author: Monell, J. Jones, J.

text:
    WILLIAM P. McANDREW and Others, Plaintiffs and Respondents, v. WILLIAM WHITLOCK, Jr., Defendant and Appellant.

      [Decided December 31, 1870.]
    A referee is required to make such findings of fact as are necessary to sustain his conclusions of law. He is not required to find other facts which are merely of a negative character.
    The duty and obligation of a common carrier ceases with a proper delivery to the consignee.
    In case of a carriage by land, such delivery, except when controlled by contract or usage, must be to the consignee in person, or at his residence or place of business. In case of carriage by water, usage has rendered landing upon a wharf or deposit in a storehouse, after notice to the consignee, a sufficient delivery.
    The notice must be such as to afford the consignee an opportunity to remove the goods.
    Where a carrier by water lands licorice upon a wharf, on a day unsuitable for landing or exposing such a perishable article, without giving seasonable notice to the consignee, the carrier is responsible for an injury by the elements.
    Before Monell, McCunn, and Jones, JJ.
    Appeal from a judgment.
    The action was against the defendant as owner of the ship Carolus Magnus, to recover for damage to a portion of a quantity of licorice brought by the ship from Liverpool to Hew York in the summer of 1860.
    The complaint alleged that the injury was caused by discharging the goods upon a dock, partly in a rain, when they could not, owing to the absence of a custom-house weighing-master, be removed, and were left exposed upon the dock, without precaution as to covering or protecting.
    The answer put these allegations in issue, and then alleged a proper, suitable, and sufficient delivery.
    The action was tried by a referee, who found the following facts:

      That in June, 1860, the plaintiffs shipped on board the ship or vessel belonging to the defendant, called the Carolus Magnus, then lying in the port of Liverpool and bound for New York, three hundred and eighty-one cases of licorice, in good order and condition, containing sixty-nine thousand two hundred and ninety-seven pounds net weight of licorice, the property of the plaintiffs, and the said master, on such shipment, signed and delivered to the shippers a bill of lading therefor, by which it was stipulated that the said licorice should be delivered in the like good order and condition at the port of New York (dangers of the seas excepted), unto the order of the shippers or assigns, he or they paying freight for the said goods, with five per cent, primage and average accustomed.
    That the licorice was consigned by the plaintiffs to James C. McAndrew, who was their agent in the city of New York, and the bill of lading, duly indorsed in blank, was transmitted to the consignee, who was ready, on the arrival of the ship at the port of New York, to receive the goods and pay therefor the freight and primage.
    That the ship, having the licorice on board, arrived at New York on the 25th day of August, 1860, and soon thereafter, and before the second day of September, the agent and consignee of the plaintiffs had notice of such arrival of the ship with the licorice on board; the agent paid the duties upon one hundred and eighty-one cases, parcel of the licorice, on the first day of September, 1860, and entered the remaining two hundred cases for warehousing, and received permission to cart the same in carts provided by himself, and a direction to place them in the United States Bonded Warehouses, Nos. 6, 8, and 10 Bridge street, in the city of New York, and duly delivered on board the ship a permit from the Collector of the Port of New York for the discharge of the goods from the vessel.
    That on the 2d day of September, 1860, and on various days between the 2d of September and the 19th of the same month, the consignee, on the behalf of the plaintiffs, applied to the agents of the defendant on board the ship, to learn when the defendant or Ms agents wouM be in readiness to land the licorice, but received no other or further information than that the licorice was in the lower hold of the ship and would not be put out until they got ready.
    That the licorice was, in fact, near the bottom of the ship, other goods were on board which must be discharged before the licorice was reached, and no want of diligence on the part of the defendant in not landing the licorice earlier than the 20th day of September was proved.
    That when the custom-house permit was delivered, the agent of the defendant in charge of and on board the ship was expressly notified by the agent of the consignee, on behalf of the plaintiffs, that the licorice was perishable, and was requested not to put it out in rainy weather, for the reason that, if he did, the plaintiffs could not take care of it, it had to be carted so far, and he was requested to be very particular, and let the day be clear, if possible, and such agent of the defendant promised to do so; on the 19th of September, the plaintiffs, by their agent, requested the defendant through Ms agent in charge and on board of the vessel to land the licorice on that day, but he declined; the- plaintiffs-then further requested that if the next day should not be fine he would not land the licorice, and the agent of the defendant then-informed the plaintiffs’ agent that, if the weather was fine on the 20th, he would discharge the licorice from the ship on that day ; on the 20th day of September (1860), in the morning it rained and continued to rain until and at 9 o’clock in the forenoon, with thunder and lightning at 4, 7:50, and 8 o’clock; at 10 o’clock it was clear and continued clear for one hour, when it became cloudy (light clouds for two hours and denser clouds thereafter), and so continued till 2 o’clock and 37 minutes p.m., when it rained; at 3 p.m. it was still cloudy, but without rain. At 4 o’clock 25-minutes p.m. the rain again commenced, with thunder and lightning, and continued with increasing violence during the rest of the day and ensmng night.
    That, without further notice to the plaintiffs or their agent and consignee, the defendant, at or about 9 o’clock in the morning of that day (20th), commenced landing the licorice in good order upon the wharf, and continued landing the same until about a quarter before twelve o’clock (noon), at which time verbal information from the defendant that the landing was in progress was given to the clerk of the consignee, and at 12 o’clock (noon) only about forty cases remained on the ship to be landed, all of which residue was landed in good order between 1 and 2 o’clock of that day on the wharf; by the law of the United States the licorice could not be removed from the landing-place until it was weighed by a weigher, for thafpurpose duly appointed under the United States laws; such weigher arrived at the said landing-place and began the weighing at about half-past two o’clock p.m. of that day, and continued to weigh the cases during the residue of the afternoon, and finishing such weighing at 5 o’clock p.m. ; the general usage in the port of New York in respect to the mode of delivery of goods by carriers in ships bringing goods from foreign ports is, that when the ship arrives the carrier advertises for permits, with notice that goods not “ permitted” will be sent to the public store, and on receiving the permits he proceeds to land the goods; the consignees generally send their carts, and cart them away.
    That immediately upon receipt of information by the clerk of the consignee that the landing of the said licorice had begun as above stated, the consignee employed a large number of carts, and used extraordinary diligence to remove the licorice to the United States bonded warehouses, but notwithstanding such' diligence the same was wet and injured by the rain, and thereby depreciated in value, with the exception of fifty cases which arrived at the warehouses at about 3 p.m., without having been wet or injured by the rain.
    That the warehouses were at such distance from the vessel that the time required for a trip by the carts to the same and back to the wharf was about one hour and a half.
    That the United States warehouses closed at six o’clock p.m., and one hundred and seventy cases of the licorice remained on the wharf during the night, neither party protecting the same from injury; the damages sustained by the plaintiffs by the depreciation in value of the licorice by the rain, were on the 21st day of September, 1860, two thousand and seventy-eight dollars and ninety-one cents, and the interest thereon from that day, which to the date of this report is six hundred and ninety-one dollars and twenty-three cents, amounting together to two thousand seven hundred and seventy dollars and fourteen cents.
    That the defendant was guilty of negligence and breach of his obligation and duty as the carrier of the goods, in landing the licorice on the dock, with knowledge of its perishable character, on a day unsuitable to the landing and transportation of such goods, without reasonable notice to the consignee sufficient to enable him to cause the same to be weighed, transported, and protected against injury by the weather.
    That no negligence was imputable to the plaintiffs, or the consignee, in respect thereto.
    From these facts the referee found and determined that the defendant was liable to the plaintiffs for the damages so sustained, and accordingly ordered judgment in favor of the plaintiffs and against the defendant for the sum of two thousand seven hundred and seventy dollars and fourteen cents, and their costs.
    The defendants requested the referee to find the following facts, in addition to those stated and found in his report, viz.
    1. That at 9 o’clock, on the 20th of September, 1860, the master of the vessel consulted the barometer, and found it to be rising.
    2. That at 12 m. the master again consulted the barometer, and found it to be still rising.
    3. That the rain at 2:37 o’clock p.m. was merely a slight shower, lasting about five minutes, and doing no damage to the licorice.
    4. That the landing of the licorice was made under the superintendence of a United States inspector, stationed on the ship by the custom-house authorities.
    5. That the licorice, as it was landed, was placed by itself on the wharf.
    6. That no steps were taken by the consignee’s agent to protect or provide covering for the licorice from the rain, either on the wharf or during the transit to the warehouses.

      The referee refused to find upon any of said requests otherwise than as he had already found. The defendants excepted to several of the findings of fact and to conclusions of law of the referee, and to his refusal to find the additional facts as requested.
    There was also ah exception to the exclusion of the following questions:

      Q. Is there any general usage regulating the time with respect to the landing of goods on the wharf, when the responsibility of the ship or its owner ceases in regard to the goods, or their care or custody %

      Q. Does the usage to which you have already referred regulate the time with respect to the landing of the goods on the wharf, when the responsibility of the ship or its owners ceases, in regard to the goods, or their care or custody ?

      Q. Is there any settled usage in the port of Hew York as to what constitutes a delivery of goods by vessels bringing them from foreign ports ?
    The last question was objected to, and the referee sustained the objection, at the same time stating that he would allow proof of the actual usage of carriers as a question of fact, but would not allow the question in its present form.
    The defendant appealed from the judgment.

      Mr. William H. Scott for appellant.
    It is submitted that the defendant has made out affirmatively a good delivery of the licorice, terminating his liability as carrier from the moment of the landing on the wha/rf according to the well-settled law regulating the mode of the delivery of their cargoes by ships from foreign ports.
    In regard to goods carried under bills of lading, the determination of the “period at which the responsibility of the master and owner will ceasef usually depends upon the “ manner of delivering the goods” as regulated bylaw or settled usage (Abbott on Shipping, 378; 3 Kent Com., 215, 9th ed., 291).
    “ The general rule is, that delivery at the wharf (when there are no special directions to the contrary) discharges the master ” (3 Kent, 215).
    The same learned authority, however, lays it down as a qualification of this rule, that there must be “ a delivery at the wharf to some person authorized to receive the goods, or due previous notice must have been given to the consignee of the time and place of delivery ” (id.).
    But even under this qualification of the general rule, it was only necessary that the notice should be of the “ time and place ” of delivery.
    No case can be cited, even among the earlier authorities, requiring notice to be given of the fact of the delivery on the wharf by ships from foreign ports, in addition to the notice of time andplace. But independent of the question of the receipt or acceptance of the licorice by the plaintiffs’ agent on the wharf, and whether the case be governed by the old rule in regard to notice or the relaxation of the rule as established by the later and more judicious decisions, it is insisted that according to the whole current of the authorities, both earlier and later, the defendant, upon the facts found and stated by the learned referee himself, has made out affirmatively a good delivery of the licorice under the bill of lading, ending his responsibility for the licorice, and placing it at the exclusive risTs of the plaintiffs, several hours before the occurrence of the storm by which the damage was occasioned (Hyde v. Trent Navigation Company, 5 Term, 389, 394, 395, 396, 399; Cope v. Cordova, 1 Rawle, 203; Angell on Carriers, § 310, et seq.; Story on Bailments, 534; 1 Parsons’ Maritime Law, 152; Richardson v. Goddard, 23 How. (U. S.) 28; The Grafton, Olcott, 43; Gibson v. Culver, 17 Wend., 311; Chickering v. Fowler, 4 Pick., 371; Kohn v. Packard, 3 Louisiana, 224; Ely v. The New Haven Steamboat Company, 53 Barb., 207).
    The defendant is not liable under his contract as carrier for the damage done to the licorice by the rain storm of the afternoon and night of the 20th September.
    The discharge of the licorice was completed by half-past one in the afternoon.

      The rain did- not commence .until twenty-five minutes past four in the afternoon.
    Under the law, even if the defendant’s responsibility did not terminate as to each case of the licorice, pari passu, with the landing, and even if, as to the whole of the licorice, it did not terminate with its delivery on the wharf to the custom-house officers at the ship and on the wharf, the liability as to all the licorice -certainly terminated with the delivery of the whole on the wharf at p.m.
    But it is insisted that the responsibility of the defendant terminated, as to each case, with the delivery of each case on the wharf, and if not eo instanti with the landing, nevertheless with its possession by the plaintiffs’ agents on the wharf, at or about 12 m. (The Grafton, Olcott, 51).
    But, independent of the delivery to the plaintiffs’ agent, there was a clear delivery of the whole of the licorice .to the United States custom-house officers on the wharf, “ and with its receipt by them * * * * the liability of the defendant terminated.”
    In regard to ships from foreign ports it has been settled ever . since the case of Hyde v. Trent navigation Company (5 Term., 394), that “ the liability of ship carriers is at an end when the goods are landed at the usual wharf ” (per Grose, J., page 399; Cope v. Cordova, 1 Rawle, 203).

      Mr. Augustus F. Smith for respondents.
    The general rule is, that the carrier must deliver to the consignee personally (Fisher v. Newton, 1 Denio, 45, 47).
    But a usage prevails in respect to carriage by water, that the delivery may be made on the wharf.
    The reason of the usage is apparent. The duty of the carrier is bounded by the ability of the vehicle.
    The reason of the usage exists, and the usage prevails to the same extent, and as well in the internal and coasting trade as in trade with Europe or other parts of the world.
    The rule is stated in the following authorities: Story on Bailments, § 545; Price v. Powells, 3 Com., 322; Ostrander v. Brown, 15 J. R., 39, 42; Fisk v. Newton, 1 Denio, 45, 47; Angell on Carriers, § 310; 2 Kent, 605 (margin) and notes; Barclay v. Clyde, 2 E. D. Smith, 95; Chickering v. Fowler, 4 Pick. 371.
    The defendant failed to prove any usage in Hew York at variance with the established rule.
    The case, Cope v. Cordova (1 Rawle, 203), went upon a special usage in Philadelphia, and even in that case the court leave for future decision the case of the landing of perishable articles at improper times (Angell on Carriers, § 311; Gibson v. Culver, 17 Wend., 305.)
    To discharge the carrier, however, from all further liability, the following are necessary:
    1. He must give reasonable notice to the consignee.
    2. A reasonable time must elapse after notice to remove the goods.
    3. As a corollary from these two, the discharge must be at a reasonable time.
    Story says:
    “ But it is of the very essence of the rule, that due and reasonable notice should be given to the consignee before or at the time of landing, and that he should have a fair opportunity of providing suitable means to take care of the goods, and to carry them away” (Story on Bailments, § 545).
    And in Price v. Powell:
    “And, after notice to the consignee, the carrier still continues liable until the consignee has had a reasonable time to remove the goods ” (3 Cow., 322).
    It is also clear, that under no circumstances can the carrier place the goods upon the wharf and abandon them to thieves or the elements.
    If the consignee be dead, or cannot be found, or even if he neglect or refuse to talce the goods, the carrier must store them, and, until he does, he is responsible for their safety (Ostrander v. Brown, 15 J. R., 39, 42; Fisk v. Newton, 1 Denio, 45, 47; Story on Bailments, § 545; 2 Kent, 605, margin).

      Doubtless the freight is earned when the goods are tendered, but the consignee cannot then abandon them.
    No reasonable notice was given, and as every effort was made to remove the licorice, the reasonable time required by the law had not elapsed when the damage occurred, whether at the wharf or upon the carts, and therefore the ship remained liable.
    For all that remained upon the wharf, and all that was injured at the wharf, the ship is liable, for it still remained in the ship’s custody. It should have been protected by the ship.
   By the Court:

Monell, J.

The very full, comprehensive, and intelligent finding by the referee, of the facts established by the evidence, has rendered it easy in the application of the principles of law which must govern the case.

There was but little dispute at the trial, and most of the facts found were not contested. Such as were disputed had enough evidence to support them, and we cannot, upon this appeal, disturb the referee’s conclusions.

The defendant, on the trial, requested the referee to find certain other and additional facts, which had been established by uncontradicted evidence, and which it was claimed exonerated from liability. But the referee refused to make such additional findings, not because they had not been proven, but because, in his judgment, they were immaterial. The rule on this subject is, that a referee is required to make such findings of fact as are necessary to sustain his conclusions of law. He is not required to find other facts which are merely of a negative character (Nelson v. Ingersoll, 27 How. Pr. R., 1).

I had occasion recently, in the case of Mierson v. Hope (decided December 3, 1870), to examine at some length into the duties and obligations of common carriers both upon land and by water. The result of such examination and of the authorities, most of which have been cited by the respondent’s counsel in this case, was, that such duty and obligation ceased only with a proper delivery to the consignee. In the case of carriage by land, such delivery, except where otherwise controlled by contract or usage, and except, perhaps, in the single instance of carriage by railroad companies, must be to the consignee in person, or at his residence or place of business. In respect, however, to carriage by water, custom or common usage has relieved the carrier from the duty of actual delivery, and a landing upon a wharf, or a deposit in a storehouse, after notice to the consignee, is such a delivery as will terminate the responsibility of the carrier (1 Pars. on Con., 668; Story on Bail., § 545; Ostrander v. Brown, 15 J. R., 39; Fisk v. Newton, 1 Denio, 45).

The notice which it is required shall be given to the consignee, must be such as will afford him a fair opportunity of providing suitable means to take care of the goods, or to carry them away. And if such notice is not suitable in point of time or other circumstance, the carrier and not the owner takes the responsibility, if they are landed and left exposed to danger or loss (Mayell v. Potter, 2 J. C., 371).

Upon these general principles of law, the liability of a carrier by water depends, therefore, upon the character of the notice to the consignee, and the manner of discharging the goods intrusted to his care; and where the fact is found, that the notice was not sufficient in point of time or otherwise; or that the attempted delivery was not made in a suitable place or manner, or at a suitable time; or that it was done while being exposed to the elements, or was left exposed to the elements, without a justifiable reason, the law adjudges the carrier responsible for all such damages as may thereby happen to the goods.

The referee, as a concluding fact from all the evidence, found that the defendant was guilty of negligence and breach of his obligation and duty as the carrier of the goods, in landing the licorice on the dock, with knowledge of its perishable character, on a day unsuitable to the landing and transportation of such goods, without reasonable notice to the consignee sufficient to enable him to cause the same tó be weighed, transported, and protected against injury by the weather. We are not called upon to review these findings, upon any allegation that they were not supported by sufficient evidence, but it is claimed, assuming the facts to be as found, that when they are coupled with such other facts as the defendant says ought to have been found, they show a complete discharge of his duty.

It appeared that on the 19th of September, the plaintiffs’ agent requested the defendant to land the licorice on that day, but he declined. He was then requested that if the next day should not be fine not to land it; and the defendant then said if the weather was fine on the next day he would discharge the licorice from the ship.

On the 20th of September (the next day) in the morning it rained and continued to rain until and at 9 o’clock in the forenoon, with thunder and lightning at 4, 7:50, and 8 o’clock. At 10 o’clock it was clear, and continued clear for one hour, when it became cloudy (light clouds for two hours and denser clouds thereafter),-and so continued till 2 o’clock and 37 minutes p.m., when it rained. At 3 p.m. it was still cloudy, but without rain. At 4 o’clock 25 minutes p.m. the rain again commenced, with thunder and lightning, and continued with increasing violence during the rest of the day and ensuing night.

Without further notice to the plaintiffs or their agent and consignee, the defendant, at or about 9 o’clock in the morning of that day (20th) commenced landing the licorice in good order upon the wharf, and continued landing the same until about J before 12 o’clock (noon), at which time verbal information from the defendant that the landing was in progress was given to the clerk of the consignee, and at 12 o’clock (noon) only about forty eases remained in the ship to be landed, all of which residue was landed in good order between 1 and 2 o’clock of that day on the wharf.

It will be seen that the rain on the morning of the 20th continued until 9 o’clock, after which time it was clear for a couple of hours, then became cloudy, then rained again a little after 2, and finally set in at 4, and continued a heavy rain during the afternoon and evening.

In such a state of the weather, and after the implied promise not to land the licorice if the weather was not fine, and without any further notice to the consignee, the defendant commenced discharging the licorice upon the wharf, where, by exposure to the elements, it was damaged. And although notice was conveyed to the consignee at about 12 o’clock of the same day, there was not, for sufficient reasons, enough time for him to remove or shelter the property.

The reasons for the consignee’s inability to remove the goods were, that by the laws of the United States goods of foreign importation could not be removed from the wharf until weighed by a government weigher. A weigher could not be procured until 2 o’clock. He continued to weigh, and finished at 5 o’clock. The plaintiffs with great diligence removed the goods, but could not, although they made extraordinary efforts, secure them from the rain which fell during the afternoon and evening.

Under these facts the delivery on the wharf was not of a character to exonerate the defendant, and unless there was other evidence which ought to have controlled the referee’s conclusions, his judgment must be sustained.

An officer of customs testified that he was present, officially, while the cargo was being discharged, and took an account of it; that his duties required him to take such account, and he had a right to not permit working before sunrise or after sundown, and to stop working if it stormed.

The, duty of the custom-house official was simply to protect the interests of the government, and in the discharge of that duty he had a right to exercise a certain kind of authority over the cargo, and to prescribe, to a certain extent, the time and manner of discharging it. But the superintendence of such officer in no respect affected or changed the obligations of the defendant. The officer could have prevented the landing the goods in the night-time, and might have stopped their being discharged during a rain. But if he omitted to exercise his authority, he certainly would not be liable; and I cannot see how the defendant can seek shelter behind the officer’s neglect of duty, and claim immunity for his own negligence.

The only additional fact which it was claimed ought to have influenced the referee’s decision, was that the master of the vessel upon examining his barometer found it was rising, and thereupon commenced unlading his cargo.

It is undoubtedly true that a common carrier is not responsible for injury to property, which, without his fault, has been caused by the elements, after it has been placed upon a wharf. In such case the liability, if any, is that of a warehouseman and not of a common carrier. But, be that as it may, the circumstance that the master discovered that the barometer indicated a clearing away of the rain, was not sufficient to justify a discharge of cargo at the late hour of the day and with the limited notice to the consignee.

We therefore think that the conclusions of fact reached by the referee were all that it was necessary for him to find; and that those he was requested to find, and refused to find, were wholly immaterial.

Upon these facts, under the principles of law which we have stated, it follows that the decision of the referee was correct.

The attempt to prove a custom or usage regulating the time - for landing goods on a wharf, to determine when the carrier’s responsibility ceases, was properly defeated.

And the further offer to show what constitutes a delivery of goods was an attempt to settle as a fact what is commonly considered a difficult question of law.

The judgment should be affirmed.

Jones, J.

(dissenting). I cannot concur in affirming the judgment. I think the plaintiff had ample notice that the goods would be delivered on the day in question if the weather was suitable. The weather at the time the discharge commenced was fine and suitable, with every indication that it would remain so.

If the carman and weigher had been on hand, the great portion of the goods could have been safely housed. That they were not on hand arises from the fact that in consequence of it having rained in the morning they judged the weather would not be suitable during the day. In this they were mistaken. The defendant cannot be held for a damage occurring through their mistake. But I think the carrier, after the weather became threatening, was not justified in continuing to discharge. For the damage to such of the goods as were discharged after the weather became threatening, I think the plaintiff may recover.

Judgment shall be reversed and new trial granted, with costs to the appellant to abide the event.


source: Caselaw Access Project

author: Monell, J. McCunn, J.

license: Public Domain

text:
    THE COMMERCIAL WAREHOUSE COMPANY OF NEW YORK, Plaintiffs and Appellants, v. JOHN S GRABER, Defendant and Respondent.

      [Decided December 31, 1870.]
    Where a sum of money is puts into the hands of the sheriff by a person who has become bail for a defendant on an order of arrest, to secure the sheriff until such bail shall justify, it is but a deposit in lieu of bail. McCunn, J., dissenting.

    The sheriff is himself responsible as bail until the bail justifies, and it may be that he can protect himself against such contingent liability by taking security from the bail that he will justify. Per Monell, J.
    But even if such security was void, the plaintiff would not thereby acquire any right to it. Per Monell, J.
    Before Monell, McCunn, and Freedman, JJ.
    Appeal from an order made at Special Term.
    This was a motion to require the. sheriff to pay or deposit with the clerk a sum of money alleged to have been received by the former in lieu of bail, upon an order of arrest, or to apply the same in satisfaction of the judgment which had been obtained in this action.
    The motion was denied at Special Term, and the plaintiffs appealed.

      Mr. Francis H. Dykers for appellants.
    The Code, section 198, expressly directs that the sheriff shall within four days after the deposit of money in lieu of bail, pay the same into court, and as by section 200, on the recovery of a judgment by the plaintiff while the money remains on deposit, the plaintiff is entitled to have the same applied to the satisfaction of his judgment by the clerk, the failure on the part of the sheriff to perform what the law directs him to do, affects a substantial right of the plaintiff.
    On an arrest, a defendant at any time before execution may be discharged from arrest, either upon giving bail, or upon depositing the amount mentioned in the order of arrest, as provided in the chapter on arrest (Code, sections 186, 197, 198, 199).
    This was a deposit such as is contemplated by section 197 of the Code, and was given and intended as such.
    It was the exact amount of bail fixed by the order of arrest.
    It was given to the deputy sheriff at the time of the arrest of the defendant.
    The defendant was not discharged from arrest until the amount had been delivered to the deputy.
    The deputy must be considered in all he did as the sheriff for the purpose of this motion, and as the sheriff would have been liable as bail to the plaintiff, if the bail offered, did not justify (Code, section 201), the taking by the deputy of fifteen hundred dollars as security to himself that the bail would justify, showed that he was not satisfied with the bond offered, but relied on the money.
    The tailing of the bond was entirely proper, as an initiatory stop to having the money refunded to the defendant on the justification of bail, as is provided in section 199.
    It is expressly declared by law that “ no sheriff or other officer shall take any bond, obligation, or security by color of his office, in any other case or manner than such as are provided by law > and any such bond, obligation, or security taken otherwise than as herein directed, shall be void” (3 Rev. Stat., 5th ed., 476, § 48).
    The fact that the deposit was made by a third party, is the same as if it were made by the defendant (Herman v. Aaronsen, 3 Abb. Pr., N. S., 389).
    It was deposited for the defendant, and on the strength of such deposit he was set at liberty (Salter v. Weiner, 6 Abb. Pr., 191).

      Mr. James R. Cuming for respondent.
    The order was rightly made. The money was not paid by the defendant, and was not paid to the sheriff or for his use. It was paid by Mr. Alexander, one of defendant’s bail, to Mr. Bancker, deputy sheriff, as security to him that the bail would justify.
    Bail had been taken when the money was handed to the deputy sheriff, and this bail' was excepted to by plaintiffs, who proceeded with the justification.
    There is no equity in the application. The money was Alexander’s, and this application was an attempt to take it to pay defendant’s debt, although plaintiffs have got' his body on the limits.
    If, as plaintiffs claim, a deposit has been made with the sheriff, which he has not paid in, their remedy is provided by section 198 of Oode. That section directs the sheriff, within four days after a deposit, in lieu of bail, to pay the same into court, take two certificates, etc.; and provides that, “ for any default in making such payment, the same proceedings may be had on the official bond of the sheriff, to collect the sum deposited, as in other cases of delinquency.”
    Under this the sheriff has a right to a trial of the issue between the plaintiffs and himself, viz., whether the money was deposited with him or not. Plaintiffs’ proposition is to deprive him of this right. There was no authority of statute or precedent for the motion below.
    Tersely stated, plaintiffs’ application is to make Sheriff O’Brien make his deputy take Alexander’s money to pay Graber’s debt.

       Affirmed by Court of Appeals, 1871.

   By the Court:

Monell, J.

The evidence upon which the motion in this case was made and resisted at the Special Term was somewhat conflicting, and we are, perhaps, concluded by the decision upon it by the judge below. For where a question of fact is involved in a motion, and the evidence upon it is disputed, the determination of the fact by the judge must be governed by the same rules which apply to the findings of fact by the court, referee, or jury, upon a trial of an action.

But, however that may be, I think the motion, upon the evidence, was properly disposed of.

Murphy, who was in some way connected with the plaintiffs’ attorney, swore that he was present when the defendant was arrested, and that the defendant offered to the sheriff a bond executed by the defendant, and by Magnus Alexander and Henry W. Wagner; that the deputy charged with the taking of the same asked him whether he was satisfied with the same, and he told him that he was not; that the sheriff thereupon declined to accept the bond, and the sum of fifteen hundred dollars was thereupon deposited with the sheriff by the defendant, or some one on his behalf, through Magnus Alexander, and the defendant was set at liberty; that the money had not been paid to the clerk by the sheriff, although more than four days had elapsed since such deposit with the sheriff; and that the sureties on the bond had failed to justify. He further stated that judgment had been entered in the action.

This was all the proof in support of the motion.

Alexander, one of the persons who had signed the bail-bond, stated in his affidavit that the sheriff accepted the bail; that afterwards he attended to justify and was examined. The justification was then adjourned at the plaintiff’s request. That upon the adjourned day, the plaintiff appeared and objected to proceeding, on the ground that he had entered judgment against the defendant. He stated that he lent no money to the defendant to deposit as bail, nor did he deposit any money for bail, but that at the request of the deputy sheriff he placed fifteen hundred dollars in his hands as security to him that the sureties would justify or the defendant surrender himself to the sheriff. That it was expressly explained to him that the money was in no jeopardy, provided the sureties justified or the defendant delivered himself up.

This was corroborated by the affidavit of Stevens, the under-sheriff.

Bancker, the deputy sheriff who made the arrest, says in his affidavit that he did not decline to accept .the bond executed on behalf of the defendant; but, on the contrary, he did accept it, and upon accepting it released the defendant from custody. That the sum of fifteen hundred dollars was placed in his hands by one of the defendant’s bail. That he received it as, and solely as, personal security or indemnity to himself that the bail would appear and justify; and that the money was in no sense intended as a deposit in lieu of bail.

It further appeared that after the judgment was entered, the defendant was surrendered by the bail to the custody of the sheriff, who took from him bail for the jail limits.

So far, therefore, as the facts are concerned, there is, I think, a preponderance of proof that the sum of money delivered to the deputy sheriff was not a deposit by the defendant, nor a deposit, in any sense, in lieu of bail.

That bail was given and in part justified upon the exception of the plaintiffs was distinctly testified to, as was also the fact of the abandonment of the justification by the plaintiffs on the ground that judgment had been entered. These allegations were not contradicted, and they tend strongly to establish the understanding of the plaintiffs that the money placed in the deputy’s hands was not a deposit for the defendant.

Besides, it does not appear that the deposit was made by the defendant. It is, perhaps, not necessary to determine whether a deposit mad & for a defendant by a third person would not be a deposit by the defendant so far as to make it amenable to the judgment. Probably that would be so. But the deposit must be in the stead of bail. There cannot be bail and also a deposit.

■ If bail is actually given and justifies, the sheriff is exonerated, and the plaintiff must look to the bail alone for his security.

I think it is quite clear that the money was placed in the deputy’s hands for the purpose stated by him, and possibly he may have had a right to receive it for that purpose. The sheriff is himself responsible as bail until the bail shall have justified, and it may be that he has the right to protect himself against such a contingent liability by taking security from the bail that they will justify. - But however that may be, the question cannot be raised by the plaintiff.

If the sheriff violated the law in taking the security, the security would be void in his hands, but the plaintiffs would not thereby acquire a right to the security.

The determination of questions of fact upon exparte affidavits is sometimes quite difficult, and is not always satisfactory. Upon an oral examination of the witnesses in this case, a different state of facts may be established, and as the plaintiffs have a remedy (Code, sec. 198) by action, they should be left to that remedy.

The order appealed from should be affirmed with costs.

McCunn, J.

(dissenting). I must dissent in this case. On the hearing before us in General Term, with the slight attention which can be given to cases there, I was favorably inclined to the theory propounded by counsel for the respondent, but on a more careful perusal of all the cases, both English and American, I have decidedly changed my views, and I am now quite positive the moneys should be looked upon as the moneys of the defendant, and should have been, by order of the court below, applied to the satisfaction of the judgment.

Let us see what the application is for.

On the third of January, 1870, the parties applied before the deputy sheriff (defendant having been arrested) to put in special bail. The bail offered was not satisfactory, and Alexander, one of the bondsmen, said: I will deposit the amount of the bail ($1,500) with you, Mr. Deputy Sheriff, until we justify, or until proper bail justify.” This was done. Mr. Bancker, the deputy who took the money, says he took it to secure himself, and not as a deposit in the action under the Code. This he could not do, for two reasons. 1. He was not acting for himself; he had no interest in the matter; he was acting as sheriff, as officer of the law, and that for the security of the plaintiff, under and by virtue of a solemn statute passed for that purpose, and he could not and was not acting for himself, he not being interested. 2. He was acting for the accommodation of the defendant, to keep him from jail, and in order that the requirements of the Code in such cases should be complied with.

The fact that Mr. Bancker says he was acting for his own security does not legally make it so. He cannot qualify his acts. He either took the money in the action or he did not. How let us see whether he took the money in the action or not. The suit was not commenced for his (Mr. Bancker’s) benefit. It was commenced for plaintiff’s benefit. The order of arrest was not for Mr. Bancker’s benefit; it was for the plaintiff’s benefit; and all he (Deputy Sheriff Bancker) had to do, after process was placed in his hands, was to exercise proper diligence and get the person of defendant in custody. He did so, and when he laid his hands upon the defendant’s shoulder Deputy Sheriff Bancker was safe, quite safe, because he could have no better or higher security than the person of defendant—so that anything done after the arrest was made, was done to accommodate defendant and for the plaintiff’s benefit. When the defendant was arrested the Code required one of three things to be done (the statute, as' I will show hereafter, prohibiting any other, course): the deputy had either to lock defendant up, or take special bail, or take a deposit for the amount front defendant or some one acting for him. The special bail was given and accepted by Mr. Bancker, as he says. He also says that he asked the attorney for plaintiff to approve it; the attorney declined, and then Mr. Bancker says he exacted the money “ solely as vndemnity to himself so that the hail might justify.” .... “ The money was to protest myself against cmy liability to which I might he made hy reason of their failing to appear to justify.” The defendant’s attorney’s deposition is quite different to this. Be that as it may, however, the statement of Mr. Bancker is quite sufficient in itself to enable me to show that the fund deposited with him was liable under the Code, if the bail did not justify before judgment. What does the depositor say himself % Why, he says, here is $1,500; keep it until I justify. If he do not justify, what then ? Can he coolly take that money back ? Why, no; that would be trifling with justice. Well, what next? Why, the law declares he forfeits it; indeed, the depositor lost all interest in the money the moment it touched Hr. Bancker’s hands; it then became defendant’s, because the law does not say that a third party can make a deposit for defendant. It says that defendant can only make it, and third parties are not recognized and cannot be recognized in the action.

Supposing Hr. Bancker had taken this $1,500, or any other amount whatever, corruptly, as against his principal, the high sheriff, and as against the plaintiff—which of course he did not do in this case—but supposing he had done so, would the law tolerate such a course for one moment ? Certainly not; and yet if we countenance this kind of procedure we are opening a wide door for the grossest kind of frauds—frauds which can be perpetrated by deputies, not only on the plaintiffs inactions, but on the high sheriff also.

Again, supposing Hr. Bancker had had confidence in defendant, and without the bond had said to him, You indemnify me privately with $1,500; I will take the risk; I will say nothing about it; then I will let you go, and when you perfect special bail I will give you the money back,” and defendant under these circumstances had failed to perfect bail, and left the jurisdiction of the court; could Hr. Bancker have kept the money, or could he have given it back to the depositor ? Certainly not. Why, it is a misdemeanor for a deputy to do this. And this is exactly what he claims to have done. Because, when Hr. Bancker hesitated about the names of the sureties, and after the attorney declared them bad, or at least declined to accept them, that instant the bond, so far as plaintiff was concerned, was utterly worthless. Until the sureties had justified (and the sureties named in the special bail-piece could not justify after judgment—and have not justified to this day), we must bear in mind that until they do justify, and that before judgment, the plaintiff is not bound to receive them as sureties.

If such a theory was tolerated for one moment any deputy could in any cause, by such a juggle, seriously impair the rights of the parties litigant. Now Hr. Bancker says he took the funds to save himself. Surely, it does not belong to deputy sheriffs or high sheriffs to make law by their sayings, nor can a principle of law be in any way affected by any of their utterances. What they do as officers of the law can only be told by them after being done, and then from what they have done the law can be fitly applied. It would be well for ministerial officers to "leam that in controversies where they are called upon to act officially, they cannot act for themselves and for their own security and safety, but must act for the benefit of the parties in the controversy. It is not from what the sheriff or any of the parties said at the time a deposit such as this was made that conclusions can be drawn; it is from what they did that the law can be inferred, and from that the legal effect must follow, so that we have without any dispute or contradiction the failure to put in satisfactory bail and the consequent deposit of the money in-lieu thereof. Now, this being the case, what is the legal effect ? It is expressly declared by law that no sheriff or other officer shall- take any bond, obligation, or security, taken otherwise than as herein directed.” In this case fifteen hundred dollars was taken by the sheriff, a security recognized by the Code as one which the sheriff might take, and surely we must not permit the deputy sheriff to allege that it was taken otherwise than as the law directs, and claim that what he had a right to do legally was not intended to be done legally, but was intended to be done by him illegally. If, as I have said before? we permit a deputy sheriff or a sheriff to say that moneys received as these moneys were received was not a real deposit as ■ provided by law, then there is no imaginable case in which a similar course to this may not be pursued by the sheriff or his deputies on arrests, and plaintiffs thus be entirely deprived of the benefits arising under section 200 of the Code.

It is urged that the moneys were not the funds of the defendant. On the contrary, we must hold they were his funds for all intents and purposes (Herman v. Aaronsen, 9th Abb. P. R., N. S., 155). They were placed for his benefit in the sheriff’s hands. It was because he, defendant, was arrested, they were placed there. They were placed there under and by virtue of the proceedings in this case, because if the action had not been commenced, and if the defendant had not been arrested in the action, the sheriff would not have possession of the money now. After the sheriff gets the funds, the instant they touch his hands, and without a word from him, the Code steps in and says how they shall be applied; whether they shall be returned after special bail is perfected, or whether they shall be applied to the payment of the judgment, and the fact that the deposit was made by a third party is the same as if it were made by the defendant (Herman v. Aaronsen, supra).

The sum was deposited for the defendant, and for his benefit, and on the strength of such deposit he was set at liberty, and not on the strength of the bond. If the bond was good, why exact the money % Indeed, if the theory of Mr. Bancker, the deputy, be correct, that he took a good bond and the money also, see what oppression it might lead to as against defendants. The exacting of double security cannot be done; it was not done in this case, and the clear rule of law will not permit it. But even if the bond was given, and it was a perfectly good bond, and was accepted as such by Mr. Bancker, and that he released defendant on its strength, yet the money was also given, and received by Mr. Bancker, and certainly plaintiff, out of the two securities, has the undoubted right to select the best; you cannot ask him to pursue a bond, perhaps the shadow of security, when there are funds of defendant in the hands of the court, placed there to the credit of the action, and for the very purpose of satisfying the claim. In all cases the rule is, that you are bound to exhaust process against the property of defendant before you can proceed against his person, and it would be absurd to resort to either with moneys of the debtor in the sheriff’s hands, and under the control of the court, which can be applied in satisfying the debt. The truth of the matter is this—the bond was declined to be taken by Mr. Bancker as sufficient, but it was retained by Mm and the money demanded and received as special deposit, and as Mr. Bancker says, for his own security; but even under these circumstances the moment the judgment was entered, if special bail was not perfected, such moneys became subject to the satisfaction of the bill.

Will any one tell me that if this defendant had disappeared or run away from the State, after giving this money and bond, the court would not have promptly ordered this judgment to be satisfied out of the fund? Certainly not. You cannot play fast and loose with clear principles of law.

About the 29th December, 1869, the order of arrest was granted, and on the 3d January, 1870, defendant was arrested and money deposited. Within a few days after efforts were made to have special bail justify, under section 199 of the Code. It was adjourned from time to time, and before the justification was completed judgment was entered. Plaintiff then (after judgment) refused to go on with the justification, because, as he alleged, under section 199, the justification must be completed before judgment, and applied to the court to have the moneys so deposited appropriated to satisfy the judgment. On the refusal to proceed with the justification on the part of the plaintiff, defendant surrendered himself in exoneration and afterward put in bail on the limits. This last act of defendant—his surrender and bail to the limits—does not in any way change matters. Plaintiff’s rights had attached to the moneys in the hands of the sheriff on the entry of judgment, and any act of any other party but his (plaintiff’s) own cannot affect the question. Hay, more, I think the court has no power, even on an application, in the absence of this motion, to order the money to be refunded to Alexander, the bondsman. Ho such power is conferred on this court. On the contrary, by the very letter and spirit of the Code, the failure to put in and perfect special bail or to surrender before judgment makes the fund subject to be immediately applied to the payment of the judgment. By section 198 the sheriff must, within four days after receipt, pay the sum into court. Section 199 provides that after the money is so deposited bail maybe given and justified upon notice, as prescribed by section 193, any time before judgment, and thereupon before judgment the judge shall direct the money deposited to be refunded to the defendant—not to the depositor. Indeed, the depositor cannot be recognized at all. The statute, in express terms, allows only the defendant to -make the deposit, and treats him throughout as its owner.

Our books furnish but two cases where these questions have been discussed: Herman v. Aaronsen (3 Abb., N. S., 389), in which the application is made by the depositor prior to the justification of bail and of course denied; and the case of Salter v. Werner (6 Abbott Pr. R., 191), both of which sustain me as far as they go in my views here. These cases, however, do not furnish absolute precedents for this case, as the application was premature in the former ease, the defendant having put in special bail before judgment, and in the latter case the bail duly justified and there ended the matter. The English books, however, contain many cases covering the grounds we are now discussing, and the construction placed upon the English statutes of 43 George the Third, c. 46, and to the subsequent statute of George the Fourth, c. 71, all tend to establish the rule that if money be deposited by a third person as bail for the defendant, and special bail be perfected or the defendant surrendered, an application by him for the money so deposited before judgment would be granted if the defendant assented (Nunn v. Powell, 1 Smith R., 13; Edelstein v. Adams, 2 Moore, 610; S. C., Taunton, 557; Bull v. Turner, 1 Tyrwhitt & Granger, 367; Douglas v. Stoubrough, 3 Adolph & Ellis, 316; 1 Tidds Pr., 9th ed., 288).

By the English courts a surrender before judgment was regarded as equivalent to putting in special bail, inasmuch as the object was to secure the appearance of the defendant, although neither the statute of 43 Geo. III., nor 7 and 8 Geo. IV., c. 71, provided that it could be so regarded in reference to money deposited under its provisions. The act of George the Third and the provisions of the Code in regard to this subject are nearly similar. They both provide for the deposit of money instead of bail, and for the payment of the money into court, and that if bail shall be duly perfected before judgment the money deposited shall be refunded to the defendant. They differ as to the mode in which the money is to be paid. By the Code the act by which the fund may be restored to the defendant is to be performed before judgment. By section 199 the special bail must be given before bail, and by section 200, if the money remain on deposit at the time of the judgment, the clerk shall, under the direction of the court, apply it to the satisfaction thereof.

The statute of George III. provides, that if bail be not perfected the money deposited shall, by order of the court, be paid directly to the- plaintiff; and the act of 7 and 8 George IT. provides that the defendant making the deposit may at any time during the progress of the cause receive the same by order of the court upon putting in and perfecting bail. This section and section 199 of the Code are to the same effect, both providing for the restoration of the money if bail be put in before judgment. Section 200 of the Code declares that if the money remain on deposit at the time of an order or judgment for the payment of the money, the clerk shall, under the direction of the court, apply the same, thus confirming the intention that the money must be withdrawn before judgment. In the case of Bull v. Turner, above cited, application for the money deposited was made after the judgment by the plaintiff, and although the defendant had surrendered himself, yet the court granted it—Baron Park saying, it is perfectly clear that the party has paid this sum into court instead of the defendant, and if so can only have it back upon the same terms as he could have done,” thereby holding in fact that after judgment the fund could not be given to the depositor.

By the express provisions of the Code (section 200) the money can only be refunded to the defendant where the special bail is put in before judgment, although, by a liberal construction, it may be paid out to the person who makes the deposit within the same limit. But when the judgment is perfected, then the money can only be treated as the defendant’s; the construction favoring the depositor ceases, and he must lose his funds for two reasons:

First. The presumption is that the money belongs to the defendant.

Secondly. After judgment there is no power to restore it to him.

If the bondsman Alexander wished to have his money refunded to him, he should have seen to it that special bail was put in or the defendant surrendered before judgment was entered. If neither act be done the money can only be regarded as in the custody of the lawj and that for the benefit of the plaintiff.

It is lastly said by the respondent’s counsel that, because the sheriff or deputy sheriff did not pay the money into court and give the necessary certificate, these funds remain the funds of the depositor Alexander. This cannot be, for two reasons: 1st. The sheriff cannot take advantage of his own neglect or wrong in not paying the money into court. This is familiar learning. 2d. The depositor and his principal did not apply in time—before judgment—to have these funds returned. Again, it is conceded that after the money was paid to the deputy sheriff he set the defendant at liberty; and it is also conceded that the special bail did not justify before final judgment. Now the effect of all this must be one of two things— either the money was deposited by the defendant under the Code, or else there was an escape, for which the sheriff can be sued, for the bond cannot be sued, for it never was perfected ; and as it is the duty of the courts to protect public officers as far as in their power lies, we would be derelict in our duty, when we have it in our power, not to protect the. high sheriff by ordering the moneys now in the hands of his deputy to be applied to the payment of this judgment.

The order of the court below should be reversed, and an order entered satisfying the judgment out of the moneys now in the hands of the deputy, Hr. Bancker.


author: Monell, J.

text:
    SAMUEL NIMMONS and Another, Plaintiffs, v. J. NELSON TAPPAN, Defendant.

      [Decided December 31, 1870.]
    The pendency of an action against all the trustees of a mining company, to enforce their liability for falsely certifying that all the capital had been paid in, is no bar to an action against one of such trustees, to enforce his individual liability, for a default of the company to file its annual report.
    The recovery of a judgment against such company is conclusive evidence of a debt against the company, and is open to attack by others only for fraud or collusion.
    When it is shown that a person had been elected a trustee of a corporation, his acceptance will be presumed.
    Corporations are not dissolved by insolvency or non-user. Those are grounds for judicially declaring them dissolved. Dissolutions can be effected only in the manner prescribed by statute.
    The liability of a trustee for the omission of a corporation to make an annual report, is in the nature of a penalty, and within the three years’ limitation of action for penalties or forfeitures.
    A trustee in office at the time a corporation fails to make its annual report, is liable for all the existing debts of the company, and such as may thereafter be contracted, until the report is filed.
    And such liability attaches upon each default of the company, so long as the trustee remains in office. So that although there have been several successive defaults of the company, and the first of which was more than three years before suit brought, but the last was within three years, the action is maintainable upon the last default, and the statute of limitations is not a bar.
    A new and original liability is created on each default, and if any of the defaults is within three years, it may be made the foundation of the action; and the creditor is not bound to confine himself to the first default.
    Before Monell, McCunn, and Spencer, JJ.
    The action was against the defendant, to enforce his joint and several liability as one of the trustees of the Montana Mill Company, a corporation formed under the laws of this State, arising from the omission of such company to file its annual report, pursuant to the provisions of the statute.
    The complaint alleged the formation of the company, and the making of their promissory note on the 27th of November, 1865 for the sum of $5,076.77, payable in sixty days, to the order of Samuel Lawrence, and by him indorsed to the plaintiffs. The complaint then alleged the recovery of a judgment upon the note against the company, and the return of an execution unsatisfied. It further alleged, and was also admitted on the trial, that at the time the note was made, and ever since, the defendant was and has been a trustee of the company. It then alleged that the company did not, within twenty days from the first day of January, 1866, nor within twenty days from the first day of January, 1867, make and publish, nor have they at any time since made and published the report required by law. And the plaintiffs demanded judgment for the amount of the note.
    The defendant, in his answer, alleged that at the time of commencing this action another action was pending between the same parties, and for the same cause of action, and was still pending. He further alleged that the cause of action stated in the complaint did not accrue within three years before the commencement of the action. He further alleged that he had ceased to be a trustee on or about the first of September, 1866. That since the last-mentioned day the company has been insolvent, and had ceased to do business. This action was commenced on the tenth day of January, 1870.
    The action was tried before Hr. Justice Jones and a jury.
    The plaintiffs produced the by-laws of the company, which provided for the election of five trustees at an annual meeting on the first Tuesday in April in each year. They then introduced the minutes of the company, showing that at the annual meeting on the first Tuesday in April, 1866, five trustees of the company, of which the defendant was one, were elected for the ensuing year. ;
    They then proved that no report of the company had ever been filed.
    Evidence was given tending to show the insolvency of the company at all times since the making of the note, and that it had from that time ceased to do business..
    The defendant proved the pleadings in the suit alleged to be pending, which was an action in favor of these plaintiffs against all of the trustees to enforce their joint liability for falsely making a certificate that all the capital had been paid in, which action it was admitted was commenced before this action, and was still pending.
    At the close of the evidence a motion was made to dismiss the complaint on the following grounds:
    1. That there was another action pending in this court for the same cause of action, brought by the same plaintiffs against this defendant.
    2. That this action was barred by the statute of limitations.
    3. That the authority of the treasurer to make the note in the complaint averred had not been proved.
    4. That there was no proof that the defendant had ever accepted the office of trustee under the election of April 10, 1866.
    5. That as to its creditors, said company was dissolved before January 1,1867.
    6. That the defendant ceased to be a trustee of the company before January 1,1867.
    The court denied the motion, and refused to dismiss the complaint, to which the defendant excepted.
    The jury were instructed by the court to render a verdict for the plaintiffs for the amount claimed.
    To which direction the defendant excepted.
    The court ordered the exceptions to be heard in the first instance at the General Term, and the judgment in the mean time to be suspended.

      Mr. Everett P. Wheeler for defendant.
    This action is brought to recover a penalty from the defendant for his failure to file the certificate required by section 12 of the general manufacturing act.
    It must be brought within three years from the time the cause of action accrued.

      Both the points were expressly adjudicated in McHarg v. Eastman (7 Robertson, 137), Bird v. Hayden (2 Abb. Pr., N. S., 61), Merchants’ Bank v. Bliss (1 Robertson, 391), affirmed by Court of Appeals (35 N. Y., 412).
    No certificate was filed in 1866. The plaintiffs’ debt became due January 27,1866. The very next day their cause of action accrued against the defendant. They were not required to wait for judgment and execution against the company, but could sue at once (McHarg v. Eastman, 7 Robertson, 137).
    The statute then barred their action, January 28, 1869. And even if the cause of action was held to accrue when they recovered judgment against the company, and execution thereon was returned unsatisfied, it was barred three years from June 13, 1866.
    The plaintiffs claim that a new cause of action accrues to them January 20,1867.
    There is no proof in the case that the defendant was trustee at that time. The only evidence on the subject is the admission by both parties that he was trustee from November 27,1865, to September 1,1866. That limits the inference that might otherwise be drawn from the fact of his election in April, 1866.
    But no one was bound to file any certificate for the Montana Mill Company in 1867. The statute does not apply to insolvent corporations whose property has all been sold on execution, and who have ceased to do business. There is nothing to certify. The act requires that the certificate shall be filed “ where the business of said company is carried on ” (Laws of 1848, ch. 40, §12; 3 Edmond’s Stat., 735). If the business has ceased, there is no place where the certificate can be filed.
    The company, as to its creditors, was dissolved by its insolvency—its loss of all its property, and its ceasing to do business. It had, and could have, no further existence, not even for the purpose of winding up its affairs, because there were no assets (Briggs v. Penniman, 8 Cowen, 387; Slee v. Bloom, 19 Johns., 456).

      Mr. Albert Stickney for plaintiffs.
    The only two objections taken to the admission of the note in evidence were that the corporate existence of the company had not been shown; that the authority of the treasurer to make the note on behalf of the company was not proved.
    The incorporation was proved by the certificate of incorporation.
    The authority of the treasurer and the point that the note was the note of the Montana Mill Company, were shown by the judgment roll in the action by these plaintiffs against the company.
    In that action the company admitted that the note was made by the company for goods sold and delivered to the company.
    The judgment roll was properly admitted.
    No charge was made of any fraud. No evidence was offered to impeach it in any manner (Belmont v. Coleman, 1 Bosw., 188; affirmed, 21 N. Y., 96; Squires v. Brown, 22 How., 35; Moss v. Oakley, 2 Hill, 265; Dayton v. Borst, 7 Bosw., 115; Hoagland v. Bell, 36 Barb., 57).
    The defendant admits that he was a trustee from the making of the note, 27th November, 1865, to 1st September, 1866.
    The term for which he was elected was one year from 10th April, 1866.
    H, as the defendant admits, he was a trustee on 1st September, 1866, he was such trustee only by virtue of his election.
    He had then accepted this term of one year, and was such trustee certainly as late as 10th April, 1867.
    The fact that no report was filed in 1867 is not disputed.
    This makes a default if the company then had an existence.
    If the company, in January, 1867, had an existence, and there was a default, the trustees were, in the language of the statute, “jointly and severally liable for all the debts of the company then existing.”
    Was not this note then an existing debt of the company?
    If so, the defendant was then liable for this note and interest then accrued.

      The statute provides fully for the proceedings for the dissolution of corporations in certain cases (2 R. S., 463).
    One of the causes is insolvency, continued for more than a year. And in that case the statute provides for regular proceedings in the Supreme Court.
    The defense claims a dissolution without proceedings of any kind.
    When was this dissolution ?
    The defendant admits that he was a trustee till 1st September, 1866.
    The dissolution claimed by him took place in the spring of 1866, when the business was discontinued and the company became insolvent.
    Of what was he a trustee in September ?
    The cause of action accrued on the 21st January, 1867, and the action being brought on the 10th January, 1870, is within the-three years.
    The statute fixes a penalty for not filing a report. The trustees and corporators have great privileges. They have the chance-of large profits, and avoid all personal liability so long as they obey the statute.
    They can protect themselves and their creditors.
    If the corporation is losing money, and they wish to discontinue the business, the statute provides the proper way for them to end it, and distribute its property equally among the creditors.
    If they continue its business, they can warn creditors of its condition by filing the report.
    In either way the plaintiffs would have been protected. In the one they would have been warned of the company’s condition, and would not have given credit. In the other they would have had, on the dissolution, their share of the property.
    The defendant, by raising the point of the statute of limitations, expressly places himself on the position that this is a penalty and not an original liability. Otherwise the time is six years, and not three.
    The penalty is utterly distinct from the debt. It is a penalty for a default, and accrues when the default takes place, and not sooner.

      “ The liability of the defendant does not arise from any act connected with the creation of the debt to the plaintiff ” (Merchants’ Bank v. Bliss, 13 Abb., 237).

      “ Besides these considerations, the period of limitations is made to run from the time the cause of action accrued, not from the time the debt was incurred ” (35 N. Y., 412).
    The cause of action in the other suit was for a different penalty, arising entirely from a distinct violation of the statute.
    The basis of computation alone is the same.
    Of course, whenever the plaintiffs’ claim is paid from any source, it cannot be again collected.
   By the Court:

Monell, J.

The objections to a recovery in this action may be disposed of nearly in the order they were stated.

First.—The pending of another action against this and other defendants, as trustees, to enforce their joint liability under the statute for falsely making, as was alleged, a certificate that all the capital of the company had been paid in, was not a defense io this action. The liability which was sought to be enforced in .the other action was for a different cause, and to recover a different penalty.

Second.—The authority of the treasurer of the company to make the note on its behalf was, I think, sufficiently established. The judgment-roll, in the action against the company, which was given in evidence for the purpose of establishing the making of .the note and the authority of the treasurer, was conclusive upon .the company, and was open to attack by the defendant only for fraud or collusion (Horry v. Ten Broeck, 3 Robt., 319, and cases there cited).

Third.—The proof was also prima facie sufficient that the -defendant had accepted the office of trustee under the election of April., 1866. Indeed it was, I think, substantially admitted by -him in ¡his answer. Besides, it was sufficient to show his election, and it then lay with him to show his non-acceptance of the office.

Fourth.—The two objections, that as to creditors of the company the company was dissolved, and that the defendant ceased to be a trustee previous to the first of January, 1867, were put upon the ground that the company had, prior to that time, become insolvent, and had ceased to do business. It was admitted that no meeting of the company, or of its stockholders or trustees, had been held or business transacted since April, 1866, at which time the company became insolvent.

The objections, however, were untenable. Corporations are not dissolved either by insolvency or by non-user. These are grounds for judicially declaring a corporation dissolved, but do not operate to create a dissolution. That can be effected only in the mode prescribed by statute (2 R. S., 466; N. Y. Marbled Iron Works v. Smith, 4 Duer, 362). So long, therefore, as the term of office of the defendant continued, he remained a trustee, notwithstanding the insolvency and non-user of the company. He was elected a trustee in April, 1866, for the ensuing year, and was therefore in office diming January, 1867.

But the principal objection relied upon by the defendant arises upon the defense of the statute of limitations. It was claimed that more than three years had elapsed, after the cause of action had accrued, before the commencement of the action.

The statute (Laws of 1848, chap. 40, p. 54, § 12) requires that corporations formed under it shall annually, within twenty days from the first day of January, make and publish a report of their financial condition; and, upon failure to do so, all the trustees “shall be jointly and severally liable for all the debts of the company then existing,” etc.

The statute has uniformly been held to create a liability, which is in the nature of a penalty, and therefore within the limitations of actions for penalties and forfeitures (Code, § 92, sub. 2; Bird v. Hayden, 1 Robt., 382; McHarg v. Eastman, 7 id., 137; Merchants’ Bank v. Bliss, 35 N. Y. R., 412).

• It is conceded that the defendant, being" a trustee at the time the company failed to make its report within the first twenty days in January, 1866, was liable upon that default, and could immediately thereupon have been prosecuted for the existing debts of the company. And it must be conceded that if thereafter, and before another default of the company had occurred, the defendant had ceased to be a trustee, his liability would have been confined to such previous default. So that it is quite clear that, as respects the liability of the defendant for the omission of the company which happened in January, 1866, the statute began to run at that time, and is a complete bar as to that liability.

But it appears that the,defendant continued in office, and was a trustee in and during January of the succeeding year, when another default of the company occurred; and it is claimed that, as respects the cause of action in this suit, the statute began to run only from that time.

Whether that is so depends upon whether there can be several and separate liabilities created by several and separate defaults of the company.

I think the proper construction of the statute is, that for each default of the company the trustees in office at the time are re sponsible to the creditors, and that such responsibility is not confined to a single default, or to one or more defaults, but for every time the company fails to comply with the statute the trustees then in office become liable for all existing debts. And, although the defendant was a trustee in January, 1866, and became liable to the plaintiff at that time, nevertheless he became again and freshly liable in the January of the succeeding year, and a creditor of the company could elect upon which default he would proceed. The creating of a new liability each year that a default is made does not deprive the creditor of the right to seize upon the penalty at any time. The statute declares, that upon a failure to make an “annual” report the liability shall arise for all debts then existing. So that the penalty for any failure is the existing debts of the company. When the company failed to discharge its duty in January, 1866, the defendant became liable for the penalty which was then imposed. But for that penalty this action doubtless was barred by the statute. But in January, 1867, the. company again failed to discharge its duty, and the defendant, as one of its trustees, again became liable for the penalty, namely, for all debts then existing, and among them this debt due to the plaintiffs. If it could be said that, because there was a right of action against the defendant in January, 1866, he could not be held responsible for the company’s default in the succeeding year, then this action would be barred. But it cannot be pretended that a mere previous liability would screen the defendant from the consequences of a subsequent default of the company. On the contrary, a new and fresh liability was created on each successive failure of the company, and the statute would begin to run only from the last default. The action, therefore, was very properly founded upon the company’s default in January, 1867, and the statute commenced running only from that time.

This new or original liability, created by each successive default, is fully recognized in Boughton v. Otis (21 N. Y. R., 261). The company, in that case, had failed to make its annual report in January, 1857, but the defendant was not made a trustee until the subsequent March, and the court held, that only such trustees as were in office when the default occurred were liable for existing debts. In the course of the opinion Judge Comstock says:

“A single case may occur where successive boards may be liable for the same debts, and that is where there are successive defaults in January. By the express terms of the statute, the trustees, omitting to file their statement within the first twenty days of that month, are liable for all debts then existing. Now, the debts then existing may be, wholly or partly, the very debts for which their predecessors became liable by reason of a previous default in the January of the preceding year. But from this simple liability there is a chance of escape by a simple performance of the duty required.”

And in Shaler and Hall Quarry Co. v. Bliss (27 N. Y. R., 297), the court says three things must concur, in point of time, to render a trustee liable, viz., the existence of the debt, a default in making the report, and the trusteeship. Where these concur the trustee is liable for all debts, “ if he was such trustee when the default occurred.”

Upon our construction of the statute, therefore, there was no error in overruling the defense.

The exceptions must also be overruled, and judgment ordered for the plaintiff on the verdict, with costs.


text:
    SAMUEL NIMMONS and Another, Plaintiffs, v. ANDREW J. HENNION, Defendant.

      [Decided December 31, 1870.]
    A trustee of a corporation, created under the general act for the incorporation of manufacturing and mining companies, being made liable, upon the default of the company to file an annual report, for the existing debts of the company, is liable for such debts, although they were contracted before he became a trustee.
    The meaning of “ existing debts,” in the statute, is such debts as were due at the time of the default of the company.
    Therefore, where the company had. given its promissory note, which, by its terms, was not due or payable until after the default of the company to file its report—held, not to be an existing debt for which a trustee then in office would be made liable.
    Before Monell, McCunn, and Spencer, JJ.
    The action was against the defendant to enforce his joint and several liability, as one of the trustees of thé Montana Mill Company, a corporation formed under the laws of this State, arising from the omission of such company to file its annual report, pursuant to the provisions of the statute.
    The pleadings and the facts established at the trial were substantially the same as in the case of these plaintiffs against Tap-pan, another of the trustees of such company, decided at this term. The defendant was elected a trustee on the ninth of January, 1866, and was in office when the company made default in that month, and the defendant claimed that his liability attached to the omission to file the report in the first twenty days in January, 1866, and as the action was not commenced until the nineteenth of January, 1870, the statute of limitations was a bar.
    It, however, appeared that the defendant continued in office as a trustee until and during January, 1867, and that the company in that year also omitted to file an annual report.

      The same objections to a recovery as were taken in the Tappan case were taken in this; and also the further objection, that the liability of a trustee extended only to such debts as were contracted while he was in office.
    The objections were overruled, and the jury were directed to find a verdict for the plaintiffs for the amount claimed.
    The defendant excepted, and the exceptions were sent to the General Term, to be there heard in the first instance.

      Mr. A. B. Capwell for defendant.
    The liability of a trustee for omission to make, file, and publish an annual report, as required by the twelfth section of the manufacturing act of 1848, is in the nature of a penalty, and an action thereon must be commenced within three years after the cause of action shall have accrued (Code, sections 74 and 92, subdivision 2; Merchants’ Bank of New Haven v. Bliss, 1 Robertson, 391; same case, 35 New York, 412).
    The cause of action in this case arose, if at all, by reason of the failure to make and publish an annual report in January, 1866.
    The indebtedness of the corporation arose by contracting the debt for which their note was given November 27,1865, and was an existing debt on the 1st day of January, 1866.
    As defendant was made trustee January 9, 1866, he became liable, if liable at all, for this debt by reason of the non-filing and publishing an annual report in January, 1866; and this statute of limitations of three years began to run January 21, 1866.
    This action was commenced January 19, 1870, more than three years after the default.
    The court erred in not dismissing the complaint for this reason, the defense having been specially set up in the answer.
    But if the court was right in denying the motion to dismiss the complaint for the reason above stated, it erred in directing the jury to find a verdict for the plaintiffs, because the debt sought to be collected from the defendant was contracted before the defendant became a trustee. Debt contracted on or before November 27, 1865. Defendant first elected trustee January 9, 1866.
    The liability of trustees under the manufacturing act, for failure to file and publish annual reports, should be confined to debts contracted while they are trustees.
    “ The twelfth section of the statute must be construed as if it read for all debts then existing (contracted by them), and for all that shall be contracted (by them) before such report shall be filed ” (McHarg v. Eastman, 4 Robertson, 635; same case, General Term, 7 Robertson, 137).

      Mr. Albert Stickney for plaintiffs.
    The defendant admits, by his pleading, that the company existed, and that he was a trustee, in January, 1867. The proof showed the same state of facts.
    On the pleadings, too, it is not disputed that the note was still an “existing debt” of the company in January, 1867.
    There being a default in January, 1867, and the note being then, in the language of the statute, “ an existing debt of the company,” the defendant became liable as a trustee for the statutory penalty, when the default took place, i. <?., 20th January, 1867.
    The company’s debt and the penalty are entirely distinct.
    The debt is merely the basis of computation.
    No suit could be brought against the defendant at all if there was no default.
    The suit cannot, then, be brought until the default takes place. The default on which this suit is brought is the default in January, 1867, which was complete on the 20th January, 1867, and not before.
    The default is not destroyed by the fact that there has been a previous default.

      And whether the previous default has been of the same or other trustees is completely immaterial.
    “ A single case may occur where successive boards may be liable for the same debts : and that is, where there are successive defaults in January. By the express terms of the statute the trustees omitting to file their statement within the first twenty days of that month are liable for all debts then existing. Wow the debts then existing may be wholly or partly the very debts for which their predecessors became liable by reason of a default in January of the previous year. But from this liability there is a chance of escape by a simple performance of the duty required ” (Boughton v. Otis, 21 N. Y., 264).
    “ The liability of the defendants does not arise from any act connected with the creation of the debt due the plaintiff ” (Merchants’ Bank v. Bliss, 13 Abb. Pr., 237).
    “Besides these considerations, the period of limitations is made to run from the time the cause of action accrued, not from the time the debt was incurred ” (same case, p. 238, affirmed, 35 N Y., 412; Peck v. Hurlburt, 46 Barb., 559; Corning v. Southland, 3 Hill, 554; Brick v. Campbell, 15 Johns., 456).
    The defendant insists very strongly that this is a penalty. Otherwise the plaintiffs have, on his own position, six years from 29th January, 1866, instead of three, to bring this action.
    The penalty is not the debt, and is entirely distinct from it in every way.
   By the Court:

Monell, J.

All the questions which are presented by the exceptions in this case, except one, have been determined by the decision at this term in the case of these plaintiffs against Tappan, another of the trustees of the Montana Mill Company.

The question not decided by the Tappan case is, whether the defendant is liable for the debts of the' company contracted before he became a trustee.

1 The question arising upon the statute of limitations is the same as arose in Tappan’s case, except that to make the objection available in this case, it was and had to be claimed that the debt prosecuted in the action was an “ existing debt” in January, 1866, although the note had not then become due.

But I think that this was not an existing debt, within the meaning of the statute.

There was no default of the company until after twenty days from the first day of January, 1866, and the note of the company did not fall due until after such default had occurred.

The obligation to pay was made in the previous November, when the company gave its promissory note, and it may, perhaps, be said that a debt was then created. But there was no obligation to pay until sixty days afterwards, and when the payment of a debt is imposed as a penalty, it must be construed to mean a present obligation which is capable of being immediately enforced. Otherwise the penalty would be nugatory, as it could not be prosecuted or collected.

Debt, it is true, is ordinarily understood to mean any obligation to pay, either in presentí or in futuro, and it is commonly understood to be equivalent with liability. Bouvier says, “ debt is a sum of money due by certain and express agreement;” in a more enlarged sense, any kind of a just demand, and he describes the liquid debt to be one the payment of which may be immediately enforced, and not one which is due at a future time.

At the time of the company’s default, in January, 1866, an action was not maintainable against it upon this obligation or promise to pay. It therefore follows, it appears to me, that an action against a trustee would also have failed! And this furnishes a proper test of what the legislature are supposed to have meant by “existing debts;” and it is, therefore, to be presumed that they intended to create a liability for such debts only as were due and payable at the time the penalty was affixed.

In Garrison v. Howe (17 N. Y. R., 458) the plaintiff contracted to deliver, and the corporation to receive and pay for, a large quantity of lumber at a future day; and it was held not to be a “debt” within the meaning of the statute, nor until the delivery of the property.

And in Oviatt v. Hughes (41 Barb., 541) a trustee was sued for a claim of the plaintiff against the company. The former was employed by the latter as its general agent at a per annum salary. As the salary was not due at the time of the company’s default, it was held not to be a debt within the meaning of the statute. The court says, the statute speaks of debts existing or contracted, not of liabilities which may ultimately ripen into debts.

If, therefore, the decision of this case depended upon bringing it within the intended meaning' of “ existing debt,” I think it might be correctly disposed of by holding that this was not such a debt as attached to the default of January, 1866.

The remaining objection is, that the debt was contracted before the defendant became a trustee, and that he is liable for such debts only as were contracted while he was trustee. But I think the defendant’s counsel has misunderstood or overlooked that part of the statute which creates a liability for the “existing debts” of the corporation. That is one liability, and is apart from the other liability, which is for debts “ afterwards contractedP The meaning' of the statute is, that the trustees of a corporation which shall omit to make its annual report, who are in office at the time of such omission, shall be liable for all debts existi/ng at that time whenever contracted, and shall also be further liable for all debts which may be contracted after such time, and until such report is filed. That is the plain letter and intent of the statute, and is recognized in the following cases: Garrison v. Howe (ubi supra), Shaler and Hall Quarry Co. v. Bliss (ubi supra), Boughton v. Otis (ubi supra), and McHarg v. Eastman (7 Robt., 137).

If these views are correct there was no error in overruling the defense, and is none in overruling the exceptions.

The plaintiff should have judgment on the verdict with costs.