author: Vann, J.

text:
    The Walden National Bank, Resp’t, v. Caleb Birch et al., App’lts.

      (Court of Appeals, Second Division,

      Filed December 1, 1891.)

    1. Principal and Surety—Liability op surety on bond on bank CASHIER.
    One T. to secure his notes due plaintiffs assigned thirty shares of plaintiff’s stock to R., plaintiff’s cashier, which the latter really took in trust for the hank and endorsed the notes simply to deceive the IT, S. Government and avoid the statute which forbids a bank taking its own stock as security. Ten of the shares were sold and applied to the indebtedness and R. converted the balance to his own use. In an action upon the R’s official bond signed by defendants, Held, that defendants could not take advantage of the fact that the transfer to R. was in violation of the U. S. Revised Statutes because the act imposed no penalty, and the prohibition of the statute could be urged against the validity of the transaction only by the government.
    2. Same.
    When R. appropriated the stock to his own use, although he may not have been guilty under the circumstances of strict conversion, he was guilty of misappropriating the property of the bank that had been entrusted to him as cashier, in violation of his duty to the plaintiff and of the bond given by the defendants in his behalf.
    3. Same.
    The plaintiff did not by recovering judgment against R. as endorser waive its right to sue him in tort and thus deprive defendants of a substantial right in case they paid the bond.
    Appeal from a judgment of the general term of the supreme court, ®in the second judicial department, affirming a judgment entered upon the decision of the court at special term.
    This was an action to recover from the defendants as sureties of one Rutherford, cashier of the plaintiff’s bank, the value of certain of its securities alleged to have been converted by him.
    The trial court found the following facts: Said Rutherford was cashier of the plaintiff, a national bank, from its organization until March 19, 1887, except during a few months in the year 1886, when he was ill. The bond in question, dated February 2, 1887, is in the penalty of $4,000, and contains the condition that if said Rutherford, “ honestly and in good faith, performs all the duties of cashier in the Walden National Bank, and all the duties in any manner incident thereto, while acting as such cashier, and also all such duties, acts and work as may be required of the said William Gr. Rutherford by the said bank, or its board of directors, which shall from time to time be assented to on his part, and in all respects conduct honestly and in good faith toward or in respect to said bank, its moneys and securities, and the moneys and securities of any other person, or persons, left in any manner with said bank,' then the above obligation to be void, otherwise to remain in full force and virtue.” Prior to December 12, 1882, one Terbell owned thirty shares of the stock of said bank, of the par value of $100 per snare, and on that day he assigned and delivered the same to said Rutherford in his “ individual name,” and thereupon it was transferred to him on the books of the bank, and three new certificates for ten shares each were issued to him therefor.
    At this time Terbell was indebted to the bank to an amount exceeding $9,000 upon certain notes made or endorsed by him and discounted by the plaintiff for his benefit. He was not indebted to said Eutherford, but was in financial difficulties and wanted to secure the bank. Said stock was thus transferred to ¡said Eutherford upon the understanding “that it was to be held for the bank as collateral security for the payment of ” said notes. The transfer “took place over the counter of the bank while said Eutherford was acting as its cashier, and the transaction was with him in that capacity.” Said Terbell “ understood he was dealing with the bank, and not Eutherford personally, and the only reason given at any time for assigning the stock to Eutherford instead •of the bank was, as Eutherford told Terbell, because the banking act prohibited the bank from making loans upon the security of its own stock.” “ Said cashier, after the transfer aforesaid, put said stock in an envelope and informed the president of the bank that it belonged to Terbell, and the bank thereafter held such stock as security for Terbell’s paper, although it held it in Eutherford’s name.” December 20, 1883, Terbell made his note for $1,000, .and April 1, 1884, another for the same amount, each payable to the order of Eutherford and endorsed by him, and. the plaintiff discounted both for said Terbell and at the time “ held said bank •stock as security for the payment ” thereof, under the aforesaid agreement. The endorsements of Eutherford “ were in form only and was only done to make the transaction appear regular, under the national banking laws.” The note dated April 1, 1884, was given to take up a note made by Terbell and held by the plaintiff •on December 12, 1882, or in renewal of a note given for that purpose. September 1, 1886, at the request of Terbell and the plaintiff, Eutherford sold ten shares of said stock to the defendant Snyder for $1,210, which was applied on the indebtedness of Terbell to the bank, except a small sum, which was placed to his •credit on the books. Up to this time the dividends upon the ■stock had been credited to Terbell, and after this sale the dividends upon the twenty shares remaining were equal to the inter•est on said two notes and “ they were balanced in that way by the cashier, said Eutherford.”
    January 13, 1887, Eutherford borrowed $1,000, upon his own note and for his own use, from the Groshen National Bank, to which he gave as collateral security ten shares of said stock. The note was not paid and the bank last named sold said collateral and with the proceeds paid the note. March 18, 1888, Eutherford borrowed another $1,000, upon his own note and for his own use, from the Chase National Bank and assigned to it the remaining ten shares of said stock as collateral. That note was not paid and that bank sold its collateral and paid its note out of the proceeds.
    Neither of the notes so held by the plaintiff was ever paid although payment was duly demanded, and no part of said twenty shares of stock was ever returned to the plaintiff notwithstanding due demand made of said Rutherford.
    September 10, 1887, the plaintiff recovered judgment on its notes against Terbell and Rutherford, but no part thereof having been paid, an offer was made to the defendants to assign the same to them, “ but they declined to do anything about the matter.”
    Upon the request of the defendants the court also found that the notes, made or endorsed by Terbell and held by the plaintiff on December 12, 1882, with two or three unimportant exceptions, had upon them the name of a responsible maker or endorser, in addition to that of Terbell.
    The trial judge refused to find, upon the like request, that “ the transfer of said stock by said Terbell was made to said Rutherford and held by him in his individual capacity, as a personal matter, and he did not take and hold the stock as cashier for the plaintiff and as collateral security to the indebtedness to and for said bank,” and after so refusing, added: “ Rutherford was not liable as an endorser, though one in form.” The defendants excepted generally, but did not except specifically to the addition as found.
    After finding these facts the trial court found as conclusions ■of law that the transaction was not prohibited by the national banking act, and if it was, that the defendant could not take advantage of it in this action; that Rutherford was not liable to the bank as endorser on said notes and that the recovery of said judgment does not help the defendants because the rule as to election of remedies does not apply; that the defendants were not liable for the stock given to the Goshen Bank on the 13th of January, 1887, because they were not then the sureties of said Rutherford, but that they were liable for the value of the other ten shares delivered to the Chase Bank, March 18, 1887, as that was after they had signed said bond.
    Rutherford died in March, 1888, and this action was commenced about two months afterward.

      A. S. Cassedy, for app’Its; B. R. Champion, for resp’t.

       Affirming 28 St. Rep., 98.

   Vann, J.

The appellants claim that the transaction whereby the stock in question was transferred to Rutherford was in violation of the national banking act, which provides that no banking association “shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith.” U. S. R S., § 5201. Assuming this to be true, the defendants cannot take advantage of it, because the act “ imposes no penalty, either upon the bank or borrower, if a loan upon such security be made.” National Bank of Xenia v. Stewart, 107 U. S., 676. The case cited was an action by the personal representatives of a borrower to recover from a national bank the value of certain shares of its capital stock delivered to it as collateral at the time the loan was made and, after default in payment of the note, sold by the bank and applied on the debt. The court held that if the prohibition of the statute could be urged against the validity of the transaction by anyone except the government, it could only be done before the contract was executed and while the security was still subsisting in the hands of the bank.

The decisions of the federal courts, construing the provision of said act, which prohibits national banks from purchasing, holding or conveying real estate, except for certain purposes, are analogous, because no penalty is provided for a violation of that section. U. S. R. S., § 5137. While it permits banks to purchase and hold such real estate “ as shall be mortgaged to it in good faith by way of security for debts , previously contracted,” it prohibits the taking of a mortgage to secure future advances, but does not declare void any security taken in violation of the act. It has been repeatedly held that a mortgage, although taken to secure future advances, is a valid and enf orcible security, notwithstanding the prohibition, and that only the federal government can take advantage of the violation of the statute. National Bank v. Matthews, 98 U. S., 621; National Bank v. Whitney, 103 id., 99 ; Fortier v. New Orleans National Bank, 112 id., 439.

In Wyman v. Citizens’ National Bank, 29 Fed. Rep., 734, it was held that a contract was not void, if entered into by a national bank in violation of § 5200, which provides that “ the total liabilities ” to such a bank of any person, corporation or firm, shall not exceed one-tenth of its capital stock actually paid in. The court said that 11 the decisions of the United States supreme court, heretofore made, warrant the conclusion that objections of the character presented to a breach of the banking law by a national bank caú only be urged by the government.”

Similar decisions have been made by this court under somewhat similar circumstances. Thompson v. St. Nicholas National Bank, 113 N. Y., 325, 334; 22 St. Rep., 929 : Atlantic State Bank v. Savery, 82 N. Y., 291.

The principle on which these cases rest applies to the point under consideration and requires us to hold that even if the transaction with Rutherford was a mere evasion, and hence a violation of the provisions of the National banking act, the fact is not available as a defense to this action.

The claim of the defendants that Rutherford held the stock to secure him for endorsing the note in question is not supported either by the findings or the evidence. The transaction was not with Rutherford as an individual, but as cashier of the bank. No' evidence was given upon the subject except by Mr. Terbell, who testified: “ When I go to the bank and a man comes to the hole and I tell him anything, I consider I am saying it to the bank. This conversation was over the counter in the Walden Bank. * * * I so transferred it (the stock) to him individually to secure the bank. I did not make it directly to the bank because I supposed he was the bank. He endorsed these two notes * * * when I wanted him to pin the stock on these notes he said, When the government official comes here, we can’t take our own stock, and when he comes here and sees this stock pinned on th^se notes he will say, ‘You sell it right off and pay this.’ I will endorse them and will tell the board how it is.’ The object was to get rid of the provision forbidding banks to take their own stock, and so I made the stock to him. He endorsed the paper to get around that. * * * When Rutherford took this stock away he put it in an envelope, and I think told Mr. Scofield, then president of the bank, if anything happened, that belonged to me.” Thus it is clear that Rutherford, as cashier, took and held the stock in trust for the bank and endorsed the notes simply to deceive the government. He had no personal interest in the matter. All that he did was for the benefit of the bank in the transaction of its business, as its officer. His object was to get security for the bank, which was in the line of his duty. The method adopted by him to effect his object was the transfer of the stock, not to the bank directly, as that was deemed inadvisable, but to himself still acting as cashier, for the benefit of the bank. His endorsement, although a contract in form, was no contract in reality, unless made so by subsequent ■adjudication, but an artifice resorted to by him, while doing the business of the bank, to deceive the official inspector for its protection. In no part of the transaction did he act for himself. The plaintiff, therefore, became the equitable owner of the stock, subject to the right of Mr. Terbell to redeem. ■ When Rutherford appropriated the stock to his own use, he deprived the bank of that which belonged to it as the beneficial owner, and which was in his name, and the evidence thereof in his custody, by virtue of his official relation to the bank. Although he may not have been guilty, under the circumstances, of strict conversion, he was guilty of misappropriating the property of the bank that had been entrusted to him as its cashier. This was in violation of his duty to the plaintiff and of the bond given by the defendants in his behalf.

The defendants further claim that even if Rutherford held the stock for the benefit of the bank, and in his capacity as cashier, still, by recovering judgment against him as endorser, the plaintiff waived its right to sue him in tort, and thereby deprived the defendants of a substantial right in case they should pay the bond.

Although Rutherford, upon the facts herein as found by the special term, had a perfect defense to the action brought against him on the notes, still the judgment entered by default was an adjudication irrevocably establishing a contract of endorsement between him and the plaintiff. Lorillard v. Clyde, 122 N. Y., 41; 33 St. Rep., 303; Brown v. The Mayor, etc., 66 N. Y., 385; Newton v. Hook, 48 id., 676; Gates v. Preston, 41 id., 113. If this was a waiver by the bank of its right to sue him for misappropriating its property, it was also a waiver of its right to sue his sureties for the damages caused by such misappropriation. Pitts v. Congdon, 2 N. Y., 352; Chester v. Bank of Kingston, 16 id., 336; Bank of Albion v. Burns, 46 id., 170; Barnes v. Mott, 64 id., 397 ; Ludlow v. Simond, 2 Cai. Cas., 1: Colemard v. Lamb, 15 Wend., 329; Stevens v. Cooper, 1 John. Ch., 425; Harris on Subrogation, § 17.

It must be assumed on the facts found that the plaintiff had two causes of action against Rutherford, one on the note and the other for misappropriating the security collateral to the note; If they were concurrent the defendants cannot complain, as both could be prosecuted until one or the other was satisfied. If they were necessarily inconsistent so that a judgment in one was a defense to the other, their liability on the bond ceased when the judgment was entered.

We think that the remedies were concurrent and not inconsistent. By endorsing the notes, not formally, but, as it must now be assumed, with the intention of binding himself, Rutherford, became liable tó the plaintiff on his contract Subsequently, by misappropriating the security that be had taken and, was holding as cashier for the plaintiff’s benefit, he violated his fiduciary relation to the bank and made himself liable in tort The latter cause of action accrued nearly five years after the former, to which it had only an accidental relation. His liability on the notes did not prevent him from wrongfully disposing of the bank’s collateral and making himself liable on that account also. The casual circumstance that one payment would discharge both liabilities does not affect their independent origin and nature because no fact essential to liability on the note was essential to liability for the misappropriation. There was a breach of contract and also a breach of duty in no manner dependent on such contract. Under such circumstances no election of remedies was required, for both were available. Manning v. Keenan, 73 N. Y., 45, 51; Morgan v. Skidmore, 3 Abb. N. C., 92; Morgan v. Powers, 66 Barb., 35; White v. Whiting, 8 Daly, 23, 25; 6 Am. & Eng. Encyc. of Law, 248.

It may be that the error of the learned trial judge, in his legal conclusion that Rutherford was not liable as endorser, affected his finding of the fact that Rutherford held the stock as cashier for the benefit of the bank. We find no exception to the-facts as found that is specific enough to raise this point While said conclusion of law was wrong, it did not constitute reversible error, because the final result reached in the judgment ordered was right

We think that the judgment should be affirmed, with costs.

All concur, except Brown, J., not voting.


source: Caselaw Access Project

author: Brown, J.

license: Public Domain

text:
    May Williams, Resp’t, v. Cornelius Williams, App’lt.

      (Court of Appeals, Second Division,

      Filed December 1, 1891.)

    1. Husband and wife—Action fob sepabation—“ Desebtion.”
    Desertion, as used in the law of divorce, contemplates a voluntary separation of one party from the other without justification, with the intention, of not returning.
    2. Same.
    The parties were married in New York, and in less than a year defendant gave up his house and refused to permit the plaintiff to live with him, unless she absolutely gave up all intercourse with her mother. The condition was never withdrawn, and under it she refused to live with him, hut offered to return to him if. he would permit her occasionally to visit her mother. EM, that under these circumstances defendant never had a cause of action in this state against the plaintiff for desertion; it was merely a temporary separation of the parties because of a disagreement, and on plaintiff’s offer to return unconditionally, defendant was without legal excuse in refusing to receive her.
    3. Same—Status of foreign divorce.
    A divorce granted by the courts of another state without service upon or , personal appearance by the defendant merely establishes the status of the parties to it within the state in which it is rendered.

    4. Same—Evidence.
    The decree granted in Minnesota being void, was properly excluded upon the trial of this action. It could not be considered as having any effect upon the status of the plaintiff.
    Appeal from a judgment of the general term of the first judicial department, affirming a judgment of the special term.
    This action was brought to obtain a judgment separating the parties from bed and board forever, and was based upon an allegation that the defendant had abandoned the plaintiff in August, 1882, and refused to permit her to return to him.
    The defendant denied the allegation of abandonment, and alleged that the plaintiff had abandoned him in 1880. He further set up in his defense a judgment of divorce in his favor from the plaintiff rendered in the district court of Ramsay county, in the state of Minnesota, in January, 1884, which court was alleged to be a court of general jurisdiction under the laws of that state.
    The parties were married in this state in 1879, and the defendant resided here until August, 1882, when he removed to Minnesota. The plaintiff continued to reside in Hew York, and was at the commencement of this action a resident of this state. The summons and complaint in the Minnesota action were personally delivered to her while temporarily stopping in Philadelphia.
    The j udgment roll in the Minnesota action was offered in evidence iipon the trial and excluded.
    The court found as a fact that the defendant abandoned the plaintiff in August, 1882, and gave judgment in accordance with the prayer of the complaint.
    Further facts appear in the opinion.

      Frank H. Platt, for app’lt; Austen G. Fox, for resp’t.

       Affirming 25 St. Rep., 183.

   Brown, J.

The chief ground upon which the appellant asks a reversal of the judgment in this action is that the court erred in refusing to find, as a conclusion of law, that the plaintiff had abandoned him two years prior to his leaving this state and taking up his residence in Minnesota.

The evidence is substantially undisputed that the defendant refused to permit the plaintiff to live with him unless she absolutely gave up all intercourse with her mother.

The parties were married in June, 1879, and lived together in a house in Fifty-ninth street in Hew York until the latter part of April, 1880, when the lease thereof expired. When preparing to remove from this house the defendant’s command to his wife was, “ When you leave this house you are not to see your mother. * * * You shall not go where she is, you will have no communication with her, you shall not write to her, have no communication with her whatever. If you want to see your mother you cannot go with me." The condition thus imposed upon the plaintiff was never withdrawn, and under it she refused to live with the defendant.

The cause for this disagreement is not disclosed in the record, but the evidence amply justified the conclusion that the plaintiff was always willing to live with the defendant if-he would permit her occasionally to visit her mother, and before he left the state she offered unconditionally and in good faith to return to him, and this he refused to permit her to do, but left New York and took up his residence in Minnesota, where he procured a decree of divorce against her.

Under these circumstances it is clear that the defendant never had a cause of action in this state against the plaintiff for desertion. That term as used in the law of divorce contemplates a voluntary separation of one party from the other without justification, with the intention of not returning.

It could not he said in this case that the plaintiff's act in leaving her husband was voluntary. It was coerced by a harsh and unnatural condition, and she was at no time unwilling to return and live with him as his wife if that condition was withdrawn.

The evidence discloses nothing more than a temporary separation of the parties because of a disagreement. There was no desertion by either party, and neither, up to the time of the husband’s refusal to receive the plaintiff in the summer of 1882, had a cause of action against the other.

But upon the plaintiff’s offer to return unconditionally the defendant was without legal excuse in refusing to receive her. It is also claimed that it was error to refuse to admit in evidence the record of the Minnesota decree, and upon this point it is claimed that the rule heretofore prevailing in this state with reference to judgments of divorce rendered in other states against residents of this state where there was no personal service of process within the state rendering the decree and no personal appearance by the defendant in the action, has been changed by recent decisions of the supreme court of the United States.

In support of this claim we are referred by the appellant to Maynard v. Hill, 125 U. S., 190, and Cheely v. Clayton, 110 id., 701.

The latter case turned upon the construction of the statutes of the territory of Colorado relating to the service of a summons upon a non-resident, and following the decision of the highest court of the territory the supreme court held the service in the case before it defective and the decree void.

Maynard v. Hill was an action in equity to charge the defendants as trustees of certain lands in Washington territory and to compel a conveyance thereof to the plaintiffs.

The case involved the legality of a legislative divorce granted by the legislature of the territory of Oregon, but the consideration of this question was by the facts of the case confined wholly to the territory within which the decree was granted. Neither case questioned the rule prevailing in this state, and the decree in Maynard v. Hill goes no further than that a divorce granted without service upon or personal appearance of the defendant establishes the status of the parties to it within the state in which it is rendered. It does not overrule the decisions of this state, but is in harmony with them, as it has never been denied by our courts that a state may adjudge the status of its citizens towards a nonresident, and that so long as the operation of the judgment is kept within its own confines, other states must acquiesce. People v. Baker, 76 N. Y., 78-84.

This subject Lad very full and careful consideration in the case cited, which was an extreme one, and until it is squarely overruled by a court of ultimate authority, must and will be regarded as settling the law in this state. O'Dea v. O'Dea, 101 N. Y., 23 ; Jones v. Jones, 108 id., 415—424; 13 St. Rep., 838; De Meli v. De Meli, 120 N. Y., 485-495 ; 31 St. Rep., 704.

It is also claimed by the defendant that the Minnesota decree should have been admitted in evidence for the purpose of limiting the effect.of the judgment in this state. This argument is based upon the anticipation that the plaintiff may seek to enforce the judgment for alimony in the jurisdiction where the defendant resides, and is based upon the fact that the plaintiff had actual notice of the pendency of the Minnesota action.

The argument is fully answered in the cases of O'Dea v. O'Dea and Jones v. Jones, supra.

In the former case it appeared that the process of the Ohio court was actually delivered to the defendant, and she had notice of and was personally present at the taking of depositions on the part of the plaintiff in Toronto. This court held, however, that the Ohio court acquired no jurisdiction over her person and that the decree was void.

In Jones v. Jones, a decree of divorce granted in Texas, where service was made out of the state, was held valid on the sole ground that defendant appeared in the action and submitted herself to the jurisdiction of the court, but it was said in that case that “ the marriage relation is not a res within the state of the party invoking the jurisdiction of a court to dissolve it, so as to authorize the court to bind the absent party, a citizen of another jurisdiction, by substituted service or actual notice of the proceedings given without the jurisdiction of the court where the proceeding is pending.”

The decree granted in Minnesota being void, was properly excluded. It could not be considered as having any effect upon the status of the plaintiff.

Being -legally the wife of the defendant within this state, she must be considered as legally entitled to all the rights flowing from that relation under the constitution and laws of the state and of the United States, and if the result be to compel defendant in the jurisdiction where he now resides to comply with our decree, that is a right to which she is entitled under the constitution of the United States, and the courts of this state have no power to deny it to her.

The judgment must be affirmed.

Judgment affirmed, with costs.

All concur, except YajsTN, J., not voting.


author: Follett, Ch. J.

text:
    Sarah M. Gerard et al., Resp’ts, v. James McCormick, App’lt.

      (Court of Appeals. Second Division,

      Filed December 1, 1891.)

    1. Principal and agent.
    In case a person having notice that money or property is held by another in a fiduciary capacity receives it without inquiry from the agent in satisfaction of a personal debt, the sum or property so received may be recovered by the true owner unless the agent was authorized to so dispose of it.
    2. Money had and received — Where paid out through fraud of AGENT.
    In an action for money had and received, the defense was a loan to-plaintiffs through its agent, and that the money received was in repayment of the loan. The agent had used the rents for his own purposes, and had borrowed the money of defendant individually, and repaid it to him as agent. Held, that the jury were authorized to find that the amount standing to the credit of the agent as such, in the bank, belonged to the plaintiffs, and that by means of the check the sum represented by it was, by the fraud of the agent, withdrawn from the account and paid to and received by the defendant.
    3. Same—Evidence—Check by agent.
    Defendant was repaid the loan by plaintiffs’ agent, by a check signed "William Boswell, Agt., Glass Buildings,” without inquiry as to his right to use the fund. Held, that the form of the ¿heck was sufficient to put the defendant upon inquiry as to the authority of Boswell to use the money in payment of his debt.
    Appeal from a judgment of the general term of the common pleas of the city of New York, which affirmed a judgment entered on a verdict.
    The action was brought to recover $501.25, money received by the defendant September 19, 1882, alleged to belong to the plaintiffs.
    For many years the plaintiffs have owned Nos. 87 and 89 Wall street, New York, known as “ Glass Buildings.” From 1872 to February 1887, William Boswell was the agent of the plaintiffs, having authority to collect and deposit the sums received for rents in the Corn Exchange Bank to the credit of an account kept in the name of “ William Boswell, Agent Glass Buildings,” and to draw therefrom sums due for repairs, insurance, taxes, interest, on incumbrances, his own commissions, and for the usual expenses of such buildings, and then to divide by checks on the account the remainder among the plaintiffs, according to their respective interests. The checks drawn against this account were signed “William Boswell, Agt., Glass Buildings.”
    August 31,1882, William Boswell borrowed $500 of the defendant upon securities deposited as collateral, and on the 19th of September, 1882, he paid the loan, amounting, with interest, to $501.25, by the following check:

      “ No. New York, Sep. 19th, 1882.
    “ Corn Exchange Bank:
    “ Pay to the order of James McCormick, five hundred and one 25-100 dollars.
    “ $501.25. William Boswell,
    “Agt. Glass Buildings.”
    Upon receiving the check the defendant surrendered to Boswell the collateral pledged as security for the loan, and, thereupon, the check was thus endorsed:
    “James McCormick,
    “For deposit to the credit of James McCormick & Co.,
    “per John C. Fink,

      “Atfy."

    Thereafter, the check was paid by the Corn Exchange Bank, pursuant to the above order endorsed thereon and charged to the account of “William Boswell, Agt. Glass Buildings.”
    In 1887 the plaintiffs learned that Boswell had, from time to time, appropriated large sums of money arising from the rents to his own use. The appropriations were made by drawing checks for his own benefit, like the one given to the defendant, and by neglecting to keep down the taxes and interest, which he reported to the owners as paid After Boswell’s frauds were discovered, this action was begun, September 5, 1888, to recover from the defendant the sum received by him by this check. The defenses interposed were:
    (1) That the money secured by means of it did not belong to the plaintiffs.
    (2) That the defendant received it for value, in good faith and without notice of the plaintiffs’ rights, if any they had.
    When the plaintiffs rested, and again at the close of the evidence, the defendant asked the court to dismiss the complaint, on the grounds, among others, that the evidence was insufficient to authorize the jury to find that the money received belonged to the plaintiffs, and was insufficient to authorize them to find that the defendant had knowledge that the check was drawn against money belonging to the plaintiffs. The motion was denied and an exception taken. The questions were submitted to the jury under instructions which are not contained in the case, and must have been satisfactory to both parties. A verdict was found for the plaintiffs on which a judgment was entered, which was affirmed by the general term, and from that judgment the defendant appealed to this court.

      H. Kettell, for resp’t; Samuel Fleischman, for app’lt

       Affirming 29 St. Rep., 709.

   Follett, Ch. J.

The evidence was abundant to authorize the jury to find that the amount standing to the credit of “ William Boswell, Agt. Glass Buildings ” in the Corn Exchange Bank belonged to the plaintiffs, and that by means of the check the sum represented by it was, by the fraud of Boswell, withdrawn from the account and paid to and received by the defendant.

The remaining question is, whether the evidence authorized the court to submit to the jury the question of good faith, or was sufficient to authorize the jury to find that the defendant had notice that the check was drawn against an account not owned by Boswell.

The defendant testified, and his evidence was not disputed, that he received the check from Boswell in payment of $500 loaned August 31, 1882, and at the same time surrendered securities pledged as collateral to the loan. He was a holder of the check, and of the money received by it, for value. The defendant also testified that he took the check in good faith, and there is nothing in the case which tends to raise any question about his personal good faith except that he received a check from Boswell in payment of his individual debt signed “William Boswell, Agt. Glass Buildings,” without inquiry as to the right of Boswell to so use the fund.

The learned counsel for the appellant cites Ford v. Union National Bank, 13 W. Dig., 552; aff’d 88 N. Y., 672, as decisive of the case at bar. That case arose out of the following facts: An account was kept by “ G. F. Norton, Agt.,” with the defendant bank, whose cashier knew that it belonged to some principal whose name, was to him unknown, for whom Norton was acting as agent. Norton, being indebted to the bank, drew his check signed “ O. F. Norton, Agt.,” in its favor on this account for $1,000. The check was charged to the account, and the sum represented by it applied on Norton’s debt When Norton’s principal learned of this misappropriation he sued the bank and recovered a judgment for the sum on a trial before the court without a jury, which was reversed by the general term and a new trial granted. On an appeal from the order it was affirmed by the court of appeals without an opinion and without making any reference to the opinion of the court below. 88 N. Y., 672. The learned general term correctly stated the abstract rule : “ That to entitle a principal to recover his money wrongfully paid by his agent upon the agent’s debt, the person receiving the money must have known that the agent was acting in violation of his authority.” But the court overlooked the rule that a person who knowingly receives the money or property of a principal from an agentan payment of the latter’s debt does so at his peril; and if the agent acted without authority the principal may, on proof of these facts, recover his money. National Bank v. Insurance Company, 104 U. S., 54, and the cases there cited; Wright v. Cabot, 89 N. Y., 570; Baker v. N. Y. National Exchange Bank, 16 Abb. N. C., 458. Story states the rule as follows: “ Thus, a person dealing with a factor or broker is bound to know that, by law, a factor or broker, although a general agent, is not clothed with authority to pledge, deposit or transfer the property of his principal for his own debt; and, if he receives such a deposit or pledge, the title is invalid, and the property may be reclaimed by the principal.” Story’s Agency, § 225. The affirmance of the order by the court of appeals in Ford's case, there being exceptions in the record, cannot be regarded as an approval of tbe opinion of the general term as applied to the facts of that case.

It is a legal, though a rebuttable presumption, that one who holds money or property as agent, trustee, executor, administrator, guardian or partner, has no authority to dispose of it in payment of his own debt.

This brings us to the question whether the form of the check was sufficient to put the defendant upon inquiry as to the authority of Boswell to use the money in payment of his debt.

A certificate for shares of stock running to “A. B., trustee,” or to “A. B., in trust,” without disclosing the names of the beneficiaries or the particulars of the trust, is notice to a purchaser of the shares that “A. B.” does not hold them in his own right, but as a trustee. Sturtevant v. Jaques, 96 Mass. (14 Allen), 523 ; Shaw v. Spencer, 100 Mass., 382; Budd v. Munroe, 18 Hun, 316; Gaston v. American Exchange Nat'l Bank, 29 N. J. Eq., 98; Perry on Trusts, §§ 225, 814; Lowell Trans. Stock, § 69; Mor. Corp., 2d ed., §§ 181 to 184; Cook S. & S., § 325.

In Fellows v. Longyor, 91 N. Y., 331, it was said: “ The words ‘guardian, etc.,’ in the securities in question, operated as notice to the defendant Longyor of the rights of the wards of whom Downer was guardian.” In California it is held that a certificate for shares running to “A. B., trustee,” without disclosing the beneficiaries, or the particulars of the trust, is not sufficient to put a proposed purchaser upon inquiry. Brewster v. Sime, 42 Cal., 139; Thompson v. Toland, 48 id., 99. The two cases last cited are not in accordance with the current of authority, and do not, as we think, lay down a rule best adapted to protect the interest of owners, as well as dealers in such securities. The check gave the defendant notice that William Boswell did not assume to be the beneficial owner of the account against which he drew, but that he held it as agent, and also as agent for the Glass Buildings. Had he signed as agent for Sarah H. Gerard and others, owners of “ Glass Buildings,” the efficiency of the notice that the drawer of the check was not the owner of the fund against which it was drawn could not be questioned under any well considered authority. We think that the form of the signature to the check was sufficient to put the payee on inquiry as to the right of the agent to pay his personal debt out of the fund. The buildings and the bank were both well known, were in the same city and very near to the place where the check was received by the defendant, and had an inquiry been made at the bank or at the buildings, it would have been ascertained that the account was held by William Boswell, not as owner, but as agent for these plaintiffs.

In case a person having notice that money or property is held by another in a fiduciary capacity receives it without inquiry from the agent, in satisfaction of his personal debt, the sum or property so received may be recovered by the true owner unless the agent was authorized to so dispose of it The court did not err in refusing to non-suit or in submitting the case to the jury.

Hone of the exceptions to the admission or exclusion of evidence require consideration.

The judgment should be affirmed, with costs.

All concur.


author: Haight, J.

text:
    Theodore S. Jenkins, Resp’t, v. William E. Dean, App’lt.

      (Court of Appeals, Second Division,

      Filed December 1, 1891.)

    Services—When amount earned by sub-contractor.
    Defendant had employed H., plaintiff's assignor, as superintendent of the construction of certain sewers, under an agreement by which defendant was to be paid for the use of tools and machinery, and H. was to have one-third of the profits. The city by the contract with defendant was to retain a percentage of the contract price for six months after the completion of the work, which sum was finally paid June 29, 1888. This action was commenced January 31, 1888. Held,, that in the agreement between H. and defendant they had reference to the contract between defendant and the city, and both should be construed together, and H. should be paid for the work as it progressed with the reservation by the city of the stipulated percentage for repairs. It was not necessary for H. to wait until the net profits could be ascertained and determined before he could claim his share. °
    Appeal from a judgment of the general term of the supreme court, second department, affirming a judgment entered upon a verdict

      James Edward Graybill, for app’lt; William N. Dykman, for resp’t

       Affirming 28 St. Rep., 735.

   Haight, J.

This action was brought to recover pay for services rendered as defendant’s superintendent

It appears that on or about the 19th day of October, 1886, the defendant entered into a contract with the city of Hew York to construct sewers in Eighth and Eleventh avenues of said city. This contract contained a provision authorizing the city to retain for the period of six months after the work was performed a certain percentage of the contract price, for the purpose of making repairs upon the streets through which the sewers were to be constructed. On the same day the defendant entered into a contract with the plaintiff’s assignor, W. L. Holmes, to superintend the construction of the sewers, the defendant agreeing to furnish all moneys, tools and machinery necessary for the performance of the work, and for the use of the tools and machinery he was to receive a fair compensation and two-thirds of the net profits of the work. Holmes was to furnish his labor as superintendent and work under instructions of the defendant, and in lieu of salary was to receive the other third of the net profits of the work for his services. The work of constructing the sewers commenced on the 27th of October, 1886, and continued about one year. Payments were made by the city on account of the work as it progressed, from time to time, in accordance with the provisions of the contract The amount of the percentage retained by the city after the work was completed amounted to the sum of $1,773.12, which sum was finally paid to the defendant on the 29th of June, 1888.

This action was commenced on the 31st of January, 1888, and the claim is that it was prematurely brought.

Holmes, in his testimony, admitted that he knew of the provisions of. defendant’s contract with the city, under which the work was to be performed, and that it authorized the city to retain a percentage of the contract price for the purpose of making such repairs as should thereafter be found necessary.

It will be observed that nothing was said in the agreement between Holmes and the defendant as to when his compensation •should become due and payable. Under such contracts it would ordinarily become due when the work was completed, but in this ■case Holmes’ compensation was to be one-third of the net profits of the work, and it appears that in making this agreement they had reference to the contract between the defendant and the city, •and both should be construed together.

Under the agreement with the city the defendant was to be paid for the work as it progressed from time to time, the city reserving the stipulated percentage for repairs. It was doubtless within the contemplation of the parties that Holmes should at •such times and in like manner be paid for his services.

It is claimed, however, that the compensation for his services •could not become due and payable until such time as the net profits could be ascertained and determined; that such profits could not be ascertained until after the expiration of six months from the completion of the work, and until the amount that had been expended for repairs out of the percentage retained by the city could be determined. We must admit the force of this argument, and concede that it could not have been within the contemplation of the parties that the money should become due and payable until the amount thereof could be ascertained, but upon reference to the agreement between the defendant and the city we find that the city is only authorized to expend for repairs the money retained, and that only after the contractor has had notice to make the repairs required and a failure so to do on his part. So that the contractor could not be made liable for a greater sum than that retained by the city. Upon the conclusion of the work and upon the payment of the amount earned, less the amount retained by the city, the parties could have then determined the net profits and divided the same in accordance with their agreement ; but their interest in the amount retained by the city could not have been ascertained until the expiration of the time provided for in the contract.

At the conclusion of the plaintiff’s evidence, the defendant moved for a dismissal of the complaint upon the ground that the evidence showed that the action had been begun before the contract had been completed and before Holmes’ one-third interest in the profits had become due Exception was taken to the denial of this motion, and it now remains to be determined whether there was anything due upon the contract as we have construed it at the time the action was brought.

There appears to have been some discrepancy in the figures, but as taken by the trial court in his charge to the jury, and then acquiesced in by the parties, neither taking exception thereto, they are as follows :

Plaintiff concedes he had been paid................. $234 00-

Verdict'...............'........................ 1,021 15-

Plaintiff’s one-third of profits..................... $1,255 15

- Defendant’s two-thirds.......................... 2,510 30

Total net profits............................ $3,765 45

Total profits................................... $4,008 46-

Deduct total net profits.......................... 3,765 45

Allowed by jury for use of tools............. $243 01

Amount of profits due and to become due when the

action was brought................... . i...... ' $4,008 46-

Value of the use of tools............... $243 01

Paid after action begun................ 1,773 12

--2,016 13

Amount of net profits on hand when the action was

begun...................................... $1,992 33-

One-third of which is . _.......................... 664 11

Less previously paid............................ 234 00

Balance due............................... $430 11

This result would be changed in case the jury’disallowed the-two items amounting to $407; but with those items disallowed, there would still be a balance due.

It would consequently follow that the motion for a nonsuit was-properly denied.

The jury, however, were permitted to find under the charge of ' the court the amount of the plaintiff’s interest in the $1,773.12-that had been retained by the city. The plaintiff could not properly have been allowed for this amount, but there appears to-be no exception to the charge raising the question, and the parties-must be deemed therefore to have acquiesced in the charge in this regard.

The case of Everson v. Powers, 89 N. Y., 527, has no application to the one under consideration. In that case the action was-for damages suffered in consequence of a breach of contract. In this case it is to recover pay for services rendered, and the question is as to whether the amount earned had become due and. payable at the time the action was brought.

We have examined the other exceptions appearing in the case, but find none that point to error.

The judgment should consequently be affirmed, with costs.

All concur.


text:
    Ann Keane, Resp’t, v. The Village of Waterford, App’lt.

      (Court of Appeals, Second Division,

      Filed December 1, 1891.)

    1. Negligence—Snow and ice.
    In an action brought against defendant for damages for personal injury, there was evidence that there was a ridge of snow and ice which had been there a week, extending lengthwise of the walk, which was four or five inches thick and sloping either way from the top of the ridge; that it was this ridge that caused plaintiff to slip and fall. Defendant claimed that the ridge was caused by drippings from the piazza of a hotel. Held, that there was no error in the refusal of the court to nonsuit.
    2. Same—Evidence.
    In an action for injuries sustained by plaintiff’s falling upon an icy sidewalk, followed shortly after by rectocele, the judge properly submitted to the jury the question as to whether it was occasioned by her fall, although a physician testified that childbirth was an adequate and the usual cause of the rectocele, and that he had not known of a case where a rectocele was occasioned by a fall other physicians testifying to the contrary.
    Appeal from a judgment of the general term of the supreme ■court, third department, affirming a judgment entered upon a verdict.

      N. C. Moak and Thomas O'Connor, for app’lt; J. F. Crawford, for resp’t.

       Affirming 29 St. Rep., 340.

   Haight, J.

This action was brought to recover damages for a personal injury.

On the 23d day of January, 1886, the plaintiff, whilst walking with her daughter-in-law upon the sidewalk on Broad street, in the village of Waterford, slipped and fell, receiving the injuries for which the jury has awarded damages.

The accident occurred nearly in front of the bar room door of the Worthington hotel, at about seven o’clock in the evening, and after it had become dark. There is some conflict as to the ■condition of the walk, but all agree that it was slippery.

It is claimed on behalf of the plaintiff that there was a ridge of snow and ice extending lengthwise of the walk which was four or five inches thick, and that it sloped either way from the top of the ridge ; that it was this ridge that caused her to slip and fall. Whilst on the part of the defendant it was claimed that the ridge was composed of ice which was formed from water dripping from the roof of the piazza in front of the hotel.

Considerable evidence was given in support of this contention. The trial court charged the jury that if the ridge was of ice formed from the drip from the roof of the piazza the defendant was not liable. Of this charge the appellant does not complain. It is claimed to be in accordance with the rule laid down in the case of Kaveny v. The City of Troy, 108 N. Y., 571; 14 St. Rep., 18. Whether it is or not we do not now deem it necessary to consider, for the jury found a verdict for the plaintiff, and must therefore be deemed to have found that the ridge was not so formed, and whilst we might have reached a different conclusion had we been called upon to determine the fact in the first instance, we are of the opinion that there is evidence which supports the verdict in this regard. It appears that, in the early part of the month, between the 5th and 8th, there was quite a heavy fall of snow; that again on the 19th of the month there was a fall of nearly eight inches. The witness, Thomas Cramer, testified that the ridge was five or six inches-high and was formed by snow; that it was uneven and very slippery; that it had been there about a week before she fell; that it was formed of snow packed down and glazed over with rain; that it had never been touched; that it was formed in part from the snow that fell during the last storm, and in part, from that which fell during the first storm.

This evidence is in accordance with the verdict and renders unavailing the exceptions taken to the refusal of the court to non-suit.

It is also claimed that the court erred in submitting to the jury the question as to whether the rectocele from which the plaintiff was found to be suffering was occasioned by her fall, but we think the question was one for the jury. It is true that one of the physicians testified that childbirth was .an adequate and the-usual cause of rectocele, and that he had not known of a case where a rectocele was occasioned by a fall. But the other physicians differ with him in this regard. Dr. Stubbs testified that prolapsis of the posterior vagina wall, senile atrophy, violent muscular efforts of the abdominal muscles, a fall or an attempt to save one’s self from a fall, may produce rectocele. It is our duty to consider this evidence in connection with the fact that, rectocele was discovered shortly after the plaintiff received her injury ; that none had existed before, and that all of the symptoms following the injury were such as to indicate its existence.

Exceptions were taken to the refusals to charge as requested, but there are none which we think require a new trial. They have been considered by the general term, and further discussion we do not consider necessary.

The judgment should be affirmed, with costs.

All concur.


author: Ingraham, J.

text:
    Julius J. Frank, Resp’t, v. Edward A. Davis, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Foreclosure—J udqment.
    In an action to foreclose a mortgage no judgment can be entered except, one directing the sale of the property. Where, during the pendency of an appeal from such judgment, the premises are sold under foreclosure of a prior lien, so that the lien of the mortgage sought to be foreclosed liasbeen destroyed, the court has no power to direct by a subsequent order a personal judgment against a defendant for the whole or any part of the amount due on the bond.
    Appeal from order of special term, directing a judgment against the defendant for the amount due to plaintiff upon a bond of the defendant less the amount of the surplus moneys in another action to foreclose a prior mortgage bv the plaintiff.

      B. A. Cardozo, for app’lt; Samuel W. Wise, for resp’t
   Ingraham, J.

This action was brought to foreclose a mortgage upon real property, and the judgment demanded in the complaint was for the usual relief granted in such action, viz.: that the property be sold and the proceeds applied to the payment of the amount due to plaintiff and that the defendant pay any deficiency. The case was tried and the plaintiff recovered a judgment as prayed for, which was affirmed by this court and, subsequently, by the court of appeals.

It appears that there was also a mortgage upon the same premises which was a prior lien to the mortgage foreclosed in this action, and that, pending the appeals from the judgment in this action, such prior mortgage was foreclosed and the property sold under a judgment in the action brought for that purpose and that there was a surplus over the amount required to pay the amount due on such prior mortgage, which was paid to the plaintiff, leaving a balance due to the plaintiff of $3,081.28, for which sum this court at special term directed a deficiency j udgment to be entered against the defendant.

In determining this question, it is important to bear in mind the distinction between this action and an action upon the defendant’s bond, to secure which the mortgage was given.

An action upon the bond would be an action at law, to which the plaintiff would be entitled to a trial by jury. This action is in equity, and the court of equity obtains jurisdiction because the aid of that court is necessary to direct a sale of the mortgaged property so that the lien of the mortgaged property can be enforced, and having acquired such jurisdiction, the court then gives to plaintiff all the relief to which he is entitled, including a judgment for any deficiency which would arise because of the insufficiency of the proceeds of such sale to pay the amount due to the plaintiff.

An action to foreclose such a mortgage, and the power of the court to order a personal judgment for such deficiency, is regulated by §§ 1626 to 1637 of the Code.

By § 1626 it is provided that in an action to foreclose a mortgage upon real property, if plaintiff becomes entitled to final judgment, it must direct the sale of the property mortgaged. And § 1627, that any person who is liable to the plaintiff for the payment of a debt secured by a mortgage may be made a defendant in the action, and if he has appeared, or has been personally served with the summons, the final judgment may award payment by him of the residue of the debt remaining unsatisfied after the sale of the mortgaged property and the application of the proceeds pursuant to the directions contained therein.

This section contains the only provision by which the court is authorized to award judgment in an action of foreclosure for the recovery of the money against any defendant.

It seems to me clear that in an action to foreclose a mortgage no judgment could be entered except one directing the sale of the property. If before the entry of final judgment the property had been sold under the foreclosure of the prior lien, so that the lien of the mortgage sought to be foreclosed had been destrayed, no judgment could be entered in favor of the plaintiff for the amount due upon the bond, because the lien sought to be foreclosed having been destroyed by virtue of the foreclosure of the prior lien there could be no sale of the property mortgaged, as provided in § 1626.

The jurisdiction of a court of equity which was acquired in order to sell the property and apply the proceeds to the payment of the mortgage ended when such a sale was impossible, and there could be no judgment against the defendant for the residue of the debt remaining unsatisfied after a sale of the mortgaged premises and the application of the proceeds, as there could be no sale and no proceeds to apply.

Mor does the fact that prior to the destruction of the lien of the mortgage to foreclose which the action was brought a judgment had been entered directing the sale of such property give the court power to direct by a subsequent order a personal judgment against a defendant for the whole or any part of the amount due on the bond to secure which the mortgage was given.

This would be turning an equity action into a common law action when the facts which alone gave the court of equity jurisdiction had ceased to exist, and would be contrary to the provisions of the only judgment that the court has authority to enter in such an action.

The judgment as actually entered in the action provides that if the proceeds of the sale thereby directed be insufficient to pay the amount and interest, that the defendant pay to plaintiff the amount of such deficiency.

It is only in the event of the salé and a failure of the proceeds realized therefrom to pay the amount due that the defendant was ordered to pay anything to plaintiff, and there having been no sale of the premises in this action according to the terms of the judgment there was nothing that the defendant was required to pay plaintiff, and as before stated the court had no power in this action to grant any other personal judgment against the defendant except the one contained in the judgment and which does not in terms make the defendant liable for the amount of the bond until there has been a sale of the mortgaged premises under the judgment and the application of the proceeds realized upon such sale to the amount due on plaintiff’s mortgage.

It is evident that Mr. Justice Barrett, who granted this order, did so only because he considered himself bound by the case of Siewert v. Hamel, 33 Hun, 44, and it would seem that that case was an authority for the order.

The contrary view, however; has been taken by this court in the case of Loeb v. Willis, 22 Hun, 508.

In the opinion in the case of Siewert v. Hamel, supra, no reference is made to the sections of the Code under which the judgment in this action was granted, and as it is clear that the court had no power to grant the order, I think we should follow the earlier case of Loeb v. Willis.

It follows, therefore, that the order appealed from should be reversed and the motion below denied. As, however, the applicatian was justified by the case above cited, it should be without costs.

Van Brunt, P. J., and Daniels, J., concur.


author: Per Curiam.

text:
    Joseph McGuire, Resp’t, v. John H. Hudson, App’lt.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Supplementary proceedings—Limitation.
    The time within which an order for the examination of a judgment debtor in supplementary proceedings can be obtained is limited to ten years from the return of an execution unsatisfied.
    Appeal from order denying motion to vacate order for examination of a judgment debtor.

      John Vincent, for app’lt; Joseph Steinert, for resp’t.
   Per Curiam.

It was held in Conyngham v. Duffy, 125 N. Y., 200; 34 St. Rep., 736, that the time within which an order for the examination of a judgment debtor in supplementary proceedings could be obtained is ten years from the return of an execution unsatisfied even though the right accrued before the Code of Civil Procedure was enacted.

As it does not appear from the affidavit upon which the order for the examination of the judgment debtor in his proceeding was granted that the execution upon the judgment had been returned within ten years from the time of the granting of the order for such examination, Conyngham v. Duffy, supra, applies and the-order for the examination should have been vacated.

Order appealed from reversed,, with ten dollars costs and disbursements of this appeal, and motion granted.

Van Brunt, P. J., Daniels and Ingraham, JJ., concur.


author: Van Brunt, P. J.

text:
    Helen Phillips et al., App’lts, v. Jacob Lindner, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed, November 13, 1891.)

    Evidence—Letters of third person.
    In an action upon a promissory note against an alleged endorser thereof, who claimed that the endorsement was a forgery, to corroborate the testimony of defendant a letter purporting to have been written to him by his son admitting the forgery was admitted in evidence. Held, error. .
    Appeal from judgment entered on verdict of a jury in favor of the defendant and from order denying motion for new trial.

      E. L. Mooney, for app’lts; W. C. Kellogg, for resp’t
   Van Brunt, P. J.

This action was brought to recover upon a promissory note made by one George J. Lindner to the order of one George Morell, and endorsed by said Morell and claimed to have been endorsed by the respondent, Jacob Lindner. The sole defense of said Jacob Lindner was that his alleged endorsement of the note was a forgery.

Upon the trial of .this action the plaintiff gave certain evidence tending to prove that the endorsement upon the note in question was made by the defendant, Jacob Lindner.

The respondent denied that the endorsement upon the note was his signature and endeavored to show that it had been forged by his son, the maker of the note.

Among other evidence which was introduced to support this claim was a letter to him dated about a month before the note fell due, purporting to have been written by his son, admitting the forgery. The introduction of this letter was objected to as incompetent, immaterial and irrelevant, and as not binding upon the plaintiff, and hearsay evidence. These objections were overruled, the letter admitted in evidence and exception taken.

This seems to have been clearly error. We are referred to the case of Smith v. National Benefit Society, 123 N. Y., 85 ; 33 St. Rep., 67, as supporting this ruling; but an examination of that case shows that it has no application whatever to the one at bar. The question involved in that case was as to whether insurance was obtained resulting from a preconceived design to defraud the insurance company, and acts and declarations of the party insured were admitted for the purpose of establishing that intent. In the case at bar no such issue whatever was presented; no question of intent was involved. It was a question of fact as to whether the defendant had or had not endorsed this note.

The other case, Magee v. Osborn, 32 N. Y., 669, has not the slightest application to the question presented by the exception under consideration.

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

Daniels and Ingraham, JJ., concur.


text:
    Levi Decker, Pl’ff, v. The Gutta Percha & Rubber Mfg. Co., Def't.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Sale—Wareahtt—Evidence.
    Plaintiff bought billiard table cushions of defendant for use in his business, the negotiation being made with defendant’s superintendent, who was accustomed to negotiate sales and talk with customers, plaintiff being referred to the president only as to the price. In an action upon an alleged breach of warranty, Held, that plaintiff had a right to show what took place between the superintendent and himself whereby he was induced to make the purchase, and that it was error to exclude such proof.
    Motion for new trial by the plaintiff upon exceptions taken at the trial, the complaint having been dismissed.

      E. P. Wheeler, for pl’ff; W. H. Arnoux, for def’t.
   Van Brunt, P. J.

The plaintiff in this action had been for many years a manufacturer of billiard tables, and had been accustomed to purchase billiard table cushions of the defendant, and in April, 1881, being desirous of obtaining rubber for the purpose of constructing the cushions of billiard tables, applied to the defendants therefor, and saw the general manager and superintendent of the business of the defendants at their factory, who made certain representations in reference to the character, quality and durability of these cushions. The superintendent referred the plaintiff to the president of the defendants to fix the price thereof. The cushions having turned out to be of an inferior quality, the plaintiff brought this action to recover damages sustained because of the breach of an alleged warranty in reference to the quality and durability of these cushions.

Upon the trial he sought to prove what representations and statements had been made by the superintendent at the time of the purchase of these cushions, and this evidence was excluded upon the ground of want of authority upon the part of the superintendent to bind the corporation by any such representations.

It is not necessary in considering this proposition to treat of the question of election as to the causes of action, no such question being raised upon this appeal.

The ruling of the court is sought to be sustained by the cases of Mining Co. v. Anglo-Californian Bank, 104 U. S., 192, and Martin v. Webb, 110 id., 7. But an examination of those cases shows that they have no relevancy to the question presented by the ruling of the court below. In the case of Mining Co. v. Californian Bank, it was held that as incident to the general powers of a mining company its board of directors may borrow money for its purposes and invest certain of its officers with authority to negotiate loans, execute notes and sign checks drawn upon its bank account, and that the fact that the board has invested them with such authority may be shown otherwise than by the official record of its proceedings; as by evidence that without objection by the board checks have for a long period been signed by the president and secretary of the company. In the case of Martin v. Webb, it was held that the cashier of a bank might be shown to have been clothed with power to transact business outside of his ordinary duties by paroi, or that it might be implied from the conduct and acquiescence of its directors. The principles enunciated in those cases are in no wise in conflict with the ordinary rule, which has been long established, that a salesman in the conduct of a mercantile business may make declarations and representations in regard to the quality, character and fitness of the merchandise entrusted to him for sale. And there is no difference in this respect between the agents of a corporation and the agents of an individual.

In the case of Ahern v. Goodspeed, 72 N. Y., 108, the rule is expressly laid down that an agent for the sale of property, in the absence of any express limitation of his power, has authority to do any act or make any declaration in regard to the property found necessary to make a sale and usually incidental thereto.

In the case at bar it would appear that the superintendent had been in the habit of negotiating sales and talking with customers, and that all that the president did was to fix the price. There were no limitations upon the ordinary powers which a salesman possesses, except perhaps that the price of manufacture was to be fixed by the president.

It seems to us that under these circumstances the plaintiff had a right to show what took place between the superintendent and himself whereby he was induced to make the purchase. "Whether it would turn out when the evidence was received that whatever was said "by the superintendent was more than the expression of an opinion must be determined by the character of the evidence when introduced.

But the plaintiff was precluded from giving evidence of this character, and apparently was even precluded from testifying that which he repeated to the president of the corporation. And it is to be observed in the consideration of this question that the president knew that the plaintiff had been talking to the superintendent in reference to this rubber, its character and suitability for the business, and that the only subject of conversation between the president and the plaintiff was the matter of price.

It would seem also that this was a distinct recognition of the right of the superintendent to make representations as to the quality of the goods which were to be delivered.

We think, therefore, that error was committed in excluding the testimony as to what transpired between the plaintiff and the superintendent, the effect of such testimony, however, not being passed upon in the disposition of this appeal.

The exceptions should be sustained and the motion for a new trial should be granted, with costs to plaintiff to abide event.

Daniels and Ingraham, JJ.,. concur.


text:
    William H. Knauss, App’lt, v. The Gottfried Krueger Brewing Co., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Bbokebs—Compensation.
    Plaintiff acted as broker in selling for defendant certain real estate under an agreement by which he was to receive the usual commissions for doing so. It appeared, however, that he made a contract with the purchaser for commissions, which fact was not communicated to defendant, and that such commissions were paid him by the purchaser. Held, that the making of such agreement with the purchaser precluded the plaintiff from recovering any compensation from defendant.
    Appeal from judgment entered upon a dismissal of the complaint at circuit.

      Andrew Wesley Kent, for app’lt; Samuel Untermeyer, for resp’t.
   Ingraham, J.

The complaint in this action alleges that plaintiff is and for many years has been a broker engaged in the business of buying and selling real and personal property. That on or about the 2d of February, 1889, in the city of New York he, at the defendant’s request, introduced one Gottfried Krueger, then and now the president of the defendent, to one Robert Bliss for the purpose of effecting a sale of the brewery of defendant, and that on the same day in the city of New York the defendant agreed with plaintiff that if said Bliss or his assigns purchased said defendant’s brewery and business, defendant would pay plaintiff for his services as broker the usual commissions therefor, and that during the months of February, April, May, June and July, 1889, the plaintiff rendered to defendant, at defendant’s request, services in the city of New York and elsewhere as defendant’s broker in. effectuating- such contemplated sale, which was on or about the 15th of July consummated by the purchase of the said brewing business by the United States Brewing Company, and that the plaintiff’s services were reasonably worth the sum of $45,500, for which sum plaintiff demands judgment.

The plaintiff, by his complaint, thus establishes for the purposes of this action his relation to the defendant. He alleges that he was a broker; that he rendered services to defendant as its broker, in effectuating the sale, and that such services were reasonably worth the sum for which he demands judgment, and to entitle him to recover in this action he must prove that he was employed by defendant as its broker, to render services as a broker, that he rendered such services and that the value of such services was the sum for which he §eeks to recover judgment, and he cannot ask to recover upon the pleadings for any other or different service rendered to defendant or for services rendered in another or different relation than that which he alleges did exist in- his complaint

In his testimony, to support his cause of action, the plaintiff testified that he told defendant that he was a broker and that there were parties in Hew York who represented English money, who were desirous of getting good breweries, and that they would pay good prices for them; that plaintiff had spoken to them about his, the defendant’s, being the best, and that subsequently he, the plaintiff, introduced the president of the defendant to a Mr. Bliss, who acted as a representative of the American Brewing Company, who subsequently became the purchaser of the defendant’s breweries.

The only express agreement as to plaintiff’s compensation was a conversation which he had with the president of the company, at which he said: “How you will have another interview with Mr. Bliss, if there is any price named, as you know what the regular commissions are; but I want to arrange it so I get a liberal commission on this matter,” and he, the president of the defendant, said: “ That is all right, Mr. Knauss, if we make any deal, that is all right.”

This testimony sustains the allegation of the complaint that the relation of the plaintiff to the defendant was that of a broker engaged in an endeavor to effectuate a sale of the defendant’s property.

The rules of law that apply where a broker claims commissions from his principal must govern in the determination of this action. The complaint alleges, and the evidence proves, that on or about the 15th of July, 1889, the sale was consummated by the execution and delivery of a conveyance of the defendant’s property to the United States Brewing Company, the conveyance, however, being dated the 1st of April, 1889.

It appeared on the trial that on March 29, 1889, the plaintiff and Mr. Bliss, who had been acting for the purchasers, made an agreement, whereby Mr. Bliss agreed to pay to plaintiff for services rendered in regard to the purchase of the defendant’s property, and the Knauss property, the sum of $2,500, and that subsequently, on the 25th of July, 1889, the said sum of $2,500 was paid to the plaintiff by Bliss in pursuance of such agreement

It was thus established by the evidence, and conceded by plaintiff, that at the time of negotiation and the sale of this property by defendant, and during the time the plaintiff claimed to be acting as the broker of the defendant, and was engaged in rendering the services to the defendant as such broker for which he seeks to recover in this action, he had made an agreement with the purchaser of the property whereby he was to receive from such purchaser for the services rendered in negotiating the sale of the said property the sum of $2,500, and which sum was subsequently paid to him by such purchaser, and the fact of the making of such contract with the purchaser, or that he was to receive compensation from the purchaser, was not communicated to the defendant.

That the making of an agreement whereby the plaintiff was to receive compensation from the purchaser precluded him from recovering any compensation from defendant as a broker in the transaction, is settled in this state.

This rule is applied in many cases in this state. In the case of Murray v. Beard, 102 N. Y., 508; 2 St. Rep., 466, the court says:

“An agent is held to ' UberrimaJides’ in his dealings with his principal, and if he acts adversely to his employer in any part of the transaction, and omits to disclose any interest which would naturally influence his conduct in dealing with the subject of his employment, it amounts to such a fraud upon his principal as to forfeit any right to compensation for services.

“ It is an elementary principle that an agent cannot take upon himself incompatible duties and characters, or act in a transaction where he has an adverse interest or employment.

“ In such a case he must necessarily be unfaithful to one or the other, as the duties which he owes to his respective principals are conflicting and incapable of faithful performance by the same person.” Carman v. Beach, 63 N. Y., 100; Martin v. Bliss, 57 Hun, 159; 32 St Rep., 930.

In this case the plaintiff went to the defendants representing himself as a broker and obtained employment as a broker to act for the defendant in effecting a sale of the defendant’s property, and then went to the intended purchaser and secured from him an agreement to be paid by him for rendering the same services, concealing from each of his principals his relations to the other. That the officers of the defendant relied upon plaintiff appears from plaintiff’s testimony when he says he (the defendant’s president) desired “not to go into the matter, that is, present the matter to others unless he knew they were responsible persons, and I assured him that this party was a direct representative of the capitalists.”.

The defendant, therefore, entered into the negotiations, relying upon the assurance of the plaintiff as to the responsibility and character of those with whom he-was to deal. •

It is clear, therefore, that applying the principles which we have seen established in this state, the plaintiff was entitled to no compensation from defendant.

The claim by plaintiff that he acted as a mere middleman and not a broker is negatived by his own complaint and by his own testimony upon the trial.

Without considering the other questions presented in this case, we are of the opinion that for the reasons above stated the complaint was properly dismissed, and it follows, therefore, that the judgment appealed from should be affirmed, with costs.

Van Brunt, P. J., and Daniels, J., concur.


text:
    The People ex rel. Frank Gunther v. Henry Murray, Police Justice.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Cebtiobabi—Criminal pboceedings.

      Certiorari does not lie to review a proceeding before a committing magistrate. The only mode of review is by appeal.
    Certiorari to review the determination of the respondent in ■committing, as a police justice in the city of Hew York, the .relator for disorderly conduct

      John Fennel, for app’It; David Welch, for resp’t.
   Van Brunt, P. J.

It is manifest that there is no power in this court to review in the manner sought by this proceeding the .action of the respondent. The very satisfactory opinion of the learned recorder Smyth in the case of the People ex rel. Vitan v. Vitan, 20 Abb. N. C., 298, shows conclusively that the only method of review is by appeal.

Our attention is called to the case of the People ex rel. Scherer v. Walsh, 33 Hun, 345, in support of the jurisdiction of this court, in which it was held that by § 515 of the Code of Criminal Pro«cedure writs of certiorari in criminal actions, as they have heretofore existed, were abolished, and a - review could only be had by appeal; but that the section referred only to criminal actions as •defined by the Code and that a proceeding before a committing magistrate was not a criminal action, but a special proceeding of a criminal nature ; and hence § 515 did not apply but the law remained as it existed prior to the Criminal Code.

In 1884, however, § 515 of the Code óf Criminal Procedure was amended, and its provisions extended to abolishing writs of •error and certiorari not only in criminal actions, but in proceedings and special proceedings of a criminal nature, entirely covering the case referred to in the case of Scherer v. Walsh, supra.

It is true that that case was decided in September, 1884, but it •does not appear that the attention of the court was called to the amendment which had taken place in the Code of Criminal Procedure.

The writ should, therefore, be dismissed, with costs.

Daniels and Ingraham, JJ., concur.


text:
    James H. Parker, App'lt, v. Manuel Marco, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed November 13, 1891.)

    Service—Exemption prom. '
    The rule exempting parties and witnesses who come from foreign states into this state for the purpose of a trial here from service of process applies only where the proceedings are in court, and has no application to-the case of a party living in a foreign state and having a litigation pending therein who attends in this state for the purpose of taking testimony out. of court.
    Appeal from order setting aside service of summons.

      T. H. Dewey, for app’lt; J. R. Abney, for resp’t.
   Van Brunt, P. J.

It appears that the plaintiff in this case-resides in the city of New York and the defendant in South Carolina.

At the time of the service of the summons in this action, set ting aside which the order appealed from was made, there was an action pending between the same parties in the circuit court of the United States for the district of South Carolina, and it having been agreed that certain testimony should be taken in the city of Mew York before a notary public, the defendant came to the place where such testimony was to be taken on the 6th of April, in the afternoon, and on the 7th of April the summons in this action was served upon him. A motion was thereupon made to-set aside the service, upon the ground that the defendant was exempt from service, he being in the state for the sole purpose of taking testimony before a notary public in another action to-which he was a party.

In support of this proposition, our attention is called by the counsel for the respondent to several cases, among which are the cases of Matthews v. Tufts, 87 N. Y., 568, and Person v. Grier, 66 N. Y., 124.

Mone of the cases cited however, presents the question now before the court. Mor does the rule recognized in those cases-have any application to the facts appearing in the case at bar. The reason' why parties and witnesses who come from foreign states into this state for the purpose of attending a trial here are-exempted from service of process, is that their presence is necessary for the due administration of justice and that 'without such exemption their attendance might not be readily obtained.

In the case of Person v. Grier, the court say: “It is the policy of the law to protect suitors and witnesses from arrest upon civil process while coming to and attending court and returning home. This immunity is one of the necessities of the administration of justice and courts would often be embarrassed if suitors or witnesses while attending court could be molested with process. Witnesses might be deterred and parties prevented from attending, and delays might ensue and injustice be done.”

And in the case of Matthews v. Tufts, the court say: This immunity does not depend upon the statutory provisions but is deemed necessary for the due administration of justice.

In that case the party was attending as a creditor before a commissioner, in bankruptcy in this state, and the court held that commissioners in bankruptcy are a court of justice sufficient for the purpose of having the witness protected by the court of chancery at least, if not by themselves. They sit in the nature of a court in the administration of justice in proceedings in bankruptcy, and the due administration of justice requires that all creditors should be free to attend without interference by service of process 'of any kind.

Thus it is seen that the object of the rule is to allow parties and witnesses to be present where their attendance is necessary upon the trial of causes within this state; and this rule has obtained •because it was in furtherance of justice. It has no application to the case of a party living in a foreign state, having a litigation pending in a foreign state, who attends in this state for the purpose of taking testimony out of court. The proceedings must be in court, and it is for the protection of the administration of justice that the rule has obtained

We think, therefore, that the coming into this state for the purpose of being present upon the taking of testimony to be used in an action in another state neither comes within the spirit nor the letter of the rule to which attention has been called, and- that the defendant was liable to service of process, and the service of the summons herein should not have been set aside.

The order appealed from should be reversed, with ten dollars -costs and disbursements.

Daniels and Ingraham, JJ., concur.