text:
    Birdsall, Waite & Perry Manufacturing Company, App'lt, v. George Schwarz et al., Resp'ts.

      (Supreme Court, Appellate Division, Second Department,

      Filed April 7, 1896.)

    1. Assignment for creditors—Fraud.
    It is not necessarily essential, in order to invalidate an assignment for creditors for fraud, that fraud in assignment should be established.

      2. Same.
    Retention of money by assignor, in contemplation of assignment, may or may not constitute fraud, depending upon his intent and the substantial character of the amount retained.
    3. Same.
    The law authorizes retention of sum sufficient to meet formal wants for sixty days.
    4. Same—Assignee.
    The remedy, through the intervention of the assignee, in setting aside fraudulent conveyance, can he invoked only when the assignment purports to convey such property, or by its terms such property would he embraced, or ought to have "been embraced, and does not apply where by the terms of the instrument the assignee comes under title.
    5. Same.
    The assignee, under firm assignment, acquires no title or interest in individual property of the partners and cannot maintain an action to reach it under the statute.
    6. Same.
    In such case, a creditor, whose judgment is a lien, can pursue sucli . property.
    Appeal from a judgment, dismissing the complaint as to the assignment on the merits, and as to the conveyance on the ground that°it could he attacked only by the assignee.
    Louis Marshall, for app’lts; Paul Eugene Jones, for resp’ts Schwarz and others; Paul E. De Fere, for resp’t assignee.
   HATCH, J.

This action is in the nature of a creditors’ bill, filed by three judgment creditors of George Schwarz and others, composing a firm doing business under the name of the Brooklyn Carriage & Harness Company, and seeks, as a result, to set aside the general assignment executed by the judgment debtors on October 22, 1894, to the defendant Mayer for the benefit of creditors, and also to set aside a conveyance of real estate executed by the defendant George Schwarz to his wife Barbara, on October 19, 1894. Both of these instruments are attacked as being fraudulent and void, in that they were executed for the purpose of hindering, delaying, and defrauding the creditors of the said firm, and of the individual members thereof. The assignment was of firm property, and was executed by the members thereof as partners. It did not, on its face, purport to assign individual property, and no provision was made therein for the payment of individual debts. The trial court found that the evidence was not sufficient to justify a finding of fraud in the assignment, and as to it judgment was rendered in favor of the assignee, dismissing the complaint upon the merits. As to the conveyance the court held that it could only be attacked by the assignee. The court declined to pass upon the merits in this respect, and simply dismissed the complaint, thus leaving the matter, if it was deemed advisable, open to an attack by the assignee in an action for that purpose. It is now insisted by appellant that the court erred in in both conclusions.

The first claim is that fraud in the assignment is apparent upon the undisputed facts, and consists in this : That the defendant George Schwarz did not deliver to the assignee, but retained possession of, six promissory notes, amounting, in the aggregate, to $3,550, which he held against the firm for money loaned to it; that he withheld $200 in cash, which he gave to his wife, saying to her, at the time, that it was all he had, and that he wished her to use it for the support of the family; also, that each of the partners, on the Saturday night before the execution of the assignment, drew $15 from the firm assets for their individual use. It is undoubtedly true that it is not necessarily essential, in order to-invalidate an assignment for fraud, that fraud in the assigneeshould be established. It is sufficient if fraud exist on the part of the assignors. We are, however, unable to see that fraud is necessarily to be deduced from the acts complained of, or that the' court was required to infer its existence from these facts. The retention of the notes in no wise prejudiced the assignee in carryout the purposes of the trust, nor did it deprive the creditors of the firm of any property applicable to the payment of their debts. We know of no rule of law which would prevent Schwarz from proving them as a claim against the assigned estate. What his position would be in respect to the other creditors in such event is not important now to consider. It certainly does not appear that he retained possession of the notes with any fraudulent design to defeat the purposes of the trust, and we are unable to see how anyone was prejudiced thereby. The retention of money by an assignor, in" contemplation of an assignment, may or may not constitute fraud. It is dependent, to a large extent,, upon the particular circumstances attending the case, in consequence of which each case must, in a large measure, and within certain limits, be determined upon its particular facts, having regard to the intent of the assignor, and the substantial character of the amount retained.

In Coursey v. Morton, 132 N. Y. 566; 43 St. Rep. 673, after the assignment had been executed, the assignor withdrew from tire bank $963.50, and delivered the same to his wife, who secreted it for about eight months, and it was only discovered upon a proceeding instituted for that purpose. The assignment in that case was confessedly made for the purpose of gaining time to compromise with creditors, and the sum secreted constituted, in a large measure, the available assets of the estate. The assignor was conscious at all times that he had no right to withhold the money, and that it belonged to his creditors. The court held that these acts constituted fraud, which invalidated the assignment. In Rothschild v. Salomon, 52 Hun, 486; 24 St. Rep. 205, the sum drawn out for household expenses was $4,042. Of this sum $2,300 was delivered to the wife of one of the assignors, and was falsely charged in the books as payment of a loan. No money was ever loaned by her, and in fact nothing was due. The court held this money was abstracted in anticipation of and in preparation for an assignment, in consequence of which the whole transaction was vitiated. The other cases cited by appellant in support of this contention add nothing to the strength of those already noted. We do not think they are controlling upon the proof now before us. The facts of this correspond quite closely to those' appearing in Vietor v. Nichols, 13 St. Rep. 461. There the partners drew an amount in excess of the sum drawn, here, and the whole amount drawn, so far as the report of the case shows, about equaled the sum drawn here by George Schwarz of his individual money and by the members of the firm. The court held that this withdrawal did not necessarily impeach the assignment, as the law"authorized a retention of a sum sufficient to meet family wants for a period of sixty days. This holding was affirmed on appeal. 114 N. Y. 617. We think that this auhority is abundant in support of the acts of the partners in drawing the small sum which each did from the partnership assets, and that fraud should not be inferred therefrom.

As to the withdrawal from the bank by Schwarz of his individual money, treating it as property which should necessarily have been assigned, we do not think it works out a fraudulent intent. It appears that of that sum nearly $100 was expended by him in the discharge of personal debts, and $200 was given to his wife for household expenses. It nowhere appears that this sum was excessive in amount for that purpose, and the case last cited recognized that nearly this amount was not the withdrawal of-so substantial a sum as to characterize the.act per se fraudulent. We recognize the rule that an act standing alone is not the criterion, but that all the acts which lead up to and culminate in the assignment are to be considered together, in order to determine whether a fraudulent scheme existed which, was consummated by all that was done. But here the appellant selects the specified acts, and asks the court to find, for them, that they conclusively establish the fraudulent scheme. The court below felt constrained to hold that these acts were not sufficient for that purpose, and we are not satisfied, by the argument of the learned counsel for the appellant, that any error was committed therein. The record does not disclose that any act of George Swarz respecting the disposition of his individual property was known to or participated in by his co-partners. If fraudulent design upon his part existed, both the assignee and the co-partners were evidently innocent of any knowledge or participation therein. And, further, there is no evidence that George Swarz did any act or intended any act which interfered, or was calculated to interefere, with the entire disposition of the firm’s property, and this was all that the assignment purported to convey. We are, therefore led to the conclusion that the judgment finding no fraud in this assignment was correct, and that the dismissal of the complaint upon the merits must be upheld.

Respecting the other question, the conclusion of the court is not so easily supported. We agree with the learned court in its contusion that a case was presented upon which the court might found a judgment setting aside the conveyance by George Swarz to his wife as being in fraud of creditors. The conclusion that this could only be done through the intervention of the assignee is not so certain. The court based its determination in this regard upon the case of Loos v. Wilkinson, 110 N. Y. 195; 18 St. Rep. 110, where distinction is recognized between fraud upon the assignment and frand in the assignment. As to the former, the remedy is through the assignee; as to the latter, the remedy is against the assignment. We have already concluded that there is no fraud in this assignment. Must we conclude, therefore, that the remedy, if any, is in the assignee? It is to be noticed that, in the Loos Case, the assignment was made by a partnership, and purported to convey all their property, and the deed which was there attacked was also made by the partners, and was a conveyance of firm property. It is therefore plain that this property belonged in the assignment, and its exception therefrom was a fraudulent act. In all the cases that have fallen under our observation, where this principle has been invoked, this assignment itself purported to convey, and did convey and vest, the legal title to the assigned property in the assignee. The present assignment did not purport to convey the individual property of George Swarz. It was limited exclusively to the property owned by the firm. In Wheel Co. v. Fielding, 101 N. Y. 504, there was a general assignment by the firm; also a separate conveyance of individual property by one member of the firm to the assignee for the benefit of firm creditors,. and two conveyances by the same member of separate pieces of property to his son for the benefit of individual creditors. And the court held that the general assignment act did not embrace conveyances of specific property, nor include a transfer of individual property for the benefit of the creditors of the assignor. And it further held that the grantor in that case had a right to retain his individual property, and that it did not pass by the general assignment of the firm. A court would find some evidence to sustain a finding that there existed a. bona fide debt of some amount owing by George Swarz to his wife. This debt, if it existed, he had a right to pay out of his indidividual property, to the exclusion of firm creditors. This claim is that he fraudulently transferred more property than was necessary for that purpose. This may be, but that does not affect the question here. Either the title to his individual property passed to the assigne, or it did not pass. If he could retain it to discharge individual debts, and he did retain it for that purpose, then theassignee got no title to it, and, as this, it seems, was what he did, I am unable to see how the assignment, under such circumstances, can be interposed as an obstacle to a creditor in pursuit of it. Actions are maintained by trustees by virtue of the provisions of the-statute, and are maintained upon the theory that the title to the property, if not in the grantee, is in the assignee. But this is only so when the assignment purports to convey such property, or by its terms such property would be embraced, or ought to have been embraced, and does not apply where by the terms of the instrument the assignee gets no title.

Could the assignee have maintained an action to set aside this conveyance? This necessitates a consideration of two propositions:. (1) That the conveyance should have been made with intent to hinder, delay, or defraud creditors, etc. 4 Rev. St (8th Ed.) p. 2594. (2) That the assignee should be the trustee of the creditors so defrauded, and that property so fraudulently transferred, etc., should be. “held by or of right belonging to such trustee or estate.” The property must be “so held in trust,” or must belong to the trust estate as of right and in law. The assignee and the creditors he represents must be interested in the property so held in trust,” “or of right belonging to any such trustee or estate.”" In other words the individual property of the partners must be deemed, as matter of fact, to be a part of the assigned estate, although not actually embraced within the assignment as made and executed. If it be conceded that the partners are not required by statute, to assign their individual property with the partnership-property, the assignee can have no interest whatever in the individual property when not so assigned. If the assignee, by virtue of the instrument, acquired title or right to individual property," then a subsequent individual assignment of individual property would be void as against him. It comes, then, to the proposition that the individual property of partners of right belongs in a firm assignment, or the trustee acquires no title or interest therein,; and can maintain no action to reach it under the statute. That it" does not necessarily belong therein is decided in the Royer Wheel Company Case, supra, and others. McFarland v. Bate, 45 Kan. 1, 25 Pac. 238; Drucker v. Wellhouse, 82 Ga. 129; Ex parte Hopkins, 104 Ind. 157 Bradley v. Bischel, 81 Iowa, 80; Crook v. Rindskopt, 105 N. Y. 476; 8 St. Rep. 66; Klumpp v. Gardner, 114 N. Y. 153; 22 St. Rep. 672; Burrill, Assign. (6th Ed.) p. 67.

It is claimed that this action cannot be maitained for the reason that, if the conveyance be set aside, it will not enable plaintiff’s ¡judgment to attach upon the property. But this assumes that the title is in the assignee. It was held in the Royer Wheel Company Case that the judgment, although against, the firm, nevertheless attached as a lien to the real estate of the individual member of the firm. My research has not enabled me to find a case where the precise point now presented has been considered. But it seems to me that, if it be lawful for the individual member to retain from the firm’s assignment his individual property, and that title to such property does not vest in the assignee, then, upon principle, it must follow that a creditor whose judgment is a lien can pursue that property. That seems to be the case here.

If these views are correct, it follows that the judgment appealed from, so far as it dismissed the complaint upon the merits should be affirmed, with costs to the assignee; and so far as it dismissed the complaint, without passing upon the merits, it should be reversed, and new trial ordered, with costs to abide the event.

All concur


source: Caselaw Access Project

author: WILLIAMS, J.

license: Public Domain

text:
    Reliance Marine Insurance Company, App'lt, v. Henry S. Herbert et al., Resp'ts.

      (Supreme Court, Appellate Division, First Department,

      Filed April 10, 1896.)

    Insurance—Marine—Submission.
    The submission of the question whether the company knew, when the risk was taken, that the insured were charterers of the barge containing the property insured, was held erroneous under the evidence.
    Appeal from a judgment for defendants, and an order denying a motion for a new trial
    The action was brought to recover back moneys paid by plaintiff under a mistake of fact for a loss under a marine insurance policy. The policy was issued March 1, 1891, to the Lehigh & Wilkesbarre Coal Company, on account of whom it might concern, insuring coal laden on board vessels, boats, or barges against perils of the sea, etc. Thereafter, and about March 5, 1891, the coal company shipped 461 tons of coal on board the barge Macy, to be carried from Port Johnson across the bay to Fifty-Third street, East river, and there delivered to defendants. The defendants, from the time the coal was loaded on the barge, were to be the owners of the coal. March 6, 1891, plaintiff accepted this coal as one of the risks covered by the policy, and insured the same in the sum of $1,900 ; and on the same day, while the barge was being towed across the bay in New York, it capsized and all the coal excepting thirty-four tons wms lost. Only thirty-four tons were delivered to defendants. About November 18/1891, the coal company made proofs of loss of the coal; and thereafter, and on March 2, 1892, the plaintiff paid to the coal company, on account of the loss, $1,786.14, and the coal company paid the money so received to the defendants. At the time the plaintiff paid the money to the coal company, the coal' company assigned and transferred to the plaintiff all their right, title, and interest in the coal lost, and the proceeds thereof, and all that could in any way be made, saved, or realized from the damage or loss, with full power to take and use all lawful ways and means to so make and save and realize said property or its proceeds. At the time the coal was shipped, and at the time it was lost, the defendants-were the charterers of the barge which carried it. It is claimed by the plaintiff that it was not informed at the time the risk was taken that the owners of the coal were also the charterers of the barge on which it was shipped, and that the policy was therefore void. It is claimed by the defendants that the plaintiff was informed of this fact immediately after the loss, and that the payment of the money was therefore a voluntary payment, and made with knowledge of this fact; and the money cannot therefore be recovered back, on the ground that it was paid under a mistake of fact. The court charged the jury that the fact that the owners of the coal insured were also the charterers of the barge was a fact material to the risk, and that the plaintiff was entitled to be informed of this fact at the time the risk was taken ; and if such information was not given, but the fact was suppressed, then the plaintiff had the right to repudiate the policy. The agent of the plaintiff who issued this policy testified that this information was not given him at the time the risk was taken. No evidence was given in the case tending to show that such information was given, to the agent The court, nevertheless, left to the jury, under the objection and exception of the plaintiff, the question of fact whether such information was given, or whether the fact was suppressed. There was conflicting evidence as to whether this information was given to the plaintiff after the loss, and before the money was paid.
    W. W. MacFarland, for app’lt; L. B. Adams, for resp’t.
   WILLIAMS, J.

There seems to be no dispute as to th*e law charged by the trial court, that the suppression of the fact, when the risk was taken, that the owners of the coal and the charterers of the barge were the same persons, rendered the policy void, and enabled the plaintiff to repudiate it, and, if,"the plaintiff paid the amount of the loss while still in ignorance of this fact, it was entitled to recover back the money paid. Nor does there seem to be any dispute but that if the plaintiff acquired knowledge of this fact after the loss, and before the money was paid, it was a voluntary payment, was not paid under any mistake of fact, and could not be recovered back. The rights of the parties were therefore dependent upon the determination of the question as to when, if ever, the plaintiff acquired the knowledge of this fact. There was evidence on both sides, and quite conflicting, as to whether the plaintiff was informed of this fact after the loss, and before the payment of the money; and the finding of the jury upon this branch of the case should be conclusive upon us. There was no conflict of evidence as to the question whether the plaintiff was informed of this fact at the time the risk was taken. This-question was therefore improperly submitted to the jury.. The plaintiff excepted to its submission. The court said that there was no direct evidence of the fact; that the only witnesses in that connection were those of the defendant; and he left the question to be determined' by the jury. The court permitted, the shipping clerk of the coal company to testify that he knew of the fact in question at the time the risk was taken, and his books were produced and put in evidence. This evidence,, however, did not tend to show that the plaintiff had any knowledge of the fact in question. It appeared that the books were shown to the plaintiff’s agent when the risk was taken, but that gave no information as to the fact in question. This is the only evidence to which the court could have referred in the charge, and the jury may very well have been misled by this evidence and the charge of the court, and may have based their verdict upon a finding that information of this fact was given to the plaintiff when the risk was taken. We do not think, in view of the meager evidence to support a finding that information of this fact was given to the plaintiff after the loss, and before the money was paid, that we can say that the jury based their verdict upon the finding of a voluntary payment, rather than the finding that the fact was not suppressed at the time the risk was taken. This error of the court calls for a reversal of the judgment and a new trial.

The judgment should be reversed, and a new trial granted, with costs to the appellant to abide event. All concur.


author: PER CURIAM.

text:
    Harry Ferguson, Resp’t, v. Commonwealth Rubber Company, Def't. Merchants' Bank of Buffalo, App'lt.

      (Supreme Court, Appellate Division, First Department,

      Filed April 10, 1896.)

    Motion and order—Recitad,
    Where no leave to submit replying affidavits is asked or granted, their submission is improper and an order denying motion to recite them is. right.
    Appeal from an order denying a motion to amend an order-denying a motion to vacate, by reciting in the order replying; affidavits.
    Herman Aaron, for app'lt; Philip M. Brett, for resp’t.
   PER CURIAM.

No leave to submit replying affidavits was asked for or granted, and, as the submission of such was improper, the order denying motion to recite such was right, and should be affirmed, with $10 costs and disbursements.


author: O’BRIEN, J.

text:
    William H. Wiley, Resp't, v. Edward L. Goodsell, App'lt.

      (Supreme Court, Appellate Term, First Department,

      Filed April 10, 1896.)

    1. Assumpsit—Implied contract.
    Services, neither voluntary nor gratuitous, rendered at request of, and valuable to, defendant, raise implied contract on part of defendant to make - compensation.
    2. Appeal—Conflicting evidence.
    Where amount awarded, in an action upon quantum meruit, is upon disputed testimony and clearly within province of referee, and cannot be regarded as excessive, it will not be disturbed.
    3. Evidence—Assumpsit.
    In an action to fecover on a quantum meruit for services rendered, examination of plaintiff as to amount of sales and earnings of his own business during the period he was engaged in rendering the services sued for, is rightly denied, as it is not a question of whether the plaintiff was benefited or injured in his own business, but whether he had performed services for the defendant which entitled him to compensation.
    4. Witness—Contradiction.
    Witness cannot be contradicted upon a collateral matter in any issue.
    5. Evidence—Letter.
    Where, in action to recover for liability incurred under section 2384 of gode for expenses, there is no defense that failure to arbitrate was result of any act of plaintiff and answer denied nothing except as to the amount, admission of letter, claimed to contradict plaintiff’s testimony that he never withdrew from arbitration, is rightly refused.
    Appeal from a judgment in favor of plaintiff, and entered on the report of a referee.
    The action is upon a quantum meruit for services rendered in the conduct of defendant’s business for a period of two months subsequent to October 30, 1890, and also for damages for breach of an agreement to arbitrate. The testimony shows that in the latter part of October, 1890, the defendant, becoming sick and ill,, required some one to take charge of the financial part of his auction and commission business; and a request to take such charge,' through one Millbank, a brother-in-law of the defendant, was made upon the plaintiff, who was engaged in a somewhat similar business, and to that extent familiar with it, and who prior to that time had assisted the defendant. The plaintiff having consented,, defendant executed four powers of attorney to plaintiff, which were delivered to him by Millbank, and the plaintiff thereupon entered upon the employment. These powers of attorney were lodged with the different banks with which the defendant did business. Three of them gave him the right to “sign, accept and' indorse all checks, notes and drafts,” and the fourth, lodged with the Seaboard Bank, gave him a wider range of authority. While there is a dispute as to Millbank’s authority to make the request or to employ the plaintiff, there is no question as to the execution of the powers of attorney, and that the plaintiff did in fact take complete charge and supervision of the business during the defendant’s sickness, and for two months, during a portion of which ■time there was financial stringency, he managed the finances, raised by loan and otherwise, and paid out large sums of money, amounting to nearly $800,000, in the conduct of the business. For these services compensation is claimed. A dispute as to the amount of such compensation having arisen, the parties undertook to arrange it by arbitration, but the defendant afterwards revoked the submission, incurring, as claimed, a liability under section 2384 of the Code of Civil Procedure for the expenses thereof.
    Rollin M. Morgan, for app’lt; E. M. Wight, for resp’t,
   O’BRIEN, J.

The defendant assails the plaintiff’s right to any compensation for the services rendered upon the grounds that he did not employ the plaintiff, that the services were voluntary, that they were of no benefit, and that the relations between the parties did not raise an implied contract of employment It is true that there was no actual agreement for compensation, but the evidence fully sustains the referee’s conclusion that the services were neither voluntary nor gratuitous, but were rendered at the request of, and were valuable to, the defendant. As said in Smith v. Railroad Co., 102 N. Y. at page 192:

“These circumstances prima facie raise an implied obligation on the part of the defendant to make compensation, and in order to rebut the implication there should be clear evidence that the services were to be gratuitous. The burden was upon the defendant to establish this defense. It is not claimed that there was an express agreement or understanding with the plaintiff that he was to serve without compensation.”

Finding, as we do, that the conclusions of the referee upon the disputed questions of fact are supported by the evidence, this case in principle is controlling. The contention that the services were unnecessary is remarkable, in the face of the view entertained by the defendant himself, which induced him to execute in plaintiff’s favor the four powers of attorney. And the claim that damage instead of benefit resulted from such services is shown by the referee to be equally without merit. As to the amount awarded, this, upon disputed testimony, was clearly within the province of the referee; and as it cannot be regarded as excessive, it should not be disturbed.

It is insisted that the referee erred in determining that the plaintiff did not render any material services before the execution and delivery of the powers of attorney. But we fail to see how the defendant was injured by this, its only bearing being upon the question whether the services rendered before the powers of attorney were delivered (for which no compensation was claimed) were the same as those thereafter rendered. Equally harmless was the error into which it is claimed the referee fell in confusing the word “commissions” with the word “ profits,” and from this deducing; the conclusion that the testimony was not accurate as to, such profits. Undoubtedly the amount of profits would have a bearing-upon the question of compensation to be paid for the services'rendered in making them, but for the reason already stated—that-the amount awarded for such services, in any aspect to be taken, of the testimony, was not excessive—the defendant cannot legally-complain.

This leaves but one or two rulings upon evidence, which maybe briefly noticed. The defendant sought to examine the plaintiff as to the amount of sales and earnings of his (plaintiff’s) business during the period he was engaged in rendering the services. In refusing to allow such examination we think the referee was-right, for the reason that it was not a question of whether the-plaintiff was benefited or injured in his own business, but whether he had performed services for the defendant which entitled him. to compensation.

Upon the second cause of action, there was no defense that the failure to arbitrate was the result of any act of the plaintiff’s. The-answer denied nothing except as to the amount, thus leaving, plaintiff to make proof of the sum expended, and his damages: connected with arbitration. The referee was therefore right in refusing to permit the introduction of a letter which was offered, and which, it is claimed, contradicted the plaintiff’s testimony that he never withdrew from the arbitration. The counsel’for the defendant asked for a letter from Mr. Goodsell to Mr. Wiley, and iff would appeared that that letter was produced, and the witness was-then asked, “What is this paper ?” to which he answered, “A letter from Mr. Goodsell.” It will therefore be seen that there was-some confusion at this.point, because the counsel was speaking off a letter from Mr. Goodsell, but the exhibit itself shows that it was! a letter purporting to be signed by Mr. Wiley. It does contain) a statement that the plaintiff withdraws his “acquiescence to thej arbitration.” But the answer of the plaintiff that he had not-withdrawn was given in response to a question of the defendant-upon a collateral matter not at issue. Conceding, therefore, that the letter sought to be introduced was one signed by the plaintiff,, we think it was properly excluded.

Without commenting further upon the numerous exceptions' and rulings, it is sufficient to say that none of them is so serious) as to justify our interference with the judgment, which' upon the| facts, the referee has rightfully rendered in favor of the plaintiff..

The judgment should therefore be affirmed, with costs.

All concur.


author: PATTERSON, J. INGRAHAM, J.

text:
    In the Matter of a Petition by William A. Street et al., as Executors, etc., of George Morgan, Deceased.

      (Supreme Court, Appellate Division, First Department,

      Filed March 20, 1896.)

    Appeal from a judgment affirming an order of the surrogate's, court fixing the assessment of such estate.

      George L. Rives, for app’lts; Jabish Holmes, Jr., and Edgar J. Levey, for resp’t.
   PATTERSON, J.

The questions in this case are the same as those in Re Whiting (decided herewith). For the reasons stated in the opinion in that case, therefore, the order appealed from should be affirmed, with costs.

WILLIAMS and O’BRIEN, JJ., concur.

INGRAHAM, J.

(dissenting). The question presented is discussed in the case of In re Whiting (decided herewith), views that I then expressed would lead to a reversal of this order. I therefore dissent from the conclusion arrived at by the court.

VAN BRUNT, P. J., concurs.


author: PATTERSON, J. VAN BRUNT, P. J.

text:
    People v. St. Nicholas Bank of New York et al., In the Matter of Darius O. Mills.

      (Supreme Court, Appellate Division, First Department,

      Filed April 10, 1896.)

    1. Landlord and tenant—Lease.
    The'agreement between the parties was held to be something more than a mere executory agreement and to amount to an executed lease.
    2. Same—'Waives.
    Parties may waive provision respecting execution of further paper.
    3. Same.
    Agreement of lessee to pay for full term did not cease to be a subsisting obligation by reason of his insolvency and the appointment of a receiver.
    4. Same—Receiver.
    Assets in receiver’s hands constitute a fund for the payment of debts, including those to mature as well as those that have become due.
    5. Same—Reletting.
    Lessor can, under provision and lease which authorizes him as agent for lessee to rent premises to new tenant, lease at lower rent and charge receiver with deficiency.
    Appeal from an order confirming the report of a referee in favor of allowing claim for‘rent.
    John M. Bowers, for app’lt; H. B. Anderson, for resp’t.
   PATTERSON, J.

This appeal is from an order of the special term confirming the report of a referee appointed under the statute (2 Rev. St. 45, §§ 19, 24, 25, as amended by Laws 1862, c. 373), to determine a controversy between the claimant, Mr. Mills, and the receiver of the St. Nicholas Bank. The referee reported in favor of the allowance of the claim, which arose out of a conceded state of facts, as follows:

Mr. Mills was the owner of certain premises in the city of New York, of a portion of which the St. Nicholas Bank became the tenant. In August, 1891, an instrument in writing was executed by both parties in the following words:

“Agreement to lease, to wit: D. 0. Mills, party of the first part) hereby agrees to lease unto the St. Nicholas Bank, party of the second part, and the said party of the second party hereby agrees to take rooms AA and AB in the ground story of the Mills Building, Broad St., Exchange Place, and Wall St., for a term of 5 years, to commence on the 1st day of May, 1892, and to end on the 1st day of May, 1897, at the yearly rent of $12,000 dollars.

“Memorandum: The lessee is to have the privilege of 5 years additional at the same terms. In the event of the occupancy of the offices prior tp May 1st, 1892, the rent up to that date will be one-half the rate per annum, as stated in letter of D. O. Mills, of July 23rd, 1891. Other conditions are embodied in said letter, a copy of which is attached hereto.

“The parties hereto agree to execute and exchange leases of said rooms, prior to the occupancy thereof; such leases to be drawn on, and this agreement being subject to all the provisions of, the blank forms in use in the Mills Building, except as modified by the above memorandum. This agreement shall bind the parties hereto, and each of their legal representatives.

“Dated, New York, August 20th, 1891.

“SAINT NICHOLAS BANK of N. Y. [L. &]

“By Arthur B. Graves, President [L. S.]

“In the presence of

“Wm. J. Gardner.”

The St. Nicholas Bank, in May, 1892, entered upon the occupation of the premises, and carried on its banking business therein until it became insolvent, which occurred in the latter part of December, 1893 ; and during all the period of its occupation it paid the rent as provided in the agreement above set forth. Mr. Grant was appointed receiver of the insolvent bank, and he continued in possession of the premises until the 1st of February, 1894, when lie vacated and removed from the same, whereupon Mr. Mills presented a claim for the balance of rent due and for other rent to become due under the agreement, which claim was rejected by the receiver. In the notice served upon the receiver, Mr. Mills claimed, a quarter’s rent, due February 1, 1894, and he also notified the, receiver that he had re-rented the premises covered by the agreement aforesaid to the German-American Bank from May 1, 1894, at a yearly rental of $9,000, and he claimed to be entitled, as against the receivership, to demand an item of indebtedness, amounting to $12,000, being the difference between the diminished! rent for the uuexpired term, to be paid by the German-Américan Bank, and the full amount for such unexpired term secured byi the agreement between him and the St. Nicholas Bank. This claim was asserted as arising under a condition contained in thq printed forms generally used by the Mills Building, and referred to in the agreement, by which condition it was provided that, in case the leased premises should be vacated or deserted, the lessor might re-enter as the agent of the lessee, and re-let the premises as such agent.

It appears, in the proofs, that of the amount falling due, under the agreement, on January 31, 1894, the receiver paid, pursuant to an order of the court, the sum of $1,000, not strictly as rent, but for his occupancy of the premises for the month of January, 1894. The referee, in his report, allowed Mr. Mills’ demand as a valid claim against the St. Nicholas Bank, and the assets in the hands of the receiver, as follows s For the balance of the quarter’s rent (after deducting the $1,000 referred to) which fell due on the 31st day of January, 1894, $2,000; for the quarter’s rent which fell due on the 30th day of April, 1894, $3,000 ; for the total rent for each year, to become due according to the terms of the said lease, for the three years remaining of that term, amounting to $12,000 a year, less $9,000 a year, the amount received and to fall due under the lease with the German-American Bank, amounting to $9,000. These three items aggregating the sum of $14,000.

It is contended by the receiver that the allowance of these several items by the referee was erroneous, and that the agreement of August 20, 1891, did not constitute a lease, executed and delivered as such, but was merely an agreement to execute a lease at a future time, and before the tenant was to enter into possession of the premises under the terms of the agreement; that the agreement was, therefore, merely executory, and that the complete relation of lessor and lessee, within the contemplation of the parties, and upon the terms stated in the agreement, was not to be constituted until a formal instrument of lease, on the blank form of lease mentioned in the agreement, was executed and interchanged between the parties. We agree with the learned referee that the instrument of August 20, 1891, is something more than a mere executory agreement. It is a distinct contract between the parties, in writing, by which Mr. Mills then presently agreed to lease, and the St. Nicholas Bank then presently agreed to become the lessee of, the premises in question, for a term named, at a price fixed, and upon conditions understood. The provision referring to the execution of a more formal lease was not necessary to the constitution of the relation of lessor and lessee between the parties, but merely pertained to the subsequent execution of an instrument in more extended form, and which should express more elaborately the terms and conditions of the contract of leasing then entered into between, and binding upon, both parties. There was not one single addition or different stipulation contemplated to be inserted in the formal or extended lease that was not by express understanding of the parties made part of the instrument of August 20, 1891; for the conditions which were printed upon the forms of lease used by Mr. Mills were not to become operative only when a further instrument was executed, but by the express provision ¡of the agreement of August 20th they were incorporated in and became part of that agreement itself, precisely in the same way as if they had been inserted in totidem verbis. The words are:

“ And this agreement being subject to all the provisions of the blank forms in use in the Mills Building, except as modified by the above memorandum.”

Giving effect to those conditions is not arbitrarily importing into the agreement something not contained therein, but is reading into it that which the parties specifically contracted should form a part of it; and so those conditions come into play as subsisting terms of the contract, binding upon and enforceable against them both, according to their tenor. It was competent for the parties to waive the provision respecting'the execution of a further paper, and they did waive it. The bank entered into the occupation of the premises under that agreement of August 20th, paid rent under it, and recognized it as all-sufficient; and, the question being one of intention of the parties, to be gathered from the whole instrument, that intention is quite obvious, and the conclusion of the referee in that regard is fully supported, and he was right in regarding the instrument as a lease. Poole v. Bentley, 12 East, 168. See, also, Pratt v. Railroad Co., 21 N. Y. 309, and Sanders v. Fruit Co., 144 N. Y. 209; 63 St. Rep. 76.

It is further claimed, on behalf of the receiver, that, from the nature of the indebtedness, it is not one that can be chargeable against the assets of the insolvent bank in the hands of the receiver. This objection,’in the particular aspect now presented, is not ponsidered by the referee in his opinion. Stating it in the language of the learned counsel for the receiver, the argument is that, assuming the agreement of August 20, 1891', to have been a lease, and even reading the blank form into it, nevertheless, the receiver was bound to reject the claim filed by Mr. Mills, except as to the $2,000, because, by Mr. Mills’ re-renting to the German-American Bank, he canceled the open, subsisting engagement, and substituted a claim for a contingent liability of the bank, which the receiver has no power to recognize. Authority to support this proposition, it is claimed, is found in Re Hevenor, 144 N. Y. 271; 63 St. Rep. 692. That was a case of a claim against an estate in the hands of an assignee under a general assignment for the benefit of creditors. The assignor was the lessee of certain premises in the city of Buffalo for a certain term of-years at an annual rental of $7,200, payable monthly in advance. The assignment was made to pay all debts and liabilities of the assignor then due or to grow due. The lease contained a provision substantially similar to that incorporated.in the agreement between this claimant and the St. Nicholas Bank, namely, that if the premises became vacant during the term because of nonpayment of rent or otherwise, the lessor might re-enter or re-let as agents of the lessee, and apply the avails thereof to the payment of the rent due under the lease. The lessors took possession, and re rented the premises at a greatly diminished rental, and presented their claim for the loss occasioned thereby, and the claim was rejected, and the rejection was upheld. The ground upon which the court of appeals! disallowed the claim of the lessors was that, by exercising then! •option to terminate the agreement to pay monthly rent, and re-enter the liability of Hevenor, the original lessee, became contingent upon the success which the lessors might meet with in re-renting the premises,—a liability which might or might not arise, and, if it did arise, could only be finally and definitely ascertained at the end of the term; and that, within the meaning and intent of the assignor, such a claim could not be regarded as one of the debts or liabilities contemplated to be paid under the deed of assignment. It was therefore upon the construction of the assignment that this ruling of the court of appeals was made, and the court said:

“ That instrument is to be followed strictly, by the assignee, in his disposition of the property. It is his guide, and furnishes the measure of his duty. The liability of the lessees was only for a possible deficiency. It did not exist at the time of the assignment, but arose subsequently.”

And it is also said that such after-accruing debts or liabilities ■could not be intended to be secured by an assignment, and, if an assignor so declared in a deed of assignment, it would be void.

But the situation of a receiver of an insolvent bank is quite different from that of an assignee for the benefit of creditors, limited in his authority and power by the terms of his deed of assignment. The receiver has no controlling directions to follow, except those of the court and the law. “The assets in his hands constitute a fund for the payment of debts of the bank, including those to mature as well as those that have become due, aud to cancel and discharge all subsisting obligations.” People v. National Trust Co. of New York, 82 N. Y. 283. The agreement of the St. Nicholas Bank to pay rent for the full term to Mr. Mills did not cease to be a subsisting obligation by reason of the bank’s insolvency and the appointment of the receiver. Had Mr. Mills not re-entered, but allowed the demised premises to remain vacant, he could have recovered all the rent as it accrued. But, instead of doing that, he availed himself of the right he had, under the agreement, to rent the premises to a new tenant, to contract with such new tenant as the agent of the bank; and by so doing he acted in the interest of the bank by diminishing its contracted indebtedness to him, and his action, in legal effect, was the same as if the bank itself had sublet the premises, and caused the amount to be paid by the subtenant to be paid to Mills, to be applied on the whole rent for which the bank was liable, leaving the balance as an outstanding indebtedness. His agreement having expressly conferred upon him the right he exercised, there is nothing left to construction, as in the case of the assignee for the benefit of creditors. Mr. Mills did not cancel the lease, nor discharge the lessee, but, within the scope of his authority as agent of the ■St. Nicholas Bank, made the new arrangement with the GrermanAmerican Bank in such a way that the indebtedness of the former bank to him became fixed at a definite minimum sum of $3,-000 a year, and he chose to regard that amount as the full measure of any loss he might sustain by reason of the abandonment •and vacation of the premises by the bank and the receiver. We think, therefore, there this is a clear distinction between the Hevenor Case and this, and that the order of the special term confirming the report of the referee was rightly made.

Order affirmed, with costs.

BARRETT, RUMSEY and WILLIAMS, JJ., concur.

VAN BRUNT, P. J.

I concur in the result of Mr. Justice PATTERSON’S opinion. I do not see, however, that there is any distinction between the case at bar and the case of In re Hevenor, 144 N. Y. 271; 63 St. Rep. 692. The assignee in the case cited was required to pay debts and liabilities now due and to grow due. What greater or other obligation rests upon the receiver of a corporation ? It is not to pay, as far as the assets which come into his hands will permit, the debts and liabilities of the corporation, due at the time of his appointment, and to become due? In the case of Hevenor, however, it seems to me that the court overlooked the fact that the obligation to pay rent continued to the end of the lease. All that the landlord did was as the agent of the lessee. He did not enter as of his original title. His entry did not terminate the lease, any more than the entry of any other person bv the permission of the lessee would have had such operation. The Hevenor Case, supra, seems to have proceeded upon the theory that the claim of the landlord under these circumstances is one created and arising subsequent to the assignment, and hence not within the terms of the assignment. Brainerd v. Dunning, 30 N. Y. 211. It seems to me that no liability is created or discharged by the re-renting by the landlord on behalf of the tenant if so permitted by the lease. It may be uncertain what will be the ultimate amount required to be paid, but the liability to pay was created when the lease was executed. The liability of an indorser upon a note is uncertain, dependent upon the ability of the maker to pay; and yet such liabilities have been held to be properly included in the provision of an assignment. How much more certain is the liability of a lessee who has covenanted to pay rents, who is the primary debtor and whose debt is reduced by the rent received by his agent on his behalf? How would the landlord proceed to enforce his' claim for deficiency ? Would he not sue upon the lease, setting aside the covenant to pay rent as his cause of action ? He could1 proceed upon no other theory, and would recover upon the covenant in the lease.

In the case of a note to which collaterals have been attached, the holder of the note, upon its not being paid, would bring his action upon the note, crediting any amount he had received upon the collaterals. So, in the case of a lease, the action would be upon the lease, the credits being the amount of rent received, from the renting of the premises on behalf of the lessee; the liability being one created by the lease. It is to be observed that-the words “ debts due” do not necessarily mean debts which are presently payable, but include those which mature in the future. Leggett v. Bank, 24 N. Y. 283. It seems to me, therefore, that in the case at bar there was an existing obligation to pay a sum certain, subject, however, to reduction by the amount which the agent of the leesee should collect on his behalf.

The order appealed from should be affirmed.


author: PRATT, J. BARTLETT, J.

text:
    Daniel Robert, App'lt, v. Board of Supervisors of Kings County et al., Resp'ts.

      (Supreme Court, Appellate Division, Second, Department,

      Filed April 17, 1896.)

    1. Supervisors—Delegation of authority.
    Board of supervisors are authorized to legislate, and, when this power is exercised, the laws passed by them, within their powers, have the same force and effect as though passed by the legislature.
    3. Same—More than one subject.
    Inhibition, of § 16, article 3 of Constitution is limited to acts of legislature.
    3. Same—Order of confirmation.
    Order of confirmation of reports of award and assessments has the effect of a judgment and cannot be assailed collaterally.
    Appeal from a judgment in favor of defendants.
    Henry J. Robert, for pl’ff; James C. Church, for def’ts.
   PRATT, J.

This is an appeal from a judgment dismissing the plaintiff’s complaint. The action was brought to declare invalid certain assessments levied upon plaintiff’s property for the opening and grading of certain streets in Hew Utretcht, and also seeking to enjoin the defendants, as supervisors, from selling such property on account of nonpayment of such assessments. The plaintiff, so far as appears, lay by while the improvement was being made, and his property brought into the market, and made available for sale, until asked to pay his share of the expense of such improvement, when he seeks to nullify the assessment, and throw the cost upon the public.

The facts are few and simple. By Const., art. 3, § 23, it was provided that the legislature might, by general laws, confer upon boards of supervisors such powers of local legislation as it might deem proper. In pursuance of this authority the legislature, by chapter 554 of the Laws of 1881, as amended by chapter 289 of the Laws of 1892, granted to the board of supervisors of the county of Kings powers of local legislation in regard to the opening, grading, construction and improvement of streets and highways in the county towns of Kings county. Under this act the board of ¡supervisors of the county of Kings-duly passed a resolution providing for the opening, grading and construction of the streets in; question, and for the levying of assessments for the same, and collection thereof, and the sale by the supervisors for nonpayment, Commissioners were duly appointed, strictly in accordance with said resolution, to open the streets in question. They made their report of awards and assessments which the respective pieces of real estate should bear, which said report was duly confirmed by the supreme court. Grading commissioners were then duly appointed, who made their repoft, which was also confirmed by the supreme court.

Upon what ground there was any delegation of the authority of the board of supervisors I fail to comprehend. The board of supervisors were authorized to legislate, and, when this power was exercised, the laws passed by them, within their powers, had the same force and effect as if passed by the legislature. The case cited by the appellant, Thompson v. Schermerhorn, 6 N. Y. 92, is not in point. It was held in that case that the statute authorizing the common council of Schenectady to make by-laws and ordidances “to pave, pitch and level streets within such time and. in such manner as they might prescribe,” did not authorize the common council to delegate to a city officer or committee authority to determine the manner in which such improvement should be made. It was the common council alone, under the statute, that was authorized to determine the manner in which it should be made. In this case it was the power of legislation that was delegated to the board of supervisors, and not simply an administrative power. The same criticism applies to the other cases cited. This subject of the delegation of power to legislate to the board of supervisors, in pursuance of tlie powers authorized by the constitution, has been repeatedly before the court of appeals. In re Woolsey, 95 N. Y. 135; In re Church, 92 id. 5; Hubbard v. Sadler, 104 id. 223-228; 5 St. Rep. 592. It is clear, therefore, that there is no unlawful delegation of power'by the board of supervisors.

The same statement applies to the provision of the resolution which provides for the appointment of grading commissioners. It has been the practice for many years for the legislature to pass similar laws authorizing the appointment of local officers by some other local official. Astor v. Mayor, etc., 62 N. Y. 580. In the case of Van Brunt v. Ferguson (special term case), Judge Cullen wrote as follows:

“ The act confers upon boards of supervisors, in express terms, powers not only of administration but of legislation; and the ■resolution here characterized is one of legislation, within the limits expressed by the general statutes of the state. Its powers of legislation are as broad as those of the legislature itself formerly were ; and unless the legislature could not have passed an act conferring upon the town supervisors the appointment of grading commissioners, I cannot see that this resolution is invalid. “

Hubbard v. Sadler, 104 N. Y. 223-228; 5 St. Rep. 592; People ex rel. Morrill v. Board of Sup’rs of Queens Co., 112 N. Y. 585; 21 St. Rep. 771.

It does not seem, therefore, that the right of the board of supervisors to pass this act, and that it should be treated as an act of the legislature, can be questioned.

The point, raised by appellant, that no notice was given the ^plaintiff, is answered by the fact that the resolution provided for ¡a legal notice, which was strictly complied with. See In re Union El. R. Co. of Brooklyn, 112 N. Y. 61; 20 St. Rep. 498.

The objection that the resolution embraced more than one street, and therefore fell within the inhibition of article 3, § 16, of the constitution, is without merit. That restriction is limited to acts of the legislature. Const. art. 3, §§ 14-16; People v. McCann, 16 N. Y. 58.

The objection that the resolution, referring to the act of 1875, referred to an act that had been repealed, is answered by chapter 458, Laws 1894.

Many of the objections raised by the appellant are answered by the statement that the order of confirmation of these reports has the effect of a judgment, and cannot be assailed collaterally. By section 11 of resolution No. 6, folio 91, it is provided that the order of confirmation shall have the effect of a judgment. Upon this point there are a number of authorities. See In re Department of Public Parks, 73 N. Y. 560, 567; In re Arnold, 60 N. Y. 26, 28; In re Union El. R. Co. of Brooklyn, 112 N.Y. 78; 20 St. Rep. 498. See, also, Dolan v. Mayor, etc., 62 N. Y. 472. See, also, Methodist Episcopal Church v. Mayor, etc., 55 How. Prac. 57.

In the last-named case the court, in the opinion, said:

“We do not think that a person owning land within the limits liable to be assessed, who has allowed the confirmation of the report to be made without objection, should, after the lapse of years and when it is too late to make any readjustment of the expense, be allowed by action to question the validity of the proceedings.”

It seems clear that the judgment below was right, and it must be affirmed, with costs.

BARTLETT, J.

I concur in the result, but dissent from the proposition that the board of supervisors could legislate, so as to give the order of confirmation the effect of a judgment.

CULLEN and HATCH, JJ., concur with BARTLETT, J.


author: FORBES, J.

text:
    Adolph Fleischman, Pl'ff, v. Barbara Yagel, Def't.

      (Supreme Court, Otsego Special Term,

      Filed April 3, 1896.)

    1. Hew tkial—Costs.
    The words, “costs after notice of trial,” upon granting of motion for new trial upon a case and exceptions, mean “costs from and after notice or trial,” excluding that item and commencing with first costs thereaftuf accruing.

      2. SATUT3.
    In such case, the allowance oí costs for noticing cause. for trial, and for term fees, is improper; but costs before argument, and for argument, of motion for new trial on case and exceptions, and for amendments to-case, are improperly allowed. " " "
    3. Same.
    Where an action is pending and undetermined for the collection of costs-of appeal to general term and on motion to strike cause from general term calendar, together with disbursements of general term, these items should be stricken out of bill of costs and disallowed by clerk upon new taxation.
    Appeal by both parties from a taxation of costs made by the-clerk of Otsego county.
    W. J. Palmer, for pl’ff; Wagner & Fisher, for deft.
   FORBES, J.

— This is a motion for a new taxation of costs.. An appeal to this court is taken by. the attorneys of each of the parties, and it is claimed by each that the taxation made by the clerk of Otsego .county is erroneous. The plaintiff recovered a verdict of $228 damages against the defendant, at the Otsego circuit, on the 1st day of March, 1892. At the same term a motion was made by the defendant’s attorneys for a new trial upon the minutes. That motion was entertained, to be heard upon a case and exceptions. The plaintiff was permitted to tax his costs, enter his judgment, and then a stay was granted, to make a case and exceptions. The defendant, however, appealed alone from that judgment. Upon a motion on the part of the plaintiff at the general term, there being nothing for review except the judgment roll, the judgment affirmed, with costs, and that order was duly entered and docketed in the clerk’s office for the county of Otsego.1 A motion was thereafter made, on the part of the defendant, for leave to make and served a case and exceptions. This motion was granted, upon certain conditions, which were complied with.! The proposed case and exceptions were made, amendments were proposed thereto, and the case was finally settled, and brought on for a hearing at chambers before the judge who held the circuit. A new trial was granted to the defendant “ upon the pay-j ment of the costs and disbursements of said action after notice ofi trial,” and such costs and disbursements were ordered taxed by the clerk of Otsego county. On the 14th day of February, 1896;' the clerk taxed said costs at the sum of .$174.04, From that' taxation these appeals were taken.

The clerk allowed all of the items of cost presented by the plaintiff, except the items of the motion for a new trial upon the case and exceptions, before argument, $20; for argument, $40. In the bill of costs taxed by the clerk are the following items:

“Costs after and before trial, $15. Motion costs awarded January 31, 1895, $10. Term fees, June, 1893, and October, 1893,' $20. Appeal to the general term, before argument $20; for argument, $40. Costs of the motion to strike the case from the general term calendar, $10.”

Upon the judgment for costs at the general term an action was commenced by the plaintiff to set aside certain conveyances of keal estate made by the defendant, and that action is still undetermined.

The question presented upon this appeal is this: To what costs is the plaintiff entitled upon the granting of the motion for a new trial, upon the case and exceptions ? It would seem to the casual observer that that question had been fully settled, under the decisions in this state, but I find no case reported specifically pointing out what those items of cost should be. The courts seem to have settled the proposition that, as a condition, upon granting a motion fora new trial upon the case and exceptions, or upon the minutes when the new trial rests in the discretion of the court, as against the weight of evidence, for a mistake of the jury, or when substantial justice requires a new trial to be granted, the party receiving the favor must pay all of the costs and disbursements after notice of trial. Bailey v. Park, 5 Hun, 41; Kelly v. Frazier, 27 Hun, 314; Mahar v. Simmons, 47 Hun, 479; 14 St. Rep. 443; O’Brien v. Long, 49 Hun, 80; 17 St. Rep. 510; Sewell v. Lathrop, 67 Hun, 651; 51 St. Rep. 942; Young v. Stone, 77 Hun, 395; 60 St. Rep. 419; Peck v. F., J. & G. Railroad Co., 25 St. Rep. 95; O’Shea v. McLear 16 St. Rep. 482. This condition is based upon the theory that the party against whom the favor is granted shall be fully restored to all of his rights as they existed at the circuit, before the trial. O’Shea v. McLear, 16 St. Rep. 482; Brown v. Foster, 1 App. Div. 578. This theory presupposes the facts that the cause is at issue; that it has been noticed for trial; placed upon the calendar at the circuit; that witnesses have been subpoenaed to try the question of fact; and that the cause is ready for trial when reached upon the calendar. Upon this assumption, what costs are to be paid, as -a condition for granting a new trial? 'The order should show the grounds upon which a new trial is granted. Sup. Ct. Rule 31. In case the order does not show the grounds it will be presumed that the new trial was granted because the verdict was against the weight of evidence, or that, in the opinion of the trial court, substantial justice will be promoted thereby. Young v. Stone, 77 Hun, 395; 60 St. Rep. 419; Glassford v. Lewis, 82 Hun, 46; 63 St. Rep. 484; Grening v. Malcom, 83 Hun, 9. And unless there has been an abuse of discretion, that order will be sustained. Authorities, supra.

The order in question provides for the “payment by the defendant of the costs and disbursements of said action, after notice of trial.” Upon this appeal no objection is raised to the item of $15 after notice of trial; and the appeal, on the part of the defendant admits that item as correctly taxed, and it must therefore be allowed. Cuyler v. Coates, 10 How. Prac. 141; Toll v. Thomas, 15 How. Prac. 315; People v. Lewis, 28 How. Prac. 159; affirmed, Id. 470. As an original proposition it is extremely doubtful whether that item should be covered by an order granting a new trial. Some of the earlier authorities, however, hold the doctrine otherwise. Mitchell v. Westervelt, 6 How. Prac. 265; affirmed, Id. 311, note; Dewey v. Stewart, Id. 465; Keil v. Rice, 24 How. Prac. 228. Noticing a cause for trial jis a necessary preliminary step, and this step must be taken by each of the parties desiring to bring the case on for trial at the circuit. That item of costs was earned when the case was first noticed for trial at the June term in -1893. No additional right to-this item of costs after that time, down to the time of the trial of the cause at the circuit. And, had that item been objected to, this court would be inclined to strike it out, for the reason that the rights of the parties have not been changed since that item of costs occurred. The words “after notice of trial” must be construed to mean “from and after notice of trial”; excluding that, item, and commencing with the first step thereafter taken',—the first costs thereafter accruing,—being the cost of the trial. O’Shea v. McLear, 16 St. Rep. 482; Fearly v. Bull, 71 Hun, 402; 54 St. Rep. 442; Brown v. Foster, 1 App. Div. 578, 37 N. Y. Supp. 502. The same position must be adhered to with reference to the term-fees of June and October, 1893, and those terms must be stricken out. Sewell v. Lathrop, 67 Hun, 651; 51 St. Rep. 942, and cases there cited. The case of Young v. Stone, supra, seems to have left the question still in doubt. The costs of the motion of January 31, 1895, were determined by the order therein entered; and they became in effect, collectible, by virtue of that order, and may be enforced under it. Hazard v. Wilson, 3 Abb. N. C. 50; Lyons v. Murat, 54 How. Prac. 23. Section 779, Code Civ. Proc., stays all proceedings on the part of the defendant until those costs-are paid, unless waived by the plaintiff. The item of $10 for making and serving amendments to the case must be allowed. Hossley v. Colerick, 3 How. Prac. (N. S.) 169. The item of $20 before argument, and the item of $40, for argument, fora new trial on a case and exceptions, are fairly within the purview of the order, and must be allowed, upon the theory that the plaintiff cannot be placed in the same position as that which he occupied at-the trial, without the payment of these items. The motion for a new trial was not heard upon the minutes, but upon a case and exceptions ordered to be made, served, and settled, and those-costs are the same as the costs of the general term. Selover v. Wisner, 37 How. Prac. 176; Stitt v. Rowley, Id. 179; Rousso v. Vontrin, 41 How. Prac. 8: Pilgrim v. Donnelly, 1 How. Prac. (N. S.) 160; Code Civ. Proc. § 3251, subds. 3, 4. The items of cost upon appeal to the general term from the judgment cannot be-allowed. ff'hey are already fixed by the judgment not appealed-from, and an action is pending to enforce them. The same view must be taken of-the item of $10 on the motion to strike the-cause from the general term calendar. Since an action is pending and undetermined for the collection of these items of costs, together with the disbursments -of the general term, all items connected with or growing out of that appeal must be stricken from the bill of costs herein, and disallowed by the clerk, upon a new taxation.

If I am correct in the conclusions at which I have arrived, a new taxation must be had. An order to that effect is granted, directing the clerk of Otsego county to tax the items appealed from, by each of the parties, in accordance with this opinion, without motion costs herein.


author: HERRICK, J.

text:
    James R. Bouton, App'lt, v. Sarah Ann Hill, Resp't.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14,1896.)

    1. Limitation—Payment.
    The last clause of § 359 of the Code leaves the court to determine what, constitutes a part payment and its effect, and leaves the rules of evidence-as to the effect of such payament or part payment as they were at common law.
    2. Same.
    The reason that payment is held to remove the bar of the statute is, that, it is an act acknowledging liability for the whole demand, and the law implies a promise to pay what is left of it, which promise dates from the time; of part payment.
    3. Same.
    Where a note is given with the understanding that, if the amount named in it is more than the true indebtedness of the maker, it shall he made right, and subsequently it was found that the payee was entitled to less than face of note, and the excess was, by direction of maker, indorsed on, note, such indorsement operates as payment at time it was made and relieves from statutory limitations.
    Appeal from a judgment in favor of defendant, and from am order denying a motion fora new trial.
    Soop & Andrus (I. H. Maynard, of counsel), for app’lt; James R. Baumes, for resp’t.
   HERRICK, J.

This is an appeal by the plaintiff from a judgment rendered against him and in favor of the defendant, and from; an order denying a motion for a new trial, made upon the minutes-of the court. The action is upon a note for $800, dated March-15, 1883, signed by the defendant, and payable to the order of the-plaintiff. The defense is the statute of limitations, and usury. The evidence given upon the trial was insufficient to establish-usury, and the case turned upon the defense of the statute of limitations. It is conceded that the action was commenced December 24, 1892. At the close of the evidence the plaintiff asked the-court to direct a verdict for the plaintiff upon the ground that anindorsement thereon of $117.50, made on or about the 15th of December, 1890, but entered on the note as having been made March 15, 1883, was such a payment, indorsement, and reissuing of the-note as to take it out of the statute of limitations ; and that such indorsement in 1890 was both a reissuing of the note, and a payment upon it. The court denied the motion. There was evidenceoE another ind'orsement upon the note, of $20, which plaintiff alleged had been paid upon the note by the defendant, and which, if made when it purported to be, would take the note out of the statute. The defendant denied having made such payment, or authorized it to be made on her behalf. That question was submitted to the jury, who found in favor of the defendant; and there was evidence to sustain their finding that the defendant did not make such payment of $20, or authorize it to be made, and their finding in that respect will not be disturbed.

The order denying the motion for a new trial, made upon the minutes, bring up for review the refusal of the court to direct a verdict for the plaintiff upon the ground that the indorsement of $117.50 made on said note on the 15th of December, 1890, was, in effect, a payment thereon at that time, which removed the note from the bar of the statute. We will therefore consider what the effect of that transaction was.

The note in question appears to have been in final settlement of transactions between the plaintiff and the defendant’s husband, in which the plaintiff held a note of the defendant’s husband, which had originally been for the sum of $2,000, and upon which the plaintiff claimed there was still $900 due. The defendant’s version of the transaction when the note in question here was given is this:

“Mr. Bouton had Mr. Hill’s note with him at the time, and we figured from it. He figured from it, and I did; and we didn’t agree in our figures at all. I could not make it nearly as much as he did,—the amount that was due; but finally Mr. Hill came in from the barn, and I told him how much Mr: Bouton claimed on it, and he said there was no such amount due, and not to sign it. " * * After he went„out, Mr. Bouton said he would make it $800, and I told him I thought that wasn’t right, but he was sure it was; and he said, ‘Sign that,’ and him and his wife were coming out, and, if it wasn’t right, he would then make it right, and I might get others to figure it. * * * I signed the $800 note on those terms. * * * I always said I shouldn’t pay anything on the note until it was made right.”

Mr. Andrus, a, witness called for the plaintiff, says that he was at the office of the defendant’s attorney when the question arose as to the true amount that was due between the parties; that they handed him the paper, to figure up the amount and ascertain what the true amount of the note ought to have been when it was given; that all the parties were then present,—the plaintiff, defendant, and her husband; and that he found that a mistake had been made of $117.50.

“There was quite a little conversation as to what should be done with the $117.50, and Mrs. Hill claimed that she would be deprived of the advantage of the interest on it, if indorsed on that date, and then I suggested that we indorse the amount as of the date of the note, and that it would even itself, and I did so. They consented to it, and Mrs. Hill did. She was present, and I had the note there, and indorsed it in the presence of all the parties. The indorsement was actually made about the 15th of December, 1890.”

The indorsement spoken of reads as follows: “March 15th 1888, p’d hereon $117.50.” The defendant says that the indorsement “was done substantially as Mr. Andrus states, I think.” So that the facts in relation to this transaction are undisputed, and the only question is as to their effect. Section 395 of the Code of Civil Procedure provides that:.

“An acknowledgment or promise, contained in a writing signed by the party to be charged thereby, is the only competent evidenoe of a new or continuing contract whereby to take a case out •of the operation of this title. But this section does not alter the effect of a payment of the principal or interest.”

Before the enactment of this provision of the Code, and the similar statutes that preceded it, oral acknowledgments of the continued existence of a debt were sufficient to take a case out of the operation of the statute of limitations. The natural •effect of that was to give rise to misconstruction of the words used by debtors in speaking of claims against them, and to multiply perjuries. And the reason for the enactment of the statute was to prevent perjuries, and to prevent the bar of the statute being raised except when the debtor had given unequivocal evidence of the continued existence of the debt, and of Ms intention to pay it. A writing signed by him would be such evidence. The reason that payment or part payment was •excepted from the effect of the statute was that payment or part payment was considered such an unequivocal act of acknowledgment of the debt, and promise to pay the remainder, as not to be subject to misconstruction, or prolific of perjury, the act of payment speaking for itself. The last clause of section 395 leaves the courts to determine what constitutes a part payment, and it leaves the rules of evidence as to the effect of such payment or part payment as they were at common law. Bank v. Ballou, 49 N. Y. 155 ; Mills v. Davis, 113 id. 243; 22 St. Rep. 580; Murdock v. Waterman, 145 N. Y. 55-62; 64 St. Rep. 520. Part payment of a demand has, from time immemorial, been held to remove the bar of the statute, and set it running again from the time of such payment.

“The effect of a part payment, in taking a case out of the -operation of the statute of limitations, or, rather, in enlarging the time during which an action may be brought, is not derived from any statutory provision, but results from the decisions of the courts, and depends wholly upon the reason of those decisions. The reason is that a part payment made on account of a claim is an acknowledgment by the debtor of his ability for the whole demand, and from this acknowledgment a new promise on his part to pay the residue is implied. The undertaking of the debtor, as to the unpaid part, of the debt, is thus, by a legal presumption, renewed, and made to date from the time of the part payment.” Harper v. Fairley, 53 N. Y. 442-444.

See, also, Crow v. Gleason, 141 N. Y. 489-493; 57 St. Rep. 583; Adams v. Olin, 140 N. Y. 150-160; 55 St. Rep. 257.

The efficacy of a payment to‘avert the effect of the statute as a bar resides in the conscious and voluntary act of the debtor, explainable only as a recognition and confession of the existing liability. Blair v. Lynch, 105 N. Y. 636-638; 8 St. Rep. 49. In the case of Murdock v. Waterman, 145 N. Y. 55-62; 64 St. Rep. 520, the court said:

“The effect of a part payment, in any case, and against whom it shall operate, is to be determined by the principles established by the decisions of the court applicable to the subject. The question has most frequently arisen in actions of assumpsit brought upon promises for the payment of money, against the party to the contract, in which the statute of limitations has-been interposed as a defense; and the general principle has been asserted, with great uniformity, that a part payment, available to take the case out of ttie statute, must have been made by the-debtor, or his authorized agent, or, if made originally without authority, it must have been subsequently adopted by him as his act- This view is founded upon the reason upon which a part payment is held to renew or continue the debt. Part payment of a debt by a debtor constitutes an admission, by the person obligated to pay, of his liabilffy for the whole debt upon which the partial payment is made, and justifies an inference of a new promise, made at that time, to pay the portion remaining unpaid. The courts, acting upon his admission, and inferring therefrom a new promise', treat the contract as renewed from the time of the part payment, and the payment as giving a fresh start to the running of the statute.”

It will be seen, from the cases cited, that the reason that payment is held to remove the bar of the statute is that it'is an act acknowledging liability for the whole demand, and the law implies a promise to pay what is left of it, the promise so implied dating from the'time of the part payment. What, then, is a payment that will take the case out of the operation of the statute ?' In its restricted sense, “payment ” has been defined to be the discharge in money of a sum due. In more liberal and general terms, it may be defined as anything which the creditor accepts, or, in law, should accept, in satisfaction and discharge .of the debt-due him. The performance of services, if accepted, or agreed to-be accepted in payment, is sufficient. A transfer of credit by consent of parties is equivalent to payment. Bank v. Burkhardt, 100 U. S. 686-688. An agreement that a debt due, or about to-become due, shall be deemed a payment on a debt due from the-debtor, operates as a payment and satisfaction. Davis v. Spencer, 24 N. Y. 386 ; Holcomb v. Campbell, 118 id. 46-54; 27 St. Rep. 848. But in determining what is a payment, within the meaning of the statute and the decisions of the courts, sufficient to take a demand out of the operation of the statute of limitations, the courts have been more liberal. The delivery by a debtor to a creditor of the note of a third person, as collateral to the paymetn of his debt, is equally significant, as an acknowledgement by the-debtor of his liability for the whole demand, as would be an absolute payment of a like amount, and is within the reason of the-rule which makes such an acknowledgment of a liability, from which a new promise to pay the residue is implied, sufficient to-take the case out of the statute. The act is of the same character, and equally unequivocal, as a payment in fact. The effect of the transaction is the same whether the collateral security or conditional payment is made available, and result in the payment of part of the debt, or not The statute of limitations is answered from the time of the delivery of the collateral security. Smith v. Ryan, 66 N. Y. 352. So the delivery to the creditor of a policy of life insurance, or of the renewal certificate of such a policy, as collateral security for the payment of a debt, is sufficient to constitute a renewal of the debt, and the statute will begin to run from the time of such delivery. The theory upon which the delivery of the policy saves the operation of the statute is that the debtor, by such act, acknowledges the debt, and evinces a willingness to pay. Miller v. Magee, 17 St. Rep. 547. Mow, in the case before us we have a note given with the understanding that, if the amount named in it is more than the true indebtedness of the maker, it shall be made right. It appears that in, truth the holder of the note is entitled to receive $117.50 less than the face of the note. If, during the lifetime of the note, the plaintiff had brought suit against the defendant, upon it, for the face thereof, the defendant could have pleaded a partial failure of consideration, and had the amount of $117.50 deducted from it, As between the parties to a note, a defense of a total or partial failure of consideration is good. Sawyer v. Chambers, 44 Barb. 42. A partial failure is a defense pro tanto. McKnight v. Devlin, 52 N. Y. 399. If the note had passed .into the hands of a third person, who had brought his action upon it against the defendant, who had thereby been compelled to pay the full amount specified in it, I do not think there is any question but that she could have recovered from the plaintiff the difference between the face of the note and the actual indebtedness to the plaintiff, upon .showing the agreement between them at the inception of the note. The difference, if any, that should be found to exist between the face of the note and the actual amount due the plaintiff being something that the defendant could assert as a defense, pro tanto, to a suit upon the note brought against her by the plaintiff or which she could recover from him in the event of such note’s going into the hands of a third person, and she being compelled to pay the whole amount thereof, such difference constituted a claim or credit in favor of the defendant against the plaintiff,—something which could be applied in partial reduction, extinguishment, or payment of the note. And it was so applied by consent of parties. The indorsement was not made by the plaintiff, but by a third party, with the consent, or, it may rather be said, by the instruction, of the defendant. And it was done under such circumstances as to show an acknowledgment of'the balance of the note, and an intention to pay it. Her claim that she would be deprived of the benefit of the interest upon it, if it was indorsed as of that date, emphasizes her acknowledgment or the balance of the note, and •of her intention to pajn The whole transaction brings it clearly within the reason of the decisions I have cited, for allowing .payment to prevent the operation of the statute; and within the .meaning of the statute, and the principle of the cases hereinbefore referred to, I think it must be held to be a payment upon the note, made when the indorsement was in fact placed on the ¡note. The evidence by which the facts I have recited were established was not objected to. The facts were undisputed. The ¡Statute of limitations had, by reason of the circumstances I have detailed, no application to the case, and there was nothing for the jury to pass upo^ and the court should have directed a verdict. Miller v. Talcott, 54 N. Y. 114-119. If the court had held the transaction of December 15, 1890, a payment, as herein indicated, the question as to the indorsement of $50, January 30, 1886, and of $20, December 30, 1886, would have been of no consequence; the bar of the statute being removed by the transaction of December 15, 1890.

The judgment should be reversed, and a new trial granted; costs to abide the event.

PARKER, P. J., and MERWIN and LANDON, JJ., concur; PUTNAM, J., concurs in result.


author: ADAMS, J.

text:
    Flour City National Bank of Rochester, App'lt, v. George Miller, Resp't.

      (Supreme Court, Appellate Division, Fourth Department,

      Filed April, 1896.)

    1. Trial—Question for jury.
    Where the entire evidence, when taken in connection with what is contained in the complaint, is of such a character as to permit different inferences to be drawn therefrom, a question of fact is presented, which either party is entitled to have submitted to the jury.
    2. Usury—Accommodation—Indorsement.
    The payment of a sum of money in excess of the legal rate of interest, to an accommodation indorser, as a compensation for the loan of his credit, does not affect the note with usury, in the hands of one to whom the maker subsequently negotiated it for value.
    8. Same—Question for jury.
    Where the defendant made an application to a third party, who had an arrangement with the plaintiff by which it was to discount all notes bearing his indorsement, for the benefit of the maker, for a loan of $50 for. three months, and such third party offered to make the loan or to loan Ins 'credit for §10, and a note for $60, signed by the defendant, payable to and indorsed by said third party was discounted by the plaintiff and the proceeds, less the legal discount, placed to defendant’s credit which was immediately withdrawn on his discount check, the question whether the-transaction was a cover for usury, to plaintiff’s knowledge, is one for the1 jurv
    Appeal from a judgment of the county court, reversing a judg-j menb of the municipal court of Rochester in favor of plaintiff.
    Hiram R. Wood, for app’lt; Frederick A. Mann, for resp’t.
   ADAMS, J.

This is an action brought to recover the amount of two promissory notes, inception following circumstances, viz.: Upon the 19th day of August, 1893, the defendant applied to one David J. Cushman (who, it: appears, is the nominal agent of his wife, S. J. Cushman) for th& loan of $50, and asked what he would charge for the use of that, sum for three months ; and. as the defendant testifies, the answer was, “ Ten dollars.” The defendant demurred somewhat to this charge, as excessive, but his necessities seem to have been such that he was forced to yield to the demand of the agent; and a ii'ote was thereupon drawn up, and signed by the defendant, for the sum of $60. This note was made payable to the order of S. J. Cushman, on or before November 20th, at the Union Bank, and was subsequently indorsed by the payee. There was a sharp conflict between the evidence of the defendant and that of D. J. Cushman as to what occurred at the time the note was executed ; the former insisting that lie was applying for, and that he actually received, a loan of money, while Cushman testified, with equal insistence, that he declined to make a loan, but offered to sell his wife’s credit, for a specified consideration. Without dwelling upon this feature of the case, which is almost invariably present in transactions of this character, it is perhaps sufficient to say that, whatever may have been the actual relation of Cushman or his wife to the transaction, the former seems to have been careful to obtain from the defendant the customary affidavit and chattel mortgage, containing recitals which, upon their face, appear to corroborate his version of the agreement between the parties. It also appears that this note was executed on Saturday afternoon', at which time the bank at which it was made payable was closed; and, the defendant being in immediate need of money, Cushman advanced him the sum of $25, which he says was in the nature of a temporary loan, and for which he very considerately charged nothing in addition to the $10. Upon the following Monday the defendant went up with Cushman to the Union Bank, where the note was discounted. The avails, less the legal discount, were placed to the defendant’s credit, and immediately withdrawn, upon his discount check; and thereupon Cushman retained the $25 advanced, and his charge of $10 for his wife’s indorsement, and handed over the balance to the defendant, who actually received the sum of $49.60, as the net avails of his note of $60. When this note matured the defendant was unable to meet it, and it was renewed, with Mrs. Cushman’s indorsement upon the renewal, and this occurred several times, until finally the note first mentioned in the complaint herein was given, the defendant paying $10 in addition to the legal rate of interest upon each renewal; the only variation being that from time to time the note was increased in amount, so as to cover the expenses of the renewal. The second note in suit is likewise one of a series of renewals of a note the same in amount as the first one, and given under precisely the same circumstances, save that it was made payable at the plaintiff bank, and nothing was paid the defendant thereon until it was taken to the bank.

The defense to these notes is that they are void for usury, and the only question in the case is whether the evidence is such that a jury might.be permitted to infer therefrom either that the notes had their inception prior to the time they came into the plaintiff’s possession, or that the transaction which resulted in their execution was a mere cover for usury, to enable the indorser to obtain more than the legal rate of interest. It is undoubtedly well settled that the payment of a sum of money in excess of the legal rate of interest, to an accommodation indorser, as a compensation for the loan of .his credit, does not affect the note with usury, in the hands of one to whom the maker subsequently negotiated it for value, inasmuch as it cannot be said that such a note ever had any legal inception in the hands of the accommodation indorser. Van Duzer v. Howe, 21 N. Y. 531; Bank v. Betts, 37 id. 356; Commercial Bank v. Cameron, 79 Hun, 63; 61 St. Rep. 402. And, if the evidence in this case were capable of no other construction than the one contended for»bv the plaintiff, the trial court would have been fully justified in withholding it from the consideration of the jury. But we are inclined to think that the entire evidence, when taken in connection with what is contained in the complaint, is of such a character as to permit different inferences to be drawn therefrom, and consequently that a question of fact was presented, which the defendant was entitled to have submitted to the jury. The facts appearing in the record in this case reveal a carefully devised scheme, by means of which the most flagrant extortion might be practiced upon a borrower in straitened circumstances, without rendering the lender amenable to the consequences which the law .denounces against usury; and nowhere during the entire transaction is more adroitness evidenced than in the substitution of a new note in place of the original one, and having the same discounted by the plaintiff, instead of the Hnion Bank, in order that it might not be subject to the contention that the loan of the $25 by the payee was some evidence of an inception of the original obligation. It would not, of course, be for a moment contended that these notes would possess any validity if, as a matter of fact, the originals had inception prior to their coming into the plaintiff’s possession, and the effort upon the part of the defendant has been to point to something in the record which might properly be regarded as evidence of this fact In this connection it may be observed that considerable stress is laid upon the allegation of the complaint that the notes were first “delivered” to the payee, and it is claimed that this expression is equivalent to an admission of inception; but, whatever foundation may exist for this contention, we are disposed to rest our decision upon a different ground. It appears from the evidence of the plaintiff’s cashier, as well as from that of its witness Cushman, that these notes were not discounted in the usual course of business, but that an arrangement existed between the bank and Mrs. Cushman by which the former was to discount all notes bearing her indorsement, for the benefit of the maker, and that the proceeds of the notes thus discounted were to be drawn by what are termed “discount checks,” signed by the maker. It also appears that Mrs. Cushman’s business was that of lending of money and indorsing paper, and that she had furnished the plaintiff with collateral security to indemnify it for discounting-paper bearing her indorsement, all of which might fairly warrant the inference that the bank was not only cognizant of the precise nature of her business, but that it derived some profit therefrom; and such inference might also be somewhat strengthened by the fact that Mrs. Cushman’s indorsement apparently possessed no inherent credit at the bank, inasmuch as additional security was re■quired. In the case of Bank v. Cameron, supra, the evidence was to the effect that the note in suit was discounted by the bank in good faith, and without any knowledge of any arrangement in reference thereto between the maker and the indorser. The very essential element is absent from the case under consideration. Not ■only is this so, but, as has been shown, the jury would have been warranted in concluding that the plaintiff knew, or had the means ■of knowing, the circumstances attending the giving of these notes, and that with this knowledge it assumed whatever risk attended their discount, relying upon the collateral security which it held for its indemnity. Briefly epitomizing, therefore, the case which is here presented, we are of the opinion that it should have been left to the jury to say whether or not the transaction attending the giving of these notes was a mere cover for usury, of which the plaintiff either had actual knowledge, or ample means of informing itself, before discounting the same; and, this being the case, ■the judgment of the county court should be affirmed.

Judgment affirmed, with costs.

All concur.