author: Stores, J.

text:
    Goodman vs. Jewett.
    The fifth section of the act of 1853, which provides that “ Appeals may be had, and allowed, from the county to the superior court, by the party aggrieved, in all suits or actions of ejectment or disseisin, (Rev. Stat. tit. 1, c. 5, p. 74,) was not repealed by the fifth section of the act, passed in 1854, entitled an act in addition to, and alteration of, the act relating to courts. (Rev. Stat. tit. 1, c. 5, p. 75.)
    Where it was provided, by the charter of the city of Hartford, that an appeal should be allowed from the judgment of the city court of said city, in all cases in which an appeal then was, or thereafter, by law, should be, allowed from the county court, and the plaintiff brought his action of ejectment to said city court, demanding possession of the premises described in the declaration, and ninety dollars damages; it was held, that such action was appealable.
    This was an action of ejectment, brought originally to the city court of the city of Hartford, demanding surrendry and peaceable possession of the premises described in the declaration, and the sum of ninety dollars damages.
    To the plaintiff’s declaration the defendant demurred generally. The court adjudged the declaration sufficient, and thereupon rendered judgment for the plaintiff. The defendant thereupon appealed the cause to the superior court, for Hartford county, and at the term of said court holden in March, 1856, the plaintiff moved that it be erased from the docket, on the ground that the city court, to which it was originally brought, had final jurisdiction thereof, without the right of appeal.
    The question, as to what judgment should be rendered in the case, was reserved for the advice of this court.

      Goodman 8f Collier- in support of the motion.

      T. C. Sf C. Perkins, contra.
   Stores, J.

This is an action of ejectment brought to the city court of the city of Hartford; and the question is, whether it is appealable to the superior court.

The charter of that city, passed in 1784, provided that an appeal should be allowed from the judgment of the city court, in all cases in which an appeal then was, or thereafter by law should be, allowed from the county courts. We are, therefore, only to determine whether this action would have been appealable, if it had been brought to the county court. It would, in that case, have been plainly appealable, under the fifth section of the act of June 30,1853, in alteration of the act for the regulation of civil actions, (Stat. Comp, of 1854, p. 74,) which provides, in terms, that “ appeals may be had, and allowed, from the county to the superior court, by the party aggrieved, in all suits or actions of ejectment or disseizin;” unless, as the plaintiff claims, that section is repealed by the fifth section of the act passed in 1854, in addition to and alteration of the act relating to courts, (Stat. Comp, of 1854, p. 75.) We are of opinion that such an effect ought not to be given to the latter law. It does not, in terms, repeal the law of 1853, or any part of it; nor does it impliedly repeal the fifth section of it, by force of the principle that later statutes abrogate prior contrary statutes. That maxim applies only where the later statute is couched in negative terms, or where its provisions are so clearly repugnant to the former act that it necessarily implies a negative. 1 Blk. Com., 89. If both statutes can be reconciled, they must stand, and have a concurrent operation. 1 Sw. Dig., 12. In this case, there is, at most, only a seeming contrariety between the two sections which have been mentioned and that is made out by a strained and unnatural construction. It is not a repugnancy which is real, or of such a character as to imply that it was the design of the legislature, that the fifth section of the act of 1853 should be affected by that of the act of 1854; much less that they intended to make such an important change in the ancient policy of our law, as to vest in any of our inferior courts the power of finally determining cases, brought to try the title to real estate. On the contrary, a comparison of these two statutes shows most plainly, that the only object of that of 1854 was to reduce the sole jurisdiction of the county court, and to enlarge correspondently the original and appellate jurisdictions of the superior court, as those jurisdictions were prescribed by the first three sections of the act of 1853, so that thereafter the sole jurisdiction of the county court should be limited to the cases mentioned in those particular sections, wherein the matter in demand did not exceed one hundred dollars, and the original and appellate jurisdiction of the superior court should extend to those, wherein it exceeded that sum. The fifth section of the act of 1853, allowing appeals in all actions of ejectment, which is a distinct and independent provision, was not intended to be affected by that alteration, and remains in force, as a part of the act thus altered.

The appeal in this case being valid on this ground, it is unnecessary to examine the other points which have been made.

The superior court is advised that the plaintiff’s motion ought not to be granted.

In this opinion, the other judges, Ellsworth and Hinman, concurred.

New trial not to be granted.


source: Caselaw Access Project

author: Storrs, J.

license: Public Domain

text:
    Goodwin and another vs. The United States Annuity and Life Insurance Company.
    In an action of assumpsit, upon the common counts against a corporation, to recover for the expense of obtaining the defendant’s charter, the plaintiffs, under the count upon an account stated, rested their case, on proof of an entry in what they claimed to be a record book of the defendants, of a vote of the directors, at a meeting held on the 16th of January, which approved of the plaintiffs’ bill, and directed the same to be paid. Held, that, for the purpose of showing that such record book was not authentic, two other books, purporting to contain records of the proceedings of said directors on the same day, and in which said vote did not appear, were admissible.
    The plaintiffs, having in such action adduced entries, in said book, of the proceedings of the directors at their meeting on the 15th of January, which stated that such meeting was adjourned to the 16th, which entries they claimed to be conclusive, and could not be contradicted'; it was held that the defendants might show, by parol, that said meeting was adjourned, not to the 16th, hut to the 17th of January.
    The managing directors of a corporation do not constitute the corporation itself, but are only its agents, and their acts, within the scope of their authority, are binding on it. Although it is usual to record such acts of the directors, this is not necessary to their validity.
    Where the charter, or by-laws, of a corporation require that its directors shall make a record of their votes, whether such requirement is not merely directory,—Q,u ?
    The defendants, in such action, claimed that if said meeting of the directors, on the 15th of January, was adjourned to the 16th, and there was a meeting of said directors on the latter day, it was held secretly, and concealed intentionally from the knowledge of the directors. Held, that, for the purpose of proving such secrecy and concealment, in connexion with other evidence, they might show that meetings of said directors were held at about the same time, at other places than that, where the directors’ meetings were usually held, and to which the meeting of the 15th of January was adjourned.
    Held, also, that evidence, offered by the defendants, that said vote of the 16th of January, approving the plaintiff’s bill, was rescinded by a vote of the directors passed at a subsequent meeting, was properly admitted, for the purpose of rebutting a claim' that the defendants acquiesced in the former vote, and of showing that they repudiated it, when it became known to the directors, who were not present when it was passed.
    It is now an established principle, however the law stood anciently, that an account stated may be impeached for fraud, or mistake.
    Where, in such action, the court instructed the jury, that if the defendants had proved that the purchaser had paid the plaintiffs a premium upon shares of stock in said company, partly to reimburse them for the expenses of obtaining the defendants’ charter; and the defendants, when the vote, relied on by the plaintiffs, was passed, concealed that fact from the directors, who wore ignorant of it, such concealment was a fraud, which would open the account stated, and defeat the plaintiffs’ recovery; it was held, that such instruction was correct.
    Action of assumpsit on the common counts. The defendants, having moved for a bill of particulars of the plaintiffs’ demands, the same was exhibited as follows :
    “The United States Annuity and Life Insurance Company, 1850. To James Goodwin and Guy R. Phelps, Dr.
    For expenses paid in obtaining charter, including commissioner’s fees, and interest on money advanced, $1,000
    Endorsed as follows:
    James Goodwin and Guy R. Phelps.
    Bill of expenses pr. charter, $1,000
    Approved in directors’ meeting, Jan. 16, 1851.
    N. H. Morgan, Clerk, pro tem.”

    On the trial upon the general issue, the plaintiffs, for the purpose of proving the matters contained in the count in the declaration, upon an account stated, offered in evidence, a record of the following votes which they claimed to have been passed by the directors of the aforesaid company, contained in a certain record book, which was produced :

      Directors Meeting, Jan. 15, 1851. ******

    Voted, That this meeting adjourn to meet at the state bank building, in Hartford, on the 16th inst. at 2 o’clock, P. M. Adjourned.
    Attest, N. A. Cowdry, Clerk.

      Directors Meeting, Jam. 16, 1851. *******

    Voted, That the bill of James Goodwin and Guy R. Phelps, for expenses in obtaining the charter of this company, including commissioners’ fees and interest on monies advanced, amounting to the sum of one thousand dollars, ($1,000,) be, and the same is hereby approved, and ordered paid, from the funds of the company. Voted to adjourn, to meet at the pension office in Hartford, on the 17th inst., at 8 o’clock, P. M. Adjourned.
    Attest, N. H. Morgan, Clerk pro tem.

    They also produced as a witness, John C. Palmer, who testified that he was a director of said company, at the time when said votes were passed and still remained such director, and that said record book was the record of said company. Thereupon the plaintiffs rested their cause, and introduced no other, or further evidence in chief.
    The defendants claimed that the record book produced by the plaintiffs was not the record book of said company, and had never been treated, or recognized as such, and that said votes were not in fact passed as in said book stated; that said meeting of the 15th of January, 1851, was not adjourned to the 16th of January, but was in fact adjourned to the 17th of January, and that said meeting of the 16th of January, 1851, was not held in pursuance of adjournment, and was not a legal meeting of the directors of said company ; that no notice of said meeting was given to any of the directors of said company, except three, there being at that time, seven directors, three of whom, by the by-laws of the company, were sufficient to constitute a quorum; that three only of the directors of said company were present at said meeting, and that the same was not fairly and openly held. The defendants, in support of said claim, offered witnesses to prove that the meeting of the 15th of January was adjourned from the 15th to the 17th of January, and not to the L6th, as stated in said vote; to which testimony the plaintiffs objected, on the ground, that it was not competent for the defendants to contradict their own record. But the court overruled the objection, and admitted the testimony. The defendants also offered evidence to prove, that some time subsequent to the passing of said vote of January 16th, the directors of said company passed a vote, rescinding said vote of January 16th. The precise time of passing said vote the witness did not recollect, but thought it might have been as late as October, 1851. The written evidence of the vote being in the possession of the plaintiffs, who did not produce it, the precise time did not appear. To this evidence the plaintiffs objected, upon the ground that the same was not admissible for any purpose. But the court overruled the objection, and admitted the evidence, for the sole purpose of showing, that the defendants did not acquiesce in the said vote of the 16th of January, but repudiated the same, within a reasonable time after the same became known to the other directors of the company.
    The defendants, for the purpose of showing that said record book was not the record book of the company, produced two other books, which they claimed to be the true records, in which said vote of the 16th of January did not appear, and the defendants offered evidence to prove that these books were treated as the records of said company.
    To this evidence the plaintiffs objected, and insisted, that whether these books were, or were not, records of the company, did not conduce to show that the book produced by the plaintiffs was not a record of the company, and that the company did not pass said votes of the 15th and 16th of January, and that said evidence was not legally admissible. But the court overruled the objection, and admitted the evidence.
    The defendants, for the purpose of proving that the plaintiffs had been reimbursed for the expenses incurred in obtaining the charter of said company, offered the testimony of several witnesses, to prove that, shortly prior to the 16th of January, 1851, they had purchased, from the plaintiffs, shares of stock in said company, and paid them a premium of five dollars a share therefor, and that, during the negotiations for such purchase, the plaintiffs declared that the premium was charged, partly as a profit, and partly, to reimburse themselves said expenses. To this testimony the plaintiffs objected, on the ground that it conduced to prove no matter in .issue between the parties. But the court overruled the objection, and admitted the evidence.
    The plaintiffs requested the court to charge the jury, that the record of the defendants, of their votes of the 15th and 16th of January, 1851, was conclusive upon the defendants, as to the facts stated in that record, and could not be impeached, contradicted or impaired by parol evidence, that is, the evidence of witnesses swearing that the facts stated in that record were not true. But the court did not so charge the jury, but charged them that it might be contradicted by parol evidence.
    The defendants claimed, that the bill presented by the plaintiffs to the directors on the 16th of January, 1851, and on which the vote of that day was founded, did not truly represent the plaintiffs’ claim, but was intended, fraudulently to misrepresent the character of their claim, and that the moneys, paid by the plaintiffs, were not paid as expenses for procuring the charter, for the benefit of the company, but were, in fact, paid for the private benefit of the plaintiffs, to enable them to secure the control of the company, by the purchase of its stock.
    The plaintiffs claimed the contrary, and insisted that the money was paid, as represented in their bill, but insisted that however the fact might be, if the directors, who approved the bill, had full knowledge of all the facts, and were not misled by the misrepresentations, then the vote would be binding, and the account not liable to be opened, by reason of the facts aforesaid, and requested the court so to instruct the jury. The court did not instruct the jury in conformity to this claim of the plaintiffs, but instructed the jury, that, if a fraud was intended upon the corporation, the knowledge of the directors, approving said bill, would not necessarily do away with the effect of that fraud, and if it was intended that the bill should be one thing on its face, and another in fact, and not give true information to the corporation, who were to pay the bill, then the misrepresentations would be evidence of fraud, proper to be considered by the jury, notwithstanding the supposed knowledge of the directors. The court also charged the jury, in regard to the testimony in reference to the premiums, paid to the plaintiffs, on the stock transferred by them, that if it was true, that the plaintiffs got double pay by getting a premium, and the directors were ignorant of it, it would be inequitable, and that if the plaintiffs concealed this, it would be a fraud which would vitiate said bill, and would open the account stated.
    The defendants also produced as a witness, Nathan M. Waterman, one of the directors of said company, when said vote of the 16th of January was passed, and proposed to him the following questions: “ Had you any notice of a meeting in the state bank building ? referring to the meeting of the directors, mentioned in said vote of the 16th of January To this question and evidence the plaintiffs objected, but the court admitted the evidence, and the witness testified that he was not, to his knowledge, notified of any meeting in the state bank, and, on being cross-examined, testified that he did not know that he was in town at said time. The defendants also offered, in evidence, sundry records of votes on their books, for the purpose of showing that other meetings of the directors of said company, were held at other places, and not at the state bank building, and claimed that said evidence was admissible, for the purpose of showing that said meeting of the directors of said company, referred to in the said vote of the 16th of January, 1851, was held secretly, and intended to be kept from the knowledge of the other directors. To this evidence the plaintiffs objected, and insisted that the same was not legally admissible, but the court overruled the objection, and admitted the evidence.
    The jury, having returned a verdict in favor of the defendants, the'plaintiffs filed a motion for a new trial, on the ground that the court erred in admitting the testimony objected to, and in the instructions given to the jury.

      Welles Sf Fellowes for the plaintiffs.
    I. The court admitted improper testimony. 1. Evidence of witnesses to prove that the meeting of the 15th of January was adjourned from the 15th to the 17th, and not to the 16th, as stated in the vote of the directors. This evidence does not tend to support any part of the defendant’s claim, except that the meeting was not adjourned as stated in the vote. 2. Evidence to prove that the defendants rescinded the vote of January 16th. If they did rescind their own vote, the plaintiffs had nothing to do with that, and are not to be affected by it. It was res inter alios acta. 3. Evidence to prove that two other books were treated as the record books of the company. 4. Evidence of several witnesses in regard to a sale of stock and premiums, and declarations of the plaintiffs that the premiums were partly profit, and partly for expenses of charter. 5. Evidence of N. M. Waterman that he was not notified of the meeting of the 16th of January. 6. Evidence from sundry records on their own books to show that other meetings of the directors were held at other places, and not at the state bank building. Jackson v. Walsh, 3 Johns., 226. Mayor &c. v. Wright, 2 Port., 230. Angell and Ames on Corp., 607.
    II. The court erred 1. In refusing to charge the jury, as requested by the defendants, as to contradicting their own record by parol. 2. The charge that • if the account of the plaintiffs did not truly represent the facts, and the directors knew it, yet that the knowledge of the directors would not do away with the effect of the fraud, Was erroneous. 3. The charge of the court in regard to the premiums paid to the plaintiffs; that if they got double pay and did not inform the directors, it would be inequitable, and would be a fraud, which would vitiate their bill, and open the account stated, was erroneous. 3 Bl. Com., 164. 2 Com. on Con., 176. 1 Saund. Pl. and Ev., 42-49. Salmon v. Watson, 16 E. C. L. R., 363. 4. J. B. Movn., 73.

      T. G. Perkins and Hubbard for the defendants.
    I. The evidence, that the pretended meeting of the 16th of January was not in fact held by the board, was admissible, as a circumstance tending to show that the book, offered in evidence by the plaintiffs, was not, (as the defendants claimed it was not,) the authentic records of the board. Even if the plaintiffs’ book is assumed to be the records of the board, the evidence was admissible as showing an error in the records. The records of a private corporation are only its own written declarations of its corporate acts, and as such may be contradicted. The directors are not the corporation, but mere agents. No record of the doings need be made, or if made, the principal may contradict the declaration of his agent. Angel! and Ames on Corp., § 291.
    II. The evidence that the books, offered by the defendants, were the true records of the company, and were treated as such, was admissible. The fact that this board treated this book as its records, and approved the record from time to time as made, served to authenticate this book as the true records of the board. If this was the true record, it served to show that no meeting was held on the 16th of January. If the defendants denied that the plaintiffs’ books were records, and yet had omitted to produce and prove the true records, (they having the power to produce them,) this omission would have been of itself evidence against the defendants.
    III. Evidence that the plaintiffs had reimbursed themselves for the expenses of the charter, and had so declared to the stockholders, was admissible. This evidence tended to show that the plaintiffs had no claim against the defendants.. It estopped the plaintiffs from making such a claim. It conduced to prove fraud on the part of the plaintiffs, as charged in the notice.
    IV. The judge rightly charged the jury that a knowledge of the fraud, by the three directors, would not necessarily do away with the effect of the fraud. The charge presupposes that the plaintiffs had no legal claim, and that both they and the three directors knew it, and that the plaintiffs were designing to defraud the corporation. The directors had no power to acknowledge such a debt. Salem Bank v. Gloucester Bank, 17 Mass., 29. If the plaintiffs were designing a fraud on the corporation, and the directors knew it, it would prove a collusion and fraud, on the part both of the plaintiffs and the three directors, and the corporation would not be bound by these acts.
    V. The evidence that the meeting of the 16th of January was held at an unusual place, was admissible. This was a circumstance tending to show that the business to be done was of a fraudulent character, and was designed to be kept secret. Angelí and Ames on Corp., § 496.
   Storrs, J.

The exceptions, taken by the plaintiffs, to the rulings of the superior court, on the trial of this case, will be noticed in the order in which they are presented on this motion.

1. The plaintiffs, under the count upon an account stated, rested their case on proof of an entry in what they claimed to have proved to be a book of the defendants, containing the proceedings of their directors, which entry consisted of a vote of the directors at their meeting on the 16th of January 1851, approving of the bill ofthe plaintiffs, the amount of which was sought to be recovered in this case, and directing the same to be paid. The defendants claimed that this was not a genuine, or authentic record book of the proceedings of their directors, but that it was spurious and unauthorized, and that no such vote was passed at that meeting; and on this point introduced two other books, purporting to contain, among others, the proceedings of the directors, at their meeting on said 16th of January, and in which said vote did not appear, accompanied with evidence that they were the true and genuine record books of the directors, and contained the minutes of their proceedings, and were treated as such by the defendants. The plaintiffs objected to this evidence, on the ground that it did not conduce to show that the book which they had produced was not genuine, and that the books offered by the defendants did not conduce to show that the directors did not pass said vote. In order to render the book, offered by the plaintiffs, evidence against the. defendants, it was necessary for the former to prove that it was authentic and genuine, and it was competent for the defendants to rebut that proof by any testimony proper for that purpose. We are of opinion that the evidence, so offered by the defendants, conduced to show that the book, introduced by the plaintiffs, and which contained entries of a character different from, or inconsistent with those in the books introduced by the defendants, was spurious, and that the latter books, if found to be genuine, inasmuch as they did not mention any such vote as that relied on by the plaintiffs, conduced to prove that it was not passed. The evidence, therefore, was properly received.

2. The defendants, for the purpose of showing that, if a meeting of the directors was held on the 16th of January, it was illegal and the votes therein passed consequently void, were permitted, against the objection of the plaintiffs, to prpve that the meeting of the directors of the 15th of January, the entries of the proceedings of which, adduced by the plaintiffs, stated that it was adjourned to the 16th of January, was, in fact, adjourned, not to that day, but to the 17th of January. The plaintiffs insist that the entries or minutes of the proceedings of the directors, adduced by them, were conclusive, and could not be contradicted. We are referred to no case in support of this claim, nor do we think it sustainable. Where the affairs of a corporation, like that of the defendants, are managed by a board of directors, they are only the agents of the corporation, and their acts are binding on it, when they act within the scope of their authority, however that authority may be conferred ; but they do not constitute the corporation itself. The character of their authority is the same as that of a managing board of an unincorporated association. It is not necessary, from the nature of their authority, that the acts of either of these bodies should be done by writing or vote, and the inconvenience of transacting all the numerous details of their business in that mode would be intolerable. They may act in the same manner as the agents of any other persons. It is consequently not necessary to the validity of their acts that they should be recorded, although this is perhaps usually done. It may be, and is frequently, required by the charter, or by-laws, of a corporation, that its directors shall make a record of their proceedings, in which case it is their duty to do so; in that case, however, it is at least questionable whether such requirement is not merely directory, but there is no claim that there was any such requirement as to the defendants’ corporation. If a record is kept of the proceedings of the directors of a corporation, it constitutes legal evidence of those proceedings; but as such records consist merely of the written entries of their acts made by a clerk appointed by them for that purpose, for the convenience only of themselves, or the corporation for whom they act, we think that they are not of so high or solemn a character as to be conclusive, and that they may therefore be contradicted by any person whose interests may be affected by them. Such entries stand on the same ground only, as the entries of the acts of any other persons made in their private books. The evidence, introduced for the purpose of such contradiction, was therefore properly admitted. This disposes also of the exception taken by the plaintiffs to the charge of the court below on this point.

3. The defendants claimed that if the meeting of the directors on the 15th of January was adjourned to the 16th of that month, and there was a meeting of directors on the latter day, it was not held in pursuance of said adjournment; that notice of it was not given to any of the seven directors of the company except the three who were present thereat, and who, by the by-laws of the company, were sufficient to constitute a quorum; and that the meeting was not held fairly and openly, but that it was held secretly, and concealed intentionally from the knowledge of the other directors. For the purpose of showing such secrecy and concealment, we are of opinion that, in connexion with the other evidence which appears to have been adduced by the defendants in support of this claim, it was competent for them to prove that other meetings of directors were held about the same time, at other places than the building where the directors’ meetings were usually held, and to which the meeting of the 15th of January was adjourned. The clandestine object, which the proof of the defendants, especially that as to the manner in which the holding of the meeting of the 16th was communicated to some and withheld from the other directors, tended to show, would be more successfully accomplished by holding that meeting at some other place than that to which it had been adjourned, and the circumstance, that meetings were held about that time at other places, was one which was proper to be considered on the enquiry whether the meeting in question was held at one of those places.

4. The testimony of Waterman was plainly admissible to prove the claim of secrecy and concealment in regard to the meeting of the 16th of January.

5. The evidence, offered by the defendants to prove that the vote, relied .on by the plaintiffs, was rescinded by a vote of the directors passed at a subsequent meeting, was properly admitted for the purpose of showing that the defendants did not acquiesce in the former vote, but repudiated it when it became known to the directors who were not present when it was passed ; as it repelled the inference which might otherwise be drawn’ of their assent to it.

6. The court charged the jury that if, as the defendants claimed to have proved, the premium paid by them on their stock, when they bought it of the plaintiffs, was paid by them to, and received by the latter to reimburse them for the expenses of obtaining the defendants’ charter, and the plaintiffs, when the vote relied on by them was passed, concealed that fact from the directors who passed it, and the latter were ignorant of it, such concealment was a fraud which would defeat the plaintiffs’ recovery. The plaintiffs except to this charge on the ground that the account stated, as evidenced by that vote, was conclusive as to the amount due to them. Without enquiring into the applicability of the rules on the subject of an account stated, where there is no positive, direct statement of an account, but the promise on a count upon an account stated, is only a matter of inference, or implication, from other circumstances, it is sufficient to say that, however the law stood anciently on the effect of stating an account, it is now the established doctrine that an account stated may be impeached for fraud or mistake. Trueman v. Hurst, 1 T. R., 42. Perkins v. Hart, 11 Wheat. R., 237. Barger & ux. v. Collins, 7 Har. & Johns., 213. Harden v. Gordon, 2 Mason R., 541, 561. Thomas adr. &c. v. Hawkes, et al., 8 M. & W., 140. The case last cited is exactly analogous to the present, in which the plaintiffs, from the admission, (evidenced by the vote on which they relied,) sought simply to infer the promise alleged in the count in question.

The charge on this point was therefore correct, as on the facts claimed by the defendants, there was both fraud on the part of the plaintiffs and mistake on that of the defendants. This disposes also of the objection, raised by the plaintiffs, to the evidence of their declarations that they had been reimbursed for the expenses, sought to be recovered in this case.

7. The plaintiffs except to the charge below because the court did not instruct the jury that the vote of the 16th of January was binding on the defendants, and that the account between the parties was not liable to be opened, although the bill presented by the plaintiffs to the directors who passed that vote, and on which it was founded, misrepresented the purpose for which the expenditures of money, in the course of procuring the defendants’ charter, were made by the plaintiffs, and a fraud was intended to be thereby perpetrated on the defendants, if those directors knew the facts and were not misled by those misrepresentations; but instructed them that if the plaintiffs intended that the bill should not give true information to the defendants in regard to the object of those expenditures, the misrepresentation would be evidence of fraud, proper to be considered by the jury, notwithstanding the knowledge of the directors. This charge was obviously correct. The fraudulent misrepresentations, under which that vote was procured, would plainly avoid the promise, or admission, evidenced by it, if the directors had no knowledge that they were false. Their knowledge that they were untrue, when they passed the vote, showed a combination between them and the plaintiffs to cheat the defendants. No reasoning is necessary to prove that a promise, or admission, by an agent, whether of a natural or artificial person, derives no validity against the principal, from the fact that it was obtained by a fraudulent conspiracy between such agent and the person to whom it was made.

A new trial is not advised.

In this opinion, the other judges,” Ellsworth and Hinman, concurred.

New trial not granted. these cases that of Mather v. McDonald, 6 Hill, 93, which will be relied upon by the defendant, is fully commented upon and explained. The plaintiff is entitled to recover, by the laws of the state of New York, upon the common counts, either upon the note now in suit, or by virtue of the defendant’s endorsement. Cayuga Co. Bank v. Warden &c., 2 Sel., 19.


text:
    McCasky vs. Sherman.
    In accordance with the common law of England, and with the decisions of this state, the law of the state of New York, as it now stands, and as evidenced by the reports of their judicial decisions, makes the endorsee of a negotiable promissory note, who takes it in the ordinary course of business in payment of a pre-existing debt to himself, a bona fide holder thereof for value, who may recover its amount as against any prior party, although he may have received it from a holder, not authorized to negotiate it.
    This was an action of assumpsit to recover the amount of a promissory note.
    The declaration contained a special count to which the common counts were added.
    The note declared on was for the sum of $755.87; was dated at Albany on the 16th day of January, 1849; was payable ninety days after date, at the bank of Albany, to the order of the defendant, and signed and endorsed by him.
    The defendant pleaded the general issue with notice of special matter to be given in evidence.
    The superior court for the county of Hartford, at the term holden in December, 1855, found the following facts, and reserved the case for the advice of this court.
    The defendant was a native of Albany, in the state of New York, and resided there until about the year 1838, when he removed to the city of New York; for several years before his removal from Albany, he was engaged in the practice of law, and thereafter, until after the making of said notes, had, residing in Albany, two brothers, one of whom viz: E. J. Sherman, at the time the first note hereafter described was made, and when it fell due and was protested, was engaged in the practice of law, and the other in mercantile pursuits, as a partner in the firm of Bachelder & Sherman. Both said brothers of the defendant were known to the plaintiff, and when the first note fell due, both knew that the defendant had removed from New York, and then resided at Buekland, in the town of Manchester, in Connecticut; but the plaintiff did not kno wof said removal of the defendant, or where the residence ofthe defendant then was. The defendant, after his removal from Albany, resided with his family and was engaged in the practice of law in the city of New York, until the spring of the year 1848, when he came to Connecticut and opened a law office in Hartford, and about the first of June, 1848, removed his family from the city of New York to Buekland, where he subsequently resided. On the 25th of July, 1848, Josiah S. Van Ingen, a nephew of the defendant, applied to him at Buekland, to endorse for the accommodation of Van Ingen, Van Ingen’s note of that date, for $730.74, payable to the order of the defendant, at the Bank of Albany, in said city of Albany, on the 4th of October, 1848, and on interest, and thereupon Van Ingen made said note, and the defendant endorsed it in blank, and delivered it to Van Ingen, without any consideration for said endorsement, and entirely for Van Ingen’s accommodation.
    Before said note fell due, Van Ingen at Albany transferred and delivered said note for an adequate consideration in money to the plaintiff-, who purchased it in the regular course of business, without any notice that it had been endorsed by the defendant for said Van Ingen’s accommodation, or was not good business paper, to the validity of which, as against the maker or endorser, no objection could be made.
    The plaintiff- lodged said note in the Bank of Albany for collection, and when it fell due, viz: on the 4th of October, 1848, being unpaid, the notary employed to protest it, not knowing the residence of the defendant, inquired of the plaintiff- where it was; the plaintiff did not know; but knowing that Sherman, of the aforesaid firm of Batchelder & Sherman, was a brother of the defendant, he went to the store of said firm, and there enquired where the defendantresided, and was told that he resided in the city of N. York, which information thus obtained, the plaintiff communicated to said notary; and thereupon said notary, in due time, forwarded a notice of the non-payment and protest by ¡mail, directed to the defendant at the city of New York; no further enquiry being made for the defendant’s residence by the plaintiff of said notary, said notice was never received by the defendant.
    In the month of December, 1848, Van Ingen applied to the defendant at his dwelling in Buckland, and requested him to endorse another note of Van Ingen, for the purpose of renewing and taking up the first, and informed the defendant that the plaintiff desired such renewal, but the defendant refused to make such endorsement, assigning as a reason to Van Ingen, that he was discharged from said first note, for want of notice of its non-payment and protest, and that he would not endorse another note.
    At the time the note in suit was made, the defendant being in New York, Van Ingen, (then residing in Albany,) applied to the defendant, and falsely represented to him that the plaintiff had endorsed said first mentioned note; that it was then lying in the bank under protest; that the plaintiff, though a man of considerable property, was pressed for money, and unable to pay said note ; that he desired to obtain further accommodations from said bank, but could not until he had first paid said note, the bank refusing to discount his paper while said note was lying under protest. And that the plaintiff had requested him to procure from the defendant the loan of the defendant’s note, to enable the plaintiff to get it discounted, and with the proceeds to take up said protested paper in order that the plaintiff might obtain further accommodations from said bank, and assured the defendant that the plaintiff would take up the new note when it fell due, and that the defendant should in no manner be subjected thereon, and the defendant, relying upon said representations and assurance, made the note in suit and delivered it to Van Ingen, as a loan for the accommodation of the plaintiff, to be forwarded by Van Ingen to the plaintiff, and not for the purpose of paying said note, or of being exchanged therefor, and did not intend thereby to renew, or acknowledge,- his liability as endorser of said first mentioned' note, and so informed Van Ingen at the time. Said last mentioned note was by Van Ingen, in the defendant’s presence, enclosed in a letter directed to the plaintiff at Albany, and deposited in the New York post-office for transmission to the plaintiff by mail, but whether said letter contained any information regarding said note, or of the use to which it was by the defendant designed to be applied, did not appeal-. Said representations of Van Ingen to the defendant were unauthorized by the plaintiff, and were false in fact; the plaintiff received said last mentioned note before its maturity, in said letter from Van Ingen; but had no notice or information of the manner in which it had been obtained, and received it in the regular course of business in payment of said first mentioned note, and not as a loan, supposing and believing that it was the duty of the defendant to pay said first mentioned note, as his own debt, and that he had made said last mentioned note and forwarded it to the plaintiff for that purpose. It was also found that no action could be sustained against the defendant, upon his endorsement of said first mentioned note.

      Hungerford Sf Cone, for the plaintiff.
    1. The defendant is, by the laws of the state of New York, liable for the payment of the note in suit, notwithstanding any fraud practiced upon him by Van Ingen. The note was taken in the regular course of business, before due, and in payment of the defendant’s own debts, his liability as endorser having been fixed. Pugh v. Durfee, 1 Blatch., 412.
    2. If received in payment of a debt of Van Ingen, it was received for a valuable consideration, and the defendant is liable. Story on Prom. Notes—note to § 195, p. 232, and the numerous authorities there collected, and particularly the case of Swift v. Tyron, 16 Pet., 15, cited at length in this note. White, &c. v. Springfield Bank,3 Sanford, 222. Catlin v. Hanson, 1 Duel., 309. Young v. Lee, 18 Barb. R., 187. In

      Fellowes Sf Sherman, for the defendant.
    1. The plaintiff is the payee, and original party to the note in suit, and so decided to be in the pleadings, and is so in law. The note was procured of the defendant for the plaintiff’s accommodation, by fraud of Van Ingen. The plaintiff is affected with knowledge of the fraud, and liable to this defence, being the payee. If he takes the note of Van Ingen, he makes him his agent for procuring it, and is bound by his acts, and must take it with all the defences attached to it. If he repudiates the acts of Van Ingen, who professed to act as his agent, he gets no title to the note. It never was delivered to him.
    2. But if the plaintiff is not the payee, and original party, as the note was procured of the defendant by fraud, the plaintiff must show himself to be a bona fide holder, for value. The onus is on him to show this, and failing so to do, he cannot recover. No value is pretended to have been paid by him. It is said that he received it, in payment of the former note. The court has found that he did not so receive it. He could not do so, without the defendant’s assent. The defendant made it for an entirely different purpose, to wit: the plaintiff’s accommodation. The court have so found. But if he did, yet the contract was made in New York, and payable in N. York, and must be construed according to the law of New York; and by the law of New York, an antecedent debt of itself is not a valuable consideration. The plaintiff parted with nothing, he has not the old note, but what has become of it, does not appear. The defendant never received it. Bay v. Coddington, 5 Johns., ch. 54. Wardell v. Howell, 9 Wend., 170. Rosa v. Brotherson, 10 Wend., 85. Root v. French, 13 Wend., 570. Payne v. Cutler, 13 Wend., 605. Dickerson v. Tillinghast, 4 Paige, 215, 222. Clark v. Ely, 2 Sandf. Ch. R., 166. Stalker v. McDonald, 6 Hill, 93. Catlin v. Gunter, 1 Kern. 368. White v. Springfield Bank, 1 Barb., 225.
   Stores, J.

The court dismiss all enquiry into those claims of fact and law, made by the parties, which have reference to a former note of which the plaintiff was holder, and the defendant was endorser. Our view of other aspects of the ease renders it unnecessary to decide whether the defendant, being directly indebted to the plaintiff, on account of having been legally charged with a liability, as such endorser, caused the note now in suit to be delivered to the latter, in satisfaction of that indebtedness, or whether, as claimed by the defendant, there was no such indebtedness at all, by reason of the want, not only of actual notice to him, of non-payment, but also of its legal equivalent, due diligence in the attempts made on the plaintiff’s behalf to ascertain the defendant’s residence.

There is as little occasion, as will be seen, to decide whether, according to the laws of the state of New York, or of any other jurisdiction, a recovery can be had upon the common counts, in assumpsit, in favor of the endorsee of such a note, as that on which this action is founded, against the endorser. In coming to the conclusion that the plaintiff is entitled to a judgment, we have not looked beyond the note itself, and the ordinary relation of the endorser of negotiable paper to its' bona fide holder.

The contract, which is the subject of the present suit, was made in the state of New York, and by its terms, to be executed within the same jurisdiction. Its validity, operation and effect, at least, are therefore to be determined according to the laws of that state. It is urged on the part of the defendant, that, whatever may be the legal theory elsewhere, by the law of New York, the endorsee of an accommodation note, who receives it from a former holder, only in payment of a debt, at that time outstanding in his own favor, does not become a holder, for value, in that technical sense, which will preclude an endorser from setting up against him any equities, which exist between such endorser and any of the prior parties to the note. We regard the title of the plaintiff as acquired under such circumstances, as to make his rights in the present suit dependent on the correctness of the doctrine just recited; that is, we shall regard the plaintiff as having received the note, (in suit,) in payment of Yan In-gen’s indebtedness.

As early as the year 1822, if not before, the courts of New York took the ground, that a party, whose legal or equitable rights had been violated by the unauthorized transfer of negotiable paper, had a superior equity to that of a holder, however innocent, who had received it merely as a security against an existing liability, and without parting with something of value, or relinquishing any other security at the time; and that, although he held by what would be a valid consideration between him, and the party, who had fraudulently negotiated the paper to him, he could not however be said to have given value for the note, and was not therefore to be treated as a bona fide holder, as against parties having prior equities, either as makers or former holders. Coddington v. Bay, 20 Johns., 637. This doctrine was recognized in several intervening cases, but the distinction suggested (as it would seem,) by the language of the court, between the receipt of negotiable paper, as collateral security for a debt, and its acceptance, in discharge of such debt, was explicitly recognized in subsequent decisions. Bank of Salina v. Babcock, 21 Wend. R., 499. Bank of Sandusky v. Scoville, 24 Wend. R., 115.

In 1843, the deliberate opinion of Chancellor Walworth, apparently called out by the exceptions taken by Judge Story, (see Swift v. Tyson, 16 Pet. R., 1, to the decision of Coddington v. Bay,) was pronounced in the case of Stalker v. McDonald, 6 Hill. R., 93. This opinion is relied upon by the defendant, and it unmistakeably promulgates the principle, that a party who receives negotiable paper, either as nominal payment or security for the payment of an antecedent debt, without parting with any value, or relinquishing any previous security on the credit of it, does not take it “ in the actual course of business, for a valuable consideration,” in such a sense as to protect him against the equities of the maker, or former holder of the paper. It is contended by the learned Chancellor, that such is the law of England, and the opinion of Justice Story is formally disapproved of.

The opinion however, so far as it can be construed as rejecting the distinction between the transfer of negotiable paper as a collateral security for an outstanding debt, and as payment of such debt, was subsequently disavowed as extrajudicial, and was considered by Justice Duer, a departure “ from a general and undoubted rule of mercantile law.” White v. Springfield Bank, 3 Sand. Sup. Ct. 222.

The doctrine was, nevertheless, again called in question in 1864, in the case of Youngs v. Lee, 18 Barb. R., 187. It appeared that the note, on which the suit was brought, had been improperly diverted from its proper application, and fraudulently transferred by its holder to a creditor of his own, in payment of a note given by him for goods purchased and then not quite due. The creditors at once withdrew their own security from the bank, where it had been placed for collection, and delivered it up to their debtor to be cancelled. The supreme court held, that such a transaction is in the usual course of business, if the negotiable paper is thus received before its maturity, in payment and discharge of an outstanding indebtedness. The case was then brought before the court of appeals, 2 Kern. R., 551, where the decision of the supreme court was fully affirmed by a majority of the ultimate tribunal. From the evidence of the law of New York, as furnished by the reports of its judicial decisions, we cannot doubt that the law of that state, as applicable to our view of the facts in the present case, would entitle the plaintiff to recover, had his suit been brought in that state, and conforms to the view of the common law taken by Kent and other elementary writers, and the doctrine recognized in Brush v. Scribner, 11 Conn. R., 388, by the supreme court of Connecticut.

Judgment should therefore be rendered for the plaintiff.

In this opinion, the other Judges, Ellsworth and Hinman, concurred.

Judgment for the plaintiff.


text:
    Goodrich and others vs. Stanley.
    On the hearing of a remonstrance against the acceptance of the report of a committee in chancery, the court will not entertain the enquiry, whether the committee has mistaken the weight of the evidence before them.
    On such hearing, it appeared that testimony, offered by the plaintiff, on the trial before the committee, was objected to by the defendant, and received, subject to the objection, but was excluded from the consideration of the committee in making up their finding. Held, that the course, taken by the committee, constituted no valid objection against the acceptance of such report.
    An acceptance, in discharge of a debt, of an agreement with mutual promises, on which the creditor has a legal remedy for its non-performance, is a satisfaction of the debt, although such promises are not performed.

      To constitute a defence to the original debt, there must be valid agreement to accept the agreement itself, and not the performance of it, as a satisfaction of the debt, thereby substituting a new cause of action, in place of the old.
    Where it is claimed that an agreement, with promises on the one side to pay, and on the other to accept payment of an obligation, in a mode other than according to its tenor, is a satisfaction or extinguishment of such obligation, it should explicitly appear that such was the intention of the parties.
    Where the payee of a negotiable promissory note, both before and after its transfer, promised the maker that, if the latter would continue to labor for him, he would apply the amount of such labor, in payment of the note; that in consideration thereof, the maker promised to continue so to labor until the note should be fully paid, and the payee agreed to accept the labor in satisfaction of the note; it was held, that this was only an agreement, on the part of the payee, to accept the labor of the maker, and not an agreement to accept merely his promise to render it, in satisfaction of such note.
    Where the payee, for a valuable consideration, assigned such note when over due, but the labor agreed to be performed in satisfaction of it, had not been rendered at the time of the assignment; it was further held, that said agreement to labor, not only constituted no satisfaction of the note, but was merely an unexecuted accord, and therefore imposed no legal duty upon the maker, prior to the assignment, or consequently upon the assignee, afterward to accept such labor, even if it had been tendered.
    The decree of the superior court, in the above entitled cause, having been reversed by this court, see 23 Conn. R., 79, the action was again entered in the superior court, and the former committee re-appointed, to find such facts raised by the pleadings, as were not explicitly found in said former report, and to correct any error, or deficiency, in the former finding. At an adjourned term of said superior court, holden in June, 1855, said committee returned a supplemental report, which was substantially as follows:
    Instead of the sum, heretofore reported as due on the note in suit, on the 27th day of September, 1853, there was due thereon, after deducting endorsements, seven hundred and thirty-four dollars and sixty cents.
    After the execution of the note in suit, and of the mortgage, and before the transfer thereof to Stanley, as well as afterward, Booth promised Goodrich, that if he would promise to continue to labor for him, in payment of said note, he would apply the amount of such labor in payment thereof. And said Goodrich, in consideration of said promise of said Booth, did promise to continue so to labor for him, until said note should be fully paid; and in pursuance of such promise, he did continue to labor for said Booth; and also that said promises were mutual, the one having been made in consideration of the other; and said Booth did agree to accept said labor in satisfaction of said note.
    The sums of forty-two dollars and fifty-five cents, and of sixty-one dollars and sixty-one cents, found in said report, (heretofore made,) to be due from Booth to Goodrich, on book, for work and labor done and performed, and for manufactured articles delivered, at the time when notice was given to Goodrich of the transfer of said note, by Booth to Stanley, and amounting in the whole to the sum of one hundred and four dollars and sixteen cents, were included in, and constituted a part of, the endorsements on the note in suit.
    And whereas it was found in the former report, that the note in suit was endorsed by Samuel Booth, the committee now find that it was assigned as follows :
    “ For a valuable consideration received of Fa Stanley, Jr., I hereby assign to him the within note, and the mortgage by which the same is secured.”
    Against the acceptance of this report, the defendants remonstrated. On the hearing of the remonstrance, the defendants offered testimony to prove, that there was no evidence before the committee to warrant the finding, in the additional report, relating to the ($104.16.) The court rejected the evidence, on the ground that the enquiry of fact had been referred to the committee, but stated that if the committee wished to amend his report, to correct a mistake, he would be at liberty to do so. In relation to certain testimony, concerning notice being given to Goodrich at the time of the transfer, which was objected to by him, the court found that such testimony was admitted, subject to objection, and that afterward, in the progress of the trial, other evidence, and such as was satisfactory to the committee and not objectionable, was introduced to prove the fact of notice of the assignment to the defendant, Goodrich, and that the testimony objected to was not used by the auditor in deciding the case, but the testimony was not formally ruled out. The defendants objected to the testimony of the committee by which the foregoing facts were proved, but the objection was overruled.
    The court further found that evidence offered to prove that the note for $287.29 was executed at a later period than the date of the assignment, was admissible before the committee, and that it was proper for said committee to receive and consider the same.
    Andas to the parol agreement between Goodrich and Booth, respecting the labor and services of Goodrich, as set forth in said first report, the court found that the same as between them, and without any notice thereof by the plaintiff, as found by the committee, was not legally admissible to affect the interests of the plaintiff, except so far as relates to the said sums of $42.55 and $61.61, which accrued as found in said report, prior to the time when said Goodrich received notice of said transfer of said note to said Stanley, and which sums are included in the endorsements on said note.
    And as to said agreement, as found in said second report, between said Booth and Goodrich, as to payment of said note in work and labor, the court found that such agreement was by parol, but that, upon the pleadings and the facts found, the same was not sufficient to prevent the passing, in this case, of a decree in favor of said Stanley.
    But said parol evidence was admissible, so far as it affects the interests of the estate of said Booth.
    And as to a claim of the defendants, to set off against the claim of the plaintiff, the value and amount of his labor and services, as set forth in said report, the court was of opinion that the same could not be sustained.
    The court thereupon found all the facts, embraced in the additional report, to be true, and all the facts in the first report to be true, except as modified by the second report, and that, on the 27th day of September, 1853, there was due, of said mortgage note, the sum of seven hundred and thirty-four dollars and sixty-six cents, and passed a decree foreclosing the defendants severally of their equity of redemption in the mortgaged premises, on their failure to pay said sum, within the times respectively limited therein for their payment thereof.
    To revise this decision, the defendants brought the record before this court for revision, by motion in error.
    Of the numerous assignments of error, only the following need be here stated :
    “ Twelfth : That said court erred, in finding, upon said second report of said committee, that on the 27th day of September, A. D. 1853, there was due on said note, after deducting endorsements, the sum of $734.66, inasmuch as said cause was recommitted to said committee merely for the purpose of finding such facts raised by the pleadings, as were not explicitly found by the former report, and to correct any error or deficiency in the former finding, and said committee explicitly found in said first report, that a much less sum was due on said note, and the fact, as to the amount due on said note, was explicitly found in said first report, without any error or deficiency in the finding, and therefore the said committee had no jurisdiction or authority to find, in said second report, the said amount, viz : $734.66 as aforesaid.
    Thirteenth: That said court erred in passing said decree, inasmuch as said agreement, respecting the payment of said note in work and labor, as found by said committee in said second report, and by said court found to be true, was a full accord and satisfaction of said note, and a complete bar to any recovery on said note, either in the hands of said Booth, or of said Stanley, and a full bar to any relief in this cause, and said court should therefore have dismissed said bill.

      Fourteenth : That said court erred in accepting said report of said committee, and overruling said remonstrance, inasmuch as it appears upon the record, that said committee admitted improper evidence, to prove the notice of the assignment of said note and mortgage by said Booth to said Stanley, and other improper evidence, although the same was objected to by the defendants.
    Fifteenth : That said court erred in refusing to admit the evidence offered by the defendants, to prove the facts stated in said remonstrance, and in admitting the evidence offered by the plaintiff in respect to the same, and in therefore accepting said report, finding the facts in said remonstrance untrue, except as therein found to be true, and overruling the same, and passing said decree.”

      Welles and Fellowes in support of the motion.

      T. C. and C. E. Perkins against the motion.
   Storrs, J.

The first and last assignments of error in this case are so general, that they cannot here be noticed under our rule, in relation to assignments of errors on proceedings in error, which requires that the precise matters of error, or defects in the proceedings in the court below, relied on as grounds of reversal, shall be set forth. Rules of Prac., Ch. 13. 18 Conn. R., 572.

The assignments of error, from the second to the eleventh inclusive, only present questions which were decided by us on the writ of error, brought on the first decree rendered in this case. 23 Conn. R., 79. We see no reason for disturbing any of those decisions, and a further notice of those exceptions is therefore unnecessary.

There is no semblance of foundation for the claim set up in the twelfth assignment of errors, that the committee exceeded its powers on the second hearing, in finding a different sum to be due on the note, for which the mortgage was given, from that which was found due on the first, and it has not been seriously insisted on. It was only a correction of an error in their first report, which they were expressly authorized to make.

The superior court, on the hearing of the remonstrance to the additional report of the committee, properly excluded the testimony, offered by the defendants, to prove that the evidence before the committee was not sufficient to warrant their finding the particular fact mentioned in the remonstrance. It is well settled that the court will not entertain the enquiry, whether a committee in chancery has mistaken the weight of the evidence before them. Their report, in this respect, stands on the same ground as a finding of facts by the court itself, or a report of auditors in an action of book debt. The former is obviously conclusive, and, as to the latter, we have decided, at the present term, in Colegrove v. Rockwell, (ante p. 584) that the enquiry, whether it is founded on sufficient evidence, should not be entertained.

The exception taken to the competency of the committee as witnesses to prove the circumstances under which the testimony was received by them, to show notice of the assignment to Goodrich, has not been pressed before us, and is plainly unfounded.

This disposes of the fifteenth assignment of errors.

The superior court finds that the testimony last mentioned was objected to by the defendants, but received by the committee, subject to objection, and that it was excluded from the consideration of the committee in making their finding, although it was not formally ruled out. As it appears, therefore, that it was ultimately excluded, it stands on the same ground as if it had been excluded in the first instance. The defendants could suffer no possible injury by its introduction under these circumstances, and on this point there is no just ground of complaint under the fourteenth assignment of errors.

The thirteenth is the only exception to this decree which remains to be examined. It is founded on the finding of facts by the committee in their additional report, and sets up that the agreement as therein found, respecting the payment in work and labor, of the note, on which the mortgage, sought to be foreclosed in this case, was given, constituted a full accord and satisfaction of said note, and therefore a complete defence to it against either Booth or Stanley. The validity of this exception depends on the true import of the finding as to the terms of that agreement.

The defendants claim that it is found that, after the note became due, and before its transfer to the plaintiff, there was a mutual agreement between Booth and Goodrich, in which the latter promised that he would continue to labor for the former, until the amount due on the note should be fully paid by such labor, and the former promised that he would accept said labor and apply it in satisfaction of the note ; that it was then further agreed between them, that the promise of Goodrich should be accepted by Booth in satisfaction of the note, and that it was so accepted; and the defendants insist that this substitution of the promise of Goodrich for the note was an extinguishment, by way of accord and satisfaction, of such note, and therefore constituted a valid defence to it against Booth, and consequently against the plaintiff, his assignee. If Booth accepted, in satisfaction of the note, the promise of Goodrich to pay the amount due upon it in his labor, and did not merely agree to accept such labor, when it should be performed, in satisfaction of it, and that was a valid promise, on which, upon its non-performance, an action would lie in favor of Booth, the authorities appear to be decisive to show that such acceptance would be an executed accord, which would be a satisfaction and extinguishment of the note. The principle is laid down in Com. Dig. “Accord,” (B. 4,) on the authority of Case v. Barber, T. Raym., 450, S. C. T. Jones, 158, that “ an accord with mutual promises to perform is good, though they .be not performed at the time of action; for the party has a remedy to compel the performance; but the remedy ought to be such that the party might have taken it upon the mutual promise at the time of the agreement;” the meaning of which is, that an acceptance, in satisfaction of a debt, of an accord or agreement, with mutual promises to perform, on which the party has a legal remedy for its non-performance, is a good satisfaction of such debt, although such promises are not performed. And this principle has been repeatedly and fully sanctioned by modern cases. Good v. Cheesman, 2 B. & Adol., 328. 1 Smith’s Leading Cases, 150. Evans v. Powis, 1 Weis. Hurls. & Gor., 601. In order that such an accord should be a defence to the original debt, it is necessary, in the language of Parke B. in the case last cited, that the plaintiff should have “agreed to accept the agreement itself, and not the performance of it, as a satisfaction for his debt, so that if it was not performed, his only remedy would be by an action for the breach of it, and not a right to recur to the original debt.” There must be a valid agreement substituting a new cause of action in place of the old. It is not sufficient that there is a mere accord between the same parties, with mutual promises, but there must be a new agreement with a new consideration. Although this doctrine, well established in the English cases, appears to have been regarded with disfavor by some of the courts in this country, we do not perceive why, on principle, an acceptance of a new and valid promise, which can be enforced in substitution of an existing claim, should not be held to be as effectual a satisfaction and extinguishment of such claim as the acceptance of any other thing. But, according to the view which we take of the finding in this case, it is not necessary to pursue this particular point further, or to examine the question which is, in this case, connected with it, and which might be attended with more difficulty than the main doctrine itself, namely, whether the promise of Goodrich, if the agreement between him and Booth were such as is claimed by the defendants, was one which was founded on a valid consideration, and on which, therefore, Booth could have maintained an action for its non-performance. For we are of opinion that, on the finding in this case, the agreement between Booth and Goodrich was, as claimed by the plaintiff, only that the former would accept the labor of the latter, and not merely his promise to render it, in satisfaction of the note held by the former, and that, therefore, as such labor had not been performed and accepted by Booth, when the note was assigned to the plaintiff, such agreement was then only an unexecuted accord, which by the familiar principles applicable to the doctrine of accord and satisfaction, not only constituted no satisfaction of the note, but imposed no legal duty either on Booth prior to the assignment, or on the plaintiff afterward, to accept of such labor, even if it had been tendered. 5 Coke, 79. 1 Stran., 573. 2 Pars, on Con. and cases cited, p. 198.

Notwithstanding the ingenious turn which has been given by the defendants’ counsel to the finding of the committee, we think that the only construction, of which it is fairly susceptible, is, that there was a mutual agreement between Booth and Goodrich that the latter should perform labor, and the former receive such labor, in payment of the note. It was only an agreement that the note might be paid in that particular manner. Booth did not agree to rely on the mere promise of Goodrich to perform that labor, but on the performance of the promise. There were indeed mutual promises of the parties, and the promise of one was the consideration, or inducement, of the other; but on looking at the character and terms of the agreement, we find that the promise of one was to pay the note in labor, and that of the other was to accept in payment of it, not such promise, but such labor. It is like the ordinary case, where parties agree that an obligation shall be paid in a particular mode other than according to its terms, in which there are, of course, mutual engagements, on the one side to pay, and on the other to accept payment, in that mode, but the promise so to pay is not understood to be in itself, and independent of its performance, a payment or satisfaction of such obligation; and in that case, the mere circumstance, that there was an agreement with mutual promises, does not have the effect of extinguishing the obligation. Where it is claimed that it is so extinguished, it ought most explicitly to appear that such was the intention of the parties. In this case the committee do not find expressly, nor even by reasonable implication, that the promise of Goodrich was agreed to be received in satisfaction of the claim of Booth on the note; but, on the contrary, as if to exclude that idea, they find only that the former promised to continue to labor for the latter until the note should be fully paid, and that the latter promised to apply such labor in payment of it. This implies that it was understood, that the note should remain a subsisting debt until the labor should be performed, and that only then it should be extinguished by the application upon it of the labor. And, as if further to place the meaning of the committee beyond all doubt, as to whether the promise of Goodrich, or his labor, was agreed to be accepted in satisfaction of the note, they find that “ said Booth did agree to accept said labor in satisfaction of said note.” (See Bates v. Starr, 2 Verm. R., 636.)

Such being the agreement between the original parties to this note, the plaintiff took the assignment of it, subject only to what had been previously paid and received upon it in the services of Goodrich, (and which, in conformity with our decison in this case, when it was formerly before us, has been applied on it,) and. with the right to require the balance due on it in money, according to its terms. The decree in this respect, being made on this principle, is correct.

The judgment complained of is therefore affirmed.

In this opinion, the other judges, Hinman and Ells» worth, concurred.

Judgment affirmed.