain a subsequent promise to fulfill it. Thus, in Lloyd v. Lee (1 Strange, 94), already quoted, the new promise of the defendant rested entirely.upon her having given a note during coverture. This note was void; and as there was no proof of any other consideration, either for the note or the new promise, the action was not sustained. But where there is, beyond or before the void security or agreement, a moral obligation or duty, arising from benefit received or otherwise, which would raise an implied promise, except for a disability to make a promise, which the law imposes—a promise made after the •disability is removed can rest upon this benefit and duty as a sufficient consideration. The learned note to Wennall v. Adney (3 B. & P., 247-252), which has been cited and approved by the judges in subsequent cases, requires some qualification or explanation, where it states that “if a contract between two persons be void, and not merely voidable, no subsequent express promise will operate to charge the party promising, even though he has received a benefit from the contract.” This remark is strictly true as to a promise founded upon the contract alone; but the case of usurious loans, which the borrower will be held to pay upon a subsequent promise, shows that when, behind the void, contract, there is a sufficient consideration, it will sustain the subsequent promise. The rule stated in the residue of the note needs no qualification, and has often received express judicial approval: “ An express promise can only revive a precedent good consideration which might have been enforced at law through the medium of an implied promise, had it not been suspended by some positive rule of law; but can give no original right of action, if the obligation on which it is founded could never have been enforced at law, though not barred by any legal maxim or statute provision.” The receipt of money, or of any benefit or advantage, from the promisee, at the request of the promisor, will sustain a promise to repay it, although the money was advanced or the benefit received under a void contract, provided that the consideration for that contract itself was not tarnished with fraud or otherwise invalid. So, when the promisor was, at the time of the receipt of the benefit, under a mere disability to contract to make it good, arising from a rule or maxim of law, and although such a contract could neither be expressed nor implied at the time,, yet a subsequent promise, after the disability is removed, will rest-upon the original benefit, passing over.any invalid contract or promise at the time.

But this rule would not help the case of a subsequent pn> mige to pay for goods sold or delivered to the promisor while a married woman, at common law. The difficulty in such a case was that which was seen in the two cases in the Court of King’s Bench to which I have referred. (2 B. & A., 811; 8 A. & E., 467.) In such cases, at common law, the goods were, in law, supplied to the husband, and the price was a debt owing from him, and never from her. If, .therefore, she gave a note, or other express obligation, it was not only void, but had no consideration. Even if her disability to contract were removed, or did not exist, yet, as long as the rules of the common law as to marital rights remained unchanged, there was nothing from which the law could imply a promise to pay, because the goods supplied to her became her husband’s, and she acquired no beneficial interest in them. Thedaw might imply a promise on.his part to pay for them, but not on hers. For this reason, I agree that, at common law, a promise by a woman, after coverture, to pay for goods supplied to her, or, at her request, while married, could not be sustained.

But the statutes of this State, passed in 1848 and 1849, in respect to the rights of married women, give a different aspect to such a question. (Laws of 1848, p. 308; id., 1849, p. 528.) Since these statutes, any married female may take from any person, other than her husband, and convey, personal property, and it will not be subject to the disposal, or to the debts, of her husband. It is true that these statutes did not remove the disability of married women to make executory contracts; so that any note or obligation, which a married woman should make upon the purchase or acquisition of property, would be void. It is true, also, that the same disability prevented the implication of any contract-on her part to pay for such property. But personal property, sold or conveyed in any manner to a married woman in good faith, since the statute, by any person' .other than her husband, is hers, and not his. It becomes her sole and separate property, and he is neither entitled to it nor bound to pay for it. For this reason, no debt or engagement is implied on his part in consequence of its acquisition. On the other hand, such acquisition is directly beneficial to the married woman: it becomes hers, and not her husband’s: and if it were not that the law disabled her, a promise to pay for it would at once be implied by the law from the fact of its acquisition.

The transactions stated in the complaint, in the present case, occurred in 1852, after those statutes. They are to be taken to be actual and bona fide sales and transfers of property to' the defendant, who-was then a married woman. She became, by-these transfers, the owner of these goods; and although she was incapable of any agreement, express or implied, to pay for them, yet that was merely on account of the existence of a legal rule or maxim. The delivery of the goods to her, at her request, under the statute which made them hers, and not her husband’s, was a good consideration, out of .which an implied promise would at once have arisen, had it not been suspended by the rule of law as to her disability to make an executory agreement. When that disability was removed, it furnished a sufficient consideration for her express promise upon which these actions were founded. The case comes precisely within the rule of the note to Wennall v. Adney; and it is relieved of the difficulty which was fatal to the plaintiff’s, action in the other cases referred to..

The demurrer should have been overruled in the court below, and their judgment should be reversed.

Denio, Ch. J., Selden, Rosekrans, Martín and Wright, Js., concurred. The latter read an opinion, in which he only-considered the last question discussed in the opinion of Judge Balcom, agreeing with him.

Judgment reversed and rendered for plaintiff on the demurrer.


source: Caselaw Access Project

author: Lehman, J. Crane, J. (dissenting).

license: Public Domain

text:
    Howard Jensen, Respondent, v. The Union Railway Company of New York, Appellant.
    (Argued June 13, 1932;
    decided July 19, 1932.)

      Alfred T. Davison and Addison B. Scoville for appellant.
    ,The judgment entered was not a default judgment within the meaning of section 557 of the Civil Practice Act, and, therefore, an appeal may be taken therefrom. (Citizens Trust Co. v. Prescott & Son, Inc., 221 App. Div. 426; King v. Ross, 28 App. Div. 371; Sacia v. O’Connor, 47 N. Y. Super. Ct. 53.) Defendant’s appeal from the judgment entered after the reversal by the Appellate Division of the order of Special Term vacating and setting aside the inquest and setting the case down for trial may be taken directly to the Court of Appeals. (Girling v. City of New York, 197 N. Y. 302; Logan v. Guggenheim, 230 N. Y. 19.)

      Louis W. Arnold, Jr:, Edward W. Beattie and Philip E. Barnard for respondent.
    The judgment being one by default is non-appealable. (Herpe v. Herpe, 225 N. Y. 323; Flake v. Van Wagenen, 54 N. Y. 25; Innes v. Purcell, 58 N. Y. 388; Hawkins v. Smith, 91 Hun, 209; First Nat. Bank v. Fleitmann, 168 App. Div. 75; Teeter v. Daniel, 177 App. Div. 903; Cohen, Goldman & Co. v. Ellman, 202 App. Div. 787; Strohbeck, Inc., v. Benett’s, Inc., 217 App. Div. 66; White v. Sebring, 228 App. Div, 413.) There can be no appeal from the judgment under section 588 of the Civil Practice Act. (Hermann v. Ludwig, 227 N. Y. 632; Hicks v. La Vergne, 248 N. Y. 558; Clews v. Peper, 112 App. Div. 430; Prager v. Beardsley, 133 App. Div. 592; Cascade Hotel Co. v. Orleans Real Estate Co., 153 App. Div. 882; Thorburn v. Gates, 177 App. Div. 474; Rothschild v. Haviland, 172 App. Div. 562; Fitzgerald Manufacturing Co. v. Alexander, 200 App. Div. 164; Titus v. Halsted, 209 App. Div. 66; Mandel v. Donohue, 124 Misc. Rep. 861; Dickson v. Merchants’ & Farmers’ Bank, 118 Misc. Rep. 633; Eno v. Tracy, 130 Misc. Rep. 198; Matter of Mohawk Overall Co., 210 N. Y. 474; Kennedy v. Lownes, 229 N. Y. 563.)
   Lehman, J.

The defendant has appealed from two orders of the Appellate Division of the first department, and from a final judgment of the Supreme Court, entered in the office of the Clerk of the-county of Bronx on the 4th day of May, 1932. The notice of appeal from the orders of the Appellate Division states that the defendant appeals from the order of the Appellate Division of the Supreme Court for the first department made and entered in the office of the Clerk of the said Appellate Division on the 29th day of April, 1932, reversing the order of the Supreme Court, Bronx county, made and entered herein on the 26th day of March, 1932, which opened the defendant’s default in the above entitled action,” etc. Quite evidently the appeal from the order of the Appellate Division must be dismissed. The notice of appeal from the judgment states that the appeal is taken from the final judgment of the Supreme Court entered in favor of the plaintiff herein in the office of the Clerk of the County of Bronx on the 4th day of May, 1932, which judgment was entered as a result of an order of the Appellate Division of the Supreme Court, First Department * * * reversing the order of the Supreme Court, Bronx County, made and entered herein in the office of the Clerk of the County of Bronx on the 25th day of March, 1932, vacating and setting aside the inquest herein, and which said order of the Appellate Division denied defendant’s motion to vacate and set aside said inquest.” The notice of appeal also states that the appellant intends to bring up for review the intermediate orders from which an abortive appeal has also been taken.

Upon the appeal from the judgment two closely-related questions arise: First, is the judgment appealed from a default judgment; second, if it is not a default judgment, does an appeal lie directly to this court?

The defendant has appeared and answered the plaintiff’s complaint. When the case appeared on the ready calendar of the Supreme Court for trial, the defendant’s counsel was not ready to proceed, and further proceedings were then had which resulted in a verdict for the plaintiff in the sum of $25,000. The defendant’s counsel took no part in those proceedings, which took the form of an inquest. The defendant immediately thereafter obtained an order to show cause “ why an order should not be made and entered herein vacating and setting aside the inquest herein and any judgment which may have been entered thereunder and restore this case to the trial calendar of this court for trial.” The order to show cause contained a stay of all proceedings on the part of the plaintiff or his attorney, and no judgment could be entered until that stay was vacated. The justice at Special Term who heard the defendant’s motion granted the motion, and an order was entered vacating and setting aside the “ inquest ” which had been taken before another judge at Trial Term. The plaintiff thereupon appealed to the Appellate Division, which reversed the order made at Special Term. Then, for the first time, the judgment in favor of the plaintiff could be entered, and the defendant now appeals from that judgment.

If the judgment is the result of a trial of the action and was entered after the refusal by the Appellate Division of a new trial, then the judgment is not a default judgment, and is appealable directly to this court. (Civ. Prac. Act, § 590.) On the other hand, if the judgment is the result of an inquest qccasioned by the failure or refusal of the defendant to appear at a trial, then it is certainly clear that the judgment is a default judgment from which no appeal can he.

The record on appeal does not include the proceedings in the court below which resulted in the verdict. No case has been settled. Perhaps if we had that record before us, it would appear that the protest of the defendant’s counsel asking for an opportunity to prepare for trial constituted an appearance at the trial in behalf of the defendant, and that the refusal of the court to grant the application for a postponement of the trial might constitute a ruling in the course of the trial. Then the appellate court could have reviewed the soundness of that ruling. That was the case in Citizens Trust Co. v. Prescott & Son, Inc. (221 App. Div. 426), where the attorney for the defendant appeared on the trial, made his objection and excepted to the ruling on the record. Here, however, the defendant took another course. Its attorneys moved in Special Term to vacate the inquest,” thus conceding that there was no appearance at any trial, and in fact that no trial was ever had.

In truth, the defendant has impaled itself on the horns of a dilemma. If the application for postponement of the trial constituted an appearance at the trial, and the refusal of that application constituted a ruling made at the trial, then obviously no co-ordinate justice of the Supreme Court could upon motion reverse that ruling and grant a new trial. In such case, the motion for a new trial should have been made before the justice who presided at the trial, in accordance with section 549 of the Civil Practice Act, or at Special Term, under section 552. Even in that case the motion could not have been heard by another judge without a specific direction from the trial judge that it be so heard. Even were that not true, the defendant would have been required to procure a case to be settled in the same manner as on an appeal from a judgment, before making a motion for a new trial. (Rule 221.)

The defendant did not adopt any of the methods provided by the Civil Practice Act, sections 549-552, for obtaining a new trial. On the contrary, it asserted that there had been no trial, and moved to vacate the inquest, so that a trial might be had. Otherwise it is clear that the justice at Special Term would have been compelled either to deny or dismiss the motion, and if he granted the motion, the Appellate Division would have been compelled to reverse his order, and if it failed to do so we should be compelled, on any appeal bringing up for review the determination of the Appellate Division, to reverse the order. Thus, in every stage of the litigation after the so-called inquest, the defendant has assumed the position that the motion made at Special Term was solely a motion to vacate an inquest, so that opportunity might be had for a trial. It could not ask either Special Term, the Appellate Division, or this court to grant a new trial because of any ruling that occurred at the first trial, without a settled case, and it could not ask the justice at Special Term to vacate proceedings held before a co-ordinate justice at which all parties appeared. Thus the defendant asked for relief in the Supreme Court upon the assumption that the verdict of $25,000 is the result of an inquest and not of a trial at which the defendant appeared, and is asking this court to review the denial of the relief asked, upon the assumption that the verdict is the result of a trial at which the defendant did appear; and even here asks us to review, not the ruling made by the trial justice, but the reversal by the Appellate Division of an order of another justice of the Supreme Court vacating and setting aside without appeal the proceedings before a co-ordinate justice.

Even if "we were to assume that the judgment in this case is not a default judgment and is appealable, yet no appeal would lie directly to this court. The judgment is not a judgment entered upon the decision of the Appellate Division which would be appealable as of right under section 588, subdivision 1, Civil Practice Act. It is a judgment entered after trial or inquest which has never been reviewed by the Appellate Division. That subdivision refers plainly to a judgment entered by the clerk to whom the order of the Appellate Division and the case and papers upon which the appeal was heard were transmitted, pursuant to such order and in accordance with section 621 of the Civil Practice Act. Here the judgment was entered upon the proceedings which constituted a trial or inquest, and not upon the decision of the Appellate Division.

No appeal has ever been taken from the judgment of the Appellate Division, and no case has been settled and presented to the Appellate Division, and no settled case is in the record before us. A party intending to appeal from a judgment rendered after the trial of an issue of fact must, except as otherwise prescribed by law, make a case and procure the same to be signed and settled by the judge by or before whom the action was tried. (Civ. Prac. Act, § 575.) Moreover, no appeal can be taken from such a judgment direct to this court unless there has been refusal by the Appellate Division of a new trial, and, as before pointed out, the Appellate Division may pass upon a motion for a new trial only where there has been a settled case. A case was settled in Girling v. City of New York (197 N. Y. 302) and Logan v. Guggenheim (230 N. Y. 19). In those cases the appellant did in truth rely upon form rather than substance. In this case the appellant asks us to disregard not only the letter but the spirit of the provisions of the Civil Practice Act and of the Constitution, limiting the jurisdiction of this court; and in the guise of an appeal from a judgment to review an intermediate order refusing to vacate a trial or inquest.

The appeal should be dismissed, with costs.

Crane, J. (dissenting).

Plaintiff in this case brought action against The Union Railway Company of New York City to recover damages sustained through the operation of the defendant’s car on St. Ann’s avenue, The Bronx, New York city. He was riding a motorcycle which skidded and threw him off in front of the defendant’s car. The car did not strike and knock him off; he slipped off because of the wet pavement, and charges the motorman with negligence for not having stopped in time to prevent striking him. The motorman says that he was too near the plaintiff to stop. Thus the issue, which should have been tried out in a proper and orderly way, and as is the custom in this realm.

The case appeared upon the trial calendar on February 25, 1932, when the plaintiff’s attorney made an application to have it set down for a day certain for trial. Mr. Justice Callahan set the case down for trial for March 14, 1932, giving a two weeks’ adjournment. Thereupon the plaintiff’s attorney wrote to the judge demanding an earlier day. The judge sent for the defendant’s lawyer and said .he would place the case down on the calendar for Friday, March 11, 1932, so that it would surely be tried the following Monday, March the 14th. These facts are not denied. Mr. Justice Callahan knew whether these statements were true or false.

On Friday, the 11th, the calendar was called by another judge sitting at Trial Term. The defendant not being ready, asked an adjournment until Monday, the 14th, pursuant to the previous understanding. An inquest was ordered and the trial proceeded over strenuous objection of the defendant, resulting in a recovery of $25,000 damages in favor of the plaintiff. Thereupon a motion was immediately made before Mr. Justice Callahan to open and set aside the recovery and to grant a new trial. He knew all the facts, including his directions and instructions to the defendant. The motion was made “ upon the inquest herein and upon all the pleadings and proceedings heretofore had herein,” as well as upon the affidavits of the lawyers setting forth the above facts. Mr. Justice Callahan set aside the inquest and directed a new trial. From this order the plaintiff appealed to the Appellate Division, which reversed the order granting a new trial and denied the motion, two of the justices dissenting. Thereupon, by virtue of the order of the Appellate Division, and pursuant to its directions, judgment was entered for the sum of $25,000, with costs and interest, against the defendant. From this judgment and intermediate orders the defendant appeals to this court.

A party may not appeal from a judgment or order rendered or made upon his default. (Civ. Prac. Act, § 557.) This is not a default judgment. The case was at issue. The defendant appeared and vigorously protested against the trial on Friday, March the 11th, when the arrangement had been to try it on Monday," March the 14th. The engagements of counsel were not accepted as an excuse. The appearance of a defendant earnestly pleading for an opportunity to present its evidence upon the issues framed by its answer is not a default. On the contrary, it is a vociferous appearance. The refusal of the court to give counsel a reasonable opportunity to procure his witnesses does not cast upon the defendant the opprobrium of defaulting or failing to appear. Herpe v. Herpe (225 N. Y. 323, 327) illustrates the meaning of default,” because there the party failed both to plead and to appear. The Appellate Division óf the fourth department, in Citizens Trust Co. v. Prescott & Son, Inc. (221 App. Div. 426, 431), correctly held that a judgment taken against one who appears at the trial and asks for a reasonable postponement is not a default judgment. The language, so appropriate, may be quoted here: “ Here defendant regularly appeared by attorney; had answered and, from the beginning, been actually engaged in an effort to protect its alleged rights and to avoid judgment against it. It appeared by attorney on the trial and moved for a postponement and stay upon the same grounds as had been heretofore urged by it in a similar motion on papers; it filed those papers in "connection with its renewed motion and, when overruled, duly excepted on the record.” The judgment taken was held not to be a default judgment. (See, also, King v. Boss, 28 App. Div. 371 [First. Department].)

The judgment was a final judgment, appealable to this court. An order was granted by Mr. Justice Callahan requiring the plaintiff to show cause why the inquest should not be vacated and a new trial ordered. The motion was made upon the inquest and on all the pleadings and proceedings which theretofore had been had. On the return day, the motion was granted, the inquest and the judgment granted by the trial judge, $25,000, set aside and a new trial granted. Note that all the proceedings, including the proceedings at the inquest, were before Mr. Justice Callahan, who granted this motion. On appeal the same proceedings were before the Appellate Division. Whether or not the testimony was printed in the appeal book is immaterial, for the reason that the appeal book before an appellate court is presumed to have in it all the papers and proceedings before the lower court, or such as the counsel in the case deem important. If any be omitted, it is by the acquiescence and consent of respondent’s counsel. The fact is, then, that the Appellate Division is presumed to have had before it the entire inquest and all the proceedings which were had on March 11, 1932, and the affidavits which were submitted to Mr. Justice Callahan. The recitals in his order to show cause show that the motion to vacate was made upon all these papers and proceedings.

On appeal, therefore, the Appellate Division had before it the inquest and facts relating to the asked for adjournment and the acts of Mr. Justice Callahan. The Appellate Division reversed the order of Mr. Justice Callahan and denied the motion for a new trial, whereupon, pursuant to its order, and by virtue thereof, judgment was entered against the defendant for $25,000, which was final in all its effects, including the finality required for appeal to this court.

To say that the defendant must now appeal upon the same record to the Appellate Division from this judgment is to require a vain and idle ceremony. Practice in these days has abolished such empty forms. Courts must deal with realities, and not with shades arising from speculation. The defendant has a grievance to be reviewed which must not be obscured or hindered by the complexities and uncertainties of appeal methods. The defendant has against it a final judgment without having had a fair opportunity to present its evidence and be heard, and appellate courts are to facilitate the review of such cases. Court practice is nothing but the means by which the merits of a case may be presented to a court, and must never assume such an importance that it supplants those merits. All of which has been expressed in different language in Girling v. City of New York (197 N. Y. 302). The action was brought to recover damages alleged to have been sustained by the plaintiff, owing to negligence of the defendant in failing to keep a certain sidewalk in the borough of Brooklyn free from snow and ice. A verdict for the plaintiff was set aside and a new trial granted upon the exceptions, and because the verdict was contrary to the evidence. The order setting aside the verdict was appealed to the Appellate Division, which reversed the order and reinstated the verdict. Judgment was thereupon entered on the verdict and the defendant appealed to this court. The motion to dismiss the appeal was denied, and this court said: The learned counsel for the plaintiff contends that the appeal is unauthorized because the Appellate Division did not refuse a new trial, but simply reversed an order of the Trial Term which granted a new trial. In taking this position he relies upon form rather than substance, for the effect of the determination of the Appellate Division is that a new trial was refused. The object of the section, so far as it relates to the subject now in hand, is to authorize an appeal from a final judgment rendered by the court of original jurisdiction, after the refusal directly or indirectly by the Appellate Division of a new trial, without appealing, for the second time and upon the same question, to the Appellate Division and from the final judgment there rendered to the Court of Appeals. We think the appeal was authorized because it is within the spirit of the section. A new trial was in effect refused by the Appellate Division when it reversed an order which had granted a new trial. It decided that a new trial should not be had, and this was a refusal of a new trial within the meaning of the section, and we have so held. (South Bay Company v. Howey, 190 N. Y. 240, 245; Bidgely v. Taylor & Co., 196 N. Y. 556.) ”

In substance this case and the Girling case are identical. To say that one was an inquest and the other a trial is to place emphasis upon words rather than upon things. The result to the defendants is the same. A verdict or judgment directed against the defendant was set aside, in one case by the trial judge, in the other by the Special Term, also held by a judge. The order setting aside the judgment or verdict and granting a new trial was reversed by the order of the Appellate Division in both cases, and thereafter final judgment entered against the defendant by virtue of the order of the Appellate Division. The Girling case, followed by Logan v. Guggenheim (230 N. Y. 19), bids us to consider the judgment herein as one entered by direction and authority, whether directly or indirectly, of the order of the Appellate Division and as a final judgment, reviewable directly on appeal to this court.

Coming to the merits, we recognize that the setting aside of a judgment taken upon inquest is a matter resting largely within the discretion of the trial court, and the Appellate Division, and that the calendar practice as now conducted in the first and second departments requires expedition upon the part of the litigants to get ready their causes for trial at the earliest possible hearing. Delays must not be countenanced if they can be avoided.

On the other hand, all parties must be afforded a reasonable opportunity to prepare for trial and meet the demands of law suits, or else one may be deprived of his property without due process of law, and the constitutional guaranties become meaningless phrases. Due process may be denied under legal forms as well as by force of arms. This discretion, vested in the lower courts, may, however, become a question of law reviewable by this court, when its exercise is so arbitrary as to deprive litigants of a reasonable opportunity to be heard, or, in other words, comes within that class of rulings which for better terminology, we call “ an abuse of discretion.” This is not a very polite nor exact description; the term perhaps is unfortunate; it simply means that the court has gone too far and beyond the bounds and limitations set by previous example.

Thus in Lawrence v. Farley (73 N. Y. 187), where the defendants made default in not appearing or answering, and the Special Term opened the judgment and granted relief, this court, through Rapallo, J., said: “ The sufficiency of the excuse given by the defendant for suffering the default, and the propriety of granting him the relief which he asked, were matters within the discretion of the court below, and the case discloses no abuse of such discretion.”

Chief Judge Cullen, writing in Park & Sons Co. v. Hubbard (198 N. Y. 136, p. 139), said: “As to the discretion of the court to grant or refuse leave to serve a supplemental pleading, we adhere to the views expressed by Judge Folger in Holyoke v. Adams (59 N. Y. 233) and repeated by the same learned judge in Spears v. Mayor, etc., of N. Y. (72 N. Y. 442): ' It has a discretion to permit or to refuse a supplemental pleading; but that discretion must be exercised reasonably, and not capriciously or willfully.’ ” (See, also, Halfmoon Bridge Co. v. Canal Board, 213 N. Y. 160, p. 165.)

Judge Werner, writing for this court in Matter of Superintendent of Banks (207 N. Y. 11, 15), said: “ ‘ Judicial discretion ’ is a phrase of great latitude; but it never means the arbitrary will of the judge. It is always a legal discretion to be exercised in discerning the course prescribed by law; when that is discerned it is the duty of the courts to follow it.’ ” (See, also, Forrest v. Forrest, 25 N. Y. 501; Matter of Holbrook, 99 N. Y. 539; Roberts v. N. Y. Elev. R. R. Co., 155 N. Y. 31.) This court said in Forrest v. Forrest (supra, at p. 520): “ The power must, however, be shown to have been arbitrarily exercised. Otherwise, the law does not contemplate a review of such decisions in this court.”

Bossout v. R., W. & O. R. R. Co. (131 N. Y. 37), in the last paragraph, at page 42, recognized the right of this court to review a judgment and order of this kind when there had been an abuse of discretion.

Bassett v. French (155 N. Y. 46) related to a default in pleading, and to the ordinary rule that discretionary orders and judgments are not appealable to this court. No abuse of discretion was claimed in that case, and consequently the appeal was dismissed. The situation is entirely different here.

The right to appeal to this court from this judgment is further strengthened by analogy to the practice provided in section 590 of the Civil Practice Act.

As bearing upon the abuse of the discretion of the lower courts .in refusing this defendant a reasonable opportunity to try its case, reference may be had to a prior ruling of the same Appellate Division in Riglander v. Star Co. (98 App. Div. 101,106), where it was said: “ ‘ Due process of law requires that a party shall be properly brought into court, and that he shall have an opportunity when there to prove any fact which, according to the Constitution a!hd the usages of the common law, would be a protection to him or his property.’ He is not only to be brought into court, but must have an opportunity to present his evidence. If he is not allowed sufficient time to prepare his evidence, according to the usual means of obtaining evidence for use in courts of justice, his so-called day in court is only a snare and a delusion. He is deprived of a right which is not only accorded to other suitors, but which it would be error to refuse them. This cannot be due process of law. The process of the law includes every step from summons to judgment, and if a party is deprived .of any right usually accorded to others, it is not due process of law.” (See, also, Missouri ex rel. Hurwitz v. North, 271 U. S. 40.)

When a case first appearing upon the calendar is set down for trial on March the 14th, 1932, and appears by the direction of the court on the calendar of the 11th, with the understanding that it will be held until the 14th, the beginning of the week, and another judge not familiar with these arrangements, sitting on the 11th, orders and directs an inquest, over the objection and protest of the defendant, the proceeding is so unusual that the denial of the motion by the Appellate Division to open the inquest and grant a trial to the defendant is unwarranted and should be reversed.

Pound, Ch. J., Hubbs and Crouch, JJ., concur with Lehman, J.; Crane, J., dissents in opinion in which Kellogg and O’Brien, JJ., concur.

Appeal dismissed.


author: Lehman, J.

text:
    Brooklyn Trust Company, Appellant, v. Fairfield Gardens, Inc., et al., Defendants, and Riverdale Home Builders, Inc., Respondent.

      (Argued June 10, 1932;
    decided July 19, 1932.)

      Henry Hetkin, Alexander Rubin and Lynn G. Goodnough for appellant.
    There is no basis for the decision that the failure to erect garages constituted a failure of consideration so as to defeat the priority of plaintiff’s mortgage. (Jackson v. Nicol, 23 App. Div. 139; 155 N. Y. 697; Claypool v. German Fire Ins. Co., 32 Ind. App. 540.) The failure to erect garages could not constitute complete failure of consideration. (Williston on Contracts, § 1456; Post v. Thomas, 212 N. Y. 264; De Kay v. Bliss, 120 N. Y. 91; Matter of Case, 214 N. Y. 199; Pollock v. Pollock, 71 N. Y. 137.) The priority of plaintiff’s mortgage was not conditioned upon the erection of garages. (Tipton v. Feitner, 20 N. Y. 423; Lyon v. Hersey, 103 N. Y. 264; Claypool v. German Fire Ins. Co., 32 Ind. App. 540; Lincoln Trust Co. v. Williams Building Corp., 229 N. Y. 313.) A building loan mortgagee is not responsible to the subordinating mortgagee for omissions of the owner. (Darst v. Bates, 95 III. 493; York Mortgage Corp. v. Clotar Construction Corp., 254 N. Y. 128; Tripp v. Babcock, 195 Mass. 1; Iowa Loan & Trust Co. v. Plewe, 202 Iowa, 79.)

      Clarence B. Plants for Title Guarantee and Trust Company, amicus curiae. The building loan company owed no duty to defendant-respondent and was guilty of do fraud. (York Mortgage Corp. v. Clotar Construction Corp., 254 N. Y. 128; Lehnert v. Notlim Realty Corp., 225 App. Div. 818; 251 N. Y. 340.)

      Sydney A. Syme, William F. Clare, Frederick A. Gill and William F. Clare, Jr., for respondent.
    Garages were an integral part of the improvement and so necessary an element to the success of the venture that the failure to build them wrought a substantial change in the nature of the improvement and materially diminished the value of the completed building. (Stubbe v. Adamson, 220 N. Y. 459; Postley v. Kafka, 213 App. Div. 595; People v. Tax Commrs., 67 Misc. Rep. 474; 143 App. Div. 950.) There was a failure of consideration for the subordination agreement by reason of the failure to build garages. (Ferris v. Hard, 135 N. Y. 354; Ward v. Textile Co., 139 App. Div. 109.) By virtue of the subordination agreement and the ensuing relationship of the parties, duties were imposed on the building loan company to exercise its powers under the building loan agreement so as not to prejudice the interests of the defendant-respondent, and though, as between the lender and the borrower, there were certain privileges of modification, as between the lender and the subordinator, the former could not assent to a modification which would change the subject-matter of the building loan agreement. (2 Pomeroy Eq. Jur. [4th ed.] § 902.)
   Lehman, J.

On October 4th, 1928, the defendant Fairfield Gardens, Inc., executed and delivered to the Prudence Company, Inc., its bond conditioned for the repayment of the just and full sum of Seven Hundred Thousand Dollars, lawful money of the United States, or so much thereof as may be advanced at any time by the holder of this bond.” The bond was secured by a mortgage upon premises in a residential section of the city of New York known as Riverdale. The plaintiff is the assignee of the bond and mortgage. Because of default in some interim payments by the mortgagor, the plaintiff has exercised an election, as provided in such case by the mortgage, to declare due and payable $150,000 of the principal sum advanced and has brought this action for the foreclosure of its mortgage. Its right to a judgment of foreclosure is not disputed. The only question presented upon this appeal is whether the hen of plaintiff’s mortgage is superior to the hen of a mortgage held by defendant Riverdale Home Builders, Inc. That question has been decided against the plaintiff in the courts below.

The plaintiff’s bond and mortgage were executed and delivered pursuant to the terms of a building loan agreement entered into by the same parties several months before, and the terms of that agreement were incorporated in the mortgage. At the time the building loan agreement was made, the defendant Fairfield Gardens, Inc., did not have title to the property. Title was conveyed to it on July 13th, 1928, by Riverdale Home Builders, Inc., which received back a purchase-money mortgage for $96,400. The building loan agreement provided that advances made thereunder should be secured by a mortgage which should be a “ valid first hen ” upon the premises. The Fairfield Gardens, Inc., could not comply with that condition of the building loan agreement, unless it paid off the purchase-money mortgage or secured from Riverdale Home Builders, Inc,, an instrument subordinating that mortgage to the mortgage to be executed under the building loan agreement.

On August 22nd, 1928, Fairfield Gardens, Inc., delivered to Riverdale Home Builders, Inc., an additional mortgage in the sum of $47,400 for moneys loaned and made an agreement consolidating the two mortgages. On the same date, Riverdale Home Builders, Inc., executed an instrument described as a “ subordination agreement ” between Riverdale Home Builders, Inc., designated as party of the first part, and Prudence Company, Inc., designated as party of the second part. The Prudence Company, though designated party of the second part, did not sign that agreement,” and, at least until it was thereafter delivered and accepted by Prudence Company, Inc., that corporation was not a party to the agreement. It was procured by the Fairfield Gardens, Inc., the owner of the equity, in order to enable it to comply with the terms of the building loan agreement that the mortgage •to be executed as security for the building loan would be a valid first lien ” on the premises. Though dated August 22nd, 1928, the instrument recites that Fairfield Gardens, Inc., is about to execute and deliver to the “ party of the second part ” a bond and mortgage to secure the principal sum of seven hundred thousand dollars and interest, “ dated the 4th day of October 1928,” and covering the premises already covered by the consolidated mortgage of the party of the first part,” and that “ said party of the second part has refused to make said loan of Seven Hundred Thousand Dollars unless said first consolidated mortgage is subordinated in lien to the hen of said mortgage about to be made to the party of the second part and to ah advances heretofore made, or which hereafter may be made to the extent of the last mentioned amount.”

Expressly to “ induce the said party of the second part to make said loan,” Riverdale Home Builders, Inc., covenanted and agreed that its consolidated mortgages “ are and shall continue to be subordinate in lien, to the lien of said mortgage for Seven Hundred Thousand Dollars about to be made to the party of the second part hereto.” No obligation on the part of Prudence Company, Inc., was expressed in the instrument and the only act on its part required to make the instrument effective was the advance of moneys under the mortgage to be executed and delivered to it.

The subordination agreement ” and the bond and mortgage dated October 4th, 1928, described in that instrument were executed and delivered to Prudence Company, Inc., to comply with the building loan agreement theretofore made. That agreement had been shown to the Riverdale Home Builders, Inc., and its terms and conditions were expressly incorporated in the new mortgage which it had covenanted should be the first hen on the property. The covenant contained in the so-called subordination agreement was, perhaps, not enforceable at the time the instrument was executed. Then it was merely a promise made without consideration, to induce Prudence Company, Inc., to make the loan to be secured by a first mortgage. It became enforceable if and when the Prudence Company, Inc., was induced thereby to made the stipulated loan. That is not and cannot be disputed, and it is unnecessary to determine whether it became enforceable upon the theory that a promissory estoppel then arose, or a unilateral contract in which promise to subordinate was given by one party in exchange for the act of making the stipulated building loan by the other party. Such distinctions would carry no consequences in this case, for on either theory the priority of plaintiff’s mortgage depends upon proof that the mortgagor did the act which the promise to subordinate called for. The problem which is here presented is whether the plaintiff has proven that.

It is said that the Riverdale Home Builders, Inc., was shown the building loan agreement before it promised to subordinate the lien of its own mortgage to the lien of the mortgage to be delivered to the Prudence Company, Inc., and Riverdale Home Builders, Inc., claims that, in making that promise, it relied on the terms of the building loan agreement. The plaintiff disputes that claim. Here the rights of the parties are the same in either view. The subordination agreement shows on its face that it was intended to apply to a mortgage to be delivered under the building loan agreement, and covered only advances made under that agreement. Riverdale Home Builders, Inc., sought to induce the consummation of the building loan, and no advances made in disregard of- the building loan or for other purpose would fall within the protection of the subordination agreement. (York Mortgage Corp. v. Clotar Construction Corp., 254 N. Y. 128.)

Undoubtedly Prudence Company, Inc., did enter into the building loan agreement referred to in the subordination agreement. The mortgage under foreclosure was made in accordance therewith and all the advances upon which the plaintiff’s claim is based were advances made under the terms of that mortgage. There has been no breach of any duty owed to that mortgager by the mortgagee, under the terms of the building loan agreement or mortgage, and the mortgagor has no defense to the action. All that has been conclusively established by the findings. If the holder of the mortgage subordinated by agreement to the plaintiff’s mortgage has any defense, it must be because, by the language of the subordination agreement or through the relations thereby created, some duty to protect the interests of the holder of the Subordinated mortgage was placed upon the lender, in accordance with the terms of the building loan agreement.

In order to simplify our consideration of the problem whether under the circumstances of this case such a duty arose, we accept all the findings of fact without, at present, analyzing the appellant’s claim that some are not sustained by competent evidence. The building loan agreement provided that the borrower shall erect on the premises “ a modern high class Seven story and basement garden apartment of fire proof construction containing not less than 1,594,400 cubic feet, 440 rooms and 126 baths and 2 or more fireproof garages containing 150,000 cubic feet.” That provision was, of course, inserted primarily for the benefit of the lender. It was intended as assurance to the lender that moneys advanced would be used for an improvement which would increase the value of the mortgaged land and thus furnish adequate security for the repayment of the advances. Accordingly the loan agreement and the mortgage given thereunder provided that the Lender’s obligation to make further advances shall cease * * * if the Borrower does not erect said building strictly in accordance with plans and specifications approved in writing by the Lender and conforming with all laws and municipal regulations, orders and requirements.” Plans for the erection of the apartment building without the accessory garages were approved by the lender. They conformed with all laws and municipal regulations. Permits for the erection of the building were obtained from the municipal authorities and the building was erected. No permits for the erection of the garages was ever obtained, and no garages ever erected. To that extent the purpose of the building loan agreement has been frustrated. The courts below have held that because of such frustration the stipulated consideration for the subordination agreement has failed and the agreement is not enforceable.

The premises are situated in a district in which no garages may be erected without a modification or variation of the zoning regulations of the city of New York. At the time the subordination agreement was signed, both parties had the same means of information in regard to the zoning regulations. At the time when the plans for the erection of the apartment house without garages was approved by Prudence Company, Inc., and the first advances made under the building loan agreement, it was still ignorant of that fact. It could then have refused to make any advances until complete plans were submitted and approved. It was not required by the building loan agreement to do so. That agreement expressly permitted advances to be made even though obligation to do so had ceased, and at that time the lender did not know that there was any legal obstacle to the creation of the garages or that they would not be erected. It learned of the legal obstacle some months thereafter. It did not learn that the obstacle would not be overcome till a short time before the last advance was made. Even then it did not inform Riverdale Home Builders, Inc., of these facts or avail itself of its right to cease making advances. For its own protection it arranged for further advances in order to permit the completion of the apartment house though without the garages.

The trial justice has found that by reason of the character of the neighborhood in which the said building was constructed, garages were necessary as an accessory to the building contemplated in the building loan agreement to be erected, in order to make the same rentable at an adequate rental,” and further, That the failure to erect the building with garages has resulted in a house of an entirely different character than that contemplated by the building loan agreement.” Thus it appears that the lender, perhaps through its own lack of care, has been disappointed in its expectation that as security for its loan it would hold a mortgage on property improved by the erection of an apartment house with an accessory garage necessary to make the apartment house profitable. Doubtless the holder of the subordinated mortgage expected that through the building loan agreement the hen of its mortgage would also attach to a property improved as provided in the building loan agreement. It did not, however, stipulate that in return for a subordination agreement it must obtain a promise from the lender that the lender would guarantee the erection of such an apartment house, or even exercise care to see that moneys advanced would be applied to such erection. It was content to subordinate its existing mortgage in order to induce a lender to advance moneys which the borrower agreed to apply in that manner. No adequate reason or authority is shown to sustain the conclusion of the courts below that the lender assumed any duty other than that of good faith towards the holder of the original mortgage or that conditions precedent to be performed by the borrower must be satisfied, especially where the building loan agreement gives to the lender an express right to waive such conditions precedent. Such cases as Pennsylvania Steel Co. v. Title (Guarantee & Trust Co. (193 N. Y. 37); York Mortgage Corp. v. Clotar Construction Corp. (supra); Darst v. Bates (95 III. 493); Tripp v. Babcock (195 Mass. 1) point unmistakably to the contrary conclusion.

The problem would be different if the lender co-operated with the borrower in diverting moneys advanced from the purposes of erecting the building described in the building loan contract. (Cf. York Mortgage Corp. v. Clotar Construction Corp., supra.) Here the lender failed, originally, only in care to protect its own interests and then availed itself of its rights under the building loan agreement to continue its advances so that the loss might not be increased. No want of good faith is shown by failure to notify the holder of the subordinated mortgage that the borrower would not complete the building as contemplated, for it had an absolute right to proceed as it did even if the holder of that mortgage had protested. Indeed, it is difficult to see how further advances could injure the holder of that mortgage. The plaintiff’s mortgage was a prior lien for advances previously made, and if subsequent advances made security for prior advances more adequate, that might redound to the benefit of subordinate lienors; it could not injure them.

These conclusions render it unnecessary to consider the other points urged by the appellant.

The judgments should be reversed, with costs in all courts, and judgment of foreclosure granted as demanded in the complaint.

Kellogg, O’Brien, Hubbs and Crouch, JJ., concur; Pound, Ch. J., not voting; Crane, J., not sitting.

Judgment accordingly.


author:
Crouch, J.
      Lehman, J. (dissenting).

text:
    Robertina W. Pierpoint, as Executrix of Harry G. Pierpoint, Deceased, Appellant, v. James M. Hoyt et al., Doing Business under the Firm Name of Prince & Whitely, Respondents.

      (Argued May 9, 1932;
    decided July 19, 1932.)

      Joseph C. Slaughter and Arthur B. Hyman for appellant.
    Upon the refusal of the defendants to return to the plaintiff, on his demand, the certificates of stock belonging to him, a conversion of the stock resulted at the plaintiff’s election entitling him to the full market value of the stock represented by such certificates. (McCoy v. American Express Co., 253 N. Y. 477; Casey v. Kastel, 237 N. Y. 305; Pease v. Smith, 61 N. Y. 477; Mahaney v. Walsh, 16 App. Div. 601; Bristol v. Burt, 7 Johns. 254; Lockwood v. United States Steel Corp., 209 N. Y. 375; Simpson v. Jersey City Contracting Co., 165 N. Y. 193; General Motors Corp. v. Ver Linden, 199 App. Div. 375; Ayres v. French, 41 Conn. 151; Payne v. Elliott, 54 Cal. 349; London, Paris & American Bank v. Aronstein, 117 Fed. Rep. 601; Merritt v. American Steel Barge Co., 79 Fed. Rep. 228; Thayer v. Manley, 73 N. Y. 305; Hughes v. Vermont Copper Mining Co., 72 N. Y. 207; Matter of Eckert v. Truman, 163 App. Div. 17; Kelly v. 42nd Street R. R. Co., 37 App. Div. 500; Rheinhart v. Roby Co., 179 N. Y. Supp. 781; Herbert v. Simpson, 222 Mass. 480; Mason v. Pendergast, 120 N. Y. 536; Roberts v. Ely, 113 N. Y. 128.)

      Stewart Maurice, William S. Siemon and Margaret O’Connor for respondents.
    The Appellate Division properly reversed the judgment of the trial court, as there was no conversion of the plaintiff’s stock. (Richardson v. Shaw, 209 U. S. 365; Zander v. New York Security & Trust Co., 178 N. Y. 208; Casey v. Kastel, 237 N. Y. 305; Daggett v. Davis, 53 Mich. 35; Cummins v. Peoples Bldg. L. & S. Assn., 61 Neb. 728; Davidson v. Atmar, 243 S. W. Rep. 662; Pardee v. Nelson, 59 Utah, 497; Shewalter v. Wood, 183 S. W. Rep. 1127; Wagner v. Marple, 10 Tex. Civ. App. 505.) Damages cannot be recovered for the conversion of non-negotiable documents. (Anderson v. Nicholas, 28 N. Y. 600; Blumenthal v. Levy, 82 App. Div. 536; Hollehan v. Roughan, 62 Wis. 64; Tiffany v. Lord, 65 N. Y. 310; Fleischmann v. Samuel, 18 App. Div. 97; Jessup v. Chicago & N. W. Ry. Co., 188 Fed. Rep. 931; Thayer v. Manley, 73 N. Y. 305.)
   Crouch, J.

In March, 1930, defendants acquired in good faith certain certificates of stock each bearing an indorsement purporting to be that of Harry G. Pierpoint. The certificates had been issued to Pierpoint and stood in his name on the corporate books. They had been stolen from Pierpoint’s safe in November, 1929. The indorsements were forged. Upon learning that the certificates were in defendants’ possession, Pierpoint gave notice of his ownership and demanded a return. The demand was refused without qualification. Three months later this action in conversion was begun to recover-as damages the value of the stock. The certificates were still in the possession of defendants. It has been held that the recovery must be limited to damages by way of expense incurred, profits lost or otherwise, flowing from the wrongful withholding of the certificates as distinguished from a conversion of the stock itself. The reason assigned is that the owner has not lost title to the stock, but merely his evidence of title.

It is, of course, true, as a legal concept, that a stock certificate is but an evidence of title to the property right which its owner has in the corporate stock. Important practical results may flow from a distinction between the two things. Nevertheless, certificates of stock are treated by business men as property for all practical purposes.” (Lockwood v. United States Steel Corp., 209 N. Y. 375, 382.) And the courts long since came to treat a willful and wrongful taking and disposal of stock certificates as a conversion of the property itself. (Anderson v. Nicholas, 28 N. Y. 600; McAllister v. Kuhn, 96 U. S. 87; Barry v. Calder, 48 Hun, 449; Mahaney v. Walsh, 16 App. Div. 601; Miller v. Miles, 58 App. Div. 103; Condouris v. Imperial Turkish, etc., Co., 3 Misc. Rep, 66; Ayres v. French, 41 Conn. 142, 151.)

That the certificates in all those cases bore the actual indorsement of the apparent owners is beside the point. Indorsement facilitated disposal. It did not change the essential nature of the certificates. Wrongful acts affecting property rights in corporate stock can ordinarily be committed only through the medium of the certificates which evidence those rights. For the purpose of redressing such wrongs, the law must and does treat the symbol as though it were the thing symbolized. A conversion of a certificate of stock, whether indorsed or not, is, therefore, a conversion of the stock itself.

It is elementary that the law of conversion is concerned with possession, not with title. (McCoy v. American Express Co., 253 N. Y. 477,482.) The right to possession, broadly speaking, may be infringed by a wrongful taking, as e. g., in Electric Power Co. v. Metropolitan Tel. & Tel. Co. (75 Hun, 68; affd., 148 N. Y. 746); or by a wrongful detention, as e. g., in Lewis v. Ocean Navigation & Pier Co. (125 N. Y. 341); or by a wrongful disposal, as e. g., in Boyce v. Brockway (31 N. Y. 490).

Either act as against one entitled to immediate possession constitutes conversion. The natural meaning of converting property to one’s own use has long been left behind. It came to be seen that the actual diversion of the benefit arising from use and possession was only-one aspect of the wrong, and not a constant one. It did not matter to the plaintiff whether it was the defendant, or a third person taking delivery from the defendant, who used his goods, or whether they were used at all; the essence of the injury was that the use and possession were dealt with in a manner adverse to the plaintiff and inconsistent with his right of dominion.” (Pollock on Torts [13th ed.], p. 372.) Statements to the same effect are found in many cases. (Cf. Bristol v. Burt, per Kent, Ch. J., 7 Johns. 254, 258; Salt Springs Nat. Bank v. Wheeler, 48 N. Y. 492, 495; Ball v. Liney, 48 N. Y. 6, 12; Debobes v. Butterly, 210 App. Div. 50, 54.)

Pierpoint, the original plaintiff here, was concededly the owner (cf. Knox v. Eden Musee Americain Co., 148 N. Y. 441, 456), and entitled to the right of possession of the stock and the certificates representing it. Defendants, after notice and demand for a delivery of the certificates, refused without qualification to comply. That ordinarily is conclusive evidence of conversion. (McEntee v. New Jersey Steamboat Co., 45 N. Y. 34.) In contemplation of law, Pierpoint was totally deprived of his property, (Cf. Bowen v. Fenner, 40 Barb. 383.) While other remedies were open to him, he was not bound to pursue them; he could, as he did, “ abandon [the stock] from the moment of its conversion, and sue for its value.” (People v. Bank of North America, 75 N. Y. 547, 564.) Satisfaction of the judgment ordinarily transfers title in the property to the defendant. If, to effectuate the transfer, some affirmative act by plaintiff is necessary, the court is not without power tó provide for it in the judgment or otherwise to compel it. (Cf. Pers. Prop. Law, Cons. Laws, ch. 41, § 170; Reinhard v. Roby Co., 110 Misc. Rep. 152; affd., 193 App. Div. 926.)

The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs in the Appellate Division and in this court.

Lehman, J. (dissenting).

A certificate of stock is the tangible evidence of stock ownership. Business men deal in stock certificates because transfer of title to the stock certificate results in the transfer of the owner’s property in the stock as well as in the certificate. Then a distinction between a certificate of stock and the stock represented by it carries no practical consequences. In truth the stock certificate is not merely evidence of stock ownership but when properly indorsed it constitutes authority for the transfer of the stock, and thus enables the holder to acquire record title to the stock itself. Thus the conversion of a stock certificate, if transferable by delivery or indorsed by the owner, may result in depriving the owner of property in the stock as well as in the certificate. In such case the owner is entitled to recover the value of the stock. That was the situation in the cases cited in Judge Crouch’s opinion.

Here the situation is different. The certificate was not indorsed and the true owner gave notice to the corporation that the stock certificate was stolen. Concededly until the trial the owner of the certificate was still the record owner of the stock and entitled to all the benefit which flows from such ownership. No wrongful refusal to return the stock certificate could deprive him of that property. That could pass from him only by voluntary transfer. If the owner had lost the stock certificate or if it had been destroyed by fire, his damage would certainly not be the value of the stock, for he would still retain all his rights as a stockholder and his full property in the stock. So here, even after the defendants converted the certificate, the owner still claimed and enjoyed his property in the stock and took affirmative action to prevent that property from passing, actually or apparently, to another. The plaintiff is entitled to any damages suffered by the testator by reason of the fact that he was deprived of possession of the certificate, but since possession of the certificate without title does not carry with it any beneficial rights in the stock itself, he has never been deprived of property in the stock and its value may not be included in such damages.

The judgment of the Appellate Division should be affirmed.

Pound, Ch. J., Crane, Kellogg, O’Brien and Hubbs, JJ., concur with Crouch, J.; Lehman, J., dissents in opinion.

Judgment accordingly.